EXECUTION COPY
                                                                  EXHIBIT 10.4

                          SECOND PLEDGE AGREEMENT (SPT)

     This SECOND PLEDGE AGREEMENT (this  "AGREEMENT") is dated as of October 14,
2005 and entered into by and between  AMALGAMATED  COLLATERAL  TRUST, a Delaware
business trust ("PLEDGOR"), and SNAKE RIVER SUGAR COMPANY, an Oregon cooperative
("SECURED PARTY").

     WHEREAS, Pledgor is the legal and beneficial owner of the limited liability
company  membership  interest  (the  "PLEDGED  EQUITY")  described in Schedule I
annexed  hereto  and issued by The  Amalgamated  Sugar  Company  LLC, a Delaware
limited liability company ("LLC").

     WHEREAS,  Valhi, Inc.  ("VALHI"),  a Delaware  corporation and the indirect
holder of 100% of the outstanding stock of ASC Holdings,  Inc.  ("ASC"),  a Utah
corporation and the sole owner of the Certificate of Beneficial  Interest issued
by Pledgor, has issued to Secured Party a Limited Recourse Promissory Note dated
January  3,  1997 in  aggregate  principal  amount  of  $212,500,000  (as it may
hereafter be amended,  supplemented or otherwise modified from time to time, the
"LIMITED  RECOURSE  PROMISSORY  NOTE") and a Subordinated  Promissory Note dated
January  3,  1997  in  aggregate  principal  amount  of  $37,500,000  (as it may
hereafter be amended,  supplemented or otherwise modified from time to time, the
"SUBORDINATED   PROMISSORY  NOTE",  and,  together  with  the  Limited  Recourse
Promissory Notes, the "NOTES").

     WHEREAS,  Pledgor  entered into a Guaranty (the  "ORIGINAL SPT  GUARANTY"),
dated  May 14,  1997,  in favor of  Secured  Party,  pursuant  to which  Pledgor
guaranteed the obligations of Valhi under the Limited  Recourse  Promissory Note
and in certain  circumstances  the  obligations of Valhi under the  Subordinated
Promissory Note.

     WHEREAS, Pledgor granted to Secured Party a security interest,  pursuant to
the  Pledge  Agreement  (SPT)  dated as of May 14,  1997 (the  "ORIGINAL  PLEDGE
AGREEMENT (SPT)"),  in all of Pledgor's right, title and interest in the Pledged
Equity.

     WHEREAS,  Pledgor  has amended  and  restated  the  Original  SPT  Guaranty
pursuant to the Second SPT  Guaranty  dated as of October 14, 2005 (the  "SECOND
SPT  GUARANTY")  in favor of  Secured  Party,  pursuant  to  which  Pledgor  has
continued  to  guarantee  the  obligations  of Valhi under the Limited  Recourse
Promissory Note and in certain  circumstances the obligations of Valhi under the
Subordinated Promissory Note.

     WHEREAS, Pledgor and Secured Party desire to amend and restate the Original
Pledge Agreement (SPT), as reflected herein,  and therefore this Agreement shall
supersede the Original Pledge Agreement (SPT).



<PAGE>


     WHEREAS,  Pursuant to a Pledge and Security  Agreement  (the "SENIOR PLEDGE
AGREEMENT")  dated as of October 17, 2005 between  Secured  Party and  Northwest
Farm  Credit  Services,  FLCA,  as agent (the  "AGENT")  for the  benefit of the
purchasers  named in the Note  Purchase  Agreement (as defined  below),  Secured
Party has  pledged  and  assigned  to Agent,  and  granted  to Agent a  security
interest  in, all of Secured  Party's  right,  title and  interest in and to the
Notes  and  all  collateral  related  thereto  including  its  interest  created
hereunder in the Pledged Equity.

     NOW,  THEREFORE,  in  consideration  of the premises and for other good and
valuable   consideration,   the  receipt  and   adequacy  of  which  are  hereby
acknowledged, Pledgor hereby agrees with Secured Party as follows:

     Section 1. CERTAIN DEFINITIONS.  The following terms used in this Agreement
shall have the following meanings:

     "CERTIFICATE  OF BENEFICIAL  INTEREST"  means the Certificate of Beneficial
Interest as defined in the Deposit Trust Agreement.

     "COMPANY AGREEMENT" means the Amended and Restated Company Agreement of the
Amalgamated  Sugar  Company  LLC  dated  October  14,  2005,  as the same may be
amended, supplemented or otherwise modified from time to time.

     "CONTRACTUAL OBLIGATION",  as applied to any Person, means any provision of
any security issued by that Person or of any material indenture,  mortgage, deed
of trust,  contract,  undertaking,  agreement or other  instrument to which that
Person is a party or by which it or any of its  properties  is bound or to which
it or any of its properties is subject.

     "DEPOSIT TRUST  AGREEMENT" means the Deposit Trust Agreement of Amalgamated
Collateral  Trust,  dated as of May 14, 1997,  between ASC and Wilmington  Trust
Company,  as it may be amended,  supplemented or otherwise modified from time to
time.

     "EVENT OF  DEFAULT"  means a default  under  either of the Notes  entitling
Secured Party to accelerate payment on the Notes.

     "LIEN" means any lien,  mortgage,  pledge,  assignment,  security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement,  any lease in the nature thereof, and any agreement to give
any security interest) and any option,  trust or other preferential  arrangement
having the practical effect of any of the foregoing.

     "PERSON"  means  and  includes  natural  persons,   corporations,   limited
partnerships,  general  partnerships,  joint stock  companies,  joint  ventures,
associations,  companies,  trusts, banks, trust companies, land trusts, business
trusts,  limited  liability  companies,  cooperatives  or  other  organizations,
whether or not legal  entities,  and  governments  and  agencies  and  political
subdivisions thereof.

     "RESIDENT  TRUSTEE"  means the  Resident  Trustee as defined in the Deposit
Trust Agreement.

     "COMPANY TRUSTEE" means the Company Trustee as defined in the Deposit Trust
Agreement.

     Section 2.  PLEDGE OF  SECURITY.  Pledgor  hereby  pledges  and  assigns to
Secured Party, and hereby grants to Secured Party a security interest in, all of
Pledgor's  right,  title and  interest  in and to the  following  (the  "PLEDGED
COLLATERAL"):

     (a) the Pledged Equity and any certificates representing the Pledged Equity
and any  interest  of  Pledgor  in the  entries  on the  books of any  financial
intermediary  pertaining  to  the  Pledged  Equity,  and  all  dividends,  cash,
warrants,  rights,  instruments and other property or proceeds from time to time
received,  receivable or otherwise  distributed in respect of or in exchange for
any or all of the Pledged Equity;

     (b) all additional  equity interests,  and all securities  convertible into
and  warrants,  options and other  rights to purchase or  otherwise  acquire any
equity interests, in any issuer of the Pledged Equity from time to time acquired
by  Pledgor  in any manner  (which  interests  shall be deemed to be part of the
Pledged  Equity),  any  certificates  or  other  instruments  representing  such
additional equity interests,  securities,  warrants, options or other rights and
any  interest  of  Pledgor  in  the  entries  on  the  books  of  any  financial
intermediary pertaining to such additional equity interests,  and all dividends,
cash, warrants,  rights, instruments and other property or proceeds from time to
time received,  receivable or otherwise distributed in respect of or in exchange
for  any or all of  such  additional  equity  interests,  securities,  warrants,
options or other rights; and

     (c) to the extent not covered by clauses (a) and (b) above, all proceeds of
any or all of the foregoing Pledged Collateral.  For purposes of this Agreement,
the term  "PROCEEDS"  includes  whatever is  receivable or received when Pledged
Collateral or proceeds are sold, exchanged,  collected or otherwise disposed of,
whether such  disposition  is voluntary or  involuntary,  and includes,  without
limitation,  proceeds of any indemnity or guaranty payable to Pledgor or Secured
Party from time to time with respect to any of the Pledged Collateral.

     (d) Notwithstanding  anything in this Agreement to the contrary but subject
to the  limitation  contained  in Section  2(e) of this  Agreement,  the Pledged
Collateral  shall not  include,  and  Secured  Party  shall not have a  security
interest  in  (and  Secured  Party's  security   interest  shall  terminate  and
automatically be released with respect to) any cash  distributions on account of
the Pledged  Collateral  actually paid or  distributed  by the Resident  Trustee
prior to the  date of any  Event  of  Default  on the  Notes  to  holder  of the
Certificate of Beneficial  Interest in accordance  with the terms of the Deposit
Trust Agreement,  including without  limitation any Retained Amounts (as defined
in the Company  Agreement)  actually  paid or  distributed  to the holder of the
Certificate of Beneficial Interest prior to an Event of Default.

     (e)  Notwithstanding  anything else  contained in this  Agreement,  Pledgor
agrees and  acknowledges  that the terms of the Deposit Trust Agreement  require
the  Resident  Trustee to  segregate  certain  distributions  and other  amounts
received  by  Pledgor  which  were  paid by the LLC in  respect  of the  Pledged
Collateral   (the   "DESIGNATED   DISTRIBUTIONS"),   and  that  such  Designated
Distributions  are to be paid, on behalf of Secured Party,  to the Agent for the
Senior  Notes (as  defined  below) for the benefit of the holders of such Senior
Notes,  regardless  of  whether  or not an Event of  Default on the Notes or any
acceleration  of the Notes has  occurred or exists.  The parties  hereto  hereby
acknowledge  and agree that  Pledgor  will  direct LLC and any other  applicable
party, as the case may be, to make all payments of  distributions  and any other
amounts in respect of any of the Pledged  Collateral  directly  to the  Resident
Trustee (or as otherwise instructed by the Resident Trustee).

     (f) Subject to any  limitation  contained  in the Company  Agreement on the
exercise of the put option pursuant to Article XVIII of the Company Agreement by
the  Pledgor or any  mandatory  redemption  under  Article  XVII of the  Company
Agreement,  upon the exercise of the put option pursuant to Article XVIII of the
Company Agreement by the Pledgor or any mandatory  redemption under Article XVII
of the Company  Agreement,  the proceeds received by Pledgor shall be applied as
set forth in Section 13 of this Agreement.

     Section 3.  SECURITY  FOR  OBLIGATIONS.  This  Agreement  secures,  and the
Pledged Collateral is collateral security for, the prompt payment or performance
in  full  when  due,  whether  at  stated  maturity,   by  required  prepayment,
declaration, acceleration, demand or otherwise (including the payment of amounts
that would become due but for the operation of the automatic  stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. Section362(a)),  of (i) all obligations
and  liabilities  of every  nature of Valhi now or hereafter  existing  under or
arising out of or in connection  with the  Subordinated  Promissory Note and all
extensions or renewals thereof and any agreements or instruments entered into in
connection  therewith,  and (ii) all obligations and liabilities of every nature
of Pledgor now or hereafter  existing  under or arising out of or in  connection
with  the  Second  SPT  Guaranty,  in the case of each of  clauses  (i) and (ii)
whether for principal, interest (including without limitation interest that, but
for the filing of a petition  in  bankruptcy  with  respect to Valhi or Pledgor,
would accrue on such  obligations),  fees,  expenses,  indemnities or otherwise,
whether  voluntary or involuntary,  direct or indirect,  absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and whether
or not from time to time decreased or extinguished and later increased,  created
or incurred,  and all or any portion of such obligations or liabilities that are
paid,  to the  extent all or any part of such  payment  is avoided or  recovered
directly or indirectly from Secured Party as a preference,  fraudulent  transfer
or otherwise (all such obligations and liabilities being the "UNDERLYING DEBT"),
and all  obligations of every nature of Pledgor now or hereafter  existing under
this  Agreement (all such  obligations of Pledgor,  together with the Underlying
Debt, being the "SECURED OBLIGATIONS").

     Section 4. ASSIGNMENT TO AGENT; DELIVERY OF PLEDGED COLLATERAL

     (a) Pledgor hereby  acknowledges  and agrees that Secured Party will assign
and grant a security  interest in all of Secured Party's rights in, to and under
this  Agreement  and the  Pledged  Collateral  to Agent for the  benefit  of the
holders of the 7.61% Senior Notes due  September  30, 2012 (the "SENIOR  NOTES")
issued by Secured  Party  pursuant  to the Note  Purchase  Agreement  (the "NOTE
PURCHASE  AGREEMENT"),  dated  October  17,  2005,  as the same may be  amended,
supplemented or otherwise modified from time to time, among Secured Party, Agent
and the  purchasers  referred  to  therein,  as  security  for  Secured  Party's
obligations  under  the  Senior  Notes  and the  Note  Purchase  Agreement,  and
thereafter  Agent  shall  have  all of  the  rights  granted  to  Secured  Party
hereunder.  So long as Agent has any security  interest in this Agreement or the
Pledged  Collateral,  the term  "Secured  Party"  shall  include  Agent  for all
purposes under this Agreement.

     (b) All certificates or instruments  representing or evidencing the Pledged
Collateral  shall be  delivered  to and held by or on behalf  of Agent  pursuant
hereto and to the Senior  Pledge  Agreement  and shall be in  suitable  form for
transfer  by delivery  or, as  applicable,  shall be  accompanied  by  Pledgor's
endorsement,  where  necessary,  or duly  executed  instruments  of  transfer or
assignment in blank,  all in form and  substance  satisfactory  to Agent.  Agent
shall  have the  right,  at any time in its  discretion  and  without  notice to
Pledgor,  to  transfer  to or to  register  in the  name of  Agent or any of its
nominees any or all of the Pledged  Collateral,  subject  only to the  revocable
rights specified in Section 8(a).

     Section 5. REPRESENTATIONS AND WARRANTIES.  Pledgor represents and warrants
as follows:

     (a)  Organization  and Powers.  Pledgor is a business trust duly organized,
validly  existing and in good  standing  under the laws of the State of Delaware
and has all requisite power and authority to own and operate its properties,  to
carry on its business as now conducted and proposed to be conducted and to enter
into this Agreement and carry out the transactions contemplated hereby.

     (b)  Authorization.   The  execution,  delivery  and  performance  of  this
Agreement have been duly authorized by all necessary action by Pledgor.

     (c) No Conflict. The execution, delivery and performance by Pledgor of this
Agreement will not (i) violate the Certificate of Trust or other  organizational
documents of Pledgor,  (ii) violate any provision of law  applicable to Pledgor,
or any  order,  judgment  or decree of any court or other  agency of  government
binding  on  Pledgor,  (iii) be in  conflict  with,  result  in a breach  of, or
constitute  (with  due  notice  or lapse of time or both) a  default  under  any
Contractual  Obligation  of Pledgor,  (iv) result in or require the  creation or
imposition  of any Lien  upon any of  Pledgor's  properties  or  assets,  or (v)
require the approval of LLC or any direct or indirect  beneficiary of Pledgor or
any  approval  or consent  of any Person  under any  Contractual  Obligation  of
Pledgor other than the Company Agreement.

     (d) Binding  Obligation.  This  Agreement is the legally  valid and binding
obligation  of Pledgor,  enforceable  against it in  accordance  with its terms,
except as enforcement may be limited by bankruptcy, insolvency,  reorganization,
moratorium  or similar  laws or  equitable  principles  relating  to or limiting
creditors' rights generally.

     (e) Due  Authorization,  etc. of Pledged Equity.  All of the Pledged Equity
has  been  duly   authorized   and   validly   issued  and  is  fully  paid  and
non-assessable.

     (f) Description of Pledged Equity. The Pledged Equity includes 94.7% of the
membership interests in the LLC, and there are no outstanding warrants,  options
or other rights to purchase, or other agreements outstanding with respect to, or
property  that  is now or  hereafter  convertible  into,  or that  requires  the
issuance or sale of, any Pledged Equity other than the Company Agreement and the
Senior Pledge Agreement.

     (g)  Ownership  of Pledged  Collateral.  Pledgor  is the legal,  record and
beneficial  owner of the Pledged  Collateral free and clear of any Lien,  except
for  the  security  interest  created  by  this  Agreement  and  subject  to the
limitations set forth in the Deposit Trust Agreement and the Company Agreement.

     (h) Governmental  Authorizations.  Other than the filing of appropriate UCC
financing  statements  with the  Secretary of State (or  Department  of Business
Regulation,   if   applicable)   of  the  States  of  Idaho  and  Delaware,   no
authorization, approval or other action by, and no notice to or filing with, any
governmental  authority or regulatory body is required for either (i) the pledge
by Pledgor of the Pledged Collateral pursuant to this Agreement and the grant by
Pledgor of the security interest granted hereby, (ii) the execution, delivery or
performance of this Agreement by Pledgor, or (iii) the exercise by Secured Party
of the  voting or other  rights,  or the  remedies  in  respect  of the  Pledged
Collateral,  provided  for in  this  Agreement  (except  as may be  required  in
connection  with a  disposition  of Pledged  Collateral  by laws  affecting  the
offering and sale of securities generally).

     (i)  Perfection.  The pledge of the  Pledged  Collateral  pursuant  to this
Agreement  creates a valid and perfected first priority security interest in the
Pledged Collateral, securing the payment of the Secured Obligations.

     (j) Margin  Regulations.  The pledge of the Pledged Collateral  pursuant to
this  Agreement  does  not  violate  Regulation  G,  T, U or X of the  Board  of
Governors of the Federal Reserve System.

     (k) Other  Information.  All  information  heretofore,  herein or hereafter
supplied to Secured Party by or on behalf of Pledgor with respect to the Pledged
Collateral is accurate and complete in all material respects.

     (l) Other Matters.  To the best of Pledgor's  knowledge,  the granting of a
pledge and security interest in the Pledged  Collateral  hereunder to secure the
Secured  Obligations  will benefit ASC, as the sole owner of the  Certificate Of
Beneficial Interest issued by Pledgor, because, among other reasons, (a) ASC, as
an indirectly,  wholly-owned  subsidiary of Valhi, may from time to time receive
capital  contributions  from Valhi to support its operations,  and (b) Valhi has
centralized certain management,  financial, accounting,  administrative,  income
tax,  legal and risk  management  functions  in one  central  office,  and Valhi
directly and  indirectly  provides  such services to ASC, from which ASC derives
benefit.

     Section 6. TRANSFERS AND OTHER LIENS;  ADDITIONAL PLEDGED COLLATERAL;  ETC.
Pledgor shall:

     (a) not,  except  as may be  expressly  permitted  by this  Agreement,  the
Deposit Trust Agreement,  the Notes, or the Company  Agreement (i) sell,  assign
(by operation of law or otherwise) or otherwise  dispose of, or grant any option
with respect to, any of the Pledged Collateral or (ii) create or suffer to exist
any Lien upon or with respect to any of the Pledged  Collateral,  except for the
security interest under this Agreement and the Senior Pledge Agreement;

     (b) (i) cause  each  issuer of  Pledged  Equity  not to issue any equity in
addition to or in  substitution  for the Pledged  Equity  issued by such issuer,
except to  Pledgor,  and (ii) pledge  hereunder,  immediately  upon  acquisition
(directly or indirectly)  thereof by the Pledgor,  any and all additional equity
of each issuer of Pledged Equity;

     (c) promptly deliver to Secured Party, and prior to the complete  repayment
of the Senior Notes,  the Agent, all written notices received by it with respect
to the Pledged Collateral; and

     (d) pay promptly when due all taxes,  assessments and governmental  charges
or levies imposed upon, and all claims against,  the Pledged Collateral,  except
to the extent the validity  thereof is being  contested in good faith;  provided
that Pledgor shall in any event pay such taxes, assessments,  charges, levies or
claims not later than five days prior to the date of any proposed sale under any
judgment,  writ or warrant of attachment entered or filed against Pledgor or any
of the Pledged Collateral as a result of the failure to make such payment.

     Section 7. FURTHER ASSURANCES; PLEDGE AMENDMENTS.

     (a)  Pledgor  agrees  that from time to time,  at the  expense of  Pledgor,
Pledgor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that Secured
Party may request, in order to perfect and protect any security interest granted
or purported  to be granted  hereby or to enable  Secured  Party to exercise and
enforce  its  rights  and  remedies   hereunder  with  respect  to  any  Pledged
Collateral.  Without limiting the generality of the foregoing, Pledgor will: (i)
execute  and file such  financing  or  continuation  statements,  or  amendments
thereto,  and  such  other  instruments  or  notices,  as  may be  necessary  or
desirable, or as Secured Party may request, in order to perfect and preserve the
security interests granted or purported to be granted hereby and (ii) at Secured
Party's  request,  appear in and defend any action or proceeding that may affect
Pledgor's  title to or Secured Party's  security  interest in all or any part of
the Pledged Collateral.

     (b) Pledgor  further  agrees that it will,  upon  obtaining any  additional
equity or  securities  required to be pledged  hereunder  as provided in Section
6(b),  promptly (and in any event within five business  days) deliver to Secured
Party a Pledge Amendment, duly executed by Pledgor, in substantially the form of
Schedule II annexed hereto (a "PLEDGE AMENDMENT"),  in respect of the additional
Pledged  Collateral to be pledged  pursuant to this  Agreement.  Pledgor  hereby
authorizes  Secured Party to attach each Pledge  Amendment to this Agreement and
agrees that all Pledged  Collateral listed on any Pledge Amendment  delivered to
Secured Party shall for all purposes hereunder be considered Pledged Collateral;
provided that the failure of Pledgor to execute a Pledge  Amendment with respect
to any additional  Pledged  Collateral  pledged pursuant to this Agreement shall
not impair the security interest of Secured Party therein or otherwise adversely
affect the rights and remedies of Secured Party hereunder with respect thereto.

     Section 8. VOTING RIGHTS; ETC.

     (a) So long as no Event of Default shall have occurred and be continuing:

          (i) Pledgor shall be entitled to exercise any and all voting and other
consensual rights  pertaining to the Pledged  Collateral or any part thereof for
any purpose not inconsistent with the terms of this Agreement or the Notes.

          (ii) Secured Party shall promptly  execute and deliver (or cause to be
executed and  delivered)  to Pledgor all such proxies and other  instruments  as
Pledgor  may from time to time  reasonably  request  for the purpose of enabling
Pledgor to exercise the voting and other consensual  rights which it is entitled
to exercise pursuant to paragraph (i) above.

     (b) Upon the occurrence and during the  continuation of an Event of Default
and upon written notice from Secured Party to Pledgor,  all rights of Pledgor to
exercise  the voting and other  consensual  rights  which it would  otherwise be
entitled  to exercise  pursuant to Section  8(a)(i)  shall  cease,  and all such
rights shall  thereupon  become vested in Secured Party who shall thereupon have
the sole right to exercise such voting and other consensual rights.

     (c) In order to permit  Secured  Party to  exercise  the  voting  and other
consensual rights which it may be entitled to exercise pursuant to Section 8(b),
(i) Pledgor  shall  promptly  execute  and deliver (or cause to be executed  and
delivered)  to Secured Party all such proxies and other  instruments  as Secured
Party may from time to time  reasonably  request and (ii)  without  limiting the
effect of the immediately preceding clause (i), Pledgor hereby grants to Secured
Party an irrevocable  proxy to vote the Pledged Equity and to exercise all other
rights, powers,  privileges and remedies to which a holder of the Pledged Equity
would be entitled (including,  without limitation, giving or withholding written
consents of equity  holders,  calling  special  meetings  of equity  holders and
voting at such  meetings),  which proxy shall be  effective,  automatically  and
without  the  necessity  of any action  (including  any  transfer of any Pledged
Equity on the record books of the issuer thereof) by any other Person (including
the issuer of the  Pledged  Equity or any  officer or agent  thereof),  upon the
occurrence of an Event of Default and which proxy shall only  terminate upon the
payment in full in cash of the Secured Obligations.

     Section  9.  SECURED  PARTY  APPOINTED  ATTORNEY-IN-FACT.   Pledgor  hereby
irrevocably  appoints  Secured  Party as Pledgor's  attorney-in-fact,  with full
authority in the place and stead of Pledgor and in the name of Pledgor,  Secured
Party or otherwise,  from time to time in Secured Party's discretion to take any
action and to execute any  instrument  that Secured Party may deem  necessary or
advisable  to  accomplish  the  purposes of this  Agreement,  including  without
limitation:

     (a) to file one or more financing or continuation statements, or amendments
thereto,  relative  to all or any part of the  Pledged  Collateral  without  the
signature of Pledgor;

     (b) to ask, demand, collect, sue for, recover,  compound,  receive and give
acquittance and receipts for moneys due and to become due under or in respect of
and constituting any of the Pledged Collateral;

     (c) to receive, endorse and collect any instruments made payable to Pledgor
representing any dividend,  principal or interest payment or other  distribution
in respect of and constituting the Pledged Collateral or any part thereof and to
give full discharge for the same; and

     (d) to file any claims or take any action or institute any proceedings that
Secured Party may deem  necessary or desirable for the  collection of any of the
Pledged  Collateral  or  otherwise  to enforce the rights of Secured  Party with
respect to any of the Pledged Collateral.

     Section 10.  SECURED  PARTY MAY  PERFORM.  If Pledgor  fails to perform any
agreement  contained  herein,   Secured  Party  may  itself  perform,  or  cause
performance  of, such  agreement,  and the expenses of Secured Party incurred in
connection therewith shall be payable by Pledgor under Section 14(b).

     Section  11.  STANDARD  OF CARE.  The powers  conferred  on  Secured  Party
hereunder are solely to protect its interest in the Pledged Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the exercise
of reasonable  care in the custody of any Pledged  Collateral in its  possession
and the accounting for moneys actually  received by it hereunder,  Secured Party
shall  have no duty as to any  Pledged  Collateral,  it  being  understood  that
Secured Party shall have no responsibility for (a) ascertaining or taking action
with  respect to calls,  conversions,  exchanges,  maturities,  tenders or other
matters relating to any Pledged Collateral,  whether or not Secured Party has or
is deemed to have  knowledge of such  matters,  (b) taking any  necessary  steps
(other than steps taken in accordance  with the standard of care set forth above
to maintain possession of the Pledged Collateral) to preserve rights against any
parties with respect to any Pledged  Collateral,  (c) taking any necessary steps
to collect or realize upon the Secured Obligations or any guarantee therefor, or
any part thereof, or any of the Pledged Collateral, or (d) initiating any action
to protect the Pledged Collateral against the possibility of a decline in market
value.  Secured Party shall be deemed to have exercised  reasonable  care in the
custody and preservation of Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property consisting of negotiable securities.

     Section 12. REMEDIES.

     (a) If any Event of Default shall have occurred and be continuing,  Secured
Party may  exercise  in respect of the  Pledged  Collateral,  in addition to all
other rights and remedies provided for herein or otherwise  available to it, all
the  rights  and  remedies  of a secured  party on  default  under  the  Uniform
Commercial Code as in effect in any relevant  jurisdiction (the "CODE") (whether
or not the Code applies to the affected Pledged  Collateral),  and Secured Party
may also in its sole discretion,  without notice except as specified below, sell
the Pledged  Collateral  or any part thereof in one or more parcels at public or
private  sale,  at any exchange or broker's  board or at any of Secured  Party's
offices or elsewhere,  for cash, on credit or for future delivery,  at such time
or times and at such price or prices and upon such other terms as Secured  Party
may deem commercially  reasonable,  irrespective of the impact of any such sales
on the  market  price  of  the  Pledged  Collateral.  Secured  Party  may be the
purchaser of any or all of the Pledged  Collateral at any such sale and shall be
entitled,  for the  purpose of bidding and making  settlement  or payment of the
purchase price for all or any portion of the Pledged Collateral sold at any such
public  sale,  to use and apply any of the  Secured  Obligations  as a credit on
account of the  purchase  price for any  Pledged  Collateral  payable by Secured
Party at such sale. Each purchaser at any such sale shall hold the property sold
absolutely  free from any  claim or right on the part of  Pledgor,  and  Pledgor
hereby  waives  (to the  extent  permitted  by  applicable  law) all  rights  of
redemption,  stay  and/or  appraisal  which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter  enacted.
Pledgor  agrees that,  to the extent notice of sale shall be required by law, at
least ten days'  notice to Pledgor  of the time and place of any public  sale or
the time after which any private sale is to be made shall constitute  reasonable
notification.  Secured  Party shall not be obligated to make any sale of Pledged
Collateral  regardless  of notice of sale having been given.  Secured  Party may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefore, and such sale may, without further notice, be made at
the time and  place to which it was so  adjourned.  Pledgor  hereby  waives  any
claims  against  Secured  Party  arising by reason of the fact that the price at
which any Pledged  Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale,  even if Secured
Party  accepts  the  first  offer  received  and does  not  offer  such  Pledged
Collateral  to more  than  one  offeree.  If the  proceeds  of any sale or other
disposition of the Pledged  Collateral are  insufficient  to pay all the Secured
Obligations,  Pledgor  shall be liable  for the  deficiency  and the fees of any
attorneys employed by Secured Party to collect such deficiency.

     (b) Pledgor recognizes that, by reason of certain prohibitions contained in
the Securities Act of 1933, as from time to time amended (the "SECURITIES ACT"),
and  applicable  state  securities  laws,  Secured Party may be compelled,  with
respect  to any  sale of all or any  part of the  Pledged  Collateral  conducted
without prior registration or qualification of such Pledged Collateral under the
Securities Act and/or such state  securities  laws, to limit purchasers to those
who will agree,  among other things, to acquire the Pledged Collateral for their
own account,  for investment and not with a view to the  distribution  or resale
thereof.  Pledgor  acknowledges that any such private sales may be at prices and
on terms less favorable than those obtainable through a public sale without such
restrictions (including,  without limitation, a public offering made pursuant to
a registration  statement  under the Securities Act) and,  notwithstanding  such
circumstances, Pledgor agrees that any such private sale shall be deemed to have
been made in a commercially  reasonable manner and that Secured Party shall have
no  obligation  to engage in public sales and no obligation to delay the sale of
any Pledged  Collateral  for the period of time  necessary  to permit the issuer
thereof to register it for a form of public sale  requiring  registration  under
the Securities  Act or under  applicable  state  securities  laws,  even if such
issuer would, or should, agree to so register it.

     (c) If Secured Party determines to exercise its right to sell any or all of
the Pledged Collateral,  upon written request,  Pledgor shall furnish to Secured
Party all such  information as Secured Party may reasonably  request in order to
determine the extent to which such equity interest and any instruments  included
in the  Pledged  Collateral  which  may be  sold  by  Secured  Party  in  exempt
transactions  under the  Securities  Act and the rules  and  regulations  of the
Securities and Exchange Commission thereunder, as the same are from time to time
in effect.

     Section 13. APPLICATION OF PROCEEDS. Except as expressly provided elsewhere
in this Agreement, all proceeds received by Secured Party in respect of any sale
of,  collection  from, or other  realization upon all or any part of the Pledged
Collateral  may, in the discretion of Secured Party, be held by Secured Party as
Pledged Collateral for, and/or then, or at any time thereafter,  applied in full
or in part by Secured Party  against,  the Secured  Obligations in the following
order of priority:

     FIRST: To the payment of all costs and expenses of such sale, collection or
other realization,  including  reasonable  compensation to Secured Party and its
agents and counsel,  and all other  expenses,  liabilities  and advances made or
incurred by Secured  Party in  connection  therewith,  and all amounts for which
Secured Party is entitled to indemnification  hereunder and all advances made by
Secured Party  hereunder  for the account of Pledgor,  and to the payment of all
costs and  expenses  paid or incurred by Secured  Party in  connection  with the
exercise of any right or remedy hereunder, all in accordance with Section 14;

     SECOND:  To the payment of all other Secured  Obligations  in such order as
Secured Party shall elect; and

     THIRD: To the payment to or upon the order of Pledgor,  or to whosoever may
be lawfully entitled to receive the same or as a court of competent jurisdiction
may direct, of any surplus then remaining from such proceeds.

Notwithstanding  anything to the contrary  herein,  upon the exercise of the put
option pursuant to Article XVIII of the Company  Agreement by the Pledgor or any
mandatory  redemption under Article XVII of the Company Agreement and otherwise,
in each case in compliance with the Company Agreement,  the proceeds received by
Pledgor shall be applied to the payment of the Notes.

     Section 14. INDEMNITY AND EXPENSES.


     (a) Pledgor agrees to indemnify  Secured Party from and against any and all
claims,  losses  and  liabilities  in any way  relating  to,  growing  out of or
resulting  from  this  Agreement  and  the  transactions   contemplated   hereby
(including,  without limitation,  enforcement of this Agreement),  except to the
extent such claims,  losses or  liabilities  result solely from Secured  Party's
gross  negligence  or willful  misconduct  as finally  determined  by a court of
competent jurisdiction.

     (b)  Pledgor  shall pay to Secured  Party upon demand the amount of any and
all costs and  expenses,  including  the  reasonable  fees and  expenses  of its
counsel  and of any  experts  and  agents,  that  Secured  Party  may  incur  in
connection with (i) the  administration  of this Agreement,  (ii) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the  Pledged  Collateral,  (iii) the  exercise or  enforcement  of any of the
rights of Secured Party hereunder,  or (iv) the failure by Pledgor to perform or
observe any of the provisions hereof.


     Section 15. SURETYSHIP WAIVERS BY PLEDGOR, ETC.

     (a)  Pledgor  agrees  that  its  obligations   hereunder  are  irrevocable,
absolute,  independent  and  unconditional  and  shall  not be  affected  by any
circumstance which constitutes a legal or equitable  discharge of a guarantor or
surety other than payment in full in cash of the Underlying Debt. In furtherance
of the foregoing and without limiting the generality thereof,  Pledgor agrees as
follows:  (i) Secured Party may from time to time,  without notice or demand and
without  affecting the validity or  enforceability  of this  Agreement or giving
rise  to  any  limitation,   impairment  or  discharge  of  Pledgor's  liability
hereunder,  (A) renew,  extend,  accelerate or otherwise change the time, place,
manner or terms of payment  of the  Underlying  Debt,  (B)  settle,  compromise,
release or discharge,  or accept or refuse any offer of performance with respect
to, or substitutions  for, the Underlying Debt or any agreement relating thereto
and/or  subordinate  the  payment  of the  same  to  the  payment  of any  other
obligations,  (C) request and accept  guaranties of the Underlying Debt and take
and hold other  security for the payment of the  Underlying  Debt,  (D) release,
exchange, compromise,  subordinate or modify, with or without consideration, any
other  security  for  payment of the  Underlying  Debt,  any  guaranties  of the
Underlying  Debt,  or any other  obligation  of any Person  with  respect to the
Underlying  Debt, (E) enforce and apply any other security now or hereafter held
by or for the  benefit of Secured  Party in respect of the  Underlying  Debt and
direct  the order or manner of sale  thereof,  or  exercise  any other  right or
remedy that Secured Party may have against any such  security,  as Secured Party
in its  discretion  may determine  consistent  with the Notes and any applicable
security agreement,  including  foreclosure on any such security pursuant to one
or more judicial or nonjudicial  sales,  whether or not every aspect of any such
sale is commercially reasonable,  and (F) exercise any other rights available to
Secured Party under the Notes, at law or in equity;  and (ii) this Agreement and
the  obligations of Pledgor  hereunder  shall be valid and enforceable and shall
not be subject to any limitation,  impairment or discharge for any reason (other
than  payment  in  full  in  cash of the  Underlying  Debt),  including  without
limitation the occurrence of any of the following,  whether or not Pledgor shall
have had  notice  or  knowledge  of any of them:  (A) any  failure  to assert or
enforce or  agreement  not to assert or enforce,  or the stay or  enjoining,  by
order of court, by operation of law or otherwise, of the exercise or enforcement
of,  any claim or demand or any  right,  power or  remedy  with  respect  to the
Underlying  Debt or any  agreement  relating  thereto,  or with  respect  to any
guaranty of or other  security for the payment of the  Underlying  Debt, (B) any
waiver,  amendment or modification  of, or any consent to departure from, any of
the terms or provisions  (including  without limitation  provisions  relating to
events of default) of the Notes or any agreement or instrument executed pursuant
thereto,  or of any guaranty or other security for the Underlying  Debt, (C) the
Underlying Debt, or any agreement  relating thereto,  at any time being found to
be illegal,  invalid or unenforceable in any respect, (D) any failure to perfect
or continue  perfection  of a security  interest in any other  collateral  which
secures any of the Underlying Debt, (E) any defenses,  set-offs or counterclaims
which Pledgor or Valhi may allege or assert against  Secured Party in respect of
the  Underlying  Debt,  including  but not limited to failure of  consideration,
breach of warranty,  payment, statute of frauds, statute of limitations,  accord
and satisfaction and usury, and (F) any other act or thing or omission, or delay
to do any other act or thing,  which may or might in any manner or to any extent
vary the risk of Pledgor as an obligor in respect of the Underlying Debt.

     (b) Pledgor hereby waives,  for the benefit of Secured Party: (i) any right
to require  Secured Party,  as a condition of payment or performance by Pledgor,
to (A) proceed against Valhi,  any guarantor of the Underlying Debt or any other
Person,  (B) proceed against or exhaust any other security held from Valhi,  any
guarantor of the  Underlying  Debt or any other Person,  (C) proceed  against or
have  resort to any  balance  of any  deposit  account or credit on the books of
Secured  Party in favor of Valhi or any other  Person,  or (D)  pursue any other
remedy in the power of Secured  Party  whatsoever;  (ii) any defense  arising by
reason of the  incapacity,  lack of authority or any disability or other defense
of Valhi including,  without limitation,  any defense based on or arising out of
the lack of  validity  or the  unenforceability  of the  Underlying  Debt or any
agreement or  instrument  relating  thereto or by reason of the cessation of the
liability  of Valhi  from any cause  other  than  payment in full in cash of the
Underlying  Debt;  (iii) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other  respects more  burdensome  than that of the  principal;  (iv) any defense
based upon Secured  Party's  errors or omissions  in the  administration  of the
Underlying  Debt,  except  behavior  which  amounts  to bad  faith;  (v) (A) any
principles or provisions of law,  statutory or otherwise,  which are or might be
in  conflict  with  the  terms of this  Agreement  and any  legal  or  equitable
discharge of Pledgor's obligations hereunder,  (B) the benefit of any statute of
limitations  affecting  Pledgor's liability hereunder or the enforcement hereof,
(C) any rights to set-offs,  recoupments and counterclaims,  and (D) promptness,
diligence and any  requirement  that Secured Party protect,  secure,  perfect or
insure any other security interest or lien or any property subject thereto; (vi)
notices,  demands,  presentments,  protests,  notices  of  protest,  notices  of
dishonor  and notices of any action or  inaction,  notices of default  under the
Notes or any agreement or instrument  related  thereto,  notices of any renewal,
extension  or  modification  of the  Underlying  Debt or any  agreement  related
thereto,  notices of any  extension of credit to Valhi and notices of any of the
matters  referred to in the preceding  paragraph and any right to consent to any
thereof;  and (vii) to the fullest  extent  permitted  by law,  any  defenses or
benefits  that may be derived from or afforded by law which limit the  liability
of or exonerate guarantors or sureties,  or which may conflict with the terms of
this Agreement.

     (c) As used in this Section 15, any reference to "the  principal"  includes
Pledgor and Valhi, and any reference to "the creditor" includes Secured Party.

     (d) Until the Underlying Debt shall have been paid in full in cash, Pledgor
shall withhold exercise of (i) any claim,  right or remedy,  direct or indirect,
that Pledgor now has or may hereafter have against Valhi or any of its assets in
connection  with this Agreement or the performance by Pledgor of its obligations
hereunder,  in each case whether such claim,  right or remedy  arises in equity,
under contract, by statute,  under common law or otherwise and including without
limitation (A) any right of subrogation,  reimbursement or indemnification  that
Pledgor now has or may hereafter have against  Valhi,  (B) any right to enforce,
or to participate  in, any claim,  right or remedy that Secured Party now has or
may  hereafter  have  against  Valhi,  and (C) any  benefit of, and any right to
participate  in, any other  collateral  or  security  now or  hereafter  held by
Secured Party,  and (ii) any right of contribution  Pledgor may have against any
guarantor of any of the  Underlying  Debt.  Pledgor  further agrees that, to the
extent the waiver of its rights of subrogation,  reimbursement,  indemnification
and  contribution  as  set  forth  herein  is  found  by a  court  of  competent
jurisdiction  to be void or voidable for any reason,  any rights of subrogation,
reimbursement or  indemnification  Pledgor may have against Valhi or against any
other  collateral or security,  and any rights of contribution  Pledgor may have
against  any such  guarantor,  shall be junior  and  subordinate  to any  rights
Secured Party may have against Valhi, to all right,  title and interest  Secured
Party  may have in any such  other  collateral  or  security,  and to any  right
Secured Party may have against any such guarantor.

     (e) Secured  Party  shall have no  obligation  to disclose or discuss  with
Pledgor its assessment,  or Pledgor's assessment,  of the financial condition of
Valhi.  Pledgor  has  adequate  means  to  obtain  information  from  Valhi on a
continuing basis concerning the financial  condition of Valhi and its ability to
perform its obligations under the Notes, and Pledgor assumes the  responsibility
for being and keeping  informed of the  financial  condition of Valhi and of all
circumstances  bearing  upon  the risk of  nonpayment  of the  Underlying  Debt.
Pledgor hereby waives and  relinquishes any duty on the part of Secured Party to
disclose  any matter,  fact or thing  relating to the  business,  operations  or
condition of Valhi now known or hereafter known by Secured Party.

     Section 16. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES. This Agreement
shall create a continuing  security interest in the Pledged Collateral and shall
(a)  remain in full force and  effect  until the  payment in full in cash of all
Secured  Obligations,  (b) be binding upon Pledgor,  its successors and assigns,
and (c) inure, together with the rights and remedies of Secured Party hereunder,
to the benefit of Secured  Party and its  successors,  transferees  and assigns.
Without  limiting the generality of the foregoing  clause (c), Secured Party may
assign or otherwise  transfer the Notes to any other Person,  including  without
limitation  Agent,  and such other Person shall thereupon become vested with all
the benefits in respect  thereof  granted to Secured  Party herein or otherwise.
Upon  the  payment  in full in cash of all  Secured  Obligations,  the  security
interest granted hereby shall terminate and all rights to the Pledged Collateral
shall  revert to Pledgor.  Upon any such  termination  Secured  Party  will,  at
Pledgor's  expense,  execute and deliver to Pledgor  such  documents  as Pledgor
shall  reasonably  request to evidence  such  termination,  and Pledgor shall be
entitled to the return, upon its request and at its expense, against receipt and
without  recourse to Secured Party,  of such of the Pledged  Collateral as shall
not have been sold or otherwise applied pursuant to the terms hereof.

     Section 17.  AMENDMENTS;  ETC. No amendment,  modification,  termination or
waiver of any  provision of this  Agreement,  and no consent to any departure by
Pledgor  therefrom,  shall in any event be effective unless the same shall be in
writing  and  signed by  Secured  Party.  Any such  waiver or  consent  shall be
effective only in the specific  instance and for the specific  purpose for which
it was given.

     Section 18. NOTICES.  Any notice or other communication  herein required or
permitted to be given shall be in writing and may be  personally  served or sent
by  telefacsimile,  United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service,  upon receipt of
telefacsimile,  or three business days after  depositing it in the United States
mail with postage prepaid and properly  addressed.  For the purposes hereof, the
address of each party  hereto  shall be as set forth under such  party's name on
the signature  pages hereof or, as to either party,  such other address as shall
be  designated  by such party in a written  notice  delivered to the other party
hereto.

     Section 19.  FAILURE OR  INDULGENCE  NOT WAIVER;  REMEDIES  CUMULATIVE.  No
failure  or delay on the part of  Secured  Party in the  exercise  of any power,
right or privilege  hereunder shall impair such power,  right or privilege or be
construed to be a waiver of any default or acquiescence  therein,  nor shall any
single or partial  exercise of any such power,  right or privilege  preclude any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies  existing  under this  Agreement are  cumulative to, and not
exclusive of, any rights or remedies otherwise available.

     Section 20. SEVERABILITY. In case any provision in or obligation under this
Agreement shall be invalid,  illegal or unenforceable in any  jurisdiction,  the
validity,   legality  and   enforceability   of  the  remaining   provisions  or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 21. HEADINGS. Section and subsection headings in this Agreement are
included  herein for  convenience  of reference  only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.

     Section  22.  GOVERNING  LAW;  TERMS.  THIS  AGREEMENT  AND THE  RIGHTS AND
OBLIGATIONS  OF THE  PARTIES  HEREUNDER  SHALL  BE  GOVERNED  BY,  AND  SHALL BE
CONSTRUED  AND ENFORCED IN  ACCORDANCE  WITH,  THE INTERNAL LAWS OF THE STATE OF
WASHINGTON, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT
THAT THE CODE PROVIDES THAT THE VALIDITY OR PERFECTION OF THE SECURITY  INTEREST
HEREUNDER,   OR  REMEDIES  HEREUNDER,  IN  RESPECT  OF  ANY  PARTICULAR  PLEDGED
COLLATERAL  ARE GOVERNED BY THE LAWS OF A  JURISDICTION  OTHER THAN THE STATE OF
WASHINGTON.  Unless  otherwise  defined  herein or in the  Notes,  terms used in
Articles  8 and 9 of the Code in the  State of  Washington  are used  herein  as
therein defined.

     Section 23. CONSENT TO  JURISDICTION  AND SERVICE OF PROCESS.  ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO THIS AGREEMENT
MAY BE BROUGHT IN ANY STATE OR FEDERAL  COURT OF COMPETENT  JURISDICTION  IN THE
STATE OF  WASHINGTON,  AND BY EXECUTION AND DELIVERY OF THIS  AGREEMENT  PLEDGOR
ACCEPTS  FOR  ITSELF  AND IN  CONNECTION  WITH  ITS  PROPERTIES,  GENERALLY  AND
UNCONDITIONALLY,  THE  NONEXCLUSIVE  JURISDICTION  OF THE  AFORESAID  COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.  Pledgor hereby
agrees that service of all process in any such  proceeding in any such court may
be made by registered or certified mail, return receipt requested, to Pledgor at
its address  provided in Section 18, such service being hereby  acknowledged  by
Pledgor to be sufficient for personal jurisdiction in any action against Pledgor
in any such court and to be  otherwise  effective  and binding  service in every
respect.  Nothing  herein shall  affect the right to serve  process in any other
manner  permitted  by law or shall  limit  the right of  Secured  Party to bring
proceedings against Pledgor in the courts of any other jurisdiction.

     Section 24. WAIVER OF JURY TRIAL. PLEDGOR AND SECURED PARTY HEREBY AGREE TO
WAIVE  THEIR  RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED  UPON OR  ARISING  OUT OF THIS  AGREEMENT.  The  scope of this  waiver  is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that  relate to the  subject  matter  of this  transaction,  including
without limitation contract claims, tort claims,  breach of duty claims, and all
other  common  law  and  statutory  claims.   Pledgor  and  Secured  Party  each
acknowledge  that this waiver is a material  inducement  for Pledgor and Secured
Party to enter into a business relationship, that Pledgor and Secured Party have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related  future  dealings.  Pledgor and
Secured Party further  warrant and represent  that each has reviewed this waiver
with its legal counsel,  and that each knowingly and voluntarily waives its jury
trial  rights  following   consultation  with  legal  counsel.  THIS  WAIVER  IS
IRREVOCABLE,  MEANING THAT IT MAY NOT BE MODIFIED  EITHER  ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,  RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT.  In the event of litigation,  this Agreement
may be filed as a written consent to a trial by the court.

     Section 25.  COUNTERPARTS.  This  Agreement  may be executed in one or more
counterparts and by different parties hereto in separate  counterparts,  each of
which when so executed and delivered  shall be deemed an original,  but all such
counterparts  together  shall  constitute  but  one  and  the  same  instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single  counterpart so that all signature pages are physically  attached to
the same document.



                  [Remainder of page intentionally left blank]


<PAGE>



     IN WITNESS WHEREOF, Pledgor and Secured Party have caused this Agreement to
be duly  executed and  delivered by their  respective  officers  thereunto  duly
authorized as of the date first written above.

AMALGAMATED COLLATERAL TRUST

         By:  ASC Holdings, Inc., as Company Trustee

         By:      /s/Gregory M. Swalwell
                  -----------------------------------------------------
                  Gregory M. Swalwell
                  Vice President

         Notice Address:

         ASC Holdings, as Company Trustee for
         Amalgamated Collateral Trust
         5430 LBJ Freeway, Suite 1700
         Dallas, Texas  75240
         Attn:  General Counsel
         Fax:  972-448-1445


<PAGE>



SNAKE RIVER SUGAR COMPANY

         By:      /s/Dave Budge
                  -----------------------------------------------------
                  Dave Budge
                  Vice President

         Notice Address:

         3184 Elder Street
         Boise, Idaho, 83705
         Fax:  208-383-6688

         with a copy to:
                  Northwest Farm Credit Services, FLCA
                  1700 South Assembly Street
                  Spokane, Washington  99224
                  Attn:  Mr. Stacy Lavin

         and a copy to:

                  Northwest Farm Credit Services, FLCA
                  815 North College Road
                  Twin Falls, Idaho 83303
                  Attn:  Mr. Jack Hetherington



<PAGE>



                                   SCHEDULE I


Attached  to and  forming  a part of the  Second  Pledge  Agreement  dated as of
October 14, 2005 between  Amalgamated  Collateral  Trust, as Pledgor,  and Snake
River Sugar Company, as Secured Party.




Equity                                                   Equity Interest


The Amalgamated Sugar Company LLC                    AGM Interest, as defined
                                                     in the Company Agreement


<PAGE>



                                   SCHEDULE II


                                PLEDGE AMENDMENT


This Pledge  Amendment,  dated  ____________,  20__,  is  delivered  pursuant to
Section 7(b) of the Second Pledge  Agreement  referred to below. The undersigned
hereby  agrees that this Pledge  Amendment  may be attached to the Second Pledge
Agreement dated October 14, 2005,  between the undersigned and Snake River Sugar
Company,  as Secured Party (the "SECOND  PLEDGE  AGREEMENT,"  capitalized  terms
defined  therein  being used  herein as therein  defined),  and that the Pledged
Collateral listed on this Pledge Amendment shall be deemed to be and become part
of the Pledged Collateral and shall secure all Secured Obligations.

AMALGAMATED COLLATERAL TRUST

By:  Wilmington Trust Company, not in its individual capacity but solely as
     Resident Trustee

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

By:  ASC Holdings, Inc., as Company Trustee

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



                            [LIST PLEDGED COLLATERAL]