Document:

EXECUTION COPY

                      THIRD AMENDMENT TO COMPANY AGREEMENT

         This Third  Amendment  (this "Third  Amendment") is dated as of October
19, 2000 between  Amalgamated  Collateral  Trust, a Delaware business trust (the
"Trust"),  Snake River Sugar Company, an Oregon cooperative corporation ("SRSC")
and The Amalgamated Sugar Company LLC, a Delaware limited liability company (the
"Company"),  and is acknowledged by those certain lenders who have executed this
Third Amendment (the "Noteholders") and by U.S. Bank National Association.

                                    RECITALS:

         Whereas,  ASC Holdings,  Inc.  (formerly known as The Amalgamated Sugar
Company) a Utah  corporation  ("AGM"),  SRSC and the  Company are parties to the
Company  Agreement  dated  January 3,  1997,  effective  for tax and  accounting
purposes as of December 31,  1996,  as amended by AGM,  SRSC,  the Trust and the
Company  pursuant  to the  First  Amendment  dated  May 14,  1997  and a  Second
Amendment dated November 30, 1998 (as so amended, the "Company Agreement");

         Whereas,  capitalized terms used in this Third Amendment shall have the
meanings given to them in the Company Agreement, except as otherwise provided in
this Third Amendment.

         NOW, THEREFORE, the parties hereto agree as follows:

1.       Amendments to Definitions.

                  (a) The  definition of Accrual  contained in Article II of the
         Company  Agreement  shall  be and is  hereby  amended  to  read  in its
         entirety as follows:

                           "Accrual - means the sum of (i) the positive  excess,
                  if any, of (A) the product of $2,224,781  times the cumulative
                  number of months which have elapsed  during any Fiscal Year of
                  the Company,  commencing  with  January 1, 1997,  less (B) the
                  cash distributions to all Members pursuant to Section 9.3.1(a)
                  in connection with such months and less the cash distributions
                  pursuant to Section  9.3.1(b)(i)  for the Fiscal Year relating
                  to such months,  plus (ii)  interest on any amount  determined
                  pursuant to clause (i), compounded annually, at an annual rate
                  of  10.145%,  calculated  on a daily  basis from the date cash
                  distributions  for such  month  are or would  have  been  made
                  pursuant to Section  9.3.1(a) to the date the Accrual relating
                  to such date is actually  distributed to the Members  pursuant
                  to Section 9.3.1; provided, however, that the Deferral and the
                  Insurance  Deferral  shall  not be  included  in any  Accrual;
                  provided further,  however,  that commencing on April 1, 2000,
                  interest pursuant to clause (ii) shall be at an annual rate of
                  6.49%  and shall no longer  be  compounded,  but all  interest
                  accrued prior to April 1, 2000 (including compounded interest)
                  shall continue to be included in the  determination of Accrual
                  and provided  further,  however,  that no interest  (including
                  compounded  interest) shall continue to bear interest pursuant
                  to clause (ii) subsequent to March 31, 2000."

                  (b) The definition of Accrual  Threshold  contained in Article
         II of the Company  Agreement  shall be and hereby is amended to read in
         its entirety as follows:

                           "Accrual  Threshold - means (i) from  January 1, 1997
                  to April 14,  2000,  an amount equal to  $10,526,316;  (ii) on
                  April 15, 2000 and on the 15th of each of the following  eight
                  months,  the Accrual Threshold shall be increased by an amount
                  equal to  $555,555.55,  to a total of  $15,526,316 at December
                  15,  2000;  (iii)  the  Accrual  Threshold  shall  be  further
                  increased on the 15th of each of the  following  twelve months
                  by an amount equal to  $416,666.67,  to a total of $20,526,316
                  at December 15, 2001;  and (iv)  beginning  with the Company's
                  2002  Fiscal  Year  and  continuing  until  the  date  of  the
                  Principal  Reduction,  the Accrual  Threshold  will be further
                  increased  up to the  amount of the Beet  Payment  Withholding
                  relating to such Fiscal Year (with such increase to be applied
                  ratably  during the 12 months of such  Fiscal Year on the 15th
                  day of each such month); provided,  however, that any increase
                  under  clause  (iv)  shall  never  exceed  $3,000,000  in  the
                  aggregate  in  any  given  Fiscal  Year   notwithstanding  any
                  increase  or lack of increase in any prior  Fiscal  Year,  and
                  provided  further,  however,  that there  shall be no increase
                  pursuant  to clause  (iv) for any given  Fiscal Year if SRSC's
                  Board of Directors  shall have failed to  irrevocably  approve
                  the SRSC Annual  Irrevocable Cash Plan for such Fiscal Year by
                  January 15th of such Fiscal Year."

                  (c)  The  definition  of  Subordinated   Principal   Reduction
         contained in Article II of the Company Agreement shall be and is hereby
         amended to read in its entirety as follows:

                           "Subordinated   Principal   Reduction  -  means,  the
                  repayment of all  principal,  interest and other amounts owing
                  on the SRSC Subordinated Debt."

                  (d) The definition of Deferral  contained in Article II of the
         Company  Agreement  shall  be and is  hereby  amended  to  read  in its
         entirety as follows:

                           "Deferral - means  Deferral A, together with Deferral
B and Deferral C."

                  (e) The definition of Retained Amounts contained in Article II
         of the Company  Agreement shall be and is hereby amended to read in its
         entirety as follows:

                           "Retained  Amounts  - means the sum of (i) 95% of any
                  Accrual,  (ii)  100%  of  any  Deferral  A,  (iii)  95% of any
                  Deferral  B,  (iv) 80% of any  Deferral  C and (v) 100% of any
                  Insurance  Deferral,  in each case  including  any  applicable
                  accrued interest."

                  (f) The  definition  of Voting Rights  Agreement  contained in
         Article II of the Company  Agreement  shall be and is hereby amended to
         read in its entirety as follows:

                           "Voting  Rights  Agreement - means the voting  rights
                  and  forbearance  agreement dated as of May 14, 1997 among the
                  Trust,  AGM as Company  Trustee and the Collateral  Agent (and
                  acknowledged by the Company),  as the same may be amended from
                  time to time."

                  (g) The definition of Triggering Event contained in Article II
         of the Company  Agreement shall be and is hereby amended to read in its
         entirety as follows:

                           "Triggering   Event  -  means  any   failure  by  the
                  Management  Committee or the Company to comply in all material
                  respects  with  any  provision  of  this  Company   Agreement;
                  provided,  however,  that so long as the Company has  promptly
                  notified the holders of the AGM  Interest of the  existence of
                  such a failure  pursuant  to Section  7.2.2(e),  such  failure
                  (other than a failure to comply with the provisions of Section
                  6.3(i),  6.3(ii),  6.3(xiv),  6.3(xv),  6.3(xx) and 7.2.3), if
                  capable of being cured, shall not be deemed to be a Triggering
                  Event  unless such  failure has not been cured  within 30 days
                  after the holders of the AGM  Interest  have given the Company
                  notice."

                  (h) the definition of Beet Payment  contained in Article II of
         the  Company  Agreement  shall be and is hereby  amended to read in its
         entirety as follows:

         "Beet  Payment" - means the sum of (i)  payments by the Company to SRSC
         for  sugarbeets  that would have been incurred if the Company made such
         payments at the times and pursuant to the terms and  conditions  as set
         forth  in the  Agreement  attached  as  Exhibit  D-7  to the  Formation
         Agreement,  as such Exhibit D-7 may be amended  from time to time,  and
         (ii) effective  beginning for the crop year which commences  October 1,
         2000,  incentive  payments made by the Company to SRSC to harvest early
         sugarbeets,  provided,  however,  that  the  aggregate  amount  of such
         incentive payments are equal to or less than the reduced transportation
         costs resulting from the local processing of such early sugarbeets, and
         provided further, however, that within 45 days following the completion
         of each such crop year, the Company shall have delivered to each Member
         a  certificate,  certified by a  responsible  financial  officer of the
         Company, detailing the aggregate amount of such incentive payments made
         by the Company during the applicable crop year along with a calculation
         showing the amount of reduced  transportation  costs resulting from the
         delivery of such early sugarbeets."

                  (i) The  following  new  definitions  shall be and are  hereby
         added to Article II of the Company Agreement:

                           "SRSC  Subordinated Debt - means SRSC's  indebtedness
                  incurred   pursuant  to  the  Loan  Security   Agreement  (the
                  "Subordinated Loan Agreement") dated as of January 3, 1997, to
                  be effective  for tax and  accounting  purposes as of December
                  31, 1996 among SRSC,  as Borrower,  and Valhi,  as Lender,  as
                  amended."

                           "Beet Payment  Withholding  - means amounts  withheld
                  from the Beet Payment, upon approval by the board of directors
                  of SRSC,  for the purpose of achieving the required  levels of
                  Distributable Cash consistent with the SRSC Annual Irrevocable
                  Cash Plan for any Fiscal Year."

                           "Deferral  A - means the sum of (a)  $30,546.18  plus
                  (b) the amounts that otherwise would have been  distributed to
                  the holders of the AGM Interest  pursuant to Section 9.3.1 but
                  for the provisions of Section 9.3.1(d)(i) and 9.3.1(d)(ii), in
                  each  case  plus  interest  at a rate of  10.145%  per  annum,
                  compounded  annually,  from the date such  distribution  would
                  otherwise  have  been paid to the  holder of the AGM  Interest
                  (or,  in the case of the  amount of  $30,546.18,  from May 14,
                  1997), provided,  however, that any amount arising pursuant to
                  Section  9.3.1(b)(ii) shall bear interest at a rate of 5.0725%
                  per annum, compounded annually, and provided further, however,
                  that all amounts  included in this  Deferral A will not accrue
                  interest during the period from July 1, 2000 through  December
                  31, 2002."

                           "Deferral B - means the amount of $3,450,607.00, plus
                  interest at a rate of 5.0725% per annum,  compounded annually,
                  from March 27, 1998, provided,  however,  that this Deferral B
                  will not accrue  interest  during the period from July 1, 2000
                  through December 31, 2002."

                           "Deferral C - means the amount of $4,097,595.00, plus
                  interest at a rate of 5.0725% per annum,  compounded annually,
                  from March 27, 1998, provided,  however,  that this Deferral C
                  will not accrue interest on or after July 1, 2000."

                           "SRSC Annual Irrevocable Cash Plan - means,  starting
                  with the  Company's  2001 Fiscal Year, an  irrevocable  action
                  actually approved by SRSC's Board of Directors by January 15th
                  of each  Fiscal  Year of the  Company  whereby,  to the extent
                  required,  SRSC's Board of Directors shall irrevocably approve
                  Beet  Payment   Withholdings  in  amounts  sufficient  so  the
                  Company's  actual  Distributable  Cash  for such  Fiscal  Year
                  distributed to the holders of the AGM Interest,  when combined
                  with debt  service  payments  paid by SRSC to Valhi  under the
                  SRSC  Subordinated Debt during such Fiscal Year, will at least
                  equal the amount of interest  payments  due on the Valhi Loans
                  during such Fiscal Year, and such SRSC Annual Irrevocable Cash
                  Plan is evidenced,  by delivery  within five (5) Business Days
                  following its approval, of a certified copy of a SRSC Board of
                  Director's  board   resolution   evidencing  such  irrevocable
                  approval to each of Valhi, the Trust,  AGM, and the holders of
                  the outstanding SR Term Indebtedness."

2. Amendment to Section 6.3. A new Section  6.3(xx) shall be and hereby is added
as follows:

         "(xx) Effective October 1, 2000, (Y) pay to SRSC any installment of the
         aggregate  Beet  Payment  for any  crop  year  (other  than  the  final
         installment)  without withholding from such installment an amount equal
         to a ratable portion of the aggregate Beet Payment Withholding for such
         crop year,  less an amount equal to a ratable  portion of the aggregate
         Unit Retain (as defined pursuant to the terms of SR Term  Indebtedness)
         reduction for such crop year permitted pursuant to the terms of SR Term
         Indebtedness or (Z) pay to SRSC the final  installment of the aggregate
         Beet  Payment  for  such  crop  year  without   withholding  from  such
         installment   an  amount  such  that  the  aggregate   amount  of  such
         withholdings  for such crop year will equal the aggregate  Beet Payment
         Withholding for such crop year.

3. Amendment to Section  8.2.3.  Section 8.2.3 shall be and is hereby amended by
adding the phrase ", provided,  however,  that commencing  January 1, 2000, SRSC
shall have no  obligation  to  contribute  such  additional  cash  amount to the
Company  with  respect to any Fiscal Year for which  SRSC's  board of  directors
shall have irrevocably  approved a SRSC Annual  Irrevocable Cash Plan related to
such Fiscal Year" immediately after the phrase "220,000 acres less the number of
acres from which SRSC  contracted  sugarbeets to the Company  during such Fiscal
Year".

4.  Amendment  to Sections  9.1.1(c),  9.1.2(d)  and  13.3.2(d)(ii).  The phrase
"Section   9.3.1(b)(iii)"   contained   in  Sections   9.1.1(c),   9.1.2(d)  and
13.3.2(d)(ii)  of the Company  Agreement  shall be and is hereby amended to read
"Section 9.3.1(b)(v)".

5.  Amendment to Section  9.3.1(b).  Section  9.3.1(b) of the Company  Agreement
shall be and hereby is amended to read in its entirety as follows:

                  "(b) Within 10 days following the completed audit of the books
         of the Company for each Fiscal Year  commencing  with Fiscal Year 1997,
         the  Company  will  determine  its actual  Distributable  Cash for such
         Fiscal Year and provide  written notice of such  determination  to each
         Member. If the Company's actual Distributable Cash for such Fiscal Year
         (based on such audit) exceeds amounts previously distributed to Members
         for such Fiscal Year pursuant to Section 9.3.1(a) above,  then,  within
         30 days  following  such audit,  the Company  shall  distribute  to its
         Members  cash in an  aggregate  amount  equal  to  100% of such  actual
         Distributable  Cash for such Fiscal Year (based on the Company's audit)
         less amounts actually  distributed  pursuant to Section 9.3.1(a) above.
         Such  distributions  shall  be paid in the  following  percentages  and
         priority:

                  (i)  95% to the  holders  of the  AGM  Interest  and 5% to the
                  holders of the SR Interest,  until the Members have  received,
                  pursuant to this  Section  9.3.1(b)(i)  and Section  9.3.1(a),
                  cash distributions for such Fiscal Year in an aggregate amount
                  equal to the lesser of (A) the  Company's  Distributable  Cash
                  for such  Fiscal  Year  and (B)  $26,697,372  plus any  unpaid
                  Accrual as of the beginning of such Fiscal Year, and

                  (ii) next,  95% to the holders of the AGM  Interest  and 5% to
                  the  holders  of the SR  Interest,  until  such  holders  have
                  received an aggregate  amount of  $8,888,261  (on a cumulative
                  basis for all  Fiscal  Years of the  Company  commencing  with
                  Fiscal Year  1998),  provided  that the Members  shall have no
                  right   to  any   distribution   pursuant   to  this   Section
                  9.3.1(b)(ii)  for any Fiscal Year following the Company's 2002
                  Fiscal Year,  whether or not the Members have  received all or
                  any  part  of  the  distribution   pursuant  to  this  Section
                  9.3.1(b)(ii) (provided that this shall not affect the Member's
                  rights to receive any Deferral amount after the Company's 2002
                  Fiscal Year, to the extent such  Deferral  amount arose during
                  or prior to the Company's 2002 Fiscal Year), and

                  (iii) next, 100% to the holders of the SR Interests until such
                  holders  have  received  an  aggregate  amount  equal  to  the
                  aggregate Beet Payment  Withholdings  actually withheld by the
                  Company  since  October  19,  2000 (or,  for  periods  between
                  January 1, 1997 and October 18, 2000, the equivalent thereof),
                  net of the aggregate  Unit Retain (as defined  pursuant to the
                  terms of SR Term Indebtedness) reduction since January 1, 1997
                  from the use of SRSC's  cash as  permitted  by the terms of SR
                  Term Indebtedness.

                  (iv) next,  20% to the holders of the AGM  Interest and 80% to
                  the  holders of the SR  Interest  until the holders of the AGM
                  Interest have received an aggregate amount equal to the dollar
                  amount  calculated  by  subtracting  the  amount  of  interest
                  actually accrued on the SRSC  Subordinated  Debt from April 1,
                  2000 from the interest which  otherwise  would have accrued on
                  the SRSC  Subordinated  Debt  from  April 1, 2000  absent  the
                  amendment  to the terms of the SRSC  Subordinated  Debt  dated
                  October 19, 2000.

                  (v) next, 5% to the holders of the AGM Interest and 95% to the
                  holders of the SR Interest for the Company's  1997 Fiscal Year
                  through  and  including  the 2002 Fiscal  Year,  or 10% to the
                  holders of the AGM  Interest  and 90% to the holders of the SR
                  Interest, for the Company's 2003 Fiscal Year and thereafter.

         To the  extent the  amounts  distributed  to the  Members  pursuant  to
         Section 9.3.1(a) above exceed the Company's actual  Distributable  Cash
         for such Fiscal Year (based on the Company's audit),  the Members shall
         be  obligated to return to the Company,  within 10 days  following  the
         completed audit of the books of the Company, an amount of cash equal to
         any excess of the aggregate  amount  actually  distributed  during such
         Fiscal Year to each Member  (pursuant to Section  9.3.1(a)  above) over
         such Member's  respective share of the Company's  actual  Distributable
         Cash. The parties agree that, in the event any Member of the Company is
         obligated  to return any  amounts  pursuant to the  provisions  of this
         Section 9.3.1(b), the Company may, at its option, withhold such amounts
         from amounts to be distributed to such Member pursuant to Section 9.3.1
         or otherwise, provided, however, that in the case of the Trust, so long
         as the  notes  issued  pursuant  to the Note  Purchase  Agreements  are
         outstanding, the Company shall not withhold an amount which would cause
         the Trust to  receive an  amount,  in any month,  that is less than the
         scheduled payments of interest and principal on such notes."

6.  Amendment to Section  9.3.1(d).  Section  9.3.1(d) of the Company  Agreement
shall be and is hereby amended to read in its entirety as follows:

         "(d)     Notwithstanding the foregoing:

                  (i) the  holders  of the AGM  Interest  may  not  receive  any
                  distribution  for either of the Company's  1997 or 1998 Fiscal
                  Years  that,  when added to all other  distributions  for such
                  Fiscal Year, will exceed an aggregate of $25,362,500;

                  (ii) until the first  distribution  date following the date of
                  the  Subordinated  Principal  Reduction,  no  amount  shall be
                  distributed to the holders of the AGM Interest pursuant to the
                  provisions of Sections 9.3.1(b)(ii), (b)(iv) and (b)(v) above,
                  but instead  such  amounts  shall be paid dollar for dollar to
                  the  holders  of the SR  Interest  at the  times  set forth in
                  Section 9.3.1(a) or Section 9.3.1(b), as appropriate;

                  (iii)  following  the  date  of  the  Subordinated   Principal
                  Reduction, amounts which otherwise would have been distributed
                  to  the  holders  of  the  SR  Interest  pursuant  to  Section
                  9.3.1(b)(ii) through Section 9.3.1(b)(v) shall be reduced, and
                  such distributions  shall instead be paid dollar for dollar as
                  follows:

                           (A)      first,  100%  to  the  holders  of  the  AGM
                                    Interest until such holders have received an
                                    aggregate  amount  equal  to the  amount  of
                                    Deferral A,

                           (B)      next, 95% to the holders of the AGM Interest
                                    and 5% to  the  holders  of the SR  Interest
                                    until  such   holders   have   received   an
                                    aggregate  amount  equal  to the  amount  of
                                    Deferral B,

                           (C)      next, 80% to the holders of the AGM Interest
                                    and 20% to the  holders  of the SR  Interest
                                    until  such   holders   have   received   an
                                    aggregate  amount  equal  to the  amount  of
                                    Deferral C."

7. Amendment to Section 9.3.2.  The first sentence of Section 9.3.2 shall be and
is hereby amended to read in its entirety as follows:

"Except as provided below, the Company shall distribute any  Distributable  Cash
from a Major Capital Event,  (i) first, to the Members in an amount equal to any
unpaid Accrual,  95% to the holders of the AGM Interest and 5% to the holders of
the SR Interest,  (ii)  second,  to the holders of the AGM Interest in an amount
equal to any Insurance Deferral, (iii) third, to the holders of the AGM Interest
in an amount equal to any  Deferral A, (iv) fourth,  to the Members in an amount
equal to any  Deferral B, 95% to the holders of the AGM  Interest  and 5% to the
holders of the SR Interest, (v), fifth, to the Members in an amount equal to any
Deferral C, 80% to the holders of the AGM Interest and 20% to the holders of the
SR  Interest,  (vi)  sixth,  to the Members  pro rata in  accordance  with their
Sharing  Ratios,  until each Member has  received an amount  under this  Section
9.3.2 equal in the  aggregate to the Capital  Contribution  made by each Member,
and (vii)  seventh,  to the  Members  in the  percentages  then in effect  under
Section 9.3.1(b)(v)."

8.       Amendment to Section 16.

         (a) The  following  sentence  is added  immediately  after  the  second
sentence of Section 16.1:

                  "In  addition,  to the extent that SRSC's  Board of  Directors
         shall have approved the SRSC Annual Irrevocable Cash Plan for any given
         Fiscal Year,  the Company and its Members  agree and  acknowledge  that
         money  damages  may not be an  adequate  remedy for any  failure by the
         Company to  distribute to its Members its  Distributable  Cash for such
         Fiscal Year in amounts  sufficient  to comply  with such Fiscal  Year's
         SRSC Annual  Irrevocable  Cash Plan,  to comply with the  provisions of
         Section  6.3(xx) or any failure by the Company to  otherwise  give full
         effect to such Fiscal  Year's SRSC Annual  Irrevocable  Cash Plan,  and
         that the holders of the AGM Interest may in their sole discretion apply
         to any court of law or equity or  competent  jurisdiction  for specific
         performance   by  the  Company  to   distribute   to  its  Members  its
         Distributable Cash for such Fiscal Year in amounts sufficient to comply
         with such Fiscal  Year's SRSC Annual  Irrevocable  Cash Plan, to comply
         with the provisions of Section 6.3(xx) or to otherwise take all actions
         necessary to carry out, and to give full effect to, such Fiscal  Year's
         SRSC Annual Irrevocable Cash Plan."

         (b) Section  16.2.1 of the Company  Agreement is hereby amended to read
in its entirety as follows:

                  "16.2.1 In  addition  to any other  remedies  provided by this
         Company  Agreement,  if at any  time the  unpaid  Accrual  exceeds  the
         Accrual  Threshold,  or upon the occurrence of a Triggering  Event, the
         holders of the AGM Interest voting separately as a class shall have the
         right to elect a  majority  of the  representatives  to the  Management
         Committee.  Whenever the holders of the AGM Interest  shall be entitled
         to elect  such  representatives  in  accordance  with the terms of this
         Section 16.2, then at the request of a holders of a Majority of the AGM
         Interest,  the  secretary of the Company (or if at the time the Company
         has no secretary,  then the chief executive officer or president of the
         Company)  shall  call a  special  meeting  of the  holders  of the  AGM
         Interest, such special meeting to be held within 60 days after the date
         on which the Accrual is equal to or exceeds the  Accrual  Threshold  or
         such  Triggering  Event  occurs and at the  request of the holders of a
         Majority of the AGM  Interest,  for the purpose of enabling the holders
         of the AGM  Interest to elect such  representatives  to the  Management
         Committee;  provided,  however,  that such special  meeting need not be
         called  if  the  holders  of  the  AGM   Interest   have  duly  elected
         representatives  by a written consent or power of attorney  executed by
         holders of at least a Majority of the AGM Interest or otherwise. At any
         such  special  meeting,  the  presence,  in person  or by  proxy,  of a
         Majority of the AGM  Interest  shall be required and be  sufficient  to
         constitute  a  quorum  for the  election  of any  Management  Committee
         representative and the affirmative vote of Majority of the AGM Interest
         so  present  at such  meeting  shall be  sufficient  to elect  any such
         representative."

         (c) A new Section  16.2.3  shall be and is hereby  added to the Company
Agreement as follows:

                  "Notwithstanding  the  foregoing,   the  holders  of  the  AGM
         Interest  hereby waive any rights they may have under this Section 16.2
         of the Company Agreement by reason of the failure of the Company to pay
         a  distribution  pursuant  to Section  9.3.1(a)  during the period from
         April 15, 2000 through the effective date of the Third Amendment, or by
         reason of the unpaid Accrual exceeding the Accrual Threshold during the
         period from April 15,  2000  through  the  effective  date of the Third
         Amendment."

9. Conditions  Precedent.  Each of the following shall be considered a condition
precedent to the effectiveness of this Third Amendment:

                  (a) SRSC's Board of Directors  shall have approved on June 15,
         2000,  the plan of  irrevocably  approving by January 15 of each Fiscal
         Year of the Company,  Beet Payment Withholdings in an amount sufficient
         to  generate  a  level  of  Distributable  Cash  to be  paid to the AGM
         Interest  holder for such Fiscal Year,  which,  when  combined with the
         debt service payments paid by SRSC to Valhi under the SRSC Subordinated
         Debt  during  such  Fiscal  Year,  will at least  equal  the  amount of
         interest  payments  due on the Valhi Loans  during  such  Fiscal  Year.
         Additionally,  on June 15, 2000,  SRSC's  Board of Directors  will have
         irrevocably  approved a level of Beet Payment Withholdings for the year
         2000 such that the  level of  Distributable  Cash to be paid to the AGM
         Interest  holder for the Fiscal Year 2000,  when combined with the debt
         service payments made by SRSC on the SRSC Subordinated Debt during such
         Fiscal Year, will at least equal the amount of interest payments due on
         the Valhi Loans during such Fiscal Year. Each of SRSC Board of Director
         actions  shall be evidenced  by a certified  copy of such SRSC Board of
         Director's board resolutions evidencing such actions.

                  (b)  SRSC  will  have  made  modifications  to  the  covenants
         contained in the Note Purchase Agreements and all related documentation
         consistent with this Third Amendment to the Company  Agreement and that
         certain Third Amendment to the Amended and Restated  Subordinated  Loan
         Agreement of even date,  which  modifications  must be  satisfactory to
         Valhi in all material respects.

                  (c) All parties  thereto shall execute the Third  Amendment to
         the Subordinated Loan Agreement and the related Contingent  Subordinate
         Pledge  Agreement,   Contingent   Subordinate  Security  Agreement  and
         Contingent Subordinate Collateral Agency and Paying Agency Agreement.

                  (d) All parties  thereto  shall have executed and delivered to
         all other parties  thereto that certain Master  Agreement dated October
         19, 2000, by and among the parties hereto, among others.

10.  Condition  to  Continuing  Effectiveness.  The  parties  hereto  agree  and
acknowledge that if at any time following the execution of this Third Amendment,
either (i) SRSC's  Board of  Directors  shall fail to approve by January 15th of
any year the SRSC Annual  Irrevocable Cash Plan for such Fiscal Year or (ii) the
unpaid  Accrual  exceeds  the  Accrual  Threshold  (as  adjusted  by this  Third
Amendment), then, at the option of the holders of the AGM Interest in their sole
discretion,  which option may be  exercised by said holders by giving  notice to
SRSC and the Company pursuant to Section 15.6 the Company Agreement,  this Third
Amendment shall immediately become  retroactively null and void and the terms of
the Company Agreement shall  retroactively be as in effect  immediately prior to
the  execution  of this  Third  Amendment;  provided,  however,  that  any  such
nullification  of this Third  Amendment  shall not relieve either the Company or
SRSC of their  respective  obligations  to fully  carry out and take all actions
provided  for  and  consistent  with  any  SRSC  Annual  Irrevocable  Cash  Plan
previously  approved by SRSC's Board of Directors for any given Fiscal Year, and
the holders of the AGM Interest  shall  retain their rights  pursuant to Section
8(a)  hereof  regardless  of  whether  or not the  holders  of the AGM  Interest
exercise their rights pursuant to this Section 10.

11. Representations and Warranties.  Each of the parties represents and warrants
that the  execution,  delivery  and  performance  by such  party  of this  Third
Amendment  are within its powers,  have been duly  authorized  by all  necessary
action  and do not and will  not  contravene  or  conflict  with  any  provision
applicable to such party,  the charter,  the declaration of trust with bylaws of
such party,  or any order,  judgment  or decree of any Court or other  agency of
government or any contractual  obligation  binding on such party, and this Third
Amendment and the Company  Agreement,  as amended as of the date hereof, are the
legal, valid and binding  obligations of such party and enforceable against such
party in accordance with their terms.

12.      Miscellaneous.

         (a)      Captions.  Section  captions used in this Third  Amendment are
                  for convenience only, and shall not affect the construction of
                  this Third Amendment.

         (b)      Governing Law. This Third  Amendment  shall be a contract made
                  under  and  governed  by the laws of the  State  of  Delaware,
                  without regard to conflict of law principles.

         (c)      Counterparts.  This Third  Amendment  may be  executed  in any
                  number of  counterparts,  and each such  counterpart  shall be
                  deemed  to be an  original,  but all such  counterparts  shall
                  together constitute but one and the same amendment.

         (d)      Successors and Assigns.  This Third Amendment shall be binding
                  upon the parties and their respective  successors and assigns,
                  and  shall  inure to the sole  benefit  of the  parties  their
                  successors and assigns.

              [The remainder of this page intentionally left blank]

<PAGE>

         IN WITNESS  WHEREOF,  This Third Amendment to the Company  Agreement is
dated as of the day and year first above written.

                                   AMALGAMATED COLLATERAL TRUST
                                   By: ASC HOLDINGS, INC., as Company Trustee

                                   By:/s/ Steven L. Watson
                                   ---------------------------------------------
                                   Name:    Steven L. Watson
                                   Title:   President

                                   SNAKE RIVER SUGAR COMPANY

                                   By:/s/ Lawrence L. Corry
                                   ---------------------------------------------
                                   Name:
                                   ---------------------------------------------
                                   Title:
                                   ---------------------------------------------

                                   THE AMALGAMATED SUGAR COMPANY LLC

                                   By:/s/ David L. Budge
                                   ---------------------------------------------
                                   Name:
                                   ---------------------------------------------
                                   Title:
                                   ---------------------------------------------

ACKNOWLEDGED:

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

By:  /s/ Joseph Alouf
     ------------------------------------------------
Its:
      -----------------------------------------------

CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By:  CIGNA INVESTMENTS, INC.

By:  /s/ Stephen H. Wilson
     ---------------------------------------
Its:
      --------------------------------------

LIFE INSURANCE COMPANY OF NORTH AMERICA
By:  CIGNA INVESTMENTS, INC.

By:  /s/ Stephen H. Wilson
     -------------------------------
Its:
      --------------------------------------

MINNESOTA LIFE INSURANCE COMPANY
By: Advantus Capital Management, Inc.

By:  /s/ Annette Masterson
     -------------------------------
Its:
      --------------------------------------

THE LINCOLN NATIONAL LIFE INSURANCE
COMPANY

By:      LINCOLN INVESTMENT MANAGEMENT, INC.
         Its Attorney-in-Fact

By:/s/ Annette M. Teders
   -----------------------------------------
Its:
    ----------------------------------------

<PAGE>

LINCOLN LIFE & ANNUITY COMPANY
OF NEW YORK

By:      LINCOLN INVESTMENT MANAGEMENT, INC.
         Its Attorney-in-Fact

By:/s/ Annette M. Teders
   -----------------------------------------
Its:
    ----------------------------------------

U.S. BANK NATIONAL ASSOCIATION, as agent
 under that certain Working Capital Agreement dated
 as of January 3, 1997, as amended

By: /s/ Janice T. Thede
    ----------------------------------------
Its:
    ----------------------------------------EXECUTION COPY

                 THIRD AMENDMENT TO SUBORDINATED LOAN AGREEMENT

         This Third  Amendment  to  Subordinated  Loan  Agreement  (this  "Third
Amendment")  is dated  October 19, 2000,  and is made by and between Snake River
Sugar Company, an Oregon cooperative  corporation,  as Borrower (the "Company"),
and  Valhi,  Inc.,  a  Delaware  corporation,   as  Lender  ("Valhi"),   and  is
acknowledged  by the holders of those certain Senior Notes issued by the Company
due April 30, 2009.

                             PRELIMINARY STATEMENTS

         The  Company  and Valhi are parties to a  Subordinated  Loan  Agreement
dated  January 3, 1997,  as amended and  restated  May 14,  1997 (the  "Existing
Agreement"), as further amended by the Second Amendment to the Subordinated Loan
Agreement dated as of November 30, 1998 (the "Second Amendment"), and as further
amended  by this Third  Amendment,  (the  "Subordinated  Loan  Agreement").  All
capitalized  terms  defined in the  Subordinated  Loan  Agreement  not otherwise
defined in this Third  Amendment  shall have the same meanings  herein as in the
Subordinated Loan Agreement.

         The  Company  and Valhi  have  agreed to amend  the  Subordinated  Loan
Agreement as set forth herein.

         NOW,  THEREFORE,  in  consideration  of the premises and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged by the parties,  subject to  satisfaction  of the conditions  noted
below, the Company and Valhi hereby agree as follows:

1.       Modification of Financial Covenants.

         1.1 Section 10.8(a) of the Subordinated  Loan Agreement shall be and is
hereby amended in its entirety to read as follows:

                  "(a) The Company will not permit, as at the end of each fiscal
         quarter  of the  Company,  the  ratio of  Consolidated  Senior  Debt to
         Distributable Cash for the period of four LLC fiscal quarters ending on
         or closest (but prior) to such date to exceed (i)  11.25:1.00  from the
         date of the Closing to and including November 30, 1997; (ii) 12.00:1.00
         from December 1, 1997 to and including May 30, 1999;  (iii)  10.50:1.00
         from June 1, 1999 to and including  November 30, 1999;  (iv)  7.75:1.00
         from December 1, 1999 to and including February 29, 2000; (v) 8.00:1.00
         from March 1, 2000 to and including May 31, 2000;  (vi)  7.50:1.00 from
         June 1, 2000 to and including May 31, 2001;  (vii)  8.50:1.00 from June
         1,  2001 to and  including  August  31,  2001;  (viii)  7.00:1.00  from
         September 1, 2001 to and including  February 28, 2002;  (ix)  6.50:1.00
         from March 1, 2002 to and including August 31, 2002; (x) 6.00:1.00 from
         September 1, 2002 to and including  February 28, 2003;  (xi)  5.00:1.00
         from March 1, 2003 to and including  November 30, 2003; (xii) 4.50:1.00
         from  December 1, 2003 to and including  November 30, 2006;  and (xiii)
         3.50:1.00 thereafter;  provided,  however, that following the date upon
         which  Valhi  purchases  all of the Senior  Notes upon  exercise of its
         rights under all of those certain Option Agreements  between Valhi, the
         Company and the holders of the Senior  Notes,  the ratios  contained in
         this Section  10.8(a)  shall be such ratios during such time periods as
         described in Section 10.8(a) of the Note Purchase Agreements and Senior
         Notes as in effect immediately prior to such exercise by Valhi."

         1.2 Section 10.8(b) of the Subordinated  Loan Agreement shall be and is
hereby amended in its entirety to read as follows:

                  "(b) The Company will not permit, as at the end of each fiscal
         quarter  of the  Company,  the  ratio  of  Consolidated  Total  Debt to
         Distributable Cash for the period of four LLC fiscal quarters ending on
         or closest  (but prior) to such date to exceed (i)  8.00:1.00  from the
         date of the Closing to and including November 30, 1997;  (ii)18.00:1.00
         from December 1, 1997 to and including May 30, 1999;  (iii)  16.00:1.00
         from June 1, 1999 to and including  November 30, 1999;  (iv) 12.00:1.00
         from  December  1,  1999  to  and  including  February  29,  2000;  (v)
         14.00:1.00  from  March 1, 2000 to and  including  May 31,  2000;  (vi)
         12.00:1.00  from  June 1, 2000 to and  including  May 31,  2001;  (vii)
         13.75:1.00 from June 1, 2001 to and including  August 31, 2001;  (viii)
         11.75:1.00  from September 1, 2001 to and including  February 28, 2002;
         (ix)  10.00:1.00  from March 1, 2002 to and including  August 31, 2002;
         (x)  9.50:1.00  from  September 1, 2002 to and  including  February 28,
         2003;  (xi) 6.75:1.00 from March 1, 2003 to and including  November 30,
         2003;  (xii) 6.00:1.00 from December 1, 2003 to and including  November
         30, 2006; and (xiii)  5.00:1.00  thereafter;  provided,  however,  that
         following  the date upon which Valhi  purchases all of the Senior Notes
         upon  exercise  of  its  rights  under  all  of  those  certain  Option
         Agreements  between  Valhi,  the  Company and the holders of the Senior
         Notes,  the ratios  contained  in this  Section  10.8(b)  shall be such
         ratios during such time periods as described in Section  10.8(b) of the
         Note  Purchase  Agreements  and Senior  Notes as in effect  immediately
         prior to such exercise by Valhi."

         1.3 Section 10.8(c) of the Subordinated  Loan Agreement shall be and is
hereby amended in its entirety to read as follows:

                  "(c) The Company will not permit,  as at the end of any fiscal
         quarter of the Company,  the ratio of (x) the sum of Distributable Cash
         for the period of four LLC fiscal  quarters  ending on or closest  (but
         prior) to such date and Consolidated  operating lease and rent payments
         of the  Company  and its  Subsidiaries  for the  period of four  fiscal
         quarters  ending on such date to (y)  Consolidated  Fixed Charges to be
         less than (i)  1.50:1.00  from the date of the Closing to and including
         November  30,  1997;  (ii)  0.50:1.00  from  December  1,  1997  to and
         including  May 30,  1999;  (iii)  0.60:1.00  from  June 1,  1999 to and
         including  November 30, 1999;  (iv)  0.85:1.00 from December 1, 1999 to
         and including  February 29, 2000;  (v) 0.80:1.00  from March 1, 2000 to
         and including  May 31, 2000;  (vi)  0.90:1.00  from June 1, 2000 to and
         including  February 28, 2002; (vii) 1.00:1.00 from March 1, 2002 to and
         including February 28, 2003; and (viii) 1.75:1.00 thereafter; provided,
         however,  that following the date upon which Valhi purchases all of the
         Senior  Notes upon  exercise of its rights  under all of those  certain
         Option  Agreements  between  Valhi,  the Company and the holders of the
         Senior  Notes,  the ratios  contained in this Section  10.8(c) shall be
         such ratios during such time periods as described in Section 10.8(c) of
         the Note Purchase  Agreements and Senior Notes as in effect immediately
         prior to such exercise by Valhi."

         1.4 Section 10.8(d) of the Subordinated  Loan Agreement shall be and is
hereby amended in its entirety to read as follows:

"(d) The Company will not permit LLC to have at any time a ratio of (A) accounts
receivable  plus  inventory  on  ---- a FIFO  basis  (excluding  sugar  that  is
collateral for CCC Loans), to (B) the aggregate  outstanding  amount of the Bank
Loans,  of less than (i)  1.60:1.00  from the date of Closing  to and  including
November 29,  1998;  (ii)  1.55:1.00  from  November  30, 1998 to and  including
September 29, 2000; and (iii)  1.40:1.00  thereafter,  provided,  however,  that
following  the date upon which  Valhi  purchases  all of the  Senior  Notes upon
exercise  of its rights  under all of those  certain  Option  Agreement  between
Valhi,  the Company and the holders of the Senior Notes,  the ratio contained in
this Section 10.8(d) shall be the first ratio as described in Section 10.8(b) of
the Note Purchase  Agreements and Senior Notes as in effect immediately prior to
such exercise by Valhi."

         1.5 A new  Section  10.8(h)  shall  be and is  hereby  added to read as
follows:

                  "10.8(h).   Notwithstanding   the  forgoing  Sections  10.8(a)
         through 10.8(g),  upon the Company satisfying the Conversion Condition,
         then all covenants  contained in Section 10.8 of the Existing Agreement
         shall apply for all purposes of the Subordinated  Loan Agreement,  from
         and  after  the  first  day of  fiscal  quarter  immediately  following
         satisfaction  of  such  Conversion   Condition  (after  giving  effect,
         however,  to the  amendment set forth in Sections 4.5, 4.6, 4.7 and 4.8
         of the  Second  Amendment  but  not to any  other  amendment  affecting
         Section 10.8 set forth in the Second  Amendment,  and provided that the
         date "December 1, 2001" set forth in Section 10.8(a)(ii) and in Section
         10.8(b)(iii)  of the  Existing  Agreement  shall be deemed  changed  to
         "December  1, 2000," the date  "December  1, 2004" set forth in Section
         10.8(a)(iii) and in Section 10.8(b)(iv) of the Existing Agreement shall
         be deemed  changed to  "December  1, 2003," and the date  "December  1,
         2002" set forth in Section  10.8(c)(ii) of the Existing Agreement shall
         be deemed changed to "December 1, 2001")."

2.       Amendment to the Second  Amendment.  The first sentence of Section 2 of
         the  Second  Amendment  is  hereby  deleted.  Section  3 of the  Second
         Amendment  is hereby  deleted.  Section 4.9 of the Second  Amendment is
         hereby deleted.

3.       Amendment of Section 8.1(b).  The Subordinated  Loan Agreement shall be
         and is hereby  amended  by adding the  following  to the end of Section
         8.1(b):

         "Notwithstanding the forgoing,  to the extent permitted by the terms of
         the Note Purchase  Agreements  and the Senior Notes,  beginning in 2000
         the  Company  may,  in any  given  year,  use  cash on  deposit  in the
         Distributable  Cash  Collateral  Account to reduce the Unit  Retain for
         such  year  in an  amount  equal  to or  less  than  the  Beet  Payment
         Withholding  (as defined in the Company  Agreement)  for such year, and
         such cash from the Distributable  Cash Collateral  Account shall not be
         required to be used by the Company to prepay the  Obligations  pursuant
         to this Section  8.1(b),  provided  that the actual  amount paid by the
         Company for the purchase of sugarbeets pursuant to the Grower Contracts
         for such year shall  never  exceed the Beet  Payment (as defined in the
         Company Agreement).

         Notwithstanding  the forgoing or any other provision of this Agreement,
         Valhi and the Company hereby agree, for the benefit of the Noteholders,
         that  notwithstanding  the  absence of a Default or an Event of Default
         under the Note  Purchase  Agreements  and the Senior  Notes which would
         constitute a Specified Default under the Subordination Agreement, Valhi
         shall not be entitled to receive,  and the Company shall not make,  any
         payments   pursuant  to  this  Section   8.1(b)  or  otherwise  on  the
         Subordinated  Debt  except as  permitted  by  Section  10.5 of the Note
         Purchase Agreements,  provided,  however, that when (x) the Company has
         achieved full compliance with the Original Covenants (as defined in the
         First  Amendment to the Note Purchase  Agreements) for a period of four
         consecutive  fiscal quarters ending on the last day of a fiscal year of
         the  Company,  (y) the  LLC  would  have  been  able  to pay  aggregate
         distributions  during such four consecutive fiscal quarters pursuant to
         Sections  9.3.1(a)  and  9.3.1(b) of the Company  Agreement of at least
         $26,697,372 before giving effect to any Beet Payment Withholding during
         such four consecutive fiscal quarters and (z) the Company has delivered
         to the Noteholders an Officer's Certificate in accordance with Sections
         7.1 and 7.2(a),  respectively,  of the Note Purchase Agreements, with a
         copy to Valhi,  along with audited financial  statements  demonstrating
         such compliance  (collectively,  the "Conversion Condition"),  then (i)
         the Company  shall be required to make the election set forth in clause
         (i) of the  fourth  full  paragraph  of  Section  1.2(b)  of the  First
         Amendment to the Note  Purchase  Agreements,  (ii) the Company shall be
         required to promptly prepay the  Obligations  within five Business Days
         using all  available  cash on hand,  and (iii)  thereafter  the Company
         shall be required to use all Excess Cash Flow subsequently generated to
         prepay  the  Obligations  and  shall  not  use  any  Excess  Cash  Flow
         subsequently generated for any other purpose, including making advances
         to or additional  investments in the LLC or any other Subsidiary of the
         Company,  prepaying  the Senior Notes or repaying Unit Retains owing to
         the  Company's  shareholders,  provided,  however,  that  any  and  all
         payments  on  the  Subordinated  Debt  which  are  made  following  the
         satisfaction  of the  Conversion  Condition set forth above may be made
         only in accordance with the Original  Covenants and all other covenants
         and conditions  set forth in the  Transaction  Documents,  and provided
         further  that no Default or Event of  Default  under the Note  Purchase
         Agreements exists or would result from such payments.

         Notwithstanding the forgoing,  between the period from May 15, 1997 and
         October 19, 2000,  Valhi shall be entitled to receive,  and the Company
         may pay to Valhi, the amounts of $2,679,000 (paid in 1997),  $2,864,844
         (paid in 1998),  $7,200,000  (paid in 1999) and $950,000 (paid in 2000)
         representing interest accrued on the Subordinated Debt.

         Notwithstanding the forgoing,  following the date when the Senior Notes
         are paid in full,  the Company shall use all Excess Cash Flow to prepay
         the  Obligations  and shall not use any Excess  Cash Flow for any other
         purpose,  including making advances to or additional investments in the
         LLC or any other Subsidiary of the Company,  prepaying the Senior Notes
         or repaying Unit Retains owing to the Company's shareholders.

         Valhi hereby waives all rights and remedies  otherwise  available to it
         pursuant to Section 12 as a result of the  Company's  failure to comply
         with the payment  provisions  of this  Section  8.1(b) with  respect to
         amounts  that are not  permitted  to be paid to Valhi  pursuant  to the
         terms of this Section  8.1(b),  the Note  Purchase  Agreements  and the
         Senior Notes."

4.       Amendment   of  Section  8.2.   Subsections   8.2(a)  and  (b)  of  the
         Subordinated  Loan Agreement shall be and are hereby amended to read in
         their entirety as follows:

         "(a) Rate. Prior to January 1, 1999, the outstanding  principal balance
         of the  $80,000,000  Note  shall  bear  interest  at a rate  per  annum
         (meaning 360 days) equal to 10.99 percent,  and  commencing  January 1,
         1999, the outstanding principal balance of the Subordinated Notes shall
         bear  interest  at a rate per annum  (meaning  360 days) equal to 12.99
         percent;  provided,  however,  that  commencing  on April 1, 2000,  the
         outstanding  principal  balance  of the  $80,000,000  Note  shall  bear
         interest at a rate per annum  (meaning 360 days) equal to 6.49 percent.
         The outstanding  principal  balance,  if any, of the Collateral Deposit
         Note and the Contribution  Note shall bear interest at a rate per annum
         (meaning 360 days) equal to 10.145  percent.  After the  occurrence and
         during the continuance of an Event of Default,  each  Subordinated Note
         and all other  Obligations  shall,  at your option,  bear interest at a
         rate per annum (meaning 360 days) equal to the Default Rate."

         "(b) Computation and Payment of Interest.  Interest on the Subordinated
         Notes  and  all  other  Obligations  shall  be  computed  on the  daily
         principal  balance on the basis of a 360-day year  consisting of twelve
         30-day  months and shall be payable  monthly in arrears on the last day
         of each month,  provided,  however, that interest shall only be payable
         to the  extent  provided  in  Section  8.1(b).  Interest  not paid on a
         monthly basis will be compounded  annually from the applicable  monthly
         date; provided, however, that commencing on April 1, 2000, interest not
         paid on a monthly basis will no longer be compounded,  but all interest
         accrued prior to April 1, 2000  (including  compounded  interest) shall
         remain due and payable, and provided further, however, that no interest
         (including  previously  compounded  interest)  shall  continue  to bear
         interest  pursuant to this Subsection 8.2 subsequent to March 31, 2000.
         Whenever any payment to be made hereunder  shall be stated to be due on
         a day that is not a Business  Day,  the payment may be made on the next
         succeeding Business Day and such extension of time shall be included in
         the computation of the amount of interest or fees due hereunder."

5.       Amendment to Section 9.9. Section 9.9 shall be and is hereby amended to
         read in its entirety as follows: "9.9 Annual Security Interest Opinion.

         Commencing within 30 days following occurrence of a Grant Effectiveness
         Condition  (as  defined  in  the   Contingent   Subordinated   Security
         Agreement), and for each calendar year thereafter on or before March 15
         of such calendar year, the Company shall cause to be delivered to Valhi
         an opinion of counsel, reasonably acceptable to Valhi (with John Lemke,
         general  counsel of the LLC, being  acceptable  counsel),  covering the
         matters set forth in paragraphs 23 through 28 of Exhibit  4.4(a) of the
         Note Purchase Agreement and Senior Notes. Such opinion of counsel shall
         describe  the actions  that will,  in the opinion of such  counsel,  be
         required to maintain the Lien and security  interest of the  Collateral
         Agent with respect to the Collateral in the following calendar year."

6.       Amendment of Section 10.3.  Subsection 10.3(a) of the Subordinated Loan
         Agreement  shall be and is hereby  amended to read in its  entirety  as
         follows:

         "(a) Liens securing the Senior Notes and the Subordinated Notes."

7.       Amendment of Section 11. Section 11 of the Subordinated  Loan Agreement
         shall be and hereby is amended by (i) adding the phrase "or,  following
         the  occurrence  of  the  Grant  Effectiveness  Condition  (as  defined
         therein), in any Collateral Document" immediately after the phrase "the
         Company  defaults in the  performance  of or  compliance  with any term
         contained  herein" in Section 11(c), (ii) deleting the punctuation mark
         "." at the end of clause (k) and  replacing  it with "; or",  and (iii)
         new Sections 11(l) and 11(m) shall be and are hereby added as follows:

         "(l)  Effective  October 1, 2000,  the LLC shall (Y) pay to the Company
         any  installment  of the  aggregate  Beet  Payment  (as  defined in the
         Company Agreement) for any crop year (other than the final installment)
         without  withholding from such installment an amount equal to a ratable
         portion of the aggregate Beet Payment  Withholding  for such crop year,
         less an amount equal to a ratable  portion of the aggregate Unit Retain
         reduction  for such crop year  permitted  pursuant  to the terms of the
         Note Purchase Agreements and Senior Notes or (Z) pay to the Company the
         final  installment  of the  aggregate  Beet  Payment (as defined in the
         Company  Agreement)  for such crop year without  withholding  from such
         installment   an  amount  such  that  the  aggregate   amount  of  such
         withholdings  for such crop year will equal the aggregate  Beet Payment
         Withholding for such crop year.

         (m) Any Collateral  Document  shall,  at any time,  cease to be in full
         force and  effect  (other  than by reason  of a release  of  Collateral
         thereunder  in  accordance  with  the  terms  hereof  or  thereof,  the
         satisfaction  in full of all  obligations  of the  Company  under  this
         Subordinated Loan Agreement or any other termination of such Collateral
         Document in  accordance  with the terms  hereof or thereof) or shall be
         declared null and void, or the validity or enforceability thereof shall
         be contested in writing by any Person,  or, following the occurrence of
         the  Grant  Effectiveness  Condition  (as  defined  in  the  applicable
         Collateral  Document),  the  Collateral  Agent  shall not have or shall
         cease to have, for any reason (other than the failure of the Collateral
         Agent or any holder of the Subordinated Notes to take any action within
         its control),  a valid security interest in any Collateral purported to
         be covered  thereby,  perfected and with the priority  required by this
         Agreement  and the  relevant  Collateral  Document  and subject only to
         Liens  permitted  under this  Agreement and the  applicable  Collateral
         Document."

8.       Amendment to Section  17.1 Section 17.1 shall be and is hereby  amended
         by (i) adding the phrase ", the Collateral Documents" immediately after
         the phrase "This Agreement"  contained in the first sentence of Section
         17.1,  (ii) by deleting  from the first  sentence  in Section  17.1 the
         phrase ", if required  pursuant to the  Subordination  Agreement,"  and
         (iii) by adding the phrase "or any section of the Collateral Documents"
         immediately  after the phrase "Sections 8, 11(a),  11(b), 12, 17 or 20"
         contained in the last sentence of section 17.1.

9.       Amendment of Definitions.

(a)               The  following  definitions  contained  in  Schedule  A of the
                  Subordinated Loan Agreement shall be and are hereby amended to
                  read in its entirely as follows:

                  ""Company Agreement" means the Company Agreement of the LLC as
                  it may be amended or modified from time to time."

                  ""Note Purchase Agreements" means the Note Purchase Agreements
                  dated as of the date of Closing  between  the Company and each
                  of the  purchasers  of  the  Senior  Notes  pursuant  to  such
                  agreements, as such Note Purchase Agreements may be amended or
                  modified from time to time."

                  ""Senior  Notes"  means the  Company's  10.8% Senior Notes due
                  April  30,  2009,  as such  Senior  Notes  may be  amended  or
                  modified from time to time."

                  ""Excess  Cash  Flow"  means,  with  respect  to  any  period,
                  Distributable  Cash for the comparable period of LLC ending on
                  or closest  (but prior) to the last day of such  period,  less
                  (i) actual debt service in respect of Senior Debt described in
                  clause  (i) of the  definition  of "Senior  Debt"  (including,
                  without limitation, any Debt of Persons other than the Company
                  guaranteed by the Company), including, without limitation, the
                  Senior Notes,  (ii) patronage  dividends  actually paid to the
                  Company's   shareholders   and   (iii)   Permitted   Operating
                  Expenses."

                  ""Unit  Retain" means a withholding  of beet crop payments due
                  to the grower  shareholders  of the  Company as imposed by the
                  Company's  board of directors,  including  without  limitation
                  amounts  resulting from Beet Payment  Withholdings (as defined
                  in the Company Agreement)."

                  "Loan Documents" means this Agreement, the Subordinated Notes,
                  the Collateral Documents and all other instruments,  documents
                  and  agreements  executed  by or on behalf of the  Company and
                  delivered  concurrently  herewith or at any time hereafter for
                  the benefit of you in connection with the  Subordinated  Notes
                  and other transactions  contemplated by this Agreement, all as
                  amended,  restated,  supplemented  or otherwise  modified from
                  time to time.

         (b)      The  following  definitions  shall be and are hereby  added to
                  Schedule A of the Subordinated Loan Agreement as follows:

                  ""Conversion  Condition"  shall have the  meaning set forth in
Section 8.1(b)."

                  "Collateral" means (a) "Pledged  Collateral" as defined in the
                  Contingent  Subordinate  Pledge Agreement and (b) "Collateral"
                  as defined in the Contingent Subordinate Security Agreement.

                  "Collateral  Agent"  means FSB,  or any  successor  Collateral
                  Agent under the Contingent  Subordinated Collateral Agency and
                  Paying Agency Agreement.

                  "Collateral Documents" means the Contingent Subordinate Pledge
                  Agreement,  the Contingent Subordinate Security Agreement, the
                  Contingent  Subordinate  Collateral  Agency and Paying  Agency
                  Agreement or any agreements referred to therein.

                  "Contingent  Subordinate  Collateral  Agency and Paying Agency
                  Agreement"   means   that   certain   Contingent   Subordinate
                  Collateral  Agency and  Paying  Agency  Agreement  dated as of
                  October 19, 2000 by and among  Valhi,  the Company and FSB, as
                  such may be amended or modified from time to time.

                  "Contingent  Subordinate  Pledge Agreement" means that certain
                  Contingent  Subordinate  Pledge  Agreement dated as of October
                  19, 2000 by and between the Company and Valhi and acknowledged
                  by FSB as Collateral Agent, as such may be amended or modified
                  from time to time.

                  "Contingent Subordinate Security Agreement" means that certain
                  Contingent  Subordinate Security Agreement dated as of October
                  19, 2000 by and between the Company and Valhi and acknowledged
                  by FSB as Collateral Agent, as such may be amended or modified
                  from time to time.

                  "FSB" means First Security Bank, National Association.

                  "Valhi" means Valhi, Inc., a Delaware corporation.

10.      Amendment of Section 6.3 of the Second Amendment. Subsection 6.3 of the
         Second Amendment shall be and is hereby amended to read in its entirety
         as follows:

         "6.3  Governing  Law.  This  Second  Amendment,  and the  rights of the
         parties  hereto,  shall be governed by and construed in accordance with
         the laws of the State of Utah."

11.      New Section  22.12. A new Section 22.12 shall be and is hereby added to
         read in its entirety as follows:

         "  22.12.  Certain Rights of Specific Performance.

         To the extent that the Company's Board of Directors shall have approved
         the SRSC  Annual  Irrevocable  Cash  Plan (as  defined  in the  Company
         Agreement)  for any  given  Fiscal  Year  (as  defined  in the  Company
         Agreement),  the Company agrees and acknowledges that money damages may
         not be an  adequate  remedy for any failure by the Company to make debt
         service  payments to Valhi under this  Subordinated  Loan Agreement for
         such  Fiscal  Year in amounts  sufficient  to comply  with such  Fiscal
         Year's SRSC Annual  Irrevocable Cash Plan or any failure by the Company
         to  otherwise  give  full  effect to such  Fiscal  Year's  SRSC  Annual
         Irrevocable  Cash Plan, and that Valhi may in its sole discretion apply
         to any court of law or equity or  competent  jurisdiction  for specific
         performance by the Company to make debt service payments to Valhi under
         this  Subordinated  Loan  Agreement  for such  Fiscal  Year in  amounts
         sufficient  to comply with such Fiscal  Year's SRSC Annual  Irrevocable
         Cash Plan or to otherwise take all actions  necessary to carry out, and
         to give full effect to, such Fiscal Year's SRSC Annual Irrevocable Cash
         Plan, subject always,  however, to the limitations contained in Section
         8.1(b) hereof."

12.      Conditions  Precedent.  Each of the  following  shall be  considered  a
         condition precedent to the effectiveness of this Third Amendment:

(b)               The Company  will obtain  modifications  to the Note  Purchase
                  Agreements and the Senior Notes,  which  modifications must be
                  satisfactory to Valhi in all material respects.

(c)               The  Company   will  execute  and  delivery  to  Valhi  (i)  a
                  Contingent Pledge Agreement in the form attached to this Third
                  Amendment as Exhibit A; (ii) a Contingent  Security  Agreement
                  in the form attached to this Third Amendment as Exhibit B; and
                  (iii)  a  Contingent   Collateral  Agency  and  Paying  Agency
                  Agreement  in the form  attached  to this Third  Amendment  as
                  Exhibit C.

(d)               The  execution  and delivery by all of the parties  thereto of
                  that certain Master  Agreement  dated October 19, 2000, by and
                  among the parties hereto, among others.

13.      Condition to  Continuing  Effectiveness.  The parties  hereto agree and
         acknowledge  that if at any time  following the execution of this Third
         Amendment, either (i) the Company shall fail to approve by January 15th
         of any year the SRSC  Annual  Irrevocable  Cash Plan (as defined in the
         Company  Agreement)  for such fiscal year of the LLC or (ii) the unpaid
         Accrual  exceeds  the  Accrual  Threshold  (as both are  defined in the
         Company Agreement),  then this Third Amendment shall immediately become
         retroactively  null  and void and the  terms of the  Subordinated  Loan
         Agreement shall  retroactively be as in effect immediately prior to the
         execution of this Third Amendment.

14.      Representations and Warranties:

(e)      Valhi  Representations  and  Warranties.  Valhi hereby  represents  and
         warrants as follows:

(i)                        Organization  and Authority  Valhi is an organization
                           duly and validly  incorporated  and  existing  and in
                           good standing under the laws of the State of Delaware
                           and has  full  corporate  power  to  enter  into  and
                           perform its obligations under this Third Amendment.

(ii)                       Authorization;    Enforceability.    The   execution,
                           delivery.  and performance of this Third Amendment by
                           Valhi are  within  the  corporate  power of Valhi and
                           have been duly authorized by all necessary  corporate
                           action on the part of Valhi.  This Third Amendment is
                           the  legally  valid and binding  agreement  of Valhi,
                           enforceable  against  Valhi  in  accordance  with its
                           terms.

(iii)                      No Violation or Conflict. The execution, delivery and
                           performance  of this Third  Amendment by Valhi do not
                           and will not  violate any law or the  Certificate  of
                           Incorporation  or  Bylaws  of  Valhi,  or result in a
                           breach of the terms,  conditions or provisions of, or
                           constitute a default under, any contract,  agreement,
                           instrument,  order, judgment or decree to which Valhi
                           is  a  party  or  by  which  Valhi  is  bound,  which
                           violation,  conflict,  breach or default would have a
                           material   adverse  effect  on  Valhi's   ability  to
                           consummate the transactions contemplated hereby.

(f)      Company  Representations and Warranties.  The Company hereby represents
         and warrants as follows:

(i)                        Organization   and   Authority.   The  Company  is  a
                           cooperative  corporation  duly and validly  organized
                           and existing and in good  standing  under the laws of
                           the State of Oregon  and has full power to enter into
                           and   perform  its   obligations   under  this  Third
                           Amendment.

(ii)                       Authorization;    Enforceability.    The   execution,
                           delivery and  performance of this Third  Amendment by
                           the  Company  are within the power of the Company and
                           have been duly authorized by all necessary  action on
                           the part of the Company.  This Third Amendment is the
                           legally  valid and binding  agreement of the Company,
                           enforceable  against the Company in  accordance  with
                           its terms.

(iii)                      No Violation or Conflict. The execution, delivery and
                           performance of this Third Amendment by the Company do
                           not   and   will   not   violate   any   law  or  the
                           organizational documents of the Company, or result in
                           a breach of the terms,  conditions or provisions  of,
                           or   constitute  a  default   under,   any  contract,
                           agreement,  instrument,  order, judgment or decree to
                           which the  Company is a party or by which the Company
                           is  bound,  which  violation,   conflict,  breach  or
                           default would have a material  adverse  effect on the
                           Company's  ability  to  consummate  the  transactions
                           contemplated hereby.

15.      Miscellaneous.

(g)               Enforceability;  Validity.  Each party hereto expressly agrees
                  that this Third Amendment shall be specifically enforceable in
                  any court of competent  jurisdiction  in  accordance  with its
                  terms and against each of the parties hereto.

(h)               Successors  and Assigns.  All of the covenants and  agreements
                  contained in this Third  Amendment  shall be binding upon, and
                  inure to the  benefit  of, the  respective  parties  and their
                  successors,  assigns,  heirs,  executors,  administrators  and
                  other legal representatives, as the case may be.

         (i)      Governing  Law.  This Third  Amendment,  and the rights of the
                  parties  hereto,   shall  be  governed  by  and  construed  in
                  accordance with the laws of the State of Utah.

(j)               Counterparts.  This Third  Amendment may be executed in one or
                  more  counterparts,  each of which shall be deemed an original
                  but all of which  together  shall  constitute one and the same
                  instrument.

(k)               Amendment; Waiver. No amendment, modification,  termination or
                  waiver  of any  provision  of  this  Third  Amendment,  and no
                  consent to any departure by any party therefrom,  shall in any
                  event be  effective  unless the same  shall be in writing  and
                  signed   by  the   parties   hereto.   Any   such   amendment,
                  modification,   termination,   waiver  or  consent   shall  be
                  effective  only in the specific  instance and for the specific
                  purpose for which it was given.

(l)               Severability.  If any provision of this Third  Amendment shall
                  be   declared   void  or   unenforceable   by  any   court  or
                  administrative board of competent jurisdiction, such provision
                  shall be deemed to have been  severed  from the  remainder  of
                  this Third Amendment,  and this Third Amendment shall continue
                  in all other respects to be valid and enforceable.

         IN WITNESS WHEREOF, the parties hereby have caused this Third Amendment
to be duly executed and delivered by their respective  officers  thereunder duly
authorized as of the date first written above.

              [The remainder of this page intentionally left blank]

<PAGE>

                                  SNAKE RIVER SUGAR COMPANY

                                  By:/s/ Lawrence L. Corry
                                  ----------------------------------------------
                                  Its:
                                  ----------------------------------------------

                                   VALHI, INC.

                                  By:/s/ Steven L. Watson
                                  ----------------------------------------------
                                  Its:
                                  ----------------------------------------------

ACKNOWLEDGED:

THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA

By:/s/ Joseph Alouf
   --------------------------------------------------
Its:
    -------------------------------------------------

CONNECTICUT GENERAL LIFE
INSURANCE COMPANY

By:      CIGNA INVESTMENTS, INC.

         By:/s/ Stephen H. Wilson
            -----------------------------------------
         Its:
             ----------------------------------------

<PAGE>

LIFE INSURANCE COMPANY
OF NORTH AMERICA

By:      CIGNA INVESTMENTS, INC.

         By:/s/ Stephen H. Wilson
            -----------------------------------------
         Its:
             ----------------------------------------

MINNESOTA LIFE INSURANCE COMPANY

By:      Advantus Capital
         Management, Inc.

         By:/s/ Annette Masterson
            -----------------------------------------
         Its:
             ----------------------------------------

THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY

By:      LINCOLN INVESTMENT MANAGEMENT, INC.
         Its Attorney-in-Fact

By:/s/ Annette M. Teders
   --------------------------------------------------
Its:
    -------------------------------------------------

LINCOLN LIFE & ANNUITY COMPANY
OF NEW YORK

By:      LINCOLN INVESTMENT MANAGEMENT, INC.
         Its Attorney-in-Fact

By:/s/ Annette M. Teders
   --------------------------------------------------
Its:
    -------------------------------------------------

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