Document:

EXECUTION COPY
                                                                 EXHIBIT 10.6

                                OPTION AGREEMENT

     This OPTION AGREEMENT is dated October 14, 2005 (this "Agreement"),  by and
among  Snake  River  Sugar  Company,  an  Oregon  cooperative  corporation  (the
"Company"), Valhi, Inc., a Delaware corporation ("Valhi") and the holders of the
Company's  7.61% Senior Notes due September 30, 2012, as the same may be amended
from  time to time  (the  "Senior  Notes")  whose  names  are set  forth  on the
signature page of this Agreement (the "Noteholders").

                                    RECITALS

FIn connection  with the  Noteholders'  acquisition of certain Senior Notes from
the  Company  pursuant  to the terms of a Note  Purchase  Agreement  dated as of
October 17, 2005 among Northwest Farm Credit Services, FLCA, both as a purchaser
and as agent  on  behalf  of all of the  purchasers  (the  "Agent"),  the  other
purchasers  named therein and the Company,  as the same may be amended from time
to time (the "Note  Purchase  Agreement"),  the  Noteholders  have  collectively
agreed to grant Valhi the right to acquire the Senior Notes owned or held by the
Noteholders  (the "Option  Notes"),  pursuant to and on the terms and conditions
set forth in this  Agreement.  The execution and delivery of this Agreement is a
condition to the effectiveness of the Note Purchase Agreement.

     Now,  therefore,  in  consideration of the foregoing and for other good and
sufficient consideration,  receipt of which is hereby acknowledged,  the parties
agree as follows:

     1. Grant of Option. The Noteholders  hereby  collectively grant to Valhi an
irrevocable  option (the  "Option") to purchase all but not less than all of the
Option  Notes  (including  any  principal,  interest or other  amounts  owing to
Noteholders from the Company in respect of the Option Notes). The exercise price
of the Option (the "Exercise Price") shall be an amount in cash equal to the sum
of (i) the principal  outstanding on the Option Notes, (ii) all accrued interest
on the Option Notes,  (iii) an amount equal to the sum of the Make Whole Amounts
and  Cost  Reimbursement  Amounts  (as  each are  defined  in the Note  Purchase
Agreement) related to the Option Notes and which would be required to be paid by
the Company upon a voluntary  prepayment of the Option Notes, and (iv) an amount
equal to any other  amounts  which  would be  required to be paid by the Company
pursuant  to  Article  III of  the  Note  Purchase  Agreement  upon a  voluntary
prepayment  of the Option Notes , in each case as of the closing  referred to in
Section 3.

     2.  Exercise of Option.  The Option may be  exercised by Valhi in whole and
not in part at any  time  after  the  date of  this  Agreement,  subject  to the
condition that, prior to or concurrently  with such exercise,  Valhi acquire all
Senior Notes issued by the Company pursuant to the Note Purchase  Agreement.  If
Valhi  wishes to exercise the Option,  Valhi shall send a written  notice to the
Agent on behalf of the  Noteholders  and to the Company  specifying the Exercise
Price and the place,  date and time (but not earlier  than 10 Business  Days (as
defined in the Note Purchase  Agreement) from the date such notice is given) for
the closing of such purchase.  The parties'  obligations in connection  with the
exercise  of  the  Option  are  subject  to  compliance  with  applicable  legal
requirements.  Upon request of Valhi, the Company shall promptly take all action
required to effect the exercise of the Option  (including  certifying  to Valhi,
upon request, information concerning the outstanding principal, accrued interest
and applicable Make Whole Amount of the Option Notes,  any defaults or events of
default under the Senior Notes and any other information requested).

     3. Closing of the Option and Transfer of the Option  Notes.  At the closing
of the  exercise of the Option  pursuant to this  Agreement,  Noteholders  shall
deliver to the Company the Option Notes,  in proper form for  transfer,  and the
Company  will issue a new Senior  Note to Valhi in the  principal  amount of the
Senior Notes being purchased.  At such closing,  Valhi will purchase and pay for
the Option Notes being purchased from  Noteholders by wire transfer to the Agent
on behalf of the Noteholders of cash in an amount equal to the Exercise Price.

     4.  Representations  and Warranties of Valhi. Valhi represents and warrants
to Noteholders that (a) Valhi is a corporation duly organized,  validly existing
and in good  standing  under  the  laws of the  State  of  Delaware  and has the
requisite  corporate  power to enter into and perform this  Agreement;  (b) this
Agreement has been duly authorized by all necessary corporate action on the part
of Valhi;  (c) Valhi is not subject to or obligated  under any  provision of (i)
its  Certificate  of  Incorporation  or By-Laws,  (ii) any  contract,  (iii) any
license,  franchise or permit or (iv) any law,  regulation,  order,  judgment or
decree,  which would be breached or  violated  by its  execution,  delivery  and
performance of this  Agreement and the  consummation  by it of the  transactions
contemplated  hereby, other than any such breaches or violations which will not,
individually  or in  the  aggregate,  have  a  material  adverse  effect  on the
consummation of the transactions contemplated hereby, and (d) any acquisition of
the Option Notes pursuant to the terms and conditions of this Agreement shall be
for Valhi's own account and not with a view to distribution of the Option Notes.
No authorization, consent or approval of, or filing with, any public body, court
or authority is necessary for the execution,  delivery and  performance by Valhi
of  the   transactions   contemplated  by  this   Agreement,   except  for  such
authorizations,  consents,  approvals  and  filings  as to which the  failure to
obtain or make  would not,  individually  or in the  aggregate,  have a material
adverse effect on the  consummation  of the  transactions  contemplated  by this
Agreement.

     5.   Representations   and  Warranties  of  Noteholders.   Each  Noteholder
represents  and  warrants  to Valhi that (a) such  Noteholder  is an entity duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction of its  organization  and has the requisite power to enter into and
perform this  Agreement;  (b) this  Agreement  has been duly  authorized  by all
necessary  corporate action on the part of such Noteholder;  (c) such Noteholder
is not subject to or obligated  under any  provision  of (i) its  organizational
documents, (ii) any contract, (iii) any license, franchise or permit or (iv) any
law, regulation,  order, judgment or decree, which would be breached or violated
by  its  execution,   delivery  and   performance  of  this  Agreement  and  the
consummation by it of the transactions  contemplated hereby, other than any such
breaches or violations which will not, individually or in the aggregate,  have a
material  adverse effect on the  consummation of the  transactions  contemplated
hereby;  and (d) when its Option  Note(s) are  delivered by such  Noteholder  to
Valhi upon  exercise  of the Option and  payment  of the  Exercise  Price,  such
Noteholder  will  deliver  good,  legal  and  valid  title in and to its  Option
Note(s), free and clear of any claims, liens,  encumbrances,  security interests
and  charges  of any  nature  whatsoever  (other  than any such  claims,  liens,
encumbrances,  security interests and charges created by Valhi). Each Noteholder
further  represents  and  warrants  that as of the  date of this  Agreement,  no
authorization, consent or approval of, or filing with, any public body, court or
authority is necessary  for the  execution,  delivery  and  performance  by such
Noteholder  of  this  Agreement,  except  for  such  authorizations,   consents,
approvals  and  filings  as to which the  failure  to obtain or make  would not,
individually  or in  the  aggregate,  have  a  material  adverse  effect  on the
consummation of the transactions contemplated by this Agreement. Notwithstanding
the foregoing, each Noteholder makes no representation or warranty regarding the
applicability of any federal or state securities laws or regulations, or whether
the application of such laws or regulations would prohibit,  place  restrictions
on,  or  require  authorization  of any the  transactions  contemplated  by this
Agreement.

     6. Legend.  Upon execution of this  Agreement,  the Company and Noteholders
shall place the following legend in a conspicuous place on the Option Notes:

"This  Note is  subject  to the  terms and  conditions  of that  certain  Option
Agreement dated October 14, 2005, by and between the issuer, Valhi, Inc. and the
holder of this Note."

     7.  Amendment;  Assignment.  This  Agreement may not be modified,  amended,
altered or  supplemented  except by a writing  signed by Valhi and  Noteholders.
Each of the provisions of this Agreement  shall be binding upon  Noteholders and
its  successors  and  assigns.  Valhi  may  not  assign  any  of its  rights  or
obligations  under this Agreement (other than to any affiliate of Valhi) without
the prior written consent of Noteholders.

     8. Notices. All notices, requests, claims, demands and other communications
hereunder  shall be in  writing  and shall be given  (and,  except as  otherwise
provided in this Agreement, shall be deemed to have been duly given if so given)
if delivered in person, by cable, telegram,  facsimile, or sent by registered or
certified mail (postage  prepaid,  return  receipt  requested) to the respective
parties as follows:

If to Noteholders (at the addresses specified on Schedule I to this Agreement)

If to Valhi:
Valhi, Inc.
Three Lincoln Centre, Suite 1700,
5430 LBJ Freeway,
Dallas, Texas 75240
Attn: General Counsel

<PAGE>

If to the Company:
Snake River Sugar Company
3184 Elder Street
Boise, Idaho  83705
Attn: General Counsel

or to such other  address  as either  party may have  furnished  to the other in
writing in accordance  herewith,  except that notices of change of address shall
only be effective upon receipt.

     9.   Counterparts.   This   Agreement  may  be  executed  in  two  or  more
counterparts, each of which shall be deemed to be an original, but each of which
together shall constitute one and the same document.

     10.  Governing  Law. This  Agreement  shall be governed by and construed in
accordance  with the internal laws of the State of  Washington,  without  giving
effect to the principles of conflicts of laws thereof.

     11.  Binding  Effect.  This Agreement  shall be binding upon,  inure to the
benefit  of,  and  be  enforceable  by  the  heirs,  personal   representatives,
successors and assigns of the parties hereto.  Nothing  expressed or referred to
in this  Agreement  is intended or shall be  construed  to give any person other
than  the  parties  to this  Agreement,  or  their  respective  heirs,  personal
representatives,  successors or assigns, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.

     12. Entire  Agreement.  This  Agreement  constitutes  the entire  agreement
between the parties hereto with respect to the subject matter hereof.

     13. Termination.  This Agreement shall terminate upon the repayment in full
of the Option Notes.

     14. Severability.  If any term, provision,  covenant or restriction of this
Agreement is held by a court of competent  jurisdiction  to be invalid,  void or
unenforceable,   the   remainder  of  the  terms,   provisions,   covenants  and
restrictions  of this Agreement  shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.

     15. Further Assurances. The parties will execute and deliver such documents
and  take  such  action   reasonably  deemed  necessary  or  desirable  to  more
effectively  complete  and  evidence  the sale and  transfer of the Option Notes
pursuant to this Agreement.

     16.  Miscellaneous.  The  headings  contained  in  this  Agreement  are for
reference  purposes  only  and  shall  not  affect  in any  way the  meaning  or
interpretation  of this  Agreement.  References  to  Sections,  subsections  and
clauses  refer to Sections,  subsections  and clauses of this  Agreement  unless
otherwise stated.

     17.  Notification.  The Company  agrees to provide a copy of any amendment,
modification,  waiver or  restatement  of the Senior Notes or the Note  Purchase
Agreements  to Valhi within five (5) business  days after  execution of any such
amendment,  modification, waiver or restatement. The Company and Valhi agree and
acknowledge that if any such amendment,  modification,  waiver or restatement of
the Senior Notes or the Note Purchase  Agreement are not so provided to Valhi by
the Company  within the time  period  required  herein,  then,  at Valhi's  sole
option, such amendment,  modification, waiver or restatement shall retroactively
be null and void upon (but only upon) the closing of the  purchase of the Option
Notes following the exercise by Valhi of all of its rights under this Agreement.

                  [Remainder of page intentionally left blank]

<PAGE>

IN WITNESS  WHEREOF,  the parties have caused this Agreement to be duly executed
on the day and year first above written.

VALHI, INC.

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

SNAKE RIVER SUGAR COMPANY

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

NORTHWEST FARM CREDIT SERVICES, FLCA

By:      /s/Jack Hetherington
         --------------------------------------------------------------
         Jack Hetherington
         Vice President

U.S. BANK NATIONAL ASSOCIATION

By:      /s/Jan Thede
         -------------------------------------------------------------
         Jan Thede
         Vice President

<PAGE>

                       Schedule I - Address of Noteholder

Northwest Farm Credit Services, FLCA
815 North College Road
Twin Falls, Idaho 83301
Attn:  Jack Hetherington

U.S. Bank National Association National Corporate Banking (PL-4) 555 S. W. Oak
Street
Portland, Oregon 97204
Attn: Janice T. ThedeEXECUTION COPY
                                                                 EXHIBIT 10.7

                     AMENDED AND RESTATED COMPANY AGREEMENT

                                       OF

                       THE AMALGAMATED SUGAR COMPANY LLC,
                      A DELAWARE LIMITED LIABILITY COMPANY

                                 MEMBER MANAGED

<PAGE>

                     AMENDED AND RESTATED COMPANY AGREEMENT

     This Company  Agreement (this  "Agreement" or this "Company  Agreement") of
The  Amalgamated  Sugar  Company  LLC,  a limited  liability  company  organized
pursuant to the Act,  was entered  into and was  effective  as of the  Effective
Date,  by  and  among  the  Company,  ASC  Holdings,  Inc.  (then  known  as The
Amalgamated  Sugar Company,  a Utah  corporation)  ("AGM") and Snake River Sugar
Company,  an Oregon  cooperative  ("SRSC"),  and is amended  and  restated as of
October 14, 2005 to reflect  changes made pursuant to the (i) First Amendment to
Company Agreement dated as of May 14, 1997 among the Company, SRSC, AGM, and the
Amalgamated  Collateral  Trust, a Delaware  business  trust (the "Trust"),  (ii)
Second  Amendment to Company  Agreement  dated as of November 30, 1998 among the
Company,  SRSC, AGM and the Trust and (iii) Third Amendment to Company Agreement
dated as of October 19, 2000 among the Company, SRSC, AGM and the Trust, as well
as other changes made pursuant to this amendment and restatement. All references
to this Company  Agreement or this Agreement shall mean this Company  Agreement,
as so amended and  restated.  Capitalized  terms not  otherwise  defined in this
Agreement have the meanings ascribed to such terms in Article II.

                                    ARTICLE I
                                    FORMATION

1.1  ORGANIZATION.  AGM and SRSC  organized  the  Company as a Delaware  limited
liability  company  pursuant to the provisions of the Act by filing that certain
Certificate of Formation with the Secretary of State of Delaware on December 20,
1996,  and by entering into that certain  Formation  Agreement by and among AGM,
SRSC and the Company,  dated as of January 3, 1997,  to be effective for tax and
accounting purposes as of December 31, 1996, with Exhibit D-7 thereto amended by
the Second  Amendment to  Memorandum  of Agreement  Between SRSC and the Company
dated September 30, 1998 (the "Formation Agreement").

1.2 NAME. The name of the Company is The Amalgamated  Sugar Company LLC, and all
business of the Company shall be conducted  under that name except to the extent
necessary  for  qualification  purposes in those  states  where  AGM's  presence
initially requires the Company to use a trade name or with the consent of all of
the Members.

1.3 EFFECTIVE  DATE.  This Company  Agreement  became  effective upon January 3,
1997, the closing under the Formation Agreement (the "Effective Date").

1.4 TERM.  The term of the  Company  commenced  on the  Effective  Date and will
continue  until the  Company  shall be  dissolved  and its  affairs  wound up in
accordance with the Act or this Company Agreement.

1.5 REGISTERED AGENT AND OFFICE. The Company's initial registered office and the
name of its initial  registered  agent at such address  shall be as set forth in
the Company's Certificate of Formation.  The Management Committee may, from time
to time, change the registered agent or office through  appropriate filings with
the Secretary of State. In the event the registered  agent ceases to act as such
for any reason or the registered office shall change,  the Management  Committee
shall  promptly  designate a  replacement  registered  agent or file a notice of
change of address as the case may be. If the Management  Committee shall fail to
designate a replacement  registered agent or change of address of the registered
office, any Member may designate a replacement registered agent or file a notice
of change of address upon notice to the other Members.

1.6 PRINCIPAL PLACE OF BUSINESS.  The principal place of business of the Company
shall be 3184 Elder  Street,  Boise,  Idaho,  83705.  The Company may locate its
place of business to any other place or places as the  Management  Committee may
from time to time deem advisable.

                                   ARTICLE II
                                   DEFINITIONS

For purposes of this Company  Agreement,  unless the context  clearly  indicates
otherwise,  and  subject  to the  provisions  of  Article  XIX of  this  Company
Agreement, the following terms shall have the following meanings:

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 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."

ACCRUAL THRESHOLD - means the amount of (A) $31,526,316.00 from October 14, 2005
through October 30, 2005, (B)  $18,300,000.00  from October 31, 2005 to November
29, 2005,  (C)  $11,300,000.00  from November 30, 2005 to December 30, 2005, (D)
$10,000,000.00  from  December 31, 2005 to January 30, 2006,  (E)  $9,000,000.00
from January 31, 2006 to February 27, 2006, (F) $8,200,000.00  from February 28,
2006 to March 30, 2006, (G) $7,500,000.00 from March 31, 2006 to April 29, 2006,
(H) $6,600,000.00  from April 30, 2006 to May 30, 2006, (I)  $5,800,000.00  from
May 31, 2006 to June 29, 2006, (J) $5,000,000.00  from June 30, 2006 to July 30,
2006, (K) $4,200,000.00 from July 31, 2006 to August 30, 2006, (L) $3,300,000.00
from August 31, 2006 to September 29, 2006, (M) $2,500,000.00 from September 30,
2006 to October 30, 2006,  (N)  $1,600,000.00  from October 31, 2006 to November
29, 2006,  (O) $800,000  from November 30, 2006 to December 30, 2006 and (P) nil
from December 31, 2006 and thereafter,  provided,  however, that if (i) any Beet
Payment Reduction taken by the Company in order to generate  Distributable  Cash
sufficient  to ensure  that the Accrual  does not exceed the  Accrual  Threshold
would  result in SRSC paying to its grower  members a SRSC Beet  Payment for any
crop year that aggregated less than $1,000 per acre and (ii)  Distributable Cash
for the Fiscal Year that includes the date on which the last payment of the SRSC
Beet Payment for such crop year is paid would be greater than $26,697,372,  then
the Accrual Threshold shall be increased from the amounts specified above by the
lesser of (y) the  amount  necessary  to  decrease  such  Distributable  Cash to
$26,697,372  and (z) the amount  necessary to increase such SRSC Beet Payment to
$1,000 per acre, and provided  further,  however,  that any such increase in the
Accrual Threshold from the amounts specified above shall be temporary and shall,
subject to the conditions provided herein,  revert back to the amounts specified
above for all subsequent  periods at the earliest  possible month,  and provided
further,  however,  that once the Accrual  Threshold  has been reduced to nil in
accordance with the terms of this definition,  it shall thereafter remain at nil
for all periods,  regardless of the actual level of  Distributable  Cash for any
Fiscal Year and regardless of the SRSC Beet Payment actually paid by SRSC to its
grower members for any crop year .

ACT - means the Delaware Limited  Liability Company Act, as amended from time to
time.

ADDITIONAL  MEMBER - means a Person other than an Initial Member or a Substitute
Member who has acquired a Membership Interest from the Company.

AFFILIATE - means , at any time,  and with respect to any Person,  (a) any other
Person  that  at  such  time  directly  or   indirectly   through  one  or  more
intermediaries  Controls,  or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially  owning or holding,  directly
or  indirectly,  10% or more of any class of voting or equity  interests  of the
Company  or any  Subsidiary  or any  corporation  of which the  Company  and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or  more  of any  class  of  voting  or  equity  interests.  As used in this
definition, "CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the  direction  of the  management  and policies of a Person,
whether  through the ownership of voting  securities,  by contract or otherwise.
Unless the context otherwise  clearly requires,  any reference to an "Affiliate"
is a reference to an Affiliate of the Company.

AGENT - means Northwest Farm Credit Services, FLCA, as the agent for the benefit
of the  purchasers  under the Note  Purchase  Agreement  and the NWFC Pledge and
Security  Agreement,  and any  successor  agent  pursuant  to the  terms of such
agreements.

AGGREGATE CONSOLIDATED NET INCOME - means, as at any date of determination,  the
aggregate Consolidated Net Income of the Company and its Subsidiaries during the
thirty-six (36) month period then most recently ended.

AGM - has the meaning set forth in the preamble to this Company Agreement.

AGM CAPITAL INTEREST - means the proportion that the positive Capital Account of
a Member  holding  the AGM  Interest  bears to the  aggregate  positive  Capital
Accounts of all Members  holding the AGM Interest  whose  Capital  Accounts have
positive balances as may be adjusted from time to time.

AGM INTEREST - means the  Membership  Interest  received by AGM on the Effective
Date and transferred to the Trust on May 14, 1997.

ANNUAL OPERATING PLAN - has the meaning set forth in Section 7.2.1.

ARTICLES - means the Certificate of Formation of the Company as properly adopted
and amended  from time to time by the Members  and filed with the  Secretary  of
State of Delaware.

ASSIGNEE - means a Person to whom a Membership Interest has been transferred who
has not been admitted as a Substitute Member.

ASSIGNING MEMBER - has the meaning set forth in Section 5.1.2.

BANK  INDEBTEDNESS - means revolving  Indebtedness in a principal  amount not to
exceed $150 million incurred by the Company in connection with providing working
capital for the Company, and any refinancing of such Indebtedness with a bank or
other financial  institution,  provided that, without the written consent of the
holders of a Majority of the AGM Interest,  the maximum  amount of  Indebtedness
permitted  to be incurred in any such  refinancing  does not  increase  over the
maximum  amount  of   Indebtedness   outstanding   immediately   prior  to  such
refinancing,  and the terms and conditions of such refinancing do not materially
adversely affect the holders of the AGM Interest.

BANKRUPT  MEMBER - means a Member which has commenced any  proceeding  under any
bankruptcy, debt arrangement, or insolvency law of any jurisdiction, whether now
or hereafter in effect,  or a Member against which any such  proceeding has been
commenced and to which the Member by any act or omission has indicated  approval
thereof,  consent thereto or acquiescence therein, or as to which an order shall
be entered and remain in effect for more than 120 days approving the petition in
any such proceeding.

BEET  PAYMENT - means the  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 amended through September 30, 1998.

BEET  PAYMENT  REDUCTION  - means the amount by which the Beet  Payment  must be
reduced in order for the LLC to generate  at least $25 million of  Distributable
Cash in each Fiscal Year  beginning  with the Fiscal  Year ending  December  31,
2005.

BUSINESS - has the meaning set forth in Article III.

BUSINESS DAY - means any day excluding a Saturday, Sunday and any day which is a
legal  holiday under the laws of the State of Idaho or is a day on which banking
institutions located in such state are closed.

CAPITAL ACCOUNT - means, as of any given date, the Capital  Contributions to the
Company by a Member or Assignee as adjusted up to the date in question  pursuant
to Article VIII.

CAPITAL  CONTRIBUTION - means any  contribution to the capital of the Company in
cash or Property by a Member or Assignee pursuant to Article VIII.

CAPITAL LEASE OBLIGATIONS - means with respect to any Person and a Capital Lease
(which  means,  at any time, a lease with respect to which he lessee is required
concurrently  to recognize the  acquisition  of an asset and the incurrence of a
liability in accordance with GAAP),  the amount of the obligation of such Person
as the lessee under such Capital  Lease which would,  in  accordance  with GAAP,
appear as a liability on a balance sheet of such Person

CCC  LOANS -  means  loans  made  by the  Commodity  Credit  Corporation  or any
successor entity to the Company.

CHANGE OF CONTROL EVENT - means the termination of full-time employment with the
Company as a result of  resignation  or removal  (for any reason) of any five of
the following  nine  individuals  prior to the  expiration of such  individual's
employment  contract in effect as of October 14, 2005: Ralph C. Burton,  K. Pete
Chertudi,  W. E. "Bill" Smith, David L. Budge,  Victor J. Jaro, Wayne P. Neeley,
Dennis D. Costesso, Joseph P. Huff and John C. McCreedy.

CODE - mean the Internal  Revenue Code of 1986, as amended,  and the regulations
promulgated  thereunder,  as amended, and any reference to a section of the Code
shall include any successor section or provision of the Code.

COMPANY - means The Amalgamated  Sugar Company LLC, a limited  liability company
formed under the Act, and any successor limited liability company.

COMPANY  AGREEMENT  - means this  Company  Agreement  including  all  amendments
adopted in accordance with this Company Agreement and the Act.

COMPANY MINIMUM GAIN - means the gain  (regardless of character)  which would be
realized by the Company if the  Property  subject to a  nonrecourse  debt (other
than  a  "partner   nonrecourse  debt"  as  such  term  is  defined  in  Section
1.704-2(b)(4) of the Regulations)  were disposed of in full satisfaction of such
debt on the relevant  date.  Such amount shall be computed  separately  for each
nonrecourse  liability  of the Company.  For this purpose the adjusted  basis of
Property subject to two or more liabilities of equal priority shall be allocated
among  such  liabilities  in  proportion  to the  outstanding  balances  of such
liabilities  and  the  adjusted  basis  of  Property  subject  to  two  or  more
liabilities of unequal  priority shall be allocated to the liability of inferior
priority only to the extent of the excess, if any, of the adjusted basis of such
Property over the aggregate  outstanding  balance of the liabilities of superior
priority.  If Property is  reflected  in the Capital  Accounts of the Company at
other than its basis,  Company  Minimum  Gain shall be  determined  by using the
amount recorded for such Property in determining Capital Accounts instead of the
basis of such Property.

COMPANY TRUSTEE - has the meaning given in the Deposit Trust Agreement.

CONSOLIDATED  - means with  respect to the  accounting  item with respect to any
Person, such item on a consolidated basis for such Person and its Subsidiaries.

CONSOLIDATED NET INCOME - means with respect to any Person,  Consolidated  gross
revenues less all operating and non-operating  expenses and other proper charges
determined in accordance  with GAAP;  provided that there shall be excluded from
the calculation of Consolidated Net Income:

          (1) extraordinary gains;

          (2) gains or losses  resulting  from the sale or other  disposition of
capital assets;

          (3) undistributed earnings of non-Subsidiary Investments;

          (4) gains arising from changes in accounting principles;

          (5) gains arising from the write-up of assets;

          (6) any earnings of a Person acquired by the Company or any Subsidiary
of the Company prior to the date such acquisition occurs; and

          (7)  any   gains  or  losses   resulting   from  the   retirement   or
extinguishment of Debt.

CONSOLIDATED  TANGIBLE  ASSETS - means the total net book value of all assets of
the Company and its Subsidiaries (excluding goodwill,  trade names,  copyrights,
trademarks,  other intangible  assets, and write-ups of assets after October 14,
2005)  determined  on a  Consolidated  basis as of the last day of the Company's
most recently ended fiscal year.

CONTROL  ACTION - means the exercise by the holders of the AGM Interest of their
rights under Article XVI of this Company Agreement.

CURRENT DEBT - means any Debt that is payable on demand or that  matures  within
one year, without any option on the part of the borrower or issuer thereunder to
extend  or renew  such  Debt for a period of more than one year from the date of
original  issuance or borrowing.  Notwithstanding  the  foregoing,  Current Debt
shall include the Bank Indebtedness and the CCC Loans.

DEBT - means , with respect to any Person:

          (a) any indebtedness for borrowed money,  (including  commercial paper
and  revolving  credit  line  borrowings),  or  which  is  evidenced  by  bonds,
debentures or notes, or otherwise  representing  the deferred  purchase price of
property or extensions of credit,  whether or not  representing  obligations for
borrowed money (other than trade, payroll and taxes payable),

          (b)  indebtedness  of a third party  secured by Liens on the assets of
such Person or a Subsidiary of such Person,

          (c) Capital Lease Obligations,

          (d) Guarantees,

          (e) with the exception of the AGM Interest,  capital stock (or similar
equity  interests)  that  provides for  mandatory  redemption  or  repurchase or
repurchase  at the  option  of the  holder  thereof  (and,  if such  Person is a
Subsidiary of the Company, all capital stock (or similar equity interests) which
is preferred as to liquidation  and is held by Persons other than the Company or
a Wholly-Owned Subsidiary of the Company);

          (f) obligations  with respect to Swaps,  letters or credit and similar
obligations; and

          (g) modifications, renewals and extensions of the above.

DEFICIT  CAPITAL  ACCOUNT  - means the  deficit  balance,  if any,  in a Capital
Account as of the end of the taxable year,  after giving effect to the following
adjustments:

     (1)  credit  to such  Capital  Account  any  amount  which  such  Member is
obligated to restore under Section  1.704-1(b)(2)(ii)(c) of the Regulations,  as
well as any addition  thereto  pursuant to the next to last sentence of Sections
1.704-2(g)(1) and (i)(5) of the Regulations after taking into account thereunder
any changes  during such year in  partnership  minimum  gain (as  determined  in
accordance with Section  1.704-2(d) of the  Regulations) and in the minimum gain
attributable  to any  partner  nonrecourse  debt (as  determined  under  Section
1.704-2(i)(3) of the Regulations); and

     (2) debit to such  Capital  Account  of the  items  described  in  Sections
1.704-l(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.

This  definition  of Deficit  Capital  Account is  intended  to comply  with the
provisions of Regulations Section  1.704-1(b)(2)(ii)(d) and 1.704-2, and will be
interpreted consistently with those provisions.

DEPOSIT TRUST  AGREEMENT - means the Deposit Trust Agreement dated as of May 14,
1997, as amended as of October 14, 2005, and as the same may be further amended,
supplemented or otherwise modified from time to time, between AGM and Wilmington
Trust Company, a Delaware banking corporation,

DEPRECIATION - means, for each Fiscal Year, an amount equal to the depreciation,
amortization,  or other cost  recovery  deduction  allowable  with respect to an
asset for such  Fiscal  Year,  except  that if the Gross Asset Value of an asset
differs from its adjusted basis for federal income tax purposes at the beginning
of such Fiscal Year,  Depreciation shall be an amount which bears the same ratio
to such  beginning  Gross Asset Value as the  federal  income tax  depreciation,
amortization,  or other cost  recovery  deduction  for such Fiscal Year bears to
such beginning adjusted tax basis; provided, however, that if the adjusted basis
for federal income tax purposes of an asset at the beginning of such Fiscal Year
is zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the Management Committee.

DISPOSITION  (OR  DISPOSE)  - means any sale,  assignment,  transfer,  exchange,
mortgage,  pledge,  grant,  hypothecation  or  other  transfer,  absolute  or as
security or encumbrance (including dispositions by operation of law).

DISTRIBUTABLE CASH - means, without duplication (A) the Company's net income for
financial statement purposes for each Fiscal Year, calculated in accordance with
GAAP, plus (i) actual book  depreciation,  depletion,  amortization and interest
expense  included in the  calculation  of net income,  less (ii) actual  capital
expenditures and actual interest paid (net of interest  capitalized);  provided,
however,  that in calculating net income (x) the first-in,  first-out  method of
accounting for inventories  shall be used regardless of the method actually used
by the Company to account for  inventories,  (y) expenses to reflect the cost to
purchase sugarbeets shall not exceed the Beet Payment,  regardless of the actual
expense amounts  recorded or payments made for sugarbeets by the Company and (z)
net income shall  exclude any income or expense  realized  upon a Major  Capital
Event,  and (B) any net cash  proceeds  to the  Company  generated  from a Major
Capital Event. For purposes of Section 9.3.1, the term  Distributable Cash shall
not include net cash proceeds to the Company from a Major Capital Event.

EFFECTIVE DATE - has the meaning set forth in Section 1.3.

EXCESS BEET PAYMENT - means the amounts, if any, by which the Company's expenses
to purchase sugarbeets exceeded the Beet Payment during such Fiscal Year.

FAIR MARKET VALUE - means at any time and with respect to any property, the sale
value of such  property that would be realized in an  arm's-length  sale at such
time  between an informed and willing  buyer and an informed and willing  seller
(neither being under a compulsion to buy or sell).

FISCAL YEAR - means the  Company's  fiscal year  beginning  January 1 and ending
December 31 of each year.

FORMATION AGREEMENT - has the meaning set forth in Section 1.1.

FUNDED DEBT - means all Debt other than Current Debt.

GAAP - means United States generally accepted accounting principles applied on a
basis  consistent  with the  accounting  practices  used by AGM  during its 1996
fiscal year.

GROSS ASSET VALUE - means, with respect to any asset, the asset's adjusted basis
for federal income tax purposes, except as follows:
     (1) The initial Gross Asset Value of any asset  contributed  by a Member or
Assignee to the Company  shall be the gross fair market value of such asset,  as
determined by the contributing Member or Assignee and the Management  Committee,
provided  that the initial Gross Asset Values of the assets  contributed  to the
Company pursuant to Section 8.1 shall be as set forth in APPENDIX A.

     (2) The Gross Asset Values of all Company assets shall be adjusted to equal
their respective  gross fair market values,  as determined by the unanimous vote
of the Members as of the following  times:  (a) the acquisition of an additional
interest by any new or existing  Member or Assignee in exchange  for more than a
de minimis  contribution of Property  (including money); (b) the distribution by
the Company to a Member or Assignee of more than a de minimis amount of Property
(including  money)  as  consideration  for a  Membership  Interest;  and (c) the
liquidation  of  the  Company   within  the  meaning  of   Regulations   Section
1.704-l(b)(2)(ii)(g):  provided,  however,  that adjustments pursuant to clauses
(a) and (b) above  shall be made  only if the  Management  Committee  reasonably
determines  in good faith that such  adjustments  are  necessary  to reflect the
relative economic interests of the Members in and the Assignees of the Company.

     (3) The Gross Asset Value of any Company asset distributed to any Member or
Assignee shall be adjusted to equal the gross fair market value of such asset on
the date of distribution as determined by the unanimous vote of the Members.

     (4) The Gross  Asset  Values  of  Company  assets  shall be  increased  (or
decreased)  to reflect  any  adjustments  to the  adjusted  basis of such assets
pursuant to Code Section 732(d),  734(b) or 743(b),  but only to the extent that
such adjustments are taken into account in determining Capital Accounts pursuant
to Regulation  Section  1.704-l(b)(2)(iv)(m)  and Section 8.3 and subsection (4)
under the  definition  of Net Profits and Net Losses;  provided,  however,  that
Gross Asset  Values  shall not be adjusted  pursuant to this  definition  to the
extent the  Management  Committee  determines  that an  adjustment  pursuant  to
subsection (2) of this  definition is necessary in connection with a transaction
that would otherwise result in an adjustment pursuant to this subsection (4).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to
subsection (1), (2) or (4) of this definition, then such Gross Asset Value shall
thereafter  be adjusted by the  Depreciation  taken into account with respect to
such asset for purposes of computing Net Profits and Net Losses.

GUARANTEES - means with respect to any Person, any direct or indirect liability,
contingent  or  otherwise,  of such  Person  with  respect  to any Debt,  lease,
dividend or other obligation of another, including, without limitation, any such
obligation  directly or  indirectly  guaranteed,  endorsed  (otherwise  than for
collection or deposit in the ordinary  course of business) or discounted or sold
with  recourse by such  Person,  or in respect of which such Person is otherwise
directly  or  indirectly  liable,  including,   without  limitation,   any  such
obligation in effect guaranteed by such Person through any agreement (contingent
or  otherwise)  to (i)  maintain  the  solvency  or any  balance  sheet or other
financial  condition of another  Person or (ii) make  payment for any  products,
materials or supplies or for any  transportation  or services  regardless of the
non-delivery  or  non-furnishing  thereof,  in any such case if the  purpose  or
effect of such agreement is to provide  assurance that such  obligation  will be
paid or  discharged,  or that any agreements  relating  thereto will be complied
with, or that the holders of such obligation  will be protected  against loss in
respect thereof.  Guarantees shall include obligations of partnerships and joint
ventures  of which  such  Person  or any  Subsidiary  is a  general  partner  or
co-venturer  that  is  not  expressly   non-recourse  to  such  Person  or  such
Subsidiary.

INDEBTEDNESS - means all indebtedness for borrowed money, indebtedness evidenced
by  notes,   debentures,   bonds  or  similar  instruments,   capitalized  lease
obligations, and any guarantees of the obligations of another Person.

INVESTMENT - means any investment,  made in cash or by delivery of property,  by
the Company or any of its Subsidiaries in any Person,  whether by acquisition of
stock,  Debt or other  obligation or Security (as defined in Section 2(1) of the
Securities  Act of 1933, as amended from time to time),  or by loan,  Guarantee,
advance, capital contribution or otherwise.

INFORMATION - has the meaning set forth in Section 15.4.

INITIAL CAPITAL CONTRIBUTION - means the Capital Contributions agreed to be made
by the Initial Members as of January 3, 1997, as described in Section 8.1 and as
specifically described on APPENDIX A.

INITIAL MEMBERS - means AGM and SRSC.

INSURANCE  EVENT - means any  transaction  or series of  transactions  involving
payment in  connection  with any  condemnations,  easements,  net  recoveries of
damage awards and insurance proceeds (other than incident to or resulting in the
liquidation of the Company),  which payment  exceeds $50,000 and is not promptly
reinvested in the Company's business.

MAJOR CAPITAL EVENT - means any transaction or series of transactions  involving
(i) any sale,  transfer or other  disposition of all or substantially all of the
Company's  assets  (other than in the  ordinary  course of  business),  (ii) any
Insurance  Event,  or (iii) any  financing or  refinancing  the purpose of which
financing or  refinancing  is to  distribute  all or part of the proceeds to the
Members.

MAJORITY  OF THE SR  INTEREST - means  holders of the SR  Interest  which  taken
together  exceed 50% of the SR Capital  Interests  and,  for purposes of Article
XIII,  50% of the  interest  in Profits  allocable  to holders of the SR Capital
Interest.

MAJORITY OF THE AGM  INTEREST - means  holders of the AGM  Interest  which taken
together  exceed 50% of the AGM Capital  Interests  and, for purposes of Article
XIII,  50% of the  interest in Profits  allocable  to holders of the AGM Capital
Interest.

MANAGEMENT COMMITTEE - has the meaning set forth in Section 5.1.

MATERIAL - means  material  in relation to the  business,  operations,  affairs,
financial  condition,  assets,  properties,  or prospects of the Company and its
Subsidiaries taken as a whole.

MATERIAL  ADVERSE EFFECT - means a material  adverse effect on (a) the business,
operations,  affairs,  financial condition,  assets or properties of the Company
and its Subsidiaries taken as a whole, (b) the ability of the Company to perform
its  obligations   under  the  Company   Agreement,   or  (c)  the  validity  or
enforceability of the Company Agreement.

MEMBER - means an  Initial  Member,  Substituted  Member or  Additional  Member,
provided,  that when used in connection  with the  distribution  of cash and the
allocation  of profit,  loss and other items  under  Article  IX,  Member  shall
include any Assignee.

MEMBERSHIP  INTEREST  - means  the  rights  of a  Member  or,  in the case of an
Assignee,  the rights of the assigning Member, in distributions  (liquidating or
otherwise)  and  allocations  of the Net Profits,  Net Losses and other  federal
income tax items of gains, deductions and credits of the Company.

MEMBER MINIMUM GAIN - means the gain  (regardless  of character)  which would be
realized by the Company if Property subject to a "partner  nonrecourse debt" (as
such term is defined in Section  1.704-2(b)(4) of the Regulations) were disposed
of in full satisfaction of such debt on the relevant date. The adjusted basis of
Property subject to more than one partner nonrecourse debt shall be allocated in
a manner  consistent  with the  allocation of basis for purposes of  determining
Company Minimum Gain under this Company Agreement.

NET PROFITS or NET LOSSES - means,  for each  taxable  year of the  Company,  an
amount  equal to the  Company's  net  taxable  income  or loss for such  year as
determined for federal income tax purposes  (including  separately stated items)
in accordance  with (a) the accounting  method and rules used by the Company and
(b) Section 703 of the Code, with the following adjustments:

     (1) Any items of income, gain, loss and deduction specifically or specially
allocated  to Members or  Assignees  pursuant  to Section 9.2 shall not be taken
into account in computing Net Profits or Net Losses;

     (2) Any income of the Company  that is exempt from  federal  income tax and
not  otherwise  taken into account in computing Net Profits and Net Losses shall
be added to such taxable income or loss;

     (3) Any expenditure of the Company described or deemed described in Section
705(a)(2)(B)  of the Code and not otherwise  taken into account in computing Net
Profits and Net Losses shall be subtracted from such taxable income or loss;

     (4) In the event the Gross  Asset  Value of any  Company  asset is adjusted
pursuant to clause (2) or (3) of the definition of Gross Asset Value, the amount
of such  adjustment  shall  be  taken  into  account  as gain or loss  from  the
disposition of such asset for purposes of computing Net Profits and Net Losses;

     (5) Gain or loss resulting  from any  disposition of any Company asset with
respect to which gain or loss is  recognized  for  federal  income tax  purposes
shall be computed with  reference to the Gross Asset Value of the asset disposed
of,  notwithstanding  that the adjusted tax basis of such asset differs from its
Gross Asset Value;

     (6) In lieu of the  depreciation,  amortization  and  other  cost  recovery
deductions  taken into account in computing such taxable  income or loss,  there
shall be taken into account Depreciation for such Fiscal Year; and

     (7) To the extent an  adjustment  to the  adjusted tax basis of any Company
Property  pursuant to Section  732(d),  734(b) or 743(b) of the Code is required
pursuant to Section  1.704-1(b)(2)(iv)(m)  of the  Regulations  to be taken into
account in determining Capital Accounts,  the amount of such adjustment shall be
treated as an item of gain (if the adjustment  decreases the basis of the asset)
from the  disposition  of the asset and shall be taken into account for purposes
of computing Net Profits or Net Losses.

NOTE PURCHASE  AGREEMENT - means the Note Purchase Agreement dated as of October
17, 2005, among the Agent,  SRSC and the purchasers  named therein,  pursuant to
which SRSC issued the Senior Notes.

NWFC PLEDGE AND  SECURITY  AGREEMENT - means the Pledge and  Security  Agreement
dated as of October 17, 2005 from SRSC to Agent, as agent for the benefit of the
holders of the Senior Notes.

PERCENTAGE OF EARNINGS  CAPACITY - means, with respect to assets of the Company,
and/or its  Subsidiaries  Transferred or proposed to be  Transferred,  the ratio
(expressed  as a  percentage)  of (i)  Consolidated  Net Income  produced  by or
attributable  to such  assets  during  the  thirty-six  (36) month  period  most
recently ended prior to the date of their Transfer or proposed  Transfer to (ii)
Aggregate Consolidated Net Income.

PERSON - means an individual,  a partnership,  a limited  liability  company,  a
cooperative,  a corporation,  an association, a joint stock company, a trust, an
estate,  a joint  venture,  an  unincorporated  organization  and a governmental
entity or any department, agency or political subdivision thereof.

PLANT COLLATERAL - has the meaning given in the Note Purchase Agreement.

PROPERTY  -  means  any  property  real or  personal,  tangible  or  intangible,
including  money and any  legal or  equitable  interest  in such  property,  but
excluding  services and promises to perform  services in the future.  PUT OPTION
CONSIDERATION  - means  the sum of  $250,000,000  (in the sale of all of the AGM
Interest  originally issued) or the applicable portion thereof (in the sale of a
portion of the AGM Interest),  plus any Retained Amounts (or, in the case of the
sale of a portion of the AGM Interest, the part of any Retained Amounts relating
to such  portion).  PUT NOTICE - has the meaning set forth in Section 18.1.  PUT
OPTION - has the meaning set forth in Section  18.1.  REDEMPTION  DATE - has the
meaning  set  forth  in  Section  17.2.  REDEMPTION  PRICE  -  means  the sum of
$250,000,000 (in the redemption of all of the AGM Interest originally issued) or
the  applicable  portion  thereof  (in the  redemption  of a portion  of the AGM
Interest),  plus any Retained  Amounts (or, in the case of the sale of a portion
of the AGM Interest, the part of any Retained Amounts relating to such portion).
REGULATIONS  -  means,  except  where  the  context  indicates  otherwise,   the
permanent,  proposed or temporary  regulations of the Department of the Treasury
under the Code as such  regulations  may be lawfully  changed from time to time.
REQUIRED  PURCHASERS  - has the meaning  given in the Note  Purchase  Agreement.
RESIDENT  TRUSTEE  - has the  meaning  given  in the  Deposit  Trust  Agreement.
RETAINED  AMOUNTS - means 95% of any Accrual,  including any applicable  accrued
interest.

SECURITY DOCUMENTS - has the meaning given in the Note Purchase Agreement.

SENIOR NOTES - means the 7.61% Senior Notes due  September  30, 2012,  issued by
SRSC under the Note Purchase Agreement.

SHARING  RATIO - means with respect to the holders of the SR Interest,  5.3% and
with respect to the holders of the AGM Interest, 94.7%.

SNAKE RIVER  PLEDGE  AGREEMENT - means the Second  Amended and  Restated  Pledge
Agreement  dated as October  14, 2005  between  SRSC and AGM, as the same may be
amended from time to time..

SPT GUARANTY - means the Second SPT Guaranty entered into as of October 14, 2005
by the Trust for the  benefit of SRSC,  as the same may be amended  form time to
time.

SPT PLEDGE AGREEMENT - means the Second Pledge Agreement dated as of October 14,
2005 among SRSC and the Trust, as the same may be amended from time to time.

SR CAPITAL  INTEREST - means the proportion that the positive Capital Account of
a Member holding an SR Interest bears to the aggregate positive Capital Accounts
of all  Members  holding SR  Interests  whose  Capital  Accounts  have  positive
balances as may be adjusted from time to time.

SR INTEREST - means the  Membership  Interest  received by SRSC on the Effective
Date.

SRSC - has the meaning set forth in the preamble of this Company Agreement.

SRSC  BEET  PAYMENT - means  the  payments  by SRSC to its  grower  members  for
sugarbeets,  including the Beet Payment plus any  additional  cash  available to
SRSC which SRSC uses to pay to its grower members for sugarbeets.

SRSC DEFAULT - means a default which permits the Senior Notes to be accelerated.

SRSC SUBORDINATED DEBT - has the meaning as set forth in Section 9.3.1.

SUBSIDIARY  or  SUBSIDIARIES  - means as to any  Person  (a) any  corporation(s)
organized  under the laws of any state of the United States of which such Person
or another  Subsidiary of such Person, as the case may be,  beneficially owns or
controls, either directly or indirectly,  100% of the outstanding capital stock,
and (b) any  partnership(s)  or other entities  organized  under the laws of any
state of the United  States in which such Person or another  Subsidiary  of such
Person,  as the case may be,  holds a 100%  equity  interest  and  controls  the
management of such entity.

SUBSTANTIAL  PART - means, as of any date of  determination  and with respect to
assets of the Company and/or its Subsidiaries, any of the following:

          (a)  assets  having,   when  taken  together  with  all  other  assets
Transferred  by the  Company  and/or its  Subsidiaries  during the twelve  month
period  immediately  preceding the date of determination,  an aggregate net book
value or an  aggregate  Fair Market  Value  (whichever  is greater)  equal to or
greater than 10% of Consolidated Tangible Assets;

          (b)  assets  having,   when  taken  together  with  all  other  assets
Transferred  by the Company and/or its  subsidiaries  from and after October 14,
2005, an aggregate net book value or an aggregate  Fair Market Value  (whichever
is greater) equal to or greater than 25% of Consolidated Tangible Assets;

          (c)  assets  having,   when  taken  together  with  all  other  assets
Transferred  by the  Company  and/or its  Subsidiaries  during the twelve  month
period immediately preceding the date of determination,  an aggregate Percentage
of Earnings  Capacity equal to or greater than 10%; or (d) assets  having,  when
taken  together  with all other  assets  Transferred  by the Company  and/or its
Subsidiaries  from and after  October  14,  2005,  an  aggregate  Percentage  of
Earnings Capacity equal to or greater than 25%.

SUBSTITUTE MEMBER - means an Assignee who has been admitted to all of the rights
of membership pursuant to this Company Agreement.

SWAPS - means, with respect to any Person,  payment  obligations with respect to
interest rate swaps,  currency  swaps and similar  obligations  obligating  such
Person  to make  payments,  whether  periodically  or upon  the  happening  of a
contingency.  For the purposes of this  Agreement,  the amount of the obligation
under any Swap shall be the amount  determined in respect  thereof as of the end
of the then most  recently  ended fiscal  quarter of such  Person,  based on the
assumption that such Swap had terminated at the end of such fiscal quarter,  and
in making such  determination,  if any agreement  relating to such Swap provides
for the netting of amounts  payable by and to such Person  thereunder  or if any
such agreement  provides for the simultaneous  payment of amounts by and to such
Person,  then in each such case, the amount of such obligation  shall be the net
amount so determined.

TRANSFER  OR  TRANSFERRED  - means to  consolidate  with or merge with any other
corporation or otherwise effect a  recapitalization  or restructuring or convey,
transfer  or lease  any of its  assets  in a single  transaction  or  series  of
transactions to any Person or Persons.

TRUST - has the meaning set forth in the preamble of this Company Agreement.

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),  6.3(xxi),  6.3(xxii) 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.

VALHI DEFAULT - means a default which permits the Valhi Loans to be accelerated.

VALHI OBLIGATION SECURITY DOCUMENTS - has the meaning given in the Note Purchase
Agreement.

VALHI LOANS - means the loan by SRSC to Valhi in the amount of $212,500,000, and
the loan by SRSC to Valhi, in the amount of  $37,500,000,  each dated as January
3, 1997.

VALHI - means Valhi, Inc., a Delaware corporation.

WITHDRAWAL EVENT - has the meaning set forth in Section 13.1.1(b).

WHOLLY-OWNED  SUBSIDIARY  - means with respect to any Person,  at any time,  any
Subsidiary  of such  Person  one  hundred  percent  (100%) of all of the  equity
interests (except  directors'  qualifying  shares) and voting interests of which
are owned by any one or more of such Person and such Person's other Wholly-Owned
Subsidiaries at such time.

                                   ARTICLE III
                               NATURE OF BUSINESS

     The  Company's  business  shall be the  production  and  sale of sugar  and
by-products  (the  "Business").  The Company  shall have the authority to do all
things  necessary  or  convenient  to operate its  Business as described in this
Article III  including  renewal,  amending,  modifying  or altering  any permit,
consent or authorization.  The Company exists only for the purposes specified in
this Article III and may not conduct any other  business  without the consent of
the affirmative vote of all of the Members as provided in this Agreement.

                                   ARTICLE IV
                         NAMES AND ADDRESSES OF MEMBERS

         The names and addresses of the Members are identified on APPENDIX A.

                                    ARTICLE V
                          THE MANAGEMENT OF THE COMPANY

5.1 MANAGEMENT OF THE COMPANY BY THE MANAGEMENT COMMITTEE.

     5.1.1 The  business  and  affairs  of the  Company  shall be managed by the
Members.  The Members shall exercise such management duties through a Management
Committee of seven  representatives  (the "Management  Committee"),  all of whom
initially shall be appointed by SRSC, and shall continue to be appointed by SRSC
subject  to Article  XVI.  Except  when the  representatives  to the  Management
Committee  are  appointed  by the  holders  of a  Majority  of the AGM  Interest
pursuant to Article XVI, each  representative to the Management  Committee shall
be an  officer,  director  or  employee  of SRSC and a member of SRSC,  actively
engaged in the growing of sugarbeets. The representatives as of October 14, 2005
are the  individuals  identified  on  APPENDIX  A.  Each  representative  to the
Management Committee shall serve until such representative's resignation, death,
disability or until removal by SRSC or, upon a Triggering  Event, by the holders
of a Majority of the AGM Interest pursuant to Article XVI.

     5.1.2 Any Member may at any time  remove  any of its  Management  Committee
representatives appointed by such Member and appoint a substitute representative
by delivering  written notice of such substitution to the other Members.  In the
event any Member  assigns  all or any  portion of its  Membership  Interest  (an
"Assigning  Member") to a Person  that is  admitted as a Member  pursuant to the
terms of this Agreement, the Assigning Member may, in its sole discretion, elect
to allow such Substitute or Additional Members to designate any of the Assigning
Member's  representatives  to the  Management  Committee by  delivering  written
notice of such election to the other Members.

     5.1.3 Each  representative to the Management  Committee shall have one vote
in all actions  required or permitted to be taken by the  Management  Committee.
All actions taken by the Management Committee must be by: (i) a majority vote of
the representatives then holding office and entitled to vote at a meeting of the
Management  Committee;  or (ii) by the affirmative written consent of a majority
of the  representatives  to the Management  Committee which would be entitled to
vote at a meeting of the Management  Committee  called for the purpose of taking
such action,  in which case prompt  written notice of such action shall be given
to any representative not executing such written consent.

     5.1.4 No  representative  of the Management  Committee shall be entitled to
compensation from the Company solely for serving in such capacity.

     5.1.5 The Management  Committee  shall review the operation of the business
and the management of the Company and shall establish  meeting times,  dates and
places and  requisite  notice  requirements  and adopt rules or procedures as it
deems  necessary.  Any  Member  may call a  special  meeting  of the  Management
Committee  for any  purpose by giving  the other  Members  and their  respective
representatives  to the  Management  Committee  at least 24  hours'  written  or
telephonic  notice thereof,  except in the case of an emergency,  in which case,
such notice as is practicable shall be sufficient.

     5.1.6 One or more  representatives  to the Management  Committee may attend
meetings of the Management Committee by means of conference telephone call.

     5.1.7 The Management  Committee shall appoint and terminate senior officers
of the Company  (including a Chief Executive  Officer),  define their duties and
establish their compensation.

5.2 AUTHORITY TO BIND THE COMPANY.  The Management Committee shall have full and
complete  authority,  power and  discretion  to manage and control the business,
affairs and  properties  of the Company,  to make all  determinations  regarding
those matters and to perform any and all other acts or  activities  customary or
incident  to the  management  of  the  Company's  business  except  for  matters
expressly reserved to the determination of the Members elsewhere in this Company
Agreement, including, but not limited to, the matters set forth in Section 6.3.

5.3 DUTIES OF THE MANAGEMENT COMMITTEE. The Management Committee shall cause the
Company to take the following action:

     (i) at all  times  cause  to be done  all  things  necessary  to  maintain,
preserve and renew its existence and all material  licenses,  authorizations and
permits necessary to the conduct of its businesses;

     (ii)  maintain and keep its  properties  in good repair,  working order and
condition,  and from  time to time  make all  necessary  or  desirable  repairs,
renewals  and  replacements,   so  that  its  businesses  may  be  properly  and
advantageously conducted at all times;

     (iii)  pay  and  discharge   when  payable  all  taxes,   assessments   and
governmental  charges  imposed upon its properties or upon the income or profits
therefrom (in each case before the same becomes  delinquent and before penalties
accrue thereon) and all claims for labor,  materials or supplies which if unpaid
would by law  become a lien upon any  Company  assets,  unless and to the extent
that the same are being  contested in good faith and by appropriate  proceedings
and  adequate  reserves  (as  determined  in  accordance  with  GAAP)  have been
established on its books with respect thereto;

     (iv) comply with all other  material  obligations  which the Company incurs
pursuant  to any  contract or  agreement,  whether  oral or written,  express or
implied, as such obligations become due to the extent to which the failure to so
comply would  reasonably be expected to have a Material  Adverse Effect,  unless
and to the  extent  that the same  are  being  contested  in good  faith  and by
appropriate  proceedings and adequate reserves (as determined in accordance with
GAAP) have been established on its books with respect thereto;

     (v)  comply  with  all  applicable  laws,  rules  and  regulations  of  all
governmental authorities, the violation of which would reasonably be expected to
have a Material Adverse Effect;

     (vi) apply for and  continue in force with good and  responsible  insurance
companies adequate insurance covering risks of such types and in such amounts as
are   consistent   with  past  practice  and  are  customary  for   well-insured
corporations of similar size engaged in similar lines of business; and

     (vii) maintain  proper books of record and account which fairly present its
financial  condition  and  results  of  operations  and make  provisions  on its
financial  statements for all such proper  reserves as in each case are required
in accordance with GAAP.

5.4 LIABILITY FOR CERTAIN ACTS. Each representative to the Management  Committee
shall have a fiduciary  duty to the Members and shall  perform his or her duties
in good  faith,  in a manner  he or she  reasonably  believes  to be in the best
interests of the Members,  and with such care as an ordinarily prudent person in
a like position would use under similar  circumstances.  A representative who so
performs  his or her duties  shall not have any  liability to the Company or its
Members by reason of being or having  been a  representative  to the  Management
Committee.  The representatives to the Management  Committee shall not be liable
to the Company or to any Member for any loss or damage  sustained by the Company
or any  Member,  unless the loss or damage  shall have been the result of fraud,
deceit,  gross  negligence  or willful  misconduct,  or  willful  breach of this
Company Agreement by such representative.

5.5 MANAGEMENT  COMMITTEE  REPRESENTATIVES HAVE NO EXCLUSIVE DUTY TO COMPANY. No
representative  to the  Management  Committee  shall be  required  to manage the
Company as his or her sole and exclusive activity,  and representatives may have
other business interests and may engage in other activities in addition to those
relating to the  Company.  Neither  the  Company  nor any Member  shall have any
right,  by virtue of this Company  Agreement,  to share or  participate  in such
other  interests  or  activities  of such  representatives  or to the  income or
proceeds derived  therefrom.  The  representatives  to the Management  Committee
shall not incur any liability to the Company or to any of the Members  solely as
a result of engaging in any other business or venture.

5.6 STANDARD OF CARE. The  representatives  to the  Management  Committee in the
discharge of their  duties to the Company  shall manage and operate the business
of the  Company in a manner and for the  purposes of  maximizing  its long- term
value  and  return  to  the  Members.   In   discharging   their   duties,   the
representatives to the Management  Committee shall be fully protected in relying
in good faith upon the records  required to be maintained  under Article VII and
upon such  information,  opinions,  reports or statements by the chief executive
officer of the Company,  any of the Members or agents of the Company,  or by any
other Person, as to matters such  representatives  reasonably believe are within
such other Person's  professional or expert competence and who has been selected
with  reasonable  care by or on behalf of the  Company,  including  information,
opinions,  reports  or  statements  as to the  value and  amount of the  assets,
liabilities,  profits or losses of the Company or any other facts  pertinent  to
the existence and amount of assets from which  distributions to Members might be
paid.

                                   ARTICLE VI
                          RIGHTS AND DUTIES OF MEMBERS

6.1 LIABILITY OF MEMBERS. The debts, obligations and liabilities (including, but
not limited to, strict  liability) of the Company,  whether arising in contract,
tort,  under statute or otherwise,  shall be solely the debts,  obligations  and
liabilities of the Company.  No Member of the Company shall be obligated for any
such  debt,  obligation  or  liability  solely by reason of being a Member.  The
failure of the Company to observe any  formalities or  requirements  relating to
the exercise of its powers or  management  of its business or affairs under this
Company  Agreement  or the  Act  shall  not be  grounds  for  imposing  personal
liability on the Members for liabilities of the Company.

6.2 VOTING RIGHTS. All Members shall be entitled to vote on any matter submitted
to a vote of the Members.  Unless the vote of a lesser or greater  proportion or
number is otherwise  required by the Act or this Company Agreement or unless the
consent of Members  holding  the AGM  Interest  is  otherwise  required  by this
Company  Agreement,  the  affirmative  vote of one or  more  Members  holding  a
Majority of the SR Interest  shall be the act of the  Members.  Unless  required
under  applicable law,  Members who have an interest  (economic or otherwise) in
the outcome of any particular  matter upon which the Members vote or consent may
vote or consent upon any such matter and their vote or consent,  as the case may
be, shall be counted in the  determination  of whether the requisite  matter was
approved by the Members.

6.3 AGM MEMBER CONSENT.  Notwithstanding  anything in this Company  Agreement to
the  contrary,  the  Company  shall not do any of the  following  acts,  and the
Company will not permit any Subsidiary of the Company to do any of the following
acts,  directly or indirectly,  without the written consent of a Majority of the
AGM Interest:

          (i) make any  distributions  upon any  Membership  Interest other than
distributions pursuant to the terms of Section 9.3;

          (ii)  purchase  or  otherwise  acquire  all  or  any  portion  of  any
Membership Interest (including, without limitation, rights to acquire all or any
portion of any Membership  Interest) other than the purchase of the AGM Interest
pursuant to Article XVII;

          (iii) directly or indirectly,  create, incur, assume,  guarantee, have
outstanding,  or otherwise  become or remain directly or indirectly  liable with
respect to, (i) any Consolidated  Funded Debt or (ii) any  Consolidated  Current
Debt, except for (A) the CCC Loans (provided that at any time that the CCC Loans
are recourse to the Company, the Company will not have any CCC Loans outstanding
unless there shall have been during the  immediately  preceding  twelve months a
period of at least 60  consecutive  days on each day of which  there  shall have
been no CCC Loans  outstanding in excess of $25,000,000) and (B) the Bank Loans,
provided  that there shall have been  during the  immediately  preceding  twelve
months a period of at least 60 consecutive days on each day of which there shall
have been no Bank Loans outstanding in excess of $65,000,000;

          (iv) declare, make or authorize any Investment except the following:

            (1)  Investments  in  direct  obligations  of the  United  States of
America  or  obligations  fully  guaranteed  by the  United  States of  America,
provided that such obligations mature within one year from the date acquired;

            (2) Investments in certificates of deposit  maturing within one year
from the date acquired and issued by a bank or trust company organized under the
laws of the United  States or any or its states,  rated AA or better by Standard
and Poor's Ratings  Group,  a division of McGraw Hill,  Inc. or Aa2 or better by
Moody's  Investors  Service,  Inc.,  and having  capital,  surplus and undivided
profits aggregating at least $750,000,000;

            (3) Investments in commercial  paper rated A1 by Standard and Poor's
Ratings  Group,  a division  of McGraw  Hill,  Inc.  or P1 by Moody's  Investors
Service, Inc. and maturing not more than 270 days from the date acquired;

            (4) loans and advances by the Company to its Subsidiaries;

            (5) loans and  advances  (i) by  Subsidiaries  of the Company to the
Company and (ii) between Subsidiaries of the Company;

            (6) travel and other business  advances to officers and employees of
the Company or any Subsidiary of the Company in the ordinary course of business;
and

            (7)  other   Investments  not  to  exceed  an  aggregate  amount  of
$1,500,000;

          (v) effect any Transfer except that:

            (1) the Company or any of its  Subsidiaries  may Transfer  assets in
the ordinary course of their business;

            (2) any Subsidiary of the Company may merge with the Company or with
a  Wholly-Owned  Subsidiary  of the Company,  provided  that the Company or such
Wholly-Owned Subsidiary shall be the survivor of such merger;

            (3) any  Subsidiary  of the Company may  Transfer  its assets to the
Company or any Wholly-Owned Subsidiary of the Company;

            (4) the Company may consolidate or merge with another corporation if
(i) the Company is the  continuing  or  surviving  company and (ii)  immediately
before and after  giving  effect to such  transaction,  no breach of the Company
Agreement  exists or would exist,  and no amendment of the Company  Agreement is
required; and

            (5) the Company and any of its  Subsidiaries  may Transfer assets of
the  Company  or such  Subsidiary,  as the case may be, if all of the  following
conditions  shall have been  satisfied with respect  thereto:  (i) such Transfer
does not  involve  a  Substantial  Part of the  assets  of the  Company  and its
Subsidiaries,  (ii) in the good faith opinion of the Company, the Transfer is in
exchange  for  consideration  with a Fair Market Value at least equal to that of
the property  Transferred,  and is in the best  interests of the Company and its
Members and (iii) immediately before and after giving effect to such Transfer no
breach of the Company  Agreement  exists or would exist, and no amendment of the
Company Agreement is required;

No such Transfer of assets of the Company or any of its Subsidiaries  shall have
the effect of releasing the Company or any of its  Subsidiaries or any successor
corporation that shall  theretofore have become such a successor  corporation in
the manner  prescribed in this Section 6.3(v) from any obligation to the Members
under the Company Agreement;

            (vi)  Transfer,  or part with  control  of,  any shares of stock (or
other equity  interests) or Debt of any Subsidiary of the Company except (1) the
Company or any of its Subsidiaries may Transfer shares of stock (or other equity
interests)  or  Debt  of any  Subsidiary  of the  Company  to the  Company  or a
Wholly-Owned  Subsidiary  of the  Company  and  (2)  the  Company  or any of its
Subsidiaries  may Transfer all shares of stock (or other equity  interests)  and
all  Debt of such a  Subsidiary  if (a) the  Transfer  is in  exchange  for cash
consideration  with a Fair Market  Value at least equal to that of the  property
transferred  (determined  in  good  faith  by the  Management  Committee  of the
Company),  (b) such Transfer is otherwise  permitted  under this Section 6.3 and
(c) at the time of such Transfer,  such  Subsidiary  shall not own,  directly or
indirectly, any shares of stock (or other equity interests) or Debt of any other
Subsidiary  (unless all of the shares of stock (or other equity  interests)  and
Debt of such other Subsidiary owned, directly or indirectly,  by the Company and
all Subsidiaries are simultaneously  being sold). The Company will not issue any
membership interests other than the SR Interest and the AGM Interest;

            (vii) engage in any business  other than the  production and sale of
sugar and by-products;

            (viii)  other  than in  connection  with Bank  Indebtedness,  become
subject to any  agreement  or  instrument  which by its terms  would  (under any
circumstances)  restrict the Company's  ability to perform the provisions of the
Company Agreement (including, without limitation, provisions relating to payment
of distributions on and making acquisitions of the AGM Interest);

            (ix) enter into directly or indirectly  any  transaction or Material
group of related transactions (including without limitation the purchase, lease,
sale or exchange of properties of any kind or the rendering of any service) with
any Affiliate,  except (1) the Company may provide certain  services to SRSC for
which SRSC shall pay the  Company  an amount up to  $25,000  per month,  (2) the
Company Agreement, the Formation Agreement and transactions contemplated by such
agreements,  including without  limitation the Company's  purchase of sugarbeets
from  SRSC,  (3)  in  the  ordinary   course  and  pursuant  to  the  reasonable
requirements  of the Company's or such  Subsidiary's  business and upon fair and
reasonable  terms no less  favorable to the Company or such  Subsidiary,  as the
case may be, than would be obtainable in a comparable  arm's-length  transaction
with a Person not an Affiliate, and (4) transactions between the Company and any
Subsidiary of the Company;

            (x) permit any Subsidiary of the Company to incur or permit to exist
any  restriction  on  such  Subsidiary's  ability  to  make  payments  or  other
distributions to the Company or its  Subsidiaries,  to repay intra- company Debt
or to otherwise transfer earnings or assets to the Company or its Subsidiaries;

            (xi) make or commit to make  capital  expenditures  in an  aggregate
amount exceeding  $35,000,000 on a consolidated basis during any fiscal year and
the two previous fiscal years;  provided,  however,  that (A) to the extent such
limit has been reached during any fiscal year, the Company and its  Subsidiaries
may make capital expenditures reasonably required to be made in such fiscal year
by legal or regulatory  requirements,  (B) commencing with the Company's  fiscal
year  beginning  on January 1, 1998 and on each  January 1  thereafter,  the $35
million  aggregate  threshold shall be adjusted by an amount equal to the change
since  January 1, 1997 in the U.S.  producer  price index for refined beet sugar
(as shown on the most currently available  publication) (or, if such index is no
longer available, the closest comparable U.S. producer price index available, as
reasonably  determined by the  Company),  (C) the  limitation  set forth in this
Section 6.3(xi) shall not apply to capital  expenditures which are financed with
Debt incurred by the Company specifically for the purpose of making such capital
expenditures,  so long as such  Debt is  permitted  to be  incurred  under  this
Section 6.3, and (D) for purposes of this Section 6.3(xi),  capital expenditures
for each  fiscal  year  prior to January 1, 1997 shall be deemed to be an amount
equal to $10,000,000;

            (xii)  permit  a  court  or  governmental   authority  of  competent
jurisdiction to enter an order appointing, without consent by the Company or any
Subsidiary of the Company, a custodian,  receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for relief
or  reorganization  or any other petition in bankruptcy or for liquidation or to
take  advantage of any  bankruptcy or  insolvency  law of any  jurisdiction,  or
ordering  the  dissolution,  winding-up  or  liquidation  of the  Company or any
Subsidiary of the Company or the marshaling of its assets,  or any such petition
shall be filed  against  the Company or any  Subsidiary  of the Company and such
petition shall not be dismissed within 60 days;

            (xiii)  permit the Company or any  Subsidiary  of the Company (1) to
generally  not pay, or admit in writing its  inability to pay, its debts as they
become due, (2) to file, or consent by answer or otherwise to the filing against
it of, a  petition  for relief or  reorganization  or  arrangement  or any other
petition in bankruptcy,  for liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of any jurisdiction,
(3) to make an assignment  for the benefit of its  creditors,  (4) to consent to
the appointment of a custodian,  receiver, trustee or other officer with similar
powers  with  respect  to it or  with  respect  to any  substantial  part of its
property, (5) to be adjudicated as insolvent or to be liquidated, (6) to consent
to any other  marshaling  of its assets,  (7) to take  corporate  action for the
purpose of any of the foregoing;

            (xiv) permit a final  judgment or judgments for the payment of money
aggregating  in excess of $1,000,000  to be rendered  against one or more of the
Company,  and its Subsidiaries and which judgments are not, within 60 days after
entry  thereof,  bonded,  discharged  or  stayed  pending  appeal,  or  are  not
discharged within 60 days after the expiration of such stay;

            (xvii)  (i) permit the  payment  of any  principal  of or premium or
interest  on the Bank  Indebtedness,  any CCC  Loan or any  other  Debt  that is
outstanding  to be  accelerated  according  to its  terms and  declared  due and
payable before its stated  maturity or before its regularly  scheduled  dates of
payment, or (ii) as a consequence of the occurrence or continuation of any event
or condition  (other than the passage of time or the right of the holder of Debt
to  convert  such  Debt  into  equity  interests),  permit  the  Company  or any
Subsidiary  of the  Company to become  obligated  to  purchase or repay the Bank
Loans,  such CCC Loan or such other Debt before its  regular  maturity or before
its  regularly  scheduled  dates of payment;  provided  that in the case of Debt
other than the Bank Loans or any CCC Loan, the aggregate  outstanding  principal
amount thereof subject to clauses (i) and/or (ii) above is $1,000,000 or more;

            (xviii) permit a Change Of Control Event to occur;

            (xix) fail to preserve and keep in full force and effect the limited
liability  company  existence  of the  Company  and all  rights  and  franchises
(including,  without  limitation,  licenses and  permits) of the  Company,  and,
except as otherwise expressly provided by this Section 6.3, fail to at all times
preserve  and  keep  in full  force  and  effect  the  existence  of each of its
Subsidiaries  and all  rights and  franchises  (including,  without  limitation,
licenses and permits) such  Subsidiaries  unless,  in the good faith judgment of
the Company,  the  termination  of or failure to preserve and keep in full force
and effect such existence,  right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect;

            (xx) 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
Reduction  for such  crop  year,  or 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  Reduction  for such crop
year;

            (xxi)  generate  Distributable  Cash  in  any  Fiscal  Year  in  the
aggregate amount of less than $26,697,372.00; or

            (xxii) fail to impose Beet Payment  Reductions  for any crop year in
any Fiscal Year if the result of such  failure  would be that the Accrual  would
exceed the Accrual Threshold at any month end.

6.4  REPRESENTATIONS  AND  WARRANTIES.  - Each  Member  executing  this  Company
Agreement  hereby  represents  and warrants to the Company and each other Member
that: (a) the Member,  is an  organization  that it is duly  organized,  validly
existing and in good standing  under the law of its state of  organization;  (b)
that it has full  power and  authority  to  execute  and  agree to this  Company
Agreement and to perform its obligations  hereunder;  and (c) that the Member is
acquiring  its  interest  in the  Company  for the  Member's  own  account as an
investment  and  without  an intent to  distribute  the  interest.  Each  Member
acknowledges that its Membership Interest in the Company has not been registered
under the  Securities Act of 1933 or any state  securities  laws, and may not be
resold or  transferred  by the Member without  appropriate  registration  or the
availability of an exemption from such requirements.

6.5  INDEMNIFICATION.  - The Company  may, to the full extent  permitted by law,
indemnify, defend and hold harmless any Person (or the estate of any Person) who
was or is a party to,  or is  threatened  to be made a party  to, a  threatened,
pending or completed  action,  suit or  proceeding,  whether or not by or in the
right of the Company, whether civil, criminal, administrative,  investigative or
otherwise,  by  reason  of  the  fact  that  such  Person  is or  was a  Member,
representative to the Management Committee, representative, officer, employee or
agent of the  Company,  or was serving at the request of the Company as manager,
director,   officer,  employee,  agent  or  fiduciary  of  another  corporation,
partnership,  joint venture, trust or other enterprise, from and against any and
all  claims,  demands,  liabilities  (including,   without  limitation,   strict
liability),  losses,  damages,  costs or expenses  (including  attorneys'  fees,
judgments,  fines  and  amounts  paid in  settlement)  actually  and  reasonably
incurred by such Person in connection with such action, suit or proceeding.  The
Company  may,  to the  full  extent  permitted  by law,  purchase  and  maintain
insurance  on behalf  of any such  Person  against  any  liability  which may be
asserted   against  him  or  her.   Any  expenses   covered  by  the   foregoing
indemnification  may be paid by the Company in advance of the final  disposition
of such  action,  suit or  proceeding  upon receipt of an  undertaking  by or on
behalf of the Persons  seeking  indemnification  to repay such  amounts if it is
ultimately  determined  that he or she is not  entitled to be  indemnified.  The
indemnification  provided  in this  Section 6.5 shall not be deemed to limit the
right of the Company to indemnify  any other Person for any such expenses to the
full extent  permitted  by law,  nor shall it be deemed  exclusive  of any other
rights to which any  Person  seeking  indemnification  from the  Company  may be
entitled  under any  agreement,  vote of  disinterested  representatives  to the
Management Committee or otherwise, both as to action in his, her or its official
capacity  and as to  action  in  another  capacity  while  service  as a Member,
representative, officer, employee or agent.

6.6 CONFLICTS OF INTEREST.

     6.6.1  Members  shall account to the Company and hold as trustee for it any
Company assets, profit or benefit derived by the Member,  without the consent of
the Management Committee, in the conduct or winding up of the Company's business
or from a use or  appropriation  by such Member of Company assets or opportunity
including  information  developed  exclusively for the Company and opportunities
expressly presented to the Company.

     6.6.2 A Member does not violate a duty or obligation to the Company  merely
because the Member's  conduct  furthers the Member's own interest.  A Member may
lend  money to and  transact  other  business  with the  Company  to the  extent
permitted  by this  Company  Agreement,  but no Member is  obligated to loan any
money to, or incur any  financial  obligations  for the  benefit of, the Company
except as provided by this Company  Agreement.  The rights and  obligations of a
Member who lends money to or transacts business with the Company are the same as
those of a Person  who is not a Member,  subject  to other  applicable  law.  No
transaction  with the Company  shall be voidable  solely  because a Member has a
direct or indirect  interest in the transaction if the transaction is either (i)
on terms no less  favorable  than  would be  available  to the  Company  from an
unrelated third party or (ii) the Management Committee (and, if applicable under
Section  6.3,  the  consent  of a Majority  of the AGM  Interest),  knowing  the
material facts of the transaction and the Member's interest,  authorize, approve
or ratify the transaction.

     6.6.3  Notwithstanding  anything to the contrary in this Company Agreement,
the  Members   recognize  that  AGM's  Affiliates  have  and  anticipate  having
substantial  investments  in a variety of industries  that may compete with each
other.  By  virtue  of AGM's  investment  in the  Company,  AGM  intends  to use
reasonable efforts to facilitate the Company's  operations and other activities,
although  the  Members  recognize  and agree that such effort will not be to the
exclusion  of  effort  by AGM's  Affiliates  to  facilitate  other  similar  and
dissimilar  businesses.  Nothing in this Company  Agreement  or  otherwise  will
restrict  the ability of AGM's  Affiliates  to  establish,  acquire or retain an
interest in any business that may be deemed to compete with the Company. AGM and
its  Affiliates  shall not be obligated to present to the Company any particular
investment or business opportunity, regardless of whether such opportunity is of
a character that the Company could take advantage of if it were presented to the
Company.

6.7 OTHER PROVISIONS.

Promptly  upon  request,  SRSC agrees to pay directly or to reimburse  the Trust
(and, if paid by AGM, to reimburse AGM) for all expenses  incurred by the Trust,
whether  to  compensate  or  reimburse  the  Resident  Trustee  of the  Trust or
otherwise.

6.8 EXPRESS CONSENT TO FINANCING; OTHER MATTERS.

     (a) Notwithstanding anything else to the contrary contained in this Company
Agreement,  each of AGM, the Trust and SRSC expressly  consent to the following,
which shall require no further consent of the Members:

            (i) (A) the Trust's  pledge of the AGM Interest to SRSC  pursuant to
the terms of the SPT Pledge  Agreement and the SPT Guaranty,  and any rights and
proceeds  with  respect  thereto as provided  therein,  (B) AGM's  pledge of its
interest in the Trust to SRSC pursuant to the Snake River Pledge Agreement,  and
any rights and proceeds  with respect  thereto as provided  therein,  (C) SRSC's
pledge of the SR Interest to the Agent  pursuant to the terms of the NWFC Pledge
and  Security  Agreement,  and any rights and proceeds  with respect  thereto as
provided therein,  (D) the Company's pledge of the Plant Collateral to the Agent
pursuant to the terms of certain mortgages,  deeds of trust, security agreements
and other instruments  described in the Note Purchase Agreement,  and any rights
and proceeds with respect thereto as provided therein,  and (E) SRSC's pledge of
all of its rights in the SPT Pledge  Agreement,  the SPT  Guaranty and the Snake
River Pledge Agreement to the Agent pursuant to the terms of the NWFC Pledge and
Security Agreement, and any rights and proceeds with respect thereto as provided
therein,;

            (ii) in  connection  with and  pursuant  to the terms of each of the
documents,  agreements and instruments referenced in Section 6.8(a)(i),  (A) any
transfer or sale or  foreclosure  of the SR Interest,  or any rights or proceeds
with  respect  thereto,  from  SRSC  to the  Agent,  (B) any  transfer,  sale or
foreclosure  of the AGM Interest from the Trust or AGM's  Interest in the Trust,
or any rights or proceeds with respect thereto, to SRSC or to the Agent, (C) any
transfer, sale or foreclosure of the Plant Collateral, or any rights or proceeds
with  respect  thereto,  from the  Company to SRSC or to the Agent,  and (D) any
subsequent  transfer,  sale or foreclosure of the AGM Interest,  the SR Interest
and the Plant Collateral, or any rights or proceeds with respect thereto, by the
Agent to, or for the benefit of, any Person.  Following any such transfer,  sale
or foreclosure  of the AGM Interest or the SR Interest,  and upon the receipt by
the  Company  and the  Remaining  Members  of  written  notice of such  transfer
pursuant to the  provisions  of Section  11.2 of the Company  Agreement  and the
information and agreements  referred to in Section 11.3.1,  11.3.2 and 11.3.4 of
the Company  Agreement,  the  transferee  in any such  transfer or sale shall be
admitted as a Member of the Company  without the need for any further consent of
the Members, and the provisions of Section 11.3.3 of the Company Agreement shall
not apply to any such transfer, sale or foreclosure.

            (iii) the issuance of the Senior Notes by SRSC pursuant to the terms
of the Note Purchase Agreement, the use of proceeds as described therein and the
completion of all other transactions as contemplated by the Senior Notes and the
Note Purchase Agreement.

            (iv) the  provisions  of the Deposit  Trust  Agreement,  pursuant to
which,  among  other  things,  a portion of the  Distributable  Cash paid by the
Company  to the  Trust in  respect  of the AGM  Interest  is  segregated  by the
Resident  Trustee  and paid to the Agent for the  benefit of the  holders of the
Senior Notes and no distributions of Distributable Cash are made by the Resident
Trustee in any month to any Person prior to such segregation and distribution to
the Agent.

     (b) Notwithstanding  anything in the Company Agreement to the contrary,  to
the extent that any provision of or action required by the Company  Agreement is
inconsistent  with or prohibited  by the terms of the Note  Purchase  Agreement,
then until the Note  Purchase  Agreement  is  terminated,  the terms of the Note
Purchase Agreement shall govern, provided,  however, that without the consent of
the holders of the AGM Interest, no amendment,  modification or other alteration
of the Note  Purchase  Agreement  after  October 14, 2005 shall be deemed to (i)
create any liability of, or increase any  obligation  of, the holders of the AGM
Interest,  (ii) reduce any  liability  of, or decrease  any  obligation  of, the
holders  of the  SR  Interest,  (iii)  require  any  change  in  the  governance
provisions of the Company Agreement, including without limitation the provisions
of the Company Agreement relating to the selection of the Management  Committee,
the rights and responsibilities of representatives on the Management  Committee,
or the voting rights of Members, (iv) change any provision of Section 6.3 of the
Company Agreement,  (v) reduce or eliminate any rights of the holders of the AGM
Interest  to receive  information  from the  Company or SRSC,  (vi)  require any
change in the Capital  Account of the holder of the AGM  Interest,  (vii) change
any provisions  relating to distributions  and  allocations,  (viii) require the
admission of any new member,  the withdrawal of any Member or the dissolution of
the  Company,  (ix)  change  any  provisions  relating  to the Put Option or the
mandatory redemption of the AGM Interest, and (x) provide for any discriminatory
treatment  (including,  without limitation,  relating to distributions)  between
Members not expressly permitted by the Company Agreement.

     (c) The  parties  acknowledge  and agree that until  payment in full of the
Senior Notes  pursuant to the terms of the Note  Purchase  Agreement,  no Member
shall,  without the prior  written  consent of all holders of the Senior  Notes,
take  any  action  or  refrain  from  taking  any  action,  either  directly  or
indirectly,  if the effect of such action or failure to act would  result in the
dissolution, liquidation or winding up of the Company.

     (d) The  parties  acknowledge  and agree that until  payment in full of the
Senior Notes  pursuant to the Note Purchase  Agreement,  the Trust will not take
any Control  Action and will not take any  enforcement  action or  exercise  any
rights or remedies with respect to any breach of the Company Agreement (pursuant
to  Article  XVI or  otherwise)  without  the  prior  consent  of  the  Required
Purchasers, provided, however, that without such consent:

            (i) the Trust may take any  Control  Action or take any  enforcement
action or  exercise  any rights or  remedies  with  respect to any breach of the
Company  Agreement  (pursuant to Article XVI or  otherwise)  so long as no Valhi
Default has  occurred  and is  continuing  and so long as such  Control  Action,
enforcement  action  or  exercise  of rights or  remedies  does not,  and is not
reasonably  likely to, result in (A) a failure of the Company to make  scheduled
distributions  of  Distributable  Cash (or estimated  payments of  Distributable
Cash) to any  Member  consistent  with past  practices  or (B) a failure  of any
Member to comply with the terms of the Deposit Trust Agreement;

            (ii) the Trust may take action to enforce  specific  performance  of
the  provisions  of the Company  Agreement  other than (x) any  provision  which
conflicts  with any  provisions of the Note Purchase  Agreements or the Security
Documents or Valhi  Obligation  Security  Documents,  and (y) the  provisions of
Section 6.3 except for Section 6.3(i), Section 6.3(ii) and 6.3(xxi); and

            (iii)  the Trust may take a  Control  Action if the  unpaid  Accrual
exceeds the Accrual Threshold or the Triggering Event giving rise to the ability
to exercise and continue a Control  Action is a default under the  provisions of
Article III, or Sections 6.3,  8.4.1,  or 11.1 of the Company  Agreement and, in
either case, (x) the Trust delivers to the Agent and SRSC a certificate executed
by two officers of the Company  Trustee of the Trust  certifying to such effect,
and (y) if more  than 30 days has  elapsed  following  written  notice  by or on
behalf of the  Required  Purchasers  to the  Trust,  SRSC and the Agent of their
intention, following an SRSC Default, to exercise any remedies available to them
with  respect  to such SRSC  Default  (other  than  solely to cause the Agent to
exercise any voting  rights it may have with respect to the AGM  Interest),  the
Trust takes a Control  Action only after first  obtaining  written  confirmation
from the Agent that no SRSC Default  exists at the time such Control Action will
be taken and that  Snake  River has  deposited  with or  delivered  to the Agent
additional  collateral  for the  Senior  Notes in an  amount  and  type  that is
reasonably  acceptable to the Agent and the holders of the Senior Notes in their
sole discretion.

     (e) Notwithstanding anything in this Company Agreement to the contrary, the
parties agree that none of the following  actions may be taken  pursuant to this
Company  Agreement  while the Senior  Notes are  outstanding  without  the prior
written consent of the Agent and the Required Purchasers:

            (i) any  distribution  pursuant to Section  9.3.1(b)(ii)  or Section
9.3.1(b)(iii) if the effect of such distributions  means that the Trust will not
receive,  in any month,  an amount  that is less than the  required  payments of
interest  and  principal  on the Senior  Notes on the next date set for payment,
including without  limitation any amounts then past due, (and if no such consent
of the Agent and Required Purchasers is obtained, then the provisions of Section
9.3.1(b)(ii) and/or Section  9.3.1(b)(iii),  as applicable,  will be disregarded
for purposes of application of Section 9.3.1);

            (ii) the  holder of the AGM  Interest  may not  request a  mandatory
redemption  under  Section 17.2 or exercise  the Put Option  pursuant to Article
XVIII unless and until SRSC has provided the Agent with assurances  satisfactory
to the Agent and the holders of the Senior  Notes that the Senior  Notes will be
paid in full  (including any make-whole  amount or other amounts  required under
the Note  Purchase  Agreement)  as of the date of such  redemption  or  purchase
pursuant to the Put Option;

            (iii) if a Valhi Default has occurred and is continuing, the holders
of the AGM Interest may not exercise  their rights under Article XIX without the
prior written consent of the Agent and the holders of the Senior Notes; and

            (iv) if no Valhi Default has occurred and is continuing, the holders
of the AGM Interest may not exercise  their rights under Article XIX without the
prior  written  consent of the Agent and the holders of the Senior  Notes if the
exercise of such rights would, or would reasonably be likely to, result in (A) a
failure of the Company to make scheduled distributions of Distributable Cash (or
estimated  payments of  Distributable  Cash) to any Member  consistent with past
practices or (B) a failure of any Member to comply with the terms of the Deposit
Trust Agreement;

     (f) The  parties  acknowledge  that the Agent and the holders of the Senior
Notes are third party beneficiaries of the provisions of this Section 6.8 of the
Company Agreement.

                                   ARTICLE VII
                             ACCOUNTING AND RECORDS

7.1 RECORDS TO BE  MAINTAINED.  The  Management  Committee  shall  maintain  the
following records at the Principal Office:

     7.1.1 A current  list of the full name and last known  business  address of
each Member, former Member's and other holders of a Membership Interest;

     7.1.2 A copy of the  Articles and all  amendments  thereto,  together  with
executed  copies of any powers of attorney  pursuant to which Articles have been
executed;

     7.1.3 Copies of the Company's federal,  foreign, state and local income tax
returns and reports, if any;

     7.1.4 Copies of this Company Agreement including all amendments thereto;

     7.1.5 Any financial statements of the Company;

     7.1.6 The general ledger and subsidiary ledgers of the Company; and

     7.1.7 Employee benefit and benefit plan records.

7.2  REPORTS.

     7.2.1 At least 30 days but not more than 90 days prior to the  beginning of
each Fiscal Year, the chief executive officer or other designated officer of the
Company  (acting under the  supervision  of the chief  executive  officer) shall
prepare for the approval by the Management  Committee and deliver to the Members
an annual business plan ("Annual  Operating Plan"). The initial Annual Operating
Plan,  for the Fiscal Year  ending  December  31,  1997,  shall be prepared  and
delivered to the Members  within 15 days after the Effective  Date.  Each Annual
Operating  Plan shall  consist of a strategic  plan setting  forth the Company's
goals and  objectives  regarding  the  operation  and  growth  of the  Company's
business  during  the  next  Fiscal  Year,  a  description  of the  methods  for
accomplishment  of these goals and  objectives,  the Company's  expense  budget,
market  approach  and plan for  development  and closure of  opportunities;  and
projected  financial  statements of the Company for such period (such statements
to include a projected balance sheet, income statement and cash flow statement).
The Annual  Operating  Plan shall also include such other  information  or other
matters requested by the Management  Committee  necessary in order to enable the
Management  Committee to make an informed  decision with respect to its approval
of such Annual Operating Plan.

     7.2.2 In addition, the chief executive officer shall provide the Management
Committee and deliver to the Members the following information:

     (a) as soon as  available  but in any event within 30 days after the end of
each monthly  accounting period in each Fiscal Year (including the last month of
the Fiscal Year), unaudited consolidated statements of income of the Company for
such monthly  period and for the period from the beginning of the Fiscal Year to
the end of such month,  and  balance  sheet of the Company as of the end of such
monthly  period,  setting forth in each case  comparisons  to the  corresponding
period in the preceding  Fiscal Year, and all such statements  shall be prepared
in accordance with GAAP,  subject to the absence of footnote  disclosures and to
normal year-end adjustments;

     (b) as soon as  available  but in any event within 45 days after the end of
the first three  quarterly  accounting  periods in each Fiscal  Year,  unaudited
consolidated  statements  of income and cash flows of the Company for the period
from  the  beginning  of the  Fiscal  Year  to  the  end of  such  quarter,  and
consolidated  balance  sheets  of the  Company  as of the end of such  quarterly
period,  setting forth in each case comparisons to the  corresponding  period in
the  preceding  Fiscal  Year,  and all  such  statements  shall be  prepared  in
accordance  with GAAP,  subject to the  absence of footnote  disclosures  and to
normal year-end adjustments;

     (c)  within  90  days  after  the  end of each  Fiscal  Year,  consolidated
statements  of income and cash flows of the Company for such  Fiscal  Year,  and
consolidated  balance  sheets of the Company as of the end of such Fiscal  Year,
setting  forth in each  case  comparisons  to the  preceding  Fiscal  Year,  all
prepared in accordance  with GAAP, and  accompanied by an opinion  containing no
exceptions or  qualifications  (except for  qualifications  regarding  specified
contingent liabilities and exceptions relating to the adoption of new accounting
standards with which the independent  accounting firm concurs) of an independent
accounting firm reasonably acceptable to all Members;

     (d) at least 30 days but not more than 90 days  prior to the  beginning  of
each Fiscal Year, an annual budget prepared on a quarterly basis for the Company
for such Fiscal Year (displaying anticipated statements of income and cash flows
and balance sheets), and promptly upon preparation thereof any other significant
budgets  prepared  by the  Company  and any  revisions  of such  annual or other
budgets;

     (e)  promptly  (but in any  event  within  five  Business  Days)  after the
discovery,  or receipt of notice,  of (i) any Triggering Event, (ii) any default
under any material  agreement to which the Company is a party or (iii) any other
material  adverse event or  circumstance  affecting the Company  (including  the
filing of any material  litigation  against the Company or the  existence of any
dispute  with  any  Person  which  involves  a  reasonable  likelihood  of  such
litigation being commenced),  an officer's certificate specifying the nature and
period of  existence  thereof and what actions the Company has taken and propose
to take with respect thereof;

     (f)  within  ten days  after  transmission  thereof,  copies  of all  press
releases and other  statements  made  available  generally by the Company to the
public concerning material developments in the Company's businesses;

     (g) as soon as available  but in any event no later than  November  15th of
each year, a  calculation  of the aggregate  Beet Payments  relating to the crop
year ended on the immediately  preceding September 30th, the actual amounts paid
by the Company for  sugarbeets  with respect to such crop year, any Beet Payment
Reduction  with  respect to such crop year and any  Excess  Beet  Payments  with
respect to such crop year;

     (h) the notices  required by Section 9.3, at the times set forth in Section
9.3, and promptly, within five days of any payment, a calculation of any amounts
paid as cash  distributions  or advances to Members,  in each case  showing such
amounts for the month then ended and for the Fiscal Year;

     (i) in a timely manner,  subject to Section 10.4, those information returns
required by the Code and the laws of any state and with  information  concerning
the Company's income, gain, loss, deduction or credit when relevant to reporting
a Member's or Assignee's  share of such items for Federal or state tax purposes;
and

     (j) with reasonable  promptness,  such other information and financial data
concerning the Company as any holder of the AGM Interest may reasonably  request
(including  without  limitation  information  relating to the Company's employee
benefits  and benefit  plans),  which  information  shall not contain any untrue
statement  of a material  fact or omit to state any material  fact  necessary in
order to make such information not misleading.

Each of the financial  statements referred to in Sections 7.2.2 (a), (b) and (c)
above shall be true and correct in all material respects as of the dates and for
the  periods  stated  therein,  subject in the case of the  unaudited  financial
statements to changes  resulting from normal year-end audit adjustments (none of
which would,  alone or in the aggregate,  be materially adverse to the financial
condition,  operating results,  assets,  operations or business prospects of the
Company taken as a whole).

     7.2.3 The Company shall permit any representatives designated by any holder
of the AGM Interest,  for a purpose reasonably related to such holder's interest
as a holder of the AGM  Interest,  upon  reasonable  notice  and  during  normal
business hours and such other times as any such holder may  reasonably  request,
to (a) visit and inspect any of the  properties of the Company,  (b) examine the
financial and other  records of the Company and make copies  thereof or extracts
therefrom and (c) discuss the affairs, finances and accounts of the Company with
the  Management  Committee,   representatives,   officers,   key  employees  and
independent  accountants  of the  Company.  The  presentation  of a copy of this
Company  Agreement  containing  this  Section  7.2.3,  certified  by  the  Chief
Executive  Officer  or  Secretary  of the  Company,  by any such  holder  to the
Company's  independent   accountants  shall  constitute  the  Company's  written
permission to its  independent  accountants to  participate in discussions  with
such representatives.

7.3  ADDITIONAL  COPIES.  The Company agrees that it shall provide copies of all
reports  and  information  required  to be  provided  to the  holder  of the AGM
Interest to each of the Trust and AGM.

                                  ARTICLE VIII
                       CONTRIBUTIONS AND CAPITAL ACCOUNTS

8.1 MEMBERS'  CAPITAL  CONTRIBUTION.  AGM and SRSC  contributed  such assets and
amounts  as is set  forth in  APPENDIX  A as their  respective  Initial  Capital
Contributions.  Upon Closing (as defined in the  Formation  Agreement),  AGM and
SRSC  received  their  respective  Membership  Interest.   The  Initial  Capital
Contributions  shall have the value set forth on APPENDIX  A. No interest  shall
accrue on any Capital Contribution.

8.2 ADDITIONAL CAPITAL CONTRIBUTIONS.

     8.2.1  Except as provided in Section  8.2.2 or Section 9.3, no Member shall
be  required to make any Capital  Contributions  other than the Initial  Capital
Contributions,  and no  Member  shall  have  the  obligation  to fund  operating
deficits nor have the obligation to loan,  invest or otherwise provide any funds
to the Company. Any amounts distributed to Members pursuant to Section 9.3 shall
be promptly  recontributed to the Company if it is determined  subsequent to the
distribution  that the  distribution  was not in  accordance  with this  Company
Agreement.

     8.2.2 If Valhi makes any principal payment to SRSC on the Valhi Loans, then
each holder of the SR Interest shall  contribute to the Company,  simultaneously
with such  principal  payment,  a pro rata portion  (such pro rata portion to be
equal to the  portion  of the SR  Interests  held by each  such  holder)  of the
aggregate amount of such principal payment. The Company and SRSC hereby instruct
Valhi to make any such principal payment directly to the Company. The provisions
of this Section 8.2.2 shall not apply if the Company has previously  redeemed in
full all of the AGM  Interest  pursuant to Article XVII or if the holders of the
AGM Interest have received full payment upon exercise of the Put Option  granted
pursuant to Article XVIII.

     8.3 CAPITAL ACCOUNTS.

     8.3.1 A separate  Capital  Account will be  maintained  for each Member and
Assignee.  The respective  Capital  Accounts of each Member and Assignee will be
increased by (1) the amount of money  contributed by such Member to the Company;
(2) the Gross Asset Value of Property  contributed by such Member or Assignee to
the Company (net of liabilities  secured by such  contributed  Property that the
Company is  considered  to assume or take subject to, as provided by Section 752
of the Code); (3) allocations to such Member or Assignee of Net Profits; and (4)
any items in the nature of income and gain which are specially  allocated to the
Member or Assignee pursuant to Sections 9.2.1,  9.2.2,  9.2.3,  9.2.4,  9.2.5 or
9.2.9.  The Capital  Account of each Member or Assignee will be decreased by (1)
the amount of money  distributed to such Member or Assignee by the Company;  (2)
the Gross Asset Value of Property  distributed to such Member or Assignee by the
Company  (net of  liabilities  secured by such  distributed  Property  that such
Member or Assignee is  considered  to assume or take  subject to, as provided by
Section  752 of the  Code);  (3) any items in the nature of  deduction  and loss
which are  specially  allocated  to the Member or Assignee  pursuant to Sections
9.2.1, 9.2.2, 9.2.3, 9.2.4, 9.2.5 or 9.2.9; and (4), allocations of Net Losses.

     8.3.2 In the event of a permitted sale or exchange of a Membership Interest
in the Company,  the Capital Account of the transferor  shall become the Capital
Account of the transferee to the extent it relates to the transferred Membership
Interest in accordance with Section 1.704-l(b)(2)(iv)(l) of the Regulations.

     8.3.3 The manner in which Capital Accounts are to be maintained pursuant to
this Section 8.3 is intended to comply with the  requirements  of Section 704(b)
of the Code and the Regulations  promulgated  thereunder.  If, in the opinion of
the  Company's  accountants,  the  manner in which  Capital  Accounts  are to be
maintained  pursuant to the  preceding  provisions of this Section 8.3 should be
modified in order to comply with Section 704(b) of the Code and the  Regulations
thereunder,  then  notwithstanding  anything to the  contrary  contained  in the
preceding  provisions of this Section 8.3, the method in which Capital  Accounts
are maintained shall be so modified;  provided,  however, that any change in the
manner of maintaining  Capital  Accounts shall not materially alter the economic
agreement between or among the Members and Assignees.

     8.3.4 Except as otherwise  required in the Act, no Member or Assignee shall
have any  liability  to restore all or any portion of a deficit  balance in such
Member's or Assignee's Capital Account.

8.4  WITHDRAWAL OR REDUCTION OF MEMBERS' CONTRIBUTIONS.

     8.4.1  Without  the  consent of both a Majority  of the SR  Interest  and a
Majority of the AGM  Interest,  no Member or Assignee  shall  receive out of the
Company assets any part of its Capital Contribution until all liabilities of the
Company,   except   liabilities   to  Members   on  account  of  their   Capital
Contributions,  have been paid or there remains Company assets sufficient to pay
them.

     8.4.2 A Member, irrespective of the nature of its Capital Contribution, has
only  the  right  to  demand  and  receive   cash  in  return  for  its  Capital
Contribution;  provided,  however,  no Member or Assignee shall be entitled to a
repayment,  return or  withdrawal  of any part of such  Member's  or  Assignee's
Capital  Contribution,  or  similar  distribution,  except as  provided  in this
Company Agreement.

                                   ARTICLE IX
              ALLOCATIONS AND DISTRIBUTIONS, ELECTIONS AND REPORTS

9.1  ALLOCATION  OF PROFITS AND LOSSES.  Subject to Article XIX of this  Company
Agreement, and except as otherwise set forth in Section 9.2:

     9.1.1 Allocations of Profits from Operations.  For any Fiscal Year or other
taxable  period,  the Net Profits of the Company from sources other than a Major
Capital Event shall be allocated as follows:

     (a) First,  in an amount up to the net cash  distributed to the Members for
the Fiscal Year as to which Net Profits are being  allocated,  among the Members
in proportion to the net cash paid to each;

     (b) Second, to those Members with a negative Capital Account balance at the
beginning  of the Fiscal Year as to which Net Profits  are being  allocated,  in
proportion to such negative  Capital Account  balances until the Capital Account
balances of all such Members would be equal to zero; and

     (c) Third, to the Members in the proportions then in effect as set forth in
Section 9.3.1(b)(iv).

     9.1.2  Allocation of Income or Gain from a Major Capital Event.  Any income
or gain realized by the Company from a Major Capital Event shall be allocated as
follows:

     (a) First, subject to adjustment as hereafter provided,  an amount equal to
the cash to be distributed as a result of such transaction shall be allocated to
those Members who will be distributed such cash pursuant to Section 9.3.2;

     (b) Second, if the cash distributed exceeds the gain from the Major Capital
Event, the amount tentatively  allocated pursuant to Section 9.1.2(a) to Members
with  a  positive  Capital  Account  balance  (determined  after  the  tentative
allocation  provided  for  in  Section  9.1.2(a)  above)  shall  be  reduced  in
proportion  to the  positive  balances  of the  Capital  Accounts of all Members
having positive  Capital Account  balances  immediately  prior to the allocation
provided from in Section  9.1.2(a) above until the total amount allocated equals
the total gain from such Major Capital Event to be allocated; provided, that the
amount of reduction  for any Member shall not exceed the total amount  allocated
to all  Members  under  Section  9.1.2(a)  and,  any excess  reduction  shall be
allocated among the remaining  Members in the same manner as otherwise  provided
in this Section 9.1.2(b);

     (c)  Third,  to  the  Members  with  negative   Capital  Account   balances
(determined prior to the allocation set forth in Section 9.1.2(a)) in proportion
to the negative  balances of such  Capital  Accounts  until the Capital  Account
balances of all such Members equal zero;

     (d) Fourth,  to the Members in the percentages  then in effect as set forth
in Section 9.3.1(b)(iv); and

     (e) If some Members have negative  Capital  Accounts and some have positive
Capital  Accounts  immediately  prior to the allocation  provided for in Section
9.1.2(a),  the amount of gain  allocable  to the Members with  positive  Capital
Accounts  pursuant  to this  Section  shall be  reduced in  proportion  to their
positive  balances  in an amount  not to  exceed  the  lesser  of the  aggregate
positive  Capital Account  balances of such Members,  or the aggregate  negative
Capital Account balances of other Members, and such amount of gain shall instead
be allocated to the Members with negative Capital Account balances in proportion
to their negative balances.

     9.1.3 Allocation of Losses. Losses shall be allocated among all the Members
in accordance with their respective Capital Interest.

     9.1.4  Recapture.  Any recapture of  depreciation or investment tax credits
shall  be  allocated  to  the  Members  who  were   previously   allocated  such
depreciation or tax credits.

9.2  SPECIAL  ALLOCATIONS  TO CAPITAL  ACCOUNTS  AND  CERTAIN  OTHER  INCOME TAX
ALLOCATIONS.

     9.2.1 In the  event  any  Member  or  Assignee  receives  any  adjustments,
allocations,  or  distributions  described in Sections  1.704-l(b)(2)(ii)(d)(4),
(5), or (6) of the Regulations,  which unexpectedly create or increase a Deficit
Capital  Account  of  such  Member,  then  items  of  Company  income  and  gain
(consisting  of a pro rata  portion  of each item of Company  income,  including
gross income,  and gain for such year and, if necessary,  for subsequent  years)
shall be specially  allocated to such Member or Assignee in an amount and manner
sufficient to eliminate, to the extent required by the Regulations,  the Deficit
Capital  Account so created as quickly as  possible.  It is the intent that this
Section  9.2.1 be  interpreted  to comply with the  alternate  test for economic
effect set forth in Section 1.704-l(b)(2)(ii)(d) of the Regulations.

     9.2.2 In the event any  Member or  Assignee  would  have a Deficit  Capital
Account at the end of any Company  taxable  year,  the  Capital  Account of such
Member shall be specially credited with items of income (including gross income)
and gain in the amount of such excess as quickly as possible.

     9.2.3  Notwithstanding any other provision of this Section 9.2, if there is
a net  decrease  in the  Company  Minimum  Gain as defined in either  Regulation
Section  1.704-2(d) or in the definition of Member Minimum Gain during a taxable
year of the Company,  then the Capital Accounts of each Member or Assignee shall
be allocated  items of income  (including  gross  income) and gain for such year
(and if necessary  for  subsequent  years) equal to that  Member's or Assignee's
share of the net decrease in Company  Minimum Gain or Member  Minimum  Gain,  as
applicable.  This  Section  9.2.3 is intended  to comply  with the minimum  gain
chargeback  requirement  of  Section  1.704-2  of the  Regulations  and shall be
interpreted  consistently therewith. If in any taxable year that the Company has
a net decrease in the Company  Minimum Gain or there is a net decrease in Member
Minimum  Gain,  if  the  minimum  gain  chargeback  requirement  would  cause  a
distortion in the economic arrangement among the Members and Assignees and it is
not expected that the Company will have sufficient  other income to correct that
distortion,  the  Management  Committee  may in its  discretion  (and shall,  if
requested to do so by a Member) seek to have the Internal  Revenue Service waive
the minimum gain chargeback  requirement in accordance  with Regulation  Section
1.704-2(f)(4).

     9.2.4  Items of Company  loss,  deduction  and  expenditures  described  in
Section  705(a)(2)(B)  which are  attributable  to any  nonrecourse  debt of the
Company are  characterized  as partner  (Member)  nonrecourse  deductions  under
Section  1.704-2(i)  of the  Regulations  and shall be allocated to the Members'
Capital Accounts in accordance with Section 1.704-2(i) of the Regulations.

     9.2.5 Beginning in the first taxable year in which there are allocations of
nonrecourse  deductions (as described in Section  1.704-2(b) of the Regulations)
such  deductions  shall be  allocated  to the Members or  Assignees  in the same
manner as Net Profits or Net Losses are allocated for such period.

     9.2.6 In  accordance  with  Section  704(c)(1)(A)  of the Code and  Section
1.704-l(b)(2)(I)(iv)  of the  Regulations,  if a Member or Assignee  contributes
Property  with a Gross Asset Value that differs  from its adjusted  basis at the
time of  contribution,  income,  gain,  loss and deductions  with respect to the
Property  shall,  solely for federal  income tax  purposes  (and not for Capital
Account  purposes),  be allocated  among the Members and Assignees so as to take
account of any  variation  between the  adjusted  basis of such  Property to the
Company and its fair market value at the time of contribution in accordance with
Section 1.704-3(b)(i) of the Regulations;  provided, however, that the gain from
the sale of contributed  Property shall be allocated  first to the  contributing
Member  to the  extent  necessary  to offset  the  effect  of the  ceiling  rule
limitation under Section 1.704-3(b)(1) of the Regulations.

     9.2.7 In the case of any  distribution  of Property other than money by the
Company to a Member or  Assignee,  such  Member or  Assignee  shall,  solely for
federal income tax purposes (and not for Capital Account  purposes),  be treated
as recognizing gain in an amount equal to the lesser of:

     (a) the  excess  (if any) of (A) the  fair  market  value  of the  Property
received in the  distribution  over (B) the adjusted  basis of such  Member's or
Assignee's  Membership Interest immediately before the distribution reduced (but
not below zero) by the amount of money received in the distribution; or

     (b) the Net  Precontribution  Gain (as  defined  below in  accordance  with
Section 737(b) of the Code) of the Member or Assignee.  The Net  Precontribution
Gain  means  the net gain (if any)  which  would  have  been  recognized  by the
distributee  Member or Assignee  under Section  704(c)(1)(B)  of the Code of all
Property which (1) had been  contributed to the Company within five years of the
distribution,   and  (2)  is  held  by  the  Company   immediately   before  the
distribution, had been distributed by the Company to another Member or Assignee.
If any portion of the Property  distributed  consists of Property which had been
contributed  by the  distributee  Member or Assignee to the  Company,  then such
Property  shall not be taken into account under this Section 9.2.7 and shall not
be taken into account in determining the amount of the Net Precontribution Gain.
If the  Property  distributed  consists of an interest in an  organization,  the
preceding sentence shall not apply to the extent that the value of such interest
is  attributable  to the Property  contributed to such  organization  after such
interest had been contributed to the Company.

     9.2.8  All  recapture  of  income  tax  deductions  resulting  from sale or
disposition  of  Company  Property  shall  be  allocated  to  the  Member(s)  or
Assignee(s) to whom the deduction that gave rise to such recapture was allocated
hereunder to the extent that such Member or Assignee is allocated  any gain from
the sale or other disposition of such Property.

     9.2.9 Any  credit  or charge to the  Capital  Accounts  of the  Members  or
Assignees  pursuant to Sections 9.2.1,  9.2.2,  9.2.3, 9.2.4 and/or 9.2.5 hereof
shall be taken into account in computing  subsequent  allocations of Net Profits
and Net  Losses  pursuant  to Section  9.1,  so that the net amount of any items
charged or credited  to Capital  Accounts  pursuant  to Sections  9.1 and 9.2.1,
9.2.2,  9.2.3, 9.2.4 and/or 9.2.5 shall to the extent possible,  be equal to the
net amount that would have been allocated to the Capital  Account of each Member
or  Assignee  pursuant  to the  provisions  of this  Article  IX if the  special
allocations  required by Sections 9.2.1, 9.2.2, 9.2.3, 9.2.4 and/or 9.2.5 hereof
had not occurred.

9.3  DISTRIBUTIONS.  Subject  to Article  XIX and  Section  6.8 of this  Company
Agreement, and commencing with the Company's 1997 Fiscal Year, the Company shall
make distributions of cash to its Members in accordance with the following:

     9.3.1 On or before the first day of each calendar  month,  commencing  with
January 1, 1997, the Company shall make a good faith  estimate of  Distributable
Cash  for the then  current  Fiscal  Year and  provide  written  notice  of such
estimate to each Member.

     (a) On or  before  the 15th day of each  calendar  month,  commencing  with
January 1997,  the Company shall  distribute to its Members cash in an aggregate
amount  equal to the lesser of (i) the  product of (A) the  Company's  estimated
Distributable  Cash for such Fiscal Year (based on the Company's  estimate as of
the first day of such month) times (B) a fraction, the numerator of which is the
number of  calendar  months  which have  commenced  in the  current  Fiscal Year
(including the current  month) and the  denominator of which is 12, and (ii) the
sum of (A) the product of $2,224,781  times the number of calendar  months which
have commenced in the current Fiscal Year  (including the current  month),  plus
(B) any unpaid  Accrual as of the  beginning of such Fiscal  Year;  and, in each
case  set  forth  in (i) or (ii)  above,  less  the  aggregate  amount  actually
distributed to Members pursuant to this Section 9.3.1(a) for each prior month of
the  current  Fiscal  Year.  Such  distributions   shall  be  in  the  following
percentages: 95% to the holders of the AGM Interest and 5% to the holders of the
SR Interest.

     (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,  100% to the holders of the SR  Interests  for Fiscal Year 1997,
and thereafter  100% to the holders of the SR Interests  until such holders have
received an aggregate  amount  equal to the  aggregate  Beet Payment  Reductions
actually  withheld by the  Company  since  October  14,  2005 (and,  for periods
between  January 1, 1997 and October 13, 2005, the equivalent  thereof),  net of
the  aggregate  amount of cash used by SRSC since  January 1, 1997 to reduce the
amount  of the Beet  Payment  Reduction  that  was  actually  withheld  from the
aggregate amount paid by SRSC to its members for the purchase of sugarbeets that
were sold by SRSC to the Company.

     (iii) 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 that certain  indebtedness owed by SRSC to Valhi
pursuant to the terms of that certain  subordinated  loan agreement  dated as of
May 14, 1997, as amended (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  amendments to the terms of the SRSC  Subordinated
Debt dated October 19, 2000 and October 14, 2005; and

     (iv) 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 AGM  Interest  held by the Trust,  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 payment of principal and interest
on the Senior Notes for such month.

     (c) Notwithstanding  the foregoing,  any distribution to the holders of the
SR Interest  pursuant to this  Section  9.3.1 will be reduced by any Excess Beet
Payment made during such Fiscal Year (based upon final  distribution of the Beet
Payment),  and any Excess Beet  Payment  made during such Fiscal Year will,  for
purposes of this  Section  9.3.1,  be treated as if  distributed  in cash to the
holders of the SR  Interest  ratably at the times and in the manner set forth in
Section 9.3.1(a).

     (d) Amounts  distributed to the holders of the AGM Interest pursuant to the
provisions of Sections 9.3.1(a) and 9.3.1(b)(i)  shall be considered  "preferred
returns" for purposes of Section 1.707-4(a)(3) of the Regulations.

     9.3.2.   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 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 (iii)  third,  to the Members in the  percentages  then in
effect under Section 9.3.1(b)(iv).

Notwithstanding  anything to the  contrary  in this  Section  9.3.2,  if a Major
Capital  Event is  incident  to or results in the  liquidation  of the  Company,
Distributable  Cash therefrom  shall be  distributed in accordance  with Section
13.3.

     9.3.3  No  distribution  shall  be  declared  and paid  unless,  after  the
distribution  is made,  the fair value of assets of the Company are in excess of
all  liabilities  of the Company and the Company will not be rendered  insolvent
within the meaning of UCC Section1-201(23).

     9.3.4 The parties  acknowledge and understand that, pursuant to the Deposit
Trust Agreement,  any distribution  paid in respect of the AGM Interest shall be
paid to the Trust.

     9.3.5 The parties  acknowledge and understand that, pursuant to the Deposit
Trust Agreement,  immediately upon any Retained Amount being accrued,  the Trust
will  distribute  to its  beneficiaries  all  rights of the  holders  of the AGM
Interest to receive any Retained Amounts,  and,  accordingly,  the pledge of the
AGM Interest  pursuant to the SPT Pledge  Agreement does not include a pledge of
any rights  held by the  holders of the AGM  Interest  to receive  any  Retained
Amounts accrued prior to the date of any Valhi Default or SRSC Default. Prior to
any Valhi  Default or SRSC  Default,  the  Company may pay amounts in respect of
Retained  Amounts  pursuant to the  provisions  of this Section 9 of the Company
Agreement. Following any Valhi Default or SRSC Default which is continuing, each
of AGM, the Trust and SRSC agree that no amounts shall be paid in respect of any
Retained  Amounts,  except as may  otherwise  be  approved by the holders of the
Senior Notes. .

9.4 ACCOUNTING PRINCIPLES.  The profits and losses of the Company for Income Tax
purposes shall be determined in accordance with accounting principles applied on
a consistent  basis using the accrual method of accounting.  It is intended that
the Company will elect those accounting  methods for federal income tax purposes
which provide the Members with the greatest income tax benefits.

                                    ARTICLE X
                                      TAXES

10.1  ELECTIONS.  Except as otherwise  provided in this Company  Agreement,  the
Management  Committee may make any tax  elections for the Company  allowed under
the  Code or the tax  laws of any  state or  other  jurisdiction  having  taxing
jurisdiction  over the Company,  provided that the  Management  Committee  shall
first  provide  reasonable  written  notice of any proposed tax election to each
Member and shall  provide  each  Member with an  opportunity  to comment on such
proposed election.

10.2 TAXES OF TAXING JURISDICTIONS. All amounts withheld pursuant to the Code or
any provisions of any state or local tax law with respect to any distribution to
the  Members  shall be  treated as amounts  distributed  in cash to the  Members
pursuant to Section 9.3 for all purposes  under this  Agreement.  The Management
Committee may, where permitted by the rules of any taxing  jurisdiction,  file a
composite, combined or aggregate tax return reflecting the income of the Company
and pay the tax,  interest  and  penalties of some or all of the Members on such
income to the taxing  jurisdiction,  in which case the Company shall inform each
Member of the amount of such tax interest and penalties so paid.

10.3 TAX MATTERS PARTNER.  SRSC shall serve as the initial "tax matters partner"
pursuant  to  Section  6231(a)(7)  of the Code.  The  Management  Committee  may
designate another Member as the "tax matters partner" of the Company. Any Member
designated as tax matters  partner shall take such action as may be necessary to
cause each other Member to become a notice partner within the meaning of Section
6223 of the Code. Any Member who is designated tax matters  partner may not take
any action  contemplated  by Sections  6222 through 6232 of the Code without the
consent of the other  Members.  SRSC shall have the  authority to represent  the
Company in all audits or other  administrative  proceedings  with state or local
taxing authorities subject to the same limits,  notice requirements and approval
requirements imposed on SRSC in its capacity as "tax matters partner" under this
Section 10.3.

10.4 TAX RETURNS.  The "tax matters partner" shall cause all necessary  federal,
state and local  income tax  returns to be timely  prepared  and filed and shall
furnish to each Member and Assignee a copy of any proposed  return not less than
30 days prior to filing for the purpose of providing each Member and Assignee an
opportunity to review such return and to discuss with the "tax matters  partner"
the appropriate treatment of any items of issues relevant to such return.

                                   ARTICLE XI
                       DISPOSITION OF MEMBERSHIP INTERESTS

11.1 GENERAL.  Neither a Member nor an Assignee shall have the right to Dispose,
except in the case of bankruptcy,  all or any part of its Membership Interest to
any  Person,  without  the  consent of the other  Members  which  consent may be
withheld in the  absolute  discretion  of such  non-transferring  Members.  Each
Member and Assignee hereby  acknowledges the  reasonableness of the restrictions
on sale and gift of the Membership  Interests  imposed by this Company Agreement
in view of the  Company's  purposes and the  relationship  among the Members and
Assignees.  Notwithstanding  the  foregoing,  any  Membership  Interest  may  be
transferred,  sold or otherwise  Disposed  pursuant to the provisions of Section
6.8.  Accordingly,  the restrictions on Disposition contained herein, other than
any transfer,  sale or  Disposition  pursuant to the  provisions of Section 6.8,
shall be specifically enforceable.

SRSC and the Company have consented to the transfer of the AGM Interest from AGM
to the Trust and to the  admission of the Trust as a Member of the Company,  and
the parties have agreed to waive the  requirement set forth in Section 11.3.1 of
the Company  Agreement that the Trust provide a legal opinion in connection with
such  transfer.  The  Company  agrees  that it has  received  from the Trust all
information  and agreements  required  pursuant to Section 11.3.2 of the Company
Agreement.

11.2  REQUIREMENTS OF TRANSFER.  No Disposition of a Membership  Interest in the
Company shall be effective  unless and until written notice  (including the name
and  address  of  the  proposed  transferee  or  donee  and  the  date  of  such
Disposition) has been provided to the Company and the non-transferring Members.

11.3 DISPOSITION.  Any Member or Assignee may Dispose of all or a portion of the
Member's or Assignee's Membership Interest upon compliance with this Article XI.
In addition to the other requirements of this Article XI, no Membership Interest
shall be Disposed of:

     11.3.1  without  an  opinion  of  counsel  satisfactory  to the  Management
Committee that such assignment is subject to an effective registration under, or
exempt from the  registration  requirements of, the applicable state and federal
securities laws;

     11.3.2  unless  and  until  the  Company  receives  from the  Assignee  the
information and agreements that the Management Committee may reasonably require,
including  but  not  limited  to any  taxpayer  identification  number  and  any
agreement that may be required by any taxing jurisdiction;

     11.3.3 without the consent of all Members if such Disposition when added to
the total of all other  Dispositions  within the  preceding  twelve  (12) months
would  result in the Company  being  considered  to have  terminated  within the
meaning of Code section 708; and

     11.3.4. unless and until the Company receives from the Assignee its written
agreement to be bound by and subject to the terms hereof.

11.4  TRANSFEREE  NOT  MEMBER IN ABSENCE OF  CONSENT.  Notwithstanding  anything
contained in this Agreement to the contrary,  if any proposed  assignment of the
transferring  Member's  Membership Interest to an Assignee which is not a Member
is not  unanimously  approved by the Members (which  approval may be withheld in
the absolute  discretion of the Members),  then the Assignee shall have no right
to  participate  in the management of the business and affairs of the Company or
to become a Member.  In the event that an  Assignee  does not become a Member of
the Company,  the Assigning Member shall retain all rights to participate in the
management of the business and the affairs of the Company,  including all Member
voting  rights  and all  other  rights  not  transferred  to  Assignee,  and the
Assigning Member shall be entitled to exercise all such rights on its own behalf
or on behalf of the Assignee to the same extent as prior to any such transfer.

11.5  DISPOSITIONS  NOT IN  COMPLIANCE  WITH THIS ARTICLE  VOID.  Any  attempted
Disposition  of a Membership  Interest,  or any part thereof,  not in compliance
with this Article XI shall be, and is declared to be, null and void ab initio.

                                   ARTICLE XII
                  ADMISSION OF ASSIGNEES AND ADDITIONAL MEMBERS

Any Person may become a Member of this Company upon (i) the unanimous consent of
the Members or (ii) pursuant to Article XI as an Assignee of a Member's Interest
or any portion  thereof,  subject to the terms and  conditions  of this  Company
Agreement.  No new Members  shall be entitled to any  retroactive  allocation of
losses,  income,  expenses or deductions incurred by the Company. The Management
Committee may, in its reasonable discretion, at the time an Additional Member or
Substituted Member is admitted, close the Company books (as though the Company's
tax year had ended) or make pro rata allocations of loss,  income,  expenses and
deductions to an Additional Member or Substituted Member for that portion of the
Company's  tax  year in which a  Member  was  admitted  in  accordance  with the
provisions  of  Section  706(d)  of  the  Code  and  the  Treasury   Regulations
promulgated thereunder.

                                  ARTICLE XIII
                           DISSOLUTION AND WINDING UP

13.1 DISSOLUTION.

     13.1.1  Subject to the  provisions  of Section  6.8,  the Company  shall be
dissolved  and its affairs  wound up,  upon the first to occur of the  following
events:

     (a) the unanimous vote of all Members;

     (b) upon the death, insanity, retirement,  resignation, or dissolution of a
Member or upon a Member  becoming a Bankrupt  Member or  occurrence of any other
event which  terminates  the continued  membership of a Member in the company (a
"Withdrawal  Event"),  unless the  business of the Company is  continued  by the
affirmative vote of the remaining  Members holding a Majority of the SR Interest
(if any) and the  remaining  Members  holding a Majority of the AGM Interest (if
any) within 90 days after the Withdrawal Event; and

     (c) the entry of a decree of dissolution  pursuant to Section 18-802 of the
Act.

     13.1.2 Notwithstanding  anything to the contrary in this Company Agreement,
if the  dissolution  of the Company is approved by the  affirmative  vote of all
Members  pursuant to Section  13.1.1(a),  then all of the Members shall agree in
writing to dissolve  the Company as soon as possible  (but in any event not more
than ten (10) days) thereafter.

     13.1.3 As soon as possible  following  the  occurrence of any of the events
specified in this Article XIII  effecting  the  dissolution  of the Company,  an
appropriate representative of the Company shall execute a statement of intent to
dissolve in such form as shall be prescribed by the Delaware  Secretary of State
and file same with the Delaware Secretary of State's office.

     13.1.4  If a  Member  who is an  individual  dies or a court  of  competent
jurisdiction  adjudges him to be incompetent to manage his person or his assets,
the Member's  executor,  administrator,  guardian,  conservator,  or other legal
representative  may  exercise  all of the  Member's  rights  for the  purpose of
settling his estate or administering his assets.

     13.1.5 Except as expressly  permitted in this Company  Agreement,  a Member
shall not voluntarily  resign or take any other voluntary  action which directly
causes a Withdrawal  Event.  Damages for breach of this Section  13.1.5 shall be
monetary  damages only, and such damages may be offset against  distributions by
the Company to which such resigning Member would otherwise be entitled.

13.2 EFFECT OF  DISSOLUTION.  Upon the  dissolution  of the Company which is not
followed by an election  pursuant to Section  13.1.1(b) to continue the Company,
the  Company  shall  cease to carry on its  business,  except  insofar as may be
necessary for the winding up of its business,  but its separate  existence shall
continue until a certificate of dissolution  has been issued by the Secretary of
State or until a decree  dissolving  the Company has been  entered by a court of
competent jurisdiction.

13.3 WINDING UP, LIQUIDATION AND DISTRIBUTION OF ASSETS.

     13.3.1  Upon  dissolution,  an  accounting  shall be made by the  Company's
independent  accountants  of the  accounts of the  Company and of the  Company's
assets,  liabilities  and  operations,  from  the  date  of  the  last  previous
accounting  until  the  date of  dissolution.  The  Management  Committee  shall
immediately proceed to wind up the affairs of the Company.

     13.3.2 Subject to Article XIX of this Company Agreement, and if the Company
is dissolved and its affairs are to be wound up, the Management Committee shall:

     (a) Sell or otherwise  liquidate all of the Company's assets as promptly as
practicable  (except to the extent the  Management  Committee  may  determine to
distribute any assets to the Members in kind);

     (b) Allocate any Net Profits or Net Losses resulting from such sales to the
Members' and Assignee's Capital Accounts in accordance with Article IX hereof;

     (c) Discharge all  liabilities  of the Company,  including  liabilities  to
Members and Assignees who are also creditors,  to the extent otherwise permitted
by law, other than  liabilities to Members and Assignees for  distributions  and
the  return  of  capital,  and  establish  such  reserves  as may be  reasonably
necessary to provide for contingent  liabilities of the Company (for purposes of
determining  the Capital  Accounts of the Members and Assignees,  the amounts of
such reserves shall be deemed to be an expense of the Company); and

     (d) Distribute the Company assets as follows:

     (i)  First,  to all  Members  and  Assignees  in an  amount  equal to their
respective  positive  Capital  Account  balances taking into account all Capital
Account  adjustments  for the  Company's  taxable year in which the  liquidation
occurs; provided, that to the extent the positive Capital Account balance of the
holders of the AGM Interest  exceeds the positive Capital Account balance of the
holders of the SR Interest , such excess  shall be paid to the holder of the AGM
Interest first, prior to any distribution to the holder of SR Interest; and

     (ii) Then, to the Members in the percentages then in effect as set forth in
Section 9.3.1(b)(iv);  provided, however, that if the dissolution of the Company
occurs  pursuant  to Section  13.1.1(d),  then the  Members  shall  endeavor  to
terminate and dissolve the Company and distribute its assets,  so that upon such
distribution  the holder of the SR Interest  will receive a sum in cash equal to
its  Initial  Capital  Contribution  and the  holder  of the AGM  Interest  will
receive, in kind, all remaining assets of the Company.

     13.3.3 Notwithstanding  anything to the contrary in this Company Agreement,
upon a  liquidation  within the meaning of Section  1.704-l(b)(2)(ii)(g)  of the
Regulations, if any Member has a Deficit Capital Account (after giving effect to
all  contributions,   distributions,   allocations  and  other  Capital  Account
adjustments  for all  taxable  years,  including  the  year  during  which  such
liquidation  occurs),  such Member shall have no  obligation to make any Capital
Contribution,  and the negative  balance of such Member's  Capital Account shall
not be  considered  a debt owed by such  Member to the  Company  or to any other
Person for any purpose whatsoever.

     13.3.4 Upon completion of the winding up,  liquidation and  distribution of
the assets, the Company shall be deemed terminated.

     13.3.5  The   Management   Committee   shall  comply  with  any  applicable
requirements  of applicable  law  pertaining to the winding up of the affairs of
the Company and the final distribution of its assets.

13.4  CERTIFICATE OF  DISSOLUTION.  When all debts,  liabilities and obligations
have been paid and discharged or adequate provisions have been made therefor and
all  of  the  remaining  assets  have  been  distributed  to  the  Members,  the
certificate of dissolution shall be executed in duplicate and shall be delivered
to the Delaware  Secretary of State.  Upon the  issuance of the  certificate  of
dissolution, the existence of the Company shall cease, except for the purpose of
suits,  other  proceedings  and  appropriate  action as provided in the Act. The
Management  Committee  shall have  authority to  distribute  any Company  assets
discovered after  dissolution,  convey real estate and take such other action as
may be necessary on behalf of and in the name of the Company.

13.5 RETURN OF  CONTRIBUTION  NONRECOURSE TO OTHER MEMBERS Except as provided by
law or as expressly provided in this Company Agreement,  upon dissolution,  each
Member  shall  look  solely to the assets of the  Company  for the return of its
Capital  Contribution.  If the  Company  assets  remaining  after the payment or
discharge of the debts and  liabilities of the Company is insufficient to return
the cash contribution of one or more Members,  such Member or Members shall have
no recourse against any other Member,  except to the extent any Member knowingly
received a distribution made in violation of this Company Agreement.

                                   ARTICLE XIV
                                    AMENDMENT

14.1 AMENDMENT OF COMPANY AGREEMENT.  This Company Agreement may be amended from
time to time only by a written  instrument adopted and executed by the unanimous
vote or written consent of all Members.

14.2  AMENDMENTS  UPON A MAJOR  CAPITAL  EVENT.  Upon the  occurrence of a Major
Capital  Event,  the  Members  agree to  negotiate  in good  faith to amend this
Company  Agreement  as  necessary  or  desirable  to  reflect  any  economic  or
structural  changes to the Company or among the Members  which may have resulted
from such Major Capital Event.

                                   ARTICLE XV
                            MISCELLANEOUS PROVISIONS

15.1 ENTIRE AGREEMENT.  This Company  Agreement  represents the entire agreement
among all the Members and between the Members and the Company and supersedes all
prior oral or written agreements and understandings  with respect to the subject
matter of this Company Agreement.

15.2 NO PARTNERSHIP  INTENDED FOR NONTAX  PURPOSES.  The Members have formed the
Company  under the Act and  expressly do not intend hereby to form a partnership
under  either the  Delaware  Uniform  Partnership  Act or the  Delaware  Uniform
Limited  Partnership  Act.  The  Members  do not  intend to be  partners  one to
another, or partners as to any third party. To the extent any Member, by word or
action,  represents to another Person that any other Member is a partner or that
the Company is a  partnership,  the Member making such  wrongful  representation
shall be liable to any other Member who incurs  personal  liability by reason of
such wrongful representation.

15.3 RIGHTS OF CREDITORS AND THIRD PARTIES UNDER COMPANY AGREEMENT. This Company
Agreement  is entered  into among the Company and the Members for the  exclusive
benefit of the Company,  its Members and their  successors and  assignees.  This
Company  Agreement is expressly  not intended for the benefit of any creditor of
the  Company  or any other  Person  except to the extent  specifically  provided
herein.  Except  and  only to the  extent  expressly  provided  in this  Company
Agreement or by applicable  statute,  no such creditor or third party shall have
any rights under this Company Agreement or any agreement between the Company and
any Member with respect to any Capital Contribution or otherwise.

15.4 CONFIDENTIALITY.  Each of the Members acknowledges that, in its capacity as
such, it will have access to trade secrets and  confidential  information of the
Company (collectively, the "Information"), and each agrees that such Information
belongs   exclusively  to  the  Company.   The  Information  shall  include  any
information  which is or has been disclosed to a Member, or of which such Member
became  aware as a  consequence  of or  through  its  status  as a Member of the
Company, which has value to the Company, is not generally known by the public or
the Company's  competitors and which is treated by the Company as  confidential,
whether  or not such  material  or  information  is marked  `confidential."  The
obligation  of  confidentiality  imposed by this Section 15.4 shall not apply to
any information (and, as used in this Agreement,  the term Information shall not
include any  information)  that is: (i)  ascertainable  from public or published
information or trade sources (provided such information has not been made public
from any act or  omission  of the  disclosing  Member);  or (ii)  required to be
publicly  disclosed  by law,  rule,  regulation  or  court  order.  Each  Member
acknowledges  and agrees that the  Information  is a unique asset of the Company
which  is of a  confidential  nature  and has  significant  value  and  that the
disclosure  of all or any  part  of the  Information  to  third  Persons  may be
damaging  to the  Company.  Each  Member  agrees  that,  during  the term of the
Company,  it will keep  confidential  and not  directly or  indirectly  divulge,
furnish  or make  accessible  to anyone any of the  Information,  unless (i) the
Management  Committee  determines  that  such  disclosure  would  be in the best
interest of the  Company;  (ii) such  disclosure  is necessary in order for such
Member to enforce its rights or perform its  obligations  under this  Agreement,
(iii) such disclosure is required by law, rule,  regulation or court order or by
rule of any stock  exchange  or similar  entity  listing the  securities  of the
Member or an Affiliate of such Member,  or (iv) such  disclosure is to financial
representatives,  counsel, accountants or business advisors of such Member or to
a  prospective  acquiror  of such  Member's or any of its  parent's  business or
assets,  provided that such Persons agree to be bound by a similar,  appropriate
confidentiality agreement.

15.5 AGREEMENT,  EFFECT OF INCONSISTENCIES WITH ACT. For and in consideration of
the  mutual   covenants  herein  contained  and  for  other  good  and  valuable
consideration,  the receipt and sufficiency of which is hereby acknowledged, the
Company and the Members hereby agree to the terms and conditions of this Company
Agreement,  as it may from time to time be amended according to its terms. It is
the express  intention of the Members that this Company  Agreement  shall be the
sole  source  of  agreement  among the  Members,  and,  except  to the  extent a
provision of this Company Agreement  expressly  incorporates  federal income tax
rules by  reference  to  Sections  of the Code or  Regulations  or is  expressly
prohibited or ineffective  under the Act, this Company  Agreement  shall govern,
even when inconsistent with, or different than, the provisions of the Act or any
other law or rule.  To the extent any  provision  of this  Company  Agreement is
prohibited  or  ineffective  under  the Act,  this  Company  Agreement  shall be
considered  amended  to the  smallest  degree  possible  in  order  to make  the
Agreement effective under the Act. In the event the Act is subsequently  amended
or  interpreted  in such a way to make any  provision of this Company  Agreement
that was formerly invalid valid,  such provision shall be considered to be valid
from the effective date of such interpretation or amendment.  The parties hereby
agree  that each  party  shall be  entitled  to rely on the  provisions  of this
Company Agreement,  and no party shall be liable to the Company or to any Member
for any action or refusal  to act taken in good faith  reliance  on the terms of
this Company Agreement. The Members and the Company hereby agree that the duties
and  obligations  imposed on the  Company and the Members as such shall be those
set  forth  in  this  Company  Agreement,   which  is  intended  to  govern  the
relationship among the Company and the Members, notwithstanding any provision of
the Act or common law to the contrary.

15.6 NOTICE.

     15.6.1 Any notice to any Member  shall be at the address of such Member set
forth in  APPENDIX A hereto or such other  mailing  address of which such Member
shall advise the Company in writing.  Any notice to the Company  shall be at the
principal office of the Company as set forth in Section 1.6 hereof or such other
address as amended by the Management  Committee,  upon due notice to each Member
in accordance with this Section 15.6.

     15.6.2 Any notice hereunder shall be in writing and shall be deemed to have
been duly given if personally  delivered,  sent by overnight  courier or sent by
United States mail, or by facsimile  transmission,  and will be deemed received,
(i) if sent by certified or registered  mail,  return  receipt  requested,  when
actually received,  (ii) if sent by overnight  courier,  when actually received,
(iii) if sent by facsimile  transmission on the date sent, and (iv) if delivered
by hand, on the date of receipt.

     15.6.3.   Numerical  or  alphabetic   references  to  articles,   sections,
paragraphs, clauses, schedules, exhibits and appendices in this agreement are to
articles, sections,  paragraphs,  clauses, schedules, exhibits and appendices of
this Company Agreement unless otherwise stated.

                                   ARTICLE XVI
                                REMEDY PROVISIONS

16.1  TRIGGERING  EVENT.  Subject to the  provisions  of Section  6.8,  upon the
occurrence  of a  Triggering  Event,  the  holders of the AGM  Interest  will be
entitled to enforce the provisions of this Company  Agreement  specifically,  to
recover  damages  by  reason  of any  breach of any  provision  of this  Company
Agreement  and to exercise all other  rights to which they may be entitled.  The
Company and its Members agree and  acknowledge  that money damages may not be an
adequate remedy for breach of the provisions of this Company  Agreement and that
the holders of the AGM Interest may in their sole discretion  apply to any court
of law or equity of  competent  jurisdiction  for  specific  performance  and/or
injunctive  relief  in  order  to  enforce  or  prevent  any  violations  of the
provisions of this Company Agreement.

16.2 MANAGEMENT COMMITTEE.

     16.2.1  In  addition  to  any  other  remedies  provided  by  this  Company
Agreement,  and  subject to the  provisions  of Section  6.8, 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.

     16.2.2  Immediately  after the date on which the Accrual  equals or exceeds
the Accrual  Threshold or such Triggering Event occurs and at the request of the
holders of a Majority of the AGM Interest,  the number of representatives to the
Management  Committee shall be set at eleven, with five of such  representatives
being  representatives  then in office or otherwise selected by the holders of a
Majority of the SR Interest,  and six of such representatives  being selected by
the holders of a Majority of the AGM Interest. Any representative elected by the
holders of the AGM Interest shall cease to serve as a representative whenever no
unpaid  Accrual  exists and all Accrual  amounts  have been paid in full and any
Triggering  Event  has  been  cured.  If,  prior  to the end of the  term of any
representative  elected  by the  holders of the AGM  Interest,  a vacancy in the
office of such  representative  shall  occur by  reason  of death,  resignation,
removal or disability,  or for any other cause, such vacancy shall be filled for
the unexpired term by the remaining representative or representatives elected by
the  holders of the AGM  Interest,  or in the event  there is no such  remaining
representative, by a vote of the holders of the AGM Interest as provided in this
Section 16.2.2.  Any  representative  elected by the holders of the AGM Interest
may be  removed  with or  without  cause  only by the vote of the  holders  of a
Majority of the AGM Interest.

I          16.2.3 Subject to Article XIX of this Company Agreement, and
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 October 19, 2000, or by reason of
the unpaid Accrual exceeding the Accrual Threshold during the period from April
15, 2000 through October 19, 2000.

                                  ARTICLE XVII
                         REDEMPTION OF THE AGM INTEREST

17.1 OPTIONAL REDEMPTION BY THE COMPANY. At any time and from time to time after
the 30th  anniversary of the Effective  Date, the Company may redeem all but not
less than all of the AGM Interest at a price equal to the Redemption  Price.  If
the  Company  desires to redeem all of the AGM  Interest  as  permitted  by this
Section 17.1, the Company shall mail holders of the AGM Interest  written notice
of such  determination  at least 60 days and not more than 90 days  prior to the
date specified in such notice for redemption of the AGM Interest.

17.2 MANDATORY  REDEMPTION UPON REQUEST OF A HOLDER.  Subject to Section 6.8, at
any  time  and  from  time to time on or  after  the  fifth  anniversary  of the
Effective  Date,  any holder of the AGM  Interest  may provide the Company  with
written  notice of the  holder's  intent to require the Company to redeem all or
part of the AGM Interest  held by such holder.  The Company  shall redeem all of
the AGM Interest  specified in such redemption  notice,  at a price equal to the
Redemption Price, on a date set by the Company, which shall be within 15 days of
the date of the holder's  redemption  notice. For purposes of this Article XVII,
the "Redemption  Date" shall be the date specified by the Company for redemption
of the AGM Interest pursuant to Sections 17.1 and 17.2.

17.3 REDEMPTION  PRICE.  The Company will be obligated on the Redemption Date to
pay to the holders of the AGM Interest being  redeemed  (upon  surrender by such
holder at the Company's  principal office of the certificate  representing  such
AGM Interest) an amount in immediately  available  funds equal to the Redemption
Price. If the funds of the Company  legally  available for redemption of the AGM
Interest on the Redemption  Date are  insufficient to redeem the AGM Interest to
be redeemed on such date,  those funds which are legally  available will be used
to redeem the maximum  possible  amount of the AGM  Interest  ratably  among the
holders of the AGM Interest to be redeemed  based upon the aggregate  amounts to
be paid to each such holder.  At any time  thereafter,  when additional funds of
the Company are legally  available for the redemption of the AGM Interest,  such
funds will  immediately  be used to redeem the balance of the AGM Interest which
the Company has become  obligated to redeem on the Redemption  Date but which it
has not redeemed.

17.4  DISTRIBUTIONS  AFTER  REDEMPTION  DATE.  Following the  establishment of a
Redemption  Date by the Company,  the Company may set aside all funds  necessary
for such  redemption or reserve such funds by means of an irrevocable  letter of
credit, separate and apart from the other funds of the Company, in trust for the
benefit of the holders of the AGM Interest to be redeemed, pro rata, so as to be
and continue to be available therefor,  then from and after the Redemption Date,
the AGM  Interest  shall no longer be deemed  outstanding,  the right to receive
distributions  thereon shall cease to accrue and all rights with respect to such
AGM Interest  subject to redemption  shall forthwith at the close of business on
such  Redemption  Date cease and terminate  except only the right of the holders
thereof to receive the  Redemption  Price of the AGM Interest so to be redeemed.
Any moneys so set aside by the Company and  unclaimed  at the end of three years
from the date fixed for  redemption  shall  revert to the  general  funds of the
Company and the right of holders of the AGM  Interest to receive the  Redemption
Price will be unaffected thereby.

17.5  CERTIFICATES.  In case  fewer  than the total  amount of the AGM  Interest
represented by any certificate are redeemed, a new certificate  representing the
amount of the AGM Interest shall be issued to the holder thereof without cost to
such  holder  as  soon  as  practicable   after  surrender  of  the  certificate
representing the redeemed the AGM Interest.

17.6 OTHER  REDEMPTIONS  OR  ACQUISITIONS.  Without  consent of the holders of a
Majority of the AGM Interest,  the Company shall not redeem or otherwise acquire
any of the AGM  Interest,  except  (i) as  expressly  authorized  herein or (ii)
pursuant to a purchase offer made pro-rata to all holders of the AGM Interest on
the basis of the amount of the AGM Interest held by each such holder.

                                  ARTICLE XVIII
                               GRANT OF PUT OPTION

18.1 GRANT OF PUT OPTION.  SRSC hereby  grants to the holder of the AGM Interest
and its successors and assigns,  an option (the "Put Option")  giving the holder
of the AGM  Interest and its  successors  and assigns the right to sell to SRSC,
and its successors or assigns (and requiring SRSC and its successors and assigns
to purchase),  all or any portion of the AGM  Interest,  in exchange for the Put
Option  Consideration.  Subject to Section 6.8,  the Put Option is  exercisable,
from time to time and in amounts as set forth  below,  at any time and from time
to  time  on  or  after  the  fifth  anniversary  of  the  Effective  Date,  and
concurrently  with the time that Valhi makes any principal  payment on the Valhi
Loans,  unless  the  Company  has  previously  redeemed  in full  all of the AGM
Interest  pursuant to Article XVII.  The holder of the AGM Interest may exercise
the Put Option by giving written notice to SRSC of its intent to do so (the "Put
Notice").  The Put Notice  shall  include a  statement  of the holder of the AGM
Interest's  determination of the Put Option Consideration and that proportion of
the AGM  Interest  that  shall be sold.  The  portion of the AGM  Interest  sold
pursuant to any Put Notice (such  portion to be  determined as if all of the AGM
Interest  originally issued to AGM were then  outstanding)  shall not exceed the
proportion  that the principal  payment  giving rise to such Put Notice bears to
the original principal balance of the Valhi Loans.

18.2 CLOSING OF PUT OPTION. The closing of the sale of the AGM Interest pursuant
to the Put Option  shall be held at the  offices of the  Company on the date set
forth by the  holder of the AGM  Interest  in the Put Notice  (unless  otherwise
delayed in  accordance  with the  provisions  of Section  18.3 below) or at such
other time and place as the holders of the AGM Interest  and SRSC may agree.  At
the  closing,  SRSC shall pay to the holder of the AGM  Interest  the Put Option
Consideration  by wire  transfer  of funds,  and the holder of the AGM  Interest
shall deliver an assignment of the AGM Interest in a form reasonably  acceptable
to SRSC,  pursuant to which the AGM Interest will be  transferred to SRSC or its
permitted  designee  free and clear of any  liens or  encumbrances  (other  than
encumbrances that secure indebtedness of the Company).

18.3 REGULATORY APPROVAL. The consummation of the assignment of the AGM Interest
pursuant to the exercise of the Put Option may be delayed  until the  expiration
or earlier  termination of any waiting period,  and the receipt of any approval,
imposed  or  required  by any  statute  or  any  regulation  promulgated  by any
governmental or regulatory authority.  If it is determined that any such waiting
period or prior approval is required to be complied with or obtained,  then each
of SRSC and the holder of the AGM  Interest  the shall use their  diligent  best
efforts (a) in  connection  with the filing or providing of any  information  in
connection therewith (including,  without limitation,  a notice and report under
the Hart- Scott-Rodino Antitrust Improvements Act of 1976, as amended and (b) to
obtain the approval required.

                                   ARTICLE XIX
                              SNAP-BACK PROVISIONS

19.1 SNAP-BACK  PROVISIONS.  Subject to Section 6.8, if, at any time, either (i)
the  Company  fails to make the Beet  Payment  Reduction  (and  hence  generates
Distributable  Cash in any Fiscal Year in the aggregate  amount of less than $25
million) or (ii) the unpaid Accrual exceeds the Accrual Threshold,  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 of this  Company  Agreement,  any one or more of the
provisions noted below in this Article XIX shall immediately,  and retroactively
to January 3, 1997,  become applicable and operative and supersede the indicated
portion or section of this Company  Agreement,  and such  superseded  portion or
section of this Company  Agreement shall thereafter be null and void;  provided,
however,  that any such voidance or  nullification  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.

     19.1.1.  The definition of Accrual  contained in Article II of this Company
Agreement would be amended to read in its entirety as follows:  "ACCRUAL - shall
mean  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 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 shall not be included in any Accrual."

     19.1.2. The definition of Accrual Threshold contained in Article II of this
Company Agreement would be amended to read in its entirety as follows:  "ACCRUAL
THRESHOLD - means the amount of $10,526,316."

     19.1.3. The (i) definition of Deferral would be added to Article II of this
Company Agreement to read in its entirety as follows:  "DEFERRAL - means the sum
of (a)  $30,546.18,  together  with interest on such amount at a rate of 10.145%
per  annun,  compounded  annually,  from May 14,  1997,  and (b)  $6,556,152.00,
together with interest on such amount at a rate of 5.0725% per annun, compounded
annually,  from March 27,  1998," and (ii) the  definition  of Retained  Amounts
would be amended to read in its entirety as follows:  "RETAINED  AMOUNTS - means
the sum of (i) 95% of any Accrual, (ii) 100% of any Deferral, plus (iii) 100% of
any interest accrued on any such Deferral."

     19.1.4.  Section 9.3.1(b) of this Company Agreement would be amended in its
entirety to read 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
$15,789,474  (on a  cumulative  basis  for  all  Fiscal  Years  of  the  Company
commencing with Fiscal Year 1997), 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 prior to the Company's 2002 Fiscal Year), and

     (iii) 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."

     19.1.5.  The phrase  "Section  9.3.1(b)(iv)"  contained  in each of Section
9.1.1(c),  9.1.2(d) and 13.3.2(d)(ii) of this Company Agreement would be amended
to read "Section 9.3.1(b)(iii)."

     19.1.6.  Section 9.3.1 (d) of this Company Agreement shall be renumbered as
Section  9.3.1(e),  and Section  9.3.1(d)  of this  Company  Agreement  would be
amended in its entirety to read 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, and

     (ii) until  September  30, 2005,  no amounts  shall be  distributed  to the
holders of the AGM Interest pursuant to the provisions of Sections  9.3.1(b)(ii)
and (b)(iii) above.

The amounts that would otherwise have been distributed to the holders of the AGM
Interest,  but for the  provisions of Sections  9.3.1(d)(i)  and (d)(ii)  above,
(which,  including interest,  is referred to as the Deferral),  shall instead 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. Following September 30,
2005,  amounts  which would  otherwise be  distributed  to the holders of the SR
Interest  pursuant to Sections  9.3.1(b)(ii) and (b)(iii) shall be reduced,  and
such distribution  shall instead be paid dollar for dollar to the holders of the
AGM  Interest,  until the date an  aggregate  amount  equal to such  Deferral is
actually  paid to the  holders  of the AGM  Interest  pursuant  to this  Section
9.3.1(d)."

     19.1.7. The first sentence of Section 9.3.2 of this Company Agreement would
be amended in its entirety to read 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,  until such holders have received an
amount equal to any Deferral, (iii) third, 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 (iv) fourth, to the Members in the percentages then in effect under
Section 9.3.1(b)(iii) ."

     19.1.8.  Section 16.2.3 of this Company  Agreement  would be deleted in its
entirety.

                                  * * * * * * *

<PAGE>

                               * * * * * * * * * *

                                   CERTIFICATE

                               * * * * * * * * * *

The undersigned hereby agree, acknowledge and certify that the foregoing Amended
and Restated  Company  Agreement  constitutes  the Amended and Restated  Company
Agreement of The Amalgamated  Sugar Company LLC,  adopted by the Company and its
Members  January 3, 1997, to be effective for tax and accounting  purposes as of
December 31, 1996, as amended and restated through October 14, 2005.

COMPANY:

THE AMALGAMATED SUGAR COMPANY LLC

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

MEMBERS:

SNAKE RIVER SUGAR COMPANY

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

                          AMALGAMATED COLLATERAL TRUST

By: ASC Holdings, Inc., Company Trustee

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

<PAGE>

<TABLE>
<CAPTION>
                                   Appendix A

------------------------------------------------ ---------------------- ---------------- --------------------------
                    Member                             Initial             Initial               Initial
                                                       Capital              Shares          Representatives to
                                                     Contribution             Of                Management
                                                          and               Total               Committee
                                                         Value             Capital

------------------------------------------------ ---------------------- ---------------- --------------------------
<S>                                                <C>                    <C>              <C>
Amalgamated Collateral Trust                       $250,000,0000          94.7%            None

c/o Wilmington Trust
Company, as Resident Trustee
Rodney Square North
1100 N. Market St.
Wilmington, DE 19890-0001

And

c/o ASC Holdings, Inc., as Company Trustee
Three Lincoln Center
5430 LBJ Freeway
Suite 1700
Dallas, Texas  75240
------------------------------------------------ ---------------------- ---------------- --------------------------
With a copy to:
Valhi, Inc.
Three Lincoln Center
5430 LBJ Freeway
Suite 1700
Dallas, Texas  75240
Attn: General Counsel

------------------------------------------------ ---------------------- ---------------- --------------------------
Snake River Sugar Company                          $14,000,000            5.3%           1.  Terry Ketterling
Attn:  Ralph C.  Burton,  President  and  Chief                                          2.  Scott Stevenson
Executive Officer.                                                                       3. Duane Ramseyer
3184 Elder Street                                                                        4. Doug Maag
Boise, Idaho  83705                                                                      5.  Mike Driscoll
                                                                                         6.  Todd Merrigan
                                                                                         7.  Duane Grant

------------------------------------------------ ---------------------- ---------------- --------------------------
</TABLE>

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