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                     CONTINGENT SUBORDINATE PLEDGE AGREEMENT

         This CONTINGENT  SUBORDINATE  PLEDGE  AGREEMENT  (this  "Agreement") is
dated as of October 19, 2000 and entered  into by and between  SNAKE RIVER SUGAR
COMPANY,  an Oregon  cooperative  corporation  ("Pledgor"),  and VALHI,  INC., a
Delaware  corporation  ("Secured  Party") and is  acknowledged by FIRST SECURITY
BANK,  NATIONAL  ASSOCIATION,  as Collateral Agent for the holders of the Senior
Notes referred to below ("FSB") and the holders of said Senior Notes.

                             PRELIMINARY STATEMENTS

         A.  Pledgor  is the  legal  and  beneficial  owner  of (i) the  limited
liability company membership interest (the "Pledged Equity") listed in Part A of
Schedule I annexed  hereto and issued by The  Amalgamated  Sugar  Company LLC, a
Delaware limited liability  company (the "LLC"),  and (ii) the indebtedness (the
"Pledged Debt") described in Part B of said Schedule I and issued by the obligor
(the "Obligor") named therein.

         B.  Pursuant  to those  certain  Note  Purchase  Agreements  (said Note
Purchase Agreements, as they may hereafter be amended, supplemented or otherwise
modified from time to time,  being the "Note Purchase  Agreements"),  each dated
May 14, 1997 and as amended as of November  30,  1998,  between  Pledgor and the
holders of the Senior  Notes (the "Senior  Noteholders"),  Pledgor has issued to
the Senior  Noteholders  $100,000,000  aggregate  principal amount of its 10.80%
Senior Notes due April 30, 2009 (said  Senior  Notes,  as they may  hereafter be
amended, supplemented or otherwise modified from time to time, being the "Senior
Notes," and together with the debt associated therewith, the "Senior Debt").

         C. Pursuant to the  Collateral  Agency  Agreement,  dated as of May 14,
1997, among the Senior Noteholders and FSB (the "Collateral Agency  Agreement"),
the Senior  Noteholders  have  appointed FSB to act as Collateral  Agent for the
Senior Noteholders.

         D. In  connection  with the Note Purchase  Agreements,  Pledgor and FSB
have  entered into a pledge  agreement  dated as of May 14, 1997 (the "SR Pledge
Agreement") and a related  Security  Agreement dated May 14, 1997 (the "Security
Agreement")  whereby  Pledgor has pledged  the  Pledged  Collateral  (as defined
below) to FSB, as collateral agent, for the Senior Noteholders.

         E.  Pledgor  and  Secured  Party are  parties  to a  Subordinated  Loan
Agreement  dated  January 3, 1997,  as amended and  restated May 14, 1997 and as
amended as of November 30, 1998, (said  Subordinated  Loan Agreement,  as it may
hereafter  be amended,  supplemented  or otherwise  modified  from time to time,
being the "Subordinated Loan Agreement").

         F.  Pledgor  desires  that certain  further  amendments  be made to the
Subordinated Loan Agreement.

         G. It is a condition  precedent to the  amendment of even date herewith
to the  Subordinated  Loan  Agreement  that Pledgor  shall have  undertaken  the
obligations   and  granted  the   contingent   subordinate   security   interest
contemplated by this Agreement,  subject only to the provisions of the SR Pledge
Agreement and the senior pledge made by Pledgor in connection therewith.

         NOW, THEREFORE, in consideration of the premises and in order to induce
the Secured Party to amend the  Subordinated  Loan  Agreement and for other good
and  valuable  consideration,  the  receipt  and  adequacy  of which are  hereby
acknowledged, Pledgor hereby agrees with Secured Party as follows:

SECTION 1. Definitions. Terms defined in the Subordinated Loan Agreement and not
otherwise defined herein are used herein as therein defined.

SECTION 2.  Contingent  Subordinate  Pledge of  Security.  Immediately  upon the
occurrence of the earliest to occur of the following  (the "Grant  Effectiveness
Condition"):  (i) the full payment of the Secured Obligations, as defined in the
Security  Agreement  ("Senior  Secured  Obligations"),  (ii) the date upon which
Secured  Party  purchases all of the Senior Notes upon an exercise of its rights
under all of those certain Option Agreements between Secured Party,  Pledgor and
the Senior  Noteholders,  and (iii) the date at which the outstanding balance of
the  Senior  Secured  Obligations  is  less  than  the  amount  of  cash or cash
equivalents contained in the Distributable Cash Collateral Account (as such term
is defined in the Note Purchase  Agreements),  and such cash or cash equivalents
have been  irrevocably  and  indefeasibly  dedicated  by the Pledgor to, and are
available solely for (as evidenced by a written  certificate from the Pledgor to
the Senior  Noteholders,  acknowledged  by Secured  Party) payment of the Senior
Secured   Obligations  at  the  sole  and  absolute  discretion  of  the  Senior
Noteholders,  Pledgor  will  pledge and assign to Secured  Party,  and grants to
Secured Party a contingent,  subordinate,  security interest in all of Pledgor's
right,  title and interest in and to the following  (the  "Pledged  Collateral")
which security interest shall become immediately  effective only upon occurrence
of a Grant Effectiveness Condition.

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

(b) the Pledged Debt and the instruments evidencing the Pledged Debt, all of the
Pledgor's  rights in and to any and all collateral for the Pledged Debt, and all
interest,  cash,  instruments  and other  property or proceeds from time to time
received,  receivable or otherwise  distributed in respect of or in exchange for
any or all of the foregoing;

(c) all of Pledgor's  rights in, under and pursuant to (as each of the following
documents is defined in the Note Purchase Agreements, collectively, the "Pledged
Debt Documents"): (i) the SPT Guaranty; (ii) the SPT Pledge Agreement,  together
with all Pledged Collateral defined therein;  (iii) the  Indemnification  Pledge
Agreement,  together with all  Collateral  defined  therein;  and (iv) the Valhi
Entity Pledge  Agreement,  together with all Collateral  defined  therein,  such
rights to include,  without limitation,  the following rights: (x) all rights of
Pledgor to receive  proceeds of any insurance,  indemnity,  warranty or guaranty
with  respect to the  Pledged  Debt  Documents,  (y) all  claims of Pledgor  for
damages arising out of any breach of or default under the Pledged Debt Documents
and (z) all  rights  of  Pledgor  to  terminate,  amend,  supplement,  modify or
exercise  rights or  options  under  the  Pledged  Debt  Documents,  to  perform
thereunder  and to  compel  performance  and  otherwise  exercise  all  remedies
thereunder;

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

(e) all additional indebtedness from time to time owed to Pledgor by any obligor
on the Pledged Debt and the instruments  evidencing such  indebtedness,  and all
interests, cash instruments, collateral and other property or proceeds from time
to time  received,  receivable  or  otherwise  distributed  in  respect of or in
exchange for any or all of such  indebtedness,  including without limitation the
AGM Interest;

         (f) all  equity  interests,  and all  securities  convertible  into and
warrants,  options and other rights to purchase or otherwise  acquire any equity
interests, in any Person that, on or after the date of this Agreement,  becomes,
as a result of any  occurrence,  a direct  Subsidiary  of Pledgor  (which equity
interests shall be deemed to be part of the Pledged Equity), any certificates or
other  instruments  representing such equity  interests,  securities,  warrants,
options or other  rights and any interest of Pledgor in the entries on the books
of any  financial  intermediary  pertaining  to such equity  interests,  and all
dividends,  cash, warrants,  rights,  instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of or
in  exchange  for any or all of such  equity  interests,  securities,  warrants,
options or other rights;

         (g) all  indebtedness  from time to time owed to  Pledgor by any Person
that, after the date of this Agreement,  becomes, as a result of any occurrence,
a direct or indirect Subsidiary of Pledgor, and all interest,  cash, instruments
and other  property  or  proceeds  from  time to time  received,  receivable  or
otherwise  distributed  in  respect  of or in  exchange  for  any or all of such
indebtedness; and

         (h) to the extent not covered by clauses  (a)  through  (g) above,  all
proceeds of any or all of the foregoing Pledged Collateral. For purposes of this
Agreement,  the term "proceeds" includes whatever is receivable or received when
Pledged  Collateral  or proceeds  are sold,  exchanged,  collected  or otherwise
disposed of, whether such disposition is voluntary or involuntary, and includes,
without limitation,  proceeds of any indemnity or guaranty payable to Pledgor or
Secured  Party from time to time with respect to any of the Pledged  Collateral.
Nothing  in this  Agreement  shall be deemed to grant  Secured  Party a security
interest in the AGM Interest or any proceeds of the AGM Interest,  except to the
extent of Pledgor's interest therein assigned to Pledgor pursuant to the Pledged
Debt Documents.

         SECTION 3. Security for Obligations. Immediately upon occurrence of the
Grant  Effectiveness  Condition,  this Agreement  shall secure,  and the Pledged
Collateral will be collateral security for, the prompt payment or performance in
full when due, whether at stated maturity, by required prepayment,  declaration,
acceleration,  demand or otherwise  (including the payment of amounts that would
become due but for the operation of the automatic  stay under Section  362(a) of
the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all obligations and liabilities of
every nature of Pledgor now or hereafter  existing under or arising out of or in
connection  with the  Subordinated  Loan Agreement and the other Loan Documents,
and  all  extensions  or  renewals  thereof,  whether  for  principal,  interest
(including without limitation interest that, but for the filing of a petition in
bankruptcy  with respect to Pledgor,  would accrue on such  obligations),  fees,
expenses, indemnities or otherwise, whether voluntary or involuntary,  direct or
indirect,  absolute or contingent,  liquidated or  unliquidated,  whether or not
jointly  owed with  others,  and whether or not from time to time  decreased  or
extinguished and later increased, created or incurred, and all or any portion of
such  obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered  directly or indirectly  from Secured Party
as a preference,  fraudulent  transfer or otherwise  (all such  obligations  and
liabilities being the "Underlying Debt"), and all obligations of every nature of
Pledgor now or hereafter  existing under this Agreement (all such obligations of
Pledgor, together with the Underlying Debt, being the "Secured Obligations").

SECTION 4. Delivery of Pledged Collateral:  Payment Directions.  (a) Immediately
upon  occurrence  of the Grant  Effectiveness  Condition,  all  certificates  or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of  Secured  Party  pursuant  hereto and shall be in
suitable form for transfer by delivery or, as  applicable,  shall be accompanied
by Pledgor's  endorsement,  where  necessary,  or duly executed  instruments  of
transfer or  assignment  in blank,  all in form and  substance  satisfactory  to
Secured Party. Immediately upon occurrence of the Grant Effectiveness Condition,
Secured Party shall have the right,  at any time in its  discretion  and without
notice to Pledgor, to transfer to or to register in the name of Secured Party or
any of its  nominees any or all of the Pledged  Collateral,  subject only to the
revocable rights specified in Section 8(a).

         (b) Pledgor  agrees that it will,  immediately  upon  occurrence of the
Grant  Effectiveness  Condition,  direct  the LLC,  the  Obligor  and any  other
applicable  Person,  as the case may be, to make all payments of  distributions,
dividends,  principal,  interest and any other  amounts in respect of any of the
Pledged  Collateral  directly to Secured Party, to be applied as provided in the
Contingent  Collateral  Agency and Paying Agency Agreement by and among Pledgor,
Secured Party and FSB.

SECTION 5.  Representations  and Warranties.  Pledgor represents and warrants as
follows:

         (a) Due Authorization,  etc. of Pledged Collateral.  All of the Pledged
Equity  has been  duly  authorized  and  validly  issued  and is fully  paid and
nonassessable.  All of the Pledged Debt has been duly authorized,  authenticated
or issued,  and delivered and is the legal,  valid and binding obligation of the
issuers thereof and is not in default.

         (b) Description of Pledged  Collateral.  The Pledged Equity constitutes
5.3% of the membership interests in the LLC. Except as may otherwise be provided
in the Company Agreement (i) there are no agreements outstanding with respect to
any Pledged  Equity,  (ii) there are no outstanding  warrants,  options or other
rights to purchase any Pledged Equity and (iii) there is no property that is now
or may hereafter become  convertible into, or that requires the issuance or sale
of,  any  Pledged  Equity.  The  Pledged  Debt  includes  all of the  issued and
outstanding  intercompany  indebtedness  evidenced by a  promissory  note of the
respective issuers thereof owing to Pledgor.

         (c) Ownership of Pledged  Collateral.  Pledgor is the legal, record and
beneficial  owner of the Pledged  Collateral free and clear of any Lien,  except
for the security interest created in connection with the SR Pledge Agreement and
the  contingent  subordinate  security  interest  pursuant to this Agreement and
subject to the restrictions set forth in the Company Agreement.

         (d) Governmental  Authorizations.  No authorization,  approval or other
action  by,  and no notice to or filing  with,  any  governmental  authority  or
regulatory body is required for either (i) this pledge by Pledgor of the Pledged
Collateral pursuant to this Agreement and the grant by Pledgor of the contingent
subordinate  security interest granted hereby,  (ii) the execution,  delivery or
performance of this Agreement by Pledgor, or (iii) the exercise by Secured Party
of the  voting or other  rights,  or the  remedies  in  respect  of the  Pledged
Collateral  immediately  upon  occurrence of the Grant  Effectiveness  Condition
provided for in this Agreement  (except as may be required in connection  with a
disposition  of Pledged  Collateral  by laws  affecting the offering and sale of
securities generally).

         (e) Perfection.  Immediately upon occurrence of the Grant Effectiveness
Condition, the pledge of the Pledged Collateral pursuant to this Agreement shall
create a valid  and  perfected  subordinate  security  interest  in the  Pledged
Collateral, securing the payment of the Secured Obligations.

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

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

SECTION 6.  Transfers  and Other  Liens:  Additional  Pledged  Collateral:  etc.
Following the occurrence of the Grant Effectiveness Condition, Pledgor shall:

         (a)  not,  except  as  expressly  permitted  by the  terms  of the Note
Purchase Agreements and/or the Subordinated Loan Agreement, (i) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Pledged  Collateral or (ii) create or suffer to exist any
Lien upon or with  respect  to any of the  Pledged  Collateral,  except  for the
security interests under the SR Pledge Agreement and the contingent  subordinate
security interest pursuant to this Agreement;

         (b) (i) cause each issuer of Pledged  Equity not to issue any equity in
addition to or in  substitution  for the Pledged  Equity  issued by such issuer,
except to Pledgor,  and (ii) pledge hereunder,  immediately upon its acquisition
(directly  or  indirectly)  thereof and  occurrence  of the Grant  Effectiveness
Condition,  any and all additional equity of each issuer of Pledged Equity,  and
(iii) pledge  hereunder,  immediately upon acquisition  (directly or indirectly)
thereof by Pledgor and occurrence of the Grant Effectiveness  Condition, any and
all equity of any Person that, after the date of this Agreement,  becomes,  as a
result of any occurrence, a direct or indirect subsidiary of Pledgor;

         (c)  (i)  pledge   hereunder,   immediately  upon  their  issuance  and
occurrence of the Grant  Effectiveness  Condition,  any and all  instruments  or
other evidences of additional  indebtedness from time to time owed to Pledgor by
any obligor on the Pledged Debt,  and (ii) pledge  hereunder,  immediately  upon
their issuance and occurrence of the Grant Effectiveness  Condition, any and all
instruments or other evidences of indebtedness from time to time owed to Pledgor
by any Person that after the date of this Agreement becomes,  as a result of any
occurrence, a direct or indirect subsidiary of Pledgor;

         (d) promptly notify Secured Party of any event of which Pledgor becomes
aware  causing  material  loss  or  depreciation  in the  value  of the  Pledged
Collateral;

         (e) promptly  deliver to Secured Party all written notices  received by
it with respect to the Pledged Collateral; and

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

SECTION 7. Further Assurances: Pledge Amendments.

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

         (b) Pledgor  further agrees that it will, upon obtaining any additional
equity or  securities  required to be pledged  hereunder  as provided in Section
6(b) or (c),  promptly (and in any event within five  Business  Days) deliver to
Secured Party, as applicable,  either a Contingent  Subordinate Pledge Amendment
(prior to occurrence  of the Grant  Effectiveness  Condition) or  Non-Contingent
Subordinate  Pledge  Amendment  (after  occurrence  of the  Grant  Effectiveness
Condition),  duly executed by Pledgor,  in substantially the form of Schedule II
or Schedule III,  respectively,  annexed hereto (each a "Pledge Amendment"),  in
respect of the additional  Pledged Equity or Pledged Debt to be pledged pursuant
to this Agreement. Pledgor hereby authorizes Secured Party to attach each Pledge
Amendment to this  Agreement and agrees that all Pledged  Equity or Pledged Debt
listed on any Pledge Amendment delivered to Secured Party shall for all purposes
hereunder be considered Pledged Collateral; provided that the failure of Pledgor
to execute a Pledge  Amendment with respect to any additional  Pledged Equity or
Pledged Debt pledged  pursuant to this  Agreement  shall not impair the security
interest of Secured Party therein or otherwise  adversely  affect the rights and
remedies of Secured Party hereunder with respect thereto.

SECTION 8. Voting Rights Following Occurrence of Grant Effectiveness  Condition;
Etc.

         (a) Upon and following occurrence of the Grant Effectiveness Condition,
so long as no Event of Default shall have occurred and be continuing:

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

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

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

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

SECTION 9. Special Provisions With Respect to the Pledged Debt Documents.

         (a) Upon and following occurrence of the Grant Effectiveness Condition,
Pledgor shall at its expense:

                  (i)  perform  and  observe  all  terms and  provisions  of the
         Pledged Debt Documents to be performed or observed by it,  maintain the
         Pledged Debt  Documents  in full force and effect,  enforce the Pledged
         Debt Documents in accordance with their terms, and take all such action
         to such end as may be from time to time requested by Secured Party; and

                  (ii) furnish to Secured Party,  promptly upon receipt thereof,
         copies of all notices, requests and other documents received by Pledgor
         under or pursuant to the Pledged Debt Documents,  and from time to time
         furnish to Secured  Party such  information  and reports  regarding the
         Pledged Debt Documents as Secured Party may reasonably request.

         (b) Upon and following occurrence of the Grant Effectiveness Condition,
except as expressly permitted by the Subordinated Loan Agreement,  Pledgor shall
not, without the express written consent of the Secured Party:

                  (i) cancel or terminate  any of the Pledged Debt  Documents or
         consent to or accept any cancellation or termination thereof;

                  (ii) amend or otherwise  modify the Pledged Debt  Documents or
         give any consent, waiver or approval thereunder;

                  (iii)  waive any default  under or breach of the Pledged  Debt
         Documents; or

                  (iv) take any other action in connection with the Pledged Debt
         Documents  that  would  impair the value of the  interest  or rights of
         Pledgor  thereunder  or that  would  impair the  interest  or rights of
         Secured Party.

SECTION  10.  Secured  Party  Appointed  Attorney-in-Fact.  Pledgor  irrevocably
appoints Secured Party,  which  appointment  shall become effective  immediately
upon   occurrence   of  the  Grant   Effectiveness   Condition,   as   Pledgor's
attorney-in-fact,  with full  authority in the place and stead of Pledgor and in
the name of Pledgor,  Secured Party or  otherwise,  from time to time in Secured
Party's discretion to take any action and to execute any instrument that Secured
Party may deem  necessary  or  advisable  to  accomplish  the  purposes  of this
Agreement, including without limitation:

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

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

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

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

         (e) to execute on behalf of Pledgor a pledge  agreement that is neither
subordinated  or contingent  but is otherwise  similar to this  Agreement in all
material respects.

SECTION  11.  Secured  Party  May  Perform.  Following  occurrence  of the Grant
Effectiveness  Condition,  if Pledgor fails to perform any  agreement  contained
herein,  Secured  Party  may  itself  perform,  or cause  performance  of,  such
agreement,  and the expenses of Secured Party  incurred in connection  therewith
shall be payable by Pledgor under Section 15(b).

SECTION 12.  Standard of Care. The powers  conferred on Secured Party  hereunder
are solely to protect  its  interest  in the  Pledged  Collateral  and shall not
impose any duty upon it to exercise any such powers.  Except for the exercise of
reasonable  care in the custody of any Pledged  Collateral in its possession and
the accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Pledged  Collateral,  it being  understood  that  Secured
Party shall have no  responsibility  for (a)  ascertaining or taking action with
respect to calls, conversions,  exchanges,  maturities, tenders or other matters
relating  to any  Pledged  Collateral,  whether or not  Secured  Party has or is
deemed to have knowledge of such matters,  (b) taking any necessary steps (other
than steps  taken in  accordance  with the  standard  of care set forth above to
maintain  possession of the Pledged  Collateral) to preserve  rights against any
parties with respect to any Pledged  Collateral,  (c) taking any necessary steps
to collect or realize upon the Secured Obligations or any guarantee therefor, or
any part thereof, or any of the Pledged Collateral, or (d) initiating any action
to protect the Pledged Collateral against the possibility of a decline in market
value.  Secured Party shall be deemed to have exercised  reasonable  care in the
custody and preservation of Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment  substantially equal to that which such Secured
Party accords its own property consisting of negotiable securities.

SECTION 13. Remedies.

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

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

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

SECTION 14.  Application of Proceeds.  Except as expressly provided elsewhere in
this  Agreement,  all proceeds  received by Secured Party in respect of any sale
of,  collection  from, or other  realization upon all or any part of the Pledged
Collateral  may, in the discretion of Secured Party, be held by Secured Party as
Pledged Collateral for, and/or then, or at any time thereafter,  applied in full
or in part by Secured Party  against,  the Secured  Obligations in the following
order of priority:

                  FIRST:  To the payment of all costs and expenses of such sale,
         collection or other realization,  including reasonable  compensation to
         Secured  Party and its  agents  and  counsel,  and all other  expenses,
         liabilities   and  advances  made  or  incurred  by  Secured  Party  in
         connection  therewith,  and all  amounts  for  which  Secured  Party is
         entitled to indemnification  hereunder and all advances made by Secured
         Party  hereunder for the account of Pledgor,  and to the payment of all
         costs and expenses paid or incurred by Secured Party in connection with
         the exercise of any right or remedy  hereunder,  all in accordance with
         Section 15;

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

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

SECTION 15. Indemnity and Expenses.

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

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

SECTION  16.  Continuing  Subordinate  Security  Interest:  Transfer  of Secured
Obligations.   Upon  occurrence  of  the  Grant  Effectiveness  Condition,  this
Agreement shall create a continuing subordinate security interest in the Pledged
Collateral  and shall (a) remain in full force and effect  until the  payment in
full in cash of all  Secured  Obligations,  (b) be  binding  upon  Pledgor,  its
successors and assigns, and (c) inure,  together with the rights and remedies of
Secured Party  hereunder,  to the benefit of Secured  Party and its  successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(c),  Secured  Party may assign or  otherwise  transfer  the  Subordinated  Loan
Agreement,  the other  Loan  Documents  and the  Secured  Obligations  evidenced
thereby to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof  granted herein or otherwise.  Upon the
payment in full in cash of all Secured  Obligations,  the  subordinate  security
interest  granted  hereby  shall  terminate,  and  all  rights  to  the  Pledged
Collateral  shall revert to Pledgor.  Upon any such  termination  Secured  Party
will,  at Pledgor's  expense,  execute and deliver to Pledgor such  documents as
Pledgor shall reasonably request to evidence such termination, and Pledgor shall
be entitled to the return, upon its request and at its expense,  against receipt
and without  recourse to Secured  Party,  of such of the Pledged  Collateral  as
shall not have been sold or otherwise applied pursuant to the terms hereof

SECTION 17.  Condition  Precedent.  The  execution  and delivery of that certain
Master Agreement dated October 19, 2000, by and among the parties hereto,  among
others,  shall be a condition  precedent  to the initial  effectiveness  of this
Amendment.

SECTION 18. Amendments Etc. No amendment, modification, termination or waiver of
any  provision  of this  Agreement,  and no consent to any  departure by Pledgor
therefrom,  shall in any event be effective  unless the same shall be in writing
and  signed  by  Secured  Party  and,  in the  case  of any  such  amendment  or
modification,  by Pledgor. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.

SECTION  19.  Notices.  Any notice or other  communication  herein  required  or
permitted to be given shall be in writing and may be  personally  served or sent
by  telefacsimile,  United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service,  upon receipt of
telefacsimile,  or three Business Days after  depositing it in the United States
mail with postage prepaid and properly  addressed.  For the purposes hereof, the
address of each party  hereto  shall be as set forth under such  party's name on
the signature  pages hereof or, as to either party,  such other address as shall
be  designated  by such party in a written  notice  delivered to the other party
hereto.

SECTION 20. Failure or Indulgence Not Waiver, Remedies Cumulative. No failure or
delay on the  part of  Secured  Party in the  exercise  of any  power,  right or
privilege  hereunder shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence  therein,  nor shall any single or
partial  exercise of any such power,  right or  privilege  preclude any other or
further exercise thereof or of any other power,  right or privilege.  All rights
and remedies  existing under this Agreement are cumulative to, and not exclusive
of, any rights or remedies otherwise available.

SECTION 21.  Severability.  In case any  provision in or  obligation  under this
Agreement shall be invalid,  illegal or unenforceable in any  jurisdiction,  the
validity,   legality  and   enforceability   of  the  remaining   provisions  or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

SECTION 22.  Headings.  Section and  subsection  headings in this  Agreement are
included  herein for  convenience  of reference  only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.

SECTION 23. Full Subordination. Notwithstanding anything herein to the contrary,
(i) all rights  granted to Secured Party  pursuant to this Agreement are subject
and  subordinated  to all  rights  granted  in favor of FSB  under the SR Pledge
Agreement  and the related  documents  and (ii) prior to the  occurrence  of the
Grant  Effectiveness  Condition  (or,  in the  case of the  Grant  Effectiveness
Condition  described  in  clause  (iii)  of  Section  2  hereof,  prior  to  the
satisfaction of the  requirement  set forth in Section 24 below),  Secured Party
shall not  exercise any  remedies or initiate or pursue any  proceedings  of any
nature whatsoever against the Pledged Collateral or the Pledgor.

SECTION 24. Dedication of Distributable Cash Collateral Account. Notwithstanding
anything to the contrary  herein,  at the first date upon which the  outstanding
balance of the  Senior  Secured  Obligations  is less than the amount of cash or
cash equivalents  contained in the Distributable  Cash Collateral  Account,  the
Pledgor  hereby  agrees to  immediately  dedicate  that  portion,  and only that
portion,  of  the  Distributable  Cash  Collateral   Account,   irrevocably  and
indefeasibly,  necessary for the full payment of the Senior Secured  Obligations
in such form as  reasonably  required  by the  Senior  Noteholders  so that such
Distributable  Cash Collateral  Account will be available  solely for payment of
the Senior Secured Obligations at the sole and absolute discretion of the Senior
Noteholders.  Secured  Party  hereby  agrees  and  acknowledges  that  upon  the
dedication of the Distributable Cash Collateral Account as provided herein, such
Distributable  Cash Collateral  Account will not constitute  Pledged  Collateral
pursuant to this Agreement.

SECTION 25. Governing Law; Terms.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE  PARTIES  HEREUNDER  SHALL BE  GOVERNED  BY, AND SHALL BE  CONSTRUED  AND
ENFORCED IN ACCORDANCE  WITH, THE INTERNAL LAWS OF THE STATE OF UTAH  (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
DELAWARE), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES,  EXCEPT TO THE EXTENT
THAT THE CODE PROVIDES THAT THE VALIDITY OR PERFECTION OF THE SECURITY  INTEREST
HEREUNDER,   OR  REMEDIES  HEREUNDER,  IN  RESPECT  OF  ANY  PARTICULAR  PLEDGED
COLLATERAL  ARE GOVERNED BY THE LAWS OF A  JURISDICTION  OTHER THAN THE STATE OF
UTAH.

SECTION  26.  Consent to  Jurisdiction  and  Service of  Process.  ALL  JUDICIAL
PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO THIS AGREEMENT
MAY BE BROUGHT IN ANY STATE OR FEDERAL  COURT OF COMPETENT  JURISDICTION  IN THE
COUNTY  OF  DALLAS,  STATE OF  TEXAS,  AND BY  EXECUTION  AND  DELIVERY  OF THIS
AGREEMENT  PLEDGOR  ACCEPTS FOR ITSELF AND IN  CONNECTION  WITH ITS  PROPERTIES,
GENERALLY AND  UNCONDITIONALLY,  THE NONEXCLUSIVE  JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY  AGREES TO
BE BOUND BY ANY JUDGMENT  RENDERED  THEREBY IN CONNECTION  WITH THIS  AGREEMENT.
Pledgor hereby agrees that service of all process in any such  proceeding in any
such  court  may be  made  by  registered  or  certified  mail,  return  receipt
requested,  to Pledgor at its address  provided in  accordance  with Section 18,
such service being hereby  acknowledged by Pledgor to be sufficient for personal
jurisdiction in any action against Pledgor in any such court and to be otherwise
effective and binding service in every respect.  Nothing herein shall affect the
right to serve  process in any other manner  permitted by law or shall limit the
right of Secured Party to bring proceedings against Pledgor in the courts of any
other jurisdiction.

SECTION 27.  Waiver of Jury Trial.  PLEDGOR AND SECURED  PARTY  HEREBY  AGREE TO
WAIVE  THEIR  RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED  UPON OR  ARISING  OUT OF THIS  AGREEMENT.  The  scope of this  waiver  is
intended to be all encompassing of any and all disputes that may be filed in any
court and that  relate to the  subject  matter  of this  transaction,  including
without limitation contract claims, tort claims,  breach of duty claims, and all
other  common  law  and  statutory  claims.   Pledgor  and  Secured  Party  each
acknowledge  that this waiver is a material  inducement  for Pledgor and Secured
Party to enter into a business relationship, that Pledgor and Secured Party have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related  future  dealings.  Pledgor and
Secured Party further  warrant and represent  that each has reviewed this waiver
with its legal counsel,  and that each knowingly and voluntarily waives its jury
trial  rights  following   consultation  with  legal  counsel.  THIS  WAIVER  IS
IRREVOCABLE,  MEANING THAT IT MAY NOT BE MODIFIED  EITHER  ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,  RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT.  In the event of litigation,  this Agreement
may be filed as a written consent to a trial by the court.

SECTION 28. Third Party Beneficiaries.  The Senior Noteholders from time to time
shall be third party beneficiaries of this Agreement, and no amendment, consent,
waiver or other  modification of the terms hereof may be entered into, issued or
granted without the prior written consent of such holders.

SECTION  29.  Counterparts.  This  Agreement  may be  executed  in  one or  more
counterparts and by different parties hereto in separate  counterparts,  each of
which when so executed and delivered  shall be deemed an original,  but all such
counterparts  together  shall  constitute  but  one  and  the  same  instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single  counterpart so that all signature pages are physically  attached to
the same document.

              [The remainder of this page intentionally left blank]

<PAGE>

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

                                   VALHI, INC.

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

                                   SNAKE RIVER SUGAR COMPANY

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

ACKNOWLEDGED:

FIRST SECURITY BANK, NATIONAL ASSOCIATION

By: /s/ C. Scott Nielsen
    -------------------------------------------------
Its:
     ------------------------------------------------

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

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

<PAGE>

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

By:  CIGNA INVESTMENTS, INC.

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

LIFE INSURANCE COMPANY OF NORTH AMERICA

By:  CIGNA INVESTMENTS, INC.

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

MINNESOTA LIFE INSURANCE COMPANY

By: Advantus Capital Management, Inc.

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

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

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

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

LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK

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

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

<PAGE>

                                   SCHEDULE I

         Attached to and  forming a part of the  Contingent  Subordinate  Pledge
Agreement  dated as of October 19, 2000 between  Snake River Sugar  Company,  as
Pledgor, and Valhi, Inc., as Secured Party.

                                     Part A

Equity Issuer                                  Equity Interest

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

                                     Part B

Debt Issuer   Debt Instrument                    Amount of Indebtedness

Valhi, Inc.   Limited Recourse Promissory Note   $212,500,000.00

Valhi, Inc.   Subordinated Promissory Note       $ 37,500,000.00

<PAGE>

                                   SCHEDULE II

                     CONTINGENT SUBORDINATE PLEDGE AMENDMENT

         This Contingent Subordinate Pledge Amendment,  dated _________________,
20__, is delivered pursuant to Section 7(b) of the Contingent Subordinate Pledge
Agreement  referred to below. The undersigned hereby agrees that this Contingent
Subordinate  Pledge  Amendment  may be  attached to the  Contingent  Subordinate
Pledge  Agreement,  dated October 19, 2000,  between the  undersigned and Valhi,
Inc.,  as  Secured  Party  (the  "Contingent   Subordinate   Pledge  Agreement,"
capitalized terms defined therein being used herein as therein defined) and that
the [Pledged Equity] [Pledged Debt] listed on this Contingent Subordinate Pledge
Amendment shall be deemed to be part of the [Pledged  Equity] [Pledged Debt] and
shall  become  part of the  Pledged  Collateral  and shall  secure  all  Secured
Obligations following occurrence of the Grant Effectiveness Condition.

                                     SNAKE RIVER SUGAR COMPANY

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

Equity Issuer                        Equity Interest

Debt Issuer                          Amount of Indebtedness

ACKNOWLEDGED AND ACCEPTED:

VALHI, INC.

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

<PAGE>

                                  SCHEDULE III

                         NON-CONTINGENT PLEDGE AMENDMENT

         This Non-Contingent Pledge Amendment, dated _________________, 20__, is
delivered  pursuant  to  Section  7(b)  of  the  Contingent  Subordinate  Pledge
Agreement   referred  to  below.   The  undersigned   hereby  agrees  that  this
Non-Contingent  Pledge  Amendment may be attached to the Contingent  Subordinate
Pledge  Agreement,  dated October 19, 2000,  between the  undersigned and Valhi,
Inc., as Secured Party (the "Contingent  Pledge  Agreement,"  capitalized  terms
defined  therein  being used herein as therein  defined)  and that the  [Pledged
Equity]  [Pledged  Debt] listed on this Pledge  Amendment  shall  immediately be
deemed to be part of the [Pledged  Equity]  [Pledged Debt] and shall become part
of the Pledged  Collateral  and shall  secure all Secured  Obligations.  Pledgor
hereby acknowledges that the Grant  Effectiveness  Condition has previously been
satisfied.

                                     SNAKE RIVER SUGAR COMPANY

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

Equity Issuer                        Equity Interest

Debt Issuer                          Amount of IndebtednessEXECUTION COPY

                    CONTINGENT SUBORDINATE SECURITY AGREEMENT

         This CONTINGENT  SUBORDINATE  SECURITY  AGREEMENT (this "Agreement") is
dated as of  October19,  2000 and entered into by and between  SNAKE RIVER SUGAR
COMPANY,  an  Oregon  cooperative  ("Grantor"),  and  VALHI,  INC.,  a  Delaware
Corporation  ("Secured  Party")  and is  acknowledged  by FIRST  SECURITY  BANK,
NATIONAL  ASSOCIATION,  as Collateral  Agent for the holders of the Senior Notes
referred to below ("FSB"), and the holders of said Senior Notes.

                             PRELIMINARY STATEMENTS

         A.  Pursuant  to those  certain  Note  Purchase  Agreements  (said Note
Purchase  Agreements  as they may  hereafter  be  amended,  the  "Note  Purchase
Agreements"),  each dated May 14,  1997 and  amended as of  November  30,  1998,
between  Grantor and the  purchasers  referred  to  therein,  Grantor has issued
$100,000,000 aggregate principal amount of its 10.80% Senior Notes due April 30,
2009 (said  Senior  Notes,  as they may  hereafter be amended,  supplemented  or
otherwise  modified  from time to time,  being the "Senior  Notes," and together
with the debt associated therewith, the "Senior Debt").

         B. Pursuant to the Collateral Agency and Paying Agency Agreement, dated
as of May 14,  1997,  among the holders of the Senior Notes and FSB (the "Agency
Agreement"),  the  holders of the  Senior  Notes  have  appointed  FSB to act as
Collateral Agent for the holders of the Senior Notes.

         C. In  connection  with the Note Purchase  Agreements,  Grantor and FSB
have entered into a Security  Agreement  dated as of May 14, 1997 (the "Security
Agreement")  and a related Pledge  Agreement  dated May 14, 1997 (the "SR Pledge
Agreement")  whereby  Grantor has pledged the  Collateral  (as defined below) to
FSB, as Collateral Agent, for the holders of the Senior Notes.

         D.  Grantor  and  Secured  Party are  parties  to a  Subordinated  Loan
Agreement  dated  January 3, 1997,  as amended  and  restated  May 14,  1997 and
amended as of November 30, 1998, (said  Subordinated  Loan Agreement,  as it may
hereafter  be amended,  supplemented  or otherwise  modified  from time to time,
being the "Subordinated Loan Agreement").

         E.  Grantor  desires  that certain  further  amendments  be made to the
Subordinated Loan Agreement.

         F. It is a condition  precedent to the  amendment of even date herewith
to the  Subordinated  Loan Agreement (the "Third  Amendment") that Grantor shall
have undertaken the obligations and granted the contingent, subordinate security
interest contemplated by this Agreement.

         NOW, THEREFORE, in consideration of the premises and in order to induce
the  Secured  Party to enter  into the Third  Amendment  and for other  good and
valuable   consideration,   the  receipt  and   adequacy  of  which  are  hereby
acknowledged, Grantor hereby agrees with Secured Party as follows:

SECTION 1. Certain Definitions. Terms defined in the Subordinated Loan Agreement
and not otherwise defined herein are used herein as therein defined.

SECTION 2. Grant of Contingent  Subordinate Security Interest.  Immediately upon
the   occurrence  of  the  earliest  to  occur  of  the  following  (the  "Grant
Effectiveness Condition"):  (i) the full payment of the Secured Obligations,  as
defined in the Security Agreement (the "Senior Secured  Obligations"),  (ii) the
date upon which Secured Party purchases all of the Senior Notes upon an exercise
of its rights  under all of those  certain  Option  Agreements  between  Secured
Party,  Grantor and the holders of the Senior Notes, and (iii) the date at which
the  outstanding  balance of the  Senior  Secured  Obligations  is less than the
amount  of  cash  or  cash  equivalents  contained  in  the  Distributable  Cash
Collateral Account, as such term is defined in the Note Purchase Agreements, and
such cash or cash equivalents  have been irrevocably and indefeasibly  dedicated
by  Grantor  to,  and are  available  solely  for  (as  evidenced  by a  written
certificate  from Grantor to the holders of the Senior  Notes,  acknowledged  by
Secured  Party)  payment  of the  Senior  Secured  Obligations  at the  sole and
absolute  discretion of the holders of the Senior Notes,  Grantor will assign to
Secured  Party,  and hereby  grants to Secured  Party a  contingent  subordinate
security  interest in, all of Grantor's right,  title and interest in and to the
following  (which  assignment  shall be effective  only upon the occurrence of a
Grant Effectiveness  Condition),  in each case whether now or hereafter existing
or in which  Grantor now has or hereafter  acquires an interest and wherever the
same may be located (the "Collateral"):

(a) all  equipment  in all of its forms,  all parts  thereof and all  accessions
thereto  (any  and  all  such   equipment,   parts  and  accessions   being  the
"Equipment");

(b) all  inventory in all of its forms  (including,  but not limited to, (i) all
goods held by Grantor for sale or lease or to be  furnished  under  contracts of
service or so leased or  furnished,  (ii) all raw  materials,  work in  process,
finished  goods,  and materials  used or consumed in the  manufacture,  packing,
shipping,  advertising,  selling,  leasing,  furnishing  or  production  of such
inventory or otherwise used or consumed in Grantor's  business,  (iii) all goods
in which  Grantor has an interest in mass or a joint or other  interest or right
of any kind and (iv) all goods which are returned to or  repossessed by Grantor)
and all accessions thereto and products thereof (all such inventory,  accessions
and  products  being the  "Inventory")  and all  negotiable  documents  of title
(including without  limitation  warehouse  receipts,  dock receipts and bills of
lading) issued by any Person covering any Inventory;

(c) all  accounts,  contract  rights,  chattel  paper,  documents,  instruments,
general  intangibles and other rights and obligations of any kind arising out of
or in  connection  with the sale or lease of goods or the  rendering of services
and all  rights  in, to and  under all  security  agreements,  leases  and other
contracts securing or otherwise relating to any such accounts,  contract rights,
chattel paper, documents, instruments, general intangibles or other obligations,
excluding,  however,  accounts receivable from The Amalgamated Sugar Company LLC
("LLC")  arising  from the sale of  sugarbeets  from Grantor to LLC (any and all
such accounts, contract rights, chattel paper, documents,  instruments,  general
intangibles and other  obligations  being the  "Accounts",  and any and all such
security agreements, leases and other contracts being the "Related Contracts");

(d) all  agreements  and  contracts  with  growers of  sugarbeets  or with other
Persons  relating  to the  purchase  by  Grantor  of  sugarbeets,  as each  such
agreement may be amended,  supplemented or otherwise  modified from time to time
(said  agreements,  as so amended,  supplemented  or otherwise  modified,  being
referred to herein  individually as an "Assigned  Agreement" and collectively as
the  "Assigned  Agreements"),  including  without  limitation  (i) all rights of
Grantor to receive farm  products  (including  sugarbeets)  and moneys due or to
become due under or  pursuant  to the  Assigned  Agreements,  (ii) all rights of
Grantor to receive  proceeds of any insurance,  indemnity,  warranty or guaranty
with respect to the Assigned Agreements, (iii) all claims of Grantor for damages
arising out of any breach of or default under the Assigned Agreements,  and (iv)
all rights of Grantor to terminate, amend, supplement, modify or exercise rights
or options under the Assigned  Agreements,  to perform  thereunder and to compel
performance and otherwise exercise all remedies thereunder;

(e)      all deposit accounts;

(f) all trademarks,  tradenames,  tradesecrets,  business names, patents, patent
applications,  licenses, copyrights, registrations and franchise rights, and all
goodwill associated with any of the foregoing;

(g) to the extent not  included in any other  paragraph  of this  Section 2, all
other general intangibles  (including without limitation tax refunds,  rights to
payment or  performance,  choses in action and judgments  taken on any rights or
claims included in the Collateral);

(h) all plant  fixtures,  business  fixtures and other  fixtures and storage and
office facilities, and all accessions thereto and products thereof;

(i) all books, records, ledger cards, files, correspondence,  computer programs,
tapes,  disks and related data processing  software that at any time evidence or
contain information relating to any of the Collateral or are otherwise necessary
or helpful in the collection thereof or realization thereupon; and

(j) all  proceeds,  products,  rents and  profits  of or from any and all of the
foregoing  Collateral  and, to the extent not otherwise  included,  all payments
under insurance (whether or not the Secured Party is the loss payee thereof), or
any indemnity,  warranty or guaranty,  payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral.  For purposes of this
Agreement,  the term "proceeds" includes whatever is receivable or received when
Collateral or proceeds are sold, exchanged,  collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.

SECTION  3.  Security  for  Obligations.   Following  occurrence  of  the  Grant
Effectiveness Condition, this Agreement shall secure, and the Collateral will be
collateral  security for, the prompt  payment or  performance  in full when due,
whether at stated maturity, by required prepayment,  declaration,  acceleration,
demand or otherwise  (including the payment of amounts that would become due but
for the operation of the automatic  stay under Section  362(a) of the Bankruptcy
Code, 11 U.S.C.  ss.362(a)),  of all obligations and liabilities of every nature
of Grantor now or hereafter  existing  under or arising out of or in  connection
with the  Subordinated  Loan  Agreement  and the other Loan  Documents,  and all
extensions  or renewals  thereof,  whether for  principal,  interest  (including
without limitation interest that, but for the filing of a petition in bankruptcy
with respect to Grantor,  would  accrue on such  obligations),  fees,  expenses,
indemnities or otherwise, whether voluntary or involuntary,  direct or indirect,
absolute or contingent, liquidated or unliquidated,  whether or not jointly owed
with others,  and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or  liabilities  that are paid, to the extent all or any part of such payment is
avoided or recovered  directly or indirectly from Secured Party as a preference,
fraudulent transfer or otherwise (all such obligations and liabilities being the
"Underlying  Debt"),  and all  obligations  of every  nature of  Grantor  now or
hereafter  existing  under this  Agreement  (all such  obligations  of  Grantor,
together with the Underlying Debt, being the "Secured Obligations").

SECTION 4. Grantor Remains  Liable.  Anything  contained  herein to the contrary
notwithstanding,  (a)  Grantor  shall  remain  liable  under any  contracts  and
agreements  included  in the  Collateral,  to the extent set forth  therein,  to
perform all of its duties and  obligations  thereunder  to the same extent as if
this Agreement had not been  executed,  (b) the exercise by Secured Party of any
of its rights  hereunder  shall not  release  Grantor  from any of its duties or
obligations under the contracts and agreements  included in the Collateral,  and
(c) Secured Party shall not have any obligation or liability under any contracts
and agreements included in the Collateral by reason of this Agreement, nor shall
Secured  Party be  obligated  to  perform  any of the  obligations  or duties of
Grantor  thereunder  or to take any action to  collect or enforce  any claim for
payment assigned hereunder.

SECTION 5.  Representations  and Warranties.  Grantor represents and warrants as
follows: ------------------------------

(a) Ownership of Collateral.  Except for (i) the security  interests  created by
the  Security  Agreement  and  the  contingent,  subordinate  security  interest
pursuant  to this  Agreement  and  (ii)  Liens  created,  incurred,  assumed  or
permitted to exist pursuant to the Note Purchase  Agreements,  the  Subordinated
Loan Agreement or documents  related  thereto,  Grantor owns the Collateral free
and  clear  of any  Lien.  Except  such as may have  been  filed in favor of FSB
relating to the Security  Agreement or Secured Party  relating to this Agreement
or such as shall be released in connection with the execution of this Agreement,
no effective  financing statement or other instrument similar in effect covering
all or any part of the Collateral is on file in any filing or recording office.

(b) Location of Equipment and Inventory.  All of the Equipment and Inventory is,
as of the date hereof, located at Grantor's chief place of business.

(c) Office  Locations:  Other  Names.  The chief  place of  business,  the chief
executive  office and the office where Grantor  keeps its records  regarding the
Accounts  and all  originals  of all  chattel  paper that  evidence  Accounts is
located at 2427 Lincoln Avenue,  Ogden, Utah 84402.  Grantor has not in the past
done,  and does  not now do,  business  under  any  other  name  (including  any
trade-name or fictitious business name).

(d) Delivery of Certain Collateral.  All notes and other instruments  (excluding
checks)  comprising  any and all items of Collateral  have been delivered to FSB
duly  endorsed  and  accompanied  by duly  executed  instruments  of transfer or
assignment in blank.

(e) Governmental Authorizations. No authorization,  approval or other action by,
and no notice to or filing with, any  governmental  authority or regulatory body
is required for either (i) the grant by Grantor of the  contingent,  subordinate
security interest granted hereby, (ii) the execution, delivery or performance of
this Agreement by Grantor, or (iii) the perfection of or the exercise by Secured
Party of its rights and remedies  hereunder (except as may have been taken by or
at the direction of Grantor).

(f) Perfection.  Following occurrence of the Grant Effectiveness Condition, this
Agreement,  together  with the  filing of UCC-1  Financing  Statements  with the
Secretary of State (or Department of Business Regulation,  if applicable) of the
states of Utah,  Idaho,  Oregon and Washington,  will create a valid,  perfected
subordinate  security  interest in the  Collateral,  securing the payment of the
Secured Obligations, and all filings and other actions necessary or desirable to
perfect and protect such subordinate  security interest will have been duly made
or taken.

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

SECTION 6. Further Assurances.

(a)  Grantor  agrees  that  from  time to  time,  including  without  limitation
following  occurrence of the Grant  Effectiveness  Condition,  at the expense of
Grantor,  Grantor will promptly execute and deliver all further  instruments and
documents,  and take all further action, that may be necessary or desirable,  or
that Secured Party may request,  in order to perfect and protect any  contingent
or present  security  interest  granted or purported to be granted  hereby or to
enable  Secured Party to exercise and enforce its rights and remedies  hereunder
with  respect  to  any  Collateral.  Without  limiting  the  generality  of  the
foregoing,  following occurrence of the Grant Effectiveness  Condition,  Grantor
will: (i) mark conspicuously each item of chattel paper included in the Accounts
and, at the request of Secured  Party,  each of its  records  pertaining  to the
Collateral with a legend,  in form and substance  satisfactory to Secured Party,
indicating that such Collateral is subject to the subordinate  security interest
granted  hereby,  (ii) at the  request of Secured  Party,  deliver and pledge to
Secured Party hereunder all promissory  notes and other  instruments  (including
checks) and all original counterparts of chattel paper constituting  Collateral,
duly  endorsed  and  accompanied  by duly  executed  instruments  of transfer or
assignment,  all in form and  substance  satisfactory  to Secured  Party,  (iii)
execute  and file such  financing  or  continuation  statements,  or  amendments
thereto,  and  such  other  instruments  or  notices,  as  may be  necessary  or
desirable, or as Secured Party may request, in order to perfect and preserve the
security  interests  granted or purported to be granted  hereby,  (iv)  promptly
after the  acquisition by Grantor of any item of Equipment which is covered by a
certificate of title under a statute of any jurisdiction  under the law of which
indication of a security interest on such certificate is required as a condition
of perfection thereof,  execute and file with the registrar of motor vehicles or
other  appropriate  authority  in such  jurisdiction  an  application  or  other
document  requesting the notation or other  indication of the security  interest
created hereunder on such certificate of title, (v) within 30 days after the end
of each  calendar  quarter,  deliver to Secured Party or its agent copies of all
such  applications  or other  documents  filed during such calendar  quarter and
copies of all such  certificates  of title issued during such  calendar  quarter
indicating  the security  interest  created  hereunder in the items of Equipment
covered  thereby,  (vi) at any reasonable  time,  upon request by Secured Party,
exhibit the  Collateral  to and allow  inspection  of the  Collateral by Secured
Party,  or persons  designated by Secured  Party,  and (vii) at Secured  Party's
request, appear in and defend any action or proceeding that may affect Grantor's
title  to or  Secured  Party's  security  interest  in all or  any  part  of the
Collateral.

(b) Grantor hereby authorizes Secured Party,  following  occurrence of the Grant
Effectiveness   Condition,  to  file  one  or  more  financing  or  continuation
statements,  and  amendments  thereto,  relative  to  all  or  any  part  of the
Collateral  without the  signature of Grantor.  Grantor  agrees that,  following
occurrence of the Grant Effectiveness Condition, a carbon, photographic or other
reproduction  of this  Agreement or of a financing  statement  signed by Grantor
shall be  sufficient  as a financing  statement  and may be filed as a financing
statement in any and all jurisdictions.

(c)  Grantor  will  furnish to Secured  Party from time to time  statements  and
schedules  further  identifying  and  describing  the  Collateral and such other
reports  in  connection  with the  Collateral  as Secured  Party may  reasonably
request, all in reasonable detail.

SECTION 7.  Certain  Covenants  of Grantor.  Following  occurrence  of the Grant
Effectiveness Condition, Grantor shall:

(a) not use or permit any  Collateral  to be used  unlawfully or in violation of
any  provision  of this  Agreement  or any  applicable  statute,  regulation  or
ordinance or any policy of insurance covering the Collateral;

(b) notify Secured Party of any change in Grantor's name,  identity or corporate
structure within 15 days of such change;

(c) give Secured Party 30 days' prior written  notice of any change in Grantor's
chief place of business, chief executive office or residence or the office where
Grantor  keeps its records  regarding  the  Accounts  and all  originals  of all
chattel paper that evidence Accounts;

(d) if Secured Party gives value to enable  Grantor to acquire  rights in or the
use of any Collateral, use such value for such purposes; and

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

SECTION 8. Special Covenants With Respect to Equipment and Inventory.  Following
occurrence of the Grant Effectiveness Condition, Grantor shall:

(a) keep the Equipment and Inventory at 2427 Lincoln Avenue,  Ogden,  Utah 84402
or, upon 30 days' prior written notice to Secured Party, at such other places in
jurisdictions  where all action  that may be  necessary  or  desirable,  or that
Secured  Party may request,  in order to perfect and protect any  contingent  or
present  security  interest  granted or  purported to be granted  hereby,  or to
enable Secured Party to exercise and enforce its rights and remedies  hereunder,
with respect to such Equipment and Inventory shall have been taken; and

(b) cause any and all  Equipment to be  maintained  and kept in good  condition,
repair and working  order,  ordinary wear and tear  excepted,  and in accordance
with reasonable  commercial practices,  and shall forthwith,  or, in the case of
any loss or damage to any of the Equipment  when  subsection (c) of Section 9 is
not applicable,  as quickly as practicable after the occurrence thereof, make or
cause to be made all repairs,  replacements and other improvements in connection
therewith  that are necessary or desirable to such end.  Grantor shall  promptly
furnish to Secured Party a statement  respecting  any material loss or damage to
any of the Equipment.

SECTION 9. Insurance.

(a) Following occurrence of the Grant Effectiveness Condition, and following the
date upon which the book value of any of Grantor's  Equipment  and/or  Inventory
exceeds  $250,000,  Grantor shall, at its own expense,  maintain  insurance with
respect to the  Equipment  and  Inventory  in  accordance  with the terms of the
Subordinated Loan Agreement.  Such insurance shall include,  without limitation,
property  damage  insurance  and liability  insurance.  Each policy for property
damage  insurance shall provide for all losses (except for losses of less than $
250,000 per occurrence) to be paid directly to Secured Party.  Each policy shall
in  addition  name  Grantor  and  Secured  Party as insured  parties  thereunder
(without any  representation or warranty by or obligation upon Secured Party) as
their  interests  may appear and have  attached  thereto a loss  payable  clause
acceptable  to Secured  Party that shall (i) contain an agreement by the insurer
that any loss thereunder shall be payable to Secured Party  notwithstanding  any
action,  inaction or breach of  representation  or  warranty  by  Grantor,  (ii)
provide  that there shall be no recourse  against  Secured  Party for payment of
premiums or other amounts with respect thereto,  and (iii) provide that at least
30 days' prior written notice of cancellation,  material amendment, reduction in
scope or limits of coverage  or of lapse shall be given to Secured  Party by the
insurer.  Grantor shall,  if so requested by Secured  Party,  deliver to Secured
Party original or duplicate  policies of such insurance and, as often as Secured
Party may  reasonably  request,  a report of a reputable  insurance  broker with
respect to such  insurance.  Further,  Grantor shall,  at the request of Secured
Party,  duly execute and deliver  instruments  of assignment  of such  insurance
policies  to  comply  with  the  requirements  of  Section  6(a) and  cause  the
respective insurers to acknowledge notice of such assignment.

(b) Following  occurrence of the Grant  Effectiveness  Condition,  reimbursement
under any liability  insurance  maintained by Grantor pursuant to this Section 9
may be paid directly to the Person who shall have incurred  liability covered by
such insurance.  In case of any loss involving  damage to Equipment or Inventory
when subsection (c) of this Section 9 is not  applicable,  Grantor shall make or
cause to be made the necessary  repairs to or  replacements of such Equipment or
Inventory,  and any proceeds of insurance maintained by Grantor pursuant to this
Section  9 shall  be paid to  Grantor  as  reimbursement  for the  costs of such
repairs or replacements.

(c) Following  occurrence  of the Grant  Effectiveness  Condition,  upon (i) the
occurrence  and  during  the  continuation  of any Event of  Default or (ii) the
actual or  constructive  loss (in  excess of  $250,000  per  occurrence)  of any
Equipment or Inventory,  all insurance  payments in respect of such Equipment or
Inventory  shall be paid to and applied by Secured Party as specified in Section
19.

SECTION 10. Special Covenants with Respect to Accounts and Related Contracts.

(a) Following  occurrence of the Grant  Effectiveness  Condition,  Grantor shall
keep its chief place of business and chief executive office and the office where
it keeps its records  concerning  the  Accounts and Related  Contracts,  and all
originals of all chattel paper that evidence Accounts,  at the location therefor
specified in Section 5 or, upon 30 days' prior written  notice to Secured Party,
at such other location in a jurisdiction  where all action that may be necessary
or desirable, or that Secured Party may request, in order to perfect and protect
any security  interest  granted or purported to be granted hereby,  or to enable
Secured  Party to exercise and enforce its rights and remedies  hereunder,  with
respect to such Accounts and Related  Contracts  shall have been taken.  Grantor
will  hold  and  preserve  such  records  and  chattel  paper  and  will  permit
representatives  of Secured  Party at any time during normal  business  hours to
inspect and make  abstracts  from such  records and chattel  paper,  and Grantor
agrees to render to Secured Party, at Grantor's cost and expense,  such clerical
and  other  assistance  as may be  reasonably  requested  with  regard  thereto.
Promptly  upon the request of Secured  Party,  Grantor  shall deliver to Secured
Party complete and correct copies of each Related Contract.

(b) Following  occurrence of the Grant Effectiveness  Condition,  Grantor shall,
for not less than 5 years from the date on which such  Account  arose,  maintain
(i)  complete  records  of  each  Account,  including  records  of all  payments
received,  credits granted and merchandise returned,  and (ii) all documentation
relating thereto.

(c)  Following  occurrence  of the  Grant  Effectiveness  Condition,  except  as
otherwise provided in this subsection (c), Grantor shall continue to collect, at
its own expense,  all amounts due or to become due to Grantor under the Accounts
and Related  Contracts.  In connection with such  collections,  Grantor may take
(and,  at Secured  Party's  direction,  shall  take)  such  action as Grantor or
Secured Party may deem  necessary or advisable to enforce  collection of amounts
due or to become due under the Accounts;  provided,  however, that Secured Party
shall  have  the  right  at  any  time,  upon  the  occurrence  and  during  the
continuation  of an Event of Default or an event that, with the giving of notice
or the lapse of time, or both, would become an Event of Default and upon written
notice to Grantor of its  intention  to do so, to notify the account  debtors or
obligors  under any Accounts of the assignment of such Accounts to Secured Party
and to direct such  account  debtors or obligors to make  payment of all amounts
due or to become due to Grantor thereunder  directly to Secured Party, to notify
each  Person  maintaining  a lockbox or  similar  arrangement  to which  account
debtors or obligors  under any  Accounts  have been  directed to make payment to
remit all amounts  representing  collections  on checks and other  payment items
from time to time sent to or  deposited  in such  lockbox  or other  arrangement
directly  to Secured  Party and,  upon such  notification  and at the expense of
Grantor,  to enforce  collection of any such  Accounts and to adjust,  settle or
compromise  the amount or payment  thereof,  in the same  manner and to the same
extent as Grantor  might have done.  After receipt by Grantor of the notice from
Secured  Party  referred to in the proviso to the  preceding  sentence,  (i) all
amounts  and  proceeds  (including  checks and other  instruments)  received  by
Grantor in respect of the Accounts and the Related  Contracts  shall be received
in trust for the benefit of Secured Party  hereunder,  shall be segregated  from
other funds of Grantor and shall be forthwith  paid over or delivered to Secured
Party in the same form as so received  (with any  necessary  endorsement)  to be
held as cash  Collateral and applied as provided by Section 19, and (ii) Grantor
shall not adjust,  settle or compromise the amount or payment of any Account, or
release  wholly or partly any account  debtor or obligor  thereof,  or allow any
credit or discount thereon.

SECTION 11.       Special Provisions With Respect to the Assigned Agreements.

(a) Following occurrence of the Grant Effectiveness Condition,  Grantor shall at
its expense:

(i)      perform and observe all terms and provisions of the Assigned Agreements
         to be performed or observed by it, maintain the Assigned  Agreements in
         full force and effect,  enforce the Assigned  Agreements  in accordance
         with their  terms,  and take all such action to such end as may be from
         time to time reasonably requested by Secured Party; and

(ii)     furnish to Secured Party, promptly upon receipt thereof,  copies of all
         notices,  requests  and other  documents  received by Grantor  under or
         pursuant to the Assigned  Agreements,  and from time to time furnish to
         Secured  Party such  information  and reports  regarding  the  Assigned
         Agreements as Secured Party may reasonably request.

(b) Following  occurrence of the Grant  Effectiveness  Condition,  Grantor shall
not:

(i)      cancel or  terminate  any of the Assigned  Agreements  or consent to or
         accept any cancellation or termination thereof;

(ii)     amend or otherwise modify the Assigned  Agreements or give any consent,
         waiver or approval thereunder;

(iii)    waive any default under or breach of the Assigned Agreements; or

(iv)     take any other action in connection  with the Assigned  Agreements that
         would impair the value of the interest or rights of Grantor  thereunder
         or that would impair the interest or rights of Secured  Party except as
         permitted or required under the Security Agreement;

(v)      if the effect of any of the foregoing  could  reasonably be expected to
         have a Material Adverse Effect.

SECTION 12. Deposit Accounts.  Following  occurrence of the Grant  Effectiveness
Condition,  upon the  occurrence  and  during  the  continuation  of an Event of
Default,  Secured Party may exercise  dominion and control  over,  and refuse to
permit further withdrawals (whether of money,  securities,  instruments or other
property) from any deposit accounts  maintained with Secured Party  constituting
part of the Collateral.

SECTION 13.  License of Patents,  Trademarks.  Copyrights.  etc.  Grantor hereby
assigns,  transfers and conveys to Secured Party, effective following occurrence
of the Grant  Effectiveness  Condition and the  occurrence of the first Event of
Default  thereafter,  the nonexclusive  right and license to use all trademarks,
tradenames,  copyrights, patents or technical processes owned or used by Grantor
that relate to the  Collateral  and any other  collateral  granted by Grantor as
security for the Secured  Obligations,  together  with any  goodwill  associated
therewith,  all to the extent  necessary to enable Secured Party to use, possess
and realize on the Collateral and to enable any successor or assign to enjoy the
benefits of the Collateral. This right and license shall inure to the benefit of
all  successors,  assigns and  transferees of Secured Party and its  successors,
assigns and  transferees,  whether by  voluntary  conveyance,  operation of law,
assignment,  transfer,  foreclosure,  deed in lieu of  foreclosure or otherwise.
Such right and license is granted free of charge,  without  requirement that any
monetary payment whatsoever be made to Grantor.

SECTION  14.  Transfers  and  Other  Liens.  Following  occurrence  of the Grant
Effectiveness Condition, Grantor shall not:

(a)  except  as  permitted  pursuant  to the Note  Purchase  Agreements  and the
Subordinated Loan Agreement,  sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral; or

(b) except for (i) the security  interests created by the Security Agreement and
the contingent,  subordinate  security  interest  pursuant to this Agreement and
(ii) Liens created, incurred, assumed or permitted to exist pursuant to the Note
Purchase  Agreements and the  Subordinated  Loan Agreement,  create or suffer to
exist any Lien  upon or with  respect  to any of the  Collateral  to secure  the
indebtedness or other obligations of any Person.

SECTION 15. Secured Party Appointed Attorney-in-Fact.  Effective upon occurrence
of the  Grant  Effectiveness  Condition,  Grantor  hereby  irrevocably  appoints
Secured Party as Grantor's  attorney-in-fact,  with full  authority in the place
and stead of Grantor and in the name of  Grantor,  Secured  Party or  otherwise,
upon the occurrence of an Event of Default and in Secured Party's discretion, to
take any  action and to  execute  any  instrument  that  Secured  Party may deem
necessary or advisable to accomplish the purposes of this  Agreement,  including
without limitation:

(a) to obtain and adjust insurance  required to be maintained by Grantor or paid
to Secured Party pursuant to Section 9;

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

(c) to receive,  endorse and collect any drafts or other instruments,  documents
and chattel paper in connection with clauses (a) and (b) above;

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

(e) to pay or discharge  taxes or Liens (other than Liens  permitted  under this
Agreement  or  the  Subordinated  Loan  Agreement)  levied  or  placed  upon  or
threatened  against the  Collateral,  the  legality or validity  thereof and the
amounts necessary to discharge the same to be determined by Secured Party in its
sole discretion,  any such payments made by Secured Party to become  obligations
of Grantor to Secured Party, due and payable immediately without demand;

(f) to sign and endorse any invoices, freight or express bills, bills of lading,
storage  or   warehouse   receipts,   drafts   against   debtors,   assignments,
verifications  and  notices in  connection  with  Accounts  and other  documents
relating to the Collateral;

(g) generally to sell,  transfer,  pledge, make any agreement with respect to or
otherwise  deal with any of the  Collateral  as fully and  completely  as though
Secured Party were the absolute  owner  thereof for all purposes,  and to do, at
Secured Party's option and Grantor's expense,  at any time or from time to time,
all acts and things that Secured Party deems  necessary to protect,  preserve or
realize upon the Collateral and Secured  Party's  security  interest  therein in
order to effect the intent of this  Agreement,  all as fully and  effectively as
Grantor might do; and

(h) to  execute  on  behalf of  Grantor a  security  agreement  that is  neither
subordinated  or contingent  but is otherwise  similar to this  Agreement in all
material respects..

SECTION  16.  Secured  Party  May  Perform.  Following  occurrence  of the Grant
Effectiveness  Condition,  Grantor  fails to  perform  any  agreement  contained
herein,  Secured  Party  may  itself  perform,  or cause  performance  of,  such
agreement,  and the expenses of Secured Party  incurred in connection  therewith
shall be payable by Grantor under Section 20.

SECTION 17.  Standard of Care. The powers  conferred on Secured Party  hereunder
are solely to protect its  interest in the  Collateral  and shall not impose any
duty upon it to exercise any such powers.  Except for the exercise of reasonable
care in the custody of any  Collateral in its  possession and the accounting for
moneys actually received by it hereunder, Secured Party shall have no duty as to
any  Collateral  or as to the taking of any necessary  steps to preserve  rights
against prior parties or any other rights pertaining to any Collateral.  Secured
Party  shall be deemed to have  exercised  reasonable  care in the  custody  and
preservation  of  Collateral in its  possession  if such  Collateral is accorded
treatment  substantially  equal to that  which  Secured  Party  accords  its own
property.

SECTION 18. Remedies. Following occurrence of the Grant Effectiveness Condition,
if any Event of Default shall have occurred and be continuing, Secured Party may
exercise  in respect of the  Collateral,  in  addition  to all other  rights and
remedies  provided for herein or  otherwise  available to it, all the rights and
remedies of a secured party on default under the Uniform  Commercial  Code as in
effect  in any  relevant  jurisdiction  (the  "Code")  (whether  or not the Code
applies to the affected  Collateral),  and also may (a) require  Grantor to, and
Grantor  hereby  agrees that it will at its expense and upon  request of Secured
Party  forthwith,  assemble all or part of the Collateral as directed by Secured
Party and make it  available  to Secured  Party at a place to be  designated  by
Secured Party that is reasonably  convenient to both parties, (b) enter onto the
property  where any  Collateral is located and take  possession  thereof with or
without judicial process, (c) prior to the disposition of the Collateral, store,
process,   repair  or  recondition  the  Collateral  or  otherwise  prepare  the
Collateral  for  disposition  in any manner to the extent  Secured  Party  deems
appropriate,  (d) take possession of Grantor's  premises or place  custodians in
exclusive  control thereof,  remain on such premises and use the same and any of
Grantor's  equipment for the purpose of completing  any work in process,  taking
any actions  described in the preceding  clause (c) and  collecting  any Secured
Obligation,  and  (e)  without  notice  except  as  specified  below,  sell  the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured  Party's  offices  or  elsewhere,  for cash,  on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable. Secured Party may
be the  purchaser of any or all of the  Collateral at any such sale and shall be
entitled,  for the  purpose of bidding and making  settlement  or payment of the
purchase price for all or any portion of the Collateral  sold at any such public
sale, to use and apply any of the Secured  Obligations as a credit on account of
the purchase  price for any  Collateral  payable by Secured  Party at such sale.
Each  purchaser at any such sale shall hold the property  sold  absolutely  free
from any claim or right on the part of Grantor,  and Grantor  hereby  waives (to
the extent  permitted by applicable  law) all rights of redemption,  stay and/or
appraisal  which it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted. Grantor agrees that, to the
extent  notice of sale shall be required  by law,  at least ten days'  notice to
Grantor  of the time and place of any public  sale or the time  after  which any
private sale is to be made shall  constitute  reasonable  notification.  Secured
Party shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given.  Secured Party may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice,  be made at the time and place to which it was
so adjourned.  Grantor hereby waives any claims against Secured Party arising by
reason of the fact that the price at which any  Collateral may have been sold at
such a private sale was less than the price which might have been  obtained at a
public sale, even if Secured Party accepts the first offer received and does not
offer such  Collateral to more than one offeree.  If the proceeds of any sale or
other  disposition  of the Collateral  are  insufficient  to pay all the Secured
Obligations,  Grantor  shall be liable  for the  deficiency  and the fees of any
attorneys employed by Secured Party to collect such deficiency.

SECTION 19.  Application of Proceeds.  Except as expressly provided elsewhere in
this  Agreement,  all proceeds  received by Secured Party in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
may, in the discretion of Secured Party,  be held by Secured Party as Collateral
for, and/or then, or at any other time thereafter, applied in full or in part by
Secured  Party  against,  the  Secured  Obligations  in the  following  order of
priority:

                  FIRST:  To the payment of all costs and expenses of such sale,
         collection or other realization,  including reasonable  compensation to
         Secured  Party and its  agents  and  counsel,  and all other  expenses,
         liabilities   and  advances  made  or  incurred  by  Secured  Party  in
         connection  therewith,  and all  amounts  for  which  Secured  Party is
         entitled to indemnification  hereunder and all advances made by Secured
         Party  hereunder for the account of Grantor,  and to the payment of all
         costs and expenses paid or incurred by Secured Party in connection with
         the exercise of any right or remedy  hereunder,  all in accordance with
         Section 20;

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

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

SECTION 20. Indemnity and Expenses.

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

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

SECTION  21.  Continuing  Security  Interest;  Transfer  of  Subordinated  Loan.
Following occurrence of the Grant Effectiveness Condition,  this Agreement shall
create a continuing  subordinate  security  interest in the Collateral and shall
(a)  remain in full force and  effect  until the  payment in full in cash of the
Secured  Obligations,  (b) be binding upon Grantor,  its successors and assigns,
and (c) inure, together with the rights and remedies of Secured Party hereunder,
to the benefit of Secured  Party and its  successors,  transferees  and assigns.
Without  limiting the generality of the foregoing  clause (c), the Secured Party
may assign or otherwise  transfer the Subordinated Loan to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof  granted  herein or  otherwise.  Upon the payment in full in cash of all
Secured Obligations,  the security interest granted hereby shall terminate,  and
all rights to the Collateral shall revert to Grantor.  Upon any such termination
Secured  Party will, at Grantor's  expense,  execute and deliver to Grantor such
documents as Grantor shall reasonably request to evidence such termination.

SECTION 22. Amendments; Etc. No amendment,  modification,  termination or waiver
of any provision of this  Agreement,  and no consent to any departure by Grantor
therefrom,  shall in any event be effective  unless the same shall be in writing
and  signed  by  Secured  Party  and,  in the  case  of any  such  amendment  or
modification,  by Grantor. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.

SECTION  23.  Notices.  Any notice or other  communication  herein  required  or
permitted to be given shall be in writing and may be  personally  served or sent
by  telefacsimile,  United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service,  upon receipt of
telefacsimile  or three  Business Days after  depositing it in the United States
mail with postage prepaid and properly  addressed.  For the purposes hereof, the
address of each party  hereto  shall be as set forth under such  party's name on
the signature  pages hereof or, as to either party,  such other address as shall
be  designated  by such party in a written  notice  delivered to the other party
hereto.

SECTION 24. Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the  part of  Secured  Party in the  exercise  of any  power,  right or
privilege  hereunder shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence  therein,  nor shall any single or
partial  exercise of any such power,  right or  privilege  preclude any other or
further exercise thereof or of any other power,  right or privilege.  All rights
and remedies  existing under this Agreement are cumulative to, and not exclusive
of, any rights or remedies otherwise available.

SECTION 25.  Severability.  In case any  provision in or  obligation  under this
Agreement shall be invalid,  illegal or unenforceable in any  jurisdiction,  the
validity,   legality  and   enforceability   of  the  remaining   provisions  or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

SECTION 26.  Headings.  Section and  subsection  headings in this  Agreement are
included  herein for  convenience  of reference  only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.

SECTION 27. Governing Law; Terms.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE  PARTIES  HEREUNDER  SHALL BE  GOVERNED  BY, AND SHALL BE  CONSTRUED  AND
ENFORCED IN ACCORDANCE  WITH, THE INTERNAL LAWS OF THE STATE OF UTAH  (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES,  EXCEPT TO THE EXTENT
THAT THE CODE PROVIDES THAT THE VALIDITY OR PERFECTION OF THE SECURITY  INTEREST
HEREUNDER,  OR REMEDIES HEREUNDER,  IN RESPECT OF ANY PARTICULAR  COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF UTAH.

SECTION  28.  Consent to  Jurisdiction  and  Service Of  Process.  ALL  JUDICIAL
PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO THIS AGREEMENT
MAY BE BROUGHT IN ANY STATE OR FEDERAL  COURT OF COMPETENT  JURISDICTION  IN THE
STATE OF TEXAS AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT  GRANTOR  ACCEPTS
FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE  JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT. Grantor hereby agrees that service of
all process in any such  proceeding  in any such court may be made by registered
or certified mail, return receipt requested,  to Grantor at its address provided
in  Section  23,  such  service  being  hereby  acknowledged  by  Grantor  to be
sufficient for personal  jurisdiction  in any action against Grantor in any such
court and to be  otherwise  effective  and  binding  service  in every  respect.
Nothing  herein  shall  affect the right to serve  process  in any other  manner
permitted by law or shall limit the right of Secured Party to bring  proceedings
against Grantor in the courts of any other jurisdiction.

SECTION 29.  Waiver of Jury Trial.  GRANTOR AND SECURED  PARTY  HEREBY  AGREE TO
WAIVE  THEIR  RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED  UPON OR  ARISING  OUT OF THIS  AGREEMENT.  The  scope of this  waiver  is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that  relate to the  subject  matter  of this  transaction,  including
without limitation contract claims, tort claims,  breach of duty claims, and all
other  common  law  and  statutory  claims.   Grantor  and  Secured  Party  each
acknowledge  that this waiver is a material  inducement  for Grantor and Secured
Party to enter into a business relationship, that Grantor and Secured Party have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related  future  dealings.  Grantor and
Secured Party further  warrant and represent  that each has reviewed this waiver
with its legal counsel,  and that each knowingly and voluntarily waives its jury
trial  rights  following   consultation  with  legal  counsel.  THIS  WAIVER  IS
IRREVOCABLE,  MEANING THAT IT MAY NOT BE MODIFIED  EITHER  ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,  RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT.  In the event of litigation,  this Agreement
may be filed as a written consent to a trial by the court.
SECTION 30. Full Subordination. Notwithstanding anything herein to the contrary,
(i) all rights  granted to Secured Party  pursuant to this Agreement are subject
and  subordinated  to all  rights  granted  in favor of FSB under  the  Security
Agreement  and the related  documents  and (ii) prior to the  occurrence  of the
Grant  Effectiveness  Condition  (or,  in the  case of the  Grant  Effectiveness
Condition  contained  in  clause  (iii)  of  Section  2  hereof,  prior  to  the
satisfaction of the  requirement  set forth in Section 31 below),  Secured Party
shall not  exercise any  remedies or initiate or pursue any  proceedings  of any
nature whatsoever against the Collateral or Grantor.

SECTION 31. Dedication of Distributable Cash Collateral Account. Notwithstanding
anything to the contrary  herein,  at the first date upon which the  outstanding
balance of the  Senior  Secured  Obligations  is less than the amount of cash or
cash equivalents contained in the Distributable Cash Collateral Account, Grantor
hereby agrees to immediately  dedicate that portion,  and only that portion,  of
the  Distributable  Cash  Collateral  Account,   irrevocably  and  indefeasibly,
necessary for the full payment of the Senior Secured Obligations in such form as
reasonably   required  by  the  holders  of  the  Senior   Notes  so  that  such
Distributable  Cash Collateral  Account will be available  solely for payment of
the  Senior  Secured  Obligations  at the sole and  absolute  discretion  of the
holders of the Senior Notes.  Secured Party hereby agrees and acknowledges  that
upon the dedication of the  Distributable  Cash  Collateral  Account as provided
herein,   such   Distributable  Cash  Collateral  Account  will  not  constitute
Collateral pursuant to this Agreement.

SECTION 32.  Third  Party  Beneficiaries.  The holders  from time to time of the
Senior  Notes  shall be third  party  beneficiaries  of this  Agreement,  and no
amendment,  consent,  waiver or other  modification  of the terms  hereof may be
entered  into,  issued or  granted  without  the prior  written  consent of such
holders.

SECTION  33.  Counterparts.  This  Agreement  may be  executed  in  one or  more
counterparts and by different parties hereto in separate  counterparts,  each of
which when so executed and delivered  shall be deemed an original,  but all such
counterparts  together  shall  constitute  but  one  and  the  same  instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single  counterpart so that all signature pages are physically  attached to
the same document.

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

              [The remainder of this page intentionally left blank]

<PAGE>

                                        SNAKE RIVER SUGAR COMPANY

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

                                        Name:
                                        ----------------------------------------

                                        Title:
                                        ----------------------------------------

                                        Notice Address:

                                        SNAKE RIVER SUGAR COMPANY
                                        2427 Lincoln Avenue
                                        P.O. Box 1520
                                        Ogden, Utah  84402

                                        VALHI, INC.

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

                                        Name:
                                        ----------------------------------------

                                         Its:
                                         ---------------------------------------

                                         Notice Address:

                                         VALHI, INC.
                                         Three Lincoln Centre
                                         5480 LBJ Freeway, Suite 1700
                                         Dallas, Texas  75240-26(7
                                         Attention:  General Counsel

<PAGE>

                                  ACKNOWLEDGED

                                  FIRST SECURITY BANK, NATIONAL ASSOCIATION,
                                   as Collateral Agent

                                  By:  /s/ C. Scott Nielsen
                                       ---------------------------------------
                                  Name:
                                       ---------------------------------------
                                  Title:
                                       ---------------------------------------

                                  Notice Address:

                                  FIRST SECURITY BANK, NATIONAL ASSOCIATION
                                  79 South Main Street
                                  Corporate Trust Department
                                  Salt Lake City, Utah  84111

                                  THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

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

                                  CONNECTICUT GENERAL LIFE INSURANCE COMPANY

                                  By:  CIGNA INVESTMENTS, INC.

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

<PAGE>

                                   LIFE INSURANCE COMPANY OF NORTH AMERICA

                                   By:  CIGNA INVESTMENTS, INC.

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

                                   MINNESOTA LIFE INSURANCE COMPANY

                                   By: Advantus Capital Management,   Inc.

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

                                   THE LINCOLN NATIONAL LIFE
                                    INSURANCE COMPANY

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

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

<PAGE>

                                   LINCOLN LIFE & ANNUITY
                                   COMPANY OF NEW YORK

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

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

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