CONTINGENT SUBORDINATE COLLATERAL AGENCY AND

                             PAYING AGENCY AGREEMENT



         This  CONTINGENT   SUBORDINATE  COLLATERAL  AGENCY  AND  PAYING  AGENCY

AGREEMENT  (this  "Agreement")  is made and dated as of October  19, 2000 by and

among the Valhi, Inc., a Delaware  corporation,  ("Secured Party"),  SNAKE RIVER

SUGAR COMPANY,  an Oregon cooperative (the "Company"),  and FIRST SECURITY BANK,

NATIONAL  ASSOCIATION ("FSB"), as collateral agent for and representative of the

Secured Party with respect to the Pledged  Collateral (as  hereinafter  defined)

(in such capacity,  the "Collateral  Agent") and as paying agent for the Company

(in such capacity,  the "Paying  Agent").  The  Collateral  Agent and the Paying

Agent are sometimes referred to herein as the "Agent".



                             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 as 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,"  together with

the debt associated therewith, the "Senior Debt").



         C. In connection with the Note Purchase Agreements, the Company and FSB

have entered into a Collateral  Agency and Paying Agency  Agreement  dated as of

May 14, 1997 (the "Agency  Agreement"),  a related Security  Agreement dated May

14, 1997 (the  "Security  Agreement")  and a related  Pledge  Agreement (the "SR

Pledge Agreement").



         D. The  Company 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").



         E.  The  Company  desires  that  certain  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 the parties

hereto shall have undertaken the obligations contemplated by this Agreement.



         G.  Pursuant  to  a  Contingent  Subordinate  Pledge  Agreement  and  a

Contingent  Subordinate  Security  Agreement  both of even  date  herewith,  the

Company has assigned, contingent 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,  the  Company 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 the Company to, and are available solely for (as

evidenced by a written certificate from the Company 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,  certain

rights to Secured  Party or its agent,  including  rights the  Company  may have

pursuant to certain documents  referred to in the Contingent  Subordinate Pledge

Agreement,  including (as each of the following documents is defined in the Note

Purchase  Agreements):  (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,  to the Collateral Agent (the SPT Guaranty,  the

SPT Pledge Agreement,  the Indemnification Pledge Agreement and the Valhi Entity

Pledge   Agreement  being  referred  to  herein   collectively  as  the  "Pledge

Documents,"  and the "Pledged  Collateral" and  "Collateral"  referred to in the

Pledge Documents being referred to herein collectively as the "Collateral");



         NOW, THEREFORE, in consideration of the premises and in order to induce

Secured Party to enter into the Third  Amendment and for other good and valuable

consideration,  the receipt and adequacy of which are hereby  acknowledged,  the

Company hereby agrees with Secured Party and FSB as follows:



SECTION 1.  Definitions.  All capitalized  terms used herein without  definition

shall  have  the  meanings  assigned  to such  terms  in the  Subordinated  Loan

Agreement.  The following  terms used in this Agreement shall have the following

meanings:



                  "Affiliate"  shall,  at any  time,  and  with  respect  to any

Person,  (a) any other Person that at such time directly or  indirectly  through

one or more  intermediaries  Controls,  or is Controlled  by, or is under common

Control  with,  such first  Person,  and (b) any Person  beneficially  owning or

holding,  directly or  indirectly,  10% or more of any class of voting or equity

interests  of the  Company or any  Subsidiary  or any  corporation  of which the

Company  and  its  Subsidiaries  beneficially  own or  hold,  in the  aggregate,

directly or indirectly,  10% or more of any class of voting or equity interests.

As used  in  this  definition,  "Control"  means  the  possession,  directly  or

indirectly,  of the power to direct or cause the direction of the management and

policies of a Person,  whether  through the ownership of voting  securities,  by

contract or otherwise.



                  "Person"  shall  mean any  individual,  corporation,  company,

voluntary  association,   partnership,  trust,  unincorporated  organization  or

government (or any agency, instrumentality or political subdivision thereof).



                  "Proceeds"  shall mean all  amounts  paid or  payable  for the

benefit  of  Secured  Party or the  Collateral  Agent  pursuant  to, or upon the

exercise of remedies under, the Contingent Subordinate Pledge Agreement.



                  "Secured  Obligations"  means all  Obligations  secured by the

Pledge Documents.



SECTION 2.         Appointment and Duties of Collateral Agent.



a.  Appointment of Collateral  Agent.  Secured  Party,  by its execution of this

Agreement or its  acceptance of the benefits of this  Agreement,  the Contingent

Subordinate  Security Agreement and the Contingent  Subordinate Pledge Agreement

hereby appoints FSB as the collateral  agent as its agent and  attorney-in-fact,

effective immediately upon occurrence of the Grant Effectiveness  Condition,  to

do the following:



(i)      to enter into on behalf of, and act as agent for,  Secured  Party under

         the Pledge Documents;



(ii)     to timely prepare and provide to Secured Party and, as applicable,  the

         Company,  the notices,  certificates  and other documents called for in

         the Pledge Documents;



(iii)    to take all action expressly  required under the Pledge Documents or in

         written  instructions  from Secured Party to perfect,  and maintain the

         respective  perfection of, the Secured Parties'  security  interests in

         the Pledged Collateral covered by the Pledge Documents;



(iv)     to hold each item of Collateral  which is evidenced by a certificate or

         an  instrument  in its  possession in the State of Utah pursuant to the

         terms hereof on behalf and for the benefit of the Secured Party;



(v)      to sell the Collateral, to collect any proceeds therefrom, and to apply

         such  proceeds in accordance  with the terms of this  Agreement and the

         Pledge Documents;



(vi)     to receive  and/or release  Collateral in accordance  with the terms of

         the Pledge Documents; and



(vii)    to take such other actions as the Collateral Agent shall be directed to

         take,  either  by the  terms  of the  Pledge  Documents  or by  written

         instructions  of the Secured  Party,  to carry out the foregoing and to

         perform the duties and  obligations  set forth in the Pledge  Documents

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