SUMMARY OF THE COOPERATIVE

Snake River Sugar Company (the "Cooperative") is an Oregon cooperative corporation which was formed in July 1994 for the purpose of acquiring the operating assets of The Amalgamated Sugar Company ("Amalgamated") now known as ASC Holdings, Inc., ("ASC"). The Cooperative was established with three thousand (3,000) voting Common Shares ("Common Stock") and three hundred thousand (300,000) non-voting Patron Preferred Shares ("Patron Preferred Stock") (collectively, the "Shares"). Growers who purchase shares of Patron Preferred Stock are required to grow sugarbeets on acreage representing 98% to 100% of their purchased Patron Preferred Stock. Each member of the Cooperative must have one share of Common Stock. Ownership of Common Stock and Patron Preferred Stock is restricted to sugarbeet farm operators, and is at the discretion of the Board of Directors.

The Shares have not been registered with the Securities and Exchange Commission either because the Shares do not constitute a "Security" under Section 2(1) of the Securities Act of 1933 (the "Act") or, if the Shares are a Security, pursuant to an exemption provided under Section 3(a)(5) of the Act for Agricultural Cooperatives. Similarly, the Shares are not registered with any state securities commissions pursuant to exemptions in Idaho, Oregon, Washington, and Utah for agricultural cooperatives. The Shares have also not been approved or disapproved by the SEC or any State securities commission.

On June 20, 1996, the Cooperative issued an Offering Memorandum offering to growers of sugarbeets in Idaho, Oregon, and Washington, the opportunity to purchase its shares. The Offering Memorandum described several alternative scenarios under which the proceeds of the June 20, 1996, offering would be used to acquire the existing sugarbeet processing facilities and related assets owned by Amalgamated. As described below, that transaction closed on January 3, 1997.

The Cooperative has prepared this Summary in order that new holders of Shares in the Cooperative have an understanding both of the transaction to acquire the assets of Amalgamated, as well as events occurring since that time.

The initial offering resulted in the sale of over 222,000 shares of Patron Preferred Stock and approximately 1,300 shares of Common Stock. The Cooperative does not currently intend to issue any additional Patron Preferred Stock. Prospective purchasers of Patron Preferred Stock will have to acquire them from other members of the Cooperative and obtain approval for the transfer in accordance with the Articles of Incorporation and Bylaws of the Cooperative.

Approximately 32,000 shares of Patron Preferred Stock were purchased on a time purchase basis through arrangements established by Snake River Farms, LLC, and Snake River Farms II, LLC. In this way, growers who were initially unable to pay the full price for Shares were given the opportunity to pay for Shares on an installment basis.

ACQUISITION OF CONTROL OVER THE AMALGAMATED SUGAR COMPANY

The Acquisition. On January 3, 1997, the Cooperative entered into a series of transactions (collectively, the "Acquisition") with the initial objective of gaining management control over the assets of Amalgamated, together with a minority equity position and a specified profits interest in Amalgamated, and the ultimate objective of acquiring full ownership of the assets in Amalgamated, as follows: (i) the Cooperative contributed $14,000,000 to The Amalgamated Sugar Company LLC, a Delaware limited liability company ("Amalgamated LLC") in exchange for 5.3% of the ownership interest, a portion of the net profits, and control of the operation of Amalgamated LLC; (ii) the assets, together with the majority of the liabilities, of Amalgamated were contributed to Amalgamated LLC by ASC, with an agreed-upon value of $250 million, in exchange for 94.7% of the ownership interest and a portion of the net profits of Amalgamated LLC; (iii) the Cooperative borrowed $180 million from Valhi, Inc. (the "Valhi Loan"), the indirect parent company of ASC, which loan was secured by a pledge of the Cooperative's assets including its interest in Amalgamated LLC; and (iv) the Cooperative loaned $250 million to Valhi, Inc. ("Valhi") which pledged its interest in Amalgamated LLC to the Cooperative as security for the loan (the "Snake River Loan"). The $250 million loan to Valhi was made up of $70 million of the proceeds from the sale of Patron Preferred Stock, together with the $180 million Valhi Loan. Concurrently with the Acquisition, Amalgamated LLC entered into a $100,000,000 operating line of credit (the "Operating Line") with United States National Bank of Oregon and First Security Bank, N.A., which was subsequently amended to include five additional banks.

The result of the Acquisition is that the Cooperative currently owns a percentage of the sugar company assets through its ownership of a portion of Amalgamated LLC. Even though ASC has a large equity interest in Amalgamated LLC, the Cooperative controls the operations of the LLC and appoints all members of the LLC Management Committee.

The Operating Agreement provides that Amalgamated LLC may redeem the interest held by ASC at any time after the 30th anniversary of the date of the Operating Agreement at a price equal to the outstanding amount of the Snake River Loan plus certain other amounts. The Operating Agreement also provides other circumstances under which ASC may cause the Cooperative to redeem its interest in Amalgamated LLC.

The Valhi Loan. It had originally been intended that the Valhi Loan would be made by a lender other than Valhi. However, despite diligent efforts of the Cooperative and its Board of Directors, it became evident that the Cooperative would be unable to close the Acquisition before the end of 1996 with any of the potential lenders with whom the Cooperative had been negotiating. In order for the transaction to proceed, Valhi agreed to provide the Valhi Loan as a temporary measure while the Cooperative pursued efforts to obtain financing from third parties.

On May 14, 1997, the Cooperative issued $100 million in Notes to a group of insurance companies. As collateral, the Cooperative pledged its interest in Amalgamated LLC. The Notes bear interest at 10.80%, mature on April 30, 2009, and require monthly payments of principal and interest. Simultaneously with issuing the Note, the Valhi Loan was partially repaid and amended. The principal of the Valhi Loan was reduced to $80 million and its term extended to April 30, 2009. The Valhi Loan has no regularly-scheduled payments, but payments are required to the extent the Cooperative has excess cash. Current projections show the Valhi Loan will be repaid before the Notes mature. (Subsequent Note: On October 17, 2005, the $80,000,000 note to Valhi, Inc, was refinanced with an issuance of senior notes in the amount of $100,000,000 at 7.61% interest. Principal payments of $583,333 are due monthly with a final maturity date of September 30, 2012. Interest is due monthly in arrears on the last day of the month. As a result of this refinancing, $6,416,663 will be due during fiscal year 2006. Also as a result of this refinancing, Valhi, Inc. discounted the accrued interest due them by $22.7 million.)

BUSINESS OF AMALGAMATED

Before the Acquisition. Amalgamated was the second largest United States refiner and processor of sugar from sugarbeets. Amalgamated operated four sugar processing facilities in Idaho and Oregon and owned three distribution and six storage facilities. These production facilities have produced approximately 1.5 billion to 1.6 billion pounds of sugar annually over the past few years.

Amalgamated employed a total of approximately 1,400 persons on a year-round basis, and had approximately 1,300 additional seasonal employees during the sugarbeet processing campaign.

Approximately 90% of Amalgamated's annual sales came from refined sugar. Animal feed in the forms of beet pulp and molasses and other by-products of sugarbeet processing have historically accounted for most of its remaining sales. Amalgamated sold its sugar primarily in the North Central, Intermountain and Northwest regions of the United States.

After the Acquisition - Operation of Amalgamated LLC. It is the Cooperative's intention that the business of Amalgamated LLC will continue in essentially the same form as existed prior to the Acquisition. To this end, and as part of the Acquisition, the Cooperative agreed to cause Amalgamated LLC to enter into five year employment contracts with Amalgamated's key management personnel (the "Management Team"). In addition, the oversight of the Management Team and Amalgamated LLC will be conducted by a seven member Management Committee, all of whom are members of the Cooperative's Board of Directors.

Amalgamated LLC intends to produce, distribute and sell sugar in substantially the same manner as was done by Amalgamated. The Cooperative has entered into Grower Contracts with each individual member/grower of the Cooperative to purchase sugarbeets and, in turn, the Cooperative sells the sugarbeets to Amalgamated LLC.

Operating Funds. Amalgamated LLC operates, in part, through the Operating Line and through funds borrowed pursuant to the Sugar Program of the United States Department of Agriculture ("CCC Loans"). The CCC Loans are secured by refined sugar collateral.

BUSINESS OF THE COOPERATIVE

The principal business of the Cooperative is to purchase sugarbeets from its members and, in turn, sell them to Amalgamated LLC for processing. In addition, the Cooperative has management control over the activities of Amalgamated LLC pursuant to the terms of the organizational documents of Amalgamated LLC.

RISK FACTORS

New Venture and Dependence on Amalgamated Sugar Company Employees. The Cooperative is a cooperative association with no operating history. It is substantially dependent on the former employees of Amalgamated and the Management Team to operate Amalgamated LLC. The Board of Directors of the Cooperative consists of farmers with extensive experience in growing sugarbeets, but only limited experience in the operation of a sugar processing, marketing and distribution business.

Competition. Amalgamated LLC sells sugar in all of its markets in direct competition with beet sugar produced by other sugar companies. These products also compete with cane sugar refined by a number of sugar companies. Because sugar is a fungible commodity, competition for sales volume is based primarily upon customer service, price and reliability. In addition, Amalgamated LLC's products compete with other forms of sweeteners, such as regular and high fructose corn syrup, and non-nutritive, high intensity sweeteners such as aspartame.

Long-Term Debt. The Cooperative borrowed $180 million in order to complete the Acquisition. In the event the Cooperative does not realize sufficient revenue to amortize the debt, it may be necessary to collect from the members additional capital in the form of unit retention capital in order to avoid a default. Failure to do so could result in a default and foreclosure on the interest in Amalgamated LLC pledged by the Cooperative to lenders.

Operating Debt. The current Amalgamated LLC Operating Line will expire September 30, 2008 and is based upon a floating interest rate. Operations of Amalgamated LLC are dependent upon its ability to renew the Operating Line prior to expiration. In addition, the Operating Line is secured by the accounts receivable, inventory, and the Nampa, Idaho processing factory of Amalgamated LLC. A default in the payment of Operating Line could result in the foreclosure of liens against the security pledged to the lenders.

Other Risk Factors. Sugarbeets are affected by weather in the growing and processing seasons, and a significant reduction in the quantity and quality of sugarbeets available due to weather, disease or other factors could result in decreased production and increased per unit costs.

Amalgamated LLC uses large quantities of energy in its operations. Changes in the cost and sources of energy to Amalgamated LLC may directly affect the financial results of the Cooperative and its members.

Amalgamated LLC is subject to extensive federal and state environmental laws and regulations with respect to water and air quality. Changes in those laws or regulations could have an adverse effect on Amalgamated LLC's operations. In connection with the Acquisition, Amalgamated indicated that it was in substantial compliance with such laws and regulations. In addition, the Cooperative obtained an environmental assessment of the four factories and the other facilities which assessment did not reveal any substantial environmental problems.

1. The original Articles of Incorporation provided for a Class A Preferred Stock. No shares of this class of stock were ever issued and the Cooperative intends to amend the Articles of Incorporation to eliminate this class of stock.

2. "Operator" means a person, firm, partnership or corporation who is the legal owner of the sugarbeet crop, has a majority financial interest in the crop, has general control of the sugar-beet operations of the farm where the sugarbeet crop is grown, and is a bona fide farmer as defined in the U.S. Farm Credit Administration Regulations (12 CFR § 613.3010). The term "Operator" also includes a landowner who operates on a share crop basis and who will have sugarbeets to deliver to the Cooperative.