SC TO-T/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Amendment No. 1 to SCHEDULE TO (Rule 14d-100) TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
Keystone Consolidated Industries, Inc. (Name of Subject Company (Issuer)) Contran Corporation  (Name of Filing Person (Offeror)) Common Stock, par value $0.01 per share (Title of Class of Securities) 493422307 (CUSIP Number of Class of Securities)
Bobby D. O’Brien Three Lincoln Centre Suite 1700 5430 LBJ Freeway Dallas, Texas   75240-2694 (972) 233-1700 (Name, address, and telephone numbers of person authorized to receive notices and communications on behalf of filing persons)		Copy to: Neel Lemon Baker Botts L.L.P. 2001 Ross Avenue Dallas, Texas 752001 (214) 953-6954
CALCULATION OF FILING FEE
	Transaction Valuation*	Amount of Filing Fee**
	$16,900,000	$1,962.09
*For the purpose only of calculating the filing fee in accordance with Rule 0-11 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  The transaction value was calculated by multiplying (i) 2,600,000 shares of common stock, par value $0.01 per share, of Keystone Consolidated Industries, Inc. sought in the tender offer by (ii) the tender offer price of $6.50 per share. ** The amount of the filing fee calculated in accordance with the Exchange Act equals $116.10 per $1,000,000. The filing fee was calculated in accordance with Rule 0-11 under the Exchange Act and Fee Rate Advisory #5 for fiscal year 2011, issued December 22, 2010.
RCheck the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid.  Identify the previous filing by registration statement number, of the Form or Schedule and the date of its filing. Amount Previously Paid:$1,962.09 Form or Registration No.:Schedule TO Filing Party:Contran Corporation Date Filed:February 1, 2011 □Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: Rthird-party tender offer subject to Rule 14d-1. □issuer tender offer subject to Rule 13e-4. □going-private transaction subject to Rule 13e-3. □amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: □ If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon: □           Rule 13e—4(i) (Cross-Border Issuer Tender Offer) □           Rule 14d—1(d) (Cross-Border Third-Party Tender Offer)

           This Amendment No. 1 (this “Amendment”) amends and supplements the Tender Offer Statement on Schedule TO (together with any amendments or supplements hereto, the “Tender Offer Statement”) originally filed with the Securities and Exchange Commission on February 1, 2011 by Contran Corporation, a Delaware corporation (“Contran”), in connection with its offer to purchase up to 2,600,000 shares of common stock, par value $0.01 per share (the “Shares”), of Keystone Consolidated Industries, Inc., a Delaware corporation (“Keystone”), for $6.50 net per Share in cash, without interest and less applicable withholding taxes, upon the terms and subject to the conditions set forth in the offer to purchase dated February 1, 2011 (the “offer to purchase”) and the related letter of transmittal (the “letter of transmittal”), which, together with any amendments or supplements thereto, collectively constitute the “tender offer”.

           The information in the offer to purchase, including all schedules thereto, and the related letter of transmittal is incorporated in this Amendment by reference in response to all of the applicable items of the Tender Offer Statement, except that such information is hereby amended and supplemented to the extent specifically provided herein.  All capitalized terms used in this Amendment without definition have the meanings ascribed to them in the offer to purchase.

           The items of the Tender Offer Statement set forth below are hereby amended and supplemented as follows:

Items 1 through 9, and Item 11.

           1.           The following is hereby added to the end of the fourth paragraph under the heading “Important” on page ii of the offer to purchase:

                      “See Section 17 (‘Miscellaneous’).”

           2.           The following is added as a new question and response immediately prior to the question “If you prorate, when will I know how many Shares will actually be purchased?” in the section entitled “Summary Term Sheet” on page 2 of the offer to purchase:

“Following the Offer, will Keystone continue as a public reporting company?

“Yes.  The completion of the tender offer in accordance with its terms and conditions will not cause Keystone to become eligible to cease filing periodic reports under the Exchange Act.  If we reasonably determine that our purchase of Shares pursuant to the tender offer would cause the Shares to be held of record by less than 300 persons, then we will impose an equitable proration factor to the Shares tendered by each holder (with adjustments to avoid purchases of fractional Shares) based upon the number of Shares validly tendered by the expiration date and not properly withdrawn, such that, following completion of the tender offer, the Shares will continue to be held of record by not less than 300 persons and accordingly Keystone will continue to be subject to the reporting requirements of the Exchange Act.  See Section 1 (‘Terms of the Tender Offer; Proration’) of this offer to purchase.”

           3.           The second paragraph in response to the question “What is the purpose of the tender offer?” in the section entitled “Summary Term Sheet” on page 3 of the offer to purchase is hereby amended by replacing the paragraph in its entirety with the following:

“Contran is also making this tender offer because Contran is seeking to include Keystone in its consolidated U.S. federal income tax group (‘Contran Tax Group’) in order to achieve certain income tax efficiencies.  If we were to acquire all 2,600,000 Shares in the tender offer, Keystone would become a member of the Contran Tax Group.  Regardless of the number of Shares we acquire in the tender offer, completion of the tender offer would not result in Keystone recognizing any gain or loss for income tax purposes, nor would it have any impact on the income tax basis of Keystone’s assets, liabilities and other income tax attributes of Keystone.  If Keystone becomes a member of the Contran Tax Group, Keystone would enter into a tax sharing agreement with Contran.  In accordance with such tax sharing agreement, Contran’s policy for intercompany allocation of income taxes provides that subsidiaries included in the Contran Tax Group compute their provision for income taxes on a separate company basis.  Generally, subsidiaries make payments to or receive payments from Contran in the amounts they would have paid to or received from the Internal Revenue Service (‘IRS’) had they not been members of the Contran Tax Group.  The separate company provisions and payments are computed using the tax elections made by Contran.  Upon becoming a member of the Contran Tax Group, there are no tax elections that Contran would currently make that would have any impact on Keystone.  Consequently, upon becoming a member of the Contran Tax Group, the amount of payments for income taxes that Keystone would make to or receive from Contran is not currently expected to differ from the amount of payments for income taxes that Keystone would make to or r eceive from the IRS had Keystone not become a member of the Contran Tax Group.  In addition, if Keystone becomes a member of the Contran Tax Group, Keystone will be jointly and severally liable for the federal income tax liability of Contran and the other companies included in the Contran Tax Group for all periods in which Keystone is included in the Contran Tax Group. However, Contran would also agree to indemnify Keystone for any liability for income taxes of the Contran Tax Group in excess of Keystone’s tax liability previously computed and paid in accordance with its tax allocation policy. See Section 11 (‘Background and Purpose of the Tender Offer’) of this offer to purchase.”

           4.           The question “When will you pay for the Shares I tender?” in the section entitled “Summary Term Sheet” on page 5 of the offer to purchase is hereby amended by replacing the response to such question in its entirety with the following:

“We will pay the purchase price to you in cash, less any applicable withholding taxes and without interest, for the Shares we purchase promptly after the expiration of the tender offer and our determination of any proration factor.  We currently anticipate that will be five trading days after the expiration date. See Section 1 (‘Terms of the Tender Offer; Proration’) of this offer to purchase.”

           5.           The following new paragraph is inserted following the third paragraph under Section  1—“ Terms of the Tender Offer; Proration” on page 9 of the offer to purchase:

“In addition, notwithstanding any other provisions of this tender offer, subject to any applicable rules and regulations of the SEC, including Exchange Act Rule 14e-1(c) (relating to our obligation to pay for or return tendered Shares promptly after termination or withdrawal of the tender offer), in the event, prior to the expiration of the tender offer, we shall have reasonably determined that the completion of the tender offer and the purchase of the Shares pursuant to the tender offer may cause the Shares to be held of record by fewer than 300 persons, then we will impose an equitable proration factor to the Shares tendered by each holder (with adjustments to avoid purchases of fractional Shares) based upon the number of Shares validly tendered by the expiration date and not properly withdrawn, such that, following completion of the tender offer, the Shares will continue to be held of record by not less than 300 persons and accordingly Keystone will continue to be subject to the reporting requirements of the Exchange Act.  All Shares not accepted for payment will be returned to the stockholder or, in the case of tendered Shares delivered by book−entry transfer, credited to the account at the book−entry transfer facility from which the transfer had previously been made, promptly after the expiration or termination of the tender offer.”

           6.           The fifth paragraph under Section 5—“Material U.S. Federal Income Tax Consequences” on page 17 of the offer to purchase is hereby amended by replacing such paragraph in its entirety with the following:

“Completion of the tender offer would not result in Keystone recognizing any gain or loss for income tax purposes, nor would it have any impact on the income tax basis of Keystone’s assets, liabilities and other income tax attributes of Keystone.”

           7.           Section  12—“Source and Amount of Funds” on page 28 of the offer to purchase is hereby amended by replacing such section in its entirety with the following:

“If we purchase 2,600,000 Shares in the tender offer at $6.50 per Share, the aggregate purchase price for the Shares will be $16.9 million, not including fees and expenses, which we estimate to be approximately $150,000.  We will use Contran’s available cash resources to purchase the Shares in the tender offer, which could include borrowings under its existing revolving bank credit facility.  Contran has sufficient borrowing availability under its existing revolving bank credit facility to complete the tender offer.  The tender offer is not conditioned on the receipt of financing.  See Section 13 (‘Conditions of the Tender Offer’) of this offer to purchase.

“There are no material conditions to Contran’s ability to borrow under its existing revolving bank credit facility.  Such facility provides for borrowings of up to $70 million, collateralized by 12.82 million shares of TIMET common stock held by one of our wholly-owned subsidiaries.  Outstanding borrowings bear interest at the prime rate plus 1.0%, and the maximum amount which may be borrowed under the facility is limited to 50% of the aggregate market value of the shares of TIMET common stock pledged as collateral, less the amount of any outstanding letters of credit issued under the facility.  We currently have no borrowings outstanding under the facility and have issued letters of credit aggregating $13.2 million, and the remaining $56.8 million is fully available to us for borrowing. 
60;The facility currently matures in September 2011, although we anticipate extending the maturity date of such facility prior to its expiration for an additional year.  In the event of a change of control of Contran, as defined in the credit agreement governing the facility, the lender would have the right to accelerate the maturity of the facility.  To the extent we borrow under this facility to provide some or all of the funds required to complete the tender offer, we expect to repay such borrowings in our ordinary course of business through other cash resources we would generate.

“The foregoing summary of our existing revolving bank credit facility does not purport to be a complete description of the terms and conditions of the facility and is qualified in its entirety by reference to the Credit Agreement, as amended, and related agreements which have been filed as exhibits to the Tender Offer Statement on Schedule TO filed by Contran with the SEC in connection with the tender offer.”

           8.           The lead-in paragraph, up to the colon, under Section  13—“Conditions of the Tender Offer” on page 28 of the offer to purchase is hereby amended by replacing such lead-in paragraph in its entirety with the following:

“Notwithstanding any other provisions of this tender offer, and in addition to (and not in limitation of) our right to extend or amend the tender offer at any time, we shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Exchange Act Rule 14e-1(c) (relating to our obligation to pay for or return tendered Shares promptly after termination or withdrawal of the tender offer), pay for, and may delay or postpone the acceptance for payment of and accordingly the payment for, any tendered Shares, and may amend or terminate the tender offer, if, at any time on or after January 31, 2011, and prior to the expiration of the tender offer (or, in the case of conditions dependent upon the receipt of governmental approvals, before the time of payment for the Shares (whether or not a ny Shares have theretofore been accepted for payment pursuant to the tender offer)), any of the following events shall occur or conditions shall exist:”

           9.           Subparagraph (e) under Section  13—“Conditions of the Tender Offer” on page 30 of the offer to purchase is hereby amended by replacing such subparagraph in its entirety with the following:

“(e) Keystone (1) shall not have filed a Current Report on Form 8-K with the SEC through which it furnishes its preliminary earnings regarding its fourth quarter 2010 results at least 10 business days prior to the expiration of the tender offer (as such expiration may be extended by Contran), or (2) shall have split, combined or otherwise changed, or authorized or proposed the split, combination or other change, of the Shares, (3) shall have acquired directly or indirectly or otherwise caused a reduction in the number of, or authorized or proposed the acquisition or other reduction in the number of, the presently outstanding Shares, (4) shall have issued, distributed or sold, or authorized or proposed the issuance, distribution or sale of, additional Shares, (5) shall have authorized, recommended, proposed or entered into an agreem ent with respect to any merger, consolidation, recapitalization, liquidation, dissolution, business combination, acquisition of assets, disposition of assets, release or relinquishment of any material contractual or other right of Keystone or any of its subsidiaries or any comparable event not in the ordinary course of business, (6) shall have declared, paid or proposed to declare or pay any dividend or other distribution on the Shares, or (7) shall have amended or authorized or proposed any amendment to Keystone’s amended and restated certificate of incorporation or bylaws, or Contran shall become aware that Keystone shall have proposed or adopted any such amendment which has not been previously disclosed in publicly available documents on file with the SEC;”

          10.     The first sentence of the last paragraph under Section  13—“Conditions of the Tender Offer” on page 31 of the offer to purchase is hereby amended by replacing such sentence in its entirety with the following:

“All conditions to the tender offer must be satisfied or, other than those conditions dependent upon the receipt of governmental approvals or the condition set forth in subparagraph (e)(1) above, waived by us prior to the expiration of the tender offer.”

 11.    The second and third sentences in the first paragraph under Section  17—“Miscellaneous” on page 33 of the offer to purchase are hereby amended by replacing such sentences in their entirety with the following:

“If we become aware of any state where the making of the tender offer or the acceptance of Shares pursuant thereto is not in compliance with applicable state law, we will make a good faith effort to comply with the applicable state law.  If, after such good faith effort, we cannot comply with the applicable state law, the tender offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares in that state.”

           12.     The table in Schedule A on page A-1 of the offer to purchase is hereby amended by replacing such table in its entirety with the following:

“SCHEDULE A

Additional Information

Directors and Executive Officers of Contran.

           The name, present principal occupation and employment history for the past five years of each director and executive officer of Contran are set forth below.  The business address for each person listed below is c/o Contran Corporation, Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas 75240-2697.  All executive officers and directors listed are United States citizens.

Name	Present Principal and Five-Year Employment History
L. Andrew Fleck	Mr. Fleck has served as vice president-real estate of Contran since 2007.  From prior to 2006 to 2007, he served as real estate manager for Contran.
Robert D. Graham	Mr. Graham has servedas vice president of Contran and Valhi, Inc. a publicly held subsidiary of Contran (“Valhi”), and vice president and general counsel of NL Industries, Inc., a publicly held subsidiary of Valhi (“NL”), since prior to 2006.  He has also served as executive vice president and general counsel of Kronos Worldwide, Inc., a publicly held subsidiary of Valhi (“Kronos Worldwide”), since 2009 and its vice president and general counsel from prior to 2006 to 2009.  He has been executive vice president of Titanium Metals Corporation, a publicly held affiliate of Contran (“TIMET”), since 2006 and its vice president from 2006 and prior years and executive vice president of CompX International Inc., a publicly held subsidiary of NL (“CompX”), since May 2010.
J. Mark Hollingsworth	Mr. Hollingsworth has served as Contran’s and Valhi’s vice president and general counsel and CompX’s and Keystone’s general counsel since prior to 2006.  He has served as vice president of CompX since 2007 and vice president of Keystone since 2009.  Mr. Hollingsworth has served as legal counsel of various companies related to Contran since 1983.
William J. Lindquist	Mr. Lindquist has served as senior vice president and a director of Contran and Valhi’s senior vice president since prior to 2006.   Since 2007, he has also served as the chief executive officer of Waste Control Specialists LLC, a subsidiary of Valhi.  Mr. Lindquist has served as an executive officer or director of various companies related to Contran since 1980.
A. Andrew R. Louis	Mr. Louis has served as secretary of CompX, Contran and Valhi since prior to 2006 and secretary of Kronos Worldwide and NL since 2006.  He served as secretary of TIMET from 2006 to 2008.  Mr. Louis has served as legal counsel of various companies related to Contran since 1995.

Name	Present Principal and Five-Year Employment History
Kelly D. Luttmer	Ms. Luttmer has served as vice president and tax director of CompX, Contran, Kronos Worldwide, NL and Valhi since prior to 2006, of TIMET since 2006 and of Keystone since May 2010.  Ms. Luttmer has served in tax accounting positions with various companies related to Contran since 1989.
Bobby D. O’Brien	Mr. O’Brien has served as vice president and chief financial officer of Contran and Valhi since prior to 2006.  He has also served as chief executive officer of TIMET since 2009 and president of TIMET since 2007.  From 2006 to 2007, he served as executive vice president and chief financial officer of TIMET and vice president of TIMET from 2006 and prior years.  Mr. O’Brien has served in financial and accounting positions with various companies related to Contran since 1988.
Glenn R. Simmons	Mr. Glenn Simmons has been vice chairman of the board of Contran and Valhi, chairman of the board of CompX and Keystone and on the board of directors of Kronos Worldwide, NL and TIMET since prior to 2006.  Since prior to 2006, He has been an executive officer or director of various companies related to Contran since 1969.
Harold C. Simmons	Mr. Harold Simmons has been chairman of the board of Contran, Kronos Worldwide and Valhi and chairman of the board and chief executive officer of NL since prior to 2006.  He served as chief executive officer of Kronos Worldwide from prior to 2006 to 2009.  He also has served as chairman of the board of TIMET since prior to 2006 and its chief executive officer from 2006 and prior years.  Mr. Harold Simmons has been an executive officer or director of various companies related to Contran since 1961.
John A. St. Wrba	Mr. St. Wrbahas served as vice president and treasurer of Contran, Kronos Worldwide, NL and Valhi since prior to 2006.  He has also been vice president and treasurer of TIMET since 2006.
Gregory M. Swalwell	Mr. Swalwell has served as vice president and controller of Contran and Valhi since prior to 2006.  He has also served as Kronos Worldwide’s executive vice president and chief financial officer since 2009 and its vice president and chief financial officer from prior to 2006 to 2009.  Since prior to 2006, he has served as vice president, finance and chief financial officer of NL and vice president of TIMET.  Mr. Swalwell has served in financial and accounting positions with various companies related to Contran since 1988.
Steven L. Watson	Mr. Watson has served as Contran’s president and a director of Contran since prior to 2006.  He has served on Valhi’s board of directors since prior to 2006.  Mr. Watson has been Valhi’s chief executive officer and president since prior to 2006.  He has also served as chief executive officer of Kronos Worldwide since 2009 and its vice chairman of the board since prior to 2006 and TIMET’s vice chairman of the board since prior to 2006 and its chief executive officer from 2006 to 2009.  Since prior to 2006, Mr. Watson has served as a director of CompX, Keystone and NL.  Mr. Watson has served as an executive officer or director of various companies related to Contran since 1980.”

Item 12. Exhibits.

           Item 12 of the Tender Offer Statement is hereby amended and supplemented to add the following exhibits:

“(b)(1) Credit Agreement dated October 2, 2009 between Contran Corporation and PlainsCapital Bank (filed as Exhibit 1 of Amendment No. 28 to Schedule 13D regarding the common stock of Titanium Metals Corporation (File No. 1-14368)) filed with the SEC on August 5, 2010.

“(b)(2) Guaranty dated October 2, 2009 executed by Valhi Holding Company for the benefit of PlainsCapital Bank (filed as Exhibit 2 of Amendment No. 28 to Schedule 13D regarding the common stock of Titanium Metals Corporation (File No. 1-14368)) filed with the SEC on August 5, 2010.

“(b)(3) Pledge and Security Agreement dated October 2, 2009 between Valhi Holding Company and PlainsCapital Bank (filed as Exhibit 3 of Amendment No. 28 to Schedule 13D regarding the common stock of Titanium Metals Corporation (File No. 1-14368)) filed with the SEC on August 5, 2010.

“(b)(4) Collateral Agreement dated October 2, 2009 between Contran Corporation and Valhi Holding Company (filed as Exhibit 4 of Amendment No. 28 to Schedule 13D regarding the common stock of Titanium Metals Corporation (File No. 1-14368)) filed with the SEC on August 5, 2010.

“(b)(5) Pledged Shares Addendum Agreement dated March 5, 2010 between Valhi Holding Company and PlainsCapital Bank. **

“(b)(6) First Amendment dated October 1, 2010 to the Credit Agreement among Contran and PlainsCapital Bank. **"

“** Filed herewith.”

SIGNATURE

           After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

CONTRAN CORPORATION

By: /s/ Bobby D. O’Brien

Bobby D. O’Brien

Vice President & Chief Financial Officer

Date: February 14, 2011

EXHIBIT INDEX

Exhibit Number	Description
(a)(1)(i)	Offer to Purchase dated February 1, 2011. *
(a)(1)(ii)	Form of Letter of Transmittal. *
(a)(1)(iii)	Form of Notice of Guaranteed Delivery. *
(a)(1)(iv)	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. *
(a)(1)(v)	Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. *
(a)(1)(vi)	IRS Form W-9 (with accompanying General Instructions). *
(a)(1)(vii)	Summary Advertisement. *
(a)(1)(viii)	Press Release dated February 1, 2011. *
(b)(1)	Credit Agreement dated October 2, 2009 between Contran Corporation and PlainsCapital Bank (filed as Exhibit 1 of Amendment No. 28 to Schedule 13D regarding the common stock of Titanium Metals Corporation (File No. 1-14368)) filed with the SEC on August 5, 2010.
(b)(2)	Guaranty dated October 2, 2009 executed by Valhi Holding Company for the benefit of PlainsCapital Bank (filed as Exhibit 2 of Amendment No. 28 to Schedule 13D regarding the common stock of Titanium Metals Corporation (File No. 1-14368)) filed with the SEC on August 5, 2010.
(b)(3)	Pledge and Security Agreement dated October 2, 2009 between Valhi Holding Company and PlainsCapital Bank (filed as Exhibit 3 of Amendment No. 28 to Schedule 13D regarding the common stock of Titanium Metals Corporation (File No. 1-14368)) filed with the SEC on August 5, 2010.
(b)(4)	Collateral Agreement dated October 2, 2009 between Contran Corporation and Valhi Holding Company (filed as Exhibit 4 of Amendment No. 28 to Schedule 13D regarding the common stock of Titanium Metals Corporation (File No. 1-14368)) filed with the SEC on August 5, 2010.
(b)(5)	Pledged Shares Addendum Agreement dated March 5, 2010 between Valhi Holding Company and PlainsCapital Bank. **
(b)(6)	First Amendment dated October 1, 2010 to the Credit Agreement among Contran and PlainsCapital Bank. **
(d)(1)	Agreement Regarding Shared Insurance between Keystone, CompX International Inc., Contran, Kronos Worldwide, Inc., NL Industries, Inc., Titanium Metals Corp. and Valhi, Inc. dated as of October 30, 2003 (filed as Exhibit 10.1 to Keystone’s Annual Report on Form 10-K for the year ended December 31, 2003) filed with the SEC on November 30, 2005. *
(d)(2)	The Combined Master Retirement Trust between Contran and Harold C. Simmons as amended and restated effective September 30, 2005 (filed as Exhibit 10.2 to Keystone’s Annual Report on Form 10-K for the year ended December 31, 2006) filed with the SEC on March 28, 2007. *
(d)(3)	Intercorporate Services Agreement dated as of January 1, 2007 by and between Keystone and Contran (filed as Exhibit 10.6 to Keystone’s Annual Report on Form 10-K for the year ended December 31, 2007) filed with the SEC on March 14, 2008. *
(g)	None.
(h)	None.
*    Previously filed on February 1, 2011 as an exhibit to the Tender Offer Statement
** Filed herewith.

EX-99.B5

Exhibit (b)(5)

 

PLEDGED SHARES ADDENDUM

THIS PLEDGED SHARES ADDENDUM, dated as of MARCH 5, 2010, is delivered pursuant to the Pledge Agreement referred to below.  VALHI HOLDING COMPANY (“Valhi Holding”) hereby agrees that this Pledged Shares Addendum may be attached to that certain PLEDGE AND SECURITY AGREEMENT, dated as of OCTOBER 2, 2009 (as amended, restated, supplemented or otherwise modified from time to time, including all exhibits and schedules thereto, the “Pledge Agreement”), made by Valhi Holding and PLAINSCAPITAL BANK (“Administrative Agent”).  Initially capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Pledge Agreement.  Valhi Holding hereby agrees that the additional interests listed on this Pledged Shares Addendum as set forth below shall be and are part of the Pledged Shares pledged by Valhi Holding to Administrative Agent in the Pledge Agreement with the same force and effect as if originally named therein.

Valhi Holding hereby certifies that the representations and warranties set forth in Section 2 of the Pledge Agreement are true and correct as to the Pledged Shares listed herein on and as of the date hereof.

EXECUTED as of the date first written above.

VALHI HOLDING COMPANY By    /s/John A. St. Wrba                                                                    John A. St. Wrba         Vice President and Treasurer PLAINSCAPITAL BANK, as Administrative Agent for the Credit Parties By    /s/J. Bart Bearden                                                                     J. Bart Bearden         Executive Vice President

TIMET SHARES PLEDGED AS OF

MARCH 5, 2010

8,000,000 shares of common stock of Titanium Metals Corporation, par value $.01 per share, evidenced by the following certificate numbers:

Issuer	Certificate Number	Certificate Date	Number of Shares of Common Stock
Titanium Metals Corporation	TMC14129	December 14, 2007	1,000,000
Titanium Metals Corporation	TMC14088	March 18, 2009	7,000,000

EX-99.B6

Exhibit (b)(6)

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) dated as of OCTOBER 1, 2010 (the “Effective Date”), is by and among CONTRAN CORPORATION (“Contran”); the institutions named herein as lenders (individually a “Lender” and collectively the “Lenders”); and PLAINSCAPITAL BANK, in its capacity as agent for the Lenders (the “Administrative Agent”) and as the L/C issuer, sole lead arranger and bookrunner for the credit facilities described in this Agreement (defined below).

RECITALS

A.            Contran, the Lenders and Administrative Agent entered into that certain CREDIT AGREEMENT dated as of OCTOBER 2, 2009 (as amended, renewed and restated from time to time, the “Agreement”), pursuant to which the Lenders agreed to make certain credit facilities available to Contran on the terms and conditions set forth therein.

B.           Guarantor (as defined on the signature page hereto), Administrative Agent and First Southwest Company (“First Southwest”) entered into that certain SECURITIES ACCOUNT CONTROL AGREEMENT dated as of AUGUST 24, 2010 (such agreement is referenced herein, and a copy of such agreement is attached hereto as Exhibit A, solely for ease of reference for the parties), in order to establish First Southwest as a custodian of certain pledged collateral of Guarantor securing the credit facilities under the Agreement.

C.           The parties desire to amend the Agreement pursuant to the terms and conditions set forth herein.

NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:

1.Definitions.  Capitalized terms used in this Amendment, to the extent not otherwise defined herein, shall have the same meanings as in the Agreement, as amended hereby.

2.Extension of and Amendment to Maturity Date.  Section 2.8 of the Agreement is hereby amended in its entirety to read as follows:

2.8           Maturity Date of the Revolving Credit Facility.  On the earlier of (a) SEPTEMBER 30, 2011, or (b) acceleration of the Obligations following an Event of Default, if any, under this Agreement, the Commitments shall terminate.  The earlier of the dates specified in the preceding sentence of this Agreement is referred to in this Agreement as the “Maturity Date.” On the Maturity Date, Contran shall be obligated to pay in full the entire balance of principal, interest, fees, and (except as specified in the following sentence) all other Obligations owed pursuant to the Notes, this Agreement, and the other Loan Documents.  Notwithstanding the foregoing, amounts owed in respect of any Letter of Credit with an expiration date after the Maturity Date that are secured by cash collateral in accordance with the provisions of Section 3.11 or Section 3.12 of this Agreement shall be paid in accordance with the Issuer Documents and this Agreement.

FIRST AMENDMENT TO CREDIT AGREEMENT – PAGE  1

PLAINSCAPITAL BANK – CONTRAN CORPORATION

3.Conditions Precedent.  The obligations of the Lenders and Administrative Agent under this Amendment shall be subject to the condition precedent that Contran shall have executed and delivered to Lender this Amendment and such other documents and instruments incidental and appropriate to the transaction provided for herein as any Lender, Administrative Agent or their counsel may reasonably request.

4.Ratifications.  Except as expressly modified and superseded by this Amendment, the Loan Documents are ratified and confirmed and continue in full force and effect.  The terms, conditions and provisions of the Loan Documents (as the same may have been amended, modified or restated from time to time) are incorporated herein by reference, the same as if stated verbatim herein.  The Loan Documents, as modified by this Amendment, continue to be legal, valid, binding and enforceable in accordance with their respective terms.  Without limiting the generality of the foregoing, Contran hereby ratifies and confirms that all liens heretof ore granted to Administrative Agent, on behalf of the Lenders, were intended to, do and continue to secure the full payment and performance of the Obligations.  Contran agrees to perform such acts and duly authorize, execute, acknowledge, deliver, file and record such additional assignments, security agreements, modifications or agreements to any of the foregoing, and such other agreements, documents and instruments as Administrative Agent may reasonably request in order to perfect and protect those liens and preserve and protect the rights of Administrative Agent and the Lenders in respect of all present and future collateral.

5.Representations, Warranties and Confirmations.  Contran hereby represents and warrants to each Lender and Administrative Agent that (a) this Amendment and the other Loan Documents have been duly executed and delivered by Contran, are valid and binding upon Contran and are enforceable against Contran in accordance with their terms, except as limited by any applicable bankruptcy laws, (b) no action of, or filing with, any governmental authority is required to authorize, or is otherwise required in connection with, the execution, delivery and performance by Contran of this Amendment or any other Loan Document, and (c) the execution, delivery and performance by Contran of this Amendment and any other Loan Documents do not require the consent of any other person and do not and will not constitute a violation of any laws, agreements or understandings to which Contran is a party or by which Contran is bound.

6.Multiple Counterparts.  This Amendment may be executed in a number of identical separate counterparts, each of which for all purposes is to be deemed an original, but all of which shall constitute, collectively, one agreement.  Signature pages to this Amendment may be detached from multiple separate counterparts and attached to the same document and a telecopy or other facsimile of any such executed signature page shall be valid as an original.

7.Reference to Agreement.  Each of the Loan Documents, including the Agreement and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof containing a reference to the Agreement shall mean and refer to the Agreement as amended hereby.

8.Severability.  Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

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PLAINSCAPITAL BANK – CONTRAN CORPORATION

9.Headings.  The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

10.Release and Indemnification.  As a material inducement to each Lender and Administrative Agent to enter into this Amendment, Contran hereby fully, finally, and absolutely and forever releases and discharges each Lender and Administrative Agent and its present and former directors, shareholders, officers, employees, agents, representatives, successors and assigns, and their separate and respective heirs, personal representatives, successors and assigns, from any and all actions, causes of action, claims, debts, damages, demands, liabilities, obligations, and suits, of whatever kind or nature, in law or equity of Contran, whether now known or unknown to Cont ran, and whether contingent or matured (a) in connection with any and all obligations owed or owing to the Lender under or in respect of the Agreement, the Loan Documents, or the actions or omissions of Lender in respect of the Agreement and the Loan Documents; and (b) arising from events occurring prior to the date of this Amendment.

NOTICE OF FINAL AGREEMENT

THE AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED BY THIS AMENDMENT REPRESENT THE FINAL AGREEMENT BETWEEN AND AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN AND AMONG THE PARTIES.

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PLAINSCAPITAL BANK – CONTRAN CORPORATION

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed as of the date first above written.

PLAINSCAPITAL BANK,   as Administrative Agent and as a Lender     By :      /s/J. Bart Bearden              J. Bart Bearden              Executive Vice President CONTRAN CORPORATION       By :         /s/John A. St. Wrba            John A. St. Wrba Vice President and Treasurer

CONSENT TO AND CONFIRMATION OF GUARANTY

To induce Lender to execute the foregoing Amendment, the undersigned guarantor (“Guarantor”) (a) agrees and consents to the execution and delivery of the Agreement and the terms thereof; (b) ratifies and confirms that all guaranties and assurances granted, conveyed or otherwise provided to Lender under the Loan Documents, including, but not limited to that certain GUARANTY AGREEMENT dated as of OCTOBER 2, 2009 (as the same may have been amended, modified or restated from time to time, the “Guaranty”), are not released, diminis hed, impaired, reduced, or otherwise adversely affected by the Amendment; (c) confirms and agrees that the Guaranty continues to guarantee and assure the payment and performance of Indebtedness in accordance with its terms; (d) agrees to perform such acts and duly authorize, execute, acknowledge and deliver such additional guarantees, assurances and other documents, instruments and agreements as Lender may reasonably deem necessary or appropriate in order to create, perfect, preserve and protect those guaranties and assurances; and (e) waives notice of acceptance of this consent and confirmation, which consent and confirmation binds Guarantor and Guarantor’s successors and assigns and inures to Lender and its successors and assigns.  The terms, conditions and provisions of the Guaranty (as the same may have been amended, modified or restated from time to time) are incorporated herein by reference, as if stated verbatim herein.

Guarantor acknowledges and agrees that (a) notwithstanding the conditions to effectiveness set forth in this Amendment, Guarantor is not required by the terms of the Agreement or any other Loan Document to consent to the Amendment, and (b) nothing in the Amendment, or any other Loan Document shall be deemed to require the consent of Guarantor to any future waivers, amendments or modifications to the Loan Documents.

EXECUTED as of the date first written above.

VALHI HOLDING COMPANY

By:           /s/John A. St. Wrba

John A. St. Wrba

Vice President and Treasurer

FIRST AMENDMENT TO CREDIT AGREEMENT – PAGE 4

PLAINSCAPITAL BANK – CONTRAN CORPORATION

Exhibit A

Securities Account Control Agreement

SECURITIES ACCOUNT CONTROL AGREEMENT

THIS SECURITIES ACCOUNT CONTROL AGREEMENT, dated as of AUGUST 24, 2010 (as amended, modified or restated from time to time, this “Agreement”), is by and among PLAINSCAPITAL BANK, a Texas state bank, with an address at 2911 Turtle Creek Boulevard, Suite 1300, Dallas, Texas  75219 (together with its successors and assigns, “Administrative Age nt”); VALHI HOLDING COMPANY, a Delaware corporation (“Valhi Holding”), with an address at 5430 Lyndon B Johnson Freeway, Suite 1700. Dallas, Texas 75240-2620; and FIRST SOUTHWEST COMPANY,with an address at 325 N. St. Paul, Suite 500, Dallas, TX  75201 (“Intermediary”).

PREAMBLE

WHEREAS, Valhi Holding has granted to Administrative Agent for the benefit of the Lenders (as defined in the Credit Agreement) a security interest in (a) the Pledged Shares, (b) the Collateral Account and all investments and investment property therein, (c) all rights and privileges of Valhi Holding with respect to the Pledged Shares (including, without limitation, all representations, warranties, registration rights, and other undertakings of any person inuring to the benefit of Valhi Holding in respect thereof) and the Collateral Account, (d) all non-cash dividends and all other payments and distributions hereafter made on or with resp ect to the Pledged Shares and, following the occurrence and during the continuation of a Default or an Event of Default (as such terms are defined in the Credit Agreement), all cash dividends paid on the Pledged Shares and all interest paid on the Collateral Account, and (e) all proceeds of any or all of the foregoing (whether the same arise or are acquired before or after the commencement of a Proceeding in which Valhi Holding is a debtor); and

WHEREAS, the parties are entering into this Agreement to perfect Administrative Agent’s security interest in the Collateral pursuant to that certain PLEDGE AND SECURITY AGREEMENT (as amended, modified or restated from time to time, the “Pledge Agreement”) dated as of OCTOBER 2, 2009, between Valhi Holding and Administrative Agent;

NOW THEREFORE, for valuable consideration the receipt and adequacy of which are hereby acknowledged, Administrative Agent and Valhi Holding hereby agree, and hereby direct Intermediary to act in accordance with the following terms:

1.           Use Of Terms. Terms defined in the Uniform Commercial Code of the State of Texas, as amended from time to time (the “UCC”), shall have the same meanings in this Agreement as in the UCC, unless such terms are otherwise defined herein. However, no amendment to the UCC adopted after the date hereof shall limit any rights of Intermediary or Administrative Agent hereunder.  This Agreement shall be governed by the internal laws of the State i ndicated above in this Section without reference to the conflict of laws principles of the laws of such State. As used in this Agreement, unless otherwise specified: the term “person” includes both natural persons and organizations; the term “including” means “including without limitation;” the term “days” means “calendar days”; and terms such as “herein,” “hereof” and words of similar import refer to this Agreement as a whole. Unless the context requires otherwise, wherever used herein the singular shall include the plural and vice versa, and the use of one gender shall also denote the others.  Captions herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof; references herein to sections or provisions without reference to the document in which they are contained are references to this Agreement.  Capitalized terms not otherwise defined herein shall have the same meanings as the Pledge Agreement.  By execution and delivery of this Agreement, Administrative Agent and Valhi Holding agree that the term “Collateral Account” as used in the Pledge Agreement for purposes of this Agreement and the Pledge Agreement shall mean and include the securities account identified on Schedule 2(a) of this Agreement.

2.           Accounts.  Intermediary represents, warrants or agrees, as applicable, in favor of Administrative Agent that:

SECURITIES ACCOUNT CONTROL AGREEMENT – PAGE 1

PLAINSCAPITAL BANK – CONTRAN CORPORATION

(a)Intermediary serves as custodian for the Collateral Account set forth on Schedule 2(a) for Valhi Holding in the name of PLAINSCAPITAL BANK FOR THE BENEFIT OF VALHI HOLDING COMPANY (together with any successor or replacement accounts, individually and collectively, and also, unless the context requires otherwise, together with such other Collateral as now or hereafter held in such accounts, individually an “Account” and collectively, the “Accounts”).  Upon execution and delivery of this Agreement, Intermediary shall mark its records relating to each Account so as to disclose Administrative Agent’s security interest and shall reflect the pledged nature of such Account to PLAINSCAPITAL BANK, in the styling of each Account and on Intermediary’s books and records.

(b)Intermediary is not aware: (i) of any claim to or interest in any Account except for claims and interests of the parties hereto; or (ii) that any third party has a right to give an entitlement order regarding any other Collateral.

3.           Direct Holdings Of Certificated And Uncertificated Securities or Bonds.

(a)          This Section applies to: (i) certificated securities or bonds (if any) in any Account registered in the name of, payable to the order of, or specially indorsed to Valhi Holding, and which have not been subsequently endorsed to Intermediary or in blank; and (ii) uncertificated securities or bonds (if any) therein which are registered in Valhi Holding’s name on the issuer’s books.  This Section supplements any actions by or rights of Intermediary pursuant to any agreement between Intermediary and Valhi Holding governing any Account.

(b)          As to any such certificated bonds or securities in any Account:

(i)           Valhi Holding agrees to deliver to Intermediary the related certificates and to execute and deliver to Intermediary stock or bond powers in blank plus other related documents, all in such form as Administrative Agent or Intermediary request.

(ii)           Administrative Agent and Intermediary may at any time take such other actions as they deem necessary or appropriate, including: (A) appointment of sub-agents or depositories to retain physical possession of  such certificates, which may in Administrative Agent’s discretion be held  in the name of Administrative Agent, any such sub-agent or depository, or any nominee of the foregoing; (B) transferring such certificates into a “pledge position” or the like at any such sub-agent or depository; and (C) exchanging certificates for certificates of smaller or larger denominations.

(c)           As to any such uncertificated securities or bonds in any Account:

(i)           Valhi Holding agrees to execute and deliver, and to cause the issuer of such uncertificated securities to execute and deliver, to Administrative Agent a control agreement in such form as Administrative Agent may require, in addition to this Agreement.

(ii)           Administrative Agent and Intermediary may at any time cause such securities or bonds to be registered in Intermediary’s name.

(d)           Without limiting Administrative Agent’s and Intermediary’s rights under Sections 3(a)-(c) or any other provision hereof or of the Pledge Agreement regarding any Account: (i) Valhi Holding agrees (and authorizes Administrative Agent and Intermediary) to take or cause to be taken such actions, and execute or cause to be executed such documents and instruments, in connection with Administrative Agent’s security interest in such certificated and uncertificated securities or bonds as Administrative Agent or Intermediary may reasonably require; and (ii) Valhi Holding hereby appoints Administrative Agent and Intermediary as Valhi Holding’s attorneys-in-fact, which appointment is and shall be deemed to be irrevocable and coupled with an interest, for purposes of performing acts and signing and delivering any document or instrument on behalf of Valhi Holding in order to effectuate this Section.  Valhi Holding immediately will reimburse Administrative Agent and Intermediary for all reasonable expenses so incurred. Valhi Holding directs the issuers of, or any depository, registrar, transfer agent or similar party with respect to any of, such securities to accept the provisions hereof (without inquiry of any kind) as conclusive evidence of the right of Administrative Agent and Intermediary to take any action referenced above, and agrees to hold them harmless for doing so, notwithstanding any notice or direction to the contrary previously or hereafter given by Valhi Holding or any other person.

SECURITIES ACCOUNT CONTROL AGREEMENT – PAGE 2

PLAINSCAPITAL BANK – CONTRAN CORPORATION

(e)           Even if under the UCC or other applicable law Valhi Holding is treated as holding such certificated and uncertificated securities directly rather than as having a security entitlement with respect thereto: (i) Valhi Holding shall be deemed to have directed Intermediary to, and Intermediary acknowledges and agrees that it does and will, hold all such securities and any certificates or other documents and instruments representing them for the benefit of Administrative Agent; and (ii) such securities shall be subject to the other terms hereof, as in the case of other Account Assets.

4.           Control. Intermediary agrees to comply with all entitlement orders originated by Administrative Agent as to each Account without further consent by any Valhi Holding.  In this Agreement “entitlement order” means a notice from a party directing Intermediary to transfer to such party or to redeem for such party’s benefit any cash, security or other asset included in an Account.  As to any commodities constituting part of any Account, Administrative Agent agrees to apply any value distributed on any commodity contract as directed by Administrative Agent without further consent of any Valhi Holding.

5.           Subordination By Intermediary; No Margin Or Third-Party Loans Or Liens. Intermediary subordinates in favor of Administrative Agent any security interest, lien or right of setoff Intermediary may have, now or in the future, against any Account or Account Assets, except that Intermediary will retain its prior lien on the Accounts to secure payment for assets purchased for the Accounts and normal commissions and fees for the Accounts. Intermediary agrees not to consent to or effect or permit any margin or other borrowing against any Account excep t from Administrative Agent. Intermediary will not agree with any third party that Intermediary will comply with entitlement orders originated by the third party as to any Account.

6.           Account Activity.

(a)            Until Administrative Agent delivers to Intermediary a “Notice of Exclusive Control” (as defined below), and following Intermediary’s receipt of written instructions from Administrative Agent to rescind such Notice of Exclusive Control:

(i)           Valhi Holding will have full authority to exercise voting rights with respect to Account Assets;

(ii)           Valhi Holding may trade Account Assets within any Account; and

(iii)           Intermediary shall if Valhi Holding requests remit to Valhi Holding, and Valhi Holding may receive and retain, interest and regular cash dividends on Account Assets.

Notwithstanding the foregoing portion of this Section 6(a), Valhi Holding may not terminate or re-title any Account except as expressly set forth in Section 2(a).

(b)            Except with the prior consent of Administrative Agent, Intermediary will not comply with any entitlement order, request for withdrawal or other direction originated by Valhi Holding that would: (i) require Intermediary to make a free delivery of Account Assets to Valhi Holding or any other person; or (ii) result in a withdrawal or distribution from any Account except of interest and regular cash dividends.  Nothing in this Agreement shall, however, prohibit Intermediary from withdrawing from any Account, any fees to which Intermediary is entitled, any applicable commissions or any similar charges relating to the Account.

(c)           Administrative Agent may at any time give Intermediary a notice that Administrative Agent will exercise exclusive control over any Account (each, a “Notice of Exclusive Control”) in the form of Exhibit A or another form acceptable to Intermediary.  Upon receipt of a Notice of Exclusive Control, and until Administrative Agent shall have provided written instructions to Intermediar y to rescind such Notice of Exclusive Control:

SECURITIES ACCOUNT CONTROL AGREEMENT – PAGE 3

PLAINSCAPITAL BANK – CONTRAN CORPORATION

     (i)           Intermediary will stop: (A) complying with any exercise by Valhi Holding of voting rights with respect to any Account; (B) complying with trading instructions from Valhi Holding with respect to any Account, and (C) distributing to Valhi Holding interest and regular cash dividends on Account Assets; and

(ii)           Administrative Agent may exercise any and all trading, withdrawal, distribution, voting and other rights with respect to each Account.

7.           Account Information. Intermediary will send copies of statements for each Account simultaneously to the respective Valhi Holding and Administrative Agent, and will promptly provide Administrative Agent such other information concerning any Account as Administrative Agent may request. Intermediary will use reasonable efforts to notify Administrative Agent and the respective Valhi Holding promptly if any other person claims that it has a property or security interest in any Account.

8.           Intermediary Responsibility.

(a)           Except for permitting a withdrawal, delivery or payment in violation of this Agreement, Intermediary will not be liable to Administrative Agent for complying with entitlement orders from Valhi Holding that are received by Intermediary before Intermediary receives and has a reasonable opportunity to act on a Notice of Exclusive Control (which period shall not exceed TWO (2) business days). Intermediary will not be liable to Valhi Holding for complying with a Notice of Exclusive Control, entitlement order or other direction originated by Administrative Agent, even if Val hi Holding notifies Intermediary that Administrative Agent is not legally entitled to issue the entitlement order, Notice of Exclusive Control or other direction. Intermediary need not investigate whether Administrative Agent is entitled to give an entitlement order, Notice of Exclusive Control or other direction.

(b)           Intermediary shall not: (i) be deemed to have knowledge of an event that would entitle Administrative Agent to exercise exclusive control over any Account until the Intermediary has received a Notice of Exclusive Control; (ii) be responsible for the use that Valhi Holding or Administrative Agent makes of any withdrawn assets or funds; or (iii) be required to monitor the value of any Account.

(c)            Intermediary may disregard any and all notices or instructions received from any source except only such notices or instructions as are specifically provided for in this Agreement.  If Intermediary believes in good faith that any property held pursuant to this Agreement is subject to any order, judgment, decree, injunction, notice of levy or other request for transfer of funds from a tax authority,  or other judicial or administrative process (individually and collectively, a “Government Order”), Intermediar y may comply with any such Government Order without liability to any person, even though: (i) such Government Order may later be cancelled, released, reversed, modified, vacated or the like; and (ii) Intermediary has received a Notice of Exclusive Control.

(d)           Intermediary shall not be responsible for any losses incurred in, or tax or other consequences of, liquidating securities or other property to satisfy a distribution request hereunder, or in taking any other action permitted to Intermediary hereunder.

(e)           Intermediary shall be fully protected in relying without investigation upon any notice, demand, certificate or other document it in good faith believes to be genuine, as to the truth and accuracy of the statements made therein, the identity and authority of the persons executing the same and the validity of any signature thereon. Intermediary may consult inside or outside counsel of its own choosing regarding its duties in connection herewith, and reliance on the advice of such counsel shall fully protect Intermediary.

(f)            In addition to and not in limitation of the provisions of Section 9 below, Intermediary shall not be liable for any act taken or omitted by it under this Agreement in good faith and in the exercise of its own commercially reasonable judgment. Intermediary shall not be: (i) liable to any person for punitive, special, indirect or consequential damages of any kind, even if advised of the possibility thereof; or (ii) responsible for any delay in performance, or non-performance, of any obligation hereunder to the extent that the same is due to circumstances beyond its control or constituting force majeure at law or in equity, including equipment or communication malfunction.

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PLAINSCAPITAL BANK – CONTRAN CORPORATION

9.           INDEMNITY. TO INDUCE INTERMEDIARY TO ENTER INTO THIS AGREEMENT, VALHI HOLDING AGREES TO RELEASE AND HOLD HARMLESS INTERMEDIARY AND ITS OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS (COLLECTIVELY, THE “INTERMEDIARY PARTIES”), FROM AND AGAINST ANY CLAIMS, LOSSES, ARISING OUT OF OR RELATING IN ANY WAY TO ANY ACTUAL OR ALLEGED ACTION OR FAILURE TO ACT ON THE PART OF ANY INTERMEDIARY PARTY IN CONNECTION WITH THIS AGREEMENT.  VALHI HOLDING FURTHER AGREES TO INDEMNIFY THE INTERMEDIAR Y PARTIES AGAINST ALL CLAIMS, LOSSES, LIABILITIES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS), ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT, EXCEPT TO THE EXTENT SUCH ARE CAUSED BY INTERMEDIARY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  IN ADDITION, TO INDUCE INTERMEDIARY TO ENTER INTO THIS AGREEMENT, ADMINISTRATIVE AGENT AGREES TO INDEMNIFY THE INTERMEDIARY PARTIES AGAINST ALL CLAIMS, LOSSES, LIABILITIES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS) ARISING OUT OF ANY OF THEIR ACTUAL OR ALLEGED ACTIONS OR FAILURES TO ACT PURSUANT TO THIS AGREEMENT, EXCEPT TO THE EXTENT SUCH ARE CAUSED BY INTERMEDIARY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

10.           Termination. Administrative Agent may terminate this Agreement by notice to Intermediary and Valhi Holding. Intermediary may terminate this Agreement and close any Account on at least THIRTY (30) days’ prior notice to Administrative Agent and Valhi Holding, whereupon Intermediary shall transfer all assets in the Accounts to Administrative Agent or as Administrative Agent directs in writing. Sections 8 and 9 hereof entitled “Intermediary Responsibility” and “Indemnity” will survive any termination of this Agreement.  Until the Secured Obligations has been indefeasibly paid and fully satisfied (other than contingent indemnification obligations to the extent no unsatisfied claim has been asserted) and the commitments of Administrative Agent under the Credit Agreement have been terminated, Administrative Agent shall be entitled to retain the security interests in the Collateral granted under the Pledge Agreement and shall have the ability to exercise all rights and remedies available to Administrative Agent under the Credit Agreement and applicable laws.  Upon the indefeasible payment and full satisfaction of the Secured Obligations (other than contingent indemnification obligations to the extent no unsatisfied claim has been asserted) and the termination of the commitments of Administrative Agent under the Credit Agr eement, Administrative Agent shall, at the expense of Contran and within FIVE (5) business days, release its lien and security interest in the Collateral.

11.           Entire Agreement; This Prevails Over Account Agreement. This Agreement is the entire agreement, and supersedes any prior agreements and contemporaneous oral agreements, of the parties concerning its subject matter. No amendment hereto or waiver of a right hereunder will be binding unless it is in writing and signed by the party to be charged.  This Agreement shall prevail to the extent of any conflict or inconsistency over any account or other agreement between Intermediary and Valhi Holding pertaining to any Account.< /div>

12.           Notices. All notices, requests and demands to or upon the respective parties hereto shall be deemed to have been given or made TWO (2) business days after a record has been deposited in the mail, postage prepaid, or ONE (1) business day after a record has been deposited with a recognized overnight courier, charges prepaid or to be billed to the sender, or on the day of delivery if delivered manually with receipt acknowledged, in eac h case addressed or delivered to each party to its address set forth in the preamble hereto, or to such other address as may be hereafter designated in writing by the respective parties hereto by a notice in accord with this Section.

           13.           Miscellaneous. To the extent a provision hereof is unenforceable, this Agreement will be construed as if the unenforceable provision were omitted. This Agreement shall bind and inure to the benefit of  the parties and their respective heirs, trustees (including successor and replacement trustees), executors, personal representatives, successors and assigns, except that neither Valhi Holding nor Intermediary may transfer or assign any rights or obligations hereunder without the prior written consent of Administrative Agent. If there shall be more than one person or entity constituting Valhi Holding, each of them shall be primarily, jointly and severally liable for all obligations of Valhi Holding hereunder. This Agreement may be executed in TWO (2) or more counterparts, and  by each party on separate counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.

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PLAINSCAPITAL BANK – CONTRAN CORPORATION

14.           WAIVER OF JURY TRIAL. VALHI HOLDING, ADMINISTRATIVE AGENT AND INTERMEDIARY HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT THEY OR ANY OF THEM MAY HAVE TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG VALHI HOLDING, ADMINISTRATIVE AGENT AND/OR INTERMEDIARY ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY RELATED DOCUMENT, OR ANY RELATIONSHIP BETWEEN ADMINISTRATIVE AGENT, VALHI HOLDING, AND/OR INTERMEDIARY.  NO PARTY HERETO MAY SEEK OR RECOVER PUNITIVE DAMAGES IN ANY PROCEEDING BROUGHT UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED DOCUMENT.  THIS PROVISION IS A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT TO EXTEND CREDIT SUPPORTED BY THE ACCOUNT ASSETS.

NOTICE OF FINAL AGREEMENT

THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

SECURITIES ACCOUNT CONTROL AGREEMENT – PAGE 6

PLAINSCAPITAL BANK – CONTRAN CORPORATION

EXECUTED as of the date first written above.

VALHI HOLDING:

VALHI HOLDING COMPANY

By:                  /s/John A. St. Wrba

Name:            John A. St. Wrba

Title:              Vice President - Treasurer

INTERMEDIARY:

FIRST SOUTHWEST COMPANY

By:                 /s/Don Karas

Name:           Don Karas

Title:             Senior Vice President

ADMINISTRATIVE AGENT:

PLAINSCAPITAL BANK

By:                /s/Ronald C. Berg

Name:         Ronald C. Berg

Title:           President – Turtle Creek

AGREED AND CONSENTED to as of the date first written above.

CONTRAN CORPORATION

By:                  /s/John A. St. Wrba

Name:            John A. St. Wrba

Title:              Vice President - Treasurer

SECURITIES ACCOUNT CONTROL AGREEMENT – PAGE 7

PLAINSCAPITAL BANK – CONTRAN CORPORATION

EXHIBIT A

SAMPLE OF NOTICE OF EXCLUSIVE CONTROL

Date:           _________________

To:           INTERMEDIARY NAME] (“Intermediary”)

INTERMEDIARY ADDRESS AS PROVIDED IN CONTROL AGREEMENT]

Re: Account number _____________ owned by ______________________________(“Valhi Holding”) and pledged to PLAINSCAPITAL BANK (“Administrative Agent”)

Dear Sir or Madame:

This is to notify Intermediary that the above-referenced pledged securities account and all assets therein (“Account”) are now under the exclusive control of Administrative Agent. Intermediary is hereby instructed to stop: (A) complying with any exercise by Valhi Holding of voting or other rights with respect to the Account; (B) complying with trading instructions from Valhi Holding with respect to the Account, and (C) distributing to Valhi Holding interest and regular cash dividends on assets in the Account.  Administrative Agent warrants to Intermediary that this Notice of Exclusive Co ntrol is authorized.

Very truly yours,

PLAINSCAPITAL BANK

By:                _________________________________________

Name:           _________________________________________

Title:             _________________________________________

cc: Valhi Holding and Contran Corporation

SECURITIES ACCOUNT CONTROL AGREEMENT – PAGE 8

PLAINSCAPITAL BANK – CONTRAN CORPORATION

SCHEDULE 2(a)

ACCOUNTS

First Southwest Company Account No. 22316148

SECURITIES ACCOUNT CONTROL AGREEMENT – PAGE 9

PLAINSCAPITAL BANK – CONTRAN CORPORATION

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