PLEDGE AGREEMENT
        For the Benefit of the Contran Deferred Compensation Trust No. 2


     This  Pledge  Agreement  (this  "Agreement")  is made as of January 1, 2004
between  Contran  Corporation,  a Delaware  corporation  ("Contran"),  and Valhi
Group, Inc., a Nevada corporation and a subsidiary of Contran ("VGI").

                                    Recitals

     A. Contran and Harold C. Simmons,  the chairman of the board of Contran and
a resident of Dallas, Texas ("Simmons"),  have entered into that certain Amended
and  Restated  1984  Deferred  Compensation  Agreement  as of  January  1,  2004
(Originally  Established  October 31, 1984) (along with any further  amendments,
the "Deferred  Compensation  Agreement").  Pursuant to the Deferred Compensation
Agreement,  Contran has an  obligation  to pay Simmons  upon the  occurrence  of
certain events (a "Payout Event") the value of Simmons's  deferred  compensation
account established by the Deferred  Compensation  Agreement,  less the value of
assets concurrently distributed to him at the time by the trustee of the Amended
and Restated  Contran  Deferred  Compensation  Trust No. 2 as of January 1, 2004
(the "CDCT No. 2").

     B. Contran  desires to fund further its  obligations  to Simmons  under the
Deferred  Compensation  Agreement by  contributing to the CDCT No. 2 3.3 million
shares (the "Shares") of the common stock,  par value $0.01 per share, of Valhi,
Inc., a Delaware corporation ("Valhi"), that VGI holds.

     C. To permit Contran to fund its  obligations to Simmons under the Deferred
Compensation Agreement, VGI has agreed to pledge the Shares to the CDCT No. 2 in
consideration of a collateral fee and an indemnity from Contran.

                                    Agreement

     In  consideration  of the mutual  premises,  representations  and covenants
herein contained, the parties hereto mutually agree as follows.

     Section 1. The Pledge. VGI agrees to secure Contran's obligations under the
Deferred  Compensation  Agreement  by  granting  to the CDCT  No.  2 a  security
interest in the Shares and delivering to the CDCT No. 2 stock  certificates  for
the Shares with applicable  stock powers duly executed in blank by VGI, all in a
form  reasonably  satisfactory  to the CDCT No. 2. VGI warrants that the Shares,
when delivered to the CDCT No. 2 will be free and clear of all liens, claims and
encumbrances  whatsoever,  except for such liens, claims and encumbrances on the
Shares created by this  Agreement.  The CDCT No. 2 may at any time following the
occurrence and during the continuation of a Payout Event cause any or all of the
Shares  to be  transferred  of  record  into  the  name of the CDCT No. 2 or its
nominee and  exercise any and all rights of a secured  party  holding a security
interest in the Shares under the uniform  commercial code. Prior to the transfer
of record of a Share to the CDCT No. 2 upon a Payout Event, VGI shall retain all
rights to vote the Share and receive dividends on the Share.

     Section 2. The Pledge  Fee.  As  consideration  for  pledging  the  Shares,
Contran  shall pay to VGI on March 31, June 30,  September 30 and December 31 of
each year (if a business day, and if not, on the next successive business day as
if made as of the end of such  calendar  quarter)  a fee  equal to 0.125% of the
value of the Shares  based on the  closing  sales  price per share for shares of
Valhi common stock on the second to last day of such  calendar  quarter on which
such  shares  traded as  reported  by the New York Stock  Exchange or such other
principal  exchange or other  market  quotation  system on which such shares may
then trade.  Upon the termination of this Agreement,  if the termination date is
not as of the end of a calendar  quarter,  Contran shall pay on the  termination
date to VGI a pro rated fee based on the portion of the  calendar  quarter  that
the Shares were pledged and the closing sales price of Valhi common stock on the
second to last day on which such shares traded prior to the termination  date as
reported  by the New York Stock  Exchange  or such other  principal  exchange or
other market quotation system on which such shares may then trade.

     Section 3.  Indemnity.  Contran agrees to indemnify VGI against any loss or
incremental cost resulting from the pledge of the Shares to the CDCT No. 2 under
this  Agreement  or the  transfer  of the Shares to the CDCT No. 2 upon a Payout
Event.

     Section 4. Termination. Either party hereto may terminate this Agreement by
giving the other party thirty days advance  written notice of such  termination.
On the  termination  date of this  Agreement,  Contran  shall  return  the stock
certificates  representing  the Shares to VGI and the related  stock powers that
VGI originally tendered to Contran under this Agreement.

     Section  5.  Applicable  Law.  This  Agreement  shall  be  governed  by and
construed in accordance  with the domestic  laws of the state of Texas,  without
giving effect to any choice of law or conflict of law provision or rule (whether
of  the  state  of  Texas  or any  other  jurisdiction)  that  would  cause  the
application of the laws of any jurisdiction other than the state of Texas.

     Executed as of the date first above written.


                               CONTRAN CORPORATION



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


                               VALHI GROUP, INC.



                               By: /s/Bobby D. O'Brien
                                   -----------------------
                                   Bobby D. O'Brien, Vice President