From time to time, the registrant and companies related to the registrant may have loans or advances outstanding between them pursuant to term or demand notes. These loans or advances are generally entered into for cash management purposes, in which the lender is generally able to earn a higher rate of return on the loan than would have been earned if the lender invested the funds in other investments, and the borrower is able to pay a lower rate of interest than would be paid if the borrower had incurred third-party indebtedness. While certain of these loans may be of a lesser credit quality than cash equivalent instruments otherwise available to the lender, the lender will evaluate the credit risks involved and appropriately reflect the credit risks in the terms of the applicable loan.

In this regard, on October 29, 2008, the independent members of the board of directors of the registrant approved the terms of a loan (the "Valhi Loan") from the registrant to Valhi, Inc., a parent corporation of the registrant ("Valhi"), in amounts up to $40 million pursuant to a form of a revolving demand promissory note. The Valhi Loan was subject to the approval by Valhi. On November 5, 2008, the independent members of Valhi's board of directors approved the Valhi Loan, and Valhi then executed the revolving demand promissory note documenting the Valhi Loan. Borrowings by Valhi from the registrant under the Valhi Loan are unsecured, generally bear interest at the prime rate minus 1.5% with interest payable quarterly and all principal and interest due on demand (and no later than December 31, 2009). The registrant's obligation to loan money to Valhi under Valhi Loan is solely at the discretion of the registrant. It is the registrant's understanding that Valhi currently intends to use any borrowings under the Valhi Loan to reduce the outstanding balance under its U.S. revolving bank credit facility.

This description of the Valhi Loan is qualified in its entirety by the complete terms of the Valhi Loan that is filed as Exhibit 10.1 to this current report and incorporated herein by reference.

Item 9.01           Financial Statements and Exhibits.

(d)  Exhibits

      Item No.                        Description

     10.1*           Unsecured Revolving Demand Promissory Note
                     dated November 5, 2008 in the original
                     principal amount of $40.0 million executed by
                     Valhi, Inc. and payable to the order of NL
                     Industries, Inc.

* Filed herewith