INTERCORPORATE SERVICES AGREEMENT


     This INTERCORPORATE  SERVICES AGREEMENT (the "Agreement"),  effective as of
January 1, 2002,  amends and  supersedes  that certain  Intercorporate  Services
Agreement effective as of January 1, 2001 by and between CONTRAN CORPORATION,  a
Delaware  corporation  ("Contran"),  and VALHI,  INC.,  a  Delaware  corporation
("Recipient").

                                    Recitals

     A. Without  direct  compensation  from  Recipient,  employees and agents of
Contran  and  affiliates  of  Contran  perform  (i)  management,  financial  and
administrative  functions  for  Recipient  and (ii) pilot  services and aircraft
management  functions  with  respect  to  certain  aircraft  owned or  leased by
Recipient.

     B. Recipient does not separately  maintain the full internal  capability to
perform all necessary  management,  financial and administrative  functions that
Recipient requires.

     C. The cost of maintaining the additional  personnel by Recipient necessary
to perform the functions provided for by this Agreement would exceed the fee set
forth in Section 3 of this  Agreement,  and the terms of this  Agreement  are no
less favorable to Recipient than could  otherwise be obtained from a third party
for comparable services.

     D. Recipient desires to continue  receiving the services presently provided
by Contran  and  affiliates  of Contran  and  Contran is willing to  continue to
provide such services under the terms of this Agreement.

                                    Agreement

     For  and in  consideration  of the  mutual  premises,  representations  and
covenants herein contained, the parties hereto mutually agree as follows:

     Section 1.  Services to be Provided.  Contran  agrees to make  available to
Recipient,  upon request, the following services (the "Services") to be rendered
by the internal staff of Contran and affiliates of Contran:

          (a) Consultation and assistance in the development and  implementation
     of Recipient's corporate business strategies, plans and objectives;

          (b) Consultation and assistance in management and conduct of corporate
     affairs and corporate governance  consistent with the charter and bylaws of
     Recipient;

          (c)  Consultation  and assistance in maintenance of financial  records
     and  controls,  including  preparation  and  review of  periodic  financial
     statements and reports to be filed with public and regulatory  entities and
     those  required to be prepared for  financial  institutions  or pursuant to
     indentures and credit agreements;

          (d)  Consultation  and assistance in cash  management and in arranging
     financing necessary to implement the business plans of Recipient;

          (e) Consultation and assistance in tax management and  administration,
     including,  without limitation,  preparation and filing of tax returns, tax
     reporting, examinations by government authorities and tax planning;

          (f) Consultation and assistance with respect to employee benefit plans
     and incentive compensation arrangements;

          (g) Pilot services and aircraft  management  functions with respect to
     aircraft owned or leased by Recipient;

          (h) Certain  administration  and  management  services with respect to
     Recipient's  insurance  and  risk  management  needs,  including,   without
     limitations, administration of Recipient's:

               (i) property and casualty insurance program,

               (ii) claims management program,

               (iii) property loss control program, and

          (i) Such other  services as may be requested by Recipient from time to
     time.

     This Agreement  does not apply to, and the Services  provided for herein do
not include, any services that Harold C. Simmons,  Glenn R. Simmons or Steven L.
Watson may provide to Recipient in their roles as members of  Recipient's  board
of directors or any other activity related to such board of directors.

     Section 2. Miscellaneous  Services.  It is the intent of the parties hereto
that Contran provide only the Services requested by Recipient in connection with
routine  functions  related to the ongoing  operations of Recipient and not with
respect to special projects,  including corporate investments,  acquisitions and
divestitures.  The parties  hereto  contemplate  that the  Services  rendered in
connection with the conduct of Recipient's  business will be on a scale compared
to that existing on the effective date of this Agreement,  adjusted for internal
corporate  growth or contraction,  but not for major  corporate  acquisitions or
divestitures,  and  that  adjustments  may be  required  to the  terms  of  this
Agreement in the event of such major  corporate  acquisitions,  divestitures  or
special  projects.  Recipient will continue to bear all other costs required for
outside  services  including,  but not  limited  to,  the  outside  services  of
attorneys, auditors, trustees, consultants,  transfer agents and registrars, and
it is expressly understood that Contran assumes no liability for any expenses or
services  other than those  stated in Section 1. In  addition to the fee paid to
Contran by  Recipient  for the  Services  provided  pursuant to this  Agreement,
Recipient  will pay to Contran  the amount of  out-of-pocket  costs  incurred by
Contran in rendering such Services.

     Section 3. Fee for Services.  Recipient agrees to pay to Contran $1,044,750
quarterly on the first business day of each quarter, commencing as of January 1,
2002, pursuant to this Agreement.

     Section 4. Original  Term.  Subject to the  provisions of Section 5 hereof,
the original  term of this  Agreement  shall be from January 1, 2002 to December
31, 2002.

     Section  5.   Extensions.   This   Agreement   shall  be   extended   on  a
quarter-to-quarter  basis  after the  expiration  of its  original  term  unless
written  notification  is given by  Contran  or  Recipient  thirty  (30) days in
advance of the first day of each  successive  quarter or unless it is superseded
by a subsequent written agreement of the parties hereto.

     Section 6.  Limitation of Liability.  In providing its Services  hereunder,
Contran  shall  have a duty  to act,  and to  cause  its  agents  to  act,  in a
reasonably  prudent  manner,  but  neither  Contran nor any  officer,  director,
employee or agent of Contran or its affiliates  shall be liable to Recipient for
any error of judgment or mistake of law or for any loss incurred by Recipient in
connection  with the  matter  to which  this  Agreement  relates,  except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
Contran.

     Section  7.  Indemnification  of  Contran  by  Recipient.  Recipient  shall
indemnify  and hold  harmless  Contran,  its  affiliates  and  their  respective
officers,  directors  and  employees  from  and  against  any  and  all  losses,
liabilities,  claims, damages, costs and expenses (including attorneys' fees and
other  expenses of  litigation)  to which  Contran or any such person may become
subject  arising  out of the  Services  provided  by  Contran  to the  Recipient
hereunder, provided that such indemnity shall not protect any person against any
liability to which such person  would  otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence on the part of such person.

     Section 8. Confidentiality. Except as otherwise required by applicable law,
each of the parties agrees that it will maintain in confidence all  confidential
information  regarding  the  other  party  supplied  to it in the  course of the
performance of this Agreement.

     Section 9.  Further  Assurances.  Each of the parties  will make,  execute,
acknowledge and deliver such other instruments and documents,  and take all such
other actions,  as the other party may reasonably  request and as may reasonably
be required in order to effectuate  the purposes of this  Agreement and to carry
out the terms hereof.

     Section 10. Notices.  All communications  hereunder shall be in writing and
shall be addressed,  if intended for Contran,  to Three Lincoln Centre, 5430 LBJ
Freeway, Suite 1700, Dallas, Texas 75240,  Attention:  Chairman of the Board, or
such other  address as it shall have  furnished to Recipient in writing,  and if
intended for Recipient,  to Three Lincoln Centre, 5430 LBJ Freeway,  Suite 1700,
Dallas, Texas 75240, Attention: President or such other address as it shall have
furnished to Contran in writing.

     Section 11. Amendment and Modification. Neither this Agreement nor any term
hereof may be changed, waived,  discharged or terminated other than by agreement
in writing signed by the parties hereto.

     Section 12. Successor and Assigns. This Agreement shall be binding upon and
inure to the benefit of Contran and  Recipient and their  respective  successors
and  assigns,  except  that  neither  party may  assign  its  rights  under this
Agreement without the prior written consent of the other party.

     Section  13.  Governing  Law.  This  Agreement  shall be  governed  by, and
construed and interpreted in accordance with, the laws of the state of Texas.

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


                                    CONTRAN CORPORATION




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


                                   VALHI, INC.




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