EXHIBIT 10.3

                      INTERCORPORATE SERVICES AGREEMENT

      This INTERCORPORATE SERVICES AGREEMENT (the "Agreement"),  effective as of
January 1, 1997,  amends and  supersedes  that certain  Intercorporate  Services
Agreement effective as of January 1, 1996 by and between VALHI, INC., a Delaware
corporation ("Valhi"), and NL INDUSTRIES, INC., a New Jersey corporation ("NL").

                                   Recitals

      A. NL desires to have the services of certain Valhi personnel and Valhi is
willing to provide such services under the terms of this Agreement.

      B. Valhi  desires to have the services of certain NL  personnel  and NL is
willing to provide such services under the terms of this Agreement.

      C. The costs of maintaining the additional  personnel necessary to perform
the functions  provided for by this Agreement would exceed the amount charged to
such  party  that is  contained  in the net fee set  forth in  Section 4 of this
Agreement  and that the terms of this  Agreement  are no less  favorable to each
party  than  could  otherwise  be  obtained  from a third  party for  comparable
services.

      D. Each  party  desires  to  continue  receiving  the  services  presently
provided  by the other  party and its  affiliates  and each  party 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  contained  in  this  Agreement,  and  for  other  good  and  valuable
consideration,  the receipt and sufficiency of which is hereby acknowledged, the
parties hereto mutually agree as follows:

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

            (a)   Consultation   and   assistance   in   the   development   and
      implementation   of  NL'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 NL;

            (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;


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

            (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; and

            (f) Such other services as may be requested by NL from time to time.

      Section 2. NL  Services to be  Provided.  NL agrees to make  available  to
Valhi, upon request, the following services (the "NL Services," and collectively
with the Valhi Services, the "Services") to be rendered by the internal staff of
NL:

            (a) The services of Joseph S.  Compofelice  to act as Executive Vice
      President of Valhi,  which Valhi and NL agree shall involve  substantially
      such  time as has  been  allocated  in the  past  and is  currently  being
      devoted;

            (b) The  services of NL's  internal  audit  personnel  in  providing
      consultation  and  assistance in  performing  internal  audit  projects as
      requested from time to time; and

            (c) certain  administration and management  services with respect to
      Valhi's   insurance  and  risk  management   needs,   including,   without
      limitations, administration of Valhi's:

                  (i)   property and casualty insurance program,
                  (ii)  claims management program,
                  (iii) property loss control program, and

            (d) Such other  services as may be  requested  by Valhi from time to
      time.

      Section 3. Miscellaneous  Services. It is the intent of the parties hereto
that each  party to this  Agreement  provide  (a  "Providing  Party")  only such
Services as are requested by the other party (a "Receiving Party") in connection
with routine management,  financial and administrative  functions related to the
ongoing  operations  of the  Receiving  Party and not with  respect  to  special
projects,  including corporate investments,  acquisitions and divestitures.  The
parties hereto  contemplate  that the Services  rendered by a Providing Party in
connection  with the conduct of each  Receiving  Party'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. Each Receiving Party 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 each Providing Party assumes
no  liability  for any  expenses  or  services  other than those  stated in this
Agreement to be provided by such party.  In addition to the amounts charged to a
Receiving Party for Services provided pursuant to this Agreement, such Receiving
Party will pay the Providing Party the amount of out-of-pocket costs incurred by
the Providing Party in rendering such Services.


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      Section 4. Net Fee for  Services.  Valhi  agrees to pay to NL a net annual
fee of $138,000 payable in quarterly installments of $34,500 each, commencing as
of January 1, 1997,  pursuant to this  Agreement,  which net annual fee includes
reimbursements  of $20,000 for certain  insurance and risk  management  services
provided by NL to Valhi in 1996. In addition to the net annual fee:

            (a) Valhi shall pay to NL an additional amount equal to the sum of:

                  (i) the product of (x) $600, (y) the number of days devoted by
            NL's  internal  auditors  to  providing  NL  Services  described  in
            Subsection  2(b) and (z) the number of internal  auditors  providing
            such NL Services; and

                  (ii)  all related out-of-pocket expenses;

            (b)  Valhi  shall  pay to NL  additional  amounts  plus all  related
      out-of-pocket  costs, all as agreed to by the parties, for all NL Services
      provided under Subsection 2(d); and

            (c) NL shall  credit  or pay to Valhi  additional  amounts  plus all
      related  out-of-pocket  costs,  all as agreed to by the  parties,  for all
      Valhi Services provided under Subsection 1(f).

      Section 5. Original  Term.  Subject to the provisions of Section 6 hereof,
the original  term of this  Agreement  shall be from January 1, 1997 to December
31, 1997.

      Section  6.   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 Valhi or NL 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 7. Limitation of Liability. In providing Services hereunder,  each
Providing  Party shall have a duty to act,  and to cause its agents to act, in a
reasonably  prudent manner,  but no Providing  Party nor any officer,  director,
employee  or agent of such  party  nor or its  affiliates  shall be  liable to a
Receiving  Party for any error of  judgment  or  mistake  of law or for any loss
incurred  by the  Receiving  Party 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 the Providing Party.

      Section 8. Indemnification.  Each Receiving Party shall indemnify and hold
harmless the Providing  Party,  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 such Providing Party may become subject arising
out of the Services  provided by such  Providing  Party to the  Receiving  Party
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.


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      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 Valhi,  to Three Lincoln  Centre,  5430 LBJ
Freeway, Suite 1700, Dallas, Texas 75240,  Attention:  President,  or such other
address as it shall have furnished to NL in writing,  and if intended for NL, to
Two Greenspoint Plaza, 16825 Northchase Drive, Suite 1200, Houston, Texas 77060,
Attention:  President, or such other address as it shall have furnished to Valhi
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 Valhi and NL 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.

                                       VALHI, INC.


                                       By: _____________________________________
                                           Steven L. Watson
                                           Vice President

                                       NL INDUSTRIES, INC.


                                       By: _____________________________________
                                           J. Landis Martin
                                           President and Chief Executive Officer



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