ESCROW AGREEMENT

          This Escrow Agreement ("Agreement") is made as of October 19,
1997 by and among MAXXAM INC., a Delaware corporation ("MAXXAM"), THE
COMBINED MASTER RETIREMENT TRUST, a trust organized under the laws of Texas
(the "CMRT"), NL INDUSTRIES, INC., a New Jersey corporation ("NL"), and
FIRST TRUST NATIONAL ASSOCIATION, as escrow agent (the "Escrow Agent").

                                  RECITAL

          MAXXAM, the CMRT, and NL are parties to a Stock Purchase
Agreement, dated October 19, 1997 (the "Stock Purchase Agreement"),
pursuant to which the CMRT and NL severally have sold to MAXXAM, and MAXXAM
has purchased, the MAXXAM Shares held severally by the CMRT and NL, on the
terms and subject to the conditions set forth in the Stock Purchase
Agreement. Capitalized terms used but not otherwise defined herein shall
have the respective meanings given such terms in the Stock Purchase
Agreement.

                                 AGREEMENT

          In consideration of the premises and the respective mutual
agreements, covenants, representations and warranties herein contained, the
parties hereto agree as follows:

     1.   Appointment of Escrow Agent.  MAXXAM, the CMRT, and NL hereby
designate and appoint the Escrow Agent to serve in accordance with the
terms and conditions of this Agreement, and the Escrow Agent hereby agrees
to act as such, upon the terms and conditions provided in this Agreement.

     2.   Escrow.

          a.   Escrow Deposit by the CMRT.  Concurrently with the execution
and delivery of this Agreement, the CMRT hereby delivers or causes to be
delivered to the Escrow Agent for the benefit of MAXXAM in accordance with
the terms of the Stock Purchase Agreement one or more certificates
evidencing the MAXXAM Shares held by the CMRT accompanied by appropriate
instruments of transfer duly endorsed transferring such MAXXAM Shares to
MAXXAM (the "CMRT Escrow Deposit", which term shall include adjustments for
stock splits, stock dividends, and similar events), and a Pledge and
Custody Agreement in the form annexed as Exhibit C to the Stock Purchase
Agreement executed by the CMRT and certain other parties (the "CMRT Pledge
and Custody Agreement").

          b.   Escrow Deposit by NL.  Concurrently with the execution and
delivery of this Agreement, NL hereby delivers or causes to be delivered to
the Escrow Agent for the benefit of MAXXAM in accordance with the terms of
the Stock Purchase Agreement one or more certificates evidencing the MAXXAM
Shares held by NL accompanied by appropriate instruments of transfer duly
endorsed transferring such MAXXAM Shares to MAXXAM (the "NL Escrow
Deposit", which term shall include adjustments for stock splits, stock
dividends, and similar events), and a Pledge and Custody Agreement in the
form annexed as Exhibit C to the Stock Purchase Agreement executed by NL
and certain other parties (the "NL Pledge and Custody Agreement").

          c.   Escrow Deposits by MAXXAM.  Concurrently with the execution
and delivery of this Agreement, MAXXAM hereby delivers to the Escrow Agent
(1) for the benefit of the CMRT in accordance with the terms of the Stock
Purchase Agreement cash by way of wire transfer in the amount of
$28,249,375 (the "CMRT Cash Deposit"), a promissory note payable to the
order of the CMRT in the original principal amount of $28,249,375 (the
"CMRT Promissory Note"), the CMRT Pledge and Custody Agreement executed by
MAXXAM and an appropriate instrument of transfer duly endorsed by MAXXAM 
sufficient to transfer such MAXXAM Shares to the CMRT (collectively, the
"MAXXAM/CMRT Escrow Deposit"), and (2) for the benefit of NL in accordance
with the terms of the Stock Purchase Agreement cash by way of wire transfer
in the amount of $6,875,000 (the "NL Cash Deposit"), a promissory note
payable to the order of NL in the original principal amount of $6,875,000
(the "NL Promissory Note"), the NL Pledge and Custody Agreement executed by
MAXXAM and an appropriate instrument of transfer duly endorsed by MAXXAM
sufficient to transfer such MAXXAM Shares to NL (collectively, the
"MAXXAM/NL Escrow Deposit" and, together with the MAXXAM/CMRT Escrow
Deposit, the "MAXXAM Deposit").  The promissory notes referred to in
clauses (1) and (2) of this Section 2(c) (the "Notes") and the Pledge and
Custody Agreements delivered to the Escrow Agent pursuant to the foregoing
sentence have been executed by the applicable parties and dated as of the
date of this Agreement.

          d.   Investment of Cash by Escrow Agent.  The Escrow Agent shall
invest and reinvest the cash referred to in Sections 2(c)(1) and 2(c)(2),
together with any interest on the Notes received by the Escrow Agent
pursuant to the terms of such Notes, in each case as MAXXAM directs from
time to time by written notice to the Escrow Agent; provided, however, that
such investments and reinvestments shall be limited to:

               (i)  time deposits, certificates of deposit and acceptances,
not to exceed $5 million with any one institution, maturing within ninety
(90) days from the date of acquisition thereof, issued by banks or non-bank
brokerage firms located in the United States of America, including the
Escrow Agent or any of its affiliates, and having capital, surplus and
undivided profits of at least five hundred million dollars ($500,000,000);

               (ii) short term obligations of, or guaranteed by, the United
States of America or any state or agency thereof;

               (iii) commercial paper rated A-1 by Standard & Poors or P-1
by Moody's Investors Service;

               (iv) repurchase agreements fully collateralized by
obligations described in clauses (d)(i), (d)(ii) or (d)(iii) hereof; or

               (v)  shares of investment companies (such as money market
funds) registered under the Investment Company Act of 1940 which invest
primarily in any obligations described under (d)(i), (ii) or (iii) above,
including those for which the Escrow Agent or any of its affiliates provide
services for a fee, whether as an investment advisor, custodian, transfer
agent, registrar, sponsor, distributor, manager or otherwise.

          In the absence of any directions from MAXXAM, the Escrow Agent
shall invest and reinvest such cash in First American Fund - Government
Obligations.

          e.   Net Earnings.  All earnings or other income received from
the investments and reinvestments provided in Section 2(d), less losses and
commissions, if any, incurred on or in making such investments and
reinvestments (such net amount being herein referred to as "Net Earnings"),
shall become part of the MAXXAM/CMRT Escrow Deposit or the MAXXAM/NL Escrow
Deposit, as the case may be, and shall be disbursed as part of the
MAXXAM/CMRT Escrow Deposit and the MAXXAM/NL Escrow Deposit in accordance
with Section 2(i) hereof.  Without limiting the foregoing, the Escrow Agent
will not make any payment or distribution of the Net Earnings or the Escrow
Deposits referred to in Section 2(a), Section 2(b) and Section 2(c), above,
(collectively referred to as the "Escrow Deposits"), except as and in the
manner expressly provided by this Agreement.  Each party to this Agreement
other than the Escrow Agent has provided a taxpayer identification number
to the Escrow Agent on the signature page to this Agreement.

          f.   Right to Escrow Deposits.  Until the Escrow Deposits are
released from the escrow provided herein, the Escrow Agent shall be in sole
possession of the Escrow Deposits and will not act or be deemed to act as
custodian for any party for purposes of perfecting a security interest
therein.

          g.   Cash Payments from Escrow.  Any distribution of cash to be
made by the Escrow Agent pursuant to this Agreement shall be made by wire
transfer (upon receipt of written wire transfer instructions of the
recipient).

          h.   Status of the Escrow Deposits.  It is the intent of MAXXAM,
the CMRT, and NL that each of their respective interests in the Escrow
Deposits is merely a contingent right to receipt of the Escrow Deposits,
and that neither a voluntary or involuntary case under any applicable
bankruptcy, insolvency or similar law nor the appointment of a receiver,
trustee, custodian or similar official in respect of MAXXAM, the CMRT or NL
(any of which is referred to herein as a "Bankruptcy Event") shall increase
its respective interest in the Escrow Deposits or affect, modify, convert
or otherwise change the contingent nature of its respective right to
receipt of the Escrow Deposits in accordance with the terms of this
Agreement.

          i.   Procedures for Release of Escrow Deposits.  The Escrow
Deposits shall be held and disposed of only as follows:

               A.   Subject to Section 2(i)(B), the Escrow Agent, upon
written notice by MAXXAM, the CMRT and NL shall (i) release to MAXXAM the
CMRT Escrow Deposit and the NL Escrow Deposit from the escrow provided for
pursuant to this Agreement and retain the CMRT Escrow Deposit and the NL
Escrow Deposit, as custodian, pursuant to the terms of the CMRT Pledge and
Custody Agreement and the NL Pledge and Custody Agreement, as the case may
be, (ii) release from the escrow provided for pursuant to this Agreement
and deliver to the CMRT the CMRT Cash Deposit and any payments of interest
which have been delivered to the Escrow Agent in respect of the CMRT
Promissory Note (together with all Net Earnings on such deposits and
payments), (iii) release from the escrow provided for pursuant to this
Agreement and deliver to NL the NL Cash Deposit and any payments of
interest which have been delivered to the Escrow Agent in respect of the NL
Promissory Note (together with all Net Earnings on such deposits and
payments), (iv) release to the CMRT from the escrow provided for pursuant
to this Agreement and retain, as custodian, the CMRT Promissory Note, the
CMRT Pledge and Custody Agreement and an appropriate instrument of transfer
duly endorsed by MAXXAM  sufficient to transfer such MAXXAM Shares to the
CMRT, pursuant to the terms of the CMRT Pledge and Custody Agreement, (v)
release to NL from the escrow provided for pursuant to this Agreement and
retain, as custodian, the NL Promissory Note, the NL Pledge and Custody
Agreement and an appropriate instrument of transfer duly endorsed by MAXXAM 
sufficient to transfer such MAXXAM Shares to NL, pursuant to the terms of
the NL Pledge and Custody Agreement, and (vi) promptly cause the transfer
agent for the MAXXAM Shares to issue certificates evidencing MAXXAM's
ownership of the MAXXAM Shares and to record in the transfer agent's
customary fashion on the certificates and/or in the stockholders' list or
similar share registry for the Common Stock of MAXXAM the interest of NL
under the NL Pledge and Custody Agreement and the interest of the CMRT
under the CMRT Pledge and Custody Agreement, and upon such issuance to hold
such certificates, respectively, for the benefit of NL as secured party
under the NL Pledge and Custody Agreement and the for the benefit of the
CMRT as secured party under the CMRT Pledge and Custody Agreement.

MAXXAM, the CMRT and NL shall be obligated to give such written notice as
provided in this Section 2(i)(A) (the "Escrow Release Notice") within three
business days after the occurrence of both of the following events: (A) the
conclusion of a hearing, following notice to the stockholders of MAXXAM
(the "Hearing"), on the defendants' motion to dismiss NL and CMRT from
Consolidated Civil Action Nos. 12111 and 12353 (the "Consolidated Action")
pending in the Court of Chancery, in and for New Castle County, Delaware
(the "Court"), and (B) the entry by the Court of an order (the "Order"), in
response to a motion to dismiss the CMRT and NL from the Consolidated
Action, determining (the "Determination") that no part of the consideration
for the sale of the MAXXAM Shares contemplated by the Stock Purchase
Agreement constitutes consideration for settlement of the claims (the
"Claims") that are the subject of the Consolidated Action.  The parties
(other than the Escrow Agent) agree to recommend to the Court the entry of
the Order and the making of the Determination.  The parties (other than the
Escrow Agent) acknowledge that an agreement in principle to settle the
Claims has been reached; however, release of the Escrow Deposits shall not
be subject to approval of any such settlement as may be presented to the
Court. Upon the release of the CMRT Escrow Deposit, the NL Escrow Deposit,
the MAXXAM/CMRT Escrow Deposit and the MAXXAM/NL Escrow Deposit as provided
in this Section 2(i)(A) (the "Escrow Release Date"), the closing of the
purchase and the sale of the MAXXAM Shares shall be deemed to have occurred
as contemplated by Section 1.2 of the Stock Purchase Agreement.

               B.   If the Court (i) has not signed the Order within 150
days after the date of the Stock Purchase Agreement or such later date as
the parties may mutually agree ("Release Deadline Date"), or (ii) has made
a ruling rejecting the Determination or has declined to make the
Determination, and such decision is final and not subject to further
consideration by the Court (the "Declination Date"), then the Escrow Agent
shall, upon written notice from MAXXAM, the CMRT and NL, (a) release from
the escrow provided for pursuant to this Agreement and deliver to MAXXAM
the MAXXAM Deposit and any payments of interest which have been delivered
to the Escrow Agent in respect of the CMRT Promissory Note and/or the NL
Promissory Note (along with all Net Earnings on such deposits and
payments), (b) release from the escrow provided for pursuant to this
Agreement and deliver to the CMRT the CMRT Escrow Deposit and the CMRT
Pledge and Custody Agreement, and (c) release from the escrow provided for
pursuant to this Agreement and deliver to NL the NL Escrow Deposit and the
NL Pledge and Custody Agreement.  MAXXAM, the CMRT and NL shall be
obligated to give such notice within three business days after the
occurrence of the Release Deadline Date or the Declination Date, as the
case may be, whichever occurs earlier.

               C.   If at any time (a) MAXXAM and the CMRT shall instruct
the Escrow Agent to release the MAXXAM/CMRT Escrow Deposit and the CMRT
Escrow Deposit, or any portion of any of such Escrow Deposits, or (b)
MAXXAM and NL shall instruct the Escrow Agent to release the  MAXXAM/NL
Escrow Deposit and the NL Escrow Deposit, or any portion of any of such
Escrow Deposits, then the Escrow Agent shall promptly release such Escrow
Deposits (or any portion thereof) in accordance with such instructions. 

     3.   Protection of Escrow Agent. The parties agree that:

          a.   Escrow Agent's duties and responsibilities as escrow agent
in connection with this Agreement shall be purely ministerial and shall be
limited to those expressly set forth in this Agreement.  Escrow Agent is
not a principal, participant or beneficiary in any transaction underlying
this Agreement and shall have no duty to inquire beyond the terms and
provisions hereof.  Escrow Agent shall have no responsibility or obligation
of any kind in connection with this Agreement or the Escrow Deposits, other
than to receive, hold, invest, reinvest and deliver the Escrow Deposits as
herein provided.  Without limiting the generality of the forgoing, it is
hereby expressly agreed and stipulated by the parties hereto that Escrow
Agent shall not be required to exercise any discretion hereunder and shall
have no investment or management responsibility and, accordingly, shall
have no duty to or liability for its failure to provide investment
recommendations or investment advice to any of the other parties to this
Agreement.  Escrow Agent shall not be liable for any error in judgment, any
act or omission, any mistake of law or fact, or for anything it may do or
refrain from doing in connection herewith, except for, subject to paragraph
d. hereinbelow, its own willful misconduct or gross negligence (it being
understood that gross negligence shall include loss (other than investment
loss) by Escrow Agent of all or any part of the items escrowed pursuant to
this Agreement or failure to follow any investment or other instructions of
any of the other parties hereto provided herein).  It is the intention of
the parties hereto that Escrow Agent shall never be required to use,
advance or risk its own funds or otherwise incur financial liability in the
performance of any of its duties or the exercise of any of its rights and
powers hereunder;

          b.   the Escrow Agent makes no representation as to the validity,
value, genuineness or collectibility of any document or instrument held by
or delivered to it;

          c.   the Escrow Agent shall not be called upon to advise any
party as to taking or refraining from taking any action with respect to any
property deposited hereunder;

          d.   Escrow Agent may rely on, and shall not be liable for acting
or refraining from acting upon, any written notice, instruction or request
or other paper furnished to it hereunder or pursuant hereto and reasonably
believed by it to have been signed or presented by the proper party or
parties.  Escrow Agent shall be responsible for holding, investing,
reinvesting and disbursing the Escrow Deposits pursuant to this Agreement;
provided, however, that in no event shall Escrow Agent be liable for any
lost profits, lost savings or other special, exemplary, consequential or
incidental damages in excess of Escrow Agent's fee hereunder (except those
arising from its own willful misconduct or gross negligence) and provided,
further, that Escrow Agent shall have no liability for any loss arising
from any cause beyond its control including, but not limited to, the
following: (a) acts of God, force majeure, including, without limitation,
war (whether or not declared or existing), revolution, insurrection, riot,
civil commotion, accident, fire explosion, stoppage of labor, strikes and
other differences with employees; (b) the act, failure or neglect of any
other party to this Agreement; (c) any delay, error, omission or default of
any mail, courier, telegraph, cable and wireless agency or operator; or (d)
the acts or edicts of any government or governmental agency or other group
or entity exercising governmental powers.  Escrow Agent is not responsible
or liable in any manner whatsoever for the (i) sufficiency, correctness,
genuineness or validity of the subject matter of this Agreement or any part
hereof , (ii) transaction or transactions requiring or underlying the
execution of this Agreement or the form or execution hereof or (iii)
identity or authority of any person executing this Agreement or any part
hereof, or depositing the Escrow Deposits;

          e.   if the Escrow Agent shall be uncertain as to its duties or
rights hereunder or shall receive instructions from any of the undersigned
with respect to any property held by it in escrow pursuant to this
Agreement which, in the opinion of the Escrow Agent, are in conflict with
any of the provisions of this Agreement or any instructions received from
any other of the undersigned, the Escrow Agent shall be entitled to refrain
from taking any action until it shall be directed otherwise by the parties
pursuant to an amendment or waiver to this Agreement in accordance with
Section 4(g) below, or by order of a court of competent jurisdiction
specified in Section 4(c) below;

          f.   should any controversy arise involving the parties hereto or
any of them or any other person, firm or entity with respect to this
Agreement or the Escrow Deposits, or should a substitute escrow agent fail
to be designated as provided in paragraph g., or if Escrow Agent should be
in doubt as to what action to take, the Escrow Agent shall have the right,
but not the obligation, to institute a petition for interpleader in any
court of competent jurisdiction specified in Section 4(c) below to
determine the rights of the parties hereto.  Should a petition for
interpleader be instituted, or should the Escrow Agent be threatened with,
or become involved in, litigation or binding arbitration in connection with
this Agreement or the Escrow Deposits, then the other parties agree,
jointly and severally, to reimburse the Escrow Agent for its reasonable
attorney's fees and any and all other reasonable out of pocket expenses,
losses, costs and damages incurred by the Escrow Agent in connection with
such threatened or actual litigation prior to any disbursement hereunder
(subject, as to MAXXAM, NL and the CMRT, to the Allocation Provision, as
such term is defined in Section 3(h) below);

          g.   MAXXAM, the CMRT and NL may jointly remove and replace the
Escrow Agent at any time.  If the Escrow Agent shall be removed as escrow
agent by the parties or shall resign or otherwise cease to act as escrow
agent, MAXXAM, the CMRT and NL shall mutually agree upon a successor which
successor shall be deemed to be the Escrow Agent for all purposes of this
Agreement.  If a successor Escrow Agent has not been appointed and accepted
such appointment by the end of the thirty (30) day period following such
removal, resignation or cessation, the Escrow Agent may apply to any court
in which it is permitted to commence litigation pursuant to Section 4(c),
for the appointment of a successor Escrow Agent and deposit the Escrow
Deposits with the then chief or presiding judge of such court (and upon so
depositing such property and filing its complaint in interpleader, it shall
be relieved of all liability under the terms hereof as to the property so
deposited), and the reasonable costs and expenses and reasonable attorneys'
fees which the Escrow Agent incurs in connection with such a proceeding
shall be borne one-half by MAXXAM, one-quarter by the CMRT, and one-quarter
by NL.  The removal, resignation or other ceasing to act as escrow agent by
the Escrow Agent or any successor thereto shall have no effect on this
Agreement or any of the rights of the parties hereunder, all of which shall
remain in full force and effect;

          h.   the other parties to this Agreement hereby jointly and
severally indemnify Escrow Agent, its officers, directors, partners,
employees and agents (each herein called an "Indemnified Party") against,
and hold each Indemnified Party harmless from, any and all expenses,
including, without limitation, reasonable attorneys' fees and court costs,
losses, costs, damages and claims, including but not limited to, costs of
investigation, litigation and arbitration, tax liability and loss on
investments suffered or incurred by any Indemnified Party in connection
with or arising from or out of this Agreement, except such acts or
omissions as may result from the willful misconduct or gross negligence of
such Indemnified Party; provided that the foregoing joint and several
indemnity shall not affect the liability of MAXXAM, the CMRT and NL, as
among themselves, for the specified items for which the Escrow Agent is to
be indemnified (which in the absence of fault by any of MAXXAM, the CMRT
and/or NL, shall be one-half to MAXXAM, one-fourth to the CMRT and one-
fourth to NL, and in the presence of fault by any of MAXXAM, the CMRT
and/or NL, shall be as any court of competent jurisdiction specified in
Section 4(c) decides; the "Allocation Provision").  IT IS EXPRESS INTENT OF
EACH OTHER PARTY TO THIS AGREEMENT TO INDEMNIFY AND HOLD HARMLESS THE
INDEMNIFIED PARTIES FROM THEIR OWN NEGLIGENT ACTS OR OMISSIONS WHERE
PERMITTED TO DO SO BY APPLICABLE LAW; 

          i.   MAXXAM, as to one half, the CMRT, as to one quarter, and NL,
as to one quarter, hereby agree, upon execution by Escrow Agent of this
Agreement, to pay Escrow Agent (A) an annual fee of $4,000.00 for its
services hereunder in accordance with the fee schedule attached hereto, the
first payment to be paid on the date hereof and successive payments being
due on each anniversary date hereof, such fees being completely earned when
due; and (B) all of Escrow Agent's out-of-pocket expenses reasonably
incurred in connection with the performance of its duties and enforcement
of its rights hereunder and otherwise in connection with the preparation,
operation, administration and enforcement of this Agreement, including,
without limitation, reasonable attorneys' fees, brokerage costs and related
expenses incurred by Escrow Agent; and

          j.   Escrow Agent may consult with its counsel or other counsel
satisfactory to it concerning any question relating to its duties or
responsibilities hereunder or otherwise in connection herewith, and shall
not be liable for any action taken, suffered or omitted by it in good faith
upon the advice of such counsel.
        
     4.   Miscellaneous.

          a.   Notices.  All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given when personally
delivered (including by Federal Express or other reputable courier service)
or sent by facsimile transmission (with a confirming copy to be sent by
next day delivery by Federal Express or other reputable, regularly
operating courier service).  Notices, demands and communications to MAXXAM,
the CMRT, NL or the Escrow Agent will, unless another address is specified
in writing, be sent to the respective address indicated on the signature
page to this Agreement.

          b.   Governing Law.  This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware,
without giving effect to the conflicts of laws provisions thereof.

          c.   Jurisdiction and Venue.  The parties to this Agreement agree
that any and all actions arising under or in respect of this Agreement
(including, without limitation, the resolution of any dispute regarding the
Escrow Deposits) shall be litigated exclusively in any federal or state
court of competent jurisdiction located in the State of Delaware.  By
execution and delivery of this Agreement, each party to this Agreement
irrevocably submits to the personal and exclusive jurisdiction of such
courts for itself and in respect of the property escrowed hereunder with
respect to such action.  Each party to this Agreement agrees that venue
would be proper in any of such courts, and hereby waives any objection that
any such court is an improper or inconvenient forum for the resolution of
any such action.  The Escrow Agent need not be a party to any proceeding
involving MAXXAM, the CMRT and/or NL.  In any action in which the Escrow
Agent asserts that one or more of MAXXAM, the CMRT or NL are jointly and
severally liable for the obligations of MAXXAM, the CMRT or NL to the
Escrow Agent under this Agreement, the Escrow Agent shall join in such suit
all of MAXXAM, the CMRT and NL as a prerequisite for recovery against any
one of them, and MAXXAM, the CMRT and NL agree to contribute to any other
party against which such recovery is made in the proportions specified in
the Allocation Provisions.

          d.   Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same agreement.

          e.   Successors and Assigns.  None of MAXXAM, the CMRT and NL
shall (or shall agree to) assign, pledge, convey, hypothecate, grant a
security interest in, or grant to any other party any rights under this
Agreement, including without limitation any rights in or to the Escrow
Deposits, without the prior written consent of the other parties, and this
Agreement shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.

          f.   Specific Performance.  The obligations of the parties hereto
(including the Escrow Agent) are unique in that time is of the essence, and
any delay in performance hereunder by any party will result in irreparable
harm to the other parties hereto.  Accordingly, any party may seek specific
performance and/or injunctive relief before any court of competent
jurisdiction specified in Section 4(c) hereof in order to enforce this
Agreement or to prevent violations of the provisions hereof, and no party
shall object to specific performance or injunctive relief as an appropriate
remedy; provided, however, that nothing in this Section 4(f) is intended to
prohibit any party from bringing an action for money damages for breach of
this Agreement (either in lieu of or in addition to an action for specific
performance and/or injunctive relief).  The Escrow Agent acknowledges that
its obligations, as well as the obligations of MAXXAM, the CMRT and NL
hereunder, are subject to the equitable remedy of specific performance
and/or injunctive relief.

          g.   Amendment, Waiver, etc.  This Agreement may only be amended,
modified, altered or revoked by a written instrument, signed by MAXXAM, the
CMRT, and NL, provided that no amendment or modification to Section 3
hereof or which increases the duties or liabilities of the Escrow Agent
will be made without the written consent of the Escrow Agent.  MAXXAM, the
CMRT and NL agree to give the Escrow Agent advance notice of any amendment
or modification to this Agreement and to provide the Escrow Agent promptly
with copies of any such amendment or modification.  No failure on the part
of any party to this Agreement to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right hereunder preclude any other or future
exercise thereof or any other right.

          h.   Headings.  The headings preceding the text of the sections
and subsections hereof are inserted solely for convenience of reference,
and shall not constitute a part of this Agreement, nor shall they affect
its meaning, construction or effect

          i.   Costs, Expenses and Taxes.  Except as set forth in Section
3(f), (g), (h) and (i) hereof, each party (other than the Escrow Agent)
shall pay all of its own costs and expenses, including its legal fees, in
connection with the performance of and compliance with this Agreement by
such party.  If an action or proceeding is commenced by a party to enforce
or interpret any provision of this Agreement, the non-prevailing party or
parties (other than the Escrow Agent) shall promptly reimburse the
prevailing party or parties for the prevailing party or parties' reasonable
costs and expenses of such action or proceeding, including reasonable
attorneys fees.  In all cases arising under this Agreement where any one or
more or MAXXAM, the CMRT or NL have been held jointly and severally liable
with some but less than all of the other parties to this Agreement to the
Escrow Agent for any obligation under this Agreement, each other party to
this Agreement (other to Escrow Agent) shall contribute to such liability
in accordance with the Allocation Provision.  The party or parties
receiving any Net Earnings shall be responsible for any taxes owed in
respect thereof.

          j.   Further Assurances.  Each party shall cooperate and take
such action as may be reasonably requested by any other party in order to
carry out the provisions and purposes of this Agreement and the
transactions contemplated hereby.

          k.   Entire Agreement.  This Agreement sets forth all of the
promises, covenants, agreements, conditions and undertakings between the
parties with respect to the subject matter hereof, and supersedes all prior
and contemporaneous agreements and understandings, inducements or
conditions, express or implied, oral or written. 

          l.   Severability.  Whenever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.

          m.   Termination.  This Agreement shall terminate upon release of
the Escrow Deposits pursuant to Section 2(i) hereof; provided that Sections
3 and 4 shall survive such termination.

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<PAGE>

          IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first above written.

"ESCROW AGENT"                First Trust National Association

                              By: /S/ R. Prokosch
                              Its:  Asst. Vice President

                              First Trust National Association
                              180 East 5th Street, 2nd Floor
                              St. Paul, Minnesota  55101
                              Attention:  Rick Prokosch
                              Facsimile No.: (612) 244-0711

"MAXXAM"                      MAXXAM Inc.
                              By: /S/ Paul N. Schwartz
                              Its:  Executive Vice President

                              5847 San Felipe, Suite 2600
                              Houston, TX  77057
                              Attention:  Treasury Department
                              Facsimile No.: (713) 267-3704

                              with a copy to:
                              Attention: Corporate Secretary
                              Facsimile No.: (713) 267-3702
                              Taxpayer I.D. No.:  95-2078752

"THE CMRT"                    The Combined Master Retirement Trust

                              By:  /S/ H. Simmons
                              Its:  Trustee

                              Three Lincoln Centre, Suite 1700
                              5430 LBJ Freeway
                              Dallas, TX  75240-2697
                              Facsimile No.: (972) 450-4278
                              Taxpayer I.D. No.: 75-2202890

                              with a copy to:
                              Consulting Fiduciaries, Inc.
                              2745 Riverwoods Road
                              Riverwoods, IL   60015
                              Attention:  David Heald
                              Facsimile No.:  847-945-5611


"NL"                          NL Industries, Inc.

                              By: /S/ David B. Garten
                              Its:  Vice President, Secretary and
                                    General Counsel

                              16825 Northchase Drive, Suite 1200
                              P.O. Box 4272
                              Houston, TX  77210-4272
                              Attention:  General Counsel
                              Facsimile No.: (281) 423-3333
                              Taxpayer I.D. No.: 13 5267260
                              with a copy to:
                              Corporate Treasurer
                              Facsimile No.: (212) 421-7209