INTERCORPORATE SERVICES AGREEMENT


         This INTERCORPORATE SERVICES AGREEMENT (the "Agreement"),  effective as
of January 1, 1999, amends and supersedes that certain  Intercorporate  Services
Agreement  effective  as of  January 1, 1998  between  VALHI,  INC.,  a Delaware
corporation  ("Valhi"),  and COMPX  INTERNATIONAL  INC., a Delaware  corporation
("Recipient").

                                    Recitals

         A.  Employees  and  agents of Valhi  and  affiliates  of Valhi  perform
management,  financial and administrative functions for Recipient without direct
compensation from 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 that 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 management,  financial
and administrative  services presently provided by Valhi and affiliates of Valhi
and Valhi 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.  Valhi agrees to make  available to
Recipient the following services (the "Services") to be rendered by the internal
staff of Valhi and affiliates of Valhi:

         (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 in performing  internal audit and
                  control functions;

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

         (h)      Such other services as may be requested by Recipient or deemed
                  necessary and proper from time to time.

         Section 2.  Miscellaneous  Services.  It is the  intent of the  parties
hereto that Valhi provide only the Services requested by Recipient in connection
with routine management,  financial and administrative  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
Valhi assumes no liability for any expenses or services  other than those stated
in Section 1. In addition to the fee paid to Valhi by Recipient for the Services
provided  pursuant to this Agreement,  Recipient will pay to Valhi the amount of
out-of-pocket costs incurred by Valhi in rendering such Services.

         Section 3. Fee for Services.  Recipient  agrees to pay to Valhi $81,000
quarterly, commencing as of January 1, 1999, 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, 1999 to
December 31, 1999.

         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 Valhi 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,  Valhi shall have a duty to act, and to cause its agents to act, in a
reasonably prudent manner, but neither Valhi nor any officer, director, employee
or agent of Valhi 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
Valhi.

         Section  7.  Indemnification  of Valhi by  Recipient.  Recipient  shall
indemnify and hold harmless Valhi, 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  Valhi or any such person may become  subject
arising out of the Services provided by Valhi to 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. 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 9. 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 Recipient in writing,  and if intended for
Recipient,  to Two  Greenspoint  Plaza,  16825  Northchase  Drive,  Suite  1200,
Houston, Texas 77060, Attention: Chairman of the Board, or such other address as
it shall have furnished to Valhi in writing.

         Section 10. 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 11.  Successors and Assigns.  This  Agreement  shall be binding
upon and inure to the  benefit  of Valhi  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 12.  Governing  Law. This  Agreement  shall be governed by, and
construed and interpreted in accordance with, the laws of the state of Texas.


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         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
                                             President


                                       COMPX INTERNATIONAL INC.




                                       By:
                                            Joseph S. Compofelice
                                            Chairman   of  the  Board,
                                            President   and  Chief
                                            Executive Officer