Borden letter to Japonica Partners.

COLUMBUS, Ohio--(BUSINESS WIRE)--Dec. 4, 1994--The following letter was sent today by Frank J. Tasco, Chairman of Borden, Inc. to Japonica Partners. -0-

December 4, 1994

Japonica Partners 30 Kennedy Plaza Providence, RI 02903 Attention: Paul B. Kazarian

Gentlemen:

We will meet with you at the time you suggested in your last letter: 4:45 p.m. Tuesday, December 6, 1994, at Borden's New York offices, 277 Park Avenue, 40th floor. The purpose of this meeting, as I indicated on December 1, is to ascertain the facts we need to consider your November 30 letter. Although you are welcome to bring representatives of your financing sources, if any, we do not expect others to attend the meeting.

Your December 3 letter which we received this morning indicates that you require clarification of certain statements contained in our December 1 letter (a copy of which is attached). We believe that the questions we raised are fundamental and straight forward. However, please advise us as soon as possible of any specific matters that need to be clarified. It would be productive to have written responses to the questions raised in our December 1 letter prior to our December 6 meeting. Frankly, given the claims made in your letter of November 30, the amount of time you have spent on this matter and the timetable of the Whitehall offer, we are surprised that you did not have readily available the answers to the questions we raised on December 1, and that you did not take advantage of our offer to meet today.

We are surprised by the suggestion in your December 3 letter that there may be modifications to your November 30 proposal. Why wouldn't you have presented your best proposal on November 30? Any changes to your proposal should be communicated to us as soon as possible.

We look forward to meeting with you on Tuesday. Please confirm with Allan Miller at our Columbus headquarters by 4:00 p.m. on Monday that you will attend the meeting so that the necessary travel arrangements can be made; if we do not hear from you prior to 4:00 p.m. on Monday, we will assume that you do not wish to meet with us.

                        On behalf of the Board of Directors,
                        Frank J. Tasco
                        Chairman

-0-

The following letter was sent Dec. 1 by by Frank J. Tasco, Chairman of the Board of Borden, Inc., to Paul B. Kazarian, Managing Partner of Japonica Partners.

-0-

Mr. Paul B. Kazarian Managing Partner Japonica Partners 30 Kennedy Plaza Providence, Rhode Island 02903

Dear Mr. Kazarian:

The Board of Directors of Borden, Inc. has reviewed your letter dated Nov. 30, 1994. As I am sure you appreciate, your letter is silent on many important details, given the complex nature of the transactions you describe. As we have advised you previously, our objective is to maximize the value of Borden for its shareholders and to do so we will pursue whatever transaction we believe most likely to achieve our objective.

In view of the time factors involved in the Whitehall transaction and your proposal, we request that you meet with the Board's representatives at 10:00 AM on Sunday, December 4, 1994, at Wachtell, Lipton, Rosen & Katz's offices, at 51 West 52nd Street, 28th floor. Dr. Wilbert J. LeMelle, one of our independent directors, will chair the meeting on our behalf. The purpose of the meeting will be to obtain detailed information about your plans in order to assist the board in its consideration of your proposal.

In light of the complexity of your proposal, and to make the meeting productive, you should provide us with detailed information as to the following:

o What would happen in the near future to cause all of Borden's

shares to be worth $17 under your plan, especially since

you do not seem to contemplate injecting new equity into

the company and the Borden common stock will be further burdened

by the fixed charges of the preferred stock you propose

to issue;

o The basis for and assumptions underlying the earnings per

share forecasts of your plan, which, notwithstanding

preferred stock charges, are at levels more than double

earnings estimates by Borden's management;

o How you would deal with the legal issues of fraudulent

conveyance and illegal dividend payments in connection with

the spin-offs your proposal entails;

o How you would handle Borden's approximately $2.4 billion of

outstanding indebtedness, more than half of which would

become prepayable as a result of the split up of the company

you propose;

o The sources of your financing and any material contingencies

with respect thereto;

o The dividend rate and other terms (assuming current market

conditions) that you think would be necessary to cause the

preferred stock you would issue to trade at par; and

o The time period you think necessary to implement the

contemplated transactions (including obtaining assurances as

to the tax free status thereof) and how you would propose to

protect Borden shareholders against possible adverse

developments in the interim period.

The foregoing questions are not intended to limit the discussion at the meeting but merely to give you guidance in preparing for the meeting. You are, of course, invited to present whatever other information you wish.

We would like to proceed as expeditiously as practicable given the nature of the task before us, and we have scheduled the meeting accordingly. We look forward to receiving promptly your confirmation that we will meet on Sunday. Please contact Allan Miller at our Columbus office in this regard. If Sunday is not convenient for you, please advise us promptly and we will make every effort to schedule something more convenient. If you cannot meet on Sunday, we request that you provide us with a written response to our questions on or before Sunday.

                                On behalf of the Board of Directors,
                                Frank J. Tasco
                                Chairman

CONTACT: Borden, Inc.

             Nick Iammartino, 614/846-0755
             Office: 614/225-4485
               or
             Kekst and Company
             Jim Fingeroth, 212/744-8628
             Fred Spar, 609/921-1489
             Office: 212/593-2655