GRACE                                              A. J. Costello
                                                   Chairman and CEO
                                                   CORPORATE HEADQUARTERS

                                                   W. R. Grace & Co.
                                                   One Town Center Road
                                                   Boca Raton, FL 33486-1010

                                                   (407) 362-2121
                                                   Fax: (407) 362-2100


                                             March 4, 1996

Mr. Thomas L. Gossage
Chairman and Chief Executive Officer
Hercules Incorporated
Hercules Plaza
1313 North Market Street
Wilmington, DE  19894-0001

Dear Tom:

               Based on our discussions last Friday, I was not surprised to
receive your letter resigning from the Grace Board of Directors. I was
disappointed, however, in your characterization of the events surrounding your
resignation.

               During your service on the Board of Directors, you never once
voiced any disagreement with Grace's "direction and long-term strategy
regarding its specialty chemical business." To the contrary, the Board has
approved a number of actions which have significantly enhanced shareholder
value and will continue to do so in the future, including the disposition of
NMC and the Dearborn business, and a major corporate restructuring and
cost-cutting effort. Grace's stock price is up 31% since May 1st when I
assumed my position as Chief Executive Officer. Indeed, two recent analyst
reports have indicated that based on the successful conclusion of these
events, they expect the stock to increase another $10 to $15 per share in the
relatively short term.

               As an insider, you know our programs at Grace are able to
produce results and our plans indicate growth in value. To commence merger
discussions before these anticipated benefits are reflected in the stock price
would be a disservice to the shareholders of Grace. The other Board members
with whom I spoke agreed. As I told you, there will be a time when Grace will
deem it appropriate to consider major strategic acquisitions. Now is not the
time and Hercules is not that partner.







    




               Furthermore, there are no synergies between Hercules and the
Grace chemical business that would justify combining the two companies. If
there were strategic overlaps we would not have put you on the Grace Board in
the first instance.

               It is clear from your action that you are seeking to promote
the interests of the Hercules shareholders at the expense of the Grace
shareholders. In that regard, I accept your resignation from the Grace Board
of Directors.

                                                    Very truly yours,



                                                    Albert J. Costello