Board of Directors

September 8, 2004

VIA EMAIL AND REGULAR MAIL

Russell Budd, Chairman
Baron & Budd
3102 Oak Lawn Avenue, Suite 1100
Dallas, TX 75219

Mark H. Iola, Esq.
Stanley, Mandel & Iola
3100 Monticello Avenue, Ste. 750
Dallas, TX 75205

Robert B. Steinberg, Esq.
Rose, Klein & Marias
801 South Grand, Suite 1800
Los Angeles, CA 90017

Re: National Gypsum Chapter 11 Victims Trust
Distribution
Plan: Ounce of Prevention Worth a Pound of Cure

Gentlemen:

I am the Founding Director of the Mesothelioma Applied Research Foundation (MARF), the only 501(c)(3) charity whose mission is to eradicate mesothelioma as a life-ending disease. MARF was formed in 1999 by doctors, patients, trial lawyers and two former asbestos companies (viz., WR Grace and Owens Corning Fiberglas) who decided after years of fixing blame we needed to focus more energy on fixing a national health crisis. In 2002, we offered Judge Alfred Wolin our expertise in assisting the Bankruptcy Court evaluate the singularly devastating financial and medical hardships endured by mesothelioma patients (see attached letter, Exhibit 1).

By now, the facts are both sobering and all too familiar: millions of Americans wake up each morning with dangerous levels of carcinogenic asbestos fibers in their lungs. Millions of tons of asbestos-containing plaster, tiles, joint compounds and fireproofing continue to shed respirable fibers in thousands of schools, hospitals, buildings, homes and churches from coast to coast. Thousands of lives have been lost in the last few decades because of asbestos-induced lung cancer and mesothelioma, for which there is no "safe level" of exposure. Asbestos cancers are predicted to peak in the next two decades.

Meanwhile, billions of dollars have been consumed by asbestos litigation, more than half of which have been consumed by transaction costs. Despite the money spent and the lives lost, and the threat that more lives will be lost because of asbestos contamination, neither industry nor the government has ever embarked on a serious mission to fund medical research designed to prevent, detect, treat or cure mesothelioma. The National Cancer Institute from 2000 to 2002 spent an average of $1.7 million per year on mesothelioma basic and applied research, while it has allocated billions for breast, prostate and colorectal cancer research. MARF is the only public or private group that is actively soliciting research grant applications whose primary objective is curing mesothelioma.

Prior to filing for Chapter 11 reorganization, The National Gypsum Company was a market leader in the manufacture and sale of asbestos-containing building and insulation products. Although the company has succeeded in cleansing its civil tort liability to asbestos victims, its toxic legacy lives on. Millions of tons of National Gypsum asbestos-containing products sold over the past 60 years remain in place. The lungs of millions of Americans continue to be infested with asbestos fibers. National Gypsum may emerge from bankruptcy a viable and competitive business, and its trust will pay out much needed compensation, but what has the debtor done to help neutralize or reduce the clear and present dangers its legacy presents to the health and safety of millions of currently asymptomatic potential claimants?

A Chapter 11 Trustee has a good faith duty to use ordinary care in the management of the asbestos victims trust in the best interests of the beneficiaries, which include present and future, as yet undiagnosed claimants. Traditionally, asbestos debtors' trustees have limited their duty to the ministerial task of simply preserving the trust while paying out claims. This has served many former asbestos companies well. Once liberated from their duty to satisfy tort claims, they have found a fresh start in the marketplace. However, a legal resolution is not at all equivalent to an end to the public health risks and ongoing asbestos cancer epidemic for which, empirically (although not legally), they bear actual responsibility.

As trustees, we are asking you to acknowledge a continuing obligation to stem the tide of suffering by stopping the disease at its source. We are asking you to set aside a tiny percentage of the value of the trust for investment in medical research that is targeted to help detect, prevent, treat and cure asbestos-related cancers, such as mesothelioma. By investing in competitive, peer-reviewed research for a cure, in our view the asbestos victims trustees will be discharging their duty to preserve if not expand the value of the trust by preventing or limiting the quantum of future asbestos cancer claimants. Moreover, by investing in research to extend the life of asbestos cancer patients, you will be helping reduce the medical, emotional and financial hardships plaguing current claimants.

MARF, along with many other talented scientists and doctors, are optimistic that a cure can be found. We believe that mesothelioma is presumed to be "incurable" only because there has never been a concerted effort by the asbestos industry, the government, the insurance companies and the victims and their lawyers to fund the medical research necessary to cure it. Mesothelioma is certainly an aggressive, rapidly advancing, terminal tumor. But the current lack of effective treatments for it has less to do with the pathology of the disease than the historical apathy and nihilism towards curing it. Mesothelioma is not a disease which has "defied all our best efforts" - as almost no effort has been made to undo the pain and misery it has wrought.

We are enclosing for your review the following:

1) A memorandum by MARF's Science Advisor, Dr. Harvey Pass, which addresses the most promising areas of basic and applied research which are most likely to yield novel and useful strategies for the early detection, treatment and cure of mesothelioma (e.g., proteomics, targeted biological agents, immunotherapy, vaccines, anti-angiogenics, gene therapy and other areas). (Attached as Exhibit 2).

2) A summary of MARF's grant solicitation and peer-review system for targeting and choosing meritorious research grants (attached as Exhibit 3).

3) A summary of the $1.3 million in research grants already funded by MARF (attached as Exhibit 4).

We would like to present to the trustees our strategy for investing a portion of the asbestos victims trust in medical research. We will show that an ounce of prevention is worth a pound of cure. We believe a small allocation of the value of the trust is a good start. We are standing by to assist you in this much needed and long overdue program to help achieve the primary goal of all asbestos-injured victims: the chance to live a full life and die of old age.

Sincerely,

Roger G. Worthington, Esq.
Founding Director

Dr. Harvey Pass, MD
Chairman, Science Advisory Board

Cc: Trustees:
W.D. Hilton Jr., Executive Director
NGC Bodily Injury Trust
2716 Lee Street, Suite 500
Greenville, TX 75401
dhilton@trustservices.org

Alan R. Kahn, Trustee
230 Jack Leg Lane, PO Box 1107
Bozeman, MT 59715-0999

Walter J Taggart, Trustee
Villanova School of Law
299 North Spring Road
Villanova, PA 19085

Anne N. Foreman, Trustee
272 Riverboat Rd.
Front Royal, VA 22630

Legal Representative for Unknown Asbestos Disease Claimants:
Sander L. Esserman, Esq.
Stutzman & Brombert
2323 Bryan Street, Suite 2200
Dallas, TX 75201