Document:

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                                                                   EXHIBIT 10.19
                                                                   -------------
                             EMPLOYMENT AGREEMENT
                             --------------------

     THIS AGREEMENT ("Agreement") is made and entered into effective as of the
1st day of July, 2000 (the "Effective Date"), by and between ISOLYSER COMPANY,
INC., a Georgia corporation (hereinafter the "Company"), and MICHAEL MABRY
(hereinafter the "Employee").

                                   RECITALS:
                                   --------

     R-1. The Company develops, manufactures and markets disposable, specialty
and safety products for use in medical, industrial and commercial markets.

     R-2. The Company's markets are worldwide.

     R-3. The Company maintains certain trade secrets and confidential
information which is proprietary to the Company, the disclosure or exploitation
of which would cause significant damage to the Company.

     R-4. The Company desires to employ the Employee, and the Employee desires
to accept such employment, for which purposes each of the Company and the
Employee desire to enter into this Agreement to set forth and clarify certain of
the terms and conditions relevant to such employment.

     NOW, THEREFORE, in consideration of the recitals, the covenants and
agreements herein contained and the benefits to be derived herefrom, the
parties, intending to be legally bound, agree as follows:

     1.   Recitals. The recitals set forth above constitute part of this
          --------
Agreement and are incorporated herein by this reference.

                                      -1-
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     2.   Employment. From and after the date hereof and for the term herein
          ----------
provided, the Company agrees to employ the Employee, and the Employee accepts
such employment with the Company upon the terms and conditions hereinafter set
forth.

     3.   Term. The Employee's employment shall commence on the Effective Date
          ----
and, subject to Section 8 of this Agreement, shall continue through the third
anniversary of the Effective Date.

     4.   Duties. Subject to the direction and supervision of the Board of
          ------
Directors of the Company, the Employee agrees that: (a) he shall devote his full
working time and attention to the business of the Company and its affiliated
companies; (b) he will perform all of his duties pursuant to this Agreement
faithfully and to the best of his abilities in a manner intended to advance the
Company's interests; and (c) he shall not engage in any other business activity
except: (i) investing assets in a manner not prohibited by Section 9(e) of this
Agreement, and in such form or manner as shall not require any material services
on his part in the operations or affairs of the companies or other entities in
which such investments are made, (ii) serving on the board of directors of any
company, subject to the provisions set forth in Section 9(e) of this Agreement
and provided that he shall not be required to render any material services with
respect to the operations or affairs of any such company, (iii) engaging in
religious, charitable or other community or non-profit activities which do not
impair his ability to fulfill his duties and responsibilities under this
Agreement, or (iv) such other activities as may be expressly approved in advance
by the Board of Directors of the Company.

     5.   Compensation. As full compensation for all services rendered by the
          ------------
Employee pursuant to this Agreement and as full consideration for all of the
terms of this Agreement, the

                                      -2-
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Employee shall receive from the Company during his employment under this
Agreement the base salary, bonuses and fringe benefits described below.

          (a)  Base Salary. For all services rendered pursuant to this
               -----------
Agreement, the Company shall pay or cause to be paid to the Employee an annual
base salary (the "Floor Amount") in accordance with the following schedule:

               Effective Date to June 30, 2001            $150,000
               July 1, 2001 to June 30, 2002              $100,000
               July 1, 2002 to June 30, 2003              $ 80,000

The applicable annual salary may be increased or (subject to the terms of this
Agreement) decreased from time to time during the term of this Agreement in the
discretion of the Company. The base salary shall be payable in accordance with
the customary practices of the Company for payment of its employees, but in any
event, in installments not less frequently than once monthly.

          (b)  Bonus Compensation. To the extent that the Company shall
               ------------------
establish, from time to time in its discretion, bonus compensation plans for the
benefit of all of its management level employees, the Employee shall be entitled
to participate in such bonus compensation plans in accordance with terms and
provisions established by the Board of Directors in its discretion.

          (c)  Long Term Incentive Payments. The Company has or may from time to
               ----------------------------
time in the future grant to the Employee such long-term incentive compensation
(including, by way of illustration but not limitation, stock options) as the
Board of Directors may determine in its discretion.

          (d)  Fringe Benefits. The Company has adopted, or may from time to
               ---------------
time adopt, policies in respect of fringe benefits for its management level
employees in the nature of health and life insurance, holidays, vacation,
disability and other matters. The Company covenants

                                      -3-
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and agrees that the Employee shall be entitled to participate in any such fringe
benefit policies adopted by the Company to the same extent that such fringe
benefits shall be available to and for the benefit of all other management level
employees.

          (e)  Tax Withholdings and Other Deductions. The Company shall have the
               -------------------------------------
right to deduct from the base salary and any additional compensation payable to
the Employee all amounts required to be deducted and withheld in accordance with
social security taxes and all applicable federal, state and local taxes and
charges as may now be in effect or which may be hereafter enacted or required as
charges on the compensation of the Employee. The Company shall also have the
right to offset from the base salary and any additional compensation payable to
the Employee any loan or other amounts owed to the Company by the Employee.

     6.   Working Facilities. The Company, at its own expense, shall furnish the
          ------------------
Employee with office, working space and such equipment as may be reasonably
necessary for the Employee's performance of his or her duties.

     7.   Expenses. The Employee is required as a condition of employment to
          --------
incur ordinary, necessary and reasonable expenses for the promotion of the
business of the Company and its affiliates and subsidiaries, including expenses
for entertaining, travel and similar items. The Employee is authorized to incur
reasonable expenses in connection with such business, including travel and
entertainment expenses, fees for seminars and courses, and expenses incurred in
attendance at executive meetings and conventions. If paid by the Employee, upon
presentation by the Employee of an itemized account of such expenditures in a
manner satisfactory to the Company, the Employee shall be entitled to receive
reimbursement for these expenses, subject to policies that may be established
from time to time by the Company. It is intended by the Company and the

                                      -4-
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Employee that all expenses incurred pursuant to this paragraph are to be
ordinary and necessary business expenses.

     8.   Termination. The Employee's employment may be terminated in accordance
          ------------
with the provisions of this Section. The provisions for termination are as
follows:

          (a)  Death or Disability. The Employee's employment shall be
               -------------------
terminated upon the death or total disability of the Employee (total disability
meaning the failure of the Employee to perform his or her duties and
responsibilities hereunder in the manner and to the extent required by this
Agreement for a period of 180 consecutive days by reason of the Employee's
mental or physical disability as determined by the Board of Directors of the
Company, which determination, in the absence of a showing of bad faith, shall be
conclusive upon the Employee).

          (b)  Termination For Cause. The Employee's employment may be
               ---------------------
terminated by the Company for Cause. For purposes of this Agreement, the term
"Cause" shall mean a determination by the Board of Directors that any of the
following has occurred: (i) the Employee's material failure or refusal to comply
with the policies, standards and regulations of the Company from time to time
reasonably established and fairly administered by the Company, (ii) a material
breach by the Employee of the terms of Section 9 of this Agreement, (iii) a
material breach by the Employee of any of the other terms of this Agreement, or
(iv) the indictment or conviction of the Employee for any felony, the conviction
of the Employee for a misdemeanor involving the misuse of funds, or the
adjudication by a court that the Employee engaged in willful misconduct in
connection with the activities of the Company.

          (c)  Termination Without Cause. The Employee's employment may be
               --------------------------
terminated by the Company without Cause; provided, that, in the event of any
termination of the Employee's employment under this paragraph (c), the Employee
shall be entitled to receive such

                                      -5-
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Employee's annual base salary (but not less than the Floor Amount per year) as
would be in effect as set forth in Section 5(a) hereof until the first
anniversary of the date of such termination of employment payable at the
Company's election either in a lump sum (present valued at a discount rate of
10%) or as otherwise payable under Section 5(a). The Company's obligation to
make payments under this paragraph shall cease and terminate in the event of any
breach by the Employee of any of the provisions of Section 9 of this Agreement.
The Company may require, as a condition precedent to making any payments under
this paragraph to the Employee, that the Employee execute a customary release
and covenant not to sue in favor of the Company. Any payments under this Section
8(c) shall be subject to Section 5(e).

          (d)  Termination By Employee. The Employee may terminate his
               -----------------------
employment hereunder with or without Good Reason (as defined below) by written
notice to the Company. In the event the Employee elects to terminate this
Agreement without Good Reason, then the Employee shall offer to continue to
provide services to the Company in accordance with this Agreement for a period
of not less than ninety (90) days from the date that the Employee elects to
resign. The Company may accept such offer in full, accept such offer subject to
the Company's right to terminate the Employee's employment during such ninety
(90) day period (which termination shall nevertheless be treated as a
termination by Employee without Good Reason) or reject such offer in which event
the Employee's employment shall immediately terminate. Effective upon the date
of Employee's termination of employment following the Employee's resignation
without Good Reason, the Employee shall be entitled to no further compensation
or benefits under this Agreement. As used in this Agreement, the term "Good
Reason" shall mean (i) the reduction of the Employee's salary below the Floor
Amount per year without the written consent of the Employee, or (ii) the failure
by the Company to comply with its obligations under this Agreement in

                                      -6-
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any material respects which failure to comply continues for a period of not less
than thirty (30) days following written notice thereof by the Employee to the
Company. In the event the Employee terminates his employment hereunder for any
of the reasons set forth in clauses (i) or (ii) of this Subsection (d), the
Employee shall be entitled to receive such Employee's annual base salary (but
not less than the Floor Amount per year) as would be in effect as set forth in
Section 5(a) hereof until the first anniversary of the date of such termination
of employment. Any such severance becoming payable under this Subsection (d)
shall be payable at the Company's election either in a lump sum (present valued
at a discount rate of 10%) or as otherwise payable under Section 5(a). The
Company may require, as a condition precedent to making any payments under this
paragraph to the Employee, that the Employee execute a customary release and
covenant not to sue in favor of the Company. The Company's obligations to make
payments under this paragraph shall cease and terminate in the event of any
breach by the Employee of any provisions of Section 9 of this Agreement;
provided, that, the Employee shall not be in breach of Sections 9(d) or (e) of
this Agreement if, in advance of taking any action which would otherwise violate
such Subsections, the Employee waives and refunds to the Company the portion of
the severance payment yet to accrue hereunder. Any payments under this paragraph
shall be subject to Section 5(e).

          (e)  Change of Control.
               -----------------

               (i)  As used in this Agreement, the term "Change of Control"
                    shall mean:

                    (A)  Individuals who, as of the date of this Agreement,
          constitute the Board of Directors of the Company (the "Incumbent
          Board") cease for any reason to constitute at least a majority of such
          Board; provided, however, that any individual becoming a director
          subsequent to the date hereof whose election, or nomination for
          election by the Company shareholders, was approved by a vote of at

                                      -7-
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     least a majority of the directors then comprising the Incumbent Board shall
     be considered as though such individual was a member of the Incumbent
     Board, but excluding, for this purpose, any individual whose initial
     assumption of such directorship occurs as a result of either an actual or
     threatened election contest (as such terms are used in Section 14a-11 of
     Regulation 14A promulgated under the Securities Exchange Act of 1934 (the
     "Exchange Act")) or other actual or threatened solicitation of proxies or
     consents by or on behalf of an individual, entity or group other than the
     Board;

          (B)  The acquisition by an individual, entity or group (within the
     means of Section 13(d)(3) or 14(d)(2) of the Exchange Act) other than a
     trustee or other fiduciary holding securities under an employee benefit
     plan of the Company, of Beneficial Ownership (as defined in that certain
     Shareholder Protection Rights Agreement dated as of December 20, 1996
     between the Company and SunTrust Bank, as such agreement may be modified or
     amended from time to time) of 15% or more of either the then outstanding
     shares of common stock of the Company or the combined voting power of the
     outstanding voting securities of the Company entitled to vote generally in
     the election of directors unless the Incumbent Board determines that such
     transaction shall not constitute a "Change of Control" hereunder;

          (C)  If there occurs any merger or consolidation of the
     Company with or into any other corporation or entity (other than a
     wholly-owned subsidiary of the Company) unless the Incumbent Board
     determines that such transaction shall not constitute a "Change of Control"
     hereunder; or

                                      -8-
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               (D)  There occurs a sale or disposition by the Company of all or
          substantially all of the Company's assets. The Incumbent Board shall
          have authority to determine what constitutes substantially all of the
          Company's assets.

Notwithstanding the foregoing, no Change of Control shall be deemed to have
occurred for purposes of this Agreement by virtue of any transaction which
results in the Employee, or a group of persons which includes the Employee,
acquiring directly or indirectly all or substantially of the assets of the
Company.

          (ii) In the event of any termination of Employee's employment with the
Company by the Company or by the Employee following the occurrence of any event
constituting a Change of Control other than a termination of employment
occurring as a result of a termination under Subsection (a) of this Section 8
(being a termination for death or disability) Employee shall be entitled to
receive such Employee's annual base salary (but not less than the Floor Amount
per year) as would be in effect as set forth in Section 5(a) hereof until the
first anniversary of the date of such termination of employment. Any such
severance becoming payable under this Subsection shall be payable at the
Company's election either in a lump sum (present valued at a discount rate of
10%) or as otherwise payable under Section 5(a). The Company may require, as a
condition precedent to making any payments under this paragraph to the Employee,
that the Employee execute a customary release and covenant not to sue in favor
of the Company. Any payments under this paragraph shall be subject to Section
5(e).

     9.   Protective Covenants; Remedies.
          ------------------------------

          (a)  Property Rights. The Employee acknowledges and agrees that all
               ---------------
records of the accounts of customers, lists, prospect lists, prospect reports,
vendor lists, samples, desk calendars, briefcases, day timers, notebooks,
computers, computer records and software, policy and

                                      -9-
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procedure manuals, price lists, catalogs, premises keys, written methods of
pricing, lists of needs and requirements of customers, written methods of
operation of the Company or any subsidiary or affiliate of the Company
(collectively, the "Company Group"), manufacturing techniques, financial records
and any other records and books relating in any manner whatsoever to the
customers of the Company Group or its business, whether prepared by the Employee
or otherwise coming into the Employee's possession, are the exclusive property
of the Company Group regardless of who actually purchased or prepared the
original book, record, list or other property. All such books, records, lists or
other property shall be immediately returned by the Employee to the Company upon
any termination of employment.

          (b)  Non-Disclosure of Confidential Information. The Employee
               ------------------------------------------
acknowledges that through his employment by the Company, the Employee will
become familiar with, among other things, the following:

               Any scientific or technical information, design,
               process, procedure, formula or improvement that is
               secret and of value, and information including,
               but not limited to, technical or nontechnical
               data, formula, patterns, compilations, programs,
               devices, methods, techniques, drawings and
               processes, and product, customer and financial
               data, which the Company takes reasonable efforts
               to protect from disclosure, and from which the
               Company derives actual or potential economic value
               due to its confidential nature (the foregoing
               being hereinafter collectively referred to as the
               "Confidential Information").

               The Employee acknowledges that use or disclosure of such
Confidential Information would be injurious to the Company and will give the
Employee an unfair competitive advantage over the Company Group in the event
that the Employee should go into competition with the Company Group.
Accordingly, the Employee agrees that during the term of this Agreement and for
a period of two (2) years subsequent to the termination of employment for any
reason, the Employee will not disclose to any person, or utilize for the
Employee's benefit, any of the

                                      -10-
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Confidential Information. The Employee acknowledges that such Confidential
Information is of special and peculiar value to the Company; is the property of
the Company Group, the product of years of experience and trial and error; is
not generally known to the Company Group's competitors; and is regularly used in
the operation of the Company Group's business. The Employee acknowledges and
recognizes that applicable law prohibits disclosure of confidential information
and trade secrets indefinitely (i.e., without regard to the two year period
described in this paragraph), and the Company has the right to require the
Employee to comply with such law in addition to the Company's rights under this
paragraph.

          (c)  Non-Interference With Employees. The Employee agrees not to
               -------------------------------
solicit, entice or otherwise induce any employee of the Company Group to leave
the employ of the Company Group for any reason whatsoever, and not to otherwise
interfere with any contractual or business relationship between the Company
Group and any of its employees for two (2) years from the termination of the
Employee's employment other than a termination of employment within the scope of
Subsection (e)(ii) of Section 8 of this Agreement.

          (d)  Non-Solicitation of Customers. For so long as the Employee shall
               -----------------------------
be due or shall have accrued salary payments from the Company (including,
without limitation, any such payment under Subsections (c) or (d) of Section 8
of this Agreement which Employee does not waive and refund to the Company in
advance of taking any actions prohibited by this Subsection), and, in the event
of any termination of Employee's employment hereunder by the Company for Cause
or by the Employee without Good Reason, for one (1) year after the date of such
termination of employment, the Employee agrees that the Employee will not,
within the United States of America (the "Territory"), which the parties agree
is the territory from which the Employee shall primarily renders services, for
the Employee's own benefit or on behalf of any other person,

                                      -11-
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partnership, company or corporation, contact any customer or customers of the
Company Group who the Employee called upon or with which the Employee became
familiar while employed by the Company, for the purpose of developing,
manufacturing or selling nonwoven products, film products or contamination
control products for use in medical, industrial or consumer markets
(collectively, the "Business"). This Subsection shall not apply following the
date of any termination of employment within the scope of Subsection (e)(ii) of
Section 8 of this Agreement.

          (e)  Non-Competition. For so long as the Employee shall be due or
               ---------------
shall have accrued salary payments from the Company (including, without
limitation any payment under Subsections (c) or (d) of Section 8 of this
Agreement which Employee does not waive and refund to the Company in advance of
taking any action prohibited by this Subsection), and in the event of any
termination of Employee's employment hereunder by the Company for Cause or by
the Employee without Good Reason, for one (1) year after the date of such
termination of employment, the Employee agrees that the Employee will not (i)
within the Territory, either directly or indirectly, whether on his own behalf
or in the service of others (whether as an employee, director, consultant or
advisor) in any capacity that involves duties similar to the duties of the
Employee hereunder, engage in the Business or, (ii) become an owner (except for
the ownership of not greater then an interest of five percent of a publicly held
company) of any company which is engaged in the Business. This Subsection shall
not apply following the date of any termination of employment within the scope
of Subsection (e)(ii) of Section 8 of this Agreement.

          (f)  Remedies. In addition to any other rights and remedies which are
               --------
available to the Company, with respect to any breach or violation of the
protective covenants set forth herein, it is recognized and agreed that the
Company shall be entitled to obtain injunctive relief which would prohibit the
Employee from continuing any breach or violation of such protective covenants.

                                      -12-
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     10.  Arbitration of Disputes. Any controversy or claim arising out of or
          -----------------------
relating to the employment relationship between the Company and the Employee
shall be settled by arbitration administered by the American Arbitration
Association under its National Rules for the Resolution of Employment Disputes,
and judgment upon the award rendered by the arbitrator may be entered by any
court having jurisdiction thereof. Such arbitration shall be conducted in the
City of Atlanta, Georgia in accordance with the rules of the American
Arbitration Association. Judgment upon the award entered by the arbitrators
shall be final and may be entered in a court having jurisdiction thereof.

     11.  No Conflicting Agreements. The Employee hereby represents and warrants
          -------------------------
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or by which he is bound, and that he is not subject to any covenants
against competition or similar covenants which affect the performance of his
obligations hereunder.

     12.  Consulting Cooperation. The Employee shall cooperate fully with the
          ----------------------
Company in the defense or prosecution of any claims or actions which may be
brought against or on behalf of the Company which relate to events or
occurrences that transpired while the Employee was employed by the Company. The
Employee's full cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with counsel to prepare
for discovery or trial and to act as a witness on behalf of the Company at
mutually convenient times. The Employee shall also cooperate fully with the
Company in connection with any examination or review by any federal or state
regulatory authority as any such examination or review relates to events or
occurrences that transpired while the Employee was employed by the Company. The
obligations under this Section shall continue, to the extent required, following
the expiration of this

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Agreement. To the extent the Employee is required to provide services under this
Section subsequent to the expiration of this Agreement, the Company shall
continue to reimburse the Employee for the Employee's reasonable expenses in
connection with the performance of his duties under this Section and pay a
consulting fee in the amount of $50 per hour.

     13.  Notices.  Any notice required or permitted to be given under this
          -------
Agreement shall be in writing and personally delivered or sent by registered or
certified mail, return receipt requested, in the case of the Company, to the
principal office of the Company directed to the attention of the Company's Board
of Directors, and in the case of the Employee, to the Employee's last known
residence address.

     14.  Construction.  This Agreement shall be governed and interpreted in
          ------------
accordance with the laws of the State of Georgia.  The waiver by any party
hereto of a breach of any of the provisions of this Agreement shall not operate
or be construed as a waiver of any subsequent breach by any party.

     15.  Modification; Assignment.  This Agreement may not be changed except by
          ------------------------
written agreement duly executed by the parties hereto.  The rights and
obligations of the Company under this Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the Company.  This Agreement,
being for the personal services of the Employee, shall not be assignable or
subject to anticipation by the Employee.

     16.  Severability.  Each provision of this Agreement shall be considered
          ------------
severable.  If for any reason any provisions herein are determined to be invalid
or unenforceable, this Agreement shall be construed in all respects as though
such invalid or unenforceable provisions were omitted, and such invalidity or
unenforceability shall not impair or otherwise affect the validity of the other

                                      -14-
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provisions of this Agreement.  Moreover, the parties agree to replace such
invalid provision with a substitute provision that will correspond to the
original intent of the parties.

     17.  Number of Agreements.  This Agreement may be executed in any number of
          --------------------
counterparts, each one of which shall be deemed an original.

     18.  Pronouns.  The use of any word in any gender shall be deemed to
          --------
include any other gender and the use of any word in the singular shall be deemed
to include the plural where the context requires.

     19.  Headings.  The section headings used in this Agreement are for
          --------
convenience only and are not to be controlling with respect to the contents
thereof.

     20.  Entire Agreement.  This Agreement contains the complete and exclusive
          ----------------
statement of the terms and conditions of the Employee's employment by the
Company, and there exists no other inducement or consideration between the
Company and the Employee relative to the employment contemplated by this
Agreement.  All prior agreements relative to the subject matter of this
Agreement are terminated.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date first set forth above.

ISOLYSER COMPANY, INC.

By:____________________              ______________________________
                                     MICHAEL MABRY
Its:___________________

                                      -15-<PAGE>

                                                                   EXHIBIT 10.20
                                                                   -------------

                               LETTER AGREEMENT
                               ----------------

1.   BACKGROUND
     ----------

     a.   Isolyser Company, Inc., a Georgia corporation, having its principal
place of business at 4320 International Blvd., Norcross, Georgia 30093
("Isolyser"), and Allegiance Healthcare Corporation, a Delaware corporation
having its principal place of business at 1500 Waukegan Road, McGaw Park,
Illinois 60085, and its affiliates (collectively referred to as "Allegiance")
entered into a Supply and License Agreement effective July 12, 1999 (the
"Agreement").

     b.   Isolyser has developed proprietary rights in the manufacture and sale
of certain products which is sold under the OREX(R) trademark, all of which are
manufactured from Isolyser's proprietary degradable polyvinyl alcohol ("PVA") or
novel dispersal polymers ("NDP") material which can be dissolved and then
disposed via normal sanitary sewer systems ("Material").

     c.   Isolyser desired to expand its commercial opportunities through the
manufacture and sale of the Material to Allegiance and by licensing to
Allegiance the Patents and Trademarks relating to the right to make, use,
distribute, sell and dispose healthcare products made from the Material
("Products").

     d.   Isolyser, under the terms of the Agreement granted to Allegiance a
worldwide exclusive license to make, use and sell Products embodying or made in
accordance with the inventions claimed in the Patents within and for healthcare
applications. The Agreement defined a term and certain rights and obligations of
the parties.

2.   ISOLYSER ACKNOWLEDGES
     ---------------------

     Isolyser acknowledges that:

     a.   Allegiance has met all of its obligations and responsibilities under
     the Agreement to date; and

     b.   Allegiance is unable to fulfill the remainder of its requirements
     under the Agreement, and accordingly, is not required to do so, until such
     time as Isolyser meets its obligations under the Agreement and achieves the
     success criteria delineated in Section 4 including, without limitation,
     developing a fully operational economically feasible backend processor,
     obtaining all regulatory approvals for all disposable and/or dispersible
     Materials, and provision on a timely basis of quality materials that
     consistently meet specifications.
<PAGE>

3.   TRANSITION PERIOD
     -----------------

     In order to provide Isolyser with an additional opportunity to complete its
product and systems development and on the basis that both parties would like to
have a beneficial relationship, the parties agree as follows:

     a.   As used herein, the term "Transition Period" shall mean the period of
time beginning on the date this Letter Agreement is last executed by the parties
hereto and ending on the earlier of December 31, 2001 or such date as Isolyser
and Allegiance agree in their discretion that all product and systems
development efforts related to the Products have been satisfactorily completed.

     b.   All rights related to Allegiance's exclusive license will remain in
full force and effect during the Transition Period.

     c.   Allegiance will have no further obligations to purchase Material or
provide additional sales, marketing or promotional support or make any further
investments during the Transition Period except as set forth in 3h below.

     d.   During the Transition Period both parties agree to evaluate design and
material requirements consistent with the appropriate economic models and
environmental benefits.

     e.   During the period commencing on the date Allegiance countersigns this
letter agreement and continuing until June 30, 2001, Allegiance will accept one
order from Isolyser under which Allegiance will manufacture Products, provided
that the quantity of Product ordered must be agreed upon by the parties based on
on-hand inventory, customer demand and anticipated start date of Isolyser's
alternative operations. Isolyser will use commercially reasonable efforts to
quickly establish its converting operations.

     f.   Isolyser and Allegiance will jointly visit already established
customer accounts (the "Founder Accounts") listed on Schedule 1 attached hereto
and incorporated herein to explain the difficulties related to raw materials,
processing technology and economic viability.

     g.   During the Transition Period the Founder Accounts will make their
product selections/substitutions for the Transition Period.

     h.   Isolyser and Allegiance will develop a transition plan for each
customer in an effort to minimize the impact to that customer. During the
Transition Period, Allegiance will distribute Products to a limited number of
Founder Accounts agreed upon by Allegiance.

Isolyser will use commercially reasonable efforts to complete the development of
a satisfactory backend processor.
<PAGE>

4.   SUCCESS CRITERIA
     ----------------

     The parties have further agreed that the criteria for success to determine
if Allegiance will once again begin efforts to launch the Product line are as
follows:

     a.   The backend processor must be functioning, reliable and affordable.

     b.   Raw material must meet specifications and be free from contamination.
Isolyser will continue with development toward a three meter finished roll stock
and will explore more economic alternatives to the current raw material
available.

     c.   POTW approvals, present and future will cover any and all
dissolvable/dispersible materials (PVA, NDP or other) used in the Product line.

     d.   Both parties will agree to an acceptable rate of return for their
respective businesses. The metric for measurement and the acceptable ranges have
yet to be determined.

     e.   Three mutually agreed-upon customers will be using the Product line
and will be processing the Products without issue for a period of 90 days. The
economic model which is applied must demonstrate a position of cost neutrality
for the customer.

     f.   At such point in time the entire program (from raw material to backend
processing) has been deemed successful, the parties will review and evaluate all
options related to converting, which may include moving the conversion back to
Allegiance Convertors, or converting in China with the GRI operation.

     At regular intervals during the Transition Period and upon expiration of
the Transition Period, the parties will meet and evaluate the status of the
Success Criteria or agree to a new form of mutually acceptable agreement which
more accurately reflects the realities of the entire program and the
then-current relationship between Allegiance and Isolyser.

ALLEGIANCE HEALTHCARE CORPORATION         ISOLYSER COMPANY, INC.

By:____________________________           By:______________________________

Title:_________________________           Title:___________________________

Date:__________________________           Date: ___________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}]]