THIRD AMENDMENT OF ISOLYSER COMPANY, INC.
                        1995 EMPLOYEE STOCK PURCHASE PLAN


     WHEREAS,  by at least a majority  vote of the  holders  of the  outstanding
capital stock of Isolyser Company, Inc. (the "Company") who voted on said matter
at the Annual Meeting of Shareholders of the Company held on April 27, 1995, the
Company adopted that certain Isolyser Company, Inc. 1995 Employee Stock Purchase
Plan (the "Plan"); and

     WHEREAS,  the Plan has  been  amended  (i)  effective  July 1,  1995 by
unanimous written consent of the Board of Directors of the Company,  and (ii) on
March 15, 1996 by the Board of Directors of the company as subsequently approved
by the shareholders of the Company; and

     WHEREAS,  the Board of Directors has resolved to further amend the Plan
as hereinbelow more particularly set forth.

     NOW, THEREFORE, the Plan is hereby amended as follows:

     1. Defined Terms.  Initially capitalized terms used in this Amendment which
are not  otherwise  defined  by this  Amendment  are used with the same  meaning
ascribed to such terms in the Plan.

     2. Amendment. Section 20(d) of the Plan is hereby deleted.

     3. Effectiveness. This Amendment shall be effective at November 1, 1996.

     4. Ratification.  Except as hereinabove  amended and modified,  the Plan is
adopted and ratified without further modification or amendment.

         IN WITNESS  WHEREOF,  the Company has caused this Third Amendment to be
adopted on ____________, 1996, to be as set forth in this Second Amendment

                                                     ISOLYSER COMPANY, INC.



                                                     By:

                                                     Name: C. Fred Harlow

                                                     Title:Senior Vice President

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