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                                                                  EXHIBIT 10(ii)

                            GAMMA BIOLOGICALS, INC.
                                        
                              Severance Agreement
                              -------------------



   THIS SEVERANCE AGREEMENT (the "Agreement"), is entered into this 12th day of
August, 1996, between RAUL F. ALVAREZ ("Executive") and GAMMA BIOLOGICALS, INC.,
a Texas corporation (the "Company").

                                  WITNESSETH:

   WHEREAS, the Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its shareholders for the
Company to agree to provide benefits under circumstances described below to
Executive and other executives who are responsible for the policy-making
functions of the Company and the overall viability of the Company's business;
and

   WHEREAS, the Board recognizes that the possibility of a change of control of
the Company is unsettling to such executives and wishes to make arrangements at
this time to assure their continuing dedication to their duties to the Company
and its shareholders notwithstanding attempts by outside parties to gain control
of the Company; and

   WHEREAS, the Board believes it important, since the Company may receive
proposals from such outside parties, to enable such executives, without being
distracted by the uncertainties of their own employment situations, to perform
their regular duties and where appropriate to assess such proposals and advise
the Board as to the best interests of the Company and its shareholders and to
take such other action as the Board determines to be appropriate; and

   WHEREAS, the Board also wishes to demonstrate to the executives that the
Company is concerned with their welfare and intends to assure that loyal
executives are treated fairly.

   NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:

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     1.   In the event that any individual, corporation, partnership, company or
other entity (a "Person"), which terms shall include a "group" (within the
meaning of section 13(d) of the Securities Exchange Act of 1934, as amended (the
"Act")), begins a tender or exchange offer, circulates a proxy to the Company's
shareholders, or takes other steps to effect a "Change of Control" (as defined
in paragraph 3 below), Executive agrees that he will not voluntarily leave the
employ of the Company and will render the services contemplated in the recitals
to this Agreement until such Person has terminated its efforts to effect a
Change of Control or until a Change of Control has occurred.

     2.   If, within twenty-four months after a Change of Control, Executive's
employment is terminated by the Company for any reason other than Cause (as
defined in paragraph 4 below) subject to paragraph 6 below:

          a.   the Company will pay to Executive within 30 days of such
termination of employment a lump-sum cash payment equal to 200% of his average
annual compensation for the most recent five years ending before the Change of
Control (or for such shorter portion of that period as Executive performed
services for the Company), including for this purpose all compensation included
by the Company on his Forms W-2 for such years; and

          b.   any stock options granted to Executive by the Company will become
immediately exercisable in full; and

          c.   the Company will pay to Executive within 30 days of such
termination of employment a lump-sum cash payment equal to the full balance
standing to his credit with the Company under any and all deferred compensation
plans or arrangements; and

          d.   the Company will promptly reimburse Executive for any and all
legal fees and expenses incurred by him as a result of such termination of
employment, including, without limitation, all fees and expenses incurred to
enforce the provisions of this Agreement.

     3.   A Change of Control will occur for purposes of this Agreement if (i)
any Person becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Act) of more than thirty percent (30%) of the then outstanding voting stock of
the Company, (ii) there 

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is a change of control of the Company of a kind which would be required to be
reported under Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Act (or a similar item in a similar schedule or form) whether or not the Company
is then subject to such reporting requirement, (iii) the Company is a party to a
merger, consolidation, sale of assets or other reorganization or a proxy
contest, as a consequence of which members of the Board in office immediately
prior to such transaction or event constitute less than a majority of the Board
thereafter, or (iv) during any period of two consecutive years (which period may
begin before the date of this Agreement), individuals who at the beginning of
such period constituted the Board cease for any reason to constitute a majority
thereof; provided, however, that any director who is not in office at the
beginning of such twenty-four month period but whose election by the Board or
whose nomination for election by the Company's shareholders was approved by a
vote of at least two-thirds of the directors then still in office who either
were directors at the beginning of such period or whose election or nomination
for election was previously so approved shall be deemed to have been in office
at the beginning of such period for purposes of this definition. Notwithstanding
the foregoing provisions of this paragraph 3, a Change of Control will not be
deemed to have occurred solely because of the acquisition or ownership of
securities of the Company (or any reporting requirement under the Act relating
thereto) by any employee benefit plan maintained by the Company for the benefit
of employees.

     4.   "Cause" means only the willful commission by Executive of theft,
embezzlement or other serious and substantial crimes against the Company.  For
purposes of this definition, no act or omission shall be considered to have been
"willful" unless it was not in good faith and Executive had knowledge at the
time that the act or omission was not in the best interest of the Company.

     5.   If Executive leaves the employ of the Company for any reason following
a reduction in his position, compensation, responsibilities, authority, fringe
benefits, perquisites or any other benefit or privilege enjoyed by him prior to
the Change of Control or following an attempt by the Company after a Change of
Control to relocate Executive outside the Greater Houston Metropolitan Area or,
if Executive is at the time 

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of the Change of Control employed outside the Greater Houston Metropolitan Area,
an area of approximately comparable size surrounding the place where he is then
employed, or to require him to perform regular services outside of such area,
his employment will be deemed to have been terminated by the Company for reasons
other than Cause.

     6.   The payments and benefits due to Executive under paragraph 2 will be
subject to reduction as provided in this paragraph 6 for the purpose of avoiding
a limitation on the Company's federal income tax deduction of "excess parachute
payments" under section 280G of the Internal Revenue Code of 1986.  Within 20
days after the termination of Executive's employment, Executive may (but is not
required to ) submit to the Company a written opinion of a nationally recognized
accounting firm, employment consulting firm or law firm selected by Executive to
the effect that, in such firm's opinion, the payments and benefits due to
Executive hereunder are not required to be reduced in order to avoid such
limitation on the Company's deduction, or if such firm is of the view that a
reduction in the payments and benefits should be reduced.  The opinion of such
firm concerning the extent of the required reduction, if any, in such payments
and benefits (which opinion need not be free from doubt), shall be final and
binding on both Executive and the Company.  The Company agrees to pay the fees
and expenses of such firm in preparing and rendering its opinion.  If Executive
does not submit such an opinion within 20 days after termination of Executive's
employment, the Company will make the determination to the extent of the
required reduction, if any, in the payments and benefits due to Executive
pursuant to this paragraph 6, and will make such payments and provide such
benefits to Executive no later than 30 days after the termination of Executive's
employment.  The determination of the Company concerning the extent of such
required reduction will not be binding and will be subject to arbitration in
accordance with paragraph 8 of this Agreement.  In connection with any required
reduction in the payments or benefits due to Executive pursuant to this
paragraph 6, Executive will be entitled to designate the particular payments
and/or benefits to be reduced.

     7.   If there has been a termination to which paragraph 2 applies, and the
Company and Executive agree that Executive shall provide post-termination
consulting 

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or other services to the Company, the Company shall be entitled to reduce its
payment for such post-termination consulting or other services to the extent of
the payment made by it pursuant to paragraph 2. This paragraph 7 shall not
obligate either the Company or Executive to agree to Executive's provision of
post-termination services.

     8.   In the case of any dispute under this Agreement, Executive may
initiate binding arbitration in Houston, Texas, before the American Arbitration
Association by serving a notice to arbitrate upon the Company or, at Executive's
election, institute judicial proceedings in either case within 90 days of the
effective date of his termination or, if later, his receipt of notice of
termination, or such longer period as may be reasonably necessary for Executive
to take such action if illness or incapacity should impair him taking such
action within the 90-day period.  The Company agrees (i) to pay the cost of any
such arbitration and/or judicial proceeding, and (ii) to pay interest to
Executive on any amounts ultimately found to be due to Executive hereunder
during any period of time that such amounts are withheld pending arbitration
and/or judicial proceedings.

     9.   If the Company is at any time, whether before or after or as a part of
a Change of Control, merged or consolidated into or with any other corporation
or other entity (whether or not the Company is the surviving entity), or if
substantially all of the assets thereof are transferred to another corporation
or other entity, the provisions of this Agreement will be binding upon and inure
to the benefit of the corporation or other entity resulting from such merger or
consolidation or the acquirer of such assets, and this paragraph 9 will apply in
the event of any subsequent merger or consolidation or transfer of assets.  In
the event of any merger, consolidation or sale of assets described above,
nothing contained in this Agreement will detract from or otherwise limit
Executive's right to or privilege of participation in any stock option or
purchase plan or any bonus, profit sharing, pension, group insurance,
hospitalization or other incentive or benefit plan or arrangement which may be
or become applicable to executives of the corporation resulting from such merger
or consolidation or the corporation acquiring such assets from the Company.  In
the event of any merger, consolidation or sale of assets described above,
references to the Company in this Agreement shall unless the context suggests

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otherwise be deemed to include the entity resulting from such merger or
consolidation or the acquirer of such assets of the Company.

     10.  All payments required to be made by the Company hereunder to Executive
or his dependents, beneficiaries or estate will be subject to the withholding of
such amounts relating to tax and/or other payroll deductions as may be required
by law.

     11.  No amendment, change or modification of this Agreement may be made
except in writing, signed by both parties.

     12.  At the election of the Company, this Agreement shall not apply to a
Change of Control which takes place after the third anniversary of the date
first written above, provided that the Company has given Executive notice of its
election at least 30 days before the Change of Control.

     13.  Payments made by the Company pursuant to this Agreement shall be in
lieu of severance payments, if any, which might otherwise be available to
Executive.

     14.  The provisions of this Agreement shall be binding upon and shall inure
to the benefit of Executive, his executors, administrators, legal
representatives and assigns, and the Company and its successors.

     15.  The validity, interpretation and effect of this Agreement shall be
governed by the laws of the State of Texas.

     16.  There shall be no right of set-off or counterclaim in respect of any
claim, debt or obligation, against any payments to Executive, his dependents,
beneficiaries or estate provided for in this Agreement.

     17.  No right or interest to or in any payments shall be assignable by
Executive; provided, however, that this provision shall not preclude him from
designating one or more beneficiaries to receive any amount that may be payable
after his death and shall not preclude the legal representative of his estate
from assigning any right hereunder to the person or persons entitled thereto
under his will or, in the case of intestacy, to the person or persons entitled
thereto under the laws of intestacy applicable to his estate.  The term
"beneficiaries" as used in this Agreement shall mean a beneficiary or
beneficiaries so designated to receive any such amount or, if no beneficiary has
been so designated, the legal representative of Executive's estate.

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     18.  No right, benefit or interest hereunder shall be subject to
anticipation, alienation, sale, assignment, encumbrance, change, pledge,
hypothecation or set-off in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process, or assignment by operation of
law.  Any attempt, voluntary or involuntary, to effect any action specified in
the immediately preceding sentence, shall, to the full extent permitted by law,
be null, void and of no effect.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date set forth above.

                                    GAMMA BIOLOGICALS, INC.

                                    By:  /s/ David E. Hatcher
                                       -------------------------
                                    Name:  David E. Hatcher
                                    Title: Chairman


                                    /s/ Raul F. Alvarez
                                    ----------------------------
                                    Raul F. Alvarez, Executive

 
 

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