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                                                                   EXHIBIT 10.26


                            SEROLOGICALS CORPORATION



                               December 30, 1999



Mr. Samuel A. Penninger, Jr.
2015 Kings Cross Road
Alpharetta, GA 30022

Dear Mr. Penninger:

         You have indicated to us and confirm by your signature below that you
will, not later than the day before the Company's next annual meeting of
stockholders, or earlier if requested by the Board of Directors of Serologicals
Corporation (the "Company"), resign as the Chairman of the Board of the Company
(the "Effective Date"). In connection with such resignation, we have agreed to
provide you with the severance benefits set forth in this letter agreement.

1.       Severance Payments

         The Company shall pay to you the aggregate sum of $275,000 on or prior
to January 14, 2000. All payments under this Section 1 shall be subject to all
applicable federal, state and local withholding taxes, if any. The Company
acknowledges receipt of your Form W-4 dated December 30, 1999. Subject to
collection of the payment provided for in this Section 1 and the compensation
provided for in Section 2, you acknowledge and agree that you are not entitled
to any other payments from the Company or its affiliates.

2.       Director Compensation

         You agree that should you continue serving as a director of the
Company, you irrevocably waive any right to the "lump sum" grant of stock
options under Section 4 (or any successor section) of the Company's Amended and
Restated 1995 Non-Employee Directors' Stock Option Plan (the "Option Plan") but
instead shall receive stock options in 1999 to purchase 9,000 shares of common
stock of the Company under the Company's Amended and Restated Omnibus Incentive
Plan and shall be eligible (if serving as a director) to receive annual grants
of stock options under Section 5 (or any successor section) of the Option Plan
in accordance with the terms of the Option Plan commencing in 2001.

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Mr. Samuel A. Penninger, Jr.
December 30, 1999
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         Commencing on the date hereof, you will be entitled to the cash
compensation and reimbursement of expenses for attendance at board meetings
payable to non-employee directors generally.

3. General Release and Waiver

         (1)      You hereby release, remise, acquit and discharge the Company
and its subsidiaries, partners, directors, agents, employees, consultants,
independent contractors, attorneys, advisers, successors and assigns, jointly
and severally, from any and all claims, known or unknown, which you, your heirs,
successors, or assigns have or may have against any of such parties and any and
all liability which any of such parties may have to you whether denominated
claims, demands, causes of action, obligations, damages or liabilities arising
from any and all bases, however denominated, including but not limited to claims
under that certain severance agreement by and between Serologicals, Inc. and
you, dated as of August 3, 1993, and the letter dated April , 1996 with respect
thereto (collectively, the "Severance Agreement"), claims of discrimination
under the Civil Rights Act of 1866, as amended, the Civil Rights Act of 1991, as
amended, Title VII of the United States Civil Rights Act of 1964, as amended, 42
U.S.C. Section 1981, the Equal Pay Act, the Age Discrimination in Employment
Act, the Americans with Disabilities Act, the Employee Retirement Income
Security Act of 1974, as amended, or any other federal, Georgia or other state
or local law concerning wages, employment and discharge, and any other law,
rule, or regulation or workers' compensation or disability claim under any such
laws. Notwithstanding any other provision of this Letter Agreement, this release
is not intended to interfere with your right to file a charge with the U.S.
Equal Employment Opportunity Commission in connection with any claim you believe
you may have against the Company. However, by signing and returning the
acknowledgment copy of this Letter Agreement, you agree to waive the right to
recover damages in any proceeding you may bring before the U.S. Equal Employment
Opportunity Commission or in any proceeding brought by the U.S. Equal Employment
Opportunity Commission on your behalf. This release relates to claims arising
from and during your employment relationship with the Company or as a result of
the termination of such relationship. This release is for any relief, no matter
how denominated, including but not limited to wages, back pay, front pay, tort
claims, compensatory damages or punitive damages, in any such case whether or
not such claims have been previously asserted by you. You further agree that you
will not file or permit to be filed on your behalf any such released claim. This
release shall not apply to the obligations set forth in this Letter Agreement or
any other claims that may arise after the date on which you sign the
acknowledgment copy of this Letter Agreement.

         (2)      You expressly acknowledge that the severance payments being
offered to you are payments to which you may not otherwise be entitled and
constitute consideration for the foregoing release.

         (3)      You hereby acknowledge that you have been provided the
opportunity to take 21 days to consider whether to execute this Letter
Agreement, although the Company and you

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Mr. Samuel A. Penninger, Jr.
December 30, 1999
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understand that you may, if you so choose, execute this Letter Agreement prior
to the expiration of that 21 day waiting period.

         (4)      You understand that during the seven (7) days following your
execution of this Letter Agreement you may revoke your agreement hereto at any
time by notifying the Company in writing. You acknowledge and agree that in the
event that you revoke your agreement hereto this entire Letter Agreement will be
thereby revoked and you shall return to the Company immediately any payments or
benefits received hereunder.

4.       Return of Company Property; Other Matters

         (1)      You represent that you have returned to the Company all of the
Company's documents (other than documents necessary for your continued service
as a director of the Company) held by you as well as keys and Company credit
cards.

         (2)      You agree that upon execution of this Letter Agreement, or as
otherwise mutually agreed upon by you and the Company, you will vacate your
office at the Company and the Company will no longer be providing an office or
related office services to you. You agree that upon the receipt of the payment
required by Section 1 hereof, you shall no longer be an employee of the Company.

5.       Heirs and Assigns

         (1)      This Letter Agreement is personal to you and, without the
prior written consent of the Company, shall not be assignable by you other than
(i) by will or the laws of descent and distribution or (ii) to a trust, the sole
beneficiaries of which are any or all of you, your spouse or any of your lineal
ancestors or descendants.

         (2)      The terms of this Letter Agreement shall inure to the benefit
of and shall be binding on the Company and its respective successors and
assigns.

6.       General Provisions

         (1)      This Letter Agreement constitutes the entire understanding of
the Company and you with respect to the subject matter hereof, and supersedes
all prior understandings, written or oral, including, without limitation, the
Severance Agreement, other than the Indemnification Agreement, dated as of May
9, 1995, by and between the Company and you. The terms of this Letter Agreement
may be changed, modified or discharged only by an instrument in writing signed
by the parties hereto. A failure of a party to insist on strict compliance with
any provision of this Letter Agreement shall not be deemed a waiver of such
provision or any other provision hereof. The invalidity or unenforceability of
any provision of this Letter Agreement shall in no way affect the validity or

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Mr. Samuel A. Penninger, Jr.
December 30, 1999
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enforceability of any other provision. In the event that any provision of this
Letter Agreement is determined to be so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.

         (2)      You hereby represent that you have reviewed all aspects of
this Letter Agreement, that you have carefully read and understand all of the
provisions of this Letter Agreement, that you understand that in agreeing to
this document, you are releasing the Company, with prejudice, from any and all
claims you may have against the Company, that you voluntarily agree to all the
terms set forth in this Letter Agreement, and that you knowingly and willingly
intend to be legally bound by those terms. You further acknowledge that you have
or have had the opportunity to review it with an attorney.

         (3)      This Letter Agreement shall be construed, enforced and
interpreted in accordance with and governed by the laws of the State of Georgia
without reference to the principles of conflicts of law.

         (4)      The Company represents that this Agreement has been duly
authorized and executed by an officer authorized to sign this Agreement on
behalf of the Company.

         Upon your signature and return of this Letter Agreement, this Letter
Agreement will be effective, enforceable and irrevocable.

                                   Sincerely,


                                   By: /s/ Regina Bryant
                                      ------------------------------------------
                                      Name:  Regina Bryant
                                      Title: Director, Human Resources


Agreed to and Accepted
as of the date first above-written:


 /s/ Samuel A. Penninger, Jr.
-------------------------------------
Samuel A. Penninger, Jr.

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