[FORM OF UNIT PURCHASE WARRANT]

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, (B) AN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (C) REASONABLE ASSURANCE HAVING BEEN PROVIDED TO THE COMPANY
THAT SUCH OFFER, SALE, ASSIGNMENT OR TRANSFER IS BEING MADE PURSUANT TO RULE 144
OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

VIRAL GENETICS, INC.

UNIT PURCHASE WARRANT

Unit Purchase Warrant No. __________: Principal Amount of Additional
Debentures:_______________ Date of Issuance: March __, 2006 (“ISSUANCE DATE”)

VIRAL GENETICS, INC., a Delaware corporation (the “COMPANY”), hereby certifies
that, for value received, the receipt and sufficiency of which are hereby
acknowledged, [BUYERS], the registered holder hereof or its permitted assigns
(the “HOLDER”), is entitled, subject to the terms set forth below to purchase
from the Company, at the Exercise Price (as defined below) then in effect, at
any time or times on or after the Effective Date (as defined in the Purchase
Agreement by and among the Company and the buyers referred to therein of the
Registration Statement (as defined in the Registration Rights Agreement), but
not after 11:59 P.M., New York Time, on the Expiration Date (as defined below),
up to a total of $, in principal amount of additional Debentures (“Additional
Debentures”) and additional Warrants (“Additional Warrants”). Except as
otherwise defined herein, capitalized terms in this Unit Purchase Warrant shall
have the meanings set forth in Section 15 or in that certain Securities Purchase
Agreement, dated as of March __, 2006, by and among the Company and the buyers
referred to therein, including the Holder (the “SECURITIES PURCHASE AGREEMENT”).

1. EXERCISE OF UNIT PURCHASE WARRANT.

(a) Mechanics of Exercise. Subject to the terms and conditions hereof, this UNIT
PURCHASE WARRANT may be exercised by the Holder hereof on any day beginning on
or after the Effective Date of the Registration Statement . and ending on and
including the date which is nine months after such Effective Date (the
“EXPIRATION DATE”), in whole or in part, by (i) delivery of a written notice, in
the form attached hereto as Exhibit A (the “EXERCISE NOTICE”), of such Holder’s
election to exercise this UNIT PURCHASE WARRANT and (ii) payment to the Company
of an amount equal to $1.00 for each $1.00 of principal amount of Additional
Debentures as to which this UNIT PURCHASE WARRANT is being exercised (the
“EXERCISE PRICE”) in cash or wire transfer of immediately available funds. The
date the Exercise Notice and the Exercise Price are delivered to the Company (as
determined in accordance with the notice provisions hereof) is an “EXERCISE
DATE” provided, however, that if the Exercise Notice

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and the Exercise Price are not delivered to the Company on the same date, the
Exercise Date shall be the date of the later of the two deliveries. The Holder
of this UNIT PURCHASE WARRANT shall not be required to deliver the original UNIT
PURCHASE WARRANT in order to effect an exercise hereunder. Execution and
delivery of the Exercise Notice with respect to less than all of the Additional
Debentures shall have the same effect as cancellation of the original UNIT
PURCHASE WARRANT and issuance of a new UNIT PURCHASE WARRANT evidencing the
right to purchase the remaining number of Additional Debentures. On or before
the first Business Day following the Exercise Date, the Company shall transmit
by facsimile an acknowledgment of receipt of the Exercise Notice and the
Exercise Price to the Holder hereof. On or before the third Business Day
following the Exercise Date, the Company shall issue and deliver to the address
as specified in the Exercise Notice an Additional Debenture, registered in the
name of the Holder of this UNIT PURCHASE WARRANT or its designee, in the
principal amount as to which the Holder of this UNIT PURCHASE WARRANT is
entitled pursuant to such exercise, and Additional Warrants to purchase a number
of shares of Common Stock equal to 100% of the principal amount of the
Additional Debentures so issued divided by the Conversion Price. On the Exercise
Date, the Holder of this UNIT PURCHASE WARRANT shall be deemed for all corporate
purposes to have become the Holder of record of the Additional Debenture and
Additional Warrants with respect to which this UNIT PURCHASE WARRANT has been
exercised, irrespective of the date of delivery of such Additional Debenture and
Additional Warrants. Upon surrender of this UNIT PURCHASE WARRANT to the Company
following one or more partial exercises, the Company shall as soon as
practicable and in no event later than three Business Days after receipt of the
UNIT PURCHASE WARRANT and at its own expense, issue a new UNIT PURCHASE WARRANT
representing the right to purchase the number of Additional Debentures
Additional Warrants purchasable immediately prior to such exercise under this
UNIT PURCHASE WARRANT, less the principal amount of Additional Debentures and
number of Additional Warrants with respect to which this UNIT PURCHASE WARRANT
is exercised. The Company shall pay any and all taxes which may be payable with
respect to the issuance and delivery of Additional Debentures and Additional
Warrants upon exercise of this UNIT PURCHASE WARRANT; provided that the Company
shall not be required to pay any tax that may be payable in respect of any
issuance and delivery of Additional Debentures or Additional Warrants to any
Person other than the Holder or with respect to any income tax due by the Holder
with respect to such Additional Debentures and Additional Warrants.

(b) Company’s Failure to Timely Deliver Additional Debentures. If the Company
shall fail for any reason or for no reason to issue to the Holder within three
Business Days of the Exercise Date, Additional Debentures, the Company shall pay
as additional damages in cash to such Holder on each day after such third
Business Day that the issuance of such Additional Debentures is not timely
effected an amount equal to 1.0% of the principal amount of the Additional
Debentures into which this UNIT PURCHASE WARRANT is exercisable.

(c) Absolute and Unconditional Obligation. The Company’s obligations to issue
and deliver Additional Debentures and Additional Warrants in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, the recovery of any judgment against
any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person. Nothing herein shall
limit the Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity, including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to
timely deliver Additional Debentures or Additional Warrants upon exercise of the

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UNIT PURCHASE WARRANT as required pursuant to the terms hereof.

3. NONCIRCUMVENTION.

The Company hereby covenants and agrees that the Company will not, by amendment
of its Certificate of Incorporation or through any Fundamental Transaction,
issue or sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this UNIT PURCHASE
WARRANT, and will at all times in good faith carry out all the provisions of
this UNIT PURCHASE WARRANT and take all action as may be required to protect the
rights of the Holder of this UNIT PURCHASE WARRANT.

4. REISSUANCE OF UNIT PURCHASE WARRANTS.

(a) Transfer of UNIT PURCHASE WARRANT. If this UNIT PURCHASE WARRANT is to be
transferred, the Holder shall surrender this UNIT PURCHASE WARRANT to the
Company, whereupon the Company will forthwith issue and deliver upon the order
of the Holder of this UNIT PURCHASE WARRANT a new UNIT PURCHASE WARRANT,
registered as the Holder of this UNIT PURCHASE WARRANT may request, representing
the right to purchase the principal amount of Additional Debentures and number
of Additional Warrants being transferred by the Holder and, if less than the
total number of Additional Debentures and Additional Warrants then underlying
this UNIT PURCHASE WARRANT is being transferred, a new UNIT PURCHASE WARRANT to
the Holder of this UNIT PURCHASE WARRANT representing the right to purchase the
principal amount of Additional Debentures and number of Additional Warrants not
being transferred.

(b) Lost, Stolen or Mutilated UNIT PURCHASE WARRANT. Upon receipt by the Company
of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this UNIT PURCHASE WARRANT, and, in the case of
loss, theft or destruction, of any indemnification undertaking by the Holder of
this UNIT PURCHASE WARRANT to the Company in customary form and, in the case of
mutilation, upon surrender and cancellation of this UNIT PURCHASE WARRANT, the
Company shall execute and deliver to the Holder a new UNIT PURCHASE WARRANT
representing the right to purchase the principal amount of Additional Debentures
and number of Additional Warrants then underlying this UNIT PURCHASE WARRANT.

(c) UNIT PURCHASE WARRANT Exchangeable for Multiple UNIT PURCHASE WARRANTs. This
UNIT PURCHASE WARRANT is exchangeable, upon the surrender hereof by the Holder
at the principal office of the Company, for a new UNIT PURCHASE WARRANT or UNIT
PURCHASE WARRANT representing in the aggregate the right to purchase the
principal amount of Additional Debentures and number of Additional Warrants then
underlying this UNIT PURCHASE WARRANT, and each such new UNIT PURCHASE WARRANT
will represent the right to purchase such portion of such Additional Debentures
and Additional Warrants as is designated by the Holder of this UNIT PURCHASE
WARRANT at the time of such surrender.

(d) Issuance of New UNIT PURCHASE WARRANT. Whenever the Company is required to
issue a new UNIT PURCHASE WARRANT pursuant to the terms of this UNIT PURCHASE
WARRANT, such new UNIT PURCHASE WARRANT (i) shall be of like tenor with this
UNIT PURCHASE WARRANT, (ii) shall represent, as indicated on the face of such
new UNIT PURCHASE WARRANT, the right to purchase the principal amount of
Additional Debentures and number of Additional Warrants then underlying this
UNIT PURCHASE

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WARRANT, (iii) shall have an issuance date, as indicated on the face of such new
UNIT PURCHASE WARRANT which is the same as the Issuance Date, and (iv) shall
have the same rights and conditions as this UNIT PURCHASE WARRANT.

5. COVENANTS.

(a) Disclosure of Transactions and Other Material Information. On or before 8:30
a.m., New York Time, on the second Business Day following each Exercise Date,
the Company shall file a Current Report on Form 8-K, describing the terms of the
transactions contemplated by the exercise of this UNIT PURCHASE WARRANT in the
form required by the 1934 Act.

(b) Transfer or Resale. This UNIT PURCHASE WARRANT may not be sold, transferred
or assigned to any Person other than (i) if the seller, transferor or assignor
of the UNIT PURCHASE WARRANT is a “qualified institutional buyer” as that term
is defined in Rule 144A of the Securities Act (“QIB”), to a QIB, and (ii) if the
seller, transferor or assignor is not a QIB, to an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D that is an institution.

6. NOTICES.

Whenever notice is required to be given under this UNIT PURCHASE WARRANT, unless
otherwise provided herein, such notice shall be given in accordance with the
Securities Purchase Agreement. The Company shall provide the Holder of this UNIT
PURCHASE WARRANT with prompt written notice of all actions taken pursuant to
this UNIT PURCHASE WARRANT, including in reasonable detail a description of such
action and the reason therefore.

7. AMENDMENT AND WAIVER.

Except as otherwise provided herein, the provisions of this UNIT PURCHASE
WARRANT may be amended and the Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, only if the
Company has obtained the written consent of the Required Holders; provided that
no such action may increase the exercise price of any UNIT PURCHASE WARRANTs or
decrease the principal amount of Additional Debentures or number of Additional
Warrants

 

obtainable upon exercise of any UNIT PURCHASE WARRANTs without the written
consent of the Holder of this UNIT PURCHASE WARRANT.

No such amendment shall be effective to the extent that it applies to less than
all of the Holders of the UNIT PURCHASE WARRANTs then outstanding.

8. GOVERNING LAW.

This UNIT PURCHASE WARRANT shall be construed and enforced in accordance with,
and all questions concerning the construction, validity, interpretation and
performance of this UNIT PURCHASE WARRANT shall be governed by, the internal
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York.

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9. CONSTRUCTION; HEADINGS.

This UNIT PURCHASE WARRANT shall be deemed to be jointly drafted by the Company
and the Holder and shall not be construed against any person as the drafter
hereof. The headings of this UNIT PURCHASE WARRANT are for convenience of
reference and shall not form part of, or affect the interpretation of, this UNIT
PURCHASE WARRANT.

10. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.

The remedies provided in this UNIT PURCHASE WARRANT shall be cumulative and in
addition to all other remedies available under this UNIT PURCHASE WARRANT, the
Securities Purchase Agreement and the other Transaction Documents (as defined in
the Securities Purchase Agreement), at law or in equity (including a decree of
specific performance and/or other injunctive relief), and nothing herein shall
limit the right of the Holder of this UNIT PURCHASE WARRANT to pursue actual
damages for any failure by the Company to comply with the terms of this UNIT
PURCHASE WARRANT. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder of this UNIT
PURCHASE WARRANT and that the remedy at law for any such breach may be
inadequate. The Company therefore agrees that, in the event of any such breach
or threatened breach, the Holder of this UNIT PURCHASE WARRANT shall be
entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.

11. TRANSFER.

(a)This UNIT PURCHASE WARRANT may be offered for sale, sold, transferred or
assigned without the consent of the Company. Each person to whom this UNIT
PURCHASE WARRANT is sold, transferred or assigned shall expressly assume the
obligations of the Holder.

(b) The Company shall be entitled to treat the registered Holder of this Unit
Purchase Warrant as the absolute owner hereof and shall incur no liability for
the issuance of Additional Debentures and Additional Warrants or for other
action taken hereunder in good faith based upon such ownership until such time
as a written assignment of this Unit Purchase Warrant is effected by such
registered owner.

12. CERTAIN DEFINITIONS.

For purposes of this UNIT PURCHASE WARRANT, the following terms shall have the
following meanings:

(a) “BUSINESS DAY” means any day other than Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized or required by law
to remain closed.

(b) “COMMON STOCK” means (i) the Company’s common stock, par value $0.01 per
share, and (ii) any capital stock into which such Common Stock shall have been
changed or any capital stock resulting from a reclassification of such Common
Stock.

 

(c) “PERSON” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.

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(d) “REQUIRED HOLDERS” means the holders of UNIT PURCHASE WARRANTs representing
the right to acquire at least a majority of the principal amount of Additional
Debentures underlying the UNIT PURCHASE WARRANTs then outstanding.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company has caused this UNIT PURCHASE WARRANT to be duly
executed as of the Issuance Date set out above.

VIRAL GENETICS, INC.

By:__________________________________________

Name:

Title:

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EXHIBIT A

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

UNIT PURCHASE WARRANT

VIRAL GENETICS, INC.

To: VIRAL GENETICS, INC.

The undersigned is the holder of Unit Purchase Warrant No. (the “UNIT PURCHASE
WARRANT”) issued by VIRAL GENETICS, INC., a Delaware corporation (the
“COMPANY”). Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the UNIT PURCHASE WARRANT.

1. The UNIT PURCHASE WARRANT is currently exercisable to purchase a total of
$__________ principal amount of Additional Debentures.

2. The undersigned holder hereby exercises its right to purchase $__________
principal amount of Additional Debentures pursuant to the UNIT PURCHASE WARRANT.

3. The holder shall pay the sum of $ to the Company in accordance with the terms
of the UNIT PURCHASE WARRANT.

4. Pursuant to this exercise, the Company shall deliver to the holder
$__________ principal amount of Additional Debentures in accordance with the
terms of the UNIT PURCHASE WARRANT.

5. Following this exercise, the UNIT PURCHASE WARRANT shall be exercisable to
purchase a total of $ principal amount of Additional Debentures.

Please issue the Additional Debentures in the following name and to the
following address:

Issue to:

Date: _____________________, ___________,

Name of Registered Holder

By: ___________________________________

Name:

 

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Title:

FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of UNIT PURCHASE WARRANT]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the
right represented by the within UNIT PURCHASE WARRANT to purchase $ principal
amount of Additional Debentures of VIRAL GENETICS, INC., to which the within
UNIT PURCHASE WARRANT relates and appoints attorney to transfer said right on
the books of VIRAL GENETICS, INC. with full power of substitution in the
premises.

Dated:__________________, __________

(Signature must conform in all respects to name of holder as specified on the
face of the UNIT PURCHASE WARRANT)

Address of Transferee

In the presence of:

 

 

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