Exhibit 10.2
Form 10-KSB, 2001
Viral Genetics, Inc.
File No. 000-26875

    DISTRIBUTOR AGREEMENT between Viral Genetics, Ltd. and Esigar Quirurgica,
                                  S.A. de C.V.

Viral  Genetics,  Ltd.,  hereinafter  referred  to as the  "Company"  and Esigar
Quirurgica,   S.A.  de  C.V.,  hereinafter  referred  to  as  "Distributor,"  in
consideration  of the promises  made herein and  intending to be legally  bound,
agree as follows:

                               ARTICLE 1. RECITALS

Legal Status of Company

Section 1.01. The Company is a corporation duly organized, validly existing, and
in good standing under the laws of the State of California, with corporate power
to own  property  and carry on its  business as it is now being  conducted.  The
Company has its  principal  office and place of business at 905 Mission  Street,
Pasadena California 91030.

Status of Distributor

Section 1.02. Distributor is a corporation duly organized, validly existing, and
in good standing  under the laws of the Mexican  United  States,  with corporate
power  to own  property  and  carry  on its  business  as  contemplated  by this
Agreement.  Distributor has its principal offices and place of business at Calle
Tecamachalco No. 15, P.H., Colonia Reforma Social, 11,000 Mexico, D.F.

Company Business

Section 1.03. The Company is engaged in the manufacture and sale of Medicine for
the treatment of Acquired Immune  Deficiency  "Aid" and other products from time
to time manufactured and sold under the trade name "VTI."

Facilities, Ability, and Desire to be Distributor

Section 1.04.  (a) The  Distributor  represents  that he possesses the technical
facilities and ability to promote the sale and use of products  manufactured  by
the Company and is desirous of  developing  demand for and selling such products
on all exclusive basis in the Territory hereinafter described.

(b) Company is desirous of having  Distributor  develop  demand for and sell its
products in such Territory on the terms and conditions set forth herein.



                                      E-5
<PAGE>


                           ARTICLE 2. DISTRIBUTORSHIP

Exclusive Appointment

Section  2.01.  (a)  The  Company  appoints  the  Distributor  as the  exclusive
distributor  for the sale of its products at wholesale  within the Territory of:
the Mexican  United  States and all the  countries of Central and South  America
(hereinafter "Territory). The Territory so described, and as may be subsequently
enlarged,  reduced,  or otherwise changed in area with the mutual consent of the
parties hereto, is hereinafter sometimes referred to a the "Territory."

(b) During the life of this  Agreement,  the Company  must not sell the products
directly or  indirectly  and shall not appoint  any other or  different  person,
firm, or  corporation  to sell the same products in the  Territory.  The parties
agree that within a term of thirty (30)  calendar days starting from the date of
this Agreement, the Company must terminate any other Agreement executed prior to
this date for the distribution of its products within the Territory.

(c)  Given  the  above-mentioned,  the  parties  agree  that any sale  operation
verified in the  Territory,  shall be considered as a  Distributor's  sale,  and
shall give the later the right to ask for the corresponding  compensation in the
terms and conditions provided herein.

(d) Any new products that are development  and marketed by Company,  Distributor
will be  given a  forty-five  (45)  calendar  days  first  right of  refusal  to
distribute within the Territory as agreed upon.

(e)  Distributor  warrants to Company  that it does not  currently  represent or
promote any lines or products that compete with the products. During the term of
this Agreement,  Distributor shall not, without Company's prior written consent,
represent,  promote or otherwise  try to sell within the  Territory any lines or
products that, in Company's judgment,  compete with the products covered by this
Agreement.

(f) The  parties  acknowledge  and agree that the  relationship  of Company  and
Distributor  established by this  Agreement is that of independent  contractors,
not an agency  relationship  and nothing  contained in this  Agreement  shall be
construed  to (i)  give  either  party  the  power to  direct  and  control  the
day-to-day  activities of the other,  (ii)  constitute  the parties as partners,
joint  venturers,  co-owners or otherwise as  participants  in a joint or common
undertaking,  or (iii) allow  Distributor  to create or assume any obligation on
behalf  of  Company  for  any  purpose  whatsoever.  All  financial  obligations
associated  with   Distributor's   business  are  the  sole   responsibility  of
Distributor.

All  sales  and other  agreements  between  Distributor  and its  customers  are
Distributor's exclusive responsibility and shall have no effect on Distributor's
obligations under this Agreement.  Distributor shall be solely  responsible for,
and shall indemnify and hold Company free and harmless from, any and all claims,
damages or lawsuits  (including  Company's  attorneys'  fees) arising out of the
acts of Distributor, and its Employees or its agents.

                                      E-6
<PAGE>

(g) Distributor  agrees that Company owns all right,  title, and interest in the
product  lines  that  include  the  products  and in all of  Company's  patents,
trademarks,  trade names,  inventions,  copyrights,  know-how, and trade secrets
relating to the design,  manufacture,  operation or service of the products. The
use by Distributor of any of these  property  rights is authorized  only for the
purposes herein set forth, and upon termination of this Agreement for any reason
such authorization shall cease.

The products are offered for sale and are sold by Company  subject in every case
to the  condition  that such sale does not convey any  license,  expressly or by
implication, to manufacture, duplicate or otherwise copy or reproduce any of the
products.  Distributor  shall  take  appropriate  steps with its  customers,  as
Company  may  request,  to  inform  them  of  and  assure  compliance  with  the
restrictions contained in this paragraph.

Distributor acknowledges that by reason of its relationship to Company hereunder
it will have access to certain  information and materials  concerning  Company's
business, plans, customers,  technology,  and products that are confidential and
of  substantial  value  to  Company,  which  value  would  be  impaired  if such
information were disclosed to third parties. Distributor agrees that it will not
use in any way for its own  account  or the  account  of any  third  party,  nor
disclose to any third party, any such confidential information revealed to it by
Company.  Distributor  shall take every  reasonable  precaution  to protect  the
confidentiality of such information. Upon request by Distributor,  Company shall
advise whether or not it considers any particular information or materials to be
confidential.  Distributor  shall not publish any technical  description  of the
products beyond the  description  published by Company (except to translate that
description  to  appropriate  languages  for the  Territory).  In the  event  of
termination  of  this  Agreement,  there  shall  be  no  use  or  disclosure  by
Distributor of any confidential  information of Company,  and Distributor  shall
not  manufacture  or have  manufactured  any devices,  components  or assemblies
utilizing any of the Company's  confidential  information.  Company acknowledges
that by reason of its relationship to Distributor  hereunder it will have access
to certain information and materials concerning  Distributor's business,  plans,
customers,  technology,  and products that are  confidential  and of substantial
value to  Distributor,  which value would be impaired if such  information  were
disclosed to third  parties.  Company agrees that it will not use in any way for
its own account or the  account of any third  party,  nor  disclose to any third
party, any such confidential information revealed to it by Distributor.  Company
shall take every reasonable  precaution to protect the  confidentiality  of such
information. Upon request by Company, Distributor shall advise whether or not it
considers any particular information or materials to be confidential.

(h)  During  the term of this  Agreement,  Distributor  shall  have the right to
indicate  to the  public  that  it is an  authorized  distributor  of  Company's
products  and to  advertise  (within  the  Territory)  such  products  under the
trademarks,  marks,  and trade  names that  Company  may adopt from time to time
("Company's  Trademarks").  Distributor  shall not alter or remove any Company's
Trademarks applied to the products at the factory or product literature provided
by Company to the  Distributor.  Except as set forth in this paragraph,  nothing
contained  in this  Agreement  shall grant to  Distributor  any right,  title or
interest in  Company's  trademarks.  At no time during or after the term of this

                                      E-7
<PAGE>

Agreement shall  Distributor  challenge or assist others to challenge  Company's
Trademarks or the  registration  thereof or attempt to register any  trademarks,
marks or trade names confusingly similar to those of Company.

All  representations  of Company's  Trademarks that  Distributor  intends to use
shall  first  be  submitted  to  Company  for  approval   (which  shall  not  be
unreasonably  withheld) of design,  color,  and other  details or shall be exact
copies of those used in conjunction with another  trademark on or in relation to
the products,  then Company's mark shall be presented  equally legibly,  equally
prominently,  and of greater size than the other but nevertheless separated from
the other so that each appears to be a mark in its own right,  distinct from the
other mark.

Section 2.02.  Distributor  accepts the appointment to develop demand for and to
sell Company  products within the Territory and will make all sales hereunder in
accordance with this Agreement.

Term

Section 2.03. The initial term of this  Agreement  shall be seven (7) years from
the effective date of same.

Section 2.04.  The Company and the  Distributor  may renew this Agreement for an
additional  seven (7) years term, if both parties are satisfied with each other.
Renewal shall be automatic.


                              ARTICLE 3. OPERATIONS

Acceptance of Orders:  Filling

Section  3.01.  (a) All orders the Company  receives for its  products  from the
Distributor  are subject to  acceptance  by Company,  which shall be resolved to
Distributor within a term of fifteen (15) calendar days,  starting from the date
of the corresponding order.

(b) The Company  shall be obligated  to ship  Distributor  all accepted  orders,
within  forty-five  (45)  calendar  days  following the date of placement of the
corresponding order by Distributor, it being understood that neither Company nor
Distributor  shall be  responsible  for delays  caused by  Government  orders or
requirements,  transportation conditions, labor or material shortages,  strikes,
riots,  fires,  or any other cause  beyond the control of both  parties.  In all
cases, expenses incurred in shipment of products, shall be paid by both parties,
as follows:  the Company shall pay sixty percent (60%) and the Distributor shall
pay the remainder forty percent (40%).

In all cases, the Company will use its best efforts to advise the Distributor in
advance of any liability to make full and timely  delivery of any products which
the Distributor has previously ordered.

(c)  Notwithstanding the  above-mentioned,  the Company shall be responsible for
all penalties  imposed to Distributor by its clients,  as a consequence of delay
in the shipment of the products  deriving from causes  imputable to the Company.
In such cases,  the Company  shall make a deduction in the price of the products

                                      E-8
<PAGE>

equivalent  to the penalty  imposed to  Distributor,  it being  understood  that
neither  Company  nor  Distributor  shall be  responsible  for delays  caused by
Government orders or requirements,  transportation conditions, labor or material
shortages,  strikes, riots, fires, or any other cause beyond the control of both
parties.

Payment

Section  3.02.  (a) The parties agree that  Distributor  shall sell the products
pursuant to this  Agreement at such prices and on such terms and  conditions  as
the Company  shall  establish  from time to time, it being  understood  that all
changes in the above-mentioned prices, terms and conditions, must be notified in
writing to Distributor at least ninety (90) days in advance to the date on which
such changes must be effective.

(b) The Company  agrees to pay  Distributor  a fee for the sale of the  products
within the  Territory.  The fee for a sale shall be at all times thirty  percent
(30%) of the final sale price of the products to the customer in accordance with
the following formula:

      A = Sale price to the customer.
      B = Import taxes and duties paid.
      C = Final sales price.

                               Formula: A - B = C
                           Distributor's fee: 30% of C

Example of application of formula in U.S. dollars:

Price to Distributor:                                 $  3,000.00
"A" = Sales Price:                                    $ 10,000.00
"B" = Taxes and Duties (20%):  IF APPLICABLE          $    600.00
"C" = Final Sales Price:                              $  9,400.00

Distributor's Fee = 30% of "C":                       $  2,820.00

Real Sales Price from Company:                        $  6,580.00

Distributor  is granted  herein with the right to withhold  the  above-mentioned
fee, from the payment of the products received from the customer.

(c) Sale price  increases of the  products  shall be at all times agreed by both
parties on a yearly basis and may never exceed ten percent (10%).

(d) Furthermore, the Company shall give ninety (90) day credit to clients of the
Distributor to pay for ordered merchandise.

                                      E-9
<PAGE>

Distributor's Efforts, Facilities and Personnel

Section 3.03.  The  Distributor  will use his best efforts to promote demand for
and sale of the Company's  products and will maintain  adequate  facilities  and
sales personnel for that purpose. The Company will provide training to personnel
from the Distributor,  in order to increase sales and market penetration in each
country.

Place of Business, Display Room, and Service Department

Section 3.04. The Distributor shall maintain a place of business,  display room,
and service department satisfactory to the Company at all times, and the Company
shall have the right at all  reasonable  times during  business hours to inspect
the place of business, display room, and service department.

Appointment of Dealers, Salesmen, or other Representatives

Section 3.05. (a) The  Distributor  shall maintain a place of business,  display
room, and service  department  satisfactory to the Company at all times, and the
Company shall have the right at all  reasonable  times during  business hours to
inspect the place of business, display room, and service department.

Appointment of Dealers, Salesmen, or other Representatives

Section 3.05.  (a) The  Distributor  shall work and develop the Territory to the
satisfaction of the Company, and in doing so shall appoint dealers, salesmen, or
other representatives to sell the Company's products.

(b) The Distributor shall file with the Company a copy of each Agreement entered
into  with  such  dealers,  salesmen,  or  other  representatives  defining  the
Territory to be served,  which agreements shall be on appropriate forms supplied
by the Company.

(c) Upon  expiration or prior  termination  of any such Agreement for any cause,
the Distributor  shall furnish the Company with notice thereof in order that the
Company's field personnel records will be up to date at all times.

Freight Charges

Section  3.06.  (a) Unless the Company  shall have  authorized  or permitted the
return of any  products or parts,  the Company  shall not be obligated to accept
from the  Distributor  any products,  nor to make any exchange  thereof,  nor to
credit the Distributor thereof.

(b)  Except  in case of  damage  or  defect  attributable  to the  Company,  the
Distributor  shall not make any claim  against  the  Company  for any damages or
defective product.

Common Carrier Agents of Distributor

Section  3.07.  Whenever the Company shall deliver or cause to be delivered to a
common  carrier any goods  ordered by the  Distributor,  whether the  particular
carrier shall have been  designated in the shipping or routing  instructions  of

                                      E-10
<PAGE>

the  Distributor or not, the Company shall not be responsible  for any delays or
damages in shipment and the common  carrier,  to which the Company shall deliver
goods  shipped  to  the  Distributor,  is  declared  to  be  the  agent  of  the
Distributor.  Also,  the Company  will hire freight  insurance  which covers all
merchandise  shipped to the  Distributor.  Such insurance  shall be paid by both
parties,  as  follows:  the  Company  shall  pay  sixty  percent  (60%)  and the
Distributor shall pay the remainder forty percent (40%), once the order has been
delivered to  Distributor  at any of the addresses  stated in article 1, section
1.02.

In case the  merchandise is damaged or defective  from the factory,  the Company
shall accept  merchandise to be returned  within (30) thirty calendar days after
the detection of said damages or defect.

Report of Sales

Section  3.08.  In order to enable the Company to have a complete  record of all
products  sold, the  Distributor  shall furnish the Company  weekly,  or at such
intervals as the Company and the  Distributor  shall otherwise agree a report of
all sales of the Company's products in the Territory.

Right to Use Name

Section 3.09. (a) Subject to the provisions of Subsection  (b), the  Distributor
may use the name:  VT I Factor as applied to Company  products  in any design or
advertisement during the continuance of this Agreement. All promotion activities
must require the prior written approval of the Company.

(b) In case of  termination of this  Agreement,  or upon request of the Company,
the Distributor  shall discontinue use of such name in any sign or advertisement
and thereafter  shall not use the name directly or indirectly in connection with
his business,  nor use any other name, title, or expression so nearly resembling
it as would be likely to lead to  confusion  or  uncertainty  or to deceive  the
public.

Audits of Books

Section 3.10. The Distributor  shall have his books audited at least annually by
a competent  accountant  or auditor and shall  furnish a certified  copy of such
audit to the Company for its permanent record.

Advertising Policies

The Company will  cooperate  with  Distributor  and its dealers in providing for
continuous  and  effective  advertising  and  promotion  of  Company's  products
throughout the Territory,  and  Distributor  agrees to participate  in, actively
promote and faithfully  comply with the terms and conditions of such cooperative
advertising and merchandising programs as the Company may establish and offer to
Distributor  from time to time.  Nothing herein shall prevent  Distributor  from
independently  advertising  and  marketing  the  Company's  products  within the
Territory,  provided  the form  and  content  of the  advertising  or  marketing

                                      E-11
<PAGE>

materials  are  approved by the Company in advance.  All  expenses  derived from
advertising and promotion shall be paid by Distributor.


                             ARTICLE 4. TERMINATION

Section  4.01.  Either party shall have the right to terminate  this  Agreement,
prior to its expiration, upon the occurrence of any of the following events:

     (1)  Breach  or  default  by the  other of any of the  terms,  obligations,
covenants,  representations  of  warranties  under this  Agreement  which is not
waived in writing by the non-defaulting  party. In such case, the non-defaulting
party  shall  notify the other of such  alleged  breach or default and the other
party shall have a period of sixty (60) days to cure the same.

     (2) The  other  party  is  declared  insolvent  or  bankrupt  or  makes  an
assignment  for the  benefit of  creditors,  or a receiver is  appointed  or any
proceeding  is demanded by, for or against the other under any  provision of the
Federal Bankruptcy Act or any amendment thereof.

     (3) The failure of  Distributor  to register  this product in Mexico within
twelve (12) months of the execution of this Agreement.

Promptly  upon  the  termination  date  of  this  Agreement,  Distributor  shall
immediately and forever  thereafter  cease to solicit orders to represent in any
manner that he is associated with the Company.  Upon the  termination  date, the
Distributor  shall return or cause to be returned to the Company,  after receipt
of Company's  written  request  thereof and at Company's  expense,  all samples,
decals,  advertising  material,  promotional  items,  sample contracts and other
materials  not  previously  returned  to the Company or  previously  expended in
solicitation  activities  which have been furnished by the Company in connection
with  this  Agreement  and  will not  thereafter  hold  out to the  public  that
Distributor is a sales representative or otherwise connected with the Company.

Applicability of Terms after Termination

Section  4.02.  In  the  event  of  termination,  this  Agreement  shall  remain
applicable to any orders for products that the Distributor has previously placed
and to any  other  orders,  which  may  be  executed  within  ninety  (90)  days
subsequent to the effective date of termination.

Repurchase of Products on Termination

Section 4.03. In the event of the  termination of this Agreement by either party
for any reason, the Company may at its option repurchase from Distributor at the
net price paid by the  Distributor  to the Company,  plus actual  freight on the
shipment  thereof  to the  Distributor,  any  Company  products  on  hand in the
Distributor's  place of business or in the  possession  of the  Distributor.  On
demand  and the  tender  of the  repurchase  price,  the  Distributor  shall  be
obligated to deliver such goods to the Company forthwith.

                                      E-12
<PAGE>

Subrogation on Termination

Section 4.04. In case this  Agreement  shall be terminated  for any reason,  the
Company  shall  thereupon  at  its  option  be  subrogated  immediately  to  any
agreements,  rights, and relations of the Distributor with dealers, salesmen, or
other representatives appointed by the Distributor hereunder with regards to the
sale of Company products, and all such agreements shall contain a clause to make
this provision  effective in favor of the Company when this  Agreement  shall be
terminated.


                              ARTICLE 5. WARRANTIES

Indemnification

Section  5.01.  (a) The  parties  agree that the  Company  shall be at all times
responsible  for all and any  consequences  that  may  arise  in the  health  of
patients that may use the products,  and shall hold harmless Distributor against
any suit,  claim or proceeding  deriving  from the use of the products.  In this
cases,  Distributor  shall only be  obligated  to provide the Company  with full
information,  cooperation  and  assistance as may be required to defend any such
suit,  claim,  or  proceeding.  The  Company  liability  will  arise only if the
products are used according with the instructions provided.

(b)  Likewise,  the Company  agrees  that it will  indemnify  and hold  harmless
Distributor  against any suit,  claim or  proceeding  alleging  that the Company
industrial  property  rights  pursuant to this  Agreement  infringes any patent,
copyright, trademark or trade secret of any third party; provided, however, that
Distributor  must (a) promptly  notify the Company in writing by certified mail,
return receipt requested, of any such suit, claim, or proceeding,  (b) allow the
Company, at its expense, to direct and control all defense and all settlement or
compromise  negotiations,  and (c) provide the Company with full information and
assistance as may be required to defend any such suit, claim, or proceeding. The
Company  shall have no  obligation  or  liability  with  respect to any claim or
infringement based upon any cause imputed to Distributor.


                  ARTICLE 6. INTERPRETATION AND ENFORCEMENT

Notices

Section 6.01. Any notice,  request,  demand, or other communication  required or
permitted  hereunder  shall be deemed to be properly given when deposited in the
United States mail,  postage prepaid,  or when deposited with a public telegraph
company for transmittal, charges prepaid, addressed:

     (a) In the case of the  Company,  to 905 Mission  Street,  South  Pasadena,
California 91030, or to such other person or address as the Distributor may from
time to time furnish to the Distributor.

                                      E-13
<PAGE>

      (b)   In the case of the  Distributor,  to Calle  Tecamachalco  No.  15,
P.H., Colonia Reforma Social,  11,000 Mexico, D.F., or to such other person or
address as the Distributor may from time to time furnish to the Company.

Distributor not Agent or Legal Representative

Section 6.02.  This Agreement does not constitute the  Distributor  the agent or
legal representative of the Company for any purpose whatsoever.  The Distributor
is not granted any right or authority to assume or to create any  obligation  or
responsibility, expressed or implied, on behalf of or in the name of the Company
or to bind the Company in any manner.

Completeness of Instrument

Section 6.03.  This instrument  contains all of the agreements,  understandings,
representations,  conditions, warranties, and covenants made between the parties
hereto.  Unless  set  forth  herein,  neither  party  shall  be  liable  for any
representations  made, and all  modifications  and amendments  hereto must be in
writing.

Assignment

Section 6.04. This Agreement constitutes a personal contract and the Distributor
shall not transfer or assign the Agreement or any part thereof  without  written
consent of the  Company,  except to a new Mexican  Corporation  wholly  owned by
Messrs. Alberto Osio Sancho and Rgelio Igartua Ruiloba.

Section 6.05.  This Agreement shall inure to the benefit of and shall be binding
upon the Company's successors or assignees.  Therefore, in the event the Company
assigns  the  Agreement  or any part  thereof  to a third  party for any  reason
whatsoever,  the assignee shall be at all times obligated to comply with all the
terms and conditions provided herein.

No Implied Waivers

Section 6.06. The failure of either party at any time to require  performance by
the other  party of any  provision  hereof  shall not affect in any way the full
right to require such performance at any time  thereafter.  Nor shall the waiver
by  either  party of a breach of any  provision  hereof be taken or held to be a
waiver of the provision itself.

Force Majeure

Section 6.07. Nonperformance of either party shall be excused to the extent that
performance is rendered impossible by strike, fire, flood,  governmental acts or
orders or  restrictions  including any actual or threatened  actions by the U.S.
Food and Drug  Administration,  failure of suppliers,  or any other reason where
failure to perform is beyond the reasonable  control of and is not caused by the
negligence of the  non-performing  party.  If performance is delayed due to such
circumstances  for a period of 180 consecutive  days,  either party may elect to
terminate this Agreement.

                                      E-14
<PAGE>

Controlling Law and Forum

Section 6.08.  (a) This agreement  shall be governed by and construed  under the
laws of the State of California,  U.S.A. The federal and state courts within the
State of California, U.S.A., shall have exclusive jurisdiction to adjudicate any
dispute arising out of this Agreement.  Both parties hereby expressly consent to
the personal  jurisdiction  of the federal and state courts  within  California,
U.S.A.


Executed on July 14th, 1999, at Pasadena, California


COMPANY
Viral Genetics, Ltd.

By:   /s/ HAMPAR KARAGEOZIAN, Pharm. D.         /s/ HAIG KELEDJIAN

DISTRIBUTOR
Esigar Quirurgica, S.A. de C.V.

      /s/ ROGELIO IGARTUA RUILOBA              /s/ ALBERTO OSIO SANCHO



                                      E-15