# Version Attached as
Exhibit to 10-K SB

# Distribution
Management Agreement

This
Distribution Management Agreement (this Agreement) is made and entered into as
of the date indicated below, but deemed effective by the Parties as of July 1, 2004, by
and between Viral Genetics, Inc., a Delaware corporation, located at 1321 Mountain View
Circle, Azusa, CA 91702 (VGI), and Timothy & Thomas LLC, an Illinois
limited liability company, located at 2625 South Loomis Street, Chicago, IL 60608
(T&T).

# Recitals

|A. | T&T has made payments to VGI in the total amount of $650,000 to partially
          defray certain expenses which VGI will incur under the terms of this Agreement.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|B. | T&T has assigned to VGI all rights under a Convertible Debenture agreement
          between Tom Little and Viral Genetics, Inc. dated September 30 2003 in the
          amount of $200,000 USD to partially compensate VGI for certain expenses which
          VGI will incur under the terms of this Agreement.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|C. | Therapeutic Genetic, Inc. has been merged with VGI.
|-- | ---------------------------------------------------

|D. | VGI holds all patent rights to pharmaceutical products, which are intended for
          treatment of HIV and the related condition, AIDS, including, without limitation,
          a product based on thymus nuclear protein identified as VGV-1.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|E. | VGI plans to manufacture pharmaceutical products, which are intended for
          treatment of HIV and the related condition known as AIDS, including, without
          limitation, a product based on thymus nuclear protein identified as
          VGV-1.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|F. | T&T plans to obtain government approvals, licenses, and authorizations from
          certain governments of African nations for distribution of products imported
          from other countries (including the United States of America) and to manage and
          secure distribution capabilities in African nations through local sales
          channels, affiliated companies based in Africa, or strategic distribution
          arrangements with unrelated third parties.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|G. | VGI desires to retain T&Ts services and T&T desires to provide
          services to manage the distribution of its pharmaceutical products in Africa.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------

# Agreement

Wherefore, in consideration of the
foregoing Recitals, which are incorporated by reference in this Agreement, and the mutual
promises set forth below, the Parties hereto mutually agree as follows:

---



# Definitions:

AIDS:

Acquired
Immunodeficiency Syndrome

Alternate Product:

| | Any product, drug and/or medical device for which VGI acquires the right to market, distribute
and/or sell during the term of this Agreement which is not a Product as defined herein.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Applicable Regulations:

| | Any and all regulations pertaining to the manufacture, marketing and/or distribution of
pharmaceuticals promulgated by the Food and Drug Administration of the United States of
America or any governmental regulatory body in the Territory.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Clinical Trial:

| | The multi-center, randomized, double-blind, placebo-controlled human clinical trial of a
product named VGV-1 as approved by letter dated February 27, 2004, from the Medicines
Control Council of South Africa to be performed in accordance with an agreement between
Viral Genetics, Inc. and Virtus Clinical Development (Pty) Ltd. dated August 1, 2003
including any amendments thereto.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Distributor:

| | Any entity, designated by T&T which has entered into a contract with VGI to market,
purchase, receive, store, sell and distribute the Product for use in a designated portion
of the Territory.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Distribution Agreement:

| | Any agreement authorized by T&T between VGI and any Distributor which assigns a License to
that Distributor.
| | ------------------------------------------------------------------------------------------------------------

HIV:

Human
Immunodeficiency Virus infection

Late Stage Manufacturing:

The
packaging and labeling of the Product in accordance with Applicable Regulations.

License:

| | The sole and exclusive right to purchase, receive, store, sell and distribute the Product in a
designated portion of the Territory and/or to secure governmental approval including
licenses and
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2



| | registrations as required for said activities. The term License
as used herein shall not impart to any party any right to any intellectual property or
authorize any party to exercise any particular rights under any patent, patent pending or
patent application.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Parties:

Viral
Genetics, Inc. and Timothy & Thomas LLC collectively.

Product:

| | Any product for which VGI has secured or will secure marketing rights, distribution rights or
patent rights for the prevention or treatment of HIV and/or AIDS including but not limited
to that formulation which is described in United States patent application number
08/641,936, Compositions and Methods for Detecting and Treating
Immunodeficiency Syndrome, which is now pending and South Africa patent application
number 96/3474 (formerly referred to as TNP). Product includes any
future or subsequent modifications, improvements, reformulations, substitutes and other
enhancements developed by VGI for the prevention or treatment of HIV or AIDS.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Purchaser:

Any
party to which a Distributor sells or delivers the Product.

T&T:

Timothy
& Thomas LLC.

Territory:

| | The sovereign countries of Angola, Ascension Island, Benin, Botswana, Burkina Faso, Burundi,
Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Congo, Republic of
(Brazzaville), Congo, Democratic Republic of the, Cote dIvoire, Djibouti, Egypt,
Equitorial Guinea, Eritrea, Ethiopia, Gabon, Gambia, The Ghana, Guinea, Guinea-Bissau,
Kenya, Lesotho, Liberia, Libya, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mayotte,
Morocco, Mozambique, Namibia, Niger, Nigeria, Reunion, Rwanda, Saint Helena Island, Sao
Tome and Principe, Senegal, Seychelles, Sierra Leone, Somalia, South Africa, Sudan,
Swaziland, Tanzania, Togo, Tunisia, Uganda, Western Sahara, Zambia and Zimbabwe.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Treatment Unit:

| | Currently, that quantity and form of the Product which has been approved for the complete dosing of
HIV-1 infected and CDC stage AIDS patients by the Medicines Control Council of the
Republic of South Africa, which is currently defined as sixteen (16) vials, each
containing 2 milliliters of the Product in suspension and which is designated to be dosed
through biweekly intramuscular injections for eight (8) weeks. Treatment Unit dosing
regimen and/or quantities may be altered from time to time to conform to VGI
specifications and/or to Applicable Regulations. Each Treatment Unit shall be sealed and
labeled in accordance with Applicable Regulations. Each vial shall be suitably sized and
configured to provide a single human injection.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3



VGI:

Viral
Genetics, Inc.

1.Appointment:

| | A. | VGI hereby appoints T&T, and T&T hereby accepts the appointment by VGI
        to be the exclusive independent agent for VGI for the management of the distribution of the Product in the Territory.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | Prior to any assignment, transfer, delegation or disposal of its rights and
                    obligations under this Agreement T&T shall tender 30 days prior
                    written notice to VGI of such proposed assignment, transfer, delegation or
                    disposal of its rights and obligations. During that 30 day period T&T shall
                    extend to VGI the right to accept such proposed assignment, transfer, delegation
                    or disposal of its rights and obligations under terms and conditions equivalent
                    to the terms proposed to T&T by any third party.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | Prior to any assignment, transfer, delegation or disposal of controlling
                    interest in T&T by T&Ts current members, T&Ts members
                    shall tender 30 days prior written notice to VGI of such proposed
                    assignment, transfer, delegation or disposal of controlling interest. During
                    that 30 day period T&T shall extend to VGI the right to accept such proposed
                    assignment, transfer, delegation or disposal of controlling interest under terms
                    and conditions equivalent to the terms proposed to T&T members by any
                    third party.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2.Distribution
Agreements:

| | A. | T&T shall designate to VGI one or more Distributors. T&T shall designate
                    a specific geographic area to be assigned to each Distributor so designated.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | VGI shall enter into a Distribution Agreement with each Distributor designated
                    by T&T. Each such Distribution Agreement shall assign to the Distributor a
                    specific geographic area designated by T&T. VGI shall not be required to
                    enter into or to maintain a Distribution Agreement with any prospective
                    Distributor which is affiliated with, controlled by or owned by any entity which
                    holds any interest which is competitive with or in conflict with VGIs
                    interest or T&Ts interest. VGI may from time to time require
                    sufficient identity information to clearly ascertain whether any Distributor or
                    prospective Distributor is affiliated with, controlled by or owned by any entity
                    which holds any interest which is competitive with or in conflict with
                    VGIs interest or T&Ts interest.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | VGI shall faithfully fulfill and perform its duties and obligations under each
                    Distribution Agreement. D. Each Distributor shall faithfully fulfill and perform
                    its duties and obligations under its applicable Distribution Agreement.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | Each  Distributor  shall  faithfully  fulfill and  perform its duties and  obligations  under its  applicable  Distribution
Agreement.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------

4



| | E. | VGI shall terminate each Distribution Agreement at the time and in accordance
                    with the terms and conditions designated by T&T. T&T shall not direct
                    VGI to terminate any Distribution Agreement if such termination would cause a
                    breach of the applicable Distribution Agreement by VGI.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | F. | In the event VGI determines that any Distributor is in breach of its applicable
                    Distribution Agreement:
| | -- | ---------------------------------------------------------------------------------------------------------------------------

| | 1. | VGI shall notify T&T by email and fax of such
                    breach. Such notification shall include all facts, evidence and information
which have caused VGI to determine that said Distribution Agreement has been breached.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Within 30 days after receiving such notice of breach T&T shall either cause the
Distributor to have cured such breach
or T&T shall direct VGI to terminate the applicable Distribution Agreement.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | If, upon the expiration of said 30 day period, T&T has failed to cause the
                    breach to be cured and further, has failed to direct VGI to terminate the
                    applicable Distribution Agreement then VGI may at its sole option either
                    continue or terminate the applicable Distribution Agreement.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | VGIs option to so continue or terminate the applicable Distribution
                    Agreement shall cease upon subsequent notification by T&T that T&T has
                    caused the Distributor to cure the breach or upon subsequent direction by
                    T&T to VGI to terminate the applicable Distribution Agreement.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | G. | VGI may require any Distributor to provide VGI with identity information for any
                    prospective Purchaser prior to sale of the Product to said prospective
                    Purchaser. Required identity information may include but not necessarily be
                    limited to the Purchasers commercial identity and the identity of all
                    persons having controlling interest in the prospective Purchaser. VGI may
                    require sufficient identity information to clearly ascertain whether the
                    prospective Purchaser is affiliated with, controlled by or owned by any entity
                    which holds any interest which is competitive with or in conflict with
                    VGIs interest or T&Ts interest.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | H. | VGI may deny any Distributor the right to sell Product to any prospective
                    Purchaser which is affiliated with, controlled by or owned by any entity which
                    holds any interest which is competitive with or in conflict with VGIs
                    interest or T&Ts interest.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | I. | VGI may deny any Distributor the right to sell Product to any prospective
                    Purchaser if such sale is determined to violate Applicable Regulations.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | J. | Each Distributor shall expressly agree that it shall not, and shall cause its
                    Purchasers to agree not to, export, directly or indirectly, re-export, divert,
                    or transfer any Product to any destination, company or person, or for any end
                    use, restricted or prohibited by Applicable Regulations or Export Controls
                    maintained by the USA.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5



3.Distribution
Agreement Terms and Conditions:

| | Each Distribution Agreement shall incorporate terms and/or conditions specifically designated
by VGI and/or T&T for that specific Distribution Agreement.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------

4.Product
Delivery:

| | A. | Upon receipt of an order as described herein VGI shall deliver Product to
          Distributors f.o.b. the bonded warehouse or commercial equivalent designated by
          the Distributor and approved by VGI at the port of entry within the Territory
          designated by the Distributor. Each designated bonded warehouse or commercial
          equivalent shall conform to all Applicable Regulations. VGI shall complete each
          delivery in conformity with Applicable Regulations.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | VGI agrees to allocate and make available for delivery to all Distributors an
          absolute minimum delivery of [omitted as confidential and filed separately with
          the SEC] Treatment Units in each calendar month.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | On or before the last day of each calendar month each Distributor shall transmit
          a Purchase Order to VGI by Email and Facsimile. Each Purchase Order shall
          specify the delivery location, the type or model number of Product, and the
          quantity of Product (designated as number of Treatment Units) to be delivered to
          the Distributor on or before the last day of the following calendar month.
          Delivery on or before the last day of the following calendar month shall be
          considered delivery in a timely manner.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | Should VGI determine that it is unable to deliver all Product ordered by all
          Distributors in a timely manner VGI shall notify T&T of such inability no
          later than 5 work days after the end of the month in which Distributor Purchase
          Orders are transmitted to VGI. Should VGI fail to transmit such notice of
          inability to deliver in a timely manner, VGI shall deliver all product ordered
          in at timely manner. In any such notice of inability to deliver in a timely
          manner VGI shall state the number of Treatment Units in excess of [omitted as
          confidential and filed separately with the SEC] Treatment Units which VGI will
          deliver in a timely manner.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | E. | In the event VGI determines that it is unable to deliver all Product ordered by
          all Distributors in a timely manner VGI shall allocate the months Product
          deliveries among Distributors as designated by T&T.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | F. | At any time after all Distributors have ordered a cumulative total of [omitted
          as confidential and filed separately with the SEC] Treatment Units in monthly
          increments of [omitted as confidential and filed separately with the SEC] or
          less and further, provided that no Distributor is in arrears in payments due to
          VGI, T&T may direct VGI to increase its capacity to deliver product to
          [omitted as confidential and filed separately with the SEC] Treatment Units per
          calendar month. Within [omitted as confidential and filed separately with the
          SEC] after receiving such direction from T&T, VGI shall increase its
          capacity to deliver product at the rate of [omitted as confidential and filed
          separately with the SEC] Treatment Units per calendar month. [omitted as
          confidential and filed separately with the SEC] months after receiving such
          direction from T&T, VGI agrees to allocate and make available for delivery
          to all Distributors an absolute minimum delivery of [omitted as confidential and
          filed separately with the SEC] Treatment Units in each subsequent calendar
          month.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6



| | G. | VGI acknowledges that the monetary damages that T&T will suffer in the event
          of a breach by VGI of the terms of this Product Delivery Section will be
          difficult to fully assess and that T&T will suffer irreparable harm as a
          result of such breach. Accordingly, in addition to any other relief to which
          T&T may be entitled for any such breach by VGI or VGIs agents of the
          terms of this Product Delivery Section, T&T and/or any Distributors will be
          entitled to enforce said terms through temporary, preliminary and/or permanent
          injunctive relief against VGI and against any other persons or entities that may
          be acting in concert with or in participation with VGI in connection with any
          such breach by VGI. This provision with respect to injunctive relief shall not,
          however, in any way diminish T&Ts right to claim and to recover
          monetary damages in addition to injunctive relief.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5.Late
Stage Manufacturing:

| | A. | VGI and T&T conclude that it will be expeditious, required, or necessary to
          perform Late Stage Manufacturing in certain parts of the Territory. In the event
          T&T determines that it is expeditious, required, or necessary to perform
          Late Stage Manufacturing in any part of the Territory, then VGI shall either:
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1. | authorize T&T to establish, maintain and operate, for the term of this
          Agreement, a facility for such Late Stage Manufacturing in that part of the
          Territory;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | or authorize T&T to establish, maintain and operate, for the term of this
          Agreement, a facility for such Late Stage Manufacturing in an alternative
          location designated by VGI which T&T determines to be equally advantageous.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | In the event T&T elects to establish, maintain or operate a facility for
          such Late Stage Manufacturing:
| | -- | -----------------------------------------------------------------------------------------------------------------

| | 1. | VGI will provide T&T and/or its designated
          agent with all information necessary to design, construct, equip, install and
          operate the facility for the Late Stage Manufacturing by the most safe,
          efficient and cost effective methods known to and available to VGI.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | T&T and/or its designated agent will cause any person who gains access to
          Intellectual Property belonging to VGI to enter into an agreement not to
          disclose any such Intellectual Property to any third party.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | T&T and/or its designated agent will provide funds for, establish, maintain
          & operate said Late Stage Manufacturing facilities in conformity with
          Applicable Regulations.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | T&T will designate those Distributor Purchase Orders which will be delivered
          by any Late Stage Manufacturing facility.
| | -- | --------------------------------------------------------------------------------------------------------------------------------

| | 5. | Each Distributor will pay VGI for all Product delivered from each Late Stage
          Manufacturing facility in accordance with the payment terms of this Agreement.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

7



| | 6. | VGI shall reimburse T&T for all costs incurred by T&T and/or its
          designated agent for the establishment, maintenance and/or operation of the Late
          Stage Manufacturing facility including general and administrative costs
          associated therewith but excluding any profit margin payable to T&T. The
          calculation of costs shall be based on widely-accepted manufacturing cost
          accounting providing for, among other things, the allocation of costs
          attributable to capital investment on a per unit basis over a reasonable period
          of time. On or before the last day of each calendar month VGI shall tender
          payment to T&T in an amount equal to all costs incurred in the previous
          calendar month.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | VGI will not be required to render any assistance to T&T and T&T shall
          not establish any Late Stage Manufacturing facility unless any persons and/or
          entities involved in establishing and operating these facilities, other than the
          employees and consultants employed or engaged by VGI, agree in writing to be
          bound by the terms and provisions of this Agreement regarding protection of
          VGIs Rights to Intellectual Property.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6.Timely
Payment:

| | A. | Payment for all Product delivered by VGI to each Distributor in each calendar
          month shall be deposited by the Distributor via wire transfer to the bank
          account designated by VGI on or before the last day of the calendar month
          following the month in which delivery has been made (referred to herein as
          timely payment). All Distributor payments shall be denominated in
          currency of the United States of America.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | In the event any Distributor fails to make timely payment to VGI, VGI shall
          notify T&T of such failure. Within ten (10) days after receiving such notice
          T&T shall either cause Distributor to pay to VGI any past due amount or
          direct VGI to cease delivery of Product to that Distributor.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | Fifteen days after having tendered such notice to T&T, VGI may refuse orders
          or refuse to ship Product to any Distributor which has failed to pay VGI any
          past due balance in excess of $[omitted as confidential and filed separately
          with the SEC] USD.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.Tariffs,
Duties & Taxes:

| | A. | VGI shall comply fully with all Applicable Regulations imposed by any
          governmental authority at the location from which Product is shipped, including
          but not limited to, U.S. Export Administration Regulations and USFDA regulations
          as applied to VGIs export of Product from the United States of America.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | VGI shall pay any export license fees, tariffs, customs duties, taxes, or other
          charges imposed by any authority at the location from which VGI ships Product.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | T&T shall cause each Distributor to pay any tariff, customs duty, tax, or
          other charge imposed by any authority at the destination designated by
          Distributor for delivery of Product by VGI.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | VGI shall not be obligated to pay any tariff, customs duty, tax, or other charge
          imposed under the laws of any jurisdiction in the Territory.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------

8



8.Intellectual
Property:

| | A. | All testing protocols, methodologies, data, reports, results, analyses,
          summaries, and other information pertaining to the testing and study of the
          Product in the Territory are the sole and exclusive property of VGI, and T&T
          will take all action, and will cause each Distributor to take all action,
          required to preserve VGIs ownership thereof.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | VGI shall make available to each Distributor any Intellectual Property necessary
          or expedient for the purpose of securing any registration or licensing under
          Applicable Regulations.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | Where so required by Applicable Regulations, Intellectual Property documentation
          shall be stored and made available in the office of the Distributor.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | All right, title and interest in and to any and all know-how, trade secrets,
          trade names, trade marks, service marks, copyrights, and patents (issued,
          pending or provisional), and all other intellectual property rights and any
          license right to any patent (collectively the Rights) in any way
          pertaining to the Product or Product materials as provided by VGI, including all
          future improvements to Product from any source, do now and shall in the future
          belong solely to VGI. No sale of Product to T&T or any Distributor shall
          confer upon any of them, nor shall T&T or any Distributor be authorized to
          confer upon any Purchaser, any legal right or license of any kind regarding any
          of the Rights owned or controlled by VGI.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | E. | Any data, trade secrets, formulations, test results, manufacturing processes,
          and other Product related information regarding the Product (collectively, the
          Proprietary Data) furnished to T&T by VGI before, after, or
          contemporaneously with the execution of this Agreement are confidential and
          proprietary to VGI, are intended for confidential use by T&T only, shall
          remain the exclusive property of VGI, and shall not be used by T&T except
          for the express purposes of this Agreement. All such Proprietary Data are based
          on VGIs knowledge and work. T&T agrees not to reverse-engineer for its
          own use or for others, or to disclose to any other parties, any formulas,
          techniques, inventions, trade secrets or other Proprietary Data revealed to
          T&T by VGI in connection with this Agreement. T&T acknowledges that the
          monetary damages that VGI would suffer in the event of a breach by T&T of
          the restrictions and covenants contained herein would be extremely difficult to
          calculate and that VGI would suffer irreparable harm as a result of such breach.
          Accordingly, in addition to any other relief to which VGI may be entitled for
          any breach by T&T of the restrictions and covenants contained herein, VGI
          shall be entitled to enforce said restrictions and covenants through temporary,
          preliminary and/or permanent injunctive relief against T&T and against any
          other persons or entities that may be acting in concert or participation with
          T&T in connection with any such breach by T&T. This provision with
          respect to injunctive relief shall not, however, in any way diminish VGIs
          right to claim and to recover monetary damages in addition to injunctive relief.
          The restrictions and covenants pertaining to Proprietary Data shall survive the
          termination or expiration of this Agreement.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9



9.Product
Descriptions, Advertising and Promotional Materials:

| | A. | T&T shall monitor each Distributor to determine that no Distributor makes
          any representation or claim regarding the Product which has not been
          substantiated by VGI. Neither T&T nor any Distributor shall produce or
          disseminate any material, advertising, or document, whether in paper,
          electronic, digital, audio, video, or other format which does not conform to
          Applicable Regulations or does not accurately represent information which has
          been provided by VGI.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | VGI shall provide to T&T and to Distributors at VGIs expense, current,
          accurate, English language information pertaining to the Product and the
          administration thereof including but not limited to promotional and descriptive
          documentation. For purposes of promotion of VGIs Product, T&T and/or
          Distributors may use such information and materials, and may create and
          distribute derivative works, including translations thereof, provided such
          derivative works accurately replicate and represent information provided by VGI
          and conform to Applicable Regulations.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | VGI agrees to provide to T&T at VGIs expense, at least one copy of any
          of VGIs Product information and/or related materials promptly, when
          developed by VGI from time to time. For purposes of promotion of VGIs
          Product, T&T may use such Product information and materials, and may create
          derivative works thereof that may be used by T&T and/or Distributors
          provided such derivative works conform to Applicable Regulations.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | All Product descriptions, specifications, and informational materials and any
          copyrighted materials supplied by VGI to T&T shall be used in conformity
          with all Applicable Regulations and may be used by T&T only for the express
          purposes of this Agreement; and T&T agrees not to use these materials in any
          other manner.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | E. | T&T shall not make or permit any Distributor to make any representations or
          claims regarding the Product or their efficacy other than those which conform to
          all Applicable Regulations and set forth in Product information, marketing
          materials, brochures, etc., supplied by or approved in advance in writing by
          VGI.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10.Licenses
& Registrations

| | A. | To the extent required by Applicable Regulations VGI shall obtain and maintain
          at VGIs sole cost any certifications or approvals for the manufacture
          and/or importation of the Product in conformity with all Applicable Regulations.
          To the extent required by Applicable Regulations drug applications and
          applications for authorizations or licenses for the manufacture and/or
          importation of the Product in the Territory shall be applied for by VGI and
          secured in the name of VGI.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | T&T shall cause each Distributor in each designated portion of the Territory
          to obtain and maintain at that Distributors sole cost any licenses,
          certifications or approvals and to conduct every aspect of its business in
          conformity with all Applicable Regulations. T&T shall cause each Distributor
          in its designated portion of the Territory to apply for all authorizations or
          licenses to distribute the Product in its designated portion of the Territory.
          Said authorizations or licenses shall be applied for by the designated
          Distributor in the name of said Distributor or its designee.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10



| | C. | T&T shall cause each Distributor in each designated portion of the Territory
          to obtain and maintain any required registration and/or approval of the Product
          required by regulatory authorities in the designated portion of the Territory.
          All applications for registration and/or approval of the Product shall be made
          in the name of VGI or the Distributor as may be designated by T&T. All costs
          incurred by each Distributor in securing registration and/or approval of the
          Product shall be borne by T&T or the Distributor as determined by T&T.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | VGI shall assist each Distributor in securing, any licenses, registrations,
          authorizations, certifications and/or approvals from any regulatory authorities
          which are necessary for said Distributor to perform Distributors duties
          and obligations in accordance with its Distribution Agreement. Said assistance
          shall include but not be limited to:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1. | Services of competent persons to prepare, submit and/or present information
          required and/or requested by governmental representatives.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Preparation and dissemination of English language documentation, information and
          data reasonably required and/or requested by governmental representatives.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | Preparation and submittal of license applications.
| | -- | --------------------------------------------------

| | 4. | Personal presentations reasonably required and/or requested by governmental
          representatives.
| | -- | ------------------------------------------------------------------------------------------------------

| | 5. | Assistance in the design and conduct of clinical trials
          necessary to secure such governmental approval.
| | -- | -----------------------------------------------------------------------------------------------------------------

| | E. | VGI shall provide such
          assistance, exclusive of travel expenses, at VGIs sole cost. T&T shall
          pay all expenses for
        travel, meals, and lodging incurred by VGI as a result of providing such assistance.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11.Illegal
Activities

| | A. | The Parties hereto represent that no part of any consideration received
                    hereunder will be used by the Parties hereto for any purpose, nor have the
                    Parties hereto taken, nor will the Parties hereto take any action, which would
                    constitute a violation of any law of any jurisdiction in the Territory or of the
                    United States, including, without limitation, the Foreign Corrupt Practices Act.
                    The Parties hereto represent that they do not desire and will not request
                    any service or action which would or might constitute any such violation.
                    Further, the Parties hereto have not previously paid or promised to, and agree
                    prospectively not to, pay or promise to pay or give or promise to give anything
                    of value, either directly or indirectly, to an official of any government for
                    the purpose of influencing an act or decision in his or her official capacity,
                    inducing him or her to use his or her influence with a foreign government,
                    assisting any of the Parties hereto in obtaining or retaining business for or
                    with, or directing business to, any person or as a political contribution of any
                    kind.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11



| | B. | The Parties hereto agree to comply fully with all relevant export laws and
                    regulations of the United States and foreign governments, including, but not
                    limited to, the U.S. Export Administration Regulations (collectively, the
                    Export Controls). Without limiting the generality of the foregoing,
                    the Parties hereto expressly agree that they shall not, and shall cause its
                    representatives to agree not to, export, directly or indirectly, re-export,
                    divert, or transfer the Product to any destination, company or person, or for
                    any end use, restricted or prohibited by Export Controls.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | The Parties hereto each represent, warrant and covenant that neither they nor
                    any person who owns a controlling interest in or otherwise controls them is or
                    shall be (i) listed on the Specially Designated Nationals and Blocked Persons
                    List maintained by the Office of Foreign Assets Control (OFAC),
                    Department of the Treasury, and/or on any other similar list maintained by OFAC
                    pursuant to any authorizing statute, Executive Order or regulation
                    (collectively, OFAC Laws and Regulations), (ii) a Designated
                    National as defined in the Cuban Assets Control Regulations, 31 C.F.R.
                    Part 515, or (iii) a person designated under Section 1 (b), (c) or (d) of
                    Executive Order No. 13224 (September 23, 2001), any related enabling legislation
                    or any other similar Executive Orders (collectively, the Executive
                    Orders); and they are in compliance with all OFAC Laws and Regulations,
                    Executive Orders and related government guidance.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | The Parties hereto each represent, warrant and covenant that neither they nor
                    any person who owns a controlling interest in or otherwise controls them (i) is
                    under investigation by any governmental authority for, or has been charged with,
                    or convicted of, money laundering (under either 18 U.S.C. Section 1956 or 1957),
                    or drug trafficking, terrorist-related activities or other money laundering
                    predicate crimes or a violation of the Bank Secrecy Act laws (31 U.S.C. Sections
                    5311, et seq.), (ii) has been assessed civil penalties under these or related
                    laws (collectively, Anti-Money Laundering Laws), or (iii) has had
                    any of its funds seized or forfeited in an action under Anti-Money Laundering
                    Laws.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | E. | The Parties hereto each represent, warrant and covenant that they consent to the
                    disclosure to U.S. regulators and law enforcement authorities of such
                    information either of the Parties hereto reasonably deems necessary or
                    appropriate to comply with U.S. Anti-Money Laundering Laws, the USA PATRIOT Act
                    and other anti-terrorists laws and regulations or OFAC Laws and Regulations.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12.Product
Pricing

| | A. | VGI shall sell Product to each Distributor at a price per Treatment Unit equal
                    to the greater of $[omitted as confidential and filed separately with the SEC]
                    USD or [omitted as confidential and filed separately with the SEC] percent of
                    the Distributors sale price to each Purchaser.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | VGI and T&T agree to cause the prices paid to VGI by each Distributor to be
                    adjusted to compensate for any change in VGIs manufacturing costs which
                    result from changes to the Product, improvements to the Product, material
                    changes in manufacturing costs, or changes agreed upon between VGI and T&T.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12



| | C. | On the second anniversary of this Agreement and at two (2) year intervals
                    thereafter VGI and T&T agree to cause the prices paid to VGI by each
                    Distributor to be adjusted to compensate for changes in the value of the
                    currency of the United States of America relative to commodities and other
                    currencies.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | Notwithstanding other prices stated herein, VGI agrees to sell the Product to
                    Distributor at the most favorable prices, terms and/or conditions extended by
                    VGI to any third party.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13.T&T
Management Fees

| | VGI shall tender monthly payments to T&T in amounts equal to [omitted as confidential and
filed separately with the SEC] of the sum of all payments received by VGI in the preceding
calendar month for Product delivered to Distributors by VGI. VGI shall cause payments due
in each calendar month to be deposited via wire transfer to the bank account designated by
T&T on or before the 10th day of that month.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14.Distributor
Management

| | A. | T&T shall cause each Distributor and their respective employees and agents
                    to be thoroughly trained in and to understand any directions, applications,
                    contraindications, and cautions, including limitations on the improper uses
                    which pertain to the Product as documented in information provided by VGI.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | T&T shall cause each Distributor to perform the Distributors duties
                    and obligations in accordance with the applicable Distribution Agreement and in
                    accordance with all Applicable Regulations.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | VGI shall cause Product to be delivered to each Distributor in accordance with
                    all Applicable Regulations. D. T&T shall cause each Distributor to receive,
                    store and distribute all Product in accordance with all Applicable
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | T&T shall cause each Distributor to receive,
                    store and distribute all Product in accordance with all Applicable Regulations.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------

| | E. | T&T shall cause each Distributor to maintain accurate records indicating the
                    Purchaser to which each Treatment Unit is delivered. Said records shall indicate
                    the identity of the Purchaser, the date of delivery and the identity of the
                    Treatment Unit.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15.Clinical
Trials

| | A. | T&T shall pay $1,600,000 (One Million Six Hundred Thousand Dollars US) to
                    complete the Clinical Trial. T&T shall pay any additional costs in excess of
                    $1,600,000 (One Million Six Hundred Thousand Dollars US) incurred to complete
                    the Clinical Trial. VGI shall reimburse T&T in an amount equal to one half
                    of any such additional costs in excess of $1,600,000 (One Million Six Hundred Thousand
                        Dollars US) incurred to complete the Clinical Trial. Said
                    reimbursements shall be tendered by VGI to T&T on a monthly basis on or
                    before the 10th day of each calendar month following the month in
                    which said costs are paid by T&T.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13



| | B. | T&T will cooperate and provide all assistance, and will cause each
                    Distributor to cooperate and provide all assistance, reasonably requested by VGI
                    in the design and implementation of any and all tests, protocols, studies, or
                    trials of the Product in the Territory.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | VGI will provide reasonable assistance at its cost in the preparation and
                    submission of applications reasonably required to obtain permission for any
                    clinical trial or marketing approval of the Product in the Territory. VGI will
                    design at its cost tests, protocols, studies, or trials of the Product in the
                    Territory, and provide reasonable assistance in implementing and conducting such
                    tests, protocols, studies, or trials. If the preparation and submission of any
                    application or design and implementation of any test, protocol, study, or trial
                    requires travel of any VGI employees or consultants, T&T will pay all
                    expenses for travel, meals, and lodging.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | In the event T&T concludes that it will be expedient or necessary, for the
                    purpose of selling and distributing the Product in a significant part of the
                    Territory, to retain the services of any third party to conduct part of or all
                    of any future clinical trial services, the Parties hereto agree to share the
                    cost of such third party services equally.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16.Product
Changes & Improvements

| | Promptly provide T&T with current, accurate notice of any modifications or improvements made by
VGI to the Product and/or formulae including any available information pertaining to the
efficacy and/or health-related consequences of such modifications as well as any known
serious adverse effects related to such modifications or improvements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17.Alternative
Products

| | A. | In the event VGI develops or secures the right to sell an Alternate Product in
          the Territory, VGI shall enter into a contract with T&T whereby VGI assigns
          to T&T the right to manage the distribution of such Alternative Products in
          accordance with mutually agreeable terms and conditions which terms and
          conditions shall generally conform with the terms and conditions of this
          Distribution Management Agreement. The term of any such Alternative Product
          contract shall be 5 years.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | If, during the initial 6 months of any such Alternative Product contract VGI
          receives a bona-fide offer to manage the distribution of the Alternative Product
          which offer incorporates terms which are more favorable to VGI than the then
          existing Alternative Product contract between VGI and T&T, VGI shall notify
          T&T of such offer and shall provide an accurate copy of said offer to
          T&T.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | Upon tendering such notification VGI shall extend to T&T a 30 day option to
          revise the then existing Alternative Product contract to incorporate terms which
          are equally favorable to VGI.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | If T&T fails to exercise its 30 day option in a timely manner VGI may
          unilaterally terminate the then existing Alternative Product contract between
          VGI and T&T. Upon such termination VGI shall tender payment to T&T in an
          amount equal to any expenses which have been incurred prior to such termination
          by T&T in the performance of the terminated Alternative Product contract.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14



18.Manufacturing
and Packaging Standards:

| | A. | VGI and/or any third party which performs Late Stage Manufacturing shall:
| | -- | -------------------------------------------------------------------------

| | 1. | Affix to each 2 milliliter vial of the Product a unique label in a form such
          that said label can subsequently be uniquely identified.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Affix to each Treatment Unit a unique label in a form such that said label can
          subsequently be uniquely identified. Each label shall indicate expiration date
          of the potency period of the Product contained therein.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | Maintain a record of the unique identity of each 2 milliliter vial contained in
          each Treatment Unit.
| | -- | --------------------------------------------------------------------------------------------------------------

| | B. | Maintain a record of the unique identity of each 2 milliliter vial contained in
          each Treatment Unit. B. VGI shall be solely responsible for all manufacturing of
          the Product, and delivery of the same to any Distributor.
          Manufacturing in accordance
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | Maintain a record of the unique identity of each 2 milliliter vial contained in
          each Treatment Unit. B. VGI shall be solely responsible for all manufacturing of
          the Product, and delivery of the same to any Distributor. C. Any Distributor
          which performs Late Stage Manufacturing shall perform such Late Stage
          Manufacturing in accordance with
        Applicable Regulations.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | VGI warrants that the Product sold hereunder will conform to the formulation
                    authorized by applicable governmental agencies for distribution in the Territory
                    and will be free from any material defects in material and manufacture. VGI
                    makes no other warranties, express, implied, or otherwise, and in particular VGI
                    makes no implied warranties of merchantability or fitness for a particular
                    purpose concerning the Product.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

19.Patent
Infringement

| | A. | VGI shall defend and indemnify any claim or suit, foreign or domestic, that any
                    party may institute against T&T for alleged infringement of a patent or
                    patents or rights relating to VGIs Product, and T&T shall provide all
                    commercially reasonable assistance in the defense of same. However, this Section
                    shall apply only to such infringements as shall arise from the use of the
                    Product alone, and not as a part of any combination by T&T or any third
                    party with any other product, substances or formulas. Furthermore, VGIs
                    obligation to comply with this Section shall only arise if:
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1. | The Distributor or Distributors in the country where the claim originates have
                    made all payments then due under the applicable Distribution Agreements.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | T&T and/or the Distributor or Distributors in the country where the claim
                    originates give VGI immediate notice in writing of the alleged infringement and
                    of the institution of any claim or suit.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | T&T and/or the Distributor or Distributors in the country where the claim
                    originates permit VGI to defend such suit.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------

15



| | 4. | T&T and/or the Distributor or Distributors in the country where the claim
                    originates furnish to VGI all reasonable information, assistance, and authority
                    which is necessary to defend such claim or suit.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | VGI shall have no liability under this Section for any compromise reached by
                    T&T or any Distributor without VGIs written consent. Unless
                    established as a direct consequence of litigation, which VGI has itself defended
                    under the terms of this Section or established as a consequence of a settlement
                    agreement entered into by VGI, VGI shall have no liability for any patent
                    infringement. VGI shall not be required to defend any claims or suits or pay any
                    damages arising, directly or indirectly, from the use of any other Product,
                    substances or formulas not furnished by VGI or from any misuse of the Product.
                    To discharge its obligations under this Section, VGI may, at its option and in
                    its sole discretion, either obtain for T&T and the affected Distributors the
                    right to continue distributing the Product, or modify the Product so that it is
                    no longer infringing while retaining reasonably equivalent efficacy and safety.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20.Indemnification

| | A. | Each party agrees to indemnify and hold harmless the other and their respective
                    officers, directors and employees from and against any and all claims, suits,
                    causes of action, liabilities, defaults, obligations, injuries, losses or
                    damages, including reasonable attorneys fees and costs, arising from or
                    relating to the indemnifying partys material breach of any of its
                    obligations under this Agreement or the indemnifying partys negligent or
                    intentionally wrongful acts or omissions in connection therewith.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | VGI shall provide clinical trial results, data, data summary analyses and any
                    other information pertaining to the Product which is or will be submitted to
                    and/or required by any governmental authority in the Territory. VGI warrants all
                    such information to be true, accurate and complete in every respect. To the
                    fullest extent permitted by the laws of the government under which such
                    information is submitted, VGI shall indemnify and hold T&T and any
                    Distributor and their respective officers, directors and employees harmless from
                    any claim, allegation or determination that any such information is false,
                    inaccurate or incomplete. Such indemnification shall include but not be limited
                    to compensation by VGI to the indemnified parties for consequential damages,
                    including loss of income and/or loss of credibility suffered by said indemnified
                    parties as a result of any such false, inaccurate or incomplete information.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21.Term
of Agreement

| | A. | The term of this Agreement is for a period of 20 years commencing on July 1,
                    2004 and ending on June 30, 2024.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------

22.Termination
of Agreement

| | Either party to this Agreement may terminate this Agreement immediately upon notice to the other
party if the other party files a petition for bankruptcy protection and liquidation under
Title 11, Chapter 7 of the United States Code.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16



23.Resolution
of Disputes

| | A. | This Agreement has been entered into and is to be performed in part in the State
                    of California, and therefore shall be construed and interpreted under the laws
                    of the State of California, without regard to conflicts of law principles.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | In the event that either party hereto shall be found in default or breach of
                    this Agreement by a court of competent jurisdiction, said party shall be liable
                    to pay all reasonable attorneys fees, arbitration and court costs and
                    other reasonably related collection costs and expenses incurred by the other
                    party in enforcing its rights hereunder.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24.T&T
Representations:

| | A. | T&T represents, warrants and covenants that the person who has duly executed
                    this Agreement on behalf of the T&T is duly authorized to so act.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | T&T represents, warrants and covenants that T&T (i) is a limited
                    liability company duly organized, validly existing and in good standing under
                    the laws of the State of Illinois; and (ii) has all requisite power and all
                    governmental licenses, authorizations, consents and approvals necessary to own
                    its assets and carry on its business as now being and as proposed to be
                    conducted and to consummate the transactions contemplated by the Agreement.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | T&T represents, warrants and covenants that the execution, delivery and
                    performance by T&T of this Agreement and the consummation of the
                    transactions contemplated thereby: (i) have been duly authorized by all
                    requisite action of T&T, and, if required, any action on the part of the
                    owners of T&T; and (ii) do not and will not: (1) violate any provision of
                    law, statute, rule or regulation, any order of any governmental authority or any
                    provision of the articles of organization or operating agreement of T&T; (2)
                    violate, conflict with, result in a breach of or constitute (alone or with
                    notice or lapse of time or both) a default or an event of default under any
                    indenture, agreement, mortgage, deed of trust, note, lease, contract or other
                    instrument to which T&T is a party or by which T&T or any of its
                    property is or may be bound; or (3) result in the creation or imposition of any
                    lien upon any property or assets of T&T.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | T&T represents, warrants and covenants that this Agreement has been duly
                    executed and delivered by T&T and constitutes the legal, valid and binding
                    obligation of T&T enforceable against T&T in accordance with its terms.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

25.VGI
Representations:

VGI
represents, warrants and covenants that the following:

| | A. | VGI represents, warrants and covenants that the person who has duly executed
                    this Agreement on behalf of the VGI is duly authorized to so act.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

17



| | B. | VGI represents, warrants and covenants that VGI (i) is a corporation duly
                    organized, validly existing and in good standing under the laws of the State of
                    Delaware; and (ii) has all requisite power and all governmental licenses,
                    authorizations, consents and approvals necessary to own its assets and carry on
                    its business as now being and as proposed to be conducted and to consummate the
                    transactions contemplated by the Agreement.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | VGI represents, warrants and covenants that the execution, delivery and
                    performance by VGI of this Agreement and the consummation of the transactions
                    contemplated thereby: (i) have been duly authorized by all requisite action of
                    VGI, and, if required, any action on the part of the owners of VGI; and (ii) do
                    not and will not: (1) violate any provision of law, statute, rule or regulation,
                    any order of any governmental authority or any provision of the certificate of
                    incorporation or bylaws of VGI; (2) violate, conflict with, result in a breach
                    of or constitute (alone or with notice or lapse of time or both) a default or an
                    event of default under any indenture, agreement, mortgage, deed of trust, note,
                    lease, contract or other instrument to which VGI is a party or by which VGI or
                    any of its property is or may be bound; or (3) result in the creation or
                    imposition of any lien upon any property or assets of VGI.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | VGI represents, warrants and covenants that this Agreement has been duly
                    executed and delivered by VGI and constitutes the legal, valid and binding
                    obligation of VGI enforceable against VGI in accordance with its terms.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

26.General:

A.
            Independent Contractors

| |  | The relationship created between VGI and T&T by this
                    Agreement is solely that of independent contractors, with T&T providing
                    distribution management services for the Product and VGI acting as manufacturer
                    and exporter to the Territory. Nothing herein shall be construed as creating a
                    joint venture. Further, T&T is not an employee, agent, partner, franchisee,
                    fiduciary or representative of VGI, and does not have, nor shall it hold itself
                    out as having, any right, power or authority to create any contract or
                    obligation, either express or implied, on behalf of, in the name of, or binding
                    upon VGI, unless VGI consents thereto in advance in writing. Further, VGI is not
                    an employee, agent, partner, franchisee, fiduciary or representative of T&T,
                    and does not have, nor shall it hold itself out as having, any right, power or
                    authority to create any contract or obligation, either express or implied, on
                    behalf of, in the name of, or binding upon T&T, unless T&T consents
                    thereto in advance in writing.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

B.    
          Notices.

| | All notices or other communications under this Agreement shall be in writing and shall be
mailed by Registered U.S. mail service. Any notice shall be deemed given on the date of
receipt.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

C.    
          Entire Agreement, Modification, and Severability.

| | This Agreement constitutes the entire agreement between VGI and T&T regarding the matters
addressed herein and it may be modified only by a subsequent written agreement signed by
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18



| | duly authorized representatives of both Parties, and not by any oral waiver or course of
conduct. In the event of any conflict between the provisions of this Agreement and the provisions contained in any
prior agreement, contract or understanding, the provisions of this Agreement shall govern
and control. If any part of this Agreement is held by a court of competent jurisdiction or
an arbitrator to be invalid, void or unenforceable, the remainder of the provisions shall
remain in full force and effect and in no way be affected, impaired or invalidated. This
Agreement supersedes all prior agreements, written or oral.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

D.    
          Binding Effect.

| | This Agreement shall be binding upon and inure to the benefit of the Parties hereto, their
heirs, personal representatives, successors and permitted assigns.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | E. | Covenant To Not Disclose:
| | -- | -------------------------

| | 1. | The Parties agree that the terms and conditions of this Agreement, shall remain
          confidential as between the Parties and shall not be disclosed or otherwise
          disseminated to any other person(s) or individual(s), except as otherwise
          specifically indicated and permitted herein.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | The Parties agree that communication pertaining to the existence or substance of
          this Agreement will be limited to their attorneys, accountants and/or authorized
          agents. Such communications will be strictly limited to that information which
          is necessary for such attorneys, accountants and/or authorized agents to perform
          their respective duties. Prior to such communication the party which proposes to
          make such communication shall contractually bind each such attorney, accountant
          and authorized agent to abide by the terms of this covenant not to disclose.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | The Parties agree that the existence or substance of this Agreement may be
          communicated under the terms of an order of a court in the United States of
          America having valid jurisdiction but not in response to any subpoena or notice
          of deposition. Such communication shall be strictly limited to the scope of such
          court order.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | The Parties hereto agree that the existence or substance of this Agreement may
          be communicated or published as required by any law or regulation of the United
          States of America. Such communication of publication shall be strictly limited
          to those parts of this Agreement which are so required to be communicated and/or
          published.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | The Parties agree that neither the Parties nor their attorneys nor any other
          representative shall in any way publicize in or give comment to any news or
          communication media (including, but not limited to, newspapers, magazines,
          radio, television or any internet based service) regarding the existence or
          substance of this Agreement except as required and to the extent required by
          law.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F.     Force Majeure.

| | Neither party shall be liable for any failure to perform any obligations under this Agreement
because of acts of God, nature, war, or civil disturbance.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------

19



IN WITNESS WHEREOF, the Parties have
entered into this Agreement on the date first above written.

|                     |                      
|-------------------- | ---------------------
|VIRAL GENETICS, INC. | TIMOTHY & THOMAS, LLC
|                     |                      

|    |     |  |     |    
|--- | --- |  | --- | ---
|By: | /s/ |  | By: | /s/
|    |     |  |     |    

|              |  |  |               | 
|------------- |  |  | ------------- | 
|Printed Name: |  |  | Printed Name: | 
|              |  |  |               | 

|       |  |  |        | 
|------ |  |  | ------ | 
|Title: |  |  | Title: | 
|       |  |  |        | 

20