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 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. 2




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. VGI: Viral
Genetics, Inc. 3




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. 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 4




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 fifty thousand            (50,000) 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 fifty thousand (50,000)
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 three hundred
 thousand  (300,000)  Treatment Units in            monthly  increments of fifty thousand
 (50,000) 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 one hundred  thousand  (100,000)  Treatment            Units per calendar  month.
 Within 8 months after  receiving  such  direction  from T&T, VGI shall  increase its
capacity to            deliver  product at the rate of one hundred  thousand  (100,000)
 Treatment  Units per  calendar  month.  Eight months after            receiving such
direction  from T&T, VGI agrees to allocate 6




and
make available for delivery to all  Distributors  an absolute            minimum delivery
of one hundred thousand (100,000) Treatment Units in each subsequent calendar month. 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. 7




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. 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 $10,000 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. 8




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.     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 9




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.     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 10




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. 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




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. 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 12




(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 $700 USD or 70 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. 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 one half 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. 13




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 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. 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. 14




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. 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.
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 15




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. 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, 16




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. 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. 17




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. 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 18




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 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 sales
contract,  order forms, shipping document, or other document of VGI, the provisions of
this Agreement            shall control.  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. 19




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. 20




IN
WITNESS WHEREOF, the Parties have entered into this Agreement on the date first above
written. VIRAL GENETICS, INC.
     TIMOTHY & THOMAS, LLC  By:
     
     
     By:  Printed Name:
     
     
     Printed Name:  Title:
     
     
     Title:  21