On June 19, 2007, the Board of Directors of Viral Genetics, Inc., approved an employment agreement with its Chief Executive Officer and President, Haig Keledjian, with effect as of May 20, 2007. The agreement confirms Mr. Keledjian’s current office and duties and has an initial term until December 31, 2009, after which the agreement may be renewed for successive one-year terms upon the agreement of Viral Genetics and Mr. Keledjian. The agreement provides for minimum annual compensation of $195,000, which is subject to annual review by the Board of Directors. Mr. Keledjian is entitled to standard benefits, and the agreement contains standard non-solicitation, confidentiality and assignment of invention provisions. The agreement also provides for a termination payment to Mr. Keledjian in the amount of his annual salary in the event his employment is terminated by Viral Genetics for reasons other than cause (as defined in the agreement) or is terminated by Mr. Keledjian for good reason (as defined in the agreement). Good reason includes a change greater than 50% in the ownership of Viral Genetics common stock through merger, tender offer, or other transaction.

Pursuant to the employment agreement, Viral Genetics and Mr. Keledjian also executed a stock option agreement, also dated effective May 20, 2007, which provides for the issuance of options to purchase 2,500,000 shares of Viral Genetics common stock at a purchase price of $0.08 per share. On June 19, 2007, the closing bid price for Viral Genetics common stock was $0.04 per share. These options vest immediately, and the right to exercise all or part of the options continues to the earlier to occur of (i) one year following termination, for any reason, of Mr. Keledjian’s employment and (ii) December 31, 2012. A copy of the employment agreement, together with the stock option agreement attached thereto as Exhibit A, is filed herewith as Exhibit 10.1.

In connection with the adoption of the employment agreement for Mr. Keledjian, Viral Genetics issued to Mr. Keledjian replacement options for options to purchase common stock that were previously outstanding and would have expired in March 2008. The following table shows the number of shares covered by the options, any changes in the exercise prices, and new expiration dates.

See the discussion of options issued to Haig Keledjian, above, which is incorporated herein. On March 8, 2007, Mr. Keledjian exercised a warrant to purchase 482,772 shares of Viral Genetics common stock at an exercise price of $0.40 per share.

On June 19, 2007, Viral Genetics authorized the issuance to an employee, Michael Capizzano, of options under his employment agreement to purchase 1,800,000 shares of common stock at an exercise price of $0.08 per share, which expire December 31, 2012. At the same time, Viral Genetics issued to Mr. Capizzano replacement options and warrants for options and warrants to purchase common stock that were previously outstanding and would have expired in March 2008. The following table shows the number of shares covered by the options and warrants, any changes in the exercise prices, and new expiration dates.

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