Document:

Converted by EDGARwiz

“CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS, WHICH ARE IDENTIFIED BY ***.”

ROYALTY AGREEMENT

THIS AGREEMENT is dated for reference the 4th day of June, 2007 (the “Effective Date”).

BETWEEN:

InNexus Bioscience (Barbados) Inc., a company incorporated in Barbados

(“Grantor”)

OF THE FIRST PART

AND:

RP Dynamic Cross Linking L.P., an ************************* *************************************

(the “Royalty Holder”)

OF THE SECOND PART

WHEREAS:

A.

By way of a license agreement dated as of the date hereof (the “License Agreement”), Grantor acquired an irrevocable right and license to Exploit certain Licensed IP from its affiliate, InNexus International, the holder of the underlying Licensed Patents;

B.

By way of an agreement dated April ___, 2007 (the “Purchase Agreement”), Royalty Holder acquired certain rights to receive royalties and other amounts based upon future sales of Products and enforcement of Field IP in the Field and licensing to a Pharmaceutical Partner; and

C.

The parties wish to more clearly define the calculation and payment of such royalties and other amounts under the Purchase Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the sum of $10.00 now paid by Royalty Holder to Grantor and for other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged by Grantor, the parties agree as follows:

1

DEFINITIONS

1.1

Any capitalized terms contained herein and not otherwise expressly defined herein shall have the meanings defined in the License Agreement.

1.2

For the purposes of this Agreement the following words and phrases shall have the following meanings, namely:

(a)

“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with such other Person, whether now or in the future.  For purposes of this definition, “control” (including the terms “controlling,” “controlled by,” or “under common control with”) means possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise

(b)

“Antibody A” has the meaning set out in the License Agreement;

(c)

“Bankruptcy Event” means the occurrence of any of the following:

(i)

************************************************** **************************************************   ************************************************** ************************************************** ************************************************** ************************************************** ************************************************** ************************************************** ************************************************** ************************************************** ************************************************** **************************************************  ***********

(ii)

************************************************** ************************************************** ************************************************** ************************************************** ***********

(iii)

************************************************** **************************************************  ************************************************** **************************************************  ************************************************** **************************************************  ************************************************** **************************************************  ******* 

(iv)

************************************************** **************************************************  ************************************************** **************************************************  ************************************************** **************************************************  ************************************************** **************************************************  ********************************

(v)

************************************************** **************************************************    ************************************************** **************************************************  ************************************************** **************************************************   **************************************************    ************************************************** **************************************************  ************************************************** **************************************************   **************************************************    ************************************************** **************************************************  ************************************************** **************************************************   

(vi)

**************************************************  ************************************************** **************************

(vii)

**************************************************   

(viii)

**************************************************  **************************************************  ************************************************** **************************************************  ************************************************** **************************************************  ************************************************** **************************************************  ************************************************** ************************************************** *************************

(ix)

************************************************** ************************************************** **************************************************

(d)

“Biological Materials” has the meaning set out in the License Agreement

(e)

“Business Day” means any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the City of Bridgetown, Barbados.

(f)

“Debenture” means the Debenture dated as of the date hereof by and between Grantor and Royalty Holder, a copy of which attached hereto as Exhibit A.

(g)

“Dynamic Cross Linking Technology” means the anti-body enhancement and modification technology platform which is the subject of one or more of the Licensed IP.

(h)

“Electronic Communication” means communication by telex, telecopier or other means of electronic communication producing a printed copy

(i)

“Exploit” and “Exploitation” has the meaning set out in the License Agreement.

(j)

“Field” means  ******************************************* ********************************************************* ********************************************************* ************

(k)

“Field IP” means (i) all rights licensed, granted or otherwise transferred to Grantor pursuant to the License Agreement or Parent Agreement, (ii) all Patent Rights, Technology and Regulatory Exclusivity Periods to be assigned to Grantor pursuant to the Transaction Documents, and (iii) all Patent Rights, Technology and Regulatory Exclusivity Periods (including all Biological Materials) owned (in whole or in part) or controlled in any way (such as by license, sublicense or covenant not to sue) by Grantor or any of its direct or indirect subsidiaries as of the Effective Date or during the Term that is necessary or desirable for the Field.

(l)

“First Commercial Sale” means, ******************************* ********************************************************* ********************************************************* ********************************************************* *********************************************************

(m)

“Governmental Authority” means any government, court, regulatory or administrative agency or commission, or other governmental authority, agency or instrumentality, whether federal, state or local (domestic or foreign).

(n)

“InNexus Group” means Grantor, Parent, InNexus International and any of their Affiliates, any of their successors, assigns and legal representatives, and any other Person to which any of the foregoing transfer ownership of any right, title or interest in or to Antibody A, Products or any of the Field IP;

(o)

“InNexus International” means InNexus Biotechnology International Limited, a company registered in Barbados that is a wholly-owned subsidiary of Parent.

(p)

“License Agreement”  has the meanings set out in Recital A on the first page of this Agreement

(q)

“Licensed IP” has the meaning set out in the License Agreement.

(r)

“Licensed Patents” has the meaning set out in the License Agreement.

(s)

“Lien” means, with respect to any agreement or other asset, any mortgage, lien, pledge, charge, security interest or encumbrance of similar effect in respect of such asset.

(t)

“Material Adverse Effect” means ********************************  ********************************************************* ********************************************************* ********************************************************* ********************************************************* ********************************************************* ********************************************************* ********************************************************* ********************************************************* ********************************************************* ********************************************************* ********************************************************* ********************************************************* ********************************************************* ****************

(u)

“Material Agreements” *************************************   ********************************************************* ********************************************************* ********************************************************* ************

(v)

“Net Sales” means the gross amount invoiced in arms-length transactions by any of the InNexus Group (but not any Pharmaceutical Partner) from or on account of the sale or distribution of Product to any Third Party (excluding any free Product provided on a trial basis or as samples), less:

(i)

*************************************************** ***************************************************

(ii)

*************************************************** *************************************************** *************************************************** ****

(iii)

*************************************************** ***********************

(iv)

*****************************************

(v)

**************************************************** **************************************************** **************************************************** ******************************************

(vi)

**************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** *************

(w)

“Parent Agreement” means that certain Parent Agreement between Buyer and Parent dated the same date as the Purchase Agreement.

(x)

“Patent Rights” has the meaning set out in the License Agreement.

(y)

“Person” means an individual, corporation, partnership, association, trust or other entity or organization, but not including a government or political subdivision or any agency or instrumentality of such government or political subdivision.

(z)

“Pharmaceutical Partner” means ************************** **************************************************** **************************************************** ****************************************************

(aa)

“Product(s)” means any pharmaceutical composition(s) containing Antibody A.

(bb)

“Regulatory Exclusivity Period” has the meaning set out in the License Agreement.

(cc)

“Rejection Event” means *************************************** **************************************************** **************************************************** **************************************************** ****************************************

(dd)

“Royalty Payment Period” ****************************** **************************************************** **************************************************** ****************************************************   **************************************************** **************************************************** **************************************************** ***************

(ee)

“Royalty Payments” means (1) ************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **********************************

(ff)

“Taxes” means any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, franchise, capital, paid-up capital, profits, greenmail, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount imposed by any Governmental Authority responsible for the imposition of any such tax.

(gg)

“Technology” has the meaning set out in the License Agreement.

(hh)

“Term” means the ****************************************** **************************************************** ****************************************************            *******************************************************

(ii)

“Third Party” means any Person who is not a member of the InNexus Group.

(jj)

“Third Party Product Development Agreement” means ********* ***************************************************** **************************************************** **************************************************** **************************************************** **************************************************** **************************************************** ****************************************************   *************************************

(kk)

“Transaction Documents” ******************************* **************************************************** **************************************************** **************************************************** ****************************************************   *************************************

(ll)

“Valid Claim” means a claim of (i) an issued and unexpired Patent Right, which claim has not been revoked or held invalid or unenforceable by a court or other government agency of competent jurisdiction from which no appeal can be or has been taken and has not been held or admitted to be invalid or unenforceable through re-examination or disclaimer, reissue, opposition procedure, nullity suit or otherwise, or (ii) a pending Patent Right application that was filed in good faith and has not been cancelled, withdrawn or abandoned without the possibility of appeal or refiling.

1.3

In this Agreement, except as otherwise expressly provided:

(a)

“Agreement” means this agreement, including the preamble and the schedules hereto, as it may from time to time be supplemented or amended and in effect;

(b)

all references in this Agreement to a designated “Section” or other subdivision or to an appendix is to the designated Section or other subdivision of, or appendix to, this Agreement;

(c)

the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision or Schedule;

(d)

the headings are for convenience only and do not form a part of this Agreement and are not intended to interpret, define, or limit the scope, extent or intent of this Agreement or any provision hereof;

(e)

the singular of any term includes the plural, and vice versa, the use of any term is equally applicable to any gender and, where applicable, a body corporate, the word “or” is not exclusive and the word “including” is not limiting (whether or not non-limiting language, such as “without limitation” or “but not limited to” or words of similar import, is used with reference thereto);

(f)

any accounting term not otherwise defined has the meanings assigned to it in accordance with generally accepted accounting principles applicable in Canada;

(g)

any reference to a statute includes and is a reference to that statute and to the regulations made pursuant thereto, with all amendments made thereto and in force from time to time, and to any statute or regulations that may be passed which has the effect of supplementing or superseding that statute or regulations;

(h)

where any representation or warranty is made “to the knowledge of” any party, such party will not be liable for a misrepresentation or breach of warranty by reason of the fact, state of facts, or circumstances in respect of which the representation or warranty is given being untrue if such party proves:

(i)

that such party conducted a reasonable investigation so as to provide reasonable grounds for a belief that there had been no misrepresentation or breach of warranty; and

(ii)

that fact, state of facts, or circumstances could not reasonably be expected to have been determined as a result of that reasonable investigation, irrespective of the actual investigation conducted by such party;

(i)

except as otherwise provided, any dollar amount referred to in this Agreement is in the lawful currency of the United States; and

(j)

any other term defined within the text of this Agreement has the meaning so ascribed.

2

ROYALTY

2.1

Grantor shall remit the Royalty Payments to Royalty Holder on a quarterly basis, no later than forty-five (45) days following the end of each calendar quarter during which the sales of Product were made (other than for Royalty Payments payable directly to Royalty Holder by a Pharmaceutical Partner).  All Royalty Payments to be made by Grantor hereunder shall be made in US dollars by fedwire transfer of immediately available funds to a bank account designated by Royalty Holder.  Grantor shall not take any set-off or deduction against the Royalty Payments.

2.2

Each Royalty Payment shall be accompanied by a royalty report setting out in reasonable detail (i) the number of units of Product sold, (ii) the gross sales of Product, (iii) deductions taken from Net Sales as specified in the definition thereof, (iv) Net Sales, (v) the gross amount of any payments received by Grantor of any other member of the InNexus Group pursuant to any Third Party Product Development Agreement, (vi) Royalty Payments owed, (vii) the computations for any applicable currency conversions pursuant to Section 2.4, (viii) the date of First Commercial Sale for each Product, and (ix) any other information as Royalty Holder may reasonably request.

2.3

Grantor shall keep, and shall cause all other members of the InNexus Group and all Pharmaceutical Partners to keep, adequate books and records of accounting for the purpose of calculating all amounts payable to Royalty Holder hereunder.  For the five (5) years next following the end of the calendar year to which each shall pertain, such books and records of accounting shall be kept at each of their principal place of business and shall be open for inspection at reasonable times and upon reasonable notice by an independent certified accountant selected by Royalty Holder, and which is reasonably acceptable to Parent and Grantor, for the sole purpose of inspecting the amounts owed to Royalty Holder under this Agreement.  In no event shall such inspections be conducted hereunder more frequently than once every six (6) months.  Any underpayments from any such inspection shall be paid by Grantor within thirty (30) days of notification of the results of such inspection.  Royalty Holder shall pay for such inspections, except that in the event there is any upward adjustment in aggregate Royalty Payments payable for any calendar year shown by such inspection of more than the greater of (1) $50,000, or (2) five percent (5%) of the amount already paid for the audited period in question, Grantor shall reimburse Royalty Holder for any reasonable out-of-pocket costs for such inspection.

2.4

With respect to Net Sales invoiced in US dollars, the Net Sales and the amounts due to Royalty Holder hereunder shall be expressed in US dollars.  With respect to Net Sales invoiced in a currency other than US dollars, the Net Sales shall be expressed in the domestic currency of the entity making the sale, together with the US dollar equivalent, calculated using the official rate of exchange of such domestic currency as quoted by The Wall Street Journal, Eastern United States Edition, for the last business day of the calendar quarter for which the payment is made.

2.5

Any Royalty Payments by Grantor to Royalty Holder hereunder shall not include any applicable taxes or other governmental charges, including import or export duties, sales, use or privileges taxes, or excise or similar taxes, levied by any government, whether now or hereafter enacted.  Grantor shall pay all such taxes and charges, on or before their due dates, unless Grantor provides Royalty Holder with an exemption certificate acceptable to the relevant taxing authorities.  In the event Royalty Holder is required at any time to pay any such tax or charge, Grantor shall reimburse Royalty Holder therefor promptly on demand.  If Grantor is required by the law of any country to make any deduction, or withhold from any sum payable to Royalty Holder by Grantor hereunder, then the sum payable by Grantor upon which the deduction or withholding is based shall be increased to the extent necessary to ensure that, after such deduction or withholding, Royalty Holder receives and retains, free from liability for such deduction or withholding, a net amount equal to the amount Royalty Holder would have received and retained in the absence of such required deduction or withholding provided that, if such deduction or withholding is due to an application of taxation legislation not in effect or contemplated on the Effective Date, Grantor shall be required to increase the aforesaid sum only to the extent that the Grantor may thereafter recover and retain for itself such deduction or withholding.

2.6

In the event that, by reason of applicable law in any country, it becomes impossible or illegal for Grantor (or any of its Affiliates) to transfer, or have transferred on its behalf, Royalty Payments owed Royalty Holder hereunder, Grantor shall promptly notify Royalty Holder of the conditions preventing such transfer and such payments shall be deposited in local currency in the relevant country to the credit of Royalty Holder in a recognized banking institution designated by Royalty Holder or, if none is designated by Royalty Holder within a period of thirty (30) days, in a recognized banking institution selected by Grantor, and identified in a written notice given to Royalty Holder.

2.7

Grantor shall pay Royalty Holder, without being requested, simple interest on any payments that are not paid on or before the date such payments are due under this Agreement at a rate equal to the daily prime rate, as published in The Wall Street Journal, Eastern United States Edition, plus five percent (5%), or the maximum applicable legal rate, if less, calculated on the total number of days payment is delinquent.

3

COVENANTS

3.1

Maintenance of Agreements:  During the Term, except as otherwise consented to in writing by Royalty Holder in its sole discretion:

(a)

Grantor shall at all times comply with all of its obligations under the License Agreement.

(b)

**************************************************** **************************************************** **************************************************** ****************************************************   *****************************

(c)

**************************************************** ****************************************************   ****************************************************        ****************************************************   *****************      

(d)

**************************************************** ****************************************************   ****************************************************        ************************

(e)

**************************************************** ****************************************************   ****************************************************           **************************************************

3.2

Third Party Product Development Agreement:  *************************  ********************************************************************** ********************************************************************** ********************************************************************** ********************************************************************** ********************************************************************** *******************************

3.3

Patent Prosecution, Maintenance of Technology and Enforcement:  During the Term:

(a)

Grantor shall take such actions and prepare, execute, deliver and file such agreements, documents and instruments and pay all required maintenance or other fees as are necessary or desirable to prepare, prosecute and maintain, and cause InNexus International to do the same, all Patent Rights within the Field IP, diligently defend any interference, reissue, re-examination or opposition proceeding related to such Patent Rights, and prosecute claims for infringement of such Patent Rights in the Field, and against claims of invalidity or unenforceability, if the failure to take such action could reasonably be expected to have a Material Adverse Effect.

(b)

If Royalty Holder believes, in its sole discretion, that any (x) infringement of any Patent Rights within the Field or (y) infringement or misappropriation of any Technology in the Field IP, has occurred or will occur, then Grantor shall enforce Grantor’s rights under such Patent Rights or in such Technology to the extent requested by Royalty Holder.  No member of the InNexus Group shall seek to enforce such Patent Rights in the Field or rights to Technology in the Field IP, without Royalty Holder’s prior written consent.  If so directed by Royalty Holder, (i) Grantor shall commence legal action against any such infringing or misappropriating party with counsel selected by Royalty Holder, (ii) Royalty Holder shall have the right to control such legal action, and (iii) Grantor shall cooperate fully in any such legal action, including executing all papers and performing such acts as Royalty Holder may reasonably require to enforce such Patent Rights or rights to Technology in the Field IP.

(c)

Without limiting the generality of the foregoing, Grantor shall (i) take all reasonable security measures to protect and maintain the secrecy, confidentiality and value of all Technology in the Field IP, (ii) seek and maintain any Regulatory Exclusivity Periods, including executing all papers and performing such acts as Royalty Holder may reasonably request in relation thereto and (iii) exercise its rights under the License Agreement as Royalty Holder may direct.

4

INDEMNIFICATION

1.1

Indemnification.  *************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** *********************************************************************** ***********************************************************************

1.2

Procedures; No Waiver.

(a)

********************************************************      ********************************************************  ********************************************************  ********************************************************      ********************************************************      ********************************************************  ********************************************************  ********************************************************      ********************************************************      ********************************************************  ********************************************************  ********************************************************      ********************************************************      ********************************************************  ********************************************************  ********************************************************      ********************************************************* ********************************************************* ********************************************************* ********************************************************** ********************************************************* ********************************************************* ********************************************************** ********************************************************* ********************************************************* **********************************************************

(b)

No investigation by Grantor of the Field IP, the Transaction Documents or any other matters shall limit Grantor’s right to indemnification hereunder.

(c)

The expiration or termination of any term of this Agreement shall not excuse any Party hereto from its liability in respect of any breach hereof prior to such expiration or termination.

1.3

Default.  If a Rejection Event occurs,

(a)

Such an event will constitute a breach of this Agreement;

(b)

********************************************************* ******************************************************************************************************************* ************************************************************************************************************************

(c)

**************

(i)

****************************************************** ******************************************************

(ii)

****************************************************** ******************************************************

(iii)

****************************************************** ************************************************************************************************************ ******************************************************

(iv)

****************************************************** ******************************************************

1.4

Other Remedies upon a Rejection Event.  In addition to damages calculated pursuant to Section 4.3, upon a Rejection Event:

(a)

********************************************************* ********************************************************** **************************************

(b)

************************************************************ *********************************************************** ************************************************************ *********************************************************** *********************************************************** *********************

1.5

Debenture.  Grantor will enter into the Debenture to secure the prompt and punctual performance of its obligations to Royalty Holder.

1.6

Insurance.  Grantor will require that Parent list Grantor as an additional named insured on any insurance that Parent has for itself or any of the InNexus Group (including product liability insurance), and further Grantor obtain such insurance and in such amounts as Royalty Holder may reasonably request.

1

MISCELLANEOUS

1.1

Specific Performance.  Each of the parties hereto acknowledges that the other party will have no adequate remedy at law if it fails to perform any of its obligations under this Agreement.  In such event, each of the parties agrees that the other party shall have the right, in addition to any other rights it may have (whether at law or in equity), to specific performance of this Agreement.

1.2

Notices.  All notices, requests and other communications to either Party hereunder shall be in writing and shall be given by overnight courier, courier or facsimile as follows:

if to Royalty Holder, to:

RP Dynamic Cross Linking L.P.

*****************

****************

**************

****************

Attention:

************

Telecopy:

************

with a required copy to:

Goodwin Procter LLP

Exchange Place

53 State Street

Boston, MA  02109

Attention:

*****************

******************

Telecopy:

***********

if to Grantor, to:

InNexus Bioscience (Barbados) Inc.

Chamberlain Place,

Broad Street, Bridgetown

St. Michael, Barbados

Attention: ********

Telecopy: **************

with required copies to:

InNexus Biotechnology Inc.

13208 East Shea Blvd., Suite 200

The Mayo Clinic MCCRB Building

Scottsdale, Arizona  85259

Attention: Jeff Morhet

Telecopier: ***********

Leschert & Company

Law Corporation

Barristers & Solicitors

2760 – 200 Granville Street,

Vancouver, British Columbia

V6C 1S4

Attention: 

Allen D. Leschert

Telecopy:

**************

or to such other address as any Party may have furnished to the other in writing in accordance herewith.  All notices and other communications given to any Party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by fax prior to 4:00 p.m. EST, in each case delivered or faxed (properly addressed) to such Party as provided in this Section 5.2.

1.3

Amendments; No Waivers.  Any provisions of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Royalty Holder and Grantor or in the case of a waiver, by the Party against whom the waiver is to be effective. No failure or delay by either Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

1.4

Successors And Assigns.  The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors, assigns and legal representatives.  This Agreement and the Royalty Holder’s rights and obligations hereunder may be sold, assigned or transferred, in whole or in part, without the prior written consent of Grantor.  This Agreement and Grantor’s rights and obligations hereunder may not be sold, assigned or transferred without the prior written consent of Royalty Holder or its transferees or assignees.

1.5

Governing Law; Jurisdiction.  This Agreement shall be construed in accordance with and governed by the law of the **************  without regard to any conflicts of law principles thereof that would call for the application of the laws of any other jurisdiction.  The Parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought exclusively in the ******************************************************** or any ******** **** court sitting in **********, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the ************, and each of the Parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.  Without limiting the foregoing, each Party agrees that services of process on such Party as provided in Section 5.2 shall be deemed effective service of process on such Party.

1.6

Waiver Of Jury Trial.  Each of the parties hereto hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this agreement or the transactions contemplated hereby.

1.7

Counterparts; Effectiveness.  This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when each Party hereto shall have received a counterpart hereof signed by the other Party hereto.  Facsimile execution and delivery of this Agreement by either Party shall constitute a legal, valid and binding execution and delivery of this Agreement by such Party.

1.8

Entire Agreement.  This Agreement and the Exhibits and Schedules hereto constitute the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the Parties with respect to the subject matter of this Agreement, other than the Transaction Documents.  No representation, inducement, promise, understanding, condition or warranty not set forth herein has been made or relied upon by either Party hereto.  None of this Agreement, nor any provision hereof, is intended to confer upon any Person other than the Parties hereto any rights or remedies hereunder.

1.9

Severability.  If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties.  The Parties shall in such an instance use their reasonable best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement.

1.10

Relationship Of The Parties.  Each Party is an independent contractor under this Agreement.  Nothing contained herein is intended or is to be construed so as to constitute any of the Parties as partners, agents or joint venturers.  Neither Party shall have any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other Party to any contract, agreement or undertaking with any other Person.

1.11

Captions.  The titles and captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

[remainder of this page intentionally left blank]

ROYALTY AGREEMENT

IN WITNESS WHEREOF the Parties have duly executed this Agreement as of the day and year first above written.

	
	RP Dynamic Cross Linking L.P.

By: *************************

(Authorized Signatory)

By: ***************

Title: Chief Executive Officer 

	
	InNexus Bioscience (Barbados) Inc.

(Authorized Signatory)

By:

Title:

ROYALTY AGREEMENT

Exhibit A

Form of Debenture

ROYALTY AGREEMENT

Exhibit B

Terms of Third Party Product Development Agreement

Any Third Party Product Development Agreement shall contain the following provisions:

·

******************************************************************* *******************************************************************

·

******************************************************************* *******************************************************************

·

******************************************************************* *******************************************************************

·

******************************************************************* ******************************************************************** ******************************************************************* *************

·

******************************************************************* ******************************************************************** *********

ROYALTY AGREEMENT

LIBC/2965464.6Converted by EDGARwiz

5.1 PLEDGE AGR

Drawn & Prepared by:

Lex Caribbean

Worthing Corporate Center

Worthing

Christ Church

Barbados

“CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS, WHICH ARE IDENTIFIED BY ***.”

BARBADOS 

STAMPED TO SECURE US$2,500,000

THIS CHARGE is dated  as of the                 day of                       2007

and made BY:

(1)

INNEXUS BIOTECHNOLOGY INC., a corporation incorporated under the laws of British Columbia, Canada (the “Chargor”) and

(2)

RP DYNAMIC CROSS LINKING LP., an

**************************

 organized under the laws of ********************** 

 

and having an office at

                   

**************************************************************** *******

(hereinafter called the “Secured Party”)

WHEREAS:

 (

1

)

By an agreement dated the 

                        

 day of April, 2007 (the “License Agreement”) and made between the Secured Party, InNexus Bioscience (Barbados) Inc. (the “Licensee”) and Innexus Biotechnology International Limited (the “Licensor”), the Licensor granted to the Licensee an exclusive ******************************** ******************************** license or sublicense (as the case may be), with ************************************************* in and to all of its right, title and interest under the Licensed Patents, Licensed Know-How and Licensed Regulatory Exclusivity Periods, in the Field (the “License”). 

(

2

)

By a Royalty Agreement (the “Royalty Agreement”) and a Purchase Agreement dated the 

                               day of April, 2007 and made between the Licensee and the Secured Party (the “Licensee Agreements”) the Secured Party agreed to *************************** ************************************************************************************************************************************************************************************************************************

(

3

)

Under the terms of the License Agreement the Licensor *********************** *********************************************************************************************************************************************************************************************************************************************  

(

4

)

For the purpose of securing their respective obligations under the Licensee Agreements and the License Agreement the Licensee and the Licensor respectively agreed to ****** ***********************************

(

5

)

As a condition to the Secured Party entering into the Licensee Agreements, the Chargor, as the parent company of the Licensor and the Licensee, entered into an agreement (the “Parent Agreement”) dated the          day of    2007 with the Secured Party and the Licensee by which the Chargor gave certain assurances and guarantees to the Secured Party regarding the performance by the Licensor and the Licensee of their respective obligations under the Transaction Documents (as that term is hereinafter defined); and to secure the performance and discharge of its obligations under the Parent Agreement, the Chargor agreed to grant to the Secured Party a charge over all the shares that it holds in the capital of the Licensee upon the terms and subject to the conditions hereinafter appearing.

WITNESSES as follows:

1 

Definitions and Interpretation

1.1 

In this Charge unless the context otherwise requires:

“Charged Property” means the property and rights of the Chargor which are the subject of the security created or purported to be created by this Charge. 

 “Derivative Assets” means all stocks shares warrants or other securities rights stock dividends interest or other property whether of a capital or income nature accruing offered issued or deriving at any time by way of stock dividend bonus redemption exchange purchase substitution conversion consolidation subdivision preference option or otherwise attributable to any of the Shares and Securities or any Derivative Assets previously described but does not include cash dividends.

 “Encumbrance” means any mortgage charge pledge lien assignment hypothecation security interest title retention preferential right or trust arrangement or other security arrangement or agreement or any right conferring a priority of payment.

“Interest Rate” means the rate of interest set forth in Section 2.7 of the Royalty Agreement.

“Rejection Event” bears the same meaning as in the Royalty Agreement.

“Secured Liabilities” means all monies obligations and liabilities whatsoever whether for principal interest or otherwise in whatever currency which may now or at any time in the future be due owing or incurred by the Chargor to the Secured Party in any manner whatsoever (whether alone or jointly and in whatever style name or form and whether as principal or surety), including without limitation any obligation arising under or in respect of the guarantee given by the Chargor of the performance by the Licensor and the Licensee of their respective obligations under the Transaction Documents together with interest to date of payment at the rate set forth in Section 2.7 of the Royalty Agreement (the “Interest Rate”) to date of payment at such rates and upon such terms as may from time to time be agreed or in the absence of agreement at such rate or rates as may be specified in, or prescribed by the Secured Party pursuant to the Licensee Agreements and all commission fees and other charges and all legal and other costs charges and expenses incurred by the Secured Party in relation to the creation or enforcement of this security or the assets hereby charged on a full indemnity basis.  A reference in this deed to “Secured Liabilities” shall be deemed to include a reference to any part thereof.

“Shares and Securities” means all shares stocks and other securities listed in Schedule 1:

 (i) 

for which the share certificates or other documents of title have been deposited by the Chargor with the Secured Party; or

(ii) 

for which the share certificates or other documents of title have been deposited by the Chargor with the Secured Party or its agents or nominees or are held to the order of the Secured Party; or

(iii) 

for which the share certificates or other documents of title are now held by the Secured Party or its agents for the account of the Chargor; or

(iv) 

represented by any share certificates or other documents of title from time to time in the future deposited by the Chargor with the Secured Party or its agents or nominees or held to the order of the Secured Party or belonging to the Chargor and received by the Secured Party or its agents or nominees after the execution of this Charge

in each case whether held in Barbados or elsewhere and irrespective of whether in any such case the deposit was made or the certificates or other documents were received by the Secured Party or its agents or nominees for the purposes of creating security, safe custody, collection or otherwise.

“Transaction Documents” has the meaning attributed to it in the Parent Agreement.

1.3 

References to Clauses and Schedules are to the clauses and schedules to this Charge.

1.4 

Clause headings are inserted for ease of reference only and are not to affect the interpretation of this Charge.

1.5

Except to the extent the context otherwise requires any reference in this document to 'this Charge' and any other document referred to in it includes any document expressed to be supplemental to or collateral with or which is entered into pursuant to or in accordance herewith or therewith and shall be deemed to include any instruments amending varying supplementing novating or replacing the terms of any such documents from time to time.

1.6

References to a person are to be construed to include corporations firms companies partnerships individuals associations states and administrative and governmental and other entities whether or not a separate legal entity.

1.7 

References to any person are to be construed to include references to that person's successors transferees and assigns whether direct or indirect.

1.8 

References to any statutory provision are to be construed as reference to that statutory provision as amended supplemented re-enacted or replaced from time to time (whether before or after the date of this Charge) and are to include any orders regulations instruments or other subordinated legislation made under or deriving validity from that statutory provision.

1.9 

The words 'other' and 'otherwise' are not to be construed ejusdem generis with any foregoing words where a wider construction is possible.

1.10 

The words 'including' and 'in particular' are to be construed as being by way of illustration or emphasis only and are not to be construed as, nor shall they take effect as, limiting the generality of any foregoing words.

2 

Charge

2.1 

The Chargor (with the intent that the security so constituted shall extend to all beneficial interests of the Chargor in the Charged Property and to any proceeds of sale or other realisation of the Charged Property or any part of it) and as continuing security for the payment and discharge of the Secured Liabilities Charges the Shares and Securities and the Derivative Assets to the Secured Party.

3 

Deposit of Title Documents and Further Assurance

3.1 

The Chargor shall on the execution of this Charge deposit with the Secured Party all share certificates or other documents of title to or representing the Charged Property together with such duly executed transfers or assignments with the name of the transferee, date and consideration left blank and other consents or waivers as the Secured Party may reasonably require to enable the Secured Party to vest the same in itself or its nominees.

3.2

The Chargor shall upon the accrual offer issue or receipt of any Derivative Assets deliver or pay to the Secured Party or procure the delivery or payment to the Secured Party of all such Derivative Assets or the share certificates or other documents of title to or representing them together with such duly executed transfers or assignments in favour of the Secured Party or its nominees as the Secured Party may require to perfect the title of the Secured Party to all or any of the Derivative Assets to the intent that the Secured Party may at any time without notice present them for registration.

3.3 

For so long as the Chargor is not in default under the terms of the Parent Agreement the Secured Party will not be entitled to receive cash dividends interest and other income deriving from or in respect of the Charged Property. 

3.4

 Without prejudice to anything else contained in this Charge the Chargor shall at any time at the request of the Secured Party but at the cost of the Chargor promptly sign seal execute deliver and do all deeds instruments transfers renunciations proxies notices documents acts and things in such form as the Secured Party may from time to time reasonably require for creating perfecting or protecting the security over the Charged Property or any part of it or for facilitating its realisation.

3.5

The Secured Party, at any time and from time to time, may delegate by power of attorney or in any other manner to any person or persons all or any of the powers, authorities and discretions which are for the time being exercisable by the Secured Party under this Charge in relation to the Charged Property.  Any such delegation may be made upon such terms and subject to such regulations as the Secured Party may think fit.  The Secured Party shall give written notice to the Chargor of any delegation made pursuant to this clause 3.5 in accordance with clause 12 hereof. 

3.6

Neither the Secured Party nor its agents, managers, officers, employees, delegates and advisers will be liable for any claim, demand, liability, loss, damage, cost or expense incurred or arising in connection with the exercise or purported exercise of any rights, powers and discretions under this Charge in the absence of gross negligence or willful misconduct.

3.7

Upon notice of a Rejection Event and during the continuance of a Rejection Event  the Secured Party shall have the right, at any time in its discretion and without notice to the Chargor to transfer to or to register in the name of the Secured Party or any of its nominees any or all of the Charged Property.  In addition, the Secured Party shall have the right at any time to exchange certificates or instruments representing or evidencing Charged Property for certificates or instruments of smaller or larger denominations.

3.8

All or other of the powers, authorities and discretions which are conferred by this Charge (either expressly or impliedly) upon a Receiver of the Charged Property may be exercised after the security created by this Charge becomes enforceable by the Secured Party in relation to the Charged Property without first appointing a Receiver or notwithstanding the appointment of a Receiver.

4

 Representations Warranties and Covenants by the Chargor

4.1 

The Chargor represents and warrants to the Secured Party and undertakes that:

 (a) 

the Chargor is and will be the sole absolute and beneficial owner and the registered holder of all of the Charged Property free from Encumbrances and will not create or attempt to create or permit to arise or subsist any Encumbrance (other than this Charge) on or over the Charged Property;

 (b) 

the Chargor has not sold or otherwise disposed of or agreed to sell or otherwise dispose of or granted or agreed to grant any option in respect of all or any of its right title and interest in and to the Charged Property or any part of it and will not do any of the foregoing at any time during the subsistence of this Charge;

 (c) 

the Shares and Securities are and will at all times be fully paid and there are and will be no monies or liabilities outstanding in respect of any of the Charged Property;

 (d) 

the Charged Property has been and will at all times be duly authorised and validly issued and is and will at all times be free from any restriction on transfer or rights of pre-emption;

 (e) 

the Chargor has and will at all times have the necessary power to enter into and perform its obligations under this Charge;

 (f) 

this Charge constitutes the legal valid binding and enforceable obligations of the Chargor and is a security over all and every part of the Charged Property effective in accordance with its terms;

 (g) 

this Charge does not and will not conflict with or result in any breach or constitute a default under any agreement instrument or obligation to which the Chargor is a party or by which it is bound;

 (h) 

all necessary authorisations and consents to enable or entitle it to enter into this Charge have been obtained and will remain in full force and effect at all times during the subsistence of the security constituted by this Charge; and

 (i) 

the Chargor will use its best endeavours to procure due compliance with its obligations in this Charge by all nominees in whose name or names any Charged Property is registered or holding any certificates or other documents of title relating to any Charged Property.

4.2 

The Chargor undertakes to the Secured Party to provide a copy of any report accounts circular or notice received in respect of or in connection with any of the Charged Property to the Secured Party forthwith upon the receipt by the Chargor.

4.3 

The Chargor shall promptly pay all calls or other payments due and will discharge all other obligations in respect of any part of the Charged Property and if the Chargor fails to fulfill any such obligations the Secured Party may, but shall not be obliged to, make such payments on behalf of the Chargor in which event any sums so paid shall be reimbursed on demand by the Chargor to the Secured Party together with interest thereon until repayment whether before or after judgment.

4.4 

The Chargor shall indemnify the Secured Party on a full indemnity basis against calls or other payments relating to the Charged Property and any defect in the Chargor's title to the Charged Property and against all actions proceedings losses costs claims and demands suffered or incurred in respect of anything done or omitted in any way relating to the Charged Property or in the exercise or purported exercise of the powers contained in this Charge by the Secured Party.

4.5 

The Chargor shall not do or cause or permit anything to be done which may adversely affect the security created or purported to be created by this Charge or which is a variation or abrogation of the rights attaching to or conferred by all or any part of the Charged Property without the prior written consent of the Secured Party and shall take such action as the Secured Party may in its discretion direct in relation to any proposed compromise arrangement reorganisation conversion repayment offer or scheme of arrangement affecting all or any part of the Charged Property.

5 

Rights of the Secured Party

5.1 

The Secured Party may at its discretion (in the name of the Chargor after a demand for payment by the Secured Party under the Parent Agreement and without any consent or authority on the part of the Chargor) exercise the following rights and powers in respect of the Charged Property:

a)

any voting rights and any powers or rights which may be exercised by the person or persons in whose name or names the Charged Property is registered; and

b)

all the powers given to trustees by the Trustee Act, Cap. 250 in respect of securities or property subject to a trust.

5.2

Following default in payment by the Chargor under the Parent Agreement all dividends interest and other income forming part of the Charged Property shall, unless otherwise agreed between the Secured Party and the Chargor, be paid without any set-off or deduction whatsoever to a suspense account and retained by the Secured Party until applied as hereinafter provided as part of the Charged Property and any such monies which may be received by the Chargor shall pending such payment be held in trust for the Secured Party.

5.3 

The powers conferred on the Secured Party by this Charge are solely to protect its interests in the Charged Property and shall not impose any duty on it to exercise any such powers. The Secured Party shall not have any duty as to any Charged Property and shall incur no liability for:

 a) 

ascertaining or taking action in respect of any calls installments conversions exchanges maturities tenders or other matters in relation to any Charged Property or the nature or sufficiency of any payment whether or not the Secured Party has or is deemed to have knowledge of such matters; or

 b) 

taking any necessary steps to preserve rights against prior parties or any other rights pertaining to any Charged Property.

5.4 

The Secured Party shall not be liable to account as mortgagee in possession in respect of all or any of the Charged Property and shall not be liable for any loss upon realisation or for any failure to present any interest coupon or any bond or stock drawn for repayment or for any failure to pay any call or installment or to accept any offer or to notify the Chargor of any such matter or for any failure to ensure that the correct amounts (if any) are paid or received in respect of the Charged Property or for any negligence or default by its nominees or agents or for any other loss of any nature whatsoever in connection with the Charged Property.

5.5

The amount to be secured by this Charge shall be unlimited. This Charge shall be stamped in the first instance with stamp duty covering an aggregate indebtedness of the amount stated in Schedule 2, and the Chargor hereby agrees that the Secured Party shall be and is hereby empowered at any time or times hereafter (without further licence of consent of the Chargor) to affix additional stamp duty hereon covering any sum or sums by which the Secured Liabilities may exceed the said sum, it being the intent of these presents that until its discharge in writing by the Secured Party, any charge hereby created shall be a continuing security for payment and discharge of the Secured Liabilities.  All legal costs, charges and expenses incurred by the Secured Party in connection with such increase of stamp duty shall be deemed to be properly incurred by the Secured Party and shall be repaid by the Chargor to the Secured Party on demand, and unless repaid shall carry interest at the Interest Rate from the date of demand, and until payment shall be a charge on the Charged Property.

6 

Enforcement

6.1 

After occurrence of a Rejection Event then the security constituted by this Charge shall become immediately enforceable and the power of sale and other powers conferred by the Property Act, Cap. 236 as varied or extended by this Charge shall become immediately exercisable without the restrictions contained in Section 111 of the Property Act as to the giving of notice or otherwise.

7 

Power of Sale

7.1 

At any time after the security constituted by this Charge has become enforceable the Secured Party may without further notice to the Chargor exercise the power to sell or otherwise dispose of the whole or any part of the Charged Property, in such manner and on such terms and for such consideration (whether payable immediately or by installments) as the Secured Party shall think fit and without liability for loss whatsoever, and may (without prejudice to any right which it may have under any other provision of this Charge) treat such part of the Charged Property as consists of money as if it were the proceeds of such a sale or other disposal. The Secured Party shall after the payment of any claims having priority to the security created by this Charge apply the proceeds without prejudice to the right of the Secured Party to recover any shortfall from the Chargor in paying the costs of sale or other disposal and in or towards the discharge of the Secured Liabilities in such order as the Secured Party in its absolute discretion thinks fit and the surplus (if any) of such proceeds shall be paid to the person or persons entitled to it.

8

Protection of Third Parties

8.1 

No purchaser mortgagee or other person dealing with the Secured Party shall be concerned to enquire whether the Secured Liabilities have become payable or whether any power which it is purporting to exercise has become exercisable or whether any money is due under this Charge or as to the application of any money paid raised or borrowed or as to the propriety or regularity of any sale by or other dealing with the Secured Party. All the protection to purchasers contained in the Property Act Cap. 236 shall apply to any person purchasing from or dealing with the Secured Party as if the Secured Liabilities had become due and the statutory powers of sale in relation to the Charged Property had arisen on the date of this Charge.

9  

Power of Attorney

9.1

The Chargor by way of security irrevocably appoints the Secured Party to be the attorney of the Chargor (with full powers of substitution and delegation) for the Chargor and in his name or otherwise and on his behalf and as his act and deed to sign seal execute deliver perfect and do all deeds instruments transfers renunciations proxies notices documents acts and things which the Chargor may or ought to do under the covenants and provisions contained in this Charge and generally in his name and on his behalf to exercise all or any of the powers authorities and discretions conferred by or pursuant to this Charge or by the Property Act Cap. 236 on the Secured Party and to execute and deliver and otherwise perfect any deed assurance agreement instrument or act which it may deem proper in the exercise of all or any of the powers authorities or discretions conferred on the Secured Party pursuant to this Charge.

9.2 

The Chargor ratifies and confirms and agrees to ratify and confirm anything such attorney shall lawfully and properly do or purport to do by virtue of clause 9.1 and all money expended by any such attorney shall be deemed to be expenses incurred by the Secured Party under this Charge.

9.3 

The Chargor undertakes to procure that all registered holders from time to time of any of the Charged Property shall forthwith grant the Secured Party a power of attorney on the terms set out in clause 10.1 in respect of such Charged Property.

10 

Discharge of Security

10.1

The security constituted by this Charge shall be continuing and shall not be considered as satisfied or discharged by any intermediate payment or settlement of the whole or any part of the Secured Liabilities or any other matter or thing whatsoever including the insolvency bankruptcy or administration of the Chargor and shall be binding until all the Secured Liabilities have been unconditionally and irrevocably paid and discharged in full.

10.2

Upon the irrevocable payment or discharge in full of the Secured Liabilities whether by payment settlement set-off or otherwise the Secured Party will or will procure that its nominees will (as the case may be) at the request and cost of the Chargor retransfer to the Chargor all the Secured Party's right title and interest in or to the Charged Property free from this Charge.

11 

Costs

11.1

The Chargor shall on demand and on a full indemnity basis pay to the Secured Party the amount of all reasonable costs and expenses and other liabilities (including reasonable legal and out-of-pocket expenses and any Value Added Tax on such costs and expenses) which the Secured Party incurs in connection with:

 a) 

the preparation negotiation execution and delivery of this Charge;

 b) 

any stamping or payment of stamp duty property transfer tax or registration fees of this Charge or of any transfer of the Charged Property pursuant hereto;

 c)

any actual or proposed amendment of or waiver or consent under or in connection with this Charge;

 d) 

any discharge or release of this Charge;

 e)

the preservation or exercise (or attempted preservation or exercise) of any rights under or in connection with and the enforcement (or attempted  enforcement) of this Charge; or

 f)

dealing with or obtaining advice about any other matter or question arising out of or in connection with this Charge;

together with interest thereon at the Interest Rate until the date of payment by the Chargor whether before or after judgment.

12

Communications

12.1

All notices, demands, requests or other communications provided for under this Charge shall be in writing and may be delivered personally or by letter or facsimile transmission to the Chargor to his address specified at the head of this Charge or to the following numbers:

If to the Chargor:

RP Dynamic Cross Linking LP

*******************

******************

**********

*****************

Attention:     **************

Telecopy:     **************

with a required copy to:

Goodwin Procter LLP

Exchange Place

53 State Street

Boston, MA  02109

Attention:

*****************

*****************.

Telecopy:

************

If to the Secured Party:

InNexus Biotechnology Inc.

13208 East Shea Blvd., Suite 200

The Mayo Clinic MCCRB Building

Scottsdale, Arizona  85259

Attention: Jeff Morhet

Telecopier: ***********

with a required copy to:

Leschert & Company

Law Corporation

Barristers & Solicitors

2760 – 200 Granville Street,

Vancouver, British Columbia

V6C 1S4

Attention: 

Allen D. Leschert

Telecopy:

**************

or to such other address or facsimile number as may be notified in accordance with this Clause by the relevant party to the other party for such purpose.

12.2 

Every notice demand or other communication shall be deemed to have been received (if sent by post) five business days after being posted and (if delivered personally or dispatched by telex subject to receiving the correct telex answerback or by facsimile transmission) at the time of delivery or dispatch if during normal business hours in the place of intended receipt on a working day in the place of intended receipt and otherwise at the opening of business in that place on the next succeeding such working day.

13

Currency Indemnity

13.1

If under any applicable law or regulation or pursuant to a judgment or order being made or registered against the Chargor or the bankruptcy of the Chargor or without limitation for any other reason any payment under or in connection with this Charge is made or falls to be satisfied in a currency (the 'payment currency') other than the currency in which such payment is expressed to be due under or in connection with this Charge (the 'contractual currency') then to the extent that the amount of such payment actually received by the Secured Party when converted into the contractual currency at the rate of exchange falls short of the amount due under or in connection with this Charge the Chargor as a separate and independent obligation shall indemnify and hold harmless the Secured Party against the amount of such shortfall. For the purposes of this Clause 'rate of exchange' means the rate at which the Secured Party is able on or about the date of such payment to purchase, in accordance with its normal practice, the contractual currency with the payment currency and shall take into account (and the Chargor shall be liable for) any premium and other costs of exchange including any taxes or duties incurred by reason of any such exchange.

14

Miscellaneous

14.1

No delay or omission on the part of the Secured Party in exercising any right or remedy under this Charge shall impair that right or remedy or operate as or be taken to be a waiver of it nor shall any single partial or defective exercise of any such right or remedy preclude any other or further exercise under this Charge or that or any other right or remedy.

14.2

The Secured Party's rights under this Charge are cumulative and not exclusive of any rights provided by law and may be exercised from time to time and as often as the Secured Party deems expedient.

14.3

Any waiver by the Secured Party of any terms of this Charge or any consent or approval given by the Secured Party under it shall only be effective if given in writing and then only for the purpose and upon the terms and conditions if any on which it is given.

14.4

The security constituted by this Charge shall be in addition to and shall not be prejudiced determined or affected by nor operate so as in any way to determine prejudice or affect any Encumbrance which the Secured Party may now or at any time in the future hold for or in respect of the Secured Liabilities or any part of them and shall not be prejudiced by time or indulgence granted to any person or any abstention by the Secured Party in perfecting   or enforcing any remedies securities guarantees or rights it may now or in the future have from or against the Chargor or any other person or any waiver release variation act omission forbearance unenforceability indulgence or invalidity of any such remedy security guarantee or right.

14.5 

If at any time any one or more of the provisions of this Charge is or becomes illegal invalid or unenforceable in any respect under any law of any jurisdiction neither the legality validity or enforceability of the remaining provisions of this Charge nor the legality validity or enforceability of such provision under the law of any other jurisdiction shall be in any way affected or impaired as a result.

14.6 

Any statement certificate or determination of the Secured Party as to the Secured Liabilities or without limitation any other matter provided for in this Charge shall in the absence of manifest error be conclusive and binding on the Chargor.

15 

Law and Jurisdiction

15.1

This Charge is governed by and shall be construed in accordance with the laws of Barbados.

15.2

The Chargor irrevocably agrees for the exclusive benefit of the Secured Party that the courts of Barbados shall have jurisdiction to hear and determine any suit action or proceeding and to settle any dispute which may arise out of or in connection with this Charge and for such purposes irrevocably submits to the jurisdiction of such courts.

15.3

Nothing contained in this Clause shall limit the right of the Secured Party to take proceedings against the Chargor in any other court of competent jurisdiction nor shall the taking of any such proceedings in one or more jurisdictions preclude the taking of proceedings in any other jurisdiction whether concurrently or not (unless precluded by applicable law).

15.4 

The Chargor irrevocably waives any objection which he may have now or in the future to the courts of Barbados being nominated for the purpose of this Clause on the ground of venue or otherwise and agrees not to claim that any such court is not a convenient or appropriate forum.

IN WITNESS whereof the Chargor has executed and delivered this Charge the day and year first before written.

SCHEDULE 1

		
	NUMBER OF SHARES OR AMOUNT OF STOCK

	DESCRIPTION OF STOCKS, SHARES, OR OTHER SECURITIES

	100 Common Shares

	Common Shares in the capital of InNexus Bioscience (Barbados) Inc. 

SCHEDULE 2

Amount stamped to secure:

Two million five hundred thousand dollars currency of the United States of America (US$2,500,000.00)

(SIGNATURES APPEAR ON THE FOLLOWING PAGE)

(SIGNATURE PAGE – CHARGOR)

			
	EXECUTED AS A DEED by INNEXUS BIOTECHNOLOGY INC. pursuant to a resolution of its Board in the presence of:

	)

)

)

) 

           

	

Secretary

NOTARY

 I,                        

                                   

of                       

a Notary Public in and for

                                        do hereby CERTIFY that on the

          day

            of                          2007 personally appeared before me a male/female person 

who identified himself to be                       one of the directors/authorized signatories/officors  of

 

INNEXUS BIOTECHNOLOGY INC.

 and the sigantory to the within written Share Charge Agreement and did in my presence sign the same as and for their voluntary act and deed.

IN TESTIMONY WHEREOF

 I have hereunto set and subscribed by name and affixed my seal of office this          day of

                                     

2007.

_______________________________________

NOTARY PUBLIC

(SIGNATURE PAGE – SECURED PARTY)

			
	

EXECUTED AS A DEED

 by

RP DYNAMIC CROSS LINKING COMPANY LP.

 in the presence of:

	

)

)

)

)

)

)

	

Authorized Signatory

Authorized Signatory

NOTARY

I,                                                           of                      

a Notary Public in and for                                                                             do hereby CERTIFY that on the          day

        

                          of                         2007 personally appeared before me a male/ female person who identified himself/herself to be

 __________________________________

and  personally appeared before me a male/ female person who identified himself/herself to be

__________________________________________

 two of the authorized signatories  of 

RP DYNAMIC CROSS LINKING LP

..

 and the sigantories to the within written Share Charge Agreement

 and did in my presence sign the same as and for their voluntary act and deed.

IN TESTIMONY WHEREOF I have hereunto set and subscribed by name and affixed my seal of office this                               day of                                     2007.

_____________________________

__________

NOTARY PUBLIC

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