RESTRICTED STOCK UNIT
AGREEMENT

PALATIN TECHNOLOGIES, INC.

AGREEMENT
made as of the _______day of ___________________, 200__ (the Grant
Date), between Palatin Technologies, Inc., a Delaware corporation having its
principal place of business at 4C Cedar Brook Drive, Cranbury, New Jersey 08512 (the
Company), and ________________________ (the Participant).

WHEREAS,
the Company has adopted the 2005 Stock Plan (the Plan) to promote the
interests of the Company by providing an incentive for employees, directors and
consultants of the Company or its Affiliates;

WHEREAS,
pursuant to the provisions of the Plan, the Company desires to grant to the Participant
restricted stock units (RSUs) related to the Companys common stock, $.01
par value per share (Common Stock), in accordance with the provisions of the
Plan, all on the terms and conditions hereinafter set forth;

WHEREAS,
the Company and the Participant understand and agree that any terms used and not defined
herein have the meanings ascribed to such terms in the Plan.

NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

1.
Grant of Award. The Company hereby grants to the Participant an aggregate of
___________ RSUs (the Award) which represents a contingent entitlement of the
Participant to receive shares of Common Stock, on the terms and conditions and subject to
all the limitations set forth herein and in the Plan, which is incorporated herein by
reference. The Participant acknowledges receipt of a copy of the Plan.

2.
Vesting of Award.

Subject
to the terms and conditions set forth in this Agreement and the Plan, the Award granted
hereby shall vest as follows provided that the Participant remains employed by the Company
or an Affiliate through the vesting date provided however that any portion of the Award
that is not vested as of the fourth anniversary of the Grant Date shall not vest and no
shares shall be issued after such date:

| |                |                                                                                                                         
| | -------------- | ------------------------------------------------------------------------------------------------------------------------
| | Number of RSUs | Vesting Date                                                                                                            
|
| | _______ RSUs   | Upon attainment of $4.00 per share closing price of the Company's
     Common Stock for twenty consecutive trading days.
|
| | _______ RSUs   | Upon attainment of $6.00 per share closing price of the Company's
     Common Stock for twenty consecutive trading days.
|
| | _______ RSUs   | Upon attainment of $8.00 per share closing price of the Company's
     Common Stock for twenty consecutive trading days.

On
each vesting date set forth above, the Participant shall be entitled to receive such
number of shares of Common Stock equivalent to the number of RSUs set forth opposite such
vesting date provided that the Participant is employed by the Company or an Affiliate on
such vesting date. Such

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shares of Common Stock shall
thereafter be delivered by the Company to the Participant in accordance with this
Agreement and the Plan and as required to comply with Section 409A of the Code.
Notwithstanding the foregoing, if the Participant is as of the vesting date a specified
employee (as defined under Section 409A of the Code) then such payment of shares of
Common Stock, if required by Section 409A of the Code, will be made six months after the
date of such Separation from Service (as defined in Section 409A of the Code).

Except
as otherwise set forth in this Agreement, if the Participant ceases to be employed for any
reason by the Company or an Affiliate prior to a vesting date, then as of the date on
which the Participants employment terminates, all unvested RSUs shall immediately be
forfeited.

3.
Prohibitions on Transfer and Sale.

This
Award (including any additional RSUs received by the Participant as a result of
stock dividends, stock splits or any other similar transaction affecting the
Companys securities without receipt of consideration) shall not be transferable by
the Participant otherwise than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act or the rules thereunder. Except as provided in the
previous sentence, the shares of Common Stock to be issued pursuant to this Agreement
shall be issued, during the Participants lifetime, only to the Participant (or, in
the event of legal incapacity or incompetence, to the Participants guardian or
representative). This Award shall not be assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to execution,
attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation
or other disposition of this Award or of any rights granted hereunder contrary to the
provisions of this Section 3, or the levy of any attachment or similar process upon this
Award shall be null and void.

Until
such time as the Participant is no longer an employee of the Company, unless the Board of
Directors determines otherwise because of hardship to the Participant, the Participant
shall not sell more than 67% of the shares of Common Stock issued to the Participant
pursuant to this Agreement.

4.
Adjustments. The Plan contains provisions covering the treatment of RSUs and
shares of Common Stock in a number of contingencies such as stock splits and mergers.
Provisions in the Plan for adjustment with respect to this Award and the related
provisions with respect to successors to the business of the Company are hereby made
applicable hereunder and are incorporated herein by reference. In addition, the per share
closing price set forth in Section 2 hereof shall also be adjusted as appropriate to
reflect any stock split or other adjustment event set forth in the Plan.

5.
Securities Law Compliance. The Participant specifically acknowledges and
agrees that any sales of shares of Common Stock sold shall be made in
accordance with the requirements of the Securities Act of 1933, as amended.

6.
Rights as a Stockholder. The Participant shall have no right as a
          stockholder, including voting and dividend rights, with respect to the RSUs
          subject to this Agreement.

7.
Tax Liability of the Participant and Payment of Taxes.

The
Participant acknowledges and agrees that any income or other taxes due from the
Participant with respect to this Award or the shares of Common Stock to be issued pursuant
to this Agreement or otherwise sold shall be the Participants responsibility.
Without limiting the foregoing, the Participant agrees that the Participant will owe taxes
at each Vesting Date on the portion of the Award then vested and the Company shall be
entitled to immediate payment from the Participant of the amount of any tax required to be
withheld by the Company.

In
connection with the foregoing, the Participant agrees that if an arrangement to pay the
withholding obligation in cash has not been received by the Company prior to a vesting
date, the Company shall authorize a registered broker (the Broker) to sell on
such vesting date such number of

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shares of Common Stock otherwise deliverable to the
Participant on vesting of the Award as the Company instructs the Broker to sell to satisfy
the Companys withholding obligation, after deduction of the Brokers
commission, and the Broker shall remit to the Company the cash necessary in order for the
Company to satisfy its withholding obligation. In connection with such sale of shares of
Common Stock, the Participant shall execute any such documents requested by Broker in
order to effectuate the sale of the shares of Common Stock and payment of the withholding
obligation to the Company. The Company shall not deliver any shares of Common Stock to the
Participant until all withholdings have been made.

8.
Participant Acknowledgements and Authorizations.

The
Participant acknowledges the following:

(a)
          The Company is not by the Plan or this Award obligated to continue the
          Participant as an employee, director or consultant of the Company or an
          Affiliate.

(b)
          The Plan is discretionary in nature and may be suspended or terminated by the
          Company at any time.

(c)
          The grant of this Award is considered a one-time benefit and does not create a
          contractual or other right to receive any other award under the Plan, benefits
          in lieu of awards or any other benefits in the future.

(d)
          The Plan is a voluntary program of the Company and future awards, if any, will
          be at the sole discretion of the Company, including, but not limited to, the
          timing of any grant, the amount of the award, vesting provisions and the
          purchase price.

(e)
The value of this Award is an extraordinary item of compensation outside of the scope of
any employment. As such the Award is not part of normal or expected compensation for
purposes of calculating any severance, resignation, redundancy, end of service payments,
bonuses, long-service awards, pension or retirement benefits or similar payments. The
future value of the shares of Common Stock is unknown and cannot be predicted with
certainty.

(f)
The Participant authorizes his or her employer to furnish the Company (and any agent
administering the Plan or providing recordkeeping services) with such information and
data as it shall request in order to facilitate the grant of the Award and the
administration of the Plan, and the Participant waives any data privacy rights he or she
may have with respect to such information or the sharing of such information.

9.
Notices. Any notices required or permitted by the terms of this Agreement or the
Plan shall be given by recognized courier service, facsimile, registered or certified
mail, return receipt requested, addressed as follows:

If
to the Company at the principal business office listed on the first page of this
Agreement.

If
to the Participant:

EMPLOYEE NAME AND ADDRESS

or to such other address or addresses
of which notice in the same manner has previously been given. Any such notice shall be
deemed to have been given on the earliest of receipt, one business day following delivery
by the sender to a recognized courier service, or three business days following mailing by
registered or certified mail.

10.
Benefit of Agreement. Subject to the provisions of the Plan and the other
provisions hereof, this Agreement shall be for the benefit of and shall be binding upon
the heirs, executors, administrators, successors and assigns of the parties hereto.

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11.
Governing Law. This Agreement shall be construed and enforced in accordance with
the laws of the State of Delaware, without giving effect to the conflict of law
principles thereof. For the purpose of litigating any dispute that arises under this
Agreement, whether at law or in equity, the parties hereby consent to exclusive
jurisdiction in the State of New Jerseyand agree that such litigation shall be
conducted in the state courts of New Jersey or the federal courts of the United States
for the District of New Jersey.

12.
Severability. If any provision of this Agreement is held to be invalid or
unenforceable by a court of competent jurisdiction, then such provision or provisions
shall be modified to the extent necessary to make such provision valid and enforceable,
and to the extent that this is impossible, then such provision shall be deemed to be
excised from this Agreement, and the validity, legality and enforceability of the rest of
this Agreement shall not be affected thereby.

13.
Entire Agreement. This Agreement, together with the Plan, constitutes the entire
agreement and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings relating to
the subject matter hereof. No statement, representation, warranty, covenant or agreement
not expressly set forth in this Agreement shall affect or be used to interpret, change or
restrict the express terms and provisions of this Agreement provided, however, in any
event, this Agreement shall be subject to and governed by the Plan.

14.
Modifications and Amendments; Waivers and Consents. The terms and provisions of
this Agreement may be modified or amended as provided in the Plan. Except as provided in
the Plan, the terms and provisions of this Agreement may be waived, or consent for the
departure therefrom granted, only by written document executed by the party entitled to
the benefits of such terms or provisions. No such waiver or consent shall be deemed to be
or shall constitute a waiver or consent with respect to any other terms or provisions of
this Agreement, whether or not similar. Each such waiver or consent shall be effective
only in the specific instance and for the purpose for which it was given, and shall not
constitute a continuing waiver or consent.

15.
Counterparts. This Agreement may be executed in one or more counterparts, and by
different parties hereto on separate counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.

[THE NEXT PAGE IS THE
SIGNATURE PAGE]

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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

| |                            |             | 
| | -------------------------- | ----------- | 
| | PALATIN TECHNOLOGIES, INC. |            
| | By:                        |             | 
| |                            | Name:Title: | 
| |                            |             | 
| | Participant:               |            
| |                            |            
| | Print Name:                |            

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