SECURITIES PURCHASE
AGREEMENT

dated as of January 26,
2004,

by and among

PALATIN TECHNOLOGIES,
INC.,

and

ENTITIES LISTED ON
APPENDIX A (each a Purchaser).

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TABLE OF CONTENTS

`Page
                                                                               ----
Section 1.        Purchase and Sale of Securities................................1
Section 2.        The Closing....................................................1
   Section 2.1.      The Closing.................................................1
   Section 2.2.      Conditions to Closing.......................................2
Section 3.        Representations, Warranties and Covenants of the Company.......3
   Section 3.1.      No Material Misstatements...................................3
   Section 3.2.      Incorporated Documents......................................3
   Section 3.3.      Financial Statements........................................3
   Section 3.4.      Book and Records; Internal Controls.........................4
   Section 3.5.      Independent Accountants.....................................5
   Section 3.6.      Organization; Good Standing.................................5
   Section 3.7.      Absence of Litigation.......................................5
   Section 3.8.      Brokers or Finders..........................................5
   Section 3.9.      Use of Proceeds.............................................5
   Section 3.10.     Licenses; Leases............................................6
   Section 3.11.     Intellectual Property.......................................6
   Section 3.12.     Real Property...............................................7
   Section 3.13.     Material Contracts..........................................8
   Section 3.14.     No Violation................................................8
   Section 3.15.     Due Authorization and Delivery..............................8
   Section 3.16.     No Default..................................................8
   Section 3.17.     Capitalization..............................................9
   Section 3.18.     Lock-Ups....................................................9
   Section 3.19.     Employees...................................................9
   Section 3.20.     Related Party Transactions.................................10
   Section 3.21.     Market Stabilization.......................................10
   Section 3.22.     Taxes......................................................10
   Section 3.23.     AMEX Compliance; Listing...................................10
   Section 3.24.     Insurance..................................................11
   Section 3.25.     Environmental Laws.........................................11
   Section 3.26.     Investment Company.........................................12
   Section 3.27.     Solicitation; Other Issuances of Securities................12
Section 4.        Representations, Warranties And Covenants Of Each Purchaser...12
   Section 4.1.      Organization...............................................12
   Section 4.2.      Authorization, Enforcement, and Validity...................13
   Section 4.3.      Consents and Approvals;  No Violation......................13
   Section 4.4.      Investment Experience......................................13
   Section 4.5.      Investment Intent And Limitation On Dispositions...........13
   Section 4.6.      Information And Risk.......................................14
   Section 4.7.      Disclosures to the Company.................................15
   Section 4.8.      Nature of Purchasers.......................................15
   Section 4.9.      Ownership..................................................15
   Section 4.10.     Brokers or Finders.........................................16`

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`Section 4.11.     Acknowledgement............................................16
   Section 4.12.     Confidential Treatment.....................................16
Section 5.        Survival of Representations and Warranties....................16
Section 6.        Registration of the Shares and Warrant Shares;
                  Compliance with the Securities Act............................17
   Section 6.1.      Registration Procedures And Expenses.......................17
   Section 6.2.      Restrictions on Transferability............................19
   Section 6.3.      Termination Of Conditions And Obligations..................20
Section 7.        Legends.......................................................21
Section 8.        Indemnification...............................................21
Section 9.        Notices.......................................................24
Section 10.       Miscellaneous.................................................25
   Section 10.1.     Amendments.................................................25
   Section 10.2.     Headings...................................................25
   Section 10.3.     Severability...............................................25
   Section 10.4.     Governing Law And Forum....................................25
   Section 10.5.     Counterparts...............................................25
   Section 10.6.     Entire Agreement...........................................26
   Section 10.7.     Independent Nature Of Purchasers' Obligations And Rights...26
   Section 10.8.     Expenses...................................................26`

Appendix A Schedule of
PurchasersAppendix B Form of Warrant CertificateAppendix C Company Counsel OpinionAppendix
D Intellectual Property Counsel Opinion

Appendix E Stock
Certificate and Registration Statement QuestionnaireAppendix F Certificate of
Subsequent Sale

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SECURITIES PURCHASE
AGREEMENT

THIS
SECURITIES PURCHASE AGREEMENT (this Agreement) is made as of January 26, 2004
by and among Palatin Technologies, Inc. (the Company), a Delaware corporation,
with its principal offices at 4C Cedarbrook Drive, Cranbury, New Jersey 08512, and the
entities listed on Appendix A (each, a Purchaser).

IN
CONSIDERATION of the mutual covenants contained in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Purchasers hereby agree as follows:

Section 1. Purchase and
Sale of Securities.

Subject
to the terms and conditions of this Agreement, on the Closing Date (as defined herein),
each Purchaser agrees to purchase severally and not jointly and the Company agrees to
issue and sell to such Purchaser severally and not jointly (i) that number of whole shares
of the Companys common stock, $0.01 par value, (the Common Stock) up to
an aggregate of 7,000,000 shares (the Shares) and (ii) warrants in the form
attached hereto as Appendix B (the Warrants, together with the Shares, the
Securities) to purchase an aggregate of up to 1,050,000 shares of Common
Stock, in each case, as set forth opposite such Purchasers name on Appendix A, at a
purchase price that is equal to $3.25 per Share, of which $0.0188 per each 0.15% of a
Warrant is allocated as consideration for the Warrants (the Purchase Price).
Purchaser acknowledges that the final approval of the American Stock Exchange (the
AMEX) is required in connection with the issuance of the Common Stock and,
accordingly, the Securities may be subject to return to the Company in exchange for the
return of the full Purchase Price of the Securities.

Section 2. The Closing.

Section 2.1.
The Closing.

(a)    
The purchase and sale of the Securities upon the terms and conditions hereof will take place at a closing (the
Closing) to be held at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New
York 10036, or such other location as the parties may agree, on the date hereof at such time as shall be agreed upon by the
Company and the Purchasers (the Closing Date).

(b)    
The Company shall provide wire transfer instructions for the payment of the Purchase Price prior to the Closing.

(c)    
At the Closing, the Company and each Purchaser shall satisfy all of the conditions set forth in Sections 2.2(a) and (b),
respectively.

Section 2.2.
Conditions to Closing.



(a)    
The Companys obligation to complete the purchase and sale of the Securities and deliver such stock and warrant
certificate(s) to each Purchaser is subject to:

| | (i) | receipt by the Company of immediately available funds in the full amount of the
          purchase price for the Securities being purchased hereunder as set forth
          opposite such Purchasers name on Appendix A, in accordance with the wire
          transfer instructions delivered by the Company pursuant to Section 2.1(b); and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | the accuracy in all material respects of the representations and warranties made
          by such Purchaser in Section 4 below as of the Closing Date and the fulfillment
          in all material respects of those undertakings of such Purchaser in this
          Agreement to be fulfilled on or prior to the Closing Date.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b)    
Each Purchasers obligation to complete the purchase and sale of the Securities is subject to:

| | (i) | the accuracy in all material respects of the representations and warranties made
          by the Company in Section 3 below as of the Closing Date and the fulfillment in
          all material respects of those undertakings of the Company in this Agreement to
          be fulfilled on or prior to the Closing Date;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | delivery by the Company to such Purchaser of an opinion, dated as of the Closing
          Date, from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to the
          Company, in the form attached as Appendix C hereto;
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii) | delivery by the Company to such Purchaser of an opinion, dated as of the Closing
          Date, from Peacock, Myers & Adams, P.C., intellectual property counsel to
          the Company, substantially in the form attached as Appendix D hereto;
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv) | the Companys delivery to its transfer agent of irrevocable instructions to
          issue to such Purchaser or in such nominee name(s) as designated by such
          Purchaser in writing such number of Securities set forth opposite such
          Purchasers name on Appendix A or, if requested by the Purchaser, one or
          more certificates representing such Securities; and
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (v) | the aggregate Purchase Price paid by the Purchasers for the Securities at the
          Closing shall be greater than or equal to $19,500,000.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------

Section 3. Representations,
Warranties and Covenants of the Company. Except as specifically contemplated by this
Agreement, the Company hereby represents and warrants to, and covenants with, each
Purchaser as of the Closing Date (or such other date specified below) as follows:

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Section 3.1. No
Material Misstatements. The Private Placement Memorandum dated January 20, 2004, relating to the offering of the Securities,
including all exhibits and annexes thereto, as the same may be amended or supplemented, (the Memorandum), did not, as
of its date, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading.

Section 3.2.
Incorporated Documents.

(a)    
The documents incorporated by reference in the Memorandum, at the time they became effective or were filed with the Securities and
Exchange Commission (the Commission), as the case may be, complied in all material respects with the requirements of
the Securities Act of 1933, as amended (the Securities Act) or the Securities Exchange Act of 1934, as amended (the
Exchange Act), as applicable, and the rules and regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and any
further documents so filed and incorporated by reference in the Memorandum, when such documents become effective or are filed with
the Commission, as the case may be and as the same may be amended or supplemented, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which they are made, not misleading.

(b)    
Since July 1, 2001, the Company has filed all documents required to be filed by it prior to the date hereof with the Commission
pursuant to the reporting requirements of the Exchange Act (the SEC Documents).

Section 3.3.
Financial Statements.

(a)    
The financial statements of the Company (including all notes and schedules thereto) included in the Memorandum present fairly the
financial position of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations,
stockholders equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; and such
financial statements and related schedules and notes thereto, and the unaudited financial information included as part of the
Memorandum, have been prepared in conformity with generally accepted accounting principles, consistently applied throughout the
periods involved. The summary financial data included in the Memorandum present fairly the information shown therein as at the
respective dates and for the respective periods specified and have been presented on a basis consistent with the consolidated
financial statements set forth in the Memorandum and other financial information.

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(b)    
As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all
material respects with applicable accounting requirements and published rules and regulations of the Commission with respect
thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently
applied, during the periods involved (except as may be otherwise indicated in such financial statements or the notes thereto) and
fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).

Section 3.4. Book and
Records; Internal Controls. The books, records and accounts of the Company and its subsidiaries accurately and fairly reflect,
in reasonable detail, the transactions in, and dispositions of, the assets of, and the results of operations of, the Company and
its subsidiaries. The Company and each of its subsidiaries maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance with managements general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in
accordance with managements general or specific authorization and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; the chief
executive officer and the chief financial officer of the Company have made all certifications required by the Sarbanes-Oxley Act
of 2002 (the Sarbanes-Oxley Act) and any related rules and regulations promulgated by the Commission, and the
statements contained in any such certification are complete and correct; the Company maintains disclosure controls and
procedures (as defined in Rule 13a-14(c) under the Exchange Act); the Company is otherwise in compliance in all material
respects with all applicable effective provisions of the Sarbanes-Oxley Act and is actively taking steps to ensure that it will be
in compliance with other applicable provisions of the Sarbanes-Oxley Act upon the effectiveness of such provisions.

Section 3.5. Independent
Accountants. KPMG LLP, whose reports are included as a part of the Memorandum, are and, during the periods covered by their
reports, were independent public accountants as required by the Securities Act, and the rules and regulations of the Commission
thereunder.

Section 3.6.
Organization; Good Standing. The Company and each of its subsidiaries, is duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of incorporation or organization. The Company and each of its
subsidiaries is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the
nature of the business conducted by it or location of the assets or properties owned, leased or licensed by it requires such
qualification, except for such jurisdictions where the failure to so qualify individually or in the aggregate would not result in
a material adverse effect on the assets, properties, condition, financial or otherwise, or in the results of operations, business
affairs or business prospects of the Company and its subsidiaries considered as a whole (a Material Adverse Effect);
and to the Companys knowledge, no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing,
or seeking to revoke, limit or curtail, such power and authority or qualification.

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Section 3.7. Absence of
Litigation. Except as set forth in the SEC Documents, there is no material legal action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the
actual knowledge of the executive officers of the Company or any of its subsidiaries, threatened in writing against the Company or
any of the Companys subsidiaries or any of the Companys or the subsidiaries officers or directors in their
capacities as such, that, either individually or in the aggregate, would result in a Material Adverse Effect to the Company and
its subsidiaries taken as a whole.

Section 3.8. Brokers or
Finders. No broker, investment banker, financial advisor or other individual, corporation, general or limited partnership,
limited liability company, firm, joint venture, association, enterprise, joint securities company, trust, unincorporated
organization or other entity (each a Person), other than CIBC World Markets Corp. and Legg Mason Wood Walker (the
Placement Agents), the fees and expenses of which will be paid by the Company, is entitled to any brokers,
finders, financial advisors or other similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Company.

Section 3.9. Use of
Proceeds. The Company intends to use the net proceeds from the sale of the Securities hereunder as described in the
Memorandum.

Section 3.10. Licenses;
Leases. The Company and each of its subsidiaries has all requisite corporate power and authority, and all necessary
authorizations, approvals, consents, orders, licenses, certificates and permits of and from all governmental or regulatory bodies
or any other person or entity (collectively, the Permits), to own, lease and license its assets and properties and
conduct its business, all of which are valid and in full force and effect, except where the lack of such Permits, individually or
in the aggregate, would not result in a Material Adverse Effect to the Company and its subsidiaries taken as a whole. The Company
and each of its subsidiaries has fulfilled and performed in all material respects all of its material obligations with respect to
such Permits and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the Company thereunder. Except as may be required under the
Securities Act and state and foreign Blue Sky laws, no other Permits are required to enter into, deliver and perform this
Agreement and to issue and sell the Securities or to issue the Warrant Shares.

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Section 3.11.
Intellectual Property. The Company intends to use the net proceeds from the sale of the Securities hereunder as described in
the Memorandum.

(a)    
(i) the Company and its subsidiary RhoMed Incorporated owns, or holds under license, and will have on and after the Closing Date
full, legally enforceable rights to use, free of any Encumbrances (as defined below), all patents, patent rights, patent
applications, licenses, inventions, discoveries, improvements, copyrights (whether registered or unregistered), writings and other
works of authorship (including software), know-how (including trade secrets and other unpatented and/or unpatentable proprietary
or confidential information, systems or procedures), trademarks (whether registered or unregistered), trademark applications,
service marks and trade names (collectively, the Intellectual Property) that is, to the Companys knowledge,
material and necessary to conduct and operate the business of the Company as currently conducted, and as currently proposed to be
conducted, as described in the Memorandum (the Company Business), (ii) to the Companys knowledge, neither the
use or exploitation of any of its Intellectual Property nor the conduct and operations of the Company Business in the manner
currently conducted, each as described in the Memorandum, infringes upon, misappropriates or violates the valid Intellectual
Property rights of any other Person, (iii) to the Companys knowledge, neither the use or exploitation of any of its
Intellectual Property nor the conduct and operation of the Company Business as currently proposed to be conducted by the Company,
as described in the Memorandum, will infringe upon, misappropriate, violate or conflict in any way with the valid Intellectual
Property rights of any other Person, (iv) to the Companys knowledge, there is no, nor has there been within the last three
years, any pending or threatened assertion or claim related to the use or exploitation of its Intellectual Property or the conduct
or operation of the Company Business as described in the Memorandum, involving the infringement, misappropriation, or violation
of, or conflict with, in any way the Intellectual Property rights of any other Person, (v) to the Companys knowledge, the
Company is not and has not been, a party to any action, suit, proceeding or investigation which involves a claim of infringement
or misappropriation of any Intellectual Property of any Person, (vi) the Company has not been the subject of, and the Company has
no actual knowledge of, any claims with respect to the validity, enforceability or ownership of any of its Intellectual Property
and (vii) to the Companys knowledge, there have been no material unauthorized uses, disclosures, infringements, or
misappropriations by any Person of any of its Intellectual Property or any breaches by any Person, including the Company, of any
licenses or other agreements involving its Intellectual Property.

(b)    
To the Companys knowledge, no Person currently is in default with regard to any agreement relating to its Intellectual
Property, and there exists no condition or event (including the execution, delivery and performance of this Agreement) which, with
the giving of notice or the lapse of time or both, would constitute a default by the Company under any such agreement, or would
give any Person any right of termination, cancellation or acceleration of any performance under any such agreement or result in
the creation or imposition of any Encumbrance, in each case.

(c)    
For purposes of this Section 3.11, Encumbrance means (i) any security interest, pledge, mortgage, deed of trust,
hypothecation, lien (including environmental and tax liens), charge, encumbrance, adverse claim, preferential arrangement or
restriction of any kind, including any restriction on the use, voting, transfer, receipt of income or other exercise of any
attributes of ownership (other than the Security Agreement dated May 13, 2002, among the Company, RhoMed Incorporated and
Mallinckrodt Inc.), (ii) interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect) and (iii) any purchase option, call or similar
right of a third Person.

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Section 3.12. Real
Property. Neither the Company nor any of its subsidiaries owns any real property. All property held under lease by the Company
and its subsidiaries is held by them under valid, existing and enforceable leases, free and clear of all liens, encumbrances,
claims, security interests and defects, except such as are not material and do not materially interfere with the use made or
proposed to be made of such property by the Company and its subsidiaries. Neither the Company nor any of its subsidiaries has
sustained any loss or interference with its assets, businesses or properties (whether owned or leased) from fire, explosion,
earthquake, flood or other calamity, whether or not covered by insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree which would result in a Material Adverse Effect to the Company and its subsidiaries
taken as a whole. Since the date of the latest balance sheet included in the Memorandum neither the Company nor its subsidiaries
has (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except such
liabilities or obligations incurred in the ordinary course of business (ii) entered into any transaction not in the ordinary
course of business or (iii) declared or paid any dividend or made any distribution on any shares of its stock or redeemed,
purchased or otherwise acquired or agreed to redeem, purchase or otherwise acquire any shares of its capital stock.

Section 3.13. Material
Contracts. All material documents, contracts or other agreements are described in the Memorandum or are included in the
exhibits to the Memorandum or the SEC Documents. Each description of such contracts, documents or other agreements reflects in
material all respects the terms of the underlying contract, document or other agreement and is in full force and effect and is
valid and enforceable by and against the Company or its subsidiaries, as the case may be, in accordance with its terms.

Section 3.14. No
Violation. Neither the Company nor any of its subsidiaries is in violation of any term or provision of its charter or by-laws
or of any franchise, license, permit, judgment, decree, order, statute, rule or regulation, where the consequences of such
violation, individually or in the aggregate, would result in a Material Adverse Effect to the Company and its subsidiaries taken
as a whole.

Section 3.15. Due
Authorization and Delivery. All necessary corporate action has been duly and validly taken by the Company to authorize the
execution, delivery and performance of this Agreement, the Warrants, the issuance and sale of the Securities by the Company and
the reservation for issuance, and issuance, of up to an aggregate of 1,050,000 Warrant Shares. This Agreement has been duly and
validly authorized, executed and delivered by the Company and, when executed, the Warrants, will by duly and validly executed and
delivered by the Company, and constitute and or will constitute legal, valid and binding obligations of the Company enforceable
against the Company in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of creditors rights generally and by general
equitable principles.

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Section 3.16. No
Default. Neither the execution, delivery and performance of this Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the issuance and sale by the Company of the Securities and the
issuances of the Warrant Shares) will give rise to a right to terminate or accelerate the due date of any payment due under, or
conflict with or result in the breach of any term or provision of, or constitute a default (or an event which with notice or lapse
of time or both would constitute a default) under, or require any consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any properties or assets of the Company or its subsidiaries pursuant to the
terms of, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which either the Company or its subsidiaries or any of their properties or businesses is bound, or any franchise,
license, permit, judgment, decree, order, statute, rule or regulation applicable to the Company or any of its subsidiaries in each
case, that would result in a Material Adverse Effect to the Company and its subsidiaries taken as a whole or that would violate
any provision of the charter or by-laws of the Company or any of its subsidiaries.

Section 3.17.
Capitalization. The Company has authorized and outstanding capital stock as set forth under the caption
Capitalization in the Memorandum. The certificates evidencing the Securities and the Warrant Shares will be in due and
proper legal form and have been duly authorized for issuance by the Company. All of the issued and outstanding shares of Common
Stock have been duly and validly issued and are fully paid and nonassessable. There are no statutory preemptive or other similar
rights to subscribe for or to purchase or acquire any shares of Common Stock of the Company or any of its subsidiaries or any such
rights pursuant to its Certificate of Incorporation or by-laws or any agreement or instrument to or by which the Company or any of
its subsidiaries is a party or bound. The Securities, when issued and sold pursuant to this Agreement, and the Warrant Shares when
issued pursuant to the Warrant, will be duly and validly issued, fully paid and nonassessable and none of them will be issued in
violation of any preemptive or other similar right. Except as disclosed in the Memorandum there is no outstanding option, warrant
or other right calling for the issuance of, and there is no commitment, plan or arrangement to issue, any share of stock of the
Company or any of its subsidiaries or any security convertible into, or exercisable or exchangeable for, such stock. The Common
Stock, the Securities, and the Warrant Shares conform in all material respects to all statements in relation thereto contained in
the Memorandum. All outstanding shares of capital stock of each of the Companys subsidiaries have been duly authorized and
validly issued, and are fully paid and nonassessable and are owned directly by the Company or by another wholly-owned subsidiary
of the Company free and clear of any security interests, liens, encumbrances, equities or claims, other than those described in
the Memorandum.

Section 3.18.
Lock-Ups. For a period of ninety (90) days from the effective date of the Registration Statement (as defined in Section
6.1(a)(i) below), the Company will not, without the prior written consent of CIBC World Markets Corp., sell, contract to sell or
otherwise dispose of or issue any securities of the Company, except pursuant to previously issued options, including the Warrants,
any agreements providing for anti-dilution or other stock purchase or share issuance rights in existence on the date hereof, any
employee benefit or similar plan of the Company in existence on the date hereof or duly adopted hereafter, or any technology
license agreement, strategic alliance or joint venture in existence on the date hereof or which the Company may enter into
hereafter.

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Section 3.19.
Employees. Neither the Company nor any of its subsidiaries is involved in any labor dispute nor, to the knowledge of the
Company, is any such dispute threatened, which dispute would result in a Material Adverse Effect to the Company and its
subsidiaries taken as a whole. The Company is not aware of any existing or imminent labor disturbance by the employees of any of
its principal suppliers or contractors which would result in a Material Adverse Effect to the Company and its subsidiaries taken
as a whole.

Section 3.20. Related
Party Transactions. No transaction has occurred between or among the Company and any of its officers or directors,
shareholders or any affiliate or affiliates of any such officer or director or shareholder that is not described in the Memorandum
or the SEC Documents.

Section 3.21. Market
Stabilization. The Company has not taken, nor will it take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, or which has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock or any security of the Company to facilitate the sale or resale of
any of the Securities.

Section 3.22. Taxes.
The Company and each of its subsidiaries has filed all Federal, state, local and foreign tax returns which are required to be
filed through the date hereof, which returns are true and correct in all material respects or has received timely extensions
thereof, and has paid all taxes shown on such returns and all assessments received by it to the extent that the same are material
and have become due. There are no tax audits or investigations pending, which if adversely determined would result in a Material
Adverse Effect to the Company and its subsidiaries taken as a whole; nor does the Company have any knowledge of any material
proposed additional tax assessments against the Company or any of its subsidiaries.

Section 3.23. AMEX
Compliance; Listing.

(a)    
The Company is in compliance with the requirements of the AMEX for continued listing of the Common Stock thereon and has not
received any notification that, and has no knowledge that, the AMEX is contemplating terminating such listing nor, to the
Companys knowledge, is there any basis therefor. The transactions contemplated by this Agreement will not contravene the
rules and regulations of the AMEX, however, the approval of the AMEX will be required for the issuance and sale of the Shares and
the Warrant Shares and the Company will use commercially reasonable efforts to obtain such approval.

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Section 3.24.
Insurance. The Company and its subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks as are reasonably consistent with industry practice for the conduct of business and the value of its properties,
and in such amounts as are customary in the businesses in which they are engaged or propose to engage after giving effect to the
transactions described in the Memorandum; all policies of insurance and fidelity or surety bonds insuring the Company or any of
its subsidiaries or the Companys or its subsidiaries respective businesses, assets, employees, officers and directors
are in full force and effect; the Company and each of its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and neither the Company nor any subsidiary of the Company has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that is not materially greater than the current cost.
Neither the Company nor any of its subsidiaries has been denied any insurance coverage which it has sought or for which it has
applied.

Section 3.25.
Environmental Laws.

(a)    
(i) Each of the Company and each of its subsidiaries is in compliance in all material respects with all rules, laws and regulation
relating to the use, treatment, storage and disposal of toxic substances and protection of health or the environment
(Environmental Law) which are applicable to its business; (ii) neither the Company nor its subsidiaries has received
any notice from any governmental authority or third party of an asserted claim under Environmental Laws; (iii) each of the Company
and each of its subsidiaries has received all permits, licenses or other approvals required of it under applicable Environmental
Laws to conduct its business and is in compliance with all terms and conditions of any such permit, license or approval; (iv) to
the Companys knowledge, no facts currently exist that will require the Company or any of its subsidiaries to make future
material capital expenditures to comply with Environmental Laws; and (v) no property which is or has been owned, leased or
occupied by the Company or its subsidiaries has been designated as a Superfund site pursuant to the Comprehensive Environmental
Response, Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.) or otherwise designated as a
contaminated site under applicable state or local law. Neither the Company nor any of its subsidiaries has been named as a
potentially responsible party under the CER, CLA 1980.

(b)    
In the ordinary course of its business, the Company periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of which the Company identifies and evaluates
associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws, or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or in the aggregate, result in a Material Adverse Effect to
the Company and its subsidiaries taken as a whole.

10

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Section 3.26. Investment
Company. The Company is not and, after giving effect to the offering and sale of the Securities and the application of
proceeds thereof as described in the Memorandum, will not be an investment company within the meaning of the
Investment Company Act of 1940, as amended (the Investment Company Act).

Section 3.27.
Solicitation; Other Issuances of Securities. Neither the Company nor any of its subsidiaries or affiliates, nor any Person
acting on its or their behalf, (i) has engaged in any form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of the Securities, (ii) has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any security, under any circumstances that would require
registration of the Securities under the Securities Act or (iii) has issued any shares of Common Stock or shares of any series of
preferred stock or other securities or instruments convertible into, exchangeable for or otherwise entitling the holder thereof to
acquire shares of Common Stock which would be integrated with the sale of the Securities to such Purchaser for purposes of the
Securities Act or of any applicable stockholder approval provisions, including, without limitation, under the rules and
regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated,
nor will the Company or any of its subsidiaries or affiliates take any action or steps that would require registration of any of
the Securities under the Securities Act or cause the offering of the Securities to be integrated with other offerings. Assuming
the accuracy of the representations and warranties of Purchasers, the offer and sale of the Securities by the Company to the
Purchasers pursuant to this Agreement will be exempt from the registration requirements of the Securities Act.

Section 4. Representations, Warranties And Covenants Of Each
Purchaser.

Each Purchaser for itself
and no other Purchaser hereby represents and warrants to, and covenants with, the Company as of the Closing Date (or such other
date specified below) as follows:

Section 4.1.
Organization. Such Purchaser is an entity duly organized and validly existing in good standing (to the extent such concepts
are applicable) under the laws of its jurisdiction of organization. Such Purchaser has all requisite corporate power and authority
and all necessary governmental approvals to carry on its business as now being conducted, except as would not be reasonably likely
to result in a Material Adverse Effect on such Purchasers ability to consummate the transactions contemplated by this
Agreement.

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Section 4.2.
Authorization, Enforcement, and Validity. Such Purchaser has the requisite power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. Such Purchaser has taken all necessary action to authorize the execution,
delivery and performance of this Agreement. Upon the execution and delivery of this Agreement, this Agreement shall constitute a
valid and binding obligation of the Purchaser enforceable in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors and contracting
parties rights generally and except as enforceability may be subject to general principles of equity.

Section 4.3. Consents and
Approvals; No Violation. The execution, delivery and performance of this Agreement by such Purchaser and the consummation by
such Purchaser of the transactions contemplated hereby will not (i) result in a violation of such Purchasers organizational
documents; (ii) conflict with, or constitute a default or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture or instrument to which such Purchaser is a party (except for such conflicts,
defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate,
result in a Material Adverse Effect on such Purchasers ability to consummate the transactions contemplated by this
Agreement); or (iii) result in a violation of any law, rule, regulation, order, judgment or decree applicable to such Purchaser or
any of its Subsidiaries, except for such violations as would not, individually or in the aggregate, result in a Material Adverse
Effect on such Purchasers ability to consummate the transactions contemplated by this Agreement. Such Purchaser is not
required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental
agency or any regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under or
contemplated by this Agreement, except where the failure to obtain such consents, authorization or orders or to make such filings
or registrations would not, individually or in the aggregate, result in a Material Adverse Effect on such Purchasers ability
to consummate the transactions contemplated by this Agreement.

Section 4.4. Investment
Experience. Such Purchaser is an accredited investor within the meaning of Rule 501 of Regulation D promulgated under the
Securities Act, is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to
investments in shares representing an investment decision like that involved in the purchase of the Securities.

Section 4.5. Investment
Intent And Limitation On Dispositions. Such Purchaser is acquiring Securities and the Warrant Shares for its own account for
investment only and has no intention of selling or distributing any of such Securities or Warrant Shares or any arrangement or
understanding with any other Persons regarding the sale or distribution of such Securities or Warrant Shares except in accordance
with the provisions of Section 6 and except as would not result in a violation of the Securities Act. Such Purchaser will not,
directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Securities or Warrant Shares except in accordance with the provisions of Section 6 or
pursuant to and in accordance with the Securities Act.

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Section 4.6.
Information And Risk.

(a)    
Such Purchaser has received and reviewed the Memorandum and has requested, received, reviewed and considered all other material
information such Purchaser deems relevant in making an informed decision to purchase the Securities. Such Purchaser has had an
opportunity to discuss the Companys business, management and financial affairs with its management and also had an
opportunity to ask questions of officers of the Company that were answered to such Purchasers satisfaction.

(b)    
Such Purchaser recognizes that an investment in the Securities involves a high degree of risk, including a risk of total loss of
such Purchasers investment. Such Purchaser is able to bear the economic risk of holding the Securities for an indefinite
period, and has knowledge and experience in the financial and business matters such that it is capable of evaluating the risks of
the investment in the Securities.

(c)    
Such Purchaser has, in connection with such Purchasers decision to purchase Securities, not relied upon any representations
or other information (whether oral or written) other than as set forth in the representations and warranties of the Company
contained herein, the Memorandum, the SEC Documents and the other information described in Section 4.7(a), and such Purchaser has,
with respect to all matters relating to this Agreement and the offer and sale of the Securities, relied solely upon the advice of
such Purchasers own counsel and has not relied upon or consulted any counsel to the Placement Agents or counsel to the
Company.

(d)    
If such Purchaser is an individual, such Purchaser certifies that he or she is not nor to his or her knowledge has been
designated, a suspected terrorist as defined in Executive Order 13224. If such Purchaser is a corporation, trust,
partnership, limited liability company or other organization, such Purchaser certifies that, to the best of its knowledge, such
Purchaser has not been designated, and is not owned or controlled by, a suspected terrorist as defined in Executive
Order 13224. Such Purchaser hereby acknowledges that the Company seeks to comply with all applicable laws covering money
laundering and related activities. In furtherance of those efforts, such Purchaser hereby represents, warrants and agrees that:
(a) none of the cash or property that such Purchaser will pay or will contribute to the Company has been or shall be derived from,
or related to, any activity that is deemed criminal under United States law; and (b) no contribution or payment by such Purchaser
to the Company, to the extent that they are within such Purchasers control, shall cause the Company to be in violation of
the United States Bank Secrecy Act, the United States Money Laundering Control Act of 1986 or the United States International
Money Laundering Abatement and Anti-Terrorist Financing Act of 2001. Such Purchaser shall promptly notify the Company if any of
these representations ceases to be true and accurate regarding such Purchaser. Such Purchaser agrees to provide the Company any
additional information regarding such Purchaser that the Company deems necessary or convenient to ensure compliance with all
applicable laws concerning money laundering and similar activities. Such Purchaser understands and agrees that if at any time it
is discovered that any of the foregoing representations are incorrect, or if otherwise required by applicable law or regulation
related to money laundering similar activities, the Company may undertake appropriate actions to ensure compliance with applicable
law or regulation, including but not limited to segregation and/or redemption of such Purchasers investment in the Company.
Such Purchaser further understands that the Company may release confidential information about such Purchaser and, if applicable,
any underlying beneficial owners, to proper authorities if the Company, in its sole discretion, determines that it is in the best
interest of the Company in light of relevant rules and regulations under the laws set forth in subsection (b) above.

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Section 4.7. Disclosures
to the Company. Such Purchaser understands that the Company is relying on the statements contained herein to establish an
exemption from registration under federal and state securities laws. Such Purchaser will promptly notify the Company of any
changes in the information set forth in the Registration Statement (as defined in Section 6.1(a)(i) below) regarding such
Purchaser.

Section 4.8. Nature of
Purchasers. To the knowledge of such Purchaser, such Purchaser: (i) is not an affiliate (as such term is defined pursuant to
Rule 12b-2 promulgated under the Exchange Act) of any other Purchaser, (ii) is not constituted as a partnership, association,
joint venture or any other type of joint entity with any other Purchaser, and (iii) is not acting as part of a group (as such term
is defined under Section 13(d) of the Exchange Act) with any other Purchaser. If at any time after the Closing Date such Purchaser
becomes an affiliate (as defined herein) of any other Purchaser, such Purchaser will provide prompt written notice to the Company.

Section 4.9.
Ownership. Such Purchaser (including any Person controlling, controlled by, or under common control with such Purchaser, as
the term control is defined pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and its
implementing regulations (the HSR Act)) does not, and upon the consummation of the transactions contemplated by this
Agreement will not, hold voting securities of the Company exceeding an aggregate fair market value as of the Closing Date of fifty
million dollars ($50,000,000), calculated pursuant to the HSR Act.

Section 4.10. Brokers or
Finders. Other than with respect to CIBC World Markets Corp. and Legg Mason Wood Walker, Incorporated, no broker, investment
banker, financial advisor or other Person is entitled to any brokers, finders, financial advisors or other
similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of
such Purchaser.

Section 4.11.
Acknowledgement. Such Purchaser acknowledges and agrees that the Company does not make and has not made any representations
or warranties with respect to the transactions contemplated by this Agreement other than those specifically set forth in Section
3.

Section 4.12.
Confidential Treatment.

(a)    
The Purchasers shall hold in strict confidence all information concerning this Agreement and the Offering of the Securities until
the earlier of such time as the Company has made a public announcement concerning this Agreement or the offering of the
Securities.

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(b)    
Notwithstanding anything herein to the contrary, the Purchasers (and each employee, representative or agent of the Purchasers) may
disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the offering and all the
materials of any kind (including opinions to other tax analyses) that are provided to the Purchasers solely relating to the tax
treatment and tax structure. However, any information relating to the U.S. federal income tax treatment or tax structure will
remain confidential (and the foregoing sentence will not apply) to the extent reasonably necessary to enable any person to comply
with applicable securities laws. For this purpose, tax treatment means U.S. federal income tax treatment, and
tax structure means any facts relevant to the U.S. federal income tax treatment of the offering but does not include
information relating to the identity of the issuer of the securities, the issuer of any assets underlying the securities or any of
their respective affiliates that are offering the securities.

Section 5.
Survival of Representations and Warranties.

Notwithstanding
any investigation made by any party to this Agreement or by the Placement Agents, all
representations and warranties as to each respective Closing made by the Company and the
Purchasers herein shall survive for a period of one (1) year following the Closing Date.

Section 6. Registration of the Shares and Warrant Shares;
Compliance with the Securities Act.

Section 6.1.
Registration Procedures And Expenses.

(a)    
Except for such times as the Company may be required to suspend the use of a prospectus forming a part of the Registration
Statement (as defined below), the Company will:

| | (i) | as soon as practicable, but in no event later than thirty (30) days following
          the Closing Date, use best efforts to prepare and file with the Commission a
          registration statement on Form S-3 (the Registration Statement)
          covering the resale of the Shares and the Warrant Shares (both of them, together
          with any shares of capital stock issued or issuable, from time to time, upon any
          reclassification, share combination, share subdivision, stock split, share
          dividend, merger, consolidation or similar transaction or event or otherwise as
          a distribution on, in exchange for or with respect to any of the foregoing, in
          each case held at the relevant time by a Purchaser, the Registrable
          Securities) by each Purchaser;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | use its commercially reasonable efforts to cause the Registration Statement, as
          amended, subject to receipt of necessary information from the Purchasers on the
          questionnaire attached as Appendix E hereto, to become effective under the
          Securities Act within ninety (90) days after the Closing Date;
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (iii) | prepare and file with the Commission such amendments and supplements to the
          Registration Statement and the prospectus used in connection therewith (A) as
          may be necessary to keep the Registration Statement continuously effective until
          the earlier of (i) the second anniversary of the Closing Date, or (ii) such time
          as all Registrable Securities purchased by the Purchasers have been sold
          pursuant to the Registration Statement and (B) as may be reasonably requested by
          a Purchaser in order to incorporate information concerning such Purchaser or
          such Purchasers intended method of distribution;
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv) | so long as the Registration Statement is effective covering the resale of
          Registrable Securities owned by the Purchasers, furnish to each Purchaser with
          respect to the Registrable Securities registered under the Registration
          Statement (and to each underwriter, if any, of such Registrable Securities) such
          reasonable number of copies of prospectuses and such other documents as such
          Purchaser may reasonably request in order to facilitate the public sale or other
          disposition of all or any of the Registrable Securities by such Purchaser;
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (v) | use commercially reasonable efforts to file documents required of the Company
          for normal Blue Sky clearance in states specified in writing by the Purchasers;
          provided, however, that the Company shall not be required to qualify to do
          business or consent to service of process generally in any jurisdiction in which
          the Company is not now so qualified or has not so consented;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (vi) | bear all expenses in connection with the procedures in paragraphs (a) through
          (c) of this Section 6.1 and the registration of the Registrable Securities
          pursuant to the Registration Statement, other than fees and expenses, if any, of
          counsel or other advisers to the Purchasers or underwriting discounts, brokerage
          fees and commissions incurred by the Purchasers, if any in connection with an
          underwritten offering of the Registrable Securities;
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (vii) | use all commercially reasonable efforts to prevent the issuance of any stop
          order or other order suspending the effectiveness of such Registration Statement
          and, if such an order is issued, to obtain the withdrawal thereof at the
          earliest possible time and to notify each Purchaser of the issuance of such
          order and the resolution thereof;
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (viii) | furnish to each Purchaser, on the date that such Registration Statement becomes
          effective, (x) a letter, dated such date, of outside counsel representing the
          Company (and reasonably acceptable to such Purchaser) addressed to such
          Purchaser, confirming the effectiveness of such Registration Statement and, to
          the knowledge of such counsel, the absence of any stop order, and (y) in the
          case of an underwriting, (A) an opinion addressed to such Purchaser, dated such
          date, of such outside counsel, in such form and substance as is required to be
          given to the underwriters, and (B) a letter addressed to such Purchaser, dated
          such date, from the Companys independent certified public accountants, in
          such form and substance as is required to be given by the Companys
          independent certified public accountants to such underwriters;
| | ------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (ix) | provide to each Purchaser and its representatives, if requested, the opportunity
          to conduct a reasonable inquiry of the Companys financial and other
          records during normal business hours and make available its officers, directors
          and employees for questions regarding information which such Purchaser may
          reasonably request in order to fulfill any due diligence obligation on its part;
          and
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (x) | permit counsel for the Purchasers to review the Registration Statement and all
          amendments and supplements thereto, and any comments made by the staff of the
          Commission and the Companys responses thereto, within a reasonable period
          of time prior to the filing thereof with the Commission (or, in the case of
          comments made by the staff of the Commission, within a reasonable period of time
          following the receipt thereof by the Company);
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

provided, that in the case of
clauses (ix) and (x) above, the Company shall not be required to provide, and shall not
provide, any Purchaser with material, non-public information unless such Purchaser agrees
to receive such information and enters into a written confidentiality agreement with the
Company.

(b)    
The Company shall be permitted to suspend for one or more periods (provided that the aggregate length of such suspension shall not
exceed thirty business days in any 365 day period) the actions required under Sections 6.1(a)(i) through (iii) to the extent that
the Board of Directors of the Company concludes in good faith that the disclosure of information in the prospectus relating to any
strategic transaction or any negotiations or discussions in connection therewith is necessary.

(c)    
With a view to making available to the Purchasers the benefits of Rule 144 (or its successor rule) and any other rule or
regulation of the Commission that may at any time permit the Purchaser to sell Registrable Securities to the public without
registration, the Company covenants and agrees to: (i) make and keep public information available, as those terms are understood
and defined in Rule 144, until the earlier of (A) six months after such date as all of the Purchasers Registrable Securities
may be resold pursuant to Rule 144(k) or any other rule of similar effect or (B) such date as all of the Purchasers
Registrable Securities shall have been resold; (ii) file with the Commission in a timely manner all reports and other documents
required of the Company under the Exchange Act; and (iii) furnish to the Purchaser upon request, as long as the Purchaser owns any
Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the
Exchange Act, (B) a copy of the Companys most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C)
such other information as may be reasonably requested in order to avail the Purchaser of any rule or regulation of the Commission
that permits the selling of any such Registrable Securities without registration.

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Section 6.2.
Restrictions on Transferability.

(a)    
Each Purchaser agrees that it will not effect any disposition of the Securities or Warrant Shares that would or could reasonably
be expected to lead to, or result in or constitute a sale within the meaning of the Securities Act or pursuant to any applicable
state securities or Blue Sky laws of any state, except (i) for the Registrable Securities, as contemplated in the Registration
Statement referred to in Section 6.1 above, (ii) for the Registrable Securities, pursuant to the requirements of Rule 144 (in
which case such Purchaser will provide the Company with reasonable evidence of such Purchasers compliance therewith) or
(iii) pursuant to a written opinion of legal counsel reasonably satisfactory to the Company and addressed to the Company to the
effect that registration is not required in connection with the proposed transfer; whereupon the holder of such securities shall
be entitled to transfer such securities. Each certificate evidencing the securities transferred as above provided shall bear the
appropriate restrictive legends as may be required by Section 7.

(b)    
Each Purchaser acknowledges that there may occasionally be times when the Company must suspend the use of the prospectus forming a
part of the Registration Statement until such time as an amendment or supplement to the Registration Statement has been filed by
the Company and declared effective, or until such time as the Company has filed an appropriate report with the Commission pursuant
to the Exchange Act. Each Purchaser hereby covenants that such Purchaser will not sell any Registrable Securities pursuant to said
prospectus during the period commencing at the time at which the Company gives the Purchasers written notice of the suspension of
the use of said prospectus and ending at the time the Company gives the Purchasers written notice that the Purchasers may
thereafter effect sales pursuant to said prospectus. The Company agrees to file such amendment, supplement or report as soon as
practicable following such notice of suspension.

(c)    
Upon any sale of Registrable Securities pursuant to the Registration Statement, each Purchaser shall deliver to the transfer agent
a certificate of subsequent sale in the form attached hereto as Appendix F.

(d)    
None of the Securities or Warrant Shares shall be transferable except upon the conditions specified in this Section 6, which are
intended to ensure compliance with the provisions of the Securities Act. Each Purchaser will cause any proposed transferee of the
Securities or the Warrant Shares held by such Purchaser to agree to take and hold such Securities or Warrant Shares subject to the
provisions and upon the conditions specified in this Section 6 if and to the extent that such Securities or Warrant Shares
continue to be restricted securities in the hands of the transferee.

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Section 6.3.
Termination Of Conditions And Obligations.

(a)    
The conditions precedent imposed by Section 6.2 above regarding the transferability of the Securities or Warrant Shares shall
cease and terminate as to any particular number of the Securities or Warrant Shares upon the date on which the Purchaser may sell
without volume limitations all such Securities or Warrant Shares then held by the Purchaser without registration by reason of Rule
144 or any other rule of similar effect.

(b)    
The expiration or termination of this Agreement for any reason will have no effect on the rights of any of the parties under the
provisions of this Section 6.

Section 7. Legends. (a) Such
Purchaser understands and agrees that each certificate or other document evidencing any of
the Securities or Warrant Shares shall be endorsed with the legend in the form set forth
below, and such Purchaser covenants that such Purchaser will not transfer the shares
represented by any such certificate without complying with the restrictions on transfer
described in the legend endorsed on such certificate (unless there is in effect a
registration statement under the Securities Act covering such proposed transfer, such
securities have been sold under Rule 144 promulgated under the Securities Act (Rule
144) or as otherwise permitted by the provisions of Section 6.2 above) and
understands that the Company will refuse to register a transfer of any Securities or
Warrant Shares unless the conditions specified in the following legend are satisfied:

| | THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS. EXCEPT AS SPECIFIED IN THIS LEGEND, SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT
UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT OR UNLESS SUCH SALE, PLEDGE, HYPOTHECATION OR TRANSFER IS OTHERWISE EXEMPT FROM
REGISTRATION AND ANY APPLICABLE STATE SECURITIES LAWS. THE COMPANY MAY REQUEST A WRITTEN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH SALE OR OTHER TRANSFER. | 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

(b)    
Such certificates shall not contain any legend (i) while a Registration Statement (as defined below) covering the resale of the
Registrable Securities is effective under the Securities Act, (ii) following any sale of such Registrable Securities pursuant to
an effective Registration Statement or Rule 144, or (iii) if such Securities or Warrant Shares are eligible for sale under Rule
144(k). Following the effective date of the Registration Statement or at such earlier time as a legend is no longer required for
certain Securities or Warrant Shares, the Company will, no later than three trading days following the delivery by a Purchaser to
the Company or the Companys transfer agent of a legended certificate representing such securities, deliver or cause to be
delivered to such Purchaser a certificate representing such securities that is free from all restrictive and other legends.

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(c)    
Such Purchaser covenants that such Purchaser will not transfer the Registrable Securities represented by any certificate without
complying with any applicable requirements under the Securities Act to deliver the final prospectus included in the effective
Registration Statement to any offeree of such Registrable Securities.

Section 8.
Indemnification.

(a)    
For purposes of this Section 8:

| | (i) | the term Purchaser shall include the Purchaser and any affiliate (as
          such term is defined pursuant to Rule 12b-2 promulgated under the Exchange Act)
          of such Purchaser;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | the term Prospectus shall mean the prospectus and any amendment or
          supplement thereto in the form first filed with the Commission pursuant to Rule
          424(b) promulgated under the Securities Act or, if no Rule 424(b) filing is
          required, filed as part of the Registration Statement at the time of
          effectiveness, as supplemented or amended from time to time; and
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii) | the term Registration Statement shall include any final prospectus,
          exhibit, supplement or amendment included in or relating to the Registration
          Statement.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b)    
The Company agrees to indemnify and hold harmless each of the Purchasers and each Person, if any, who controls any Purchaser
within the meaning of the Securities Act, against any losses, claims, damages, liabilities or expenses, joint or several, to which
such Purchasers or such controlling Person may become subject, under the Securities Act, the Exchange Act, or any other federal or
state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or Prospectus, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, or arise out of or are based in whole or in part on any inaccuracy in
the representations and warranties of the Company contained in this Agreement, or any failure of the Company to perform its
obligations hereunder, and will reimburse each Purchaser and each such controlling Person for any legal and other expenses
reasonably incurred as such expenses

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are reasonably incurred by such Purchaser or such controlling Person in
connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement or Prospectus in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Purchaser expressly for use therein, (ii) the failure of such Purchaser to comply with the
covenants and agreements contained in Section 6.2 above respecting sale of the Securities and the Warrant Shares, (iii) the
inaccuracy of any representations made by such Purchaser herein or (iv) any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Purchaser a reasonable time prior to the pertinent sale or sales
by the Purchaser, and provided that the Purchaser has been notified by the Company that such earlier Prospectus should no longer
be delivered by the Purchaser.

(c)    
Each Purchaser will severally, and not jointly, indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement and each Person, if any, who controls the Company within the meaning of the
Securities Act, against any losses, claims, damages, liabilities or expenses to which the Company, each of its directors, each of
its officers who signed the Registration Statement or controlling Person may become subject, under the Securities Act, the
Exchange Act, or any other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of
any litigation, if such settlement is effected with the written consent of such Purchaser) insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof as contemplated below) arise out of or are based upon (i) any
failure by such Purchaser to comply with the covenants and agreements contained in Section 6.2 above respecting the sale of the
Securities and the Warrant Shares, (ii) the inaccuracy of any representation made by such Purchaser herein or (iii) any untrue or
alleged untrue statement of any material fact contained in the Registration Statement or the Prospectus, or the omission or
alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement or Prospectus
in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Purchaser expressly
for use therein, and will reimburse the Company, each of its directors, each of its officers who signed the Registration Statement
or controlling Person for any legal and other expense reasonably incurred, as such expenses are reasonably incurred by the
Company, each of its directors, each of its officers who signed the Registration Statement or controlling Person in connection
with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action;
provided, however, that the aggregate liability of any Purchaser hereunder shall not exceed the Purchase Price paid by such
Purchaser to the Company on the Closing Date. No Purchaser shall be liable for the indemnification obligations of any other
Purchaser.

21

---

(d)    
Promptly after receipt by an indemnified party under this Section 8 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 8, promptly
notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party hereunder or otherwise to the extent it is not prejudiced as a result of
such failure. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it may
wish, jointly with all other indemnifying parties similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably concluded that there may be a conflict between the
positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be
legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses
and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the assumption of legal defenses in accordance with the
proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses
of more than one separate counsel, reasonably satisfactory to the indemnifying party, representing the indemnified parties who are
parties to such action) or (ii) the indemnified party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice of commencement of action, in each of which cases
the reasonable fees and expenses of counsel shall be at the expense of the indemnifying party.

Section 9. Notices.

(a)    
All notices, requests, consents and other communications hereunder shall be in writing, shall be mailed by first-class registered
or certified airmail, confirmed facsimile or nationally recognized overnight express courier postage prepaid, and shall be as
addressed as follows:

if
to the Company, to:

| | Palatin Technologies, Inc.
                   4-C Cedar Brook Drive
                   Cedar Brook Corporate Center
                   Cranbury, NJ 08512
                   Attention:  Carl Spana, President and CEO
                   Telephone No.: (609) 495-2200
                   Telecopy No.: (609) 495-2201
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22

---

with
a copy to:

| | Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
                   Chrysler Center
                   666 Third Avenue
                   New York, New York 10017
                   Attention:  Faith Charles, Esq.
                   Telephone No.: (212) 692-6770
                   Telecopy No.: (212) 983-3115
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

and if to any Purchaser, at its
address as set forth in Appendix A hereto, or at such other address or addresses as may
have been previously furnished to the Company in writing in accordance with this Section
9.

(b)    
Such notices or other communications shall be deemed delivered upon receipt, in the case of overnight delivery, personal delivery,
facsimile transmission (as evidenced by the confirmation thereof), or mail.

Section 10. Miscellaneous.

Section 10.1.
Amendments. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the
Company and each Purchaser. Any amendment or waiver effected in accordance with this Section 10.1 shall be binding upon each
holder of any securities purchased under this Agreement at the time outstanding (including securities into which such securities
are convertible), each future holder of all such securities, and the Company.

Section 10.2.
Headings. The headings of the various sections of this Agreement are for convenience of reference only and shall not be
deemed to be part of this Agreement.

Section 10.3.
Severability. In the event that any provision in this Agreement is held to be 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.

Section 10.4. Governing
Law And Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. The
parties hereto agree to submit to the exclusive jurisdiction of the federal and state courts of the State of New York with respect
to the interpretation of this Agreement or for the purposes of any action arising out of or related to this Agreement.

23

---

Section 10.5.
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, and
all of which together shall constitute one and the same instrument. In the event that any signature is delivered via facsimile
transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) the same with the same force and effect as if such facsimile signature page were an original hereof.

Section 10.6. Entire
Agreement. This Agreement contains the entire understanding of the parties with respect to the matters covered herein,
supersede all prior agreements and understandings with respect to such matters and executed by and among the Company and any of
the Purchasers, and, except as specifically set forth herein or therein, neither the Company nor the Purchasers make any
representation, warranty, covenant or undertaking with respect to such matters.

Section 10.7. Independent
Nature Of Purchasers Obligations And Rights. The obligations of each Purchaser under this Agreement are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under this Agreement. Nothing contained herein and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Purchasers are in any way acting in concert or as a group, or are deemed affiliates (as
such term is defined under the Exchange Act) with respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding
for such purpose.

Section 10.8.
Expenses. Each party hereto shall pay all costs and expenses incurred by it in connection with the execution and delivery
of this Agreement, and all the transactions contemplated thereby, including fees of legal counsel.

24

---

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and
delivered by their duly authorized representatives as of the day and year first above
written.

`PALATIN TECHNOLOGIES, INC.

                                 By:_____________________________
                                       Name:
                                       Title:



                                  Purchaser:_______________________

                                 By:_____________________________
                                       Name:
                                       Title:



                                 Purchaser:_______________________

                                 By:_____________________________
                                       Name:
                                       Title:




                                 Purchaser:_______________________

                                 By:_____________________________
                                       Name:
                                       Title:`

25

---

`APPENDIX A

                                                        SCHEDULE OF PURCHASERS


-------------------------------------------------------------------------------------------------------------------
      Purchaser                Purchaser Address         Aggregate Number    Aggregate Number    Aggregate Purchase
                                                             of Shares         of Warrants               Price
-------------------------------------------------------------------------------------------------------------------
Albert Fried Jr.        c/o Albert Fried & Co.               1,000,000           150,000             $3,250,000
                        60 Broad Street, 39th Floor
                        New York, NY  10014
-------------------------------------------------------------------------------------------------------------------
Marc Florin             12 Barkers Pt. Road                   45,000              6,750               $146,250
                        Sands Point, NY  11050
-------------------------------------------------------------------------------------------------------------------
Alexandra Global        767 Third Avenue, 39th Floor         1,000,000           150,000             $3,250,000
Master Fund LTD         New York, NY  10017

-------------------------------------------------------------------------------------------------------------------
Atlas Equity I, Ltd.    181 W. Madison, Suite 3600            300,000             45,000              $975,000
                        Chicago, IL  60602
-------------------------------------------------------------------------------------------------------------------
Clariden                Clariden Bank                         400,000             60,000             $1,300,000
Biotechnology Equity    Claridenstrasse 26
Fund                    Postfach CH-8022
                        Zurich, Germany
-------------------------------------------------------------------------------------------------------------------
Clearwater Fund I,      611 Druid Road East, Suite 200        150,000             22,500              $487,500
L.P.                    Clearwater, FL  33756
-------------------------------------------------------------------------------------------------------------------
Clearwater Offshore     611 Druid Road East, Suite 200        150,000             22,500              $487,500
Fund, Ltd               Clearwater, FL  33756
-------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG,       527 Madison Avenue, 8th Floor         500,000             75,000             $1,625,000
London Branch           New York, NY  10022
-------------------------------------------------------------------------------------------------------------------
Elliott Associates,     712 Fifth Avenue, 35th Floor          280,000             42,000              $910,000
L.P.                    New York, NY  10019
-------------------------------------------------------------------------------------------------------------------
Elliott                 c/o Elliott Mgmt.                     420,000             63,000             $1,365,000
International, L.P.     712 Fifth Avenue, 35th Floor
                        New York, NY  10019
-------------------------------------------------------------------------------------------------------------------
SG Private Banking      Avenue de Rumine 20                   47,500              7,125               $154,375
(Suisse) SA             1005 Lausanne
                        Switzerland
-------------------------------------------------------------------------------------------------------------------
Lombard Odier Darier    11, rue de la Corraterie              300,000             45,000              $975,000
Hentsch & Cie           Case postale
                        1211 Geneve 11
                        Switzerland
-------------------------------------------------------------------------------------------------------------------
Alfa-Tech L.L.C.        2 North Riverdale Plaza               615,385           92,307.75          $2,000,001.25
                        Suite 1500
                        Chicago, IL  60606
-------------------------------------------------------------------------------------------------------------------
Lurie Investment        2 North Riverdale Plaza               384,615           57,692.25          $1,249,998.75
Fund, L.L.C.            Suite 1500
                        Chicago, IL  60606
-------------------------------------------------------------------------------------------------------------------
Oppenheim Prumerica     4 rue Jean Monnet                     200,000             30,000              $650,000
Asset Management        L-2180
S.a.r.l.                Luxembourg
on behalf of MEDICAL
BioHe@lth-Trends
-------------------------------------------------------------------------------------------------------------------
Hauck & Aufhaeuser      23, Avenue de la Liberte              25,000              3,750               $81,250
Banquiers Luxembourg    L-1931
S.A.                    Luxembourg
on behalf of
VCH Expert Bio Tech
-------------------------------------------------------------------------------------------------------------------`

A-1

---

`-------------------------------------------------------------------------------------------------------------------
Perry Partners          Citco Building                        375,000             56,250             $1,218,750
International, Inc.     Wickhams Cay
                        P.O. Box 662
                        Roadtown, Tortola
                        B.V.I.
-------------------------------------------------------------------------------------------------------------------
Perry Partners LP       599 Lexington Avenue                  125,000             18,750              $406,250
                        New York, NY  10022
-------------------------------------------------------------------------------------------------------------------
Porter Partners, L.P.   300 Drakes Landing Road               240,000             36,000              $780,000
                        Suite 175
                        Greenbrae, CA  94904
-------------------------------------------------------------------------------------------------------------------
EDJ Limited             c/o Deltec Bank and Trust             60,000              9,000               $195,000
                        Deltec House / Lyford Cay
                        P.O. Box N-3229
                        Nassau, Bahamas
-------------------------------------------------------------------------------------------------------------------
David D. May            605 Third Avenue, 19th Floor          15,000              2,250               $48,750
                        New York, NY  10158
-------------------------------------------------------------------------------------------------------------------
Sanford Prater          37 Gordon Road                        15,000              2,250               $48,750
                        Essex Falls, NJ  07021
-------------------------------------------------------------------------------------------------------------------
Catalyst                605 Third Avenue, 19th Floor          16,300              2,445               $52,975
International LTD       New York, NY  10158
-------------------------------------------------------------------------------------------------------------------
Quantum Partners, LDC   605 Third Avenue, 19th Floor          44,800              6,720               $145,600
                        New York, NY  10158
-------------------------------------------------------------------------------------------------------------------
Catalyst Partners LP    605 Third Avenue, 19th Floor          17,300              2,595               $56,225
                        New York, NY  10158
-------------------------------------------------------------------------------------------------------------------
Ridgecrest Partners     605 Third Avenue, 19th Floor          14,800              2,220               $48,100
LTD                     New York, NY  10158
-------------------------------------------------------------------------------------------------------------------
Ridgecrest Partners,    605 Third Avenue, 19th Floor          54,300              8,145               $176,475
QP, LP                  New York, NY  10158
-------------------------------------------------------------------------------------------------------------------
Ridgecrest Partners LP  605 Third Avenue, 19th Floor           2,500               375                 $8,125
                        New York, NY  10158
-------------------------------------------------------------------------------------------------------------------
The Sagitta             80 Harcourt Street                    100,000             15,000              $325,000
Healthcare Fund         Dublin 2
                        Ireland
-------------------------------------------------------------------------------------------------------------------
South Ferry L.P. #2     1 State Street Plaza                  30,000              4,500               $97,500
                        New York, NY  10004
-------------------------------------------------------------------------------------------------------------------
Fulton St. Capitol LLC  140 Fulton Street                     20,000              3,000               $65,000
                        Lawrence, NY  11559
-------------------------------------------------------------------------------------------------------------------
Stephen E. Garcia       700 Hunter Road                       45,000              6,750               $146,250
                        Glenview, IL  60025
-------------------------------------------------------------------------------------------------------------------`

A-2

---

APPENDIX B

FORM OF WARRANT
CERTIFICATE

THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
ACT), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT
TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.

_______ Warrants

PALATIN TECHNOLOGIES,
INC.

COMMON STOCK PURCHASE WARRANT
CERTIFICATE

THE WARRANTS EVIDENCED
BY THIS CERTIFICATE

ARE NOT EXERCISABLE
AFTER 5:00 P.M.,

NEW YORK CITY TIME, ON

January 26, 2009

THIS CERTIFIES THAT:

_____________________ or registered
assigns is the registered holder (the Registered Holder) of the number of
Warrants set forth above, each of which represents the right to purchase from Palatin
Technologies, Inc., a Delaware corporation (the Company), ____________
fully paid and nonassessable shares of Common Stock, par value $0.01 per share (the
Common Stock), of the Company, at the initial exercise price of $4.06 per
Warrant (the Exercise Price) at any time prior to the Expiration Date (as
hereinafter defined), by surrendering this Warrant Certificate, with the Form of Election
to Purchase duly executed at the principal office of the Company and by paying in full the
Exercise Price, plus transfer taxes, if any. The term Warrant as used herein
shall include this Warrant, and any warrants delivered in substitution or exchange
therefor as provided herein. Payment of the Exercise Price shall be made (i) in United
States currency, by certified check or money order payable to the order of the Company, or
(ii) by cashless exercise in accordance with the provisions below, but only
when a registration statement under the Act for the resale of the shares of Common Stock
issuable upon exercise of the Warrants is not then in effect.

The
Warrants have been issued pursuant to a private placement of Common Stock and Warrants.

B-1

---

| | This Warrant Certificate is issued under and in accordance with the Securities Purchase
Agreement dated as of January 26, 2004, (the Securities Purchase Agreement)
between the Company and the Registered Holder, as amended and is subject to the terms and
provisions contained in the Securities Purchase Agreement. Section 6 of the Securities
Purchase Agreement governs the registration rights of the shares of Common Stock
underlying the Warrants. Unless otherwise defined herein, the capitalized terms used
herein shall have the meaning assigned to such terms in the Securities Purchase Agreement.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Notwithstanding
any provisions herein to the contrary, if (i) the Per Share Market Value of one share of
Common Stock is greater than the Exercise Price (at the date of calculation as set forth
below) and (ii) a registration statement under the Act for the resale of the shares of
Common Stock issuable upon exercise of the Warrants is not then in effect, in lieu of
exercising this Warrant by payment of cash, the Registered Holder may exercise this
Warrant by a cashless exercise and shall receive the number of shares of Common Stock
equal to an amount (as determined below) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed Election to Purchase in which
event the Company shall issue to the Registered Holder a number of shares of Common Stock
computed using the following formula:

`X = Y - (A)(Y)
                     ------
                        B

Where        X =   the number of shares of Common Stock to be issued to the Registered Holder.

             Y =   the number of shares of Common Stock purchasable upon exercise of all of the Warrant or, if only a portion
                   of the Warrant is being exercised, the portion of the Warrant being exercised.

             A =   the Exercise Price.

             B =   the Per Share Market Value of one share of Common Stock.`

| | Per
Share Market Value means on any particular date (a) the closing bid price per
share of the Common Stock on such date on the American Stock Exchange (AMEX)
Market System or another registered national stock exchange on which the Common Stock is
then listed, or if there is no such price on such date, then the closing bid price on such
exchange or quotation system on the date nearest preceding such date, or (b) if the Common
Stock is not listed then on AMEX or any registered national stock exchange, the closing
bid price for a share of Common Stock in the over-the-counter market, as reported by the
over-the-counter electronic bulletin board (the OTC Bulletin Board) or in the
National Quotation Bureau Incorporated or similar organization or agency succeeding to its
functions of reporting prices) at the close of business on such date, or (c) if the Common
Stock is not then reported by the OTC Bulletin Board or the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions of reporting
prices), then the average of the Pink Sheet quotes for the relevant conversion
period, as determined in good faith by the holder, or (d) if the Common Stock is not then
publicly traded the fair market value of a share of Common Stock as determined by the
Board of Directors of the Company.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

B-2

---

As
soon as practicable after the date of exercise of any Warrants, the Company shall issue,
or cause the transfer agent for the Common Stock, if any, to issue a certificate or
certificates for the number of full shares of Common Stock to which such Registered Holder
is entitled, registered in accordance with the instructions set forth in the Form of
Election to Purchase. All shares of Common Stock issued upon the exercise of any Warrants
shall be validly authorized and issued, fully paid and nonassessable, and free from all
taxes, liens and charges created by the Company in respect of the issue thereof. Each
person in whose name any such certificate for shares of Common Stock is issued shall for
all purposes be deemed to have become the holder of record of the Common Stock represented
thereby on the date of exercise of the Warrants resulting in the issuance of such shares,
irrespective of the date of issuance or delivery of such certificate for shares of Common
Stock.

| | In the event that less than all of the Warrants represented by a Warrant Certificate are
exercised, the Company shall execute and mail, by first-class mail, within 30 days of the
date of exercise, to the Registered Holder of such Warrant Certificate, or such other
person as shall be designated in the Form of Election to Purchase, a new Warrant
Certificate representing the number of full Warrants not exercised. In no event shall a
fraction of a Warrant be exercised, and the Company shall distribute no Warrant
Certificates representing fractions of Warrants. Final fractions of shares shall be
treated as provided for herein.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company shall at all times reserve and keep available for issuance upon the exercise of
Warrants a number of its authorized but unissued shares of Common Stock that will be
sufficient to permit the exercise in full of all outstanding Warrants.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Subject
to the provisions hereof, the Exercise Price in effect from time to time shall be subject
to adjustment, as follows:

B-3

---

(a)    
In case the Company shall at any time after the date hereof (i) declare a dividend on the outstanding Common Stock payable in
shares of its capital stock, (ii) subdivide the outstanding Common Stock, (iii) combine the outstanding Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock by reclassification of the Common Stock (including any
such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), then, in
each case, the Exercise Price, and the number of shares of Common Stock issuable upon exercise of the Warrants in effect at the
time of the record date for such dividend or of the effective date of such subdivision, combination, or reclassification, shall be
proportionately adjusted so that the Holders of the Warrants after such time shall be entitled to receive the aggregate number and
kind of shares which, if such Warrants had been exercised immediately prior to such time, such Registered Holders would have owned
upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. Such
adjustment shall be made successively whenever any event listed above shall occur.

(b)    
In case the Company shall issue or fix a record date for the issuance to all holders of Common Stock of rights, options, or
warrants to subscribe for or purchase Common Stock (or securities convertible into or exchangeable for Common Stock) at a price
per share (or having a conversion or exchange price per share, if a security convertible into or exchangeable for Common Stock)
less than the Current Market Price per share of Common Stock (as determined below) on such record date, then, in each case, the
Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding on such record date plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares of Common Stock so to be offered (or the aggregate
initial conversion or exchange price of the convertible or exchangeable securities so to be offered) would purchase at such
Current Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date
plus the number of additional shares of Common Stock so issued or to be offered for subscription or purchase (or into which the
convertible or exchangeable securities so to be offered are initially convertible or exchangeable). Such adjustment shall become
effective at the close of business on such record date; provided, however, that, to the extent the shares of Common
Stock (or securities convertible into or exchangeable for shares of Common Stock) are not delivered, the Exercise Price shall be
readjusted after the expiration of such rights, options, or warrants (but only with respect to Warrants exercised after such
expiration), to the Exercise Price which would then be in effect had the adjustments made upon the issuance of such rights,
options, or warrants been made upon the basis of delivery of only the number of shares of Common Stock (or securities convertible
into or exchangeable for shares of Common Stock) actually issued and the Exercise Price shall also be adjusted for any subsequent
adjustment or other change to the number of shares of Common Stock issuable upon exercise, exchange or conversion of such rights,
options, warrants or other securities. Notwithstanding anything to the contrary contained herein, no adjustment shall be made to
the Exercise Price until any condition to the vesting of such rights, options or warrants shall be fulfilled or satisfied (and
then only with respect to the portion thereof which shall have vested). In case any subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in
good faith by the board of directors of the Company, whose determination shall be conclusive absent manifest error. Shares of
Common Stock owned by or held for the account of the Company or any majority-owned subsidiary shall not be deemed outstanding for
the purpose of any such computation. If any event occurs of the type contemplated by the provisions of this paragraph but not
expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock
rights or other rights with equity features), then the Board shall make an appropriate adjustment in the Exercise Price so as to
equitably protect the rights of holders of this Warrant.

(c)    
In case the Company shall distribute to all holders of Common Stock (including any such distribution made to the stockholders of
the Company in connection with a consolidation or merger in which the Company is the continuing corporation) evidences of its
indebtedness, cash (other than any cash dividend which, together with any cash dividends paid within the twelve (12) months prior
to the record date for such distribution, does not exceed 5% of the Current Market Price at the record date for such distribution)
or assets (other than distributions and dividends payable in shares of Common Stock), or rights, options, or warrants to subscribe
for or purchase Common Stock, or securities convertible into or exchangeable for

B-4

---

shares of Common Stock (excluding those with
respect to the issuance of which an adjustment of the Exercise Price is provided pursuant to the foregoing paragraph), then, in
each case, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date
for the determination of stockholders entitled to receive such distribution by a fraction, the numerator of which shall be the
Current Market Price per share of Common Stock on such record date, less the fair market value (as determined in good faith by the
board of directors of the Company, whose determination shall be conclusive absent manifest error) of the portion of the evidences
of indebtedness or assets so to be distributed, or of such rights, options, or warrants or convertible or exchangeable securities,
or the amount of such cash, applicable to one share, and the denominator of which shall be such Current Market Price per share of
Common Stock. Such adjustment shall become effective at the close of business on such record date.

| | For the purpose of any computation under this Warrant, the Current Market Price per share of
Common Stock on any date shall be deemed to be the average of the daily closing prices for
the five (5) consecutive trading days immediately preceding the date in question. The
closing price for each day shall be (a) the last reported sales price regular way or, in
case no such reported sale takes place on such day, the closing bid price regular way, in
either case on the principal national securities exchange or market system (including, for
purposes hereof, the AMEX Market System on which the Common Stock, is listed (Symbol, PTN)
or admitted to trading, (b) if the Common Stock, is not listed or admitted to trading on
any national securities exchange or market system, the highest reported bid price for the
Common Stock, as furnished by the National Association of Securities Dealers, Inc. or a
similar organization if AMEX is no longer reporting such information, or (c) if on any
such date the Common Stock is not listed or admitted to trading on any national securities
exchange and is not quoted by AMEX or any similar organization, as determined by reference
to the pink sheets published by the National Quotation Bureau or, if not so
published, by such other method of determining the market value of a share of Common
Stock, as the board of directors of the Company shall in good faith from time to time deem
to be fair, whose determination shall be conclusive absent manifest error shall be used.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | No adjustment in the Exercise Price shall be required if such adjustment is less than $.05;
provided, however, that any adjustments which by reason of this Warrant are
not required to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Warrant shall be made to the nearest cent or to
the nearest one thousandth of a share, as the case may be.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In any case in which this Warrant shall require that an adjustment in the Exercise Price be
made effective as of a record date for a specified event, the Company may elect to defer,
until the occurrence of such event, issuing to the Registered Holders of the Warrants, if
any Registered Holder has exercised a Warrant after such record date, the shares of Common
Stock, if any, issuable upon such exercise over and above the shares of Common Stock, if
any, issuable upon such exercise on the basis of the Exercise Price in effect prior to
such adjustment; provided, however, that the Company shall deliver to such
exercising Registered Holder a due bill or other appropriate instrument evidencing such
Registered Holders right to receive such additional shares upon the occurrence of
the event requiring such adjustment.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

B-5

---

| | Upon each adjustment of the Exercise Price as a result of the calculations made above the
Warrants shall thereafter evidence the right to purchase, at the adjusted Exercise Price,
that number of shares (calculated to the nearest thousandth) obtained by dividing (A) the
product obtained by multiplying the number of shares purchasable upon exercise of the
Warrants prior to adjustment of the number of shares by the Exercise Price in effect prior
to adjustment of the Exercise Price by (B) the Exercise Price in effect after such
adjustment of the Exercise Price.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In case of any capital reorganization, other than in the cases referred to above, or the
consolidation or merger of the Company with or into another corporation (other than a
merger or consolidation in which the Company is the continuing corporation and which does
not result in any reclassification of the outstanding shares of Common Stock or the
conversion of such outstanding shares of Common Stock into shares of other stock or other
securities or property), or the sale of the property of the Company as an entirety or
substantially as an entirety (collectively such actions being hereinafter referred to as
Reorganizations), there shall thereafter be deliverable upon exercise of any
Warrant (in lieu of the number of shares of Common Stock theretofore deliverable) the
number of shares of stock or other securities or property to which a Registered Holder of
the number of shares of Common Stock which would otherwise have been deliverable upon the
exercise of such Warrant would have been entitled upon such Reorganization if such Warrant
had been exercised in full immediately prior to such Reorganization. In case of any
Reorganization, appropriate adjustment, as determined in good faith by the Board of
Directors of the Company, shall be made in the application of the provisions herein set
forth with respect to the rights and interests of Registered Holders so that the
provisions set forth herein shall thereafter be applicable, as nearly as practicable, in
relation to any shares or other property thereafter deliverable upon exercise of Warrants.
The Company shall not effect any such Reorganization, unless upon or prior to the
consummation thereof the successor corporation, or if the Company shall be the surviving
corporation in any such Reorganization and is not the issuer of the shares of stock or
other securities or property to be delivered to holders of shares of the Common Stock
outstanding at the effective time thereof, then such issuer, shall assume by written
instrument the obligation to deliver to the Registered Holder of any Warrant Certificate
such shares of stock, securities, cash or other property as such holder shall be entitled
to purchase in accordance with the foregoing provisions. Notwithstanding anything to the
contrary contained herein, in the event of sale or conveyance or other transfer of all or
substantially all of the assets of the Company as a part of a plan for liquidation of the
Company, all rights to exercise any Warrant shall terminate thirty (30) days after the
Company gives written notice to each Registered Holder of a Warrant Certificate that such
sale or conveyance of other transfer has been consummated.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

B-6

---

| | In case of any reclassification or change of the shares of Common Stock issuable upon
exercise of the Warrants, including, without limitation, in any reorganization (other than
a change in par value or from no par value to a specified par value, or as a result of a
subdivision or combination, but including any change in the shares into two or more
classes or series of shares), the Registered Holders of the Warrants shall have the right
thereafter to receive upon exercise of the Warrants solely the kind and amount of shares
of stock and other securities, property, cash, or any combination thereof receivable upon
such reclassification or change by a Registered Holder of the number of shares of Common
Stock for which the Warrants might have been exercised immediately prior to such
reclassification or change and the term Common Stock shall thereafter include,
without limitation, such stock and other securities. Thereafter, appropriate provision
shall be as nearly equivalent as practicable to the adjustments in this Warrant. The above
provisions of this paragraph shall similarly apply to successive reclassifications and
changes of shares of Common Stock.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Notwithstanding anything to the contrary herein contained, in the event of a transaction contemplated by
the prior paragraph in which the surviving, continuing, successor, or purchasing
corporation demands that all outstanding Warrants be extinguished prior to the closing
date of the contemplated transaction, the Company shall give prior notice (the
Merger Notice) thereof to the Registered Holders advising them of such
transaction. The Registered Holders shall have ten (10) days after the date of the Merger
Notice to elect to (i) exercise the Warrants in the manner provided herein or (ii) receive
from the surviving, continuing, successor, or purchasing corporation, with respect to
outstanding Warrants, the same consideration receivable by a Registered Holder of the
number of shares of Common Stock for which the Warrants might have been exercised
immediately prior to such consolidation, merger, sale, or purchase reduced by such amount
of the consideration as has a market value equal to the exercise price of the Warrants, as
determined by the Board of Directors of the Company, whose determination shall be
conclusive absent manifest error. If any Registered Holder fails to timely notify the
Company of its election, the Holder shall be deemed for all purposes to have elected the
option set forth in (ii) above. Any amounts receivable by a Holder who has elected the
option set forth in (ii) above shall be payable at the same time as amounts payable to
stockholders in connection with any such transaction.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Whenever the Exercise Price is adjusted as provided in this Warrant, the Company will promptly
obtain a certificate of the chief financial officer of the Company setting forth the
Exercise Price as so adjusted and a brief statement of the facts accounting for such
adjustment. Whenever any adjustment is made pursuant to this Warrant, the Company shall
cause notice of such adjustment to be mailed to each Registered Holder of a Warrant
Certificate within fifteen (15) days thereafter, such notice to include in reasonable
detail (i) the events precipitating the adjustment, (ii) the computation of any
adjustments, and (iii) the Exercise Price, the number of shares or the securities or other
property purchasable upon exercise of each Warrant after giving effect to such adjustment.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In no event shall the Exercise Price
be adjusted below the par value per share of the Common Stock.

In case at any time the Company shall
propose:

B-7

---

|(a) | to pay any dividend or make any distribution on shares of Common Stock in shares
          of Common Stock or make any other distribution (other than regularly scheduled
          cash dividends which are not in a greater amount per share than the most recent
          such cash dividend) to all holders of Common Stock; or
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | to issue any rights, warrants, or other securities to all holders of Common
          Stock entitling them to purchase any additional shares of Common Stock or any
          other rights, warrants, or other securities; or
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | to effect any reclassification or change of outstanding shares of Common Stock,
          or any consolidation, merger, sale, lease, or conveyance of property, described
          above; or
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | to effect any liquidation, dissolution, or winding-up of the Company;
|--- | ---------------------------------------------------------------------

then, in each such case, the Company
shall cause notice of such proposed action to be mailed to each Registered Holder of a
Warrant Certificate. Such notice shall be mailed, at least ten (10) days prior to the
record date for determining holders of the Common Stock for purposes of receiving such
payment or offer or at least ten (10) days prior to the earlier of the date upon which
such action is to take place or any record date to determine holders of Common Stock
entitled to receive such securities or other property, as the case may be.

| | Irrespective of any adjustments pursuant to this Warrant, Warrant Certificates theretofore or
thereafter issued need not be amended or replaced, but certificates thereafter issued
shall bear an appropriate legend or other notice of any adjustments.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company shall not be required upon the exercise of any Warrant to issue fractional shares
of Common Stock which may result from adjustments in accordance with this Warrant to the
Exercise Price or number of shares of Common Stock purchasable under each Warrant. If more
than one Warrant is exercised at one time by the same Registered Holder, the number of
full shares of Common Stock which shall be deliverable shall be computed based on the
number of shares deliverable in exchange for the aggregate number of Warrants exercised.
With respect to any final fraction of a share called for upon the exercise of any Warrant
or Warrants, the Company shall pay a cash adjustment in respect of such final fraction in
an amount equal to the same fraction of the Current Market Price of a share of Common
Stock calculated in accordance with this Warrant.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | If any change to the capitalization of the Company should occur with respect to which a
favorable adjustment to the rights and interests of the Registered Holders of the Warrants
should be made, and such adjustment is not otherwise provided for in this Warrant, such
appropriate adjustment should be made as determined in good faith by the Board of
Directors of the Company.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | No Warrant may be exercised after 5:00 P.M., New York City time, on the expiration date (the
Expiration Date) which will be January 26, 2009. All Warrants evidenced hereby
shall thereafter become void.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

B-8

---

| | No Warrant Certificate shall entitle the registered holder thereof to any of the rights of a
stockholder of the Company, including, without limitation, the right to vote, to receive
dividends and other distributions, to receive any notice of, or to attend, meetings of
stockholders or any other proceedings of the Company.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | If any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the Company in its
discretion may execute and deliver, in exchange and substitution for and upon cancellation
of a mutilated Warrant Certificate, or in lieu of or in substitution for a lost, stolen or
destroyed Warrant Certificate, a new Warrant Certificate for the number of Warrants
represented by the Warrant Certificate so mutilated, lost, stolen or destroyed but only
upon receipt of evidence of such loss, theft or destruction of such Warrant Certificate,
and of the ownership thereof, and indemnity, if requested, all satisfactory to the
Company. Applicants for such substitute Warrant Certificates shall also comply with such
other reasonable regulations and pay such other reasonable charges incidental thereto as
the Company may prescribe. Any such new Warrant Certificate shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost, stolen,
mutilated or destroyed Warrant Certificate shall be at any time enforceable by anyone.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Prior to the latest time at which the Warrants may be exercised, subject to any applicable laws,
rules or regulations restricting transferability, Warrant Certificates, subject to the
provisions hereof, may be split up, combined or exchanged for other Warrant Certificates
representing a like aggregate number of Warrants or may be transferred in whole or in
part. Any holder desiring to split up, combine or exchange a Warrant Certificate or
Warrant Certificates shall make such request in writing delivered to the Company at its
principal office and shall surrender the Warrant Certificate or Warrant Certificates so to
be split up, combined or exchanged at said office with the Form of Assignment. Upon any
such surrender for split up, combination, exchange or transfer, the Company shall execute
and deliver to the person entitled thereto a Warrant Certificate or Warrant Certificates,
as the case may be, as so requested in the Form of Assignment. The Company may require the
holder to pay a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any split up, combination, exchange or transfer of Warrant Certificates
prior to the issuance of any new Warrant Certificate.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Any Warrant Certificate surrendered upon the exercise of Warrants or for split up,
combination, exchange or transfer, or purchased or otherwise acquired by the Company,
shall be canceled and shall not be reissued by the Company; and, except as otherwise
provided herein in case of the exercise of less than all of the Warrants evidenced by a
Warrant Certificate or in case of a split up, combination, exchange or transfer, no
Warrant Certificate shall be issued hereunder in lieu of such canceled Warrant
Certificate. Any Warrant Certificate so canceled shall be destroyed by the Company.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Every holder of a Warrant Certificate by accepting the same consents and agrees with the Company
and with every other holder of a Warrant Certificate that:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------

B-9

---

|(a) | transfer of the Warrant Certificates shall be registered on the books of the
          Company only if surrendered at the principal office of the Company, duly
          endorsed or accompanied by a proper instrument of transfer; and
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | prior to due presentment for registration of transfer, the Company may deem and
          treat the person in whose name the Warrant Certificate is registered as the
          absolute owner thereof and of the Warrants evidenced thereby (notwithstanding
          any notations of ownership or writing on the Warrant Certificates made by anyone
          other than the Company) for all purposes whatsoever, and the Company shall not
          be affected by any notice to the contrary.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
laws of the State of New York shall govern this Warrant Certificate.

IN
WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed.

PALATIN TECHNOLOGIES,
INC.

By:______________________________

B-10

---

FORM OF

ELECTION TO PURCHASE

| | The undersigned hereby irrevocably elects to exercise  of the Warrants represented by
this Warrant Certificate and to purchase the shares of Common Stock issuable upon the
exercise of said Warrants, and requests that certificates for such shares be issued and
delivered as follows:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ISSUE

TO:

(NAME)

---

(ADDRESS, INCLUDING ZIP
CODE)

(SOCIAL SECURITY OR
OTHER TAX IDENTIFYING NUMBER)

DELIVER

TO:

(NAME)

(ADDRESS, INCLUDING ZIP
CODE)

| | If the number of Warrants hereby exercised is less than all the Warrants represented by this
Warrant Certificate, the undersigned requests that a new Warrant Certificate representing
the number of full Warrants not exercised be issued and delivered as set forth below.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | In
full payment of the purchase price with respect to the Warrants exercised and transfer
taxes, if any, the undersigned hereby tenders payment of $ by certified check or
money order payable in United States currency to the order of the Company. In the event
payment is being made by means of a cashless exercise, then the undersigned authorizes the
surrender of the number of shares of Common Stock necessary for the full payment of the
Exercise Price in accordance with the terms and provisions of the Warrant Certificate.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

---

| | (Signature
of registered holder, if co-owned)
| | ---------------------------------------------

_________________

NOTE:
Signature must conform in all respects to name of holder as specified on the face of the
Warrant Certificate

---

FORM OF

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned
hereby sells, assigns and transfers unto the Assignee named below all of the rights of the
undersigned represented by the within Warrant Certificate, with respect to the number of
Warrants set forth below:

Name of Assignee Address
No.of Warrants

and does hereby irrevocably
constitute and appoint Attorney to make such transfer on the books of Palatin
Technologies, Inc. maintained for that purpose, with full power of substitution in the
premises.

_________________

| | (Signature must conform in all respects to name of holder as specified on the face of the Warrant
Certificate.)
| | ---------------------------------------------------------------------------------------------------------------

---

C-1

APPENDIX C

FORM OF COMPANY COUNSEL
OPINION

The
Placement Agents shall receive on the Closing Date from counsel for the Company, an
opinion (containing the customary exceptions and assumptions) addressed to each of the
Placement Agents and the Purchasers and dated such Closing Date, and stating in effect
that:

(a)    
Each of the Company and its subsidiary, RhoMed Incorporated, have been duly incorporated and are validly existing as corporations
in good standing under the laws of their respective jurisdictions of incorporation. The Company is duly qualified to transact
business and is in good standing as a foreign corporation in each jurisdiction in which the character or location of its assets or
properties or the nature of its business makes such qualification necessary, except where the failure to so qualify or to be in
good standing, individually or in the aggregate, would not have a Material Adverse Effect.

(b)    
The Company has all requisite corporate power and authority to own, lease and operate its properties and to conduct its business
as now being conducted and as described in the Memorandum and with respect to the Company to enter into and perform its
obligations under this Agreement and the Warrants and to issue and sell the Securities and to issue the Warrant Shares. RhoMed
Incorporated does not own, lease or operate any property or conduct any business.

(c)    
The authorized, issued and outstanding capital stock of the Company is as set forth in the Memorandum under the caption
Capitalization as of the dates stated therein; all of the outstanding shares of common stock of the Company have been
duly and validly authorized and issued and are fully paid and nonassessable. The Securities to be issued and sold by the Company
pursuant to this Agreement have been duly authorized for issuance and sale to the Purchasers pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth herein and pursuant
to the rules and regulations of the American Stock Exchange, will be validly issued, fully paid and nonassessable, and no holder
of the Securities is or will be subject to personal liability by reason of being such a holder. The Warrant Shares have been duly
authorized and reserved for issuance and when issued against payment of the consideration set forth in the Warrant will be validly
issued, fully paid and nonassessable, and no holder of the Warrant Shares is or will be subject to personal liability by reason of
being such a holder. The issuance and sale of the Securities and the issuance of the Warrant Shares by the Company is not subject
to any preemptive or other similar rights of any securityholder of the Company. Except as disclosed in the Memorandum, there are
no preemptive or other rights to subscribe for or to purchase or any restriction upon the voting or transfer of any securities of
the Company pursuant to the Companys Certificate of Incorporation or by-laws or other governing documents or any
Material Contracts as listed in a scheduled attached hereto or to our knowledge, any other agreements or other
instruments to which the Company is a party or by which it is bound. The Common Stock, the Securities and the Warrant Shares
conform in all material respects to the descriptions thereof contained in the Memorandum. The form of certificate used to evidence
the Common Stock is in valid and sufficient form.

C-1

---

(d)    
All necessary corporate action has been duly and validly taken by the Company to authorize the execution, delivery and performance
of this Agreement and the issuance and sale of the Securities and the issuance of the Warrant Shares. Each of this Agreement and
the Warrant have been duly and validly authorized, executed and delivered by the Company and each of this Agreement and the
Warrant constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its
terms except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting the enforcement of creditors rights generally and by general equitable
principles.

(e)    
Neither the execution, delivery and performance of this Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale by the Company of the Securities, the issuance of the
Warrant Shares, nor the execution, delivery or performance of any other agreement or instrument entered into or to be entered into
by the Company in connection with the transactions contemplated by the Memorandum, will give rise to a right to terminate or
accelerate the due date of any payment due under, or conflict with or result in the breach of any term or provision of, or
constitute a default (or any event which with notice or lapse of time, or both, would constitute a default) under, or require
consent or waiver under, or result in the execution or imposition of any lien, charge, claim, security interest or encumbrance
upon any properties or assets of the Company or its subsidiary pursuant to the terms of, any Material Contract or to our knowledge
any material indenture, mortgage, deed trust, note, or other material agreement or instrument to which the Company or its
subsidiary is a party or by which either the Company or its subsidiary or any of their assets or properties or businesses is
bound, or to our knowledge, any material license, permit, judgment, decree, order, statute, rule or regulation, domestic or
foreign, that would violate any provision of the charter or by laws of the Company or its subsidiary.

(f)    
No consent, approval, authorization, license, registration, qualification or order of any court or governmental or regulatory
authority having jurisdiction over the Company is required for the due authorization, execution, delivery or performance of this
Agreement by the Company or the consummation of the transactions contemplated hereby or thereby, except such as have been obtained
under the Securities Act and such as may be required under state securities or Blue Sky laws of any state in connection with the
purchase of the Securities by the several Purchasers, the issuance of the Warrant Shares and the rules and regulations of the
American Stock Exchange.

(g)    
To our knowledge, there is no any action, suit, proceeding or other investigation, before any court or before or by any public
body or board pending or threatened against, or involving the assets, properties or businesses of, the Company which is not
disclosed in the Memorandum and which could reasonably be expected to have a Material Adverse Effect.

---

(h)    
The statements in the Memorandum under the caption Description of Capital Stock, insofar as such statement constitutes
a summary of documents referred to therein or matters of law, is accurate in all material respects and accurately presents the
information with respect to such documents and matters.

(i)    
Assuming (i) the accuracy of the representations and warranties of the Company set forth in Section 3 of the Purchase Agreement
and of all the Purchasers in Section 4 of the Purchase Agreement, (ii) the due performance by the Company of the covenants and
agreements set forth in Section 3 of the Purchase Agreement and the due performance by all the Purchasers of the covenants and
agreements set forth in Section 3 of the Purchase Agreement, and (iii) the compliance by all the Purchasers with the offering and
transfer procedures and restrictions described in the Memorandum, the offer, sale and delivery of the Securities and the issuance
of the Warrant Shares to the Purchasers in the manner contemplated by the Purchase Agreement, the Warrant and the Memorandum, does
not require registration under the Securities Act, it being understood that we do not express any opinion as to any subsequent
reoffer or resale of the Securities or the Warrant Shares.

(j)    
The listing application for the Shares and the Warrant Shares has been submitted to the American Stock Exchange.

(k)    
The Company is not an investment company or an entity controlled by an investment company as such terms
are defined in the Investment Company Act of 1940, as amended.

To
the extent deemed advisable by such counsel, such counsel may rely as to matters of fact
on certificates of responsible officers of the Company and public officials and on the
opinions of other counsel satisfactory to the Placement Agents as to matters which are
governed by laws other than the laws of the State of New York, the General Corporation Law
of the State of Delaware and the Federal laws of the United States; provided that such
counsel shall state that in their opinion the Purchasers and the Placement Agents are
justified in relying on such other opinions. Copies of such certificates and other
opinions shall be furnished to the Placement Agents and counsel for the Purchasers.

In
addition, such counsel shall state in a separate letter that such counsel has participated
in conferences with officers and other representatives of the Company, representatives of
the Placement Agents and their counsel and representatives of the independent certified
public accountants of the Company, at which conferences the contents of the Memorandum and
related matters were discussed and, although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or fairness of the statements
contained in the Memorandum (except as specified in the foregoing opinion), on the basis
of the foregoing, no facts have come to the attention of such counsel which lead such
counsel to believe that (i) the Memorandum,

---

as of its date and as of the Closing Date,
contained or contains an untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading and (ii) the Incorporated
Documents or any further amendments or supplements thereof, when they became effective or
were filed with the Securities and Exchange Commission, as the case may be, and as of the
Closing Date, contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading (except that in each case,
that such counsel need not express any view as to statistical data, the financial
statements, schedules and other financial data or information that pertains to licenses,
patents, trademarks, trade secrets, service marks, copyrights or other proprietary
information or know-how owned or used by the Company and its subsidiary or other related
information included in the Memorandum or the Incorporated Documents).

---

APPENDIX D

FORM OF INTELLECTUAL
PROPERTY COUNSEL OPINION

The Placement Agents shall receive on
the Closing Date from intellectual property counsel for the Company, an opinion
(containing the customary exceptions and assumptions) addressed to each of the Placement
Agents and the Purchasers and dated such Closing Date, and stating in effect that:

Such
counsel are familiar with the technology used by the Company in its business and the
manner of its use thereof and have read the Memorandum and the documents incorporated by
reference therein, including particularly the portions of referring to intellectual
property and:

|1. | To the best of our knowledge, the information in the Memorandum related to
          intellectual property to the extent that it constitutes matters of law,
          summaries of legal matters, documents or proceedings, or legal conclusions, has
          been reviewed by us and is correct in all material respects and fairly and
          correctly presents the information called for with respect thereto.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | To the best of our knowledge, there are no pending or threatened legal or
          governmental proceedings, nor allegations on the part of any person of
          infringement, relating to patent rights, trade secrets, trademarks, service
          marks, copyrights or other proprietary information or know-how of the Company
          and its subsidiary and no such proceedings are threatened or contemplated.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | To the best of our knowledge, neither the Company nor its subsidiary is
          infringing or otherwise violating any valid patents, trade secrets, trademarks,
          service marks, copyrights or other proprietary information or know-how of any
          persons and, to our knowledge, no person is materially infringing or otherwise
          violating any of the Companys and its subsidiarys patents, trade
          secrets, trademarks, service marks, copyrights or other proprietary information
          or know-how of the Company and its subsidiary.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | To the best of our knowledge, the Company and its subsidiary own or possess
          sufficient licenses or other rights to use all technology covered by patents or
          trade secrets, and to use all trademarks, service marks or other proprietary
          information or know-how necessary to conduct the business now being or proposed
          to be conducted by the Company as described in the Memorandum and the documents
          incorporated by reference therein.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | To the best of our knowledge, the Companys and its subsidiarys
          United States and foreign patents issued prior to the date hereof (the
          Patents) are valid and enforceable and are entitled to a statutory
          presumption of validity and of ownership by the assignee. To the best of our
          knowledge, there are no asserted or unasserted claims of any persons relating to
          the scope or ownership of any of the Patents, there are no liens which have been
          filed against any of the Patents, and the Company or its subsidiary is listed on
          the records of the United States Patent and Trademark Office and appropriate
          foreign patent offices as the sole assignee or owner of record thereof.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

D-1

---

|6. | The Company is the licensee of the patents listed on Schedule 1 and such
          schedule contains all the licensed patents that are, to the best of our
          knowledge, material to the Companys business as described in the
          Memorandum. All licenses of the Company to patents, whether United States or
          foreign, are duly executed, validly binding and enforceable in accordance with
          their terms and, to the best of our knowledge, the Company is not in default
          (declared or undeclared) of any material provision of such licenses.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7. | To the best of our knowledge, the Company and its subsidiary take security
          measures adequate to assert trade secret protection in its non-patented
          technology.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. | To the best of our knowledge, the agreements executed by the Companys and
          its subsidiarys employees, consultants and other advisors respecting trade
          secrets, confidentiality or intellectual property rights are valid, binding and
          enforceable in accordance with their express terms.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In
addition, such counsel shall state in a separate letter that, no facts have come to the
attention of such counsel which lead such counsel to believe that, with respect to
licenses, patents, trademarks, trade secrets, service marks, copyrights or other
proprietary information or know-how owned or used by the Company and its subsidiary (i)
the Memorandum, as of its date and as of the Closing Date contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any document incorporated
by reference in the Memorandum or any further amendment or supplement to any such
incorporated document made by the Company, when they became effective or were filed with
the Commission, as the case may be, and as of the Closing Date contained, any untrue
statement of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading.

D-2

---

APPENDIX E

STOCK CERTIFICATE AND

REGISTRATION STATEMENT
QUESTIONNAIRES

1.    
          Name of selling stockholder (beneficial owner):

If
not correct, please print the correct name: _____________________________

|2. | Have you held any position or office or had any material relationship (other
          than just purchasing securities) within the past three years with Palatin
          Technologies, Inc. (Palatin)?
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | If
the answer is YES, please describe fully. Use additional pages if required.
| | ------------------------------------------------------------------------------

|3. | Palatin is registering the following common stock on behalf of the selling
          stockholder named above. The prospectus will show all of this common stock as
          offered for sale for the account of the selling stockholder. The selling
          stockholder is not required to register or sell any of this common stock, but
          absent registration, sale of this common stock is restricted.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
foregoing shows the correct number of shares of common stock to be included in the
registration statement.

If
the answer is NO, please explain:

|4. | Please list on the following page all securities of Palatin, except those
          shown in paragraph 3 above, which the selling stockholder beneficially owns. For
          purposes of this questionnaire, beneficial ownership means direct or indirect
          voting or investment power over outstanding stock and stock which a person has
          the right to acquire now or within 60 days.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

I represent and warrant that the
information furnished in this questionnaire is correct. I understand that Palatin may rely
on this information in preparing a registration statement and prospectus covering the
offer and sale of the common stock shown in paragraph 3 above and that I can only
distribute the shares of common stock included in the registration statement in the manner
described therein under the caption Plan of Distribution. I will notify
Palatin immediately of any change in this information before the effective date of the
registration statement. I understand that any material error in a registration statement
based on materially incorrect information which I have furnished in this questionnaire may
result in a violation of law and potential legal liability for the selling stockholder.

E-1

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___________________________________
Date: ____________, 2004Signature

If signing on behalf of an entity,
please print name and title:

_________________

Please fax this selling stockholder
questionnaire as soon as possible to Palatin at 609-495-2201. No cover sheet is required,
but you must include both pages. If you have any questions, please call Jeffrey Koellner
(controller) at Palatins executive offices, 609-495-2200, or Brian Lanter (special
counsel) at 505-843-7222. Thank you.

E-2

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APPENDIX F

CERTIFICATE OF
SUBSEQUENT SALE

American Stock Transfer
& Trust Company59 Maiden Lane, Ground Floor

New York, NY 10038

pursuant
to the Companys Registration Statement on Form S-3 dated

Ladies and Gentlemen:

The
undersigned hereby certifies, in connection with the sale of shares of Common Stock of the
Company included in the table of Selling Stockholders in the Registration Statement, that
the undersigned has sold the shares pursuant to the Registration Statement and in a manner
described under the caption Plan of Distribution in the Registration Statement
and that such sale complies with all applicable securities laws, including, without
limitation, the Registration Statement delivery requirements of the Securities Act of
1933, as amended.

Selling Stockholder (the beneficial
owner):

Record Holder (e.g., if held in name
of nominee):

Number of Shares of Common Stock
Sold:

Date of Sale:

In
the event that you receive a stock certificate(s) representing more shares of Common Stock
than have been sold by the undersigned, then you should return to the undersigned a newly
issued certificate for such excess shares in the name of the Record Holder and BEARING
A RESTRICTIVE LEGEND. Further, you should place a stop transfer on your records with
regard to such certificate.

Very truly yours,

F-1