EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this 1st day of October, 2003,
is entered into by Palatin Technologies, Inc., a Delaware corporation with its
principal place of business at 4C Cedar Brook Drive, Cranbury, NJ, 08512 (the
"Company"), and Carl Spana, residing at 6 Stonewall Circle, West Harrison, New
York, 10604 (the "Employee").

The Company desires to continue employing the Employee, and the Employee desires
to continue to be employed by the Company. In consideration of the mutual
covenants and promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, the parties agree as follows:

1.0  Term of Employment. The Company hereby agrees to continue employing the
     Employee, and the Employee hereby accepts the continuation of employment
     with the Company, upon the terms set forth in this Agreement, for a two
     year period commencing on October 1, 2003 (the "Commencement Date") and
     ending on the second anniversary of the Commencement Date, unless sooner
     terminated in accordance with the provisions of Section 4.

2.0  Position Title & Capacity

2.1  The Employee shall serve as Chief Executive Officer and President, with
     responsibilities consistent with this position and as the Company's Board
     of Directors (the "Board") may determine from time to time, with powers and
     duties as may be determined, from time to time, by the Board, consistent
     with the Employee's position. The Employee shall report to the Company's
     Board of Directors. The Employee shall be based at the Company's corporate
     headquarters, which is based in Cranbury, New Jersey. The Employee shall
     also be available for travel at such times and to such places as may be
     reasonably necessary in connection with the performance of his duties
     hereunder.


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2.2  The Employee may serve as an employee director on the Company's Board of
     Directors (the "Board") as determined and approved by the Board during the
     employment period; however upon termination of employment for any reason,
     the Employee will no longer serve as a member of the Company's Board of
     Directors and will take any and all actions necessary to effectuate such
     resignation as may be reasonably requested by the Company.

2.3  The Employee hereby accepts such employment and agrees to undertake the
     duties and responsibilities inherent in such position and such other duties
     and responsibilities as the Board shall from time to time reasonably assign
     to him. The Employee agrees to devote substantially all of his business
     time, attention and energies to the business and interests of the Company
     during the Employment Period. The Employee agrees to abide by the rules,
     regulations, instructions, personnel practices and policies of the Company
     and any changes therein which may be adopted from time to time by the
     Company. The Employee acknowledges receipt of copies of all such rules and
     policies committed to writing as of the date of this Agreement.

2.4  The Employee specifically covenants, warrants and represents to the Company
     that he has the full, complete and entire right and authority to enter into
     this Agreement, that he has no agreement, duty, commitment or
     responsibility of any kind or nature whatsoever with any corporation,
     partnership, firm, company, joint venture or other entity or other person
     which would conflict in any manner whatsoever with any of his duties,
     obligations or responsibilities to the Company pursuant to this Agreement,
     that he is not in possession of any document or other tangible property of
     any corporation, partnership, firm, company, joint venture or other entity
     or other person of a confidential or proprietary nature which

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     would conflict in any manner whatsoever with any of his duties, obligations
     or responsibilities to the Company pursuant to his Agreement, and that he
     is fully ready, willing and able to perform each and all of his duties,
     obligations and responsibilities to the Company pursuant to this Agreement.

3.0  Compensation and Benefits. During the Employment Period, unless sooner
     terminated in accordance with the provisios of Section 4, the Employee
     shall receive the following compensation and benefits:

3.1  Salary. The Company shall pay the Employee, in equal semi-monthly
     installments or otherwise in accordance with the Company's standard payroll
     policies as such policies may exist from time to time, an annual base
     salary of $320,000. Such salary shall be subject to review thereafter, as
     determined by the Company's Compensation Committee and approved by the
     Board, on an annual basis, but the Board shall not decrease the Employee's
     annual base salary at any such annual review.

3.2  Cash Performance Bonus. The Employee will be included in the Company's
     annual discretionary bonus compensation program based on a June 30th year
     end in an amount to be decided by the Company's Compensation Committee and
     approved by the Board, payable no later than September 30th of each year
     during the Employment Period. Such performance bonus compensation shall be
     based upon yearly objectives mutually agreed upon by and between the
     Employee and the Company.

3.3  Stock Options. As additional compensation for services rendered, the
     Company has granted to the Employee, the right and option (the "Option") to
     purchase shares of the Company's Common Stock (the "Option Shares"),
     subject to the vesting schedule set forth in subparagraph c hereof and the
     adjustments set forth in subparagraph g hereof. The Option is intended to
     be, to the maximum extent possible, a qualified incentive stock option,
     subject to the aggregate fair market value and other provisions of the
     Internal Revenue Service Code, as described in the Company's 1996 Stock
     Option Plan (the "Plan"). To the extent there are any inconsistencies
     between this Agreement and the provisions of the Plan, the provisions of
     the Plan shall govern.

(a)  Purchase Price. Except as otherwise provided in subparagraph g hereof, the
     purchase price (the "Option Price") of the Option Shares shall be as stated
     on the option grant as approved by the Company's Board of Directors.

(b)  Option Term. Except as otherwise provided in the Plan or in this Agreement,
     the Option shall expire on the first to occur of: (i) 24 months following
     the Employee's termination of employment, or (ii) 10 years from the
     Commencement Date.

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(c)  Exercise of Options.

(i)  Except as otherwise provided in the Plan and under section 3.3b hereof, the
     right of the Employee to exercise Stock Options is conditioned upon the
     Employee: (A) being in the employ of the Company, whether pursuant to this
     Agreement or otherwise, or (B) serving as a director of the Company.

(ii) Stock Options shall vest (except as otherwise provided in the Plan) per the
     provisions as stated on the option grant as approved by the Company's Board
     of Directors.

(iii) The Options may be exercised, to the extent vested, in whole or in part,
     at any time or times prior to the expiration or other termination thereof.

(d)  Method Of Exercising Options.

(i)  The Option may be exercised by giving written notice, in form substantially
     as set forth in the Company's Stock Option Exercise Form, to the Company at
     its principal office, specifying the number of Option Shares to be
     purchased and accompanied by payment in full of the aggregate purchase
     price for such Option Shares. Only full shares shall be delivered and any
     fractional share which might otherwise be deliverable upon exercise of the
     Option shall be forfeited.

(ii) The purchase price for the Option Shares shall be payable, in cash or its
     equivalent.

(iii) Upon receipt of such notice and payment, the Company, within three (3)
     business days after Exercise, shall deliver or cause to be delivered a
     certificate or certificates representing the Option Shares with respect to
     which the Option is exercised. The certificate or certificates for such
     Option Shares shall be registered in the name of the person exercising the
     Option (or, if the Employee shall so request in the notice exercising the
     Option, in the name of the Employee and his spouse, jointly, with right of
     survivorship) and shall be delivered as provided above to or upon the
     written order of the person exercising the Option.

(iv) In the event the Option is exercised by any person after the death or
     Disability of the Employee, such notice shall be accompanied by appropriate
     proof of the right of such person to exercise the Option. All Option Shares
     purchased upon the exercise of the Option as provided herein shall be fully
     paid and non-assessable by the Company.

(e)  Non-transferability of Option. The Option may not be assigned or
     transferred, in whole or in part, by the Employee, otherwise than by will
     or by the laws of descent and distribution. During the lifetime of the
     Employee, the Option shall be exercisable only by the Employee or, in the
     event of his Disability, by his legal representative.

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(f)  Withholding of Taxes. The obligation of the Company to deliver Option
     Shares upon the exercise of any Option shall be subject to any applicable
     federal, state and local tax withholding requirements.

(g)  Adjustments. The number of Option Shares and the Option Price shall be
     adjusted as set forth herein:

(i)  In the event that a stock dividend shall be declared on the Common Stock
     payable in shares of the Common Stock, the Option Shares shall be adjusted
     by adding to each Option Share the number of shares which would be
     distributed thereon if such Option Share had been outstanding on the date
     fixed for determining the shareholders entitled to receive such stock
     dividend.

(ii) In the event that the outstanding shares of the Common Stock shall be
     changed into or exchanged for a different number or kind of shares of stock
     or other securities of the Company whether through re-capitalization, stock
     split, combination of shares, or otherwise, then there shall be substituted
     for each Option Share the number and kind of shares of stock or the
     securities into which each outstanding share of the Common Stock shall be
     so changed or for which each such share shall be exchanged.

(iii) In the event that the outstanding shares of the Common Stock shall be
     changed into or exchanged for shares of stock or other securities of
     another corporation, whether through reorganization, sale of assets, merger
     or consolidation in which the Company is the surviving corporation, then
     there shall be substituted for each Option Share the number and kind of
     shares of stock or the securities into which each outstanding share of the
     Common Stock shall be so changed or for which each such share shall be
     exchanged.

(h)  Share Ownership. Neither the Employee nor the Employee's legal
     representatives nor the executors or administrators of his estate shall be
     or be deemed to be the holder of any share of Common Stock covered by an
     Option unless and until a certificate for such share shall have been
     issued.

3.4  Fringe-Benefits. The Employee shall be entitled to participate in all
     benefit programs that the Company establishes and makes available to its
     employees, if any, to the extent that the Employee's position, tenure,
     salary, age, health and other qualifications make him eligible to
     participate. The Employee shall also be entitled to holidays and annual
     vacation leave in accordance with the Company's policy as it exists from
     time to time.

3.5  Reimbursement of Expenses. The Company shall reimburse the Employee for all
     reasonable travel, entertainment and other expenses incurred or paid by the
     Employee in connection with, or related to, the performance of his duties,
     responsibilities or services under this Agreement, upon presentation by the
     Employee of documentation, expense statements, vouchers and/or such other
     supporting information as the Company may request, provided however, that
     the amount available for such travel, entertainment and other expenses may
     be fixed in advance by the Board.

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3.6  Insurance. The Employee will be covered under the Company's Directors' and
     Officers' liability insurance to the same extent the Company's directors
     and other officers are covered.

4.0  Employment Termination. The employment of the Employee by the Company
     pursuant to this Agreement shall terminate upon the occurrence of any of
     the following:

4.1  Expiration of the Employment Period in accordance with Section 1;

4.2  At the election of the Company, for Cause (as defined in Section 6),
     immediately upon written notice by the Company to the Employee, which
     notice of termination shall have been approved by a majority of the Board;

4.3  Immediately upon the death or determination of Disability (as defined in
     Section 6) of the Employee;

4.4  At the election of the Employee, for Good Reason (as defined in Section 6),
     immediately upon written notice of not less than sixty (60) days prior to
     termination by the Employee to the Company;

4.5  At the election of the Employee, within twelve (12) months following a
     Change in Control (as defined in Section 6), immediately upon written
     notice by the Employee to the Company;

4.6  At the election of either party, upon written notice of termination (the
     "Notice of Termination").

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5.0  Effect of Termination

5.1  Compensation & Benefits

(a)  As referenced in this section, compensation following the Employee's
     termination shall be in the form of severance. Severance will be based on
     the employee's base salary in effect as of the employee's last day of
     employment, and will be paid in installments in accordance with the
     Company's regular payroll schedule in effect at the time of termination.

(b)  Severance is not considered compensation for purposes of employee and
     employer matching contributions under the 401(k) plan;

(c)  As referenced in this section, upon termination of the Employee's
     employment with the Company, medical and dental benefits will be available
     to the Employee, at his election, solely pursuant to the provisions of
     COBRA with the Company paying the full cost of COBRA coverage for a period
     up to 18 months if employment is terminated for any reason except an
     Employee resignation without Good Reason (as defined in Section 6) and a
     Company discharge for Cause. If the Employee is discharged for Cause or the
     Employee resigns without Good Reason, the Employee will be required to
     remit the COBRA cost (102% of total benefit cost) of coverage.

(d)  Upon termination of the Employee's employment with the Company, apart from
     the Employee's election under COBRA to continue medical and dental benefits
     (as described in Section 5.1c), the Employee will cease to be eligible for
     participation in the Company's health and welfare insurance and any other
     fringe benefit programs that pursuant to their contracts or Company policy
     require an active employee status.

(e)  Upon termination of the Employee's employment with the Company, apart from
     the Employee's election under COBRA to continue medical and dental benefits
     (as described in Section 5.1c), the Employee will cease to be eligible for
     participation in the Company's health and welfare insurance and any other
     fringe benefit programs that pursuant to their contracts or Company policy
     require an active employee status.

5.2  Termination By The Company or at Election of the Employee (other than for
     Good Reason).

(a)  If the Employee elects to terminate his employment (other than for Good
     Reason) pursuant to Section 4.6, no severance and/or benefits shall be
     paid, and the Employee shall be entitled only to receive payment of his
     earned but unpaid salary, and accrued vacation, as of his last day of
     actual employment by the Company (the "Date of Termination");

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(b)  If the Company elects to terminate the Employee (other than for Cause)
     pursuant to Section 4.6, the Company shall pay to the Employee his salary
     in effect at that time for the greater of an twenty-four (24) month period
     following the Date of Termination, or for the duration of the then current
     Employment Period, plus medical and dental benefits (as described in
     Section 5.1c);

(c)  If the Company terminates the Employee for Cause pursuant to Section 4.2,
     no severance and/or benefits shall be paid, and the Employee shall be
     entitled only to receive payment of his earned but unpaid salary, and
     accrued vacation, as of the Date of Termination. Employee may elect COBRA
     medical and dental benefits, in which case the Employee will be required to
     remit the COBRA cost (102% of total benefit cost) of coverage.

5.3  Termination By Employee Election For Good Reason. If the Employee
     terminates employment at his election for Good Reason pursuant to Section
     4.4, the Company shall pay to the Employee his salary in effect at that
     time for the greater of a a twenty-four (24) month period following the
     Date of Termination, or for the duration of the then current Employment
     Period, plus medical and dental benefits (as described in Section 5.1c).

5.4  Termination Following a Change In Control. If the Employee or Company
     terminates the employment relationship following a Change In Control
     pursuant to Section 4.5:

(a)  The Company shall pay to the Employee his annual salary in effect at that
     time in a lump sum amount, calculated at two (2.0) times such annual
     salary, within five (5) business days following the Date of Termination
     plus medical/dental care benefits (as described in Section 5.1c);

(b)  All options to purchase shares of capital stock of the Company previously
     granted to the Employee pursuant to any stock option plan with the Company
     which have not vested at such time shall immediately vest and become fully
     exercisable in accordance with their terms, and shall remain exercisable
     for a period of 24 months following the Date of Termination;

(c)  For a six (6) month period after the Date of Termination, the Company shall
     reimburse the Employee for reasonable fees and expenses incurred by him for
     the purpose of locating employment in an amount, not to exceed $25,000,
     mutually agreed upon by and between the Employee and the Company, including
     the fees and expenses of consultants and other persons retained by him for
     such purpose, promptly, within ten days, receipt by the Company of
     satisfactory evidence of payment of such fees and expenses.

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5.5  Termination by Reason of the Employee's Death or Disability. If, prior to
     the expiration of the Employment Period, the Employee's employment is
     terminated by the Employee's death or Disability pursuant to Section 4.3,
     (a) The Company shall pay to the Employee, or in the case of the Employee's
     death, to the estate of the Employee, the severance and medical and dental
     benefits (as described in Section 5.1c).

(b)  All options to purchase shares of capital stock of the Company previously
     granted to the Employee pursuant to any stock option plan with the Company
     which have not vested at such time shall immediately vest and become fully
     exercisable in accordance with their terms, and shall remain exercisable
     for a period of 24 months following the Date of Termination.

5.6 Withholding and Deductions. (a) All payments hereunder shall be subject to
withholding and to such other deductions as shall at the time of such payment be
required pursuant to any income tax or other law, whether of the United States
or any other jurisdiction, and, in the case of payments to the executors or
administrators to the Employee's estate, the delivery to the Company of all
necessary tax waivers and other documents. (b) In the event the Employee is
required pursuant to Section 4999 of the Internal Revenue Code to pay (through
withholding or otherwise) an excise tax on "excess parachute payments" (as
defined in Section 280G(b) of the Code) made by the Company pursuant to Section
5.4 of this Agreement, the Company shall pay the Employee such additional
amounts as are necessary to place the Employee in the same after tax financial
position that he would have been in if he had not incurred any tax liability
under Section 4999 of the Code. (c) In the event the Employee is required to pay
any federal, state or local income taxes as a result of the Company's payment of
the Employee's COBRA premiums under this Section 5, the Company shall pay the
Employee such additional amounts as are necessary to place the Employee in the
same after-tax financial position that he would have been in if he had not
incurred any such tax liability.

5.7 Release of Claims. The Employee's entitlement to severance, payment of COBRA
premiums, and accelerated vesting of options under any subparagraph of this
Section 5, is contingent upon the Employee's execution of a general release of
claims in a form prepared by the Company and presented to the Employee upon
termination of his employment hereunder, as well as the Employee's compliance
with the provisions of Section 7 hereof.

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5.8  No Requirement to Mitigate. The Employee shall not be required to mitigate
     the amount of any payment provided for in this Section 5 by seeking other
     employment or otherwise.

6.0  Definitions. For purposes of this Agreement the following definitions
     apply:

6.1  "Cause" shall mean the occurrence of any of the following circumstances:

(a)  (i) the Employee's material breach of, or habitual neglect or failure to
     perform the material duties which he is required to perform under, the
     terms of this Agreement; (ii) the Employee's material failure to follow the
     reasonable directives or policies established by or at the direction of the
     Board; or (iii) the Employee's engaging in conduct that is materially
     detrimental to the interests of the Company such that the Company sustains
     a material loss or injury as a result thereof, provided that the breach or
     failure of performance by the Employee under subparagraphs (i) through
     (iii) hereof is not cured, to the extent cure is possible, within ten (10)
     days of the delivery to the Employee of written notice thereof; (b) the
     willful breach by the Employee of Section 7 of this Agreement or any
     provision of any confidentiality, invention and non-disclosure,
     non-competition or similar agreement between the Employee and the Company;
     or (c) the conviction of the Employee of, or the entry of a pleading of
     guilty or nolo contendere by the Employee to, any crime involving moral
     turpitude or any felony.

6.2  "Disability" shall mean the inability of the Employee, by reason of
     illness, accident or other physical or mental disability, for a period of
     120 days, whether or not consecutive, during any 360-day period, to perform
     the services contemplated under this Agreement. A determination of
     disability shall be made by a physician satisfactory to both the Employee
     and the Company; provided, however, that if the Employee and the Company do
     not agree on a physician, the Employee and the Company shall each select a
     physician and these two together shall select a third physician, whose
     determination as to disability shall be binding on all parties.

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6.3  "Good Reason" shall mean the occurrence of any of the following
     circumstances, and the Company's failure to cure such circumstances within
     thirty (30) days of the delivery to the Company of written notice by the
     Employee of such circumstances: (a) any significant diminution in the
     Employee's duties and responsibilities as described in Section 2.1 hereof,
     or assignment of duties and responsibilities inconsistent with the
     Employee's position;

(b)  any reduction in the Employee's salary as in effect on the Commencement
     Date or as the same may be increased from time to time;

(c)  the failure of the Company to continue in effect any material compensation
     or benefit plan in which the Employee participates as in effect on the
     Commencement Date, unless an equitable arrangement (embodied in an ongoing
     substitute or alternative plan) has been made with respect to such plan, or
     the failure by the Company to continue the Employee's participation therein
     (or in such substitute or alternative plan) on a basis not materially less
     favorable, both in terms of the amount of benefits provided and the level
     of the Employee's participation relative to other participants, as in
     effect on the Commencement Date;

(d)  the failure by the Company to continue to provide the Employee with
     benefits substantially similar to those enjoyed by the Employee under any
     of the Company's health and welfare insurance, retirement and other
     fringe-benefit plans insurance, which the Employee was participating as in
     effect on the Commencement Date, the taking of any action by the Company
     which would directly or indirectly materially reduce any of such benefits,
     or the failure by the Company to provide the Employee with the number of
     paid vacation days to which he is entitled in accordance with the Company's
     normal vacation policy in effect on the Commencement Date or in accordance
     with any agreement between the Employee and the Company existing at that
     time; or

(e)  the relocation of the Employee to a location which is greater than fifteen
     (15) miles from Cranbury, New Jersey.

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6.4  "Change in Control" shall mean the occurrence of any of the following
     events:

(a)  any "person," as such term is used in Sections 13(d) and 14(d) of the
     Securities Exchange Act of 1934, as amended (the "Exchange Act") (other
     than the Company, any trustee or other fiduciary holding securities under
     an employee benefit plan of the Company, or any corporation owned directly
     or indirectly by the stockholders of the Company in substantially the same
     proportion as their ownership of stock of the Company) is or becomes the
     "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
     directly or indirectly, of securities of the Company representing 50% or
     more of the combined voting power of the Company's then outstanding
     securities;

(b)  individuals who, as of the Commencement Date, constitute the Board (the
     "Incumbent Board") cease for any reason to constitute at least a majority
     of the Board, provided that any person becoming a director subsequent to
     the Commencement Date whose election, or nomination for election by the
     Company's stockholders, was approved by a vote of at least a majority of
     the directors then comprising the Incumbent Board (other than an election
     or nomination of an individual whose initial assumption of office is in
     connection with an actual or threatened election contest relating to the
     election of the directors of the Company, as such terms are used in Rule
     14a-11 of Regulation 14A under the Exchange Act) shall be, for purposes of
     this Agreement, considered as though such person were a member of the
     Incumbent Board;

(c)  the stockholders of the Company approve a merger or consolidation of the
     Company with any other corporation, other than (i) a merger or
     consolidation which would result in the voting securities of the Company
     outstanding immediately prior thereto continuing to represent (either by
     remaining outstanding or by being converted into voting securities of the
     surviving entity) more than 80% of the combined voting power of the voting
     securities of the Company or such surviving entity outstanding immediately
     after such merger or consolidation or (ii) a merger or consolidation
     effected to implement a re-capitalization of the Company (or similar
     transaction) in which no "person" (as defined in Section 6.4(a)) acquires
     more than 50% of the combined voting power of the Company's then
     outstanding securities; or

(d)  a sale of all or substantially all of the assets of the Company.

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7.0  Restrictive Covenants

(a)  For the purposes of this Agreement:

(i)  "Competing Products" means any products or processes of any person or
     organization other than the Company in existence or under development,
     which are substantially the same, may be substituted for, or applied to
     substantially the same end use as the products or processes that the
     Company is developing or has developed or commercialized during the time of
     the Employee's employment with the Company.

(ii) "Competing Organization" means any person or organization engaged in, or
     with definitive plans to become engaged in, research or development,
     production, distribution, marketing or selling of a Competing Product.

(b)  The Employee acknowledges that he has, on or prior to the date of the
     Agreement, executed and delivered to the Company an Employee Agreement on
     Confidentiality, Intellectual Property, Debarment Certification and
     Conflict of Interest (the "Confidentiality Agreement") and the Employee
     hereby affirms and ratifies his obligations thereunder; and the Employee
     agrees that after termination by the Company for Cause pursuant to Section
     4.2 (except in the case where such termination occurs within 12 months
     following a Change in Control), by the Employee pursuant to Section 4.6, or
     by either party upon expiration of the Employment Period, he will not
     render services of any nature, directly or indirectly, to any Competing
     Organization in connection with any Competing Product within any
     geographical territory as the Company and such Competing Organization are
     or would be in actual competition, for a period of six (6) months,
     commencing on the Date of Termination.

(c)  The Employee agrees that he will not, during the Employment Period and for
     a period of nine (9) months commencing on the Date of Termination, directly
     or indirectly employ, solicit for employment, or advise or recommend to any
     other person that they employ or solicit for employment, any person whom he
     knows to be an employee of the Company or any parent, subsidiary or
     affiliate of the Company.

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(d)  In the event a court of competent jurisdiction should find any provision in
     this Section 7 to be unfair or unreasonable, such finding shall not render
     such provision unenforceable, but, rather, this provision shall be modified
     as to subject matter, time and geographic area so as to render the entire
     section valid and enforceable.

8.0  Notices. All notices required or permitted under this Agreement shall be in
     writing and shall be deemed effective upon either: (a) personal delivery;
     or (b) three (3) days following deposit in the United States Post Office
     for delivery by registered or certified mail, postage prepaid, or one (1)
     day following deposit with a reputable overnight courier service, addressed
     to the other party at the address shown above, or at such other address or
     addresses as either party shall designate to the other in accordance with
     this Section 8.

9.0  Pronouns. Whenever the context may require, any pronouns used in this
     Agreement shall include the corresponding masculine, feminine or neuter
     forms, and the singular forms of nouns and pronouns shall include the
     plural, and vice versa.

10.0 Entire Agreement. This Agreement, together with the "Confidentiality
     Agreement", constitutes the entire agreement between the parties and
     supersedes all prior agreements and understandings, whether written or
     oral, relating to the subject matter of this Agreement.

11.0 Amendment. This Agreement may be amended or modified only by a written
     instrument executed by both the Company and the Employee.

12.0 Governing Law. This Agreement shall be construed, interpreted and enforced
     in accordance with the laws of New Jersey, without regard to its principles
     of conflict of laws.

13.0 Successors and Assigns. This Agreement shall be binding upon and inure to
     the benefit of both parties and their respective successors and assigns,
     including any corporation with which or into which the Company may be
     merged or which may succeed to its assets or business; provided, however,
     that the obligations of the Employee are unique and personal and shall not
     be assigned by him.

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14.0 Waiver of Breach.

14.1 Waiver by the Company. No delay or omission by the Company in exercising
     any right under this Agreement shall operate as a waiver of that or any
     other right. A waiver or consent given by the Company on any one occasion
     shall be effective only in that instance and shall not be construed as a
     bar or waiver of any right on any other occasion. No waiver by the Company
     shall be valid unless in writing signed by an authorized officer of the
     Company and approved by a majority of the Board.

14.2 Waiver by the Employee. No delay or omission by the Employee in exercising
     any right under this Agreement shall operate as a waiver of that or any
     other right. A waiver or consent given by the Employee on any one occasion
     shall be effective only in that instance and shall not be construed as a
     bar or waiver of any right on any other occasion. No waiver by the Employee
     shall be valid unless in a writing signed by the Employee.

15.0 Miscellaneous.

15.1 The captions of the sections of this Agreement are for convenience of
     reference only and in no way define, limit or affect the scope or substance
     of any section of this Agreement.

15.2 In case any provision of this Agreement shall be invalid, illegal or
     otherwise unenforceable, the validity, legality and enforceability of the
     remaining provisions shall in no way be affected or impaired thereby.

16.0 Survival. The provisions of Sections 3.3, 5, 6, 7 and 8 shall survive the
     termination of this Agreement.

17.0 Attorney's Fees. The Company shall reimburse the Employee for all legal
     fees and expenses associated with the negotiation and drafting of this
     Agreement, upon reasonable documentation thereof, up to a maximum of
     $5,000.

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<PAGE>


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as an
instrument under seal as of the day and year set forth above.


PALATIN TECHNOLOGIES, INC.                   EMPLOYEE

By:_____________________________             ________________________________
Name: John Prendergast                        Carl Spana
Title: Chairman of the Board                  Chief Executive Officer/President

Date:____________________________            Date: ____________________________


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