DEVELOPMENT
AND MANUFACTURING AGREEMENT

This Development and Manufacturing
Agreement is dated as of _________________

|BY AND BETWEEN: | Palatin Technologies, Inc., a Delaware corporation, having an address of 4-C Cedar
          Brook Drive, Cedar Brook Corporate Center, Cranbury, NJ 08512 (hereinafter referred to as "Palatin");
|--------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|AND: | DSM Biologics Company B.V., a company incorporated under Dutch law, having a
          registered address of Zuiderweg 72/2, Groningen, The Netherlands (hereinafter referred to as "DSM Biologics");
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Palatin and DSM Biologics hereinafter
sometimes individually referred to as Party and collectively as
Parties.

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# SECTION 1  PREAMBLE

WHEREAS, Palatin has a Product and a
basic process for manufacturing the Product and wishes to have this process developed
further and have manufactured one or more Batches of Product under cGMP conditions that
meet regulatory requirements;

WHEREAS, DSM Biologics has expertise
and know-how in the area of development and cGMP production of biopharmaceutical products
and is willing to perform such development and manufacturing activities for Palatin with
respect to the Product;

WHEREAS, Palatin wishes, subject to
the execution of a separate final contract acceptable to the Parties, to have DSM
Biologics also perform (if any) the commercial manufacturing and supply of Product;

WHEREAS, Palatin and DSM have been
working together under the Manufacturing Agreement (as defined below) and most recently
signed a Letter Agreement (as defined below), outlining the intent of Parties to terminate
the Manufacturing Agreement and to terminate the Letter Agreement, which Letter Agreement
will be superceded by this Development and Manufacturing Agreement governing the
collaboration between Parties,

NOW, THEREFORE, IN CONSIDERATION OF
THE MUTUAL COVENANTS AND AGREEMENTS HEREIN CONTAINED, IT IS HEREBY AGREED BY THE PARTIES
HERETO AS FOLLOWS:

# SECTION 2 
DEFINITIONS

In this Agreement the following
terms, whether used in the singular or plural, shall, as used herein, have the following
respective meanings:

Acceptance has the
meaning ascribed thereto in Section 5.3. Accept and Accepted shall
be similarly defined as Acceptance of either RB5 Bulk Drug Substance or of
Intermediate Drug Product;

Affiliate means
any individual, company, partnership or other entity, which directly or indirectly, at
present or in the future, controls, is controlled by or is under common control with a
Party. For this purpose control shall mean direct or indirect beneficial
ownership of at least fifty per cent (50%) of the voting share capital in such company or
other business entity. With respect to DSM Biologics, in this section Party
shall mean DSM N.V. of Heerlen, The Netherlands;

Agreement means
this Development and Manufacturing Agreement, including all the Schedules and annexes
hereto;

Batch means a
unique specific quantity of materials as defined by and processed according to the
requirements of the batch production records and all applicable cGMP requirements during
the same cycle of manufacture. The Batch is intended to have homogeneous character and
quality, as defined by the approved limits and specification requirements;

Batch Records
means documents containing written evidence of the activities that have been executed for
the manufacture of a Batch, including materials used and results of in-process testing;

Bill of Testing
means a [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.];

CCN means a
[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];

Cell Clones means
the [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.];

Certificate of
Analysis means the [INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION UNDER RULE 24b-2.];

cGMP means current
good manufacturing practices and general biological products standards, including the
regulations promulgated under the United States Federal Food Drug and Cosmetic Act, 21 CFR
§§ 210 et seq., as amended from time to time, applicable guidance
documents issued by the United States Food and Drug Administration (FDA),
applicable documents developed by the International Conference on Harmonization
(ICH), and similar requirements of other countries to the extent that they are
applicable;

Claims means any
and all claims, demands, losses, obligations, liabilities, damages, deficiencies, actions,
settlements, judgments, costs and expenses, which a Party may incur or suffer (including
reasonable costs and legal fees incident thereto or in seeking indemnification therefore);

Consistency Run
means a Production Run performed as part of a Consistency Series as further defined in the
validation protocols;

Consistency Series
means [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.];

Costs means
[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];

Defaulting Party
has the meaning ascribed thereto in Section 15.5;

[INFORMATION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];

Documents
means the Specifications, Bill of Testing, Batch Records and Certificate of Analysis;

2

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DSM Biologics
means DSM Biologics Company B.V;

DSM Biologics
Technology means any and all current and future Intellectual Property Rights
proprietary to DSM Biologics and used by or disclosed by DSM Biologics in the process of
performing the Project, pertaining to fermentation, primary recovery and purification of
biopharmaceutical products and related analytics;

Effective Date
shall have the meaning defined in Section 15.1;

Force Majeure has
the meaning ascribed thereto in Section 20;

Intellectual Property
Rights means, whether or not protected or protectable under any particular law,
all patents, patent applications, patentable subject matter, copyrights, copyrightable
subject matter, ideas, inventions, discoveries, devices, designs, apparatuses, practices,
processes, methods, products, cell lines, samples, trade secrets, technology, know-how,
software, hardware, improvements, trademarks and service marks (and the goodwill
pertaining thereto);

Invoice means an
itemized bill sent by DSM Biologics to Palatin for performance of DSM Biologics
obligations under this Agreement, such bill to be finalized according to the procedures
set forth in Annex 2;

Letter Agreement
means the [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.];

Manufacturing
Agreement means the [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.];

Manufacturing Work
means the [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.];

Manufacturing
Instructions means the production protocols and all amendments thereto for
manufacturing of Product, as agreed upon between the Parties;

Manufacturing Slot
means the timeframe allotted according to the Schedule for the performance of a
cGMP Production Run at DSM Biologics;

Milestone means a
specific milestone of the Project, as described in more detail in the Schedule;

Palatin Process
means the process of manufacturing the Product, at the Effective Date at 50 liter
fermentation scale, which is proprietary to Palatin as of the date of this Agreement;

Palatin Proprietary
Information has the meaning ascribed thereto in Section 14.1;

3

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Palatin Technology
means any and all current and future Intellectual Property Rights proprietary to or
licensed to Palatin and used by or disclosed to DSM Biologics during the term of this
Agreement;

Parties means DSM
Biologics and Palatin collectively;

Party means either
DSM Biologics or Palatin;

[INFORMATION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];

Price means
[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];

Process means
[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];

Product means [INFORMATION
OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];

Production Run
means [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.];

Project
means[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.], to be performed by DSM Biologics in connection with the Palatin Process, as
further described in the Schedule, to be agreed upon between the Parties;

Project Manager
means the individual assigned to the Project by a Party who will be responsible on behalf
of the respective Party for the scientific and technical components of the Project as set
forth herein;

QA Manager means
the individual employed by each Party to monitor quality assurance and quality control;
more specifically, the individuals identified in the QA Schedule;

QA Schedule means
the Quality Assurance Schedule attached hereto as Annex 4, incorporating all
material quality assurance and quality control obligations and responsibilities for the
Parties;

RB5 Bulk Drug
Substance means [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
UNDER RULE 24b-2.];

RB5 Intermediate Drug
Product means [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
UNDER RULE 24b-2.];

Scheduleshall mean [INFORMATION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]; and

4

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Specifications
means [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.].

# SECTION 3 
OBJECTIVES AND OBLIGATIONS OF THE PARTIES

|3.1 | Subject to the terms and conditions of this Agreement, Palatin hereby engages DSM
Biologics to carry out the Project and DSM Biologics, subject to the terms and conditions
of this Agreement, hereby undertakes to use commercially reasonable efforts to carry out
the Project in accordance with the Schedule and Annexes attached hereto and a part
hereof.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 | The Project includes the manufacture by DSM Biologics of [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.].
|--- | ------------------------------------------------------------------------------------------------------------------------------------------

|3.3 | The Parties hereby acknowledge and agree that there is no guarantee:
|--- | --------------------------------------------------------------------

| | (a) | that the Product, Palatin Process or the Process will be suitable for any
               intended purpose of Palatin, commercially exploitable, profitable or approved by
               any regulatory authority;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | that the Milestones (if any) identified in the Scheduleto this Agreement
               will be achieved; or
| | --- | ------------------------------------------------------------------------------------------------------------

| | (c) | that, unless agreed upon otherwise, any Product resulting from the Project will
               fulfill certain specifications, certain yields or will be delivered in time for
               any further use or clinical programs intended therefore by Palatin.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.4 | Palatin shall timely provide the Palatin Process and all Palatin Technology necessary for
the execution of the Project as well as, if so requested by DSM Biologics, provide
reasonable technical assistance needed by DSM Biologics for the execution of the Project.
In addition, Palatin shall timely submit to DSM Biologics one or more Cell Clones for the
manufacture of Product, if applicable, and all documentation and data reasonably required
by DSM Biologics for the execution of this Agreement.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.5 | Any material change to the Project shall not take effect unless approved by Palatin in
writing as part of a CCN.
|--- | ----------------------------------------------------------------------------------------------------------------

# SECTION 4 
EXECUTION OF THE PROJECT  [INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION UNDER RULE 24b-2.]

|4.1 | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
|--- | --------------------------------------------------------------------------------

|4.2 | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
|--- | --------------------------------------------------------------------------------

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|4.3 | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
|--- | --------------------------------------------------------------------------------

|4.4 | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
|--- | --------------------------------------------------------------------------------

# SECTION 5 
EXECUTION OF THE PROJECT  MANUFACTURING WORK

|5.1 |  | If the Parties make a Decision to Proceed according to Section 4.3, DSM Biologics shall
commence performance of the Manufacturing Work under the Project, subject to the receipt
by DSM Biologics of the payments as set forth in Section 6.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | For each Production Run, DSM Biologics shall use reasonable efforts and applicable quality assurance procedures to
               provide all related Documents to Palatin (i) within [INFORMATION OMITTED AND FILED SEPARATELY WITH THE
               COMMISSION UNDER RULE 24b-2.]; (ii) within [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
               UNDER RULE 24b-2.]; and (ii)
               [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER
               RULE 24b-2.]. However, if the relevant Documents are available any sooner,
               these will be provided to Palatin.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | DSM Biologics shall notify Palatin promptly if it expects that completion of any
               part of the Manufacturing Work will not be possible within the timeframe
               described in the Schedule, whereupon such matter shall be referred to the
               Steering Committee for determination of any remedies. If the Steering Committee
               cannot agree upon a remedy in reasonable time, such matter shall be referred to
               the CEOs of the respective Parties for discussion.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5.2 | (a) | The Product to be manufactured during the Manufacturing Work (as described in the
Schedule) shall be manufactured in accordance with [INFORMATION OMITTED AND
FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.].
|--- | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | If, based upon such tests, DSM Biologics reasonably concludes that a Batch of Product conforms to the Specifications and was
manufactured according to cGMP and the Manufacturing Instructions, a Certificate of Analysis will be completed and approved by the
quality assurance department of DSM Biologics. This Certificate of Analysis, which includes a statement of compliance with cGMP
and the Manufacturing Instructions, and all other Documents, will be delivered to Palatin for each Batch of Product. DSM Biologics
shall sample each Batch according to the Bill of Testing. Retained samples, taken by DSM Biologics according to the Bill of
Testing, shall be stored in accordance with the Bill of Testing and DSM Biologics standard operating procedures for
[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.].
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|5.3 |  | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
|--- |  | --------------------------------------------------------------------------------

| | (a) | With respect to RB5 Bulk Drug Substance, DSM Biologics shall store each Batch of
               RB5 Bulk Drug Substance according to cGMP requirements. Responsibility for the
               Batch shall remain with DSM Biologics as long as such Batch is stored by DSM
               Biologics.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.]
| | --- | -----------------------------------------------------------------------------------------------

| | (c) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.].
| | --- | ------------------------------------------------------------------------------------------------

|5.4 | If there is any dispute between the Parties as to whether Product (i) complies with the
Specifications, (ii) was manufactured in compliance with the Manufacturing Instructions,
(iii) was manufactured or stored in compliance with cGMP, (iii) has defects resulting from
the acts or omissions of Palatin after delivery of Product or (iv) any combination of the
foregoing, a sample of the rejected Product and a sample retained by DSM Biologics as set
forth above shall be exchanged between Palatin and DSM Biologics for a counter-check. If
such counter-check does not resolve the dispute, a sample of the rejected Product and a
sample retained by DSM Biologics shall be submitted to an independent, qualified
third-party laboratory that is mutually acceptable and selected by the Parties promptly
and in good faith. Such laboratory shall determine whether the rejected Product met the
Specifications at the time of delivery by DSM Biologics to the carrier and such
laboratorys determinations shall be final and determinative for purposes of this
Agreement save for manifest error. The Party against whom the laboratory rules shall bear
all costs of the third party laboratory activities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5.5 |  | Notwithstanding the provisions of Section 5.4 above, if there is any dispute concerning
only whether Product was manufactured or stored in compliance with cGMP, the QA Managers
of the Parties shall discuss in good faith to attempt to resolve such dispute. If the QA
Managers of the Parties fail to reach agreement in reasonable time, such dispute shall be
submitted to the Steering Committee, as defined in Section 7.6 of this Agreement. If the
Steering Committee fails to reach agreement in reasonable time, such dispute shall be
submitted to an independent, qualified third-party expert that is mutually acceptable and
selected by the Parties promptly in good faith. Such expert shall determine whether the
rejected Product was manufactured and stored in compliance with cGMP and such
experts determinations shall be final and determinative for purposes of this
Agreement save for manifest error. The Party against whom the expert rules shall bear all
costs of the experts activities. [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.]
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5.6 |  | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
|--- |  | --------------------------------------------------------------------------------

7

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| | (a) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.].
| | --- | ------------------------------------------------------------------------------------------------

| | (b) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.].
| | --- | ------------------------------------------------------------------------------------------------

| |  | i) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.].
| |  | -- | ------------------------------------------------------------------------------------------------

| |  | ii) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.].
| |  | --- | ------------------------------------------------------------------------------------------------

| |  | iii) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.].
| |  | ---- | ------------------------------------------------------------------------------------------------

| | (c) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.].
| | --- | ------------------------------------------------------------------------------------------------

# SECTION 6  PRICE
AND PAYMENTS

|6.1 |  | (a) |  | It is understood between the Parties that the Price for the Project shall be based
upon the assumptions contained in the Schedulehereto. If, during the execution of
the Project, the Parties agree that these assumptions are not correct, any change in the
assumptions or the Price shall be made using a CCN.
|--- |  | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (b) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.].
| |  | --- | ---------------------------------------------------------------------------------

| |  | (c) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.].
| |  | --- | ---------------------------------------------------------------------------------

| |  | (d) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]. Each Party shall promptly notify the
other Party in the event of a regulatory change relevant to the Project.
| |  | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6.2 | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
|--- | --------------------------------------------------------------------------------

|6.3 | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
|--- | --------------------------------------------------------------------------------

|6.4 | The Costs for the activities for a specific Milestone of the Project shall be invoiced to
Palatin [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6.5 | All Invoices shall be paid by Palatin within [INFORMATION OMITTED AND FILED SEPARATELY
WITH THE COMMISSION UNDER RULE 24b-2.] of receipt of any such Invoice by
Palatin. Payments shall be made by wire transfer to the bank account specified on the
Invoice. [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER
RULE 24b-2.].
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8

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|6.6 | Notwithstanding anything to the contrary herein, any change in Price or Cost
[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.].
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

# SECTION 7 
MANAGEMENT OF THE PROJECT

|7.2 | The Parties shall work together through the respective Project Managers to ensure the
satisfactory completion of the Project.
|--- | -----------------------------------------------------------------------------------------------------------------------------

|7.3 | Each Project Manager shall be entitled to propose recommendations to the Parties to ensure
that the Project meets its objectives.
|--- | ---------------------------------------------------------------------------------------------------------------------------------

|7.4 | Each Project Manager shall be in charge of all scientific and technical components of the
Project within its own organization and shall maintain communication with the other Party
in connection therewith.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7.5 | Each Party intends and shall use reasonable efforts not to replace its Project Manager
and, in case of replacement, to timely notify the other Party of such replacement.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7.6 | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
|--- | --------------------------------------------------------------------------------

|7.7 | DSM Biologics shall permit any Palatin employee so authorized by Palatin, under
appropriate confidentiality provisions reasonably acceptable to DSM Biologics, to visit,
during regular business hours, the site where the Project is being conducted to inspect
such site or to evaluate the progress thereof, unless such visit would conflict with a
prearranged visit by another client or an inspection by or for another client. Said visit
shall only be made subject to ten (10) business days prior written notice of the
requirement of such visit, such notice to be given to DSM Biologics by Palatin. Under
certain circumstances DSM will allow Palatin to visit with limited notification. DSM
Biologics shall also permit any such Palatin employee access to any DSM Biologics employee
working on or who has worked on the Project, subject to DSM Biologics approval,
which shall not be unreasonably withheld.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.]
| | --------------------------------------------------------------------------------

9

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|7.8 | The DSM Biologics Project Manager will use project management tools to manage and communicate the progress relating to the
Project. The DSM Biologics Project Manager will:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];
| | --- | ---------------------------------------------------------------------------------

| | (b) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];
| | --- | ---------------------------------------------------------------------------------

| | (c) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];
| | --- | ---------------------------------------------------------------------------------

# SECTION 8  RECORDS
AND REPORTS

DSM Biologics hereby undertakes that
it shall have the Project Manager submit to Palatin, at the times identified in the
Schedule, a report detailing the progress and results of the Project and
highlighting any issues encountered during the previous period in form and substance
acceptable to Palatin.

# SECTION 9  AUDITS
AND REGULATORY APPROVALS

|9.1 | DSM Biologics grants Palatin the right to perform a financial review, at any reasonable
time, of the allocation of hours and occupancy and Costs involved in the Project. Palatin
may appoint third parties to perform such review, provided Palatin warrants that such
third party will abide by confidentiality and non-use obligations no less stringent than
those contained in this Agreement and provided that DSM Biologics shall approve of such
third party in writing, such approval not to be unreasonably or untimely withheld. Palatin
will notify DSM Biologics at least ten (10) business days in advance of such review by
Palatin and twenty (20) days in advance of such a review by a third party.If such
review reveals that DSM Biologics has overcharged Palatin, whether in Price or Costs, DSM
Biologics shall promptly reimburse Palatin such overcharge and interest at twelve percent
(12%) per annum. [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.]
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9.2 | DSM Biologics grants Palatin the right to perform quality assurance audits, at any
reasonable time, of the facilities employed and the documentation utilized by DSM
Biologics for performing the Project. Palatin may appoint third parties to perform such
audit, provided Palatin warrants that such third party will abide by confidentiality and
non-use obligations no less stringent than those contained in this Agreement and provided
that DSM Biologics shall approve of such third party in writing, such approval not to be
unreasonably or untimely withheld. Palatin will notify DSM Biologics at least twenty (20)
days in advance of such an audit by Palatin and thirty (30) days in advance of such an
audit by a third party. Under certain circumstances DSM will allow Palatin to audit with
limited notification.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

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| | If such visit reveals cGMP compliance deficiencies, a visit report will be submitted to the
DSM Biologics QA Manager and within thirty (30) days a report will be provided to Palatin
detailing the corrective action plan. If, as a result of any visit by Palatin to the
facilities of DSM Biologics, Palatin notes any deficiency, the correction of which is
reasonably necessary for the progress of the Project, then an immediate response by DSM
Biologics is warranted and an investigation shall be initiated immediately so that
corrective action may be taken by DSM Biologics.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9.3 | DSM Biologics shall promptly provide copies of any and all part of reports regarding any
regulatory agency inspections, in as far as such parts of reports could reasonably affect
DSM Biologics performance under this Agreement or the timely and successful
completion of any Milestone or the Project.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# SECTION 10 
SUBCONTRACTING

DSM Biologics shall not be entitled
to subcontract portions of the Project to any third party or Affiliate without
Palatins prior written permission thereto, which permission shall not be
unreasonably or untimely withheld.

# SECTION 11 
INTELLECTUAL PROPERTY RIGHTS

|11.1 | Palatin declares that it has title to or the right to make available the Palatin
Technology to DSM Biologics. DSM Biologics shall use the Palatin Technology solely for the
purpose of performing the Project.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11.2 | All Palatin Technology shall be the sole and exclusive property of Palatin. All DSM
Biologics Technology shall be the sole and exclusive property of DSM Biologics.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11.3 | (a) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.]
|---- | --- | --------------------------------------------------------------------------------

11

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|11.4 | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.]
|---- | --------------------------------------------------------------------------------

|11.5 | (a) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.]
|---- | --- | --------------------------------------------------------------------------------

| | (b) | Palatin shall have the right, but not the obligation, at its own expense, to
               bring suit or other appropriate legal action against any actual or suspected
               infringement of Palatin Technology. DSM Biologics shall have the right, but not
               the obligation, at its own expense, to bring suit or other appropriate legal
               action against any actual or suspected infringement of DSM Biologics Technology.
               The Party bringing the suit shall have the right to settle such suit. Any amount
               recovered, whether by judgment or settlement, shall be allocated to the Party
               bringing suit.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# SECTION 12 
REPRESENTATIONS, WARRANTIES AND COVENANTS

|12.1 | DSM Biologics hereby represents and warrants to Palatin that on the date of this Agreement:
|---- | -------------------------------------------------------------------------------------------

| | (a) | It is a corporation duly organized, validly existing and in good standing under
               the laws of The Netherlands, and has full corporate power to conduct the
               business in which it is presently engaged and to enter into and perform its
               obligations under this Agreement.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | It has taken all necessary corporate action under the applicable laws and its
               articles of incorporation and bylaws to authorize the execution by its
               undersigned officers and consummation of this Agreement. This Agreement shall
               constitute a valid and legally binding agreement, enforceable against it in
               accordance with its terms, subject to bankruptcy, insolvency, fraudulent
               transfer, reorganization, moratorium and similar laws of general applicability
               relating to or affecting creditors rights and to general equity
               principles.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | To its knowledge, the conduct by it of the activities contemplated by the
               Project in accordance with this Agreement will not infringe upon the rights of
               any third party, nor conflict with any law or regulation applicable to DSM
               Biologics.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

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|12.2 | Palatin hereby represents and warrants to DSM Biologics that on the date of this Agreement:
|---- | -------------------------------------------------------------------------------------------

| | (a) | It is a corporation duly organized, validly existing and in good standing under
               the laws of the state of Delaware and has full corporate power to conduct the
               business in which it is presently engaged and to enter into and perform its
               obligations under this Agreement.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | It has taken all necessary corporate action under the applicable laws and its
               articles of incorporation and bylaws to authorize the execution by its
               undersigned officers and the consummation and delivery of this Agreement. This
               Agreement shall constitute a valid and legally binding agreement, enforceable
               against it in accordance with its terms, subject to bankruptcy, insolvency,
               fraudulent transfer, reorganization, moratorium and similar laws of general
               applicability relating to or affecting creditors rights and to general
               equity principles.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | To its knowledge, the conduct by it of the activities contemplated by the
               Project in accordance with this Agreement will not infringe upon the rights of
               any third party, nor conflict with any law or regulation applicable to Palatin.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12.3 | (a) | DSM Biologics covenants that the Product:
|---- | --- | -----------------------------------------

| |  | i) | will not be adulterated or misbranded under the Federal Food, Drug and Cosmetic
               Act, 21 U.S.C. §§ 321 et seq., as amended from time to time
               (FFDCA), or under any other applicable laws, rules, regulations or
               requirements and
| |  | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | ii) | will not be manufactured in violation of any agreement (commercial or
               otherwise), judgment, order or decree to which any of DSM Biologics, its
               consultants or other subcontractors are parties.
| |  | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | DSM Biologics covenants that during the term of this Agreement it shall not
               violate, or cause Palatin to violate, the US Foreign Corrupt Practices Act, as
               amended.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12.4 | DSM Biologics represents and warrants to Palatin that it will use Palatin Technology exclusively for the Project.
|---- | -----------------------------------------------------------------------------------------------------------------

|12.5 | DSM Biologics represents and warrants to Palatin that as of the date of this Agreement, to
its knowledge, the use of DSM Biologics Technology or third party technology to perform
DSM Biologics obligations under this Agreement does not infringe any third party
Intellectual Property Rights and DSM Biologics does not know of any pending or threatened
legal actions relating to DSM Biologics Technology.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12.6 | DSM Biologics acknowledges that DSM Biologics shall take reasonable steps to ensure that
neither its employees and agents nor any other party reproduces the cell line or develops
any derivative or variant thereof without the express written consent of Palatin.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

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# SECTION 13  NO
WARRANTY; LIABILITY AND INDEMNIFICATION

|13.1 | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
|---- | --------------------------------------------------------------------------------

|13.2 | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
|---- | --------------------------------------------------------------------------------

|13.3 | (a) | Palatin shall indemnify, defend and hold harmless DSM Biologics and its Affiliates against and in respect of:
|---- | --- | -------------------------------------------------------------------------------------------------------------

| |  | i) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]; or
| |  | -- | ------------------------------------------------------------------------------------

| |  | ii) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]; or
| |  | --- | ------------------------------------------------------------------------------------

| |  | iii) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.].
| |  | ---- | ---------------------------------------------------------------------------------

| | (b) | DSM Biologics shall indemnify, defend and hold harmless Palatin and its Affiliates against and in respect of:
| | --- | -------------------------------------------------------------------------------------------------------------

| |  | i) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]; or
| |  | -- | ------------------------------------------------------------------------------------

| | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
| | --------------------------------------------------------------------------------

|13.4 | (a) | Furthermore, Palatin agrees to indemnify DSM Biologics and its Affiliates and save and
hold it harmless from and against any Claims which DSM Biologics is or may become liable
for or may incur or may be called upon to pay or may pay and that result from the
infringement of any Palatin Intellectual Property Rights through the conduct by DSM
Biologics or its subcontractors of the Project, provided that DSM Biologics notifies
Palatin immediately of any demand, claim, action, suit or other proceeding. Palatin shall
however not be liable to indemnify or hold harmless DSM Biologics for payment of any
settlement unless Palatin has consented to the settlement.
|---- | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Either indemnifying Party shall have the right to assume the defense of any
               demand, claim, action, suit or proceeding brought against the indemnified Party
               by reason of any of the foregoing indemnifications and pay any and all damages
               assessed or that are payable by the indemnified Party as a result of the
               disposition of any such demand, claim, action, suit or proceeding, provided it
               shall consult with the indemnified Party regularly on the status of the
               proceeding and intended line of defense. Any amount recovered, whether by
               judgment or settlement, shall be allocated to the indemnifying Party.
               Notwithstanding the foregoing, the indemnified Party may be represented in any
               such action, suit or proceeding at its own expense and by its own counsel.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

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# SECTION 14 
CONFIDENTIALITY

|14.1 | DSM Biologics shall maintain the confidentiality of the Palatin Technology, the Documents,
the Manufacturing Instructions, the Palatin Process, all other information and data
obtained directly or indirectly from Palatin, including all information and data obtained
from Palatin by DSM pursuant to the Manufacturing Agreement or Letter Agreement (together,
the Palatin Proprietary Information) and Palatin shall maintain the
confidentiality of the DSM Biologics Technology and any and all other information and data
obtained directly or indirectly from DSM Biologics and the Parties shall not in any way or
at any time make use thereof for any purpose other than (i) pursuant to and in order to
carry out the terms and objectives of this Agreement or (ii) with respect to Palatin only,
to share the same with Mallinckrodt.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14.2 | DSM Biologics obligations contained in Section 14.1 shall not apply to Palatin
Proprietary Information, and Palatins obligations contained in Section 14.1 shall
not apply to DSM Biologics Technology which:
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | at the time of disclosure either is or was part of the public knowledge or
               literature;
| | --- | -----------------------------------------------------------------------------------------------------

| | (b) | after disclosure becomes part of the public knowledge or literature through no
               fault or action of the receiving Party;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------

| | (c) | the receiving Party can establish by documentary evidence either such
               information is or was at the time of disclosure in its lawful possession from a
               source other than the disclosing Party;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | after disclosure is acquired by the receiving Party from a third party who was
               not known to have obtained such Palatin Proprietary Information respectively DSM
               Biologics Technology, directly or indirectly, from the disclosing Party;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e) | is independently developed by Palatin or DSM Biologics without the use of DSM
               Biologics Technology or Palatin Proprietary Information, respectively.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14.3 | The obligations set forth under Section 14.1 shall, furthermore, not apply to Palatin
Proprietary Information or DSM Biologics Technology which the receiving Party is required
to disclose in initiating, prosecuting or defending litigation or in complying with
applicable governmental regulations, provided that (i) such the disclosing Party uses its
reasonable effort to obtain confidential treatment for all information to be disclosed
whether by agreement by the receiving party or by seeking all applicable governmental or
judicial protection available for like material and (ii) reasonable advance notice is
given to the nondisclosing Party. For the sake of clarity it is understood between the
Parties that the obligations set forth under Section 14.1 shall otherwise remain
applicable.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14.4 | DSM Biologics shall not disclose Palatin Proprietary Information and Palatin shall not
disclose DSM Biologics Technology to any persons other than to its Affiliates, agents,
employees, consultants, subcontractors and other authorized representatives, who have a
need to know the same and are necessarily connected with the Project. From all such
persons the Parties will, prior to his or her receipt of Palatin Proprietary Information
respectively DSM Biologics Technology, obtain undertakings to maintain the confidentiality
of any such disclosure containing the obligations as set forth in Section 14.1.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15

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|14.5 | The obligations as set forth in this Section 14 shall expire five (5) years from the date
this Agreement terminates or expires.
|---- | -------------------------------------------------------------------------------------------------------------------------------

# SECTION 15  TERM
AND TERMINATION

|15.1 | This Agreement shall be effective as of [INFORMATION OMITTED AND FILED SEPARATELY WITH
THE COMMISSION UNDER RULE 24b-2.] (the Effective Date) and shall
govern the full execution of the Project and shall remain in effect until the earlier date
of the [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.]. Notwithstanding anything in the Manufacturing Agreement or the Letter
Agreement to the contrary, the Parties hereby acknowledge and agree that the
[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.]. Any disputes between the Parties arising under any prior agreements between
the Parties shall be (i) resolved pursuant to the procedures set forth herein and
(ii) subject to the limits on liability set forth herein.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15.2 | This Agreement  shall  terminate if [INFORMATION  OMITTED AND FILED  SEPARATELY WITH THE COMMISSION  UNDER RULE
24b-2.].
|---- | ------------------------------------------------------------------------------------------------------------------------

|15.3 | (a) | Except upon termination of this Agreement by Palatin pursuant to Section 15.5, DSM
Biologics shall [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER
RULE 24b-2.]:
|---- | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | i) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.];
| |  | -- | ------------------------------------------------------------------------------------------------

| |  | ii) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.];
| |  | --- | ------------------------------------------------------------------------------------------------

| |  | iii) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.];
| |  | ---- | ------------------------------------------------------------------------------------------------

| |  | iv) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.];
| |  | --- | ------------------------------------------------------------------------------------------------

| | (b) | If DSM Biologics terminates the Agreement for any reason other than provided for
               in Section 15.5, DSM Biologics shall [INFORMATION OMITTED AND FILED
               SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.].
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16

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|15.4 | The [INFORMATION  OMITTED AND FILED  SEPARATELY WITH THE COMMISSION  UNDER RULE
24b-2.]:
|---- | ----------------------------------------------------------------------------------------

| | (a) | with respect to [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]:
| | --- | -------------------------------------------------------------------------------------------------

| | (b) | with respect to [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]:
| | --- | -------------------------------------------------------------------------------------------------

| |  | i) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.];
| |  | -- | ------------------------------------------------------------------------------------------------

| |  | ii) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.];
| |  | --- | ------------------------------------------------------------------------------------------------

| |  | iii) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.];
| |  | ---- | ------------------------------------------------------------------------------------------------

| |  | iv) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
               24b-2.];
| |  | --- | ------------------------------------------------------------------------------------------------

| |  | It is understood that [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]:
| |  | -------------------------------------------------------------------------------------------------------

|15.5 | A Party shall have the right to terminate this Agreement in the event that:
|---- | ---------------------------------------------------------------------------

| | (a) | the other Party (the Defaulting Party) fails to
               [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER
               RULE 24b-2.];
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | the Defaulting Party [INFORMATION OMITTED AND FILED SEPARATELY WITH THE
               COMMISSION UNDER RULE 24b-2.]; or
| | --- | ------------------------------------------------------------------------------------------------------------------------

| | (c) | the Defaulting Party [INFORMATION OMITTED AND FILED SEPARATELY WITH THE
               COMMISSION UNDER RULE 24b-2.].
| | --- | ---------------------------------------------------------------------------------------------------------------------

|15.6 | The effective date of termination will be the date stated in any termination notice
delivered hereunder, which date will not be before the expiration of any applicable cure
period provided for in this Agreement.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15.7 | Termination of this Agreement will not affect the rights and obligations of the Parties
accrued under this Agreement prior to termination nor the provisions contained in this
Agreement, which by their purpose have a term beyond the termination of this Agreement.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15.8 | Upon the termination of this Agreement:
|---- | ---------------------------------------

17

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| | (a) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];
| | --- | ---------------------------------------------------------------------------------

| | (b) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];
| | --- | ---------------------------------------------------------------------------------

| | (c) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];
| | --- | ---------------------------------------------------------------------------------

| | (d) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.].
| | --- | ---------------------------------------------------------------------------------

|15.9 | Notwithstanding anything to the contrary contained herein, if DSM Biologics decides to
terminate its business in whole or in part such that DSM Biologics is unable to satisfy
its obligations under this Agreement:
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | shall provide Palatin [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];
| | --- | -------------------------------------------------------------------------------------------------------

| | (b) | shall [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];
| | --- | ---------------------------------------------------------------------------------------

| | (c) | shall [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];
| | --- | ---------------------------------------------------------------------------------------

| | (d) | [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.];
| | --- | ---------------------------------------------------------------------------------

| | (e) | shall [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.].
| | --- | ---------------------------------------------------------------------------------------

|15.10 | Upon termination or expiration of this Agreement, [INFORMATION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
|----- | ----------------------------------------------------------------------------------------------------------------------------------

# SECTION 16  NOTICES

All notices, requests, demands and
other communications to be given in accordance with this Agreement shall be given in
writing and shall be given by prepaid registered mail, receipt return requested, or by
telecopier, to the other Party at the following addresses:

|if to Palatin: | Palatin Technologies, Inc.
4-C Cedar Brook Drive
Cedar Brook Corporate Center
Cranbury, NJ 08512
Fax/Telecopier: (609) 495-2203
Attention of: Stephen T. Wills, Chief Financial Officer
|-------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18

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|With a copy to: | Faith L. Charles, Esq.
Mintz Levin Cohn Ferris Glovsky & Popeo PC
The Chrysler Center
666 Third Avenue
New York, New York 10017
Fax/Telecopier:  (212) 983-3115
|--------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|if to DSM Biologics: | DSM Biologics Company B.V.
Zuiderweg 72/2
9744 AP Groningen, The Netherlands
Fax/Telecopier: +31.50.5222333
Attention of : Site Director
With a copy to: legal counsel
|-------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

or at such other address as a Party
may have previously indicated to the other Party in writing in conformity with the
foregoing. Any such notice, request, demand or other communication shall be deemed to have
been received on the seventh (7th) business day following the date of its mailing if sent
by registered mail, or the next business day immediately following the date of
transmission if sent by facsimile or telecopier.

# SECTION 17 
ASSIGNMENT

# [INFORMATION OMITTED AND
FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]

# SECTION 18 
DISPUTES AND APPLICABLE LAW

|18.1 | (a) | Except with respect to disputes relating to breaches of [INFORMATION OMITTED AND
FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.] in the event of a
dispute between the Parties, the Parties shall [INFORMATION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.].
|---- | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|18.1 | (b) | Section 18.1(a) shall [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.].
|---- | --- | -------------------------------------------------------------------------------------------------------

|18.2 | This Agreement is governed by and interpreted in accordance with the laws of
[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.] without regard to conflicts of laws principles.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|18.3 | All disputes, which cannot be settled amicably, shall be referred to [INFORMATION
OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.].
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------

# SECTION 19 
NON-SOLICITATION

During the term of this Agreement and
for one (1) year thereafter, either Party shall not, without the prior written consent of
the other Party, directly or indirectly, whether on its own behalf or on behalf of or in
conjunction with any person, company, business entity or other organization
(Person), solicit for employment any employee of the other Party who is or has
been involved in the Project pursuant to this Agreement.

19

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# SECTION 20  FORCE
MAJEURE

Neither Party shall lose any rights
hereunder or be liable to the other party for damages or losses on account of failure of
performance by the defaulting party if the failure is caused by government action, war,
fire, explosion, flood, strike, lockout, embargo, act of God or any other cause beyond the
reasonable control and without the fault or negligence of the defaulting party; provided
that the Party claiming force majeure has exerted commercially reasonable efforts to avoid
or remedy such force majeure. Such excuse shall continue as long as the condition
preventing the performance continues. Upon cessation of such condition, the affected Party
shall promptly resume performance hereunder. Each Party agrees to give the other Party
prompt written notice of the occurrence of any such condition, the nature thereof, and the
extent to which the affected Party will be unable to perform its obligations hereunder.
Each Party further agrees to use all commercially reasonable efforts to correct the
condition as quickly as possible.

# SECTION 21 
MISCELLANEOUS PROVISIONS

|21.1 | DSM Biologics shall obtain all permits and governmental or other licenses required in
connection with its activities under this Agreement. If DSM Biologics is not able at any
time to obtain the relevant permits and licenses, Palatin is entitled to (i) terminate
this Agreement forthwith and (ii) receive any deposit monies or reservation fees paid to
DSM Biologics as described in Section 15.3(a). Upon such termination, neither Party shall
have any further liability with respect to this Agreement.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21.2 | Palatin shall obtain all permits and governmental licenses required in connection with its
activities under this Agreement.
|---- | ---------------------------------------------------------------------------------------------------------------------------

|21.3 | DSM Biologics and Palatin will negotiate in good faith to obtain [INFORMATION OMITTED
AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.].
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------

|21.4 | All rights and recourses of a Party under this Agreement are cumulative and the exercise
by a Party of any of its rights or recourses will not prevent it from exercising any other
right or recourse available under this Agreement or at law.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21.5 | If any covenant, obligation or term hereunder or the application of any part of this
Agreement to any person, party or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement or the application of such covenants,
agreements or obligations other than those which are held to be invalid or unenforceable
shall not be affected thereby and each covenant, obligation and agreement contained herein
shall be separately valid and enforceable to the full extent permitted by law.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21.6 | This is an agreement between separate entities and neither is the agent, representative,
master or servant of or possesses the power to obligate the other or to make any
warranties or representations on behalf of the other. Nothing in this Agreement will be
interpreted so as to create a relationship of partners, joint ventures, agents,
fiduciaries or any other similar relationship between the Parties.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20

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|21.7 | Failure by either Party to take action against the other will not affect its right to
require the other party to fulfill its obligations hereunder. The waiver by either Party
of the breach of any term of this Agreement by the other Party will not operate or be
interpreted as a waiver of any subsequent breach by such Party. No term of this Agreement
will be deemed to have been waived by either Party unless such waiver is in writing.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21.8 | This Agreement, including the Annexes hereto, constitute the entire agreement between the
Parties with respect to the subject matter hereof and supersede all prior discussions,
negotiations and agreements with respect thereto. No amendment of, change to or variance
from this Agreement will be binding on either Party unless in writing and signed by the
Parties.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21.9 | Each of the Parties agrees to perform such acts, sign and deliver such other agreements,
cause such meetings to be held, resolutions passed and by-laws enacted, exercise their
vote and influence as may be necessary or desirable from time to time in order to give
full effect to this Agreement.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21.10 | This Agreement may be executed in two (2) counterparts, each of which shall be an original
and all of which shall constitute together but one and the same document.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21.11 | The headings and subheadings of the sections of this Agreement have been included solely
for ease of reference and do not form part of this Agreement.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------

|21.12 | The representations, warranties, covenants and agreements set forth in this Agreement are
for the sole benefit of the Parties hereto and their successors and permitted assigns, and
they shall not be construed as conferring any rights on any parties other than the
Parties.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

*    *    *    *    *

21

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IN
WITNESS WHEREOF,the Parties have executed this Development and Manufacturing
Agreement as of the date first above written.

# PALATIN TECHNOLOGIES,
INC.

_________________

Name:Title:

# DSM BIOLOGICS COMPANY B.V.

|_________________Name:Title: | _________________Name:Title:
|---------------------------- | ----------------------------

22

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# Annex 1

[INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSIONUNDER RULE 24b-2.]

---

# Annex 2

[INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSIONUNDER RULE 24b-2.]

---

# Annex 3

[INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSIONUNDER RULE 24b-2.]

---

# Annex 4

[INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSIONUNDER RULE 24b-2.]

---

# Annex 5

[INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSIONUNDER RULE 24b-2.]

---

# Annex 6

[INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSIONUNDER RULE 24b-2.]

---

# Annex 7

[INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSIONUNDER RULE 24b-2.]

---