PALATIN TECHNOLOGIES INC
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<TYPE>EX-10
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<FILENAME>ex10-32.htm
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<TITLE>Palatin Technologies, Inc. Form 10-Q September 30, 2005, Exhibit 10.32</TITLE>
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<H1 ALIGN=CENTER><FONT FACE="Arial" SIZE=4>SECOND AMENDMENT </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Arial" SIZE=4>TO </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Arial" SIZE=4>STRATEGIC
COLLABORATION AGREEMENT </FONT></H1>

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<P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS SECOND
AMENDMENT (&#147;Amendment&#148;) is made and entered into this 1st_ day of October, 2005
(the &#147;Effective Date&#148;), by and between MALLINCKRODT INC., a Delaware
corporation, with its principal place of business at 675 McDonnell Boulevard, P.O. Box
5840, St. Louis, Missouri 63134 (&#147;Mallinckrodt&#148;), and PALATIN TECHNOLOGIES,
INC., a Delaware corporation, with its principal place of business at 4-C Cedar Brook
Drive, Cranbury, New Jersey 08512 (&#147;Palatin&#148;). </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Arial" SIZE=4>RECITALS </FONT></H1>

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     <P><FONT FACE="Arial" SIZE=3>A.&nbsp;&nbsp;&nbsp;&nbsp;
          Mallinckrodt and Palatin are parties to a Strategic Collaboration Agreement,
          dated as of August 17, 1999, as amended by that certain Amendment to Strategic
          Collaboration Agreement dated May 13, 2002 (as amended, the &#147;Collaboration
          Agreement&#148;), under which they entered into a joint collaboration for the
          development of a commercial product or products from LeuTech&#153; (now known as
          &#147;NeutroSpec&#153;&#148;), a radiopharmaceutical product useful for imaging
          infection and inflammation. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>B.&nbsp;&nbsp;&nbsp;&nbsp;
          Mallinckrodt now wishes to acquire an exclusive license to use, market and
          distribute LeuTech Products in Europe under terms and conditions similar to
          those applicable to the rest of the world under the Collaboration Agreement. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>C.&nbsp;&nbsp;&nbsp;&nbsp;
          Mallinckrodt and Palatin have agreed upon the terms and conditions under which
          Mallinckrodt will acquire such an exclusive license in Europe. </FONT></P>


<P ALIGN=CENTER><FONT FACE="Arial" SIZE=3>1 </FONT></P>
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     <P><FONT FACE="Arial" SIZE=3>D.&nbsp;&nbsp;&nbsp;&nbsp;
          Mallinckrodt and Palatin further wish to amend the terms of the Collaboration
          Agreement with respect to <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE
          COMMISSION UNDER RULE 24b-2]</B>. </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Arial" SIZE=4>TERMS OF AGREEMENT </FONT></H1>

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<P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, in consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree to amend the
Collaboration Agreement as follows: </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>1.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Definitions of Certain Terms</U>. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Unless otherwise specifically provided herein, all capitalized terms undefined
          herein and used in this Amendment are defined in the same manner as provided for
          in Article 1 of the Collaboration Agreement. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The following defined term as set forth in Article 1 of the Collaboration
          Agreement is hereby amended and restated in its entirety as follows: </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          1.45 &#147;Territory&#148; shall mean all of the countries of the world,
          including Europe. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          As of the Effective Date, Section 1.46 is revised as follows: &#147;Transfer
          Price&#148; shall mean <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE
          COMMISSION UNDER RULE 24b-2]</B>. </FONT></P>

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<P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes hereof and in the event <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION UNDER RULE 24b-2]</B>. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>2.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Grant of License in Europe</U>. The parties acknowledge that by virtue of the </FONT></P>


<P ALIGN=CENTER><FONT FACE="Arial" SIZE=3>2 </FONT></P>
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<P><FONT FACE="Arial" SIZE=3>inclusion of Europe in the Territory (as provided in Paragraph 1(b) above), all
          of Mallinckrodt&#146;s and Palatin&#146;s respective rights, liabilities and
          obligations under the Collaboration Agreement shall apply to the parties&#146;
          performance in Europe to the same extent as all other parts of the Territory
          except as expressly set forth in this Amendment. Without limiting the foregoing,
          all representations and warranties set forth in the Collaboration Agreement,
          including those pertaining to compliance with United States law, FDA regulation
          or the like are hereby reasserted by the parties with respect to Europe,
          European law, EMEA (as hereafter defined) regulation or the like, and shall
          apply to the parties&#146; performance in Europe to the same extent as all other
          parts of the Territory except as expressly set forth in this Amendment. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>3.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>European License Payments</U>. In addition to the License Payments provided
          for in Section 5.1 of the Collaboration Agreement (intended to apply to the
          Territory exclusive of Europe) $250,000 shall be paid to Palatin within thirty
          (30) days of the Effective Date hereof as a License Payment. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>4.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>European and Worldwide Development Program</U>. Promptly upon execution of
          this Amendment, Palatin shall diligently undertake a Development Program for
          LeuTech Products in Europe. All Development Costs of Palatin for Development
          Programs approved by the Joint Steering Committee for any LeuTech Indication in
          Europe and any LeuTech Indication in the Development Phase in any portion of the
          Territory will be <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE
          COMMISSION UNDER RULE 24b-2]</B>, and Mallinckrodt shall make payments to
          Palatin as required thereunder. Consonant with the decisions of the Joint
          Steering Committee, the parties have agreed to conduct additional clinical
          trials and seek regulatory approvals for <B>[INFORMATION OMITTED AND FILED
          SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2]</B> for LeuTech Products in the
          United States and elsewhere in the Territory. The parties have agreed upon
          additional </FONT></P>


<P ALIGN=CENTER><FONT FACE="Arial" SIZE=3>3 </FONT></P>
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<P><FONT FACE="Arial" SIZE=3>payments in connection with the regulatory filing, approval and net
          sales of LeuTech Products in Europe as follows: </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          $250,000 shall be paid to Palatin as an additional payment due within thirty
          (30) days of <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
          UNDER RULE 24b-2]</B>; </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          $500,000 shall be paid to Palatin as an additional payment due within thirty
          (30) days of <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
          UNDER RULE 24b-2]</B>; </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          $500,000 shall be paid to Palatin as an additional payment due within thirty
          (30) days of <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
          UNDER RULE 24b-2]</B>; </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          $750,000 shall be paid to Palatin as an additional payment due within thirty
          (30) days of <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
          UNDER RULE 24b-2]</B>; </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          $1,000,000 shall be paid to Palatin as an additional payment due within thirty
          (30) days of <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
          UNDER RULE 24b-2]</B>; and </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          $1,500,000 shall be paid to Palatin as an additional payment due within thirty
          (30) days of <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
          UNDER RULE 24b-2]</B>. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>5.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>European Royalty Payments</U>. Commencing upon the First Commercial Sale of
          any LeuTech Products in Europe and continuing for so long as this Agreement is
          in effect with respect to Europe, the following Royalty Payments shall be made: </FONT></P>


<P ALIGN=CENTER><FONT FACE="Arial" SIZE=3>4 </FONT></P>
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     <P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
          24b-2]</B>. Mallinckrodt shall pay a Royalty Payment to Palatin of
          <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
          24b-2]</B>. The Royalty Payments described herein with respect to Europe shall
          be made by Mallinckrodt under the same terms and conditions as set forth in
          Section 5.9 of the Collaboration Agreement. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3><B>(b)</B>&nbsp;&nbsp;&nbsp;&nbsp;
          <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
          24b-2]</B>. In addition to the foregoing, the Royalty Payment for Net Sales in
          Europe shall be subject to the condition that <B>[INFORMATION OMITTED AND FILED
          SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2]</B>. </FONT></P>

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               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               A &#147;<B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER
               RULE 24b-2]</B>&#148; is hereby defined as a product meeting each of the
               following criteria: <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE
               COMMISSION UNDER RULE 24b-2]</B> </FONT></P></TD>
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               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               After a <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER
               RULE 24b-2]</B> is launched in Europe and if either Mallinckrodt&#146;s Net
               Sales, or Net Margin on sales (on an average per-dose basis) of LeuTech Products
               in Europe during any rolling 12-month period thereafter are <B>[INFORMATION
               OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2]</B>. </FONT></P></TD>
               </TR>
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               <BR>

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               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               After a <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER
               RULE 24b-2]</B> is launched in Europe and if either Mallinckrodt&#146;s Net
               Sales or Net Margin on </FONT></P></TD>
               </TR>
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<P ALIGN=CENTER><FONT FACE="Arial" SIZE=3>5 </FONT></P>
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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
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               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Arial" SIZE=3>sales (on an average per-dose basis)<B><I>
               </I></B><I></I>of LeuTech Products in Europe during any rolling 12-month period
               thereafter are <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
               UNDER RULE 24b-2]</B>. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               In no instance shall Palatin&#146;s Royalty Payment rate be <B>[INFORMATION
               OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2]</B>. </FONT></P></TD>
               </TR>
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     <P><FONT FACE="Arial" SIZE=3>6.&nbsp;&nbsp;&nbsp;&nbsp;
          <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
          24b-2]</B>. As of the Effective Date, with respect to sales made to
          <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
          24b-2]</B>. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>7.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Royalty Payment Reports</U>. Section 5.9(b) of the Collaboration Agreement is
          amended to provide that written quarterly reports shall be furnished by
          Mallinckrodt to Palatin within fifteen (15) days after the end of each such
          calendar quarter for the Territory excluding Europe. Royalty Payments for the
          Territory excluding Europe shall be made by Mallinckrodt within thirty (30) days
          after the end of each calendar quarter. </FONT></P>

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<P><FONT FACE="Arial" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
Europe, Mallinckrdodt shall provide written quarterly estimated reports to Palatin within
fifteen (15) days after the end of each calendar quarter. Mallinckrodt shall furnish final
reports for Europe within forty five (45) days after the end of each calendar quarter, and
shall make quarterly Royalty Payments for Europe to Palatin within sixty (60) days after
the end of each such calendar quarter. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>8.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Monthly Reporting Obligation</U>. In addition to the reporting obligations
          imposed upon Palatin under the Collaboration Agreement, Palatin shall also
          provide Mallinckrodt with written monthly reports updating the status of
          approval </FONT></P>


<P ALIGN=CENTER><FONT FACE="Arial" SIZE=3>6 </FONT></P>
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<P><FONT FACE="Arial" SIZE=3>of the LeuTech in Europe for imaging of equivocal appendicitis. Each
          report shall contain such information as is necessary to provide Mallinckrodt
          with a true and complete status report regarding such programs as of the end of
          the month in question. Palatin&#146;s reporting obligation pursuant to this
          paragraph shall terminate upon receipt of EMEA approval of LeuTech for equivocal
          appendicitis. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>9.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>EMEA Submissions and Reviews</U>. In addition to any other rights afforded to
          Mallinckrodt under the Collaboration Agreement, Mallinckrodt shall be given the
          opportunity of prior review and comment upon any and all submissions to the EMEA
          relating to LeuTech. Mallinckrodt shall also have the right to designate one
          individual to represent Mallinckrodt at EMEA meetings and conferences. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>10.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Public Disclosure</U>. Neither Palatin nor Mallinckrodt will issue a press
          release or make any other public disclosure regarding the terms of this
          Amendment without the prior written approval of the other party, which approval
          will not be unreasonably withheld. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3><B>11.</B>&nbsp;&nbsp;&nbsp;&nbsp;
          <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
          24b-2]</B>. Subsection 2.3 (g) of the Collaboration Agreement is hereby amended
          to <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
          24b-2]</B>. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3><B>12.</B>&nbsp;&nbsp;&nbsp;&nbsp;
          <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
          24b-2]</B>. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>13.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Invoice Payment</U>. Section 2.3(g) of the Collaboration Agreement is amended
          to provide that the Transfer Price for Product Units delivered in connection
          with any purchase order shall be due and payable by Mallinckrodt within thirty
          (30) days after the receipt by Mallinckrodt of an appropriate invoice and
          delivery of the Product Units for which any such invoice is submitted. </FONT></P>


<P ALIGN=CENTER><FONT FACE="Arial" SIZE=3>7 </FONT></P>
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     <P><FONT FACE="Arial" SIZE=3><B>14.</B>&nbsp;&nbsp;&nbsp;&nbsp;
          <B>[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
          24b-2]</B>. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>15.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Collaboration Agreement Survival</U>. Except to the extent provided for in
          this Amendment, the Collaboration Agreement shall continue in full force and
          effect. </FONT></P>

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     <P><FONT FACE="Arial" SIZE=3>16.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Governing Law</U>. The validity and interpretation of this Amendment and the
          rights and obligations of the parties shall be governed by the internal laws of
          the State of New York. </FONT></P>

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<P><FONT FACE="Arial" SIZE=3>IN WITNESS WHEREOF, the parties have
executed this Amendment by their duly authorized officers on the date first above-written. </FONT></P>

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<A NAME=A006></A>
<P ALIGN=LEFT><FONT FACE="Arial" SIZE=3>MALLINCKRODT INC. </FONT></P>

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<A NAME=A007></A>
<P ALIGN=LEFT><FONT FACE="Arial" SIZE=3>By:____________________<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Steve
Hanley<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;President Imaging Group </FONT></P>

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<A NAME=A008></A>
<P ALIGN=LEFT><FONT FACE="Arial" SIZE=3>PALATIN TECHNOLOGIES, INC. </FONT></P>

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<A NAME=A009></A>
<P ALIGN=LEFT><FONT FACE="Arial" SIZE=3>By:____________________<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stephen
T. Wills<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief Financial Officer </FONT></P>


<P ALIGN=CENTER><FONT FACE="Arial" SIZE=3>8 </FONT></P>
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