Exhibit
4.2

      DERMA
SCIENCES, INC.

      


      COMMON STOCK PURCHASE WARRANT

       

        
          

        

      

       

      
        
          	
                  Warrant
      Shares:

                	
                  Initial
      Exercise Date: _________ __,
2010

                


        

      

       

      Warrant
Number:

      


      THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received, _________________ (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise
Date”) and on or prior to the close of business on February __, 2015 (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Derma Sciences, Inc., a
Pennsylvania corporation (the “Company”), up to
___________
shares (the “Warrant
Shares”) of Common Stock.  The purchase price of one share of
Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2(b).

       

      Section
1.             [RESERVED]

       

      Section
2.             Exercise.

       

      a)           Exercise of
Warrant.  Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date
by:  (i) delivery to the Company (or such other office or agency
of the Company as it may designate by notice in writing to the registered Holder
at the last address of the Holder as it shall appear upon the Warrant Register
of the Company) of a duly executed facsimile copy of the Notice of Exercise Form
annexed hereto; and (ii) within three (3) Trading Days after the date said
Notice of Exercise is delivered to the Company, payment to the Company of the
aggregate Exercise Price in respect of the Warrant Shares thereby purchased by
wire transfer in immediately available funds or, if available, pursuant to the
cashless exercise procedure specified in Section 2(c)
below.  Notwithstanding anything herein to the contrary, the Holder
shall not be required to physically surrender this Warrant to the Company until
the Holder has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within three (3) Trading Days after
the date the final Notice of Exercise is delivered to the
Company.  Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased.  The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such
purchases.  Absent manifest error, the records of the Company shall be
conclusive as to the number of Warrant Shares issuable upon exercise and binding
on the Company, the Holder and any assignee.  The Company shall
deliver any objection to any Notice of Exercise Form within three (3) Business
Days after receipt of such notice.  In the event of any dispute or
discrepancy, the Company’s records shall govern.  The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder
at any given time may be less than the amount stated on the face
hereof.


      
        
           


        

        
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      b)           Exercise
Price.  The exercise price per share of the Common Stock under
this Warrant shall be $______, subject to
adjustment hereunder (as adjusted hereunder, the “Exercise
Price”).

       

      c)           Cashless
Exercise.  If at the time of exercise hereof there is no
effective registration statement registering, or the prospectus contained
therein is not available for the issuance of, the Warrant Shares to the Holder
(either of such events, a “Registration Lapse”), then this Warrant may also be
exercised, in whole or in part, at such time by means of a “Cashless Exercise”
in which the Holder shall be entitled to receive a certificate for the number of
Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:

       

      
        
          	 	
                  (A) = 

                	
                  the
      average VWAP for the five Trading Days immediately preceding the date on
      which the Holder elects to exercise this Warrant by means of a “cashless
      exercise,” as set forth in the applicable Notice of
    Exercise;

                


        

      

      


      
        
          	 	
                  (B) =

                	
                  the
      Exercise Price; and

                


        

      

      


      
        
          	 	
                  (X) =

                	
                  the
      number of Warrant Shares that would be issuable upon exercise of this
      Warrant in accordance with the terms of this Warrant if such exercise were
      by means of a cash exercise rather than a cashless
    exercise.

                


        

      

      


      Provided,
however, anything hereincontained to the contrary notwithstanding, in the event
of a Registration Lapse the sole remedy available to the Holder shall be the
aforedescribed Cashless Exercise, and the receipt thereupon of unregistered
shares of Common Stock in satisfaction of such Cashless Exercise, and the Holder
shall not under any circumstances be entitled by virtue of a Registration Lapse
to either equitable relief or monetary damages in any amount
whatsoever.

      


      “VWAP” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on the NASDAQ Capital Market or
another national securities exchange, the daily volume weighted average price
per share of the Common Stock for such date (or the nearest preceding date) on
the NASDAQ Capital Market or such exchange on which the Common Stock is then
listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time), (b)  if the
Common Stock is then quoted on the OTC Bulletin Board, the volume weighted
average price per share of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then
listed or quoted on the NASDAQ Stock Market or the OTC Bulletin Board and if
prices for the Common Stock are then reported in the “Pink Sheets” published by
Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share of the
Common Stock so reported, or (d) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in
good faith by the Company and reasonably acceptable to the Holders of a majority
in interest of the Securities then outstanding, the fees and expenses of which
shall be paid by the Company.


      
        
           


        

        
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      d)           Mechanics of
Exercise.

       

      i.         Delivery of Certificates
Upon Exercise.  Certificates for shares purchased hereunder
shall be transmitted by the Company’s transfer agent, StockTrans, Inc., or
successor thereto (“Transfer Agent”) to the Holder by crediting the account of
the Holder’s prime broker with The Depository Trust Company through its DWAC
system if the Company is then a participant in such system and either (i) there
is an effective registration statement permitting the issuance of the Warrant
Shares to the Holder or (ii) this Warrant is being exercised via cashless
exercise, and otherwise by physical delivery to the address specified by the
Holder in the Notice of Exercise, in each case by the date that is three (3)
Trading Days after the latest of (A) the delivery to the Company of the Notice
of Exercise Form and receipt of the DWAC request from the Holder’s prime broker
(if applicable), (B) surrender of this Warrant (if required) and (C) payment of
the aggregate Exercise Price as set forth above (including by cashless exercise,
if permitted) (such date, the “Warrant Share Delivery
Date”).  This Warrant shall be deemed to have been exercised on
the first date on which all of the foregoing specified in (A), (B) and (C) shall
have been delivered to the Company.  The Warrant Shares shall be
deemed to have been issued, and the Holder or any other person so designated to
be named therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date the Warrant has been properly exercised,
with payment to the Company of the Exercise Price (or by cashless exercise, if
permitted) and all taxes required to be paid by the Holder, if any, pursuant to
Section 2(d)(vi) prior to the issuance of such shares, having been
paid.

       

      ii.         Delivery of New Warrants
Upon Exercise.  If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical to this
Warrant.


      
        
           


        

        
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      iii.         Rescission
Rights.  If the Company fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates representing the
Warrant Shares in the manner provided by Section 2(d)(i) by the Warrant Share
Delivery Date, then, the Holder will have the right to rescind such
exercise.

       

      
        
          	
                	
                  iv.

                	
                  Compensation for
      Buy-In on Failure to Timely Deliver Certificates Upon
      Exercise.  In addition to any other rights available to
      the Holder, if the Company fails to cause the Transfer Agent to transmit
      to the Holder a certificate or the certificates representing the Warrant
      Shares in the manner provided by Section 2(d)(i) by the Warrant Share
      Delivery Date, and if after such date the Holder is required by its broker
      to purchase (in an open market transaction or otherwise), or the Holder’s
      brokerage firm otherwise purchases, shares of Common Stock to deliver in
      satisfaction of a sale by the Holder of the Warrant Shares which the
      Holder anticipated receiving upon such exercise (a “Buy-In”), then
      the Company shall (A) pay in cash to the Holder the amount, if any, by
      which (x) the Holder’s total purchase price (including brokerage
      commissions, if any) for the shares of Common Stock so purchased exceeds
      (y) the amount obtained by multiplying (1) the number of Warrant Shares
      that the Company was required to deliver to the Holder in connection with
      the exercise at issue by (2) the price at which the sell order giving rise
      to such purchase obligation was executed, and (B) at the option of the
      Holder, either reinstate the portion of the Warrant and equivalent number
      of Warrant Shares for which such exercise was not honored (in which case
      such exercise shall be deemed rescinded) or deliver to the Holder the
      number of shares of Common Stock that would have been issued had the
      Company timely complied with its exercise and delivery obligations
      hereunder.  For example, if the Holder purchases Common Stock
      having a total purchase price of $11,000 to cover a Buy-In with respect to
      an attempted exercise of shares of Common Stock with an aggregate sale
      price giving rise to such purchase obligation of $10,000, under clause (A)
      of the immediately preceding sentence the Company shall be required to pay
      the Holder $1,000.  Notwithstanding the foregoing, the Company
      shall not be required to make the payments set forth herein in the case of
      uncertificated Warrant Shares if the Holder fails to timely file a request
      with The Depository Trust Company to receive such uncertificated Warrant
      Shares.  The Holder shall provide the Company written notice
      indicating the amounts payable to the Holder in respect of the Buy-In and,
      upon request of the Company, evidence reasonably satisfactory to the
      Company of the amount of such loss.  Nothing herein shall limit
      a Holder’s right to pursue any other remedies available to it hereunder,
      at law or in equity including, without limitation, a decree of specific
      performance and/or injunctive relief with respect to the Company’s failure
      to timely deliver certificates representing shares of Common Stock upon
      exercise of the Warrant as required pursuant to the terms
      hereof.

                


        

      

       

      
        
          
          

        

        
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      v.         No Fractional Shares or
Scrip.  No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant.  As to any
fraction of a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole
share.

       

      vi.         Charges, Taxes and
Expenses.  Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided that in the event certificates for Warrant Shares are to be
issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto.

       

      vii.         Closing of
Books.  The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.


      
        
           


        

        
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      e)           Holder’s Exercise
Limitations.  The Company shall not effect any exercise of this
Warrant, and a Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 2 or otherwise, to the extent that after giving
effect to such issuance after exercise as set forth on the applicable Notice of
Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s
Affiliates) would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below).  For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its
Affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which would be issuable
upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates and (ii) exercise or
conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any other  Common Stock
Equivalents) subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any of its
Affiliates.  Except as set forth in the preceding sentence, for purposes of
this Section 2(e), beneficial ownership shall be calculated in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by the Holder that the Company is not
representing to the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for any schedules
required to be filed in accordance therewith.   To the extent
that the limitation contained in this Section 2(e) applies, the determination of
whether this Warrant is exercisable (in relation to other securities owned by
the Holder together with any Affiliates) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of
a Notice of Exercise shall be deemed to be the Holder’s determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder
together with any Affiliates) and of which portion of this Warrant is
exercisable, in each case subject to the Beneficial Ownership Limitation, and
the Company shall have no obligation to verify or confirm the accuracy of such
determination and shall have no liability for exercises of the Warrant that are
not in compliance with the Beneficial Ownership Limitation.   In
addition, a determination as to any group status as contemplated above shall be
determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder.  For purposes of this Section
2(e), in determining the number of outstanding shares of Common Stock, a Holder
may rely on the number of outstanding shares of Common Stock as reflected in (A)
the Company’s most recent periodic or annual report filed with the Commission,
as the case may be, (B) a more recent public announcement by the Company or (C)
a more recent written notice by the Company or the Transfer Agent setting forth
the number of shares of Common Stock outstanding.  Upon the written or oral
request of a Holder, the Company shall within two (2) Trading Days confirm
orally and in writing to the Holder the number of shares of Common Stock then
outstanding as established by (A), (B) or (C) above, as applicable.  In any
case, the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported.  The “Beneficial Ownership
Limitation” shall be 9.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant.  The Holder, upon not
less than 61 days’ prior notice to the Company, may decrease the Beneficial
Ownership Limitation provisions of this Section 2(e).  Any such
decrease will not be effective until the 61st day
after such notice is delivered to the Company and shall only be effective with
respect to such Holder.  The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict conformity with
the terms of this Section 2(e) to correct this paragraph (or any portion hereof)
which may be defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The limitations contained
in this paragraph shall apply to a successor holder of this
Warrant.  For the avoidance of doubt, no additional consideration,
cash or otherwise, will be payable by the Company or the Holder as a result of
any adjustment pursuant to this Section 2(e).


      
        
           


        

        
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      Section
3.             Certain
Adjustments.

       

      a)           Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding:
(i) pays a dividend or otherwise makes a distribution or distributions, in each
case payable in shares of its Common Stock, to all holders of Common Stock (and
not to the Holders) (excluding, for avoidance of doubt, any shares of Common
Stock issued by the Company upon exercise of this Warrant), (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, or (iii)
combines (including by way of reverse stock split) outstanding shares of Common
Stock into a smaller number of shares, then in each case the Exercise Price
shall be multiplied by a fraction, of which the numerator shall be the number of
shares of Common Stock (excluding treasury shares, if any) outstanding at 5:00
p.m. (New York City time) on the Trading Day immediately before such event, and
of which the denominator shall be the number of shares of Common Stock that
would be outstanding immediately after, and solely as a result of, such event,
and the number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged.  Any adjustment made pursuant to this Section
3(a) shall become effective immediately prior to 9:00 a.m. (New York city time)
on the Ex-Dividend Date for such dividend or distribution or the effective date
of such subdivision or combination, as the case may be.  “Ex-Dividend Date”
means, when used with respect to any dividend, distribution or issuance, the
first date on which the share of Common Stock trade on the Trading Market,
regular way, without the right to receive the relevant dividend, distribution or
issuance.

       

      b)           [RESERVED]

       

      c)           [RESERVED]

       

      d)           Pro Rata
Distributions.  If the Company, at any time while this Warrant
is outstanding, shall distribute to all holders of Common Stock (and not to the
Holders) evidences of its indebtedness or assets (excluding (i) any
dividend or distribution of Common Stock (which shall be subject to Section
3(a)), (ii) any issuance of rights or warrants to subscribe for or purchase
shares Common Stock), (iii) any dividend or distribution of cash (which
shall be subject to Section 3(e)), and (iv) any dividend or distribution in
connection with a Fundamental Transaction (which shall be subject to Section
3(f))), then in each such case the Exercise Price shall be adjusted by
multiplying the Exercise Price by a fraction, of which the numerator shall be
the VWAP on the Trading Day immediately preceding the Ex-Dividend Date for such
distribution, and of which the denominator shall be such VWAP less the fair
market value, on the Ex-Dividend Date for such distribution, of the portion of
such assets or evidence of indebtedness or the portion of such subscription or
purchase rights, in either case applicable to one outstanding share of the
Common Stock as determined by the Board of Directors in good
faith.  The adjustments shall be described in a statement provided to
the Holder, which shall set out the portion of assets or evidences of
indebtedness  or the portion of such subscription or purchase rights,
in either case applicable to one outstanding share of Common
Stock.  Such adjustment shall be made whenever any such distribution
is made and shall become effective immediately prior to 9:00 a.m. (New York city
time) on the Ex-Dividend Date for such distribution.

       

      e)           Cash
Dividends.  If the Company, at any time while this Warrant is
outstanding, pays a dividend or otherwise makes a distribution or distributions,
in each case consisting exclusively of cash, to all holders of Common Stock (and
not to the Holders) (excluding any dividend or distribution in connection with a
Fundamental Transaction (which shall be the subject of Section 3(f)), then the
Exercise Price shall be multiplied by a fraction, of which the numerator shall
be the VWAP on the Trading Day immediately preceding the Ex-Dividend Date for
such distribution, and of which the denominator shall be such VWAP less the
amount in cash per share of Common Stock of the distribution.  Such
adjustment shall become effective immediately prior to 9:00 a.m. (New York city
time) on the Ex-Dividend Date for such distribution


      
        
           


        

        
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      f)           Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the
Company, directly or indirectly, in one or more related transactions effects any
merger or consolidation of the Company with or into another Person and the
Company is not the surviving corporation, (ii) the Company, directly or
indirectly, effects any sale, lease, license, assignment, transfer, conveyance
or other disposition of all or substantially all of its assets in one or a
series of related transactions, (iii) any, direct or indirect, purchase offer,
tender offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has
been accepted by the holders of 50% or more of the outstanding Common Stock,
(iv) the Company, directly or indirectly, in one or more related transactions
effects any reclassification, reorganization or recapitalization of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property,
(v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with another Person whereby such other Person acquires
more than 50% of the outstanding shares of Common Stock (not including any
shares of Common Stock held by the other Person or other Persons making or party
to, or associated or affiliated with the other Persons making or party to, such
stock or share purchase agreement or other business combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder (without regard to any
limitation in Section 2(e) on the exercise of this Warrant), the number of
shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional consideration
(the “Alternate
Consideration”) receivable as a result of such Fundamental Transaction by
a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction (without regard to
any limitation in Section 2(e) on the exercise of this Warrant).  For
purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.  If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction.


      
        
           


        

        
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      g)           Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.

       

      h)           Notice to
Holder.

       

      i.      Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly mail to the Holder a notice
setting forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.

       

      ii.     Notice to Allow Exercise by
Holder. If during the term in which this Warrant may be exercised by the
Holder (A) the Company shall declare a dividend (or any other distribution in
whatever form) on the Common Stock, (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class, (D) the approval of any stockholders of the Company shall be required in
connection with any reclassification of the Common Stock, any consolidation or
merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, or any compulsory share exchange
whereby the Common Stock is converted into other securities, cash or property,
or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the
Company shall cause to be mailed to the Holder at its last address as it shall
appear upon the Warrant Register of the Company, at least 20 calendar days prior
to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of the Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice.  To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information regarding the Company
or any of the Subsidiaries, the Company shall simultaneously disclose such
information in compliance with applicable securities laws.  The Holder
shall remain entitled to exercise this Warrant during the period commencing on
the date of such notice to the effective date of the event triggering such
notice except as may otherwise be expressly set forth herein.


      
        
           


        

        
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      Section
4.             Transfer of
Warrant.

       

      a)           Transferability.  Subject
to compliance with applicable securities laws, this Warrant and all rights
hereunder are transferable, in whole and not in part, upon surrender of this
Warrant at the principal office of the Company or its designated agent, together
with a written assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such
transfer.  Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant in the name of the assignee, and
this Warrant shall promptly be cancelled.  The Warrant, if properly
assigned in accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant issued.

       

      b)          New Warrants. This
Warrant may be combined with other Warrants upon presentation hereof at the
aforesaid office of the Company, together with a written notice specifying the
names and denominations in which new Warrants are to be issued, signed by the
Holder or its agent or attorney.  Subject to compliance with
Section 4(a), as to any transfer which may be involved in such combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be combined in accordance with such notice. All
Warrants issued on transfers or exchanges shall include reference to the initial
issuance date set forth on the first page of this Warrant and shall be identical
with this Warrant except as to the number of Warrant Shares issuable pursuant
thereto and the Warrant number.

       

      c)           Warrant Register. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual written notice to the
contrary.

       

      Section
5.           
 Miscellaneous.

       

      a)           No Rights as Stockholder
Until Exercise.  This Warrant does not entitle the Holder to
any voting rights, dividends or other rights as a stockholder of the Company
prior to the exercise hereof as set forth in Section 2(d)(i).


      
        
           


        

        
          10

          
            

          

        

        
           


        

      


      b)          Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it, and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate. Applicants for a
replacement Warrant under such circumstances shall also comply with such other
reasonable regulations and procedures and pay such other reasonable charges as
the Company may prescribe.

       

      c)           Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then, such action may be taken or such right may be exercised
on the next succeeding Business Day.

       

      d)           No Inconsistent
Actions.  Except and to the extent as waived or consented to by
the Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of the
Holder as set forth in this Warrant against impairment.  Without
limiting the generality of the foregoing, the Company will (i) not increase the
par value of any Warrant Shares above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (ii) take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable efforts to obtain
all such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof, as may be, necessary to enable the Company to
perform its obligations under this Warrant.

       

      e)          [RESERVED]

       

      f)           Restrictions.  The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, and the Holder does not utilize cashless exercise,
will have restrictions upon resale imposed by state and federal securities
laws.

       

      g)          Nonwaiver and
Expenses.  No course of dealing or any delay or failure to
exercise any right hereunder on the part of the Holder shall operate as a waiver
of such right or otherwise prejudice Holder’s rights, powers or
remedies.  Without limiting any other provision of this Warrant, if
the Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall
pay to the Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.


      
        
           


        

        
          11

          
            

          

        

        
           


        

      


      h)           Notices.  Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered to the registered Holder at the
last address of the Holder as it shall appear upon the Warrant Register of the
Company.

       

      i)       
    Limitation of
Liability.  No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

       

      j)       
    Remedies.  Save
as provided in Section 2c) hereof, the Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to seek specific performance of its rights under this
Warrant.  Save as provided in Section 2c) hereof, the Company agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this Warrant and hereby agrees
to waive and not to assert the defense in any action for specific performance
that a remedy at law would be adequate.

       

      k)           Successors and
Assigns.  Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors and permitted assigns of the Company and the
successors and permitted assigns of Holder.  The provisions of this
Warrant are intended to be for the benefit of any Holder from time to time of
this Warrant and shall be enforceable by the Holder or holder of Warrant
Shares.

       

      l)       
    Amendment.  This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and Holders holding Warrants at least equal to
50% of the Warrant Shares issuable upon exercise of all then outstanding
Warrants.

       

      m)          Severability.  Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.

       

      n)           Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

      


      ********************

      


      (Signature
Pages Follow)


      
        
           


        

        
          12

          
            

          

        

        
           


        

      


      IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above
indicated.

       

      


      
        
          	 
      	
                  DERMA
      SCIENCES, INC.

                
	 
      	 
      	 
      
	 
      	
                  By:

                
	 
      	 
      	
                  Edward
      J. Quilty

                
	 
      	 
      	
                  President
      and Chief Executive Officer

                


        

      

      


      
        
          
            
              	
                      ATTEST:

                    	 
	 
      	 
      	 
	
                      By:

                    	 
      	 
	 
      	
                      Raymond
      C. Hedger, Jr.

                    	 
	 
      	
                      Secretary

                    	 


            

          

        

      


      
        
           


        

        
          13

          
            

          

        

        
           


        

      


      NOTICE
OF EXERCISE

      


      TO:           DERMA SCIENCES, INC.

      


      (1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.

       

      (2) Payment
shall take the form of (check applicable box):

       

      o in lawful money of
the United States; or

       

      o [if permitted] the
cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection 2(c).

       

      (3) Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:

       

      
        
          
            
              
                
                  	
                            

                        	
                           

                        	 


                

              

            

          

        

      

      


      The
Warrant Shares shall be delivered to the following DWAC Account
Number:

      


      
        
          
            
              
                
                  
                    
                      
                        	
                                Account Number:

                              	
                                 

                              	 
	
                                Account
      Name:

                              	
                                 

                              	 
	
                                DTC
      Number

                              	
                                 

                              	 


                      

                    

                  

                

              

            

          

        

      

      


      or by
physical delivery of a certificate to:

       

      
        
          
            
              	
                       

                    	
                       

                    	 
	
                       

                    	
                       

                    	 
	
                       

                    	
                       

                    	 


            

          

        

      

       

      [SIGNATURE
OF HOLDER]

      


      
        	
                Name
      of Investing
      Entity: _____________________________________________________________________________

              
	
                Signature of Authorized
      Signatory of Investing
      Entity: _______________________________________________________

              
	
                Name
      of Authorized
      Signatory: _________________________________________________________________________

              
	
                Title
      of Authorized
      Signatory: __________________________________________________________________________

              
	
                Date: ______________________________________________________________________________________________

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      ASSIGNMENT
FORM

      


      (To
assign the foregoing Warrant, execute

      this form
and supply required information.

      Do not
use this form to exercise the Warrant.)

      


      FOR VALUE
RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to

      


      _______________________________________________
whose address is

      


      _______________________________________________________________.

       

      
 

      _______________________________________________________________

      


      Dated:  ______________,
_______

      


      Holder’s
Signature:          _____________________________

      


      Holder’s
Address:            _____________________________

      


       _____________________________

       

      
 

      Signature
Guaranteed:  ___________________________________________

      


      NOTE:  The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company.  Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.