DERMA SCIENCES, INC.
                             STOCK OPTION AGREEMENT

         THIS STOCK OPTION AGREEMENT, hereby made and dated as of the 3rd day of
April,  1998 (the "Grant Date"),  between Derma  Sciences,  Inc., a Pennsylvania
corporation (the "Company") and Srini Conjeevaram (the "Optionee").
         WHEREAS,  the Company  desires to afford the Optionee an opportunity to
purchase  shares of Common  Stock,  $.01 par value  per  share,  of the  Company
("Shares") as hereinafter provided,
         NOW,  THEREFORE,  in consideration of the mutual covenants  hereinafter
set forth and for other good and valuable  consideration,  the legal sufficiency
of which is hereby  acknowledged,  the parties  hereto,  intending to be legally
bound, hereby agree as follows:
         1. GRANT OF OPTION. The Company hereby grants to the Optionee the right
and option to purchase  all or any part of an  aggregate  of 10,000  shares (the
"Option") which Option is intended as a "nonqualified  stock option." The Option
is in all respects limited and conditioned as hereinafter  provided. 
        2. PURCHASE PRICE.  The purchase price per share (the "Option Price") of
the Shares  covered by the Option  (the  "Option  Shares")  shall be the closing
price of the Company's  Common Stock as quoted on the Nasdaq  SmallCap Market on
the day predeeding the Grant Date, to wit: $1.875.

                                      
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        3. TERM. Unless earlier terminated pursuant to any provision hereof, the
Option shall expire on April 2, 2008 (the "Expiration Date").
        4.  EXERCISE  OF OPTION.  (a) The right of the  Optionee  to exercise is
subject to the  condition  that the Optionee be a director of the  Company.  The
Option shall become  exercisable in five (5) equal installments and the Optionee
shall have the right to purchase  from the Company,  on and after the  following
dates, the following number of shares:

           DATE INSTALLMENT                                    NUMBER OF
         BECOMES EXERCISABLE                                 OPTION SHARES

           April 2, 1998                                         2,000
           April 2, 1999                                         2,000
           April 2, 2000                                         2,000
           April 2, 2001                                         2,000
           April 2, 2002                                         2,000

         (b) The right of the  Optionee  to  purchase  the Option  Shares may be
exercised,  in whole or in part, at any time or times prior to the expiration or
other termination of the Option.
         (c)  If the  Optionee's  position  as  director  with  the  Company  is
terminated  prior to the  expiration  date of his  Option,  such  Option  may be
exercised by the Optionee, to the extent of the number of Shares with respect to
which the Optionee could have exercised it on the date of such  termination,  or
to any  greater  extent  permitted  by the  Committee,  at any time prior to the
earlier  of (i)  three (3)  months  after  the date of  termination  or (ii) the

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expiration date of such Option; provided,  however, if an Optionee's position as
director  was  terminated  voluntarily  by the  Optionee or by the Company  "for
cause" (as defined  below),  the  Optionee  shall have no right to exercise  his
Option on or after the date of such termination.  As used herein, termination of
an  Optionee's  position as director by the Company  shall be "for cause" if the
Board  reasonably  concludes that the Optionee has materially  failed to perform
his  responsibilities to the Company,  materially failed to follow directives or
policies  established by or at the direction of the Board, or conducted  himself
in a manner materially detrimental to the interests of the Company.
         5. METHOD OF EXERCISING OPTION. (a) Subject to the terms and conditions
of this Option  Agreement,  the Option may be exercised by giving written notice
to the Company at its principal  office,  specifying the number of Option Shares
to be purchased,  and  accompanied by payment in full of the aggregate  purchase
price for the Shares.  Only full Shares shall be delivered,  and any  fractional
share which might  otherwise be  deliverable  upon exercise of an Option granted
hereunder shall be forfeited. Attached as Exhibit 1 is a form of written notice.
                  (b) The  purchase  price shall be payable:  (i) in cash or its
equivalent,  or (ii) in whole or in part  through the  transfer of Common  Stock
previously  acquired by the Optionee,  provided the Common Stock so  transferred
have been held for the applicable holding period set forth below:

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                           1. If such previously acquired shares of Common Stock
were  acquired  through  exercise  of an  incentive  stock  option and are being
tendered as payment of the option price under an incentive  stock  option,  such
shares  have been held by the  Optionee  for a period not less than the  holding
period  described  in  ss.422(a)(1)  of the Internal  Revenue  Code of 1986,  as
amended (the "Code");
                           2. If such previously acquired shares of Common Stock
were acquired through exercise
of an  incentive  stock  option or a  nonqualified  stock  option  and are being
tendered as payment of the option price under a nonqualified stock option,  such
shares have been held by the Optionee for more than one year; or
                           3. If such previously acquired shares of Common Stock
were acquired through exercise
of a  nonqualified  stock option and are being tendered as payment of the option
price  under an  incentive  stock  option,  such  Shares  have  been held by the
Optionee for more than one year.
                  (c) Upon receipt of such notice and payment,  the Company,  as
promptly as possible,  shall deliver or cause to be delivered a  certificate  or
certificates  representing  the  Shares  with  respect to which the Option is so
exercised.  The certificate or certificates  for such Shares shall be registered
in the name of the person or persons  exercising the Option (or, if the Optionee
shall  so  request  in the  notice  exercising  the  Option,  in the name of the
Optionee  and his  spouse,  jointly,  with right of  survivorship)  and shall be

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delivered  as  provided  above to or upon the  written  order of the  person  or
persons exercising the Option. In the event the Option shall be exercised by any
person or persons  after the death or legal  disability  of the  Optionee,  such
notice shall be accompanied by appropriate  proof of the right of such person or
persons to exercise  the Option.  All shares  that shall be  purchased  upon the
exercise of the Option as provided herein shall be fully paid and  nonassessable
by the Company.
         6.  NON-TRANSFERABILITY  OF  OPTION.  The Option is not  assignable  or
transferable, in whole or in part, by the Optionee, otherwise than by will or by
the laws of descent and distribution.  During the lifetime of the Optionee,  the
Option shall be  exercisable  only by the Optionee or, in the event of his legal
disability, by his legal representative.
         7.  DISQUALIFYING  DISPOSITION OF SHARES.  The Optionee  agrees to give
written notice to the Company,  at its principal  office,  if a "disposition" of
the Shares acquired through  exercise of the Option granted  hereunder occurs at
any time  within  two years  after the Grant  Date or within  one year after the
transfer to the Optionee of such Shares.  For  purposes of this  Paragraph,  the
term "disposition" shall have the meaning assigned to such term by Sec.424(c) of
the Code.
         8.  WITHHOLDING  OF TAXES.  The  obligation  of the  Company to deliver
Shares  upon the  exercise  of any Option  shall be  subject  to any  applicable
federal, state and local tax withholding requirements.

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         9. GOVERNING LAW. This Agreement shall, to the maximum extent possible,
be  construed  in a  manner  consistent  with  the  Code  provisions  concerning
incentive and nonqualified stock options, and its interpretation shall otherwise
be governed by Pennsylvania law.
         IN WITNESS WHEREOF,  the Company has caused this Stock Option Agreement
to be executed by a duly authorized  officer,  and the Optionee has hereunto set
his hand and seal, all as of the day and year first hereinabove written.


                                        DERMA SCIENCES, INC.



                                        By: /s/ Stephen T. Wills 
                                            --------------------------
                                            Stephen T. Wills, CPA, MST
                                            Vice President and
                                            Chief Financial Officer

                                        OPTIONEE


                                             /s/ Srini Conjeevaram
                                            --------------------------(SEAL)
                                            Srini Conjeevaram








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