Exhibit 10.06

                                    AGREEMENT


         THIS AGREEMENT, made as of the 1st day of March, 2004 by and between
Derma Sciences, Inc., a business corporation organized under the laws of the
Commonwealth of Pennsylvania ("Employer"), and John E. Yetter, CPA ("Employee").

         WHEREAS, Employee is currently employed by Employer as its Vice
President and Chief Financial Officer, and

         WHEREAS, the parties desire to memorialize the terms and conditions of
Employee's employment by Employer,

         NOW, THEREFORE, the parties hereto, in consideration of the mutual
promises and covenants herein contained, hereby agree as follows:

         1. Employment. Employer hereby employs Employee, and Employee agrees to
be employed by Employer, as Employer's Vice President and Chief Financial
Officer upon the terms and conditions hereinbelow set forth.

         2. Time and Efforts. Employee will devote substantially all of his
business time and efforts to his duties hereunder.

         3. Compensation. During the Term hereof Employer shall pay compensation
to Employee as follows:

              (a) Base compensation at the rate of One Hundred Ninety Five
Thousand Dollars ($195,000) per year;

(b) Bonus, stock options and/or such other incentive compensation as may be
determined by Employer's board of directors upon recommendation of its
compensation committee.


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         Reviews by the compensation committee of Employee's base compensation
and incentive compensation shall be undertaken not less often than annually. The
principal criteria utilized by the compensation committee in the conduct of its
reviews shall be the extent to which Employer attains its performance objectives
and the extent of Employee's contributions thereto.

         4. Term. This Agreement shall be effective as of March 1, 2004 and
shall expire on February 28, 2005 unless sooner terminated pursuant to Sections
5 or 6 hereinbelow or unless renewed or extended by mutual agreement of the
parties hereto.

         5. Severance. In the event that Employer, without cause, either
terminates the Employment of Employee or fails to renew this Agreement upon
expiration hereof, Employer shall pay to Employee severance compensation in the
amount of one year's base compensation, from the date of said termination or
expiration, as applicable, at the rate most recently in effect pursuant to
paragraph 3(a) hereof.

         6. Change in Control. Within six months of the occurrence of a "change
in control" of Employer (defined below), Employee may, but shall have no
obligation to, tender his resignation from Employer and receive severance
compensation as provided in paragraph 5 above to the same extent as if Employer
had terminated Employee without cause as of the date of Employee's resignation.
For purposes of this paragraph, a "change in control" shall mean a change in
ownership of stock possessing greater than fifty percent (50%) of the total
combined voting power of all classes of stock entitled to vote of Employer.

         7. Option Exercise Extension. In the event that Employer, without
cause, either terminates Employee's employment or fails to renew this Agreement
upon expiration hereof, or in the event Employee tenders his resignation upon a
"change in control," then the period to exercise any option to purchase the
securities of Employer of which Employee may be possessed shall be extended to
the expiration thereof as set forth in the option instrument.

         IN WITNESS WHEREOF, this Agreement has been executed by Employer and
Employee as of the date first hereinabove written.


                              EMPLOYER:

                              DERMA SCIENCES, INC.



                               By:______________________________________________
                                     Edward J. Quilty
                                     President and Chief Executive Officer


                               EMPLOYEE:



                               _________________________________________________
                               John E. Yetter, CPA