Exhibit 10.06

                                    AGREEMENT


     THIS  AGREEMENT,  made this 1st day of February,  1999 by and between Derma
Sciences,  Inc.,  a  business  corporation  organized  under  the  laws  of  the
Commonwealth of Pennsylvania ("Derma") and Stephen T. Wills, CPA, MST ("Wills").

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

     2. Time and  Efforts.  Wills  shall  devote such of his  business  time and
efforts  as  may  reasonably  be  required  to  discharge  his  responsibilities
hereunder.  Provided,  however,  Derma acknowledges that Wills currently serves,
and during the Term hereof will continue to serve,  as Vice  President and Chief
Financial  Officer of Palatin  Technologies,  Inc.  and  Managing  Principal  of
Golomb,  Wills and Company, PC. Derma further acknowledges that Wills' duties to
the foregoing  organizations require that he devote a substantial portion of his
business time and efforts to the affairs thereof. Nothing contained herein shall
be deemed to restrict Wills' right to continue in the foregoing capacities.

     3.  Compensation.  During the Term hereof Derma shall pay  compensation  to
Wills as follows:

          (a) Salary at the rate of One Hundred Two Thousand Dollars  ($102,000)
     per year;

          (b)  Bonus  as  determined   by  Derma's   board  of  directors   upon
     recommendation of the Chairman.

     4. Options Grant. Wills shall receive  "non-qualified"  options to purchase
all, or any portion of, One Hundred  Thousand  (100,000)  shares of Derma common
stock at a

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price per share of $1.20.  The subject  options shall be exercisable  during the
Term hereof until 12:00 midnight December 14, 2008 and shall vest as follows:

          Number of Options                                  Vesting Date

                  25,000                                Upon execution hereof
                  25,000                                December 15, 1999
                  25,000                                December 15, 2000
                  25,000                                December 15, 2001

Vesting of the foregoing  options shall accelerate to 100% upon: (a) A change in
ownership  of in  excess  of  75%  of  Derma;  or  (b)  The  sale  by  Derma  of
substantially all of its assets.

     5. Term and  Severance.  This  Agreement  shall be effective upon execution
hereof and shall  continue  indefinitely  until  terminated as provided  herein.
Either party hereto may terminate  this  Agreement upon thirty (30) days written
notice  of  such  termination  to the  other  party.  Upon  termination  of this
Agreement by Derma without cause:

          (a) Derma shall pay to Wills a severance payment of one year's salary;
     and

          (b) The period to exercise  the  options  granted  hereunder  shall be
     extended to the earlier of five years from the date of termination or 12:00
     midnight December 14, 2008.

     6. Employee  Benefits.  During the term hereof,  Wills shall be entitled to
the following employee benefits:

          (a) Participation in Derma's medical insurance plans;

          (b)  Reimbursement  of  vehicle  expenses  at the  rate of  $0.31  per
     business mile;

          (c) Participation in Derma's deferred compensation plans in accordance
     with the terms thereof;

          (d) Reimbursement of "ordinary and necessary" business expenses; and

          (e) Paid vacation of two (2) weeks per year.


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     IN WITNESS  WHEREOF,  the parties hereto have hereunder set their hands and
seals as of the date first hereinabove written. DERMA SCIENCES, INC.



                                           By:   /s/ Edward J. Quilty
                                                 --------------------------
                                                 Edward J. Quilty, Chairman



                                                 /s/ Stephen T. Wills
                                                 --------------------------
                                                 Stephen T. Wills, CPA, MST