Exhibit 10.05


                              EMPLOYMENT AGREEMENT



     THIS AGREEMENT made this 23rd day of July, 2002 by and among 4087755
Canada, Inc., a Canadian corporation (hereinafter referred to as "Employer");
Derma Sciences, Inc. a Pennsylvania corporation (hereinafter referred to as
"Derma"), and William Goodwin (hereinafter referred to as "Employee").

     WHEREAS, Employer is a wholly-owned subsidiary of Derma; and

     WHEREAS, Employer and Derma desire that Employee be employed by Employer as
its President; and

     WHEREAS, Employee desires to so act.

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

     1. EMPLOYMENT. Employer employs Employee, and Employee accepts employment,
as the President and Chief Executive Officer of Employer reporting to the Chief
Executive Officer of Derma with responsibilities for the Employer's domestic and
international operations, and such other duties as may be determined, from time
to time, by Employer's Board of Directors. Furthermore, Derma employs Employee,
and Employee accepts employment, as an Executive Vice President of Derma.
Provided, however, the employment of Employee hereunder is contingent upon
successful completion of the asset transfer of all of the assets of Dumex
Medical, Inc. ("Dumex") pursuant to the terms of that certain Asset Purchase
Agreement dated as of June 28, 2002 (the "Asset Purchase Agreement"), as
amended, on and as of the Closing Date (as that term is defined therein).

     2. TERM. The term of this Agreement shall begin on the Closing Date (as
defined in the Asset Purchase Agreement) (herein the "Effective Date") and shall
terminate on the third anniversary thereof, unless sooner terminated pursuant to
paragraph 9 (the "Term"). Provided, however, that this Agreement shall
automatically be renewed for additional one (1) year periods (each such one year
period referred to herein as the "Renewal Term") if neither party gives written
notice to the other, at least ninety (90) days prior to the termination date of
the Term or any Renewal Term, that such party does not intend to renew the
Agreement

     3. COMPENSATION. Employer shall pay Employee compensation for services
rendered under this Agreement as set forth hereunder ("Compensation"):

     (a)  BASE COMPENSATION. Base salary of $250,000 Canadian (currently
          approximately $160,000 U.S.) per year, subject to customary annual
          increases at the discretion of the Board of Directors payable in
          accordance with Employer's regular payroll practices ("Salary").

     (b)  BONUS. Employee shall be eligible for an annual performance bonus
          subject to performance criteria and in such amount as mutually agreed
          upon by Employer and Employee within 30 days of the beginning of each
          year of the Term.

     4. STOCK OPTIONS. As additional compensation for services rendered, Derma
and Employer grant to Employee on the date hereof an option to purchase all or
any part of an aggregate of 500,000 shares of Derma Common Stock (the "Option"),
subject to the vesting schedule set forth in subparagraph c hereof and the
adjustments set forth in subparagraph g hereof, which Option is a nonqualified
stock option. The Option is in all respects limited and conditioned as provided
hereunder.

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     (a)  PURCHASE PRICE. Except as otherwise provided in subparagraph g hereof,
          the purchase price (the "Option Price") of the shares covered by the
          Option ("Option Shares") shall be the average closing bid price of
          Derma's Common Stock for the preceding 30 days on which the Common
          Stock has traded on the National Association of Securities Dealers
          Automated Quotation System (Nasdaq) preceding the date of execution of
          this Agreement, except that in no event shall such Option Price be
          less than $0.50 per share.

     (b)  OPTION TERM. Except as otherwise provided herein, the Option shall
          expire on the first to occur of: (i) Ninety (90) days following
          Employee's termination of employment with Employer, or (ii) July 23,
          2009.

     (c)  EXERCISE OF OPTION.

               (i) Except as otherwise provided herein, the right of Employee to
               exercise the Option is conditioned upon Employee being in the
               employ of the Employer, whether pursuant to this Agreement or
               otherwise. The Option shall be exercisable (1) with respect to
               100,000 Option Shares, beginning on and as of the date hereof and
               ending on July 23, 2009; and (2) with respect to the remaining
               400,000 Option Shares, beginning on and as of the first
               anniversary of the date of this Agreement, and ending on July 23,
               2009.

               (ii) The Option may be exercised, in whole or in part, at any
               time or times prior to the expiration or other termination
               thereof.

               (iii) If this Agreement, and Employee's employment with Employer,
               is terminated other than For Cause (as defined in paragraph 9) or
               Employee's voluntary resignation without Good Reason, prior to
               the expiration date of the Option, such Option may be exercised
               by Employee, to the extent the Options are exercisable on the
               date of such termination, or to any greater extent permitted by
               the Compensation Committee, at any time prior to the earlier of:
               (i) three (3) months after the date of termination, or (ii) the
               expiration date of such Option. Provided, however, if this
               Agreement, and Employee's employment, was terminated For Cause or
               by Employee's voluntary resignation without Good Reason, Employee
               shall have no right to exercise his Option on or after the date
               of such termination, and all outstanding Options, whether vested
               or unvested shall immediately expire upon the date of
               termination.

               (iv) The Option shall accelerate and become 100% exercisable upon
               the occurrence of the following: (A) Employee's Legal Disability;
               (B) Employer's termination of this Agreement other than For
               Cause; (C) "Change in Control" of Employer (as hereinafter
               defined); or termination of this Agreement by Employee for "Good
               Reason", as hereinafter defined.

               (v) Upon the termination of this Agreement by Employee under
               paragraph 9(b)(iii) hereof, Employee shall retain 50% of his
               Option that is then exercisable on the date of such termination,
               and all other Options, whether vested or unvested, shall expire
               immediately upon the date of the termination.

               (vi) The Option shall accelerate in the following manner upon the
               occurrence of Employee's death: 25% exercisable if Employee's
               death occurs within 6 months of the beginning date of this
               Agreement; 50% exercisable if Employee's death occurs between 6
               months and 1 year from the beginning date of this Agreement; and
               100% exercisable if Employee's death occurs thereafter.

               (vii) For purposes of this Agreement the following definitions
               apply:

                           (A) "Legal Disability" shall mean either Employee has
                  been unable to substantially perform his duties hereunder by
                  reason of illness, accident or other physical or mental

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                  disability for a continuous period of 180 days or an aggregate
                  period of 270 days during any continuous twelve-month period,
                  or that in the opinion of the Board of Directors, such opinion
                  to be derived from the reports of three (3) physicians of its
                  choosing, Employee will be unable to substantially perform his
                  duties hereunder by reason of illness, accident or other
                  physical or mental disability for a continuous period of 180
                  days or an aggregate period of 270 days during any continuous
                  twelve-month period.

                           (B) "Good Reason" shall mean a breach by Employer of
                  its obligations under this Agreement.

                           (C) "Change in Control" shall mean: (1) the sale by
                  Employer of all or substantially all of its assets to any
                  person (as such term is used in Sections 13(d) and 14(d) of
                  the Securities Exchange Act of 1934), the consolidation of
                  Employer with any person, or the merger of Employer with any
                  person as a result of which merger Employer is not the
                  surviving entity, or if the surviving entity, Employer is
                  owned by a parent company' or (2) the sale or transfer by one
                  or more of Employer's shareholders in one or more
                  transactions, related or unrelated, to one or more persons
                  under circumstances whereby any person and its "affiliates"
                  (as defined herein) shall own, as a result of such sale or
                  transfer thereafter, at least Fifty percent (50%) of the
                  outstanding shares of Employer. An "affiliate" shall mean any
                  person that directly, or indirectly through one or more
                  intermediaries, controls, or is controlled by, or is under
                  common control with, any other person.

     (d)  METHOD OF EXERCISING OPTION. (i) The Option may be exercised by giving
          written notice, in such form as shall be provided by Employer, to
          Employer 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. (ii) The purchase price shall be payable in cash or in its
          equivalent. (iii) Upon receipt of such notice and payment, Employer,
          within three (3) business days after Exercise, shall deliver or cause
          to be delivered a certificate or certificates representing the Shares
          with respect to which the Option is exercised. The certificate or
          certificates for such Shares shall be registered in the name of the
          person exercising the Option (or, if Employee shall so request in the
          notice exercising the Option, in the name of Employee and his spouse,
          jointly, with right of survivorship) and shall be delivered as
          provided above to or upon the written order of the person exercising
          the Option. In the event the Option is exercised by any person after
          the death or Legal Disability of Employee, such notice shall be
          accompanied by appropriate proof of the right of such person to
          exercise the Option. All shares purchased upon the exercise of the
          Option as provided herein shall be fully paid and nonassessable by
          Employer.

     (e)  NON-TRANSFERABILITY OF OPTION. The Option is not assignable or
          transferable, in whole or in part, by Employee, otherwise than by will
          or by the laws of descent and distribution. During the lifetime of
          Employee, the Option shall be exercisable only by Employee or, in the
          event of his Legal Disability, by his legal representative.

     (f)  WITHHOLDING OF TAXES. The obligation of Employer to deliver Shares
          upon the exercise of any Option shall be subject to any applicable
          federal, state and local tax withholding requirements.

     (g)  ADJUSTMENTS. The number of Option Shares and the Option Price shall be
          adjusted as set forth herein:

               (i) In the event that a stock dividend shall be declared on the
               Common Stock payable in shares of the Common Stock, the Option
               Shares shall be adjusted by adding to each Option Share the
               number of shares which would be distributable thereon if such
               Option Share had

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               been outstanding on the date fixed for determining the
               shareholders entitled to receive such stock dividend.

               (ii) In the event that the outstanding shares of the Common Stock
               shall be changed into or exchanged for a different number or kind
               of shares of stock or other securities of Employer whether
               through recapitalization, stock split, combination of shares, or
               otherwise, then there shall be substituted for each Option Share
               the number and kind of shares of stock or the securities into
               which each outstanding share of the Common Stock shall be so
               changed or for which each such share shall be exchanged.

               (iii) In the event that the outstanding shares of the Common
               Stock shall be changed into or exchanged for shares of stock or
               other securities of another corporation, whether through
               reorganization, sale of assets, merger or consolidation in which
               Employer is the surviving corporation, then there shall be
               substituted for each Option Share the number and kind of shares
               of stock or the securities into which each outstanding share of
               the Common Stock shall be so changed or for which each such share
               shall be exchanged.

     (h)  SHARE OWNERSHIP. Neither Employee nor Employee's legal representatives
          nor the executors or administrators of his estate shall be or be
          deemed to be the holder of any share of Common Stock covered by an
          Option unless and until a certificate for such share shall have been
          issued.

     (i)  ADDITIONAL GRANTS. The Board of Directors in its discretion will, on
          an annual basis, consider such additional grants of options to
          Employee when and as it considers option grants for other senior
          executive officers of Employer.

     (j)  SHARE TRANSFER RESTRICTIONS. All shares of Common Stock held by
          Employee as a result of his exercise of the Option may not be
          transferred or sold by Employee unless: (i) Employee has given
          Employer and Derma at least ten (10) days prior written notice of the
          sale, which notice shall include the number of shares to be sold, the
          name of the proposed transferee and the price to be paid per share;
          and (ii) the total number of shares to be sold does not exceed the
          average daily volume of shares of Common Stock of Derma traded over
          the preceding four (4) weeks.

     5. ASSUMPTION OF CERTAIN OBLIGATIONS.

     (a)  Employee has informed Employer and Derma that Employee entered into
          certain obligations on behalf of Dumex as follows:

               (i) a Promissory Note, dated March 19, 1993, issued by Employee
               (Borrower), to William J. Goodwin (Lender) (a copy of which is
               attached hereto as Exhibit A), and

               (ii) a Loan Agreement, dated December 17, 1998, by and between
               Dumex and China Surgical Dressings Ltd., as amended by a
               Supplementary Loan Agreement, dated December 17, 1998, by and
               between Employee and William J. Goodwin (copies of which are
               attached hereto as Exhibit B).

               In recognition that these obligations were entered into by
               Employee for the benefit of Dumex, Derma hereby agrees to deliver
               to Employee, on and as of the Effective Date hereof, a promissory
               note (the "Promissory Note"), in the principal amount of $200,000
               Canadian, made payable to William J. Goodwin, Employee's father
               (the "Payee"), such Promissory Note to bear interest at the rate
               of 5% per annum; provided, however, that such Promissory Note
               shall provide that Employee hereby undertakes and agrees to be
               solely responsible for, and indemnifies Employer and Derma for
               all liability with respect to, the payment of all interest on the
               Promissory Note, and Employee hereby authorizes Employer to
               deduct all amounts due

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               and owing for such interest payments from Employee's Salary, such
               deductions to be made from each of Employee's paychecks on a pro
               rata basis and remitted directly by Employer to Payee.

               Provided, however, that all amounts due from Derma under the
               terms of the Promissory Note shall be expressly conditioned upon
               and subject to the following:

               1)   If and only if Employer operates on a cash-flow break even
                    basis from the date of the Closing Date under the Asset
                    Purchase Agreement up through December 31, 2002, Derma shall
                    then be obligated to pay $100,000 Canadian of the principal
                    due under the Promissory Note. For these purposes,
                    "cash-flow break even basis" shall mean pre-tax earnings
                    (exclusive of any inter-Company charges, fees or expenses
                    paid to related parties) before depreciation and
                    amortization, but before interest on the operating term loan
                    as well as other required debt service (including required
                    principal repayments on the term loan) in accordance with
                    the Offer of Finance. If such cash-flow break even
                    operations as defined herein are not attained, $100,000
                    Canadian of the principal amount covered by the Promissory
                    Note shall be extinguished, on and as of December 31, 2002,
                    and Derma shall have no further responsibility or liability
                    with respect thereto; and

               2)   If and only if Employer earns at least $400,000 Canadian
                    before interest or other debt service, taxes, depreciation
                    and amortization (exclusive of any inter-Company charges,
                    fees or expenses paid to related parties) in the 12 month
                    period commencing January 1, 2003 and ending on December 31,
                    2003, the remaining $100,000 Canadian of the original
                    principal amount covered by the Promissory Note shall be
                    paid in cash by Derma. If such earnings before interest or
                    other debt service, taxes, depreciation and amortizations
                    (as defined herein) are not obtained, the remaining $100,000
                    Canadian of the principal amount covered by the Promissory
                    Note shall be extinguished, on and as of December 31, 2003,
                    and Derma shall have no further responsibility or liability
                    with respect thereto.

               Provided, further, that in the event that Employee terminates his
               employment with the Employer under paragraph 9(b)(iii) hereof,
               all obligations of Derma under the Promissory Note shall
               immediately expire, and neither Derma nor Employer shall have any
               liability whatsoever for any amount remaining unpaid as of such
               date.

     (b)  Derma agrees to indemnify Employee for liability resulting from
          Employee's personal guarantee to BDBC in connection with BDBC's
          subordinate debt, but only up to an amount not to exceed $100,000
          Canadian. Amounts owing under this indemnity shall be payable to BDBC
          in cash on ten (10) days written notice from Employee to Derma
          confirming that a settlement between Employee and BDBC has been
          concluded.

     6. DISCLOSURE OF INFORMATION. Employee recognizes and acknowledges that he
will have access to certain confidential information of Employer and that such
information constitutes valuable, special and unique property of Employer.
Employee will not, during or after the term of his employment, disclose any of
such confidential information to any person, firm, corporation, association, or
other entity for any reason or purpose whatsoever unless ordered to do so by a
court or other tribunal or government agency with jurisdiction over the subject
matter and Employee. In the event of a breach or threatened breach by Employee
of the provisions of this paragraph, Employer shall be entitled to an injunction
restraining Employee from disclosing, in whole or in part, confidential
information of Employer, or from rendering any services to any person, firm,
corporation, association, or other entity to whom such confidential information,
in whole or in part, has been disclosed or is threatened to be disclosed.
Nothing herein shall be construed as prohibiting Employer from pursuing any
other remedies available to Employer for such breach or threatened breach,
including the recovery of damages from Employee.

     7. EXPENSES. Employee may incur reasonable expenses for promoting
Employer's business, including expenses for entertainment, travel, and similar
items. Employer will reimburse Employee for all such expenses in accordance with
Employer's applicable policies, rules and regulations as from time to time
issued and amended.

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     8. INSURANCE AND BENEFITS. During the term of this Agreement, Employee will
receive benefits with respect to insurance, medical care, vacation, leased
vehicle and life insurance substantially comparable to his benefit package as
President of Dumex.

     9. TERMINATION OF AGREEMENT.

     (a)  This Agreement may be terminated by Employer For Cause if Employee (i)
          willfully breaches or habitually neglects or fails to perform the
          duties which he is required to perform under the terms of this
          Agreement; (ii) materially fails to follow the reasonable written
          directive or policies established by or at the direction of the Board
          of Directors, (iii) breaches any of the representations and warranties
          contained in paragraph 11 hereof and Employer and/or Derma are caused
          damages, losses or other liabilities aggregating at least $200,000
          Canadian in connection therewith; or (iv) conducts himself in a manner
          materially detrimental to the interests of Employer and such breach or
          failure of performance is not cured within Thirty (30) days of the
          delivery to Employee of written notice thereof.

     (b)  This Agreement may be terminated by Employee for: (i) Good Reason (as
          defined in paragraph 4(c)(vi)(B)) if Employer fails to cure its breach
          of obligation within Thirty (30) days of the delivery to Employer of
          written notice of such breach; (ii) upon a Change in Control of
          Employer, or (iii) only at the eighteen (18) month anniversary of the
          Effective Date, upon six (6) months written notice.

     (c)  This Agreement, and therefore Employee's employment with Employer,
          shall terminate automatically upon Employee's death. If Employee has
          been unable to substantially perform his duties hereunder by virtue of
          his Legal Disability (as defined in paragraph 4(c)(vi)(A)), and
          Employee has not resumed his duties to the satisfaction of the Board
          of Directors within Thirty (30) days of the delivery to Employee of
          written notice thereof, which notice shall have been approved by a
          majority of Employer's Board of Directors, Employer may terminate this
          Agreement and Employee's employment.

     10. PAYMENTS ON TERMINATION.

     (a)  If, prior to the expiration of this Agreement, Employee's employment
          is terminated by Employee under paragraph 9(b)(i) for Good Reason, or
          under paragraph 9(b)(ii) by reason of a Change in Control of Employer
          or if the Employee's employment is terminated by the Employer other
          than For Cause, Employer shall provide the Employee with: (i)
          Employee's full Salary, and Benefits through the date of his
          termination, and (ii) an amount equal to two (2) years' Salary, and
          (iii) a continuation of health benefits for two (2) years from the
          date of termination as if such termination had not occurred.

     (b)  If prior to the expiration of this Agreement, Employee's employment is
          terminated by Employee under paragraph 9(b)(iii) upon six (6) months
          written notice, Employer shall provide to Employee: (i) Employee's
          full Salary, Bonus and Benefits through the date of his termination,
          and (ii) an amount equal to one (1) year's Salary and (iii) a
          continuation of health benefits for one (1) year from the date of
          termination as if such termination had not occurred.

     (c)  During the Term, if Employee's employment is terminated pursuant to
          paragraph 9, (a) or (c), Employee shall receive, on the next normal
          pay date following the date of his termination, the Salary, Bonus and
          Benefits to which he is entitled through the date of his termination.
          Employee shall not be entitled to severance pay by virtue of this
          Agreement or otherwise.

     (b)  Employee shall not be required to mitigate the amount of any payment
          provided for herein by seeking other employment or otherwise, nor
          shall the amount of any payment provided for herein be reduced by any
          compensation or retirement benefits heretofore or hereafter earned by
          Employee as the result of employment by any other person, firm or
          corporation.

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     11. EMPLOYEE'S REPRESENTATIONS AND WARRANTIES. Employee acknowledges that
Employee is knowledgeable to the extent that would be reasonably expected of a
senior officer of a company the size of Dumex regarding the affairs of Dumex and
that Employer and Derma are relying on information provided to them by Employee
with respect to the transfer of assets of Dumex to Employer pursuant to the
Asset Purchase Agreement. Employee hereby represents and warrants to Employer
and Derma that the following are true and accurate to the best of Employee's
knowledge and contain no misstatements of which Employee is aware, on and as of
the Effective Date hereof.

     (a)  EMPLOYEE CLAIMS AND LIABILITIES. Except as set forth on Schedule "A"
          hereto, there are no claims for any wages, vacation pay, sick pay,
          severance or any other benefits or amounts due to Dumex employees that
          would rank in priority to secured creditors of Dumex, and that no
          federal, provincial or local taxes relating to wages and/or benefits
          are due.

     (b)  LABOR MATTERS. Dumex has complied in all material respects with all
          labor agreements and all applicable laws relating to employment and
          labor, and there are no disputes between Dumex and any of its past or
          present employees that would rank in priority to secured creditors of
          Dumex.

     (c)  CUSTOMERS. Except as set forth in Schedule "B" hereto, the
          relationships of Dumex with all of its customers are good commercial
          working relationships, and no customers have canceled or otherwise
          terminated, or threatened to cancel or terminate, their relationship
          with Dumex, nor does Employee have any reason to know or basis to
          believe that any customer intends to terminate or cancel its
          relationship with Dumex or materially decrease or cancel
          orders/purchases from Dumex.

     (d)  ENVIRONMENTAL LAWS. Dumex has complied in all material respects with
          all applicable laws, rules and regulations relating to the protection
          of the environment, human health or hazardous materials
          ("Environmental Laws"), and there is no notice, demand, request for
          information, complaint, order, investigation or review pending or
          threatened. Dumex has not been requested by any governmental body,
          agency, official or authority to pay any sum(s) of money, or to take
          any action or refrain from any actions with respect to any
          environmental occurrence or condition.

     (e)  REGULATORY COMPLIANCE. Dumex possesses all necessary licenses, permits
          or approvals necessary to conduct its business and is in full
          compliance with all federal, provincial and local laws applicable to
          its business or products, and there are no claims, suits or
          proceedings of any kind pending with respect thereto.

     (f)  LITIGATION. Except as set forth in Schedule "C" hereto, there are no
          pending or threatened claims, disputes, hearings, governmental
          investigations, suits, actions or arbitrations, legal or
          administrative, of any nature whatsoever, by or against Dumex.

     (g)  ASSETS. All assets being transferred to Employer pursuant to the terms
          of the Asset Purchase Agreement are in existence and, subject to
          ordinary wear and tear, are in good working order and fit for their
          intended purpose except to the extent indicated in Schedule "D"
          hereto.

     (h)  NO MATERIAL MISSTATEMENTS. Employee has not made, and the Asset
          Purchase Agreement does not contain, any material untrue statements,
          misstatements or misleading statements.

     (i)  INSURANCE. Dumex has and has at all time through the date hereof had
          in full force and effect insurance with respect to all aspects of its
          business as is adequate and customary based upon the nature of its
          business and all premiums for such policies have been fully paid to
          the date hereof.

     12. RESTRICTIVE COVENANT. For a period of two years after the termination
by Employer For Cause or by Employee other than for Good Reason or pursuant to a
Change in Control or expiration of this Agreement, Employee will not, within the
greater of the currently existing marketing area of Employer or any future
marketing area of Employer established during Employee's employment under the
terms of this Agreement, direct or indirectly, own, manage, operate, control, be
employed by, participate in, or be connected

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in any manner with the ownership, management, operation, or control of any
business related to wound care therapeutics or otherwise similar to the type of
business conducted by Employer at the time of the termination or expiration of
this Agreement. Provided, however, the aforementioned restrictions shall not be
applicable to activities in which Employee was, and continued to be, engaged in
on the date of this Agreement. In the event of Employee's actual or threatened
breach of the provisions of this paragraph, Employer shall be entitled to an
injunction restraining Employee therefrom. Nothing herein shall be construed as
prohibiting Employer from pursuing any other available remedies for such breach
or threatened breach, including the recovery of damages from Employee.

     13. WAIVER OF BREACH. The waiver by Employer of a breach of any provision
of this Agreement by Employee shall not operate or be construed as a waiver of
any subsequent breach by Employee. No waiver shall be valid unless in writing
signed by an authorized officer of Employer and approved by an absolute majority
of Employer's board of directors.

     14. ASSIGNMENT. Employee acknowledges that the services to be rendered by
him are unique and personal. Accordingly, Employee may not assign any of his
rights or delegate any of his duties or obligations under this Agreement. The
rights and obligations of Employer under this Agreement shall inure to the
benefit of and shall be binding upon the successor and assigns of Employer.

     15. ENTIRE AGREEMENT. This Agreement contains this entire understanding of
the parties. It may be changed only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, extension,
or discharge is sought to be charged.

     16. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.

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     IN WITNESS WHEREOF, the parties have set their hands and seals the day and
year first written above.


                                    EMPLOYER:

                                    4087755 CANADA, INC.



                                    By:  _______________________________
                                    Name:  Edward J. Quilty
                                    Title:   Chairman


                                    DERMA SCIENCES, INC.

                                    By:  ________________________________
                                    Name:  Edward J. Quilty
                                    Title:   President & Chief Executive Officer


                                    EMPLOYEE:



                                    -----------------------------------
                                    William Goodwin



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