LEASE

        This lease  ("Lease") is made". as of July 1, 1997 between Mark Kornfeld
and Gary  Kornfeld,  t/a CROSS  CREEK  POINTE,  hereinafter  "Lessor"  and DERMA
SCIENCES "Lessee".

                                   WITNESSETH

        Lessor hereby leases to Lessee and Lessee hereby leases from Lessor that
certain office space known as Suite 403, consisting of approximately 2003 sq.ft.
on the fourth  floor,  of that certain  office  building  located at Cross Creek
Pointe  Office  Building,  situated  at Route  315,  Wilkes-Barre,  Pennsylvania
referred to below as the Premises'.

1. Term. This Lease is for a term of three years,  beginning on July 1, 1997 and
ending on June 30, 2000 (the "Term").

2. Rent. The total rent per year, will, be Thirty-Seven  Thousand Fifty-Five end
50/100  dollars  ($37,055.50),  payable in equal monthly sums of Three  Thousand
Eighty-Seven  and 95/100 dollars  ($3,087.95) on or before the first day of each
month during the Terra.

3. Use.  The  Premises  may be used for the  operation  of offices  and  related
services.

4. Assignment and Subletting.  Lessee may assign and/or Sublet the premises with
written  permission  of  Lessor.  Lessor's  permission  shall  not  unreasonably
withheld.

5. Maintenance and Repairs. Lessor, at its own expense, will put the Premises in
good order and repair on or before the commencement of this Lease and subject to
Lessee's  inspection.  Lessor, at its own expense,  will maintain all structural
elements  of the  Premises,  the  plumbing,  electric  and other  utility  lines
servicing the Premises,  and walls,  roof,  doors,  and windows of the Premises.
Lessee,  at its own expense,  will  otherwise  maintain the Premises in good and
safe condition and will surrender the Premises, at termination of this lease, in
as good condition as received, normal wear and tear excepted.

6. Services and Utilities.  Lessor, at its own expense,  will furnish janitorial
services and all utilities except telephone.

7. Entry and  Inspection.  Lessee will permit Lessor or Lessor's agents to enter
the Premises at reasonable times and upon reasonable  notice, for the purpose of
inspection,  and to  exhibit  them for  purposes  of sale or  rental at any time
within sixty (60) days prior to the termination of this Lease.


<PAGE>


8.  Indemnification.  Lessor will not be liable for any damage or injury  caused
solely by Lessee on the Premises. Lessee will indemnify and hold Lessor harmless
for any claims for damages  caused  solely by an act or omission of Lessee,  its
agents or employees that occurs on the Premises.  Lessor will indemnify and hold
Lessee  harmless  for any claims for  damages  caused by an act or  omission  of
Lessor, its agents or employees.

 9.  Condemnation.  If any part of the Premises is taken or condemned for public
use or  purpose  than the  Term  will  cease  from  the  date of the  taking  or
condemnation  and Lessee will have no further  obligation to pay rent after such
date. All sums which may be payable on account of any  condemnation  will belong
to Lessor,  provided however, that Lessee shall be entitled to retain any amount
awarded to it for the value of the leasehold,  loss of business, moving expenses
and any other damages and/or compensation as provided in law or equity.

 10. Bankruptcy. If before or during the Term, a petition in bankruptcy is filed
by or against Lessor or Lessee and is not dismissed  within ninety (90) days, or
if  either  party  makes  an  assignment  for the  benefit  of  creditors  or is
adjudicated  bankrupt ("Bankrupt  Party"),  this Lease will be terminated at the
option of the other party,  after ten (10) days  written  notice to the Bankrupt
Party.

 11. Casualty. If any part of the Premises are damaged by fire or other cause to
the extent that the Premises are rendered  untenantable and cannot be reasonably
rendered in as good  condition as existed  prior to the damage  within (60) days
from the date of the damage,  this Lease may be  terminated  by Lessee by giving
written notice to Lessor and rent will be abated from the date of the damage. If
the damage is not such as to permit a  termination  of this  Lease as  described
above,  or if Lessee does not terminate this Lease,  Lessor will promptly repair
the Premises to its original  condition.  The obligation for rent will be abated
during the period that the Premises are being repaired.

 12. Insurance.  Lessor, at its own expense, will pay fire insurance premiums on
the building of which the Premises are a part in an amount  sufficient  to cover
the entire building. Such insurance will name both Lessee and Lessor as insureds
in  proportion of their  interests in the building or its contents.  Lessor will
provide Lessee with proof of such insurance upon Lessee's demand. Lessee, at its
option,  will provide fire insurance on the personal  property that Lessee moves
into the Premises,  and any casualty  insurance  desired by Lessee,  both at the
expense of Lessee.  To the maximum extent permitted by insurance  policies which
may be owned by Lessor or Lessee,  Lessee and  Lessor,  for the  benefit of each
other, waive any and all rights of subrogation which might otherwise exist.


<PAGE>


13. Possession. If Lessor is unable to deliver possession of the Premises at the
commencement   of  the  Term,   Lessor  will   reimburse   Lessee  for  Lessee's
out-of-pocket  expenses as a result of such delay, and Lessee will not be liable
for any rent until  possession is delivered.  Lessee may terminate this Lease if
possession  is not  delivered  within ten (10) days of the  commencement  of the
Term.

 14.  Lessee's  Default.  In the event the monthly rental provided above remains
unpaid after the due date and fifteen (15) days prior to written  notice,  or in
the event Lessee ahs not properly  corrected any other defaults under this Lease
after  thirty  (30) days  written  notice form Lessor to do so, then Lessor will
have the option to  terminate  this Lease or pursuing any other  remedies  which
Lessor may have at law or equity or under any state statute or  regulation.  The
election by Lessor of any remedy  afforded Lessor will not be deemed a waiver of
any other remedies available to Lessor, Lessor's remedies being cumulative.

 15.  Lessor's  Default.  In the event of a breach of this lease by Lessor,  and
Lessor's failure to cure such breach within thirty (30) days of Lessee's written
notice  of  breach  to  Lessor,  Lessee  will have the  option  of:  (1)  taking
reasonable  steps to cure such breach,  (2) terminating this Lease upon ten (10)
days written notice, and/or (3) pursuing any other remedies which Lessee may hat
at law or equity or under any state statute or  regulation.  Should Lessee elect
to cure Lessor's breach,  Lessee may offset the costs of cure incurred by Lessee
against any future sums due Lessor under the Lease  and/or  submit an invoice to
Lessor specifying the amount due Lessee, which amount Lessor will pay within ten
(10) days of receipt of Lessee's  invoice.  The election by Lessee of any remedy
afforded  Lessee will not be deemed a waiver of any other remedies  available to
Lessee, Lessee's remedies being cumulative.

 16.  Waiver.  The waiver by either  Lessor or Lessee of any breach by the other
will not be deemed a waiver of any other breach similar of otherwise.

 17.  Consents.  Any  consent  required  of either  Lessor or Lessee will not be
unreasonable withheld.

 18. Notice.  Any notice which wither party may or is required to give,  will be
given by registered or certified mail, upon receipt requested,  postage prepaid,
to the address(es)  shown below, or at such other places as may be designated by
the parties form time to time.


<PAGE>


To Lessor at:

         Mark Kornfeld and Cary Kornfeld
         Cross Creek Pointe
         1065 Highway 315
         Wilkes-Barre, PA 18702

To Lessee At:

         Derma Sciences
         121 W. Grace Street
         Old Forge, PA 18518
         Mr. John T. Borthwick

 19.  Option to Renew.  Lessor  grants to Lessee,  an option to renew this lease
with all the terms and  conditions  of the renewal lease being the same as terms
and conditions in this Lease.  To exercise this option,  Lessee must give Lessor
written  notice of its  intention to renew at least sixty (60) days prior to the
expiration of each such term.

 20. Quite  Enjoyment.  Lessor covenants that Lessee will have quit enjoyment of
the Premises for the duration of this Lease, and any renewal thereof.

 21.  Parties.  The covenants and agreement in this Lease will be binding on and
will inure to the  parties and may be amended  only by a writing  signed by both
parties.

         IN WITNESS  WHEREOF,  the lessor and Lessee have executed this Lease as
of the day and year first above written.

LESSOR                                      LESSEE

CROSS CREEK POINT                           DERMA SCIENCES, INC.



By:   /s/ Lena Sidelmen                     By:   /s/ John T. Borthwick
    -------------------------                   ---------------------------
    Manager                                     President

Attest:   /s/ Ann Scarantino                Attest:   /s/ Robert DiGiovine
        --------------------                        -----------------------