Exhibit 10.40

PURCHASE AGREEMENT

        THIS PURCHASE AGREEMENT (“Agreement”) made this ___ day of January, 2005, by and between Derma Sciences, Inc., a Pennsylvania corporation with offices located at 214 Carnegie Center, Suite 100, Princeton, New Jersey, 08540 (“Derma Sciences” or “the Company”) and ____________________________________ (“Purchaser”).

        IN CONSIDERATION of the mutual covenants contained in this Agreement, the Company and the Purchaser agree as follows:

    1.        Authorization of Sale of the Units. The Company has authorized the sale of a maximum of $1,500,000 in dollar amount of the Company’s units (the “Units”) at the price of $0.50 per Unit, each Unit consisting of one share of the Company’s common stock, par value $0.01 per share (the “Common Stock”), and one four-year warrant to purchase one share of Common Stock at an exercise price of $1.05 per share (the “Warrant(s)”). Each Warrant shall be issued pursuant to a warrant agreement (the “Warrant Agreement”) substantially in the form included as Exhibit D to the private placement memorandum. Shares of Common Stock issuable upon exercise of the Warrants are referred to herein and in the Registration Rights Agreement as “Warrant Shares”.

    2.        Agreement to Sell and Purchase the Units. At the Closing (as defined in Section 4), the Company will sell and deliver to the Purchaser, and the Purchaser will buy from the Company and accept delivery of, the Units at the price of $0.50 per Unit and upon the terms and conditions hereinafter set forth:

    2.1.        Number and Dollar Amounts of the Units. The number of Units and dollar amount of the Units to be purchased are as follows:

    2.2.        Documents. This Agreement and all other agreements executed by the Company and the Purchaser relative to the Units are hereinafter sometimes collectively referred to as the “Documents.” The term Documents shall mean, inter alia , this Agreement, the Registration Rights Agreement and the Warrant Agreement, together with, as the context may require, the private placement memorandum and purchase agreements and registration rights agreements executed by Additional Purchasers (defined below) and any schedules or exhibits thereto.

    2.3.        Additional Purchasers. The Company may, but shall be under no obligation to, sell the Units upon the terms set forth in this Agreement to purchasers in addition to the Purchaser (these latter individually, “Additional Purchaser” and collectively, “Additional Purchasers”). The default of the Purchaser or Additional Purchasers under this Agreement or any other agreement of like tenor for purchase of the Units shall not alter or affect the obligations of the Purchaser or any Additional Purchasers hereunder or thereunder.

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        2.4 Over-subscription. In the event the offering of the Units is over-subscribed, the Company reserves the right to allot to the Purchaser or any Additional Purchasers less than the number of Units subscribed for by the Purchaser or Additional Purchasers.

    3.        Registration Rights . The Common Stock and Warrant Shares will be registered by the Company for public sale. Terms and conditions governing registration of the Common Stock and Warrant shares are set forth in the Registration Rights Agreement attached hereto.

    4.        Delivery of the Common Stock and Warrants at the Closing. The completion of the purchase and sale of the Units (the “Closing”) shall occur at a place and time (the “Closing Date”) to be determined by the Company and of which the Purchaser will be notified by facsimile transmission or otherwise; provided, however, that the Closing shall not occur later than January 31, 2005. At the Closing, the Company shall deliver to the Purchaser one or more certificates registered in the name of the Purchaser, or in such nominee name(s) as designated by the Purchaser, representing the Common Stock and Warrants comprising the Units purchased by the Purchaser as set forth in section 2.1 hereof. The Company’s obligation to complete the purchase and sale of the Units at the Closing shall be subject to receipt of Federal Reserve (same-day) funds in the full amount of the purchase price for the Units being purchased hereunder by the Purchaser. The Purchaser’s obligation to accept and to pay for the Units shall be subject to the condition that the Company shall have (a) entered into a Registration Rights Agreement in the form attached hereto (the “Registration Rights Agreement”) and (b) the accuracy in all material respects of the representations and warranties made by the Company herein and the fulfillment in all material respects of those undertakings of the Company to be fulfilled prior to Closing.

    5.        Representations, Warranties and Covenants of the Company. The Company hereby represents and warrants to, and covenants with, the Purchaser as follows:

    5.1.        Organization and Qualification . Each of the Company and its subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to conduct its business as currently conducted and to own its assets wherever located. Each of the Company and its subsidiaries is qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the operations of the Company and its subsidiaries, taken as a whole.

    5.2.        Due Execution, Delivery and Performance of the Agreement. The Company has full power and authority to enter into this Agreement and each of the Documents. This Agreement has been, and each Document and the Common Stock will be, duly authorized, executed and delivered by the Company. The Company’s execution, delivery and performance of this Agreement and each Document will not violate (i) any law, rule or regulation applicable to the Company or its subsidiaries or (ii) the Certificate of Incorporation or Bylaws of the Company or its subsidiaries or (iii) any provision of any indenture, mortgage, agreement, contract or other instrument to which the Company or its subsidiaries is a party or by which the Company or its subsidiaries or any of their properties or assets is bound as of the date hereof, or result in a breach of or constitute (upon notice or lapse of time or both) a default under any such indenture, mortgage, agreement, contract or other instrument or result in the creation or imposition of any lien, security interest, mortgage, pledge, charge or other encumbrance upon any properties or assets of the Company or its subsidiaries, except, in the case of such clause (iii), where such violation, breach or default would not have a

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material adverse effect on the business, properties, prospects, condition (financial or otherwise), net worth or results of operations of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”). Upon their execution and delivery (assuming the valid execution thereof by the respective parties thereto other than the Company), this Agreement and the Documents will constitute valid and binding obligations of the Company, enforceable in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

    5.3.        Issuance of the Common Stock and Warrants Shares. Upon issuance, the Common Stock and Warrant Shares will be duly authorized and validly issued and, upon payment therefor, will be non-assessable.

    5.4.        Litigation. There is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened against or affecting the Company or its subsidiaries which might result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries, taken as a whole, or which might materially and adversely affect their property or assets or which might materially and adversely affect the consummation of this Agreement and the other Documents. All pending legal or governmental proceedings to which the Company or its subsidiaries is a party or of which any of their property or assets is the subject, including ordinary routine litigation incidental to the business, are, considered in the aggregate, not material to the business of the Company and its subsidiaries.

    5.5.        Exchange Act Reports; No Material Misstatement or Omission. The Company has timely filed all periodic reports required to be filed under the Securities Exchange Act of 1934 (“Exchange Act Reports”). As of