EMPLOYMENT AGREEMENT

This Employment Agreement (the Agreement), dated as of the 13th day of September 2006, and effective as of the 7th day of August 2006, is entered into by and between CardioTech International, Inc., a Massachusetts corporation having its principal place of business at 229 Andover Street, Wilmington, Massachusetts 01887 (the Company), and Michael F. Adams, an individual with an address at 505 Tremont Street, Residence 208, Boston, Massachusetts 02116 (the Executive).

TERMS OF AGREEMENT

In consideration of this Agreement and the continued employment of the Executive by the Company, the parties agree as follows:

1.         Employment.  The Company hereby employs the Executive, on a full-time basis, to act as Chief Executive Officer and President of the Company and to perform such acts and duties and furnish such services to the Company in connection with and related to that position as is customary for persons with similar positions in like companies, and as the Board of Directors of the Company (the Board) shall from time to time reasonably direct.  The Executive shall be an officer of the Company.  The Executive hereby accepts said employment.  The Executive shall use his best and most diligent efforts to promote the interests of the Company; shall discharge his duties in a highly competent manner; and shall devote his full business time and his best business judgment, skill and knowledge to the performance of his duties and responsibilities hereunder.  The Executive shall report directly to the Board.  Nothing contained herein shall preclude the Executive from devoting incidental and insubstantial amounts of time to activities other than the business of the Company.

2.         Term of Employment.  The Company agrees to employ the Executive for the period commencing on August 7, 2006 and ending on August 6, 2008 (the Employment Period).  Notwithstanding the foregoing, both the Executive and the Company shall have the right to terminate the Executives employment under this Agreement upon thirty (30) days written notice to the other party, subject to the Companys obligation to pay severance benefits under certain circumstances as provided in Sections 3.6 and 3.7 hereof.  If the Executive shall remain in the employ of the Company beyond the Employment Period, in the absence of any other express agreement between the parties, this Agreement shall be deemed to continue on a month-to-month basis (the Extended Employment Period).

3.         Compensation and Benefits; Disability.

3.1           Salary.  During the Executives employment, the Company shall pay the Executive an annualized base salary of Two Hundred and Fifty Thousand Dollars ($250,000.00) (the Base Salary), payable in equal installments pursuant to the Companys customary payroll policies in force at the time of payment (but in no event less frequently than monthly), less required payroll deductions and state and federal withholdings.  The Base Salary may be adjusted from time to time in the sole discretion of the Board, except that the Executive, if a Director, shall not be entitled to vote thereon.  The Base Salary shall be reviewed annually by the Board.

3.2           Bonus Payment.  During the Employment Period, the Executive may receive, in the sole discretion of the Compensation Committee of the Board (the Compensation Committee), an annual bonus payment in an amount, if any, to be determined by the Compensation Committee, except that the Executive, if a member of the Compensation Committee, shall not be entitled to vote thereon.

3.3           Executive Benefits.  During the Employment Period, the Executive shall receive such benefits as are customarily provided to other officers and employees of the Company, including but not limited to the following benefits:

3.3.1                        Health Insurance.  Non-contributory health insurance pursuant to a health policy or substantially similar policy; and

3.3.2                        Life Insurance.  Life insurance on the life of the Executive with an Executive-directed beneficiary in the amount of two hundred percent (200%) of the Base Salary.

3.4           Vacation.  The Executive may take six (6) weeks of paid vacation during each year at such times as shall be consistent with the Companys vacation policies and, in the Boards judgment, with the Companys vacation schedule for officers and other employees.

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