Exhibit 10.3

 

LOCK-UP AGREEMENT

 

Lock-Up Agreement (this “Agreement”) is entered into as of December 22, 2004, by
and between CardioTech International, Inc., a Massachusetts corporation (the
“Company”), and the shareholder of the Company named on the signature page
hereof (the “Shareholder”).

 

RECITALS:

 

A.                                   The Company and certain purchasers (the
“Purchasers”), have entered into a Securities Purchase Agreement dated as of
December 22, 2004 (the “Purchase Agreement”), pursuant to which the Purchasers
have agreed to purchase, and the Company has agreed to sell, shares of the
Company’s common stock, par value $0.01 per share (the “Common Stock”), warrants
to purchase shares of Common Stock, and additional investment rights to purchase
shares of Common Stock.

 

B.                                     Shareholder is a shareholder of the
Company and owns and/or controls shares of Common Stock (the “Shares”).

 

C.                                     As a condition to the Purchasers entering
into the Purchase Agreement, Shareholder has agreed to the lock-up set forth in
Section 1 hereof.

 

D.                                    Capitalized terms used in this Agreement
but not otherwise defined herein shall have the meanings ascribed to such terms
in the Purchase Agreement.

 

AGREEMENTS:

 

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Lock-Up. Shareholder hereby agrees
that, except as set forth in Section 2 below, from the date hereof until the
90th day following the date that the Registration Statement is declared
effective by the Commission (the “Lock-up Period”), without the prior written
consent of the Company and the Purchasers, he will not offer, pledge, sell,
contract to sell, grant any options for the sale of or otherwise transfer,
distribute or dispose of, directly or indirectly (collectively “Dispose of”),
any Shares (the “Lock-up”). On and after the 1st day following the last day of
the Lock-up Period, no Shares shall be subject to the Lock-up.

 

2.                                       Permitted Dispositions. The following
dispositions of Shares shall not be subject to the Lock-up set forth in
Section 1:

 

1

--------------------------------------------------------------------------------

 

(a)                                  Shareholder may Dispose of Shares to his
spouse, siblings, parents or any natural or adopted children or other
descendants or to any personal trust in which any such family member or
Shareholder retains the entire beneficial interest;

 

(b)                                 Shareholder may Dispose of Shares on his
death to Shareholder’s estate, executor, administrator or personal
representative or to Shareholder’s beneficiaries pursuant to a devise or bequest
or by laws of descent and distribution;

 

(c)                                  Shareholder may Dispose of Shares as a gift
or other transfer without consideration;

 

(d)                                 Shareholder may make a bona fide pledge of
Shares to a lender; and

 

(e)                                  Shareholder may Dispose of, through bona
fide market sale transactions, up to 15,000 Shares during the Lock-up Period.

 

provided, however, that in the case of any transfer of Shares pursuant to
clauses (a), (c), and (d), the transferor shall, at the request of the Company,
provide evidence (which may include, without limitation, an opinion of counsel
satisfactory in form, scope and substance to the Company in its sole discretion
as the issuer thereof) satisfactory to the Company that the transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended.

 

In the event Shareholder Disposes of Shares described in this Section 2, such
Shares shall remain subject to this Agreement and, as a condition of the
validity of such disposition, the transferee shall be required to execute and
deliver a counterpart of this Agreement. Thereafter, such transferee shall be
deemed to be the Shareholder for purposes of this Agreement.

 

3.                                       Miscellaneous.

 

(a)                                  Amendments and Waivers. The provisions of
this Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given other than as
initially agreed upon in writing by the Company, Shareholder and the Purchasers.

 

(b)                                 Successors and Assigns. Shareholder shall
not assign any rights or benefits under this Agreement without the prior written
consent of the Company and the Purchasers.

 

(c)                                  Counterparts. This Agreement may be
executed in a number of identical counterparts and it shall not be necessary for
the Company and Shareholder to execute each of such counterparts, but when each
has executed and delivered one or more of such counterparts, the several parts,
when taken together, shall be deemed to constitute one and the same instrument,
enforceable against each in accordance with its terms.  In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart executed by the party against whom enforcement of this
Agreement is sought.

 

2

--------------------------------------------------------------------------------

 

(d)                                 Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

(e)                                  Governing Law; Venue. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
MASSACHUSETTS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW. The
Company and Shareholder (i) hereby irrevocably submit to the non-exclusive
jurisdiction of the United States District Court sitting in the Northern
District of Texas and the courts of the State of Texas located in Dallas County
for the purposes of any suit, action or proceeding arising out of or relating to
this Agreement, and (ii) hereby waive, and agree not to assert in any such suit,
action or proceeding, any claim that he or it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper.

 

(f)                                    Severability. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under present or
future laws effective during the term of this Agreement, such provision shall be
fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of each such illegal, invalid or unenforceable provision, there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.

 

(g)                                 Entire Agreement. This Agreement is intended
by the Company and the Shareholder as a final expression of their agreement and
is intended to be a complete and exclusive statement of their agreement and
understanding in respect of the subject matter contained herein.  This Agreement
supersedes all prior agreements and understandings between the Company and the
Shareholder with respect to such subject matter.

 

(h)                                 Third Party Beneficiaries. This Agreement is
intended for the benefit of the Company, Shareholder and the Purchasers and
their respective successors and permitted assigns and is not for the benefit of,
nor may any provision hereof be enforced by, any other person or entity. The
Company and Shareholder each specifically acknowledge and agree that each
Purchaser is a third party beneficiary of this Agreement.

 

3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

 

CARDIOTECH INTERNATIONAL, INC.

 

 

 

By:

 

 

 

Michael Szycher, Ph.D., Chairman & CEO

 

 

 

 

 

“SHAREHOLDER”:

 

 

 

 

 

Name:

 

 

 

 

 

 

By:

 

 

 

 

(signature)

 

 

 

Title of signatory:

 

 

 

(if not an individual)

 

4

--------------------------------------------------------------------------------