<PAGE>
 
                                                                    EXHIBIT 10.7



                             DATED March 24, 1998



                       CARDIOTECH INTERNATIONAL LIMITED



                                      and



                                 ALAN EDWARDS



                               SERVICE AGREEMENT
<PAGE>
 
                               SERVICE AGREEMENT
                               -----------------

PARTIES

This Employment Agreement ("the Agreement"), dated the 24th day of March 1998,
is entered into by and between

     (1)  CARDIOTECH INTERNATIONAL LIMITED, (Company No. 03198267). whose
          registered office is situate at 5/7 Grosvenor Court. Foregate Street,
          Chester, CH1 1HG ("the Company"), being a wholly owned subsidiary of
          Cardiotech International Inc. a U.S. Corporation subject to the laws
          of the State of Massachusetts, ("the Parent"); and

     (2)  ALAN EDWARDS of Barnfold, Lianfair D.C., Ruthin. Clwyd, LLI5 2RU,
          United Kingdom ("the Executive").

TERMS OF AGREEMENT

1.  Employment

    1.1.  The Company hereby agrees to employ the Executive, on a full time
          basis, to act as Managing Director 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 Chairman of the
          Company shall from time to time reasonably direct. The Executive shall
          be an officer of the Company.

    1.2.  The Executive hereby accepts the said employment.

    1.3.  The Executive shall use his diligent efforts to promote the interests
          of the Company; shall discharge his duties in a Competent manner; and
          shall devote his
<PAGE>
 
          full business time and his business judgment, skill and knowledge to
          the performance of his duties and responsibilities hereunder.

    1.4.  The Executive shall report directly to the Chairman of the Company.

    1.5.  Nothing in this Agreement shall preclude the Executive from devoting
          incidental and insubstantial amounts of time to activities other than
          the business of the Company, or from performing any duties, whether as
          employee, officer or otherwise for and on behalf of the Parent.

    1.6.  The Executive's normal working hours are 9.00 am to 5.00 pm, Monday o
          Friday. but the Executive shall work such hours as are reasonably
          necessary for the performance of his duties to the Company.


2.  Term of Employment
    ------------------

    2.1.  The Company agrees to employ the Executive initially for the period
          commencing on 1st January 1998 and ending on 31st December 1998 ("the
          Employment Period"), provided that both the Executive and the Company
          shall have the right to terminate the Executive's employment under
          this Agreement upon not less than thirty (30) days written notice to
          the other party, subject to the Company's obligation to pay severance
          benefits under certain circumstances as provided in Clauses 3.6 and
          3.7 hereof.

    2.2.  If the Executive remains employed by 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").

    2.3.  For the purpose of calculating the Executive's period of continuous
          employment the Executive's previous employment with Newtec Vascular
          Products Limited

                                       3
<PAGE>
 
          from March 1989 to August 1993, and with Polymedica UK Limited From
          August 1993 until June 1996, shall be taken into account. The
          Executive's period of continuous employment with the Company began in
          March 1989.


3.  Compensation and Benefits: Disability
    -------------------------------------
    3.1.  Salary
          ------

          During the Executive's employment, the Company shall pay the Executive
          an annual base salary of Forty Thousand Four Hundred and Twenty-Three
          Pounds (L40,423) (the "Base Salary") payable in equal instalments
          pursuant to the Company's customary payroll policies in force at the
          time of payment (but in no event less frequently than monthly), by
          credit transfer to the Executive's bank. The Base Salary may be
          adjusted from time to time by the Board of Directors of the Company
          (the "Board") upon the recommendation of the Board of Directors of the
          Parent, 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 his employment, the Executive may receive, in the sole
          discretion of the Compensation Committee of the Board of Directors of
          the Parent ("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 his employment, 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:

                                       4
<PAGE>
 
          3.3.1.  Health Insurance. Non-contributory health insurance pursuant
                  ----------------  
                  to a Freedom Care policy or substantially similar policy;

          3.3.2.  Life Insurance. Life insurance on the life of the Executive
                  --------------
                  with a beneficiary nominated by the Executive in the amount of
                  one hundred and fifty per cent (150%) of the Base Salary; and

          3.3.3.  Car Allowance.  An annual car allowance of Six Thousand Pounds
                  -------------
                  (L6.000).

    3.4.  Holidays
          --------

          3.4.1.  In addition to statutory and public holidays the Executive may
                  take four weeks paid holiday during each holiday year at such
                  times as shall be consistent with the Company's holiday
                  policies and (in the Board's judgment) with the Company's
                  holiday schedule for officers and other employees.

          3.4.2.  The Company's holiday year runs from 1st January to 31st 
                  December.

          3.4.3.  Holiday entitlement will accrue pro rata on a month by month
                  basis, at the rate of one twelfth of the annual entitlement
                  for each complete month of service.

    3.5.  Disability or Death
          -------------------

          If during the Employment Period or the Extended Employment Period, the
          Executive shall

                                       5
<PAGE>
 
          3.5.1.  become ill, disabled or otherwise incapacitated so as to be
                  unable to perform his usual duties either for a period in
                  excess of one hundred twenty (120) consecutive days, or for
                  more than one hundred eighty (180) days in any consecutive
                  twelve (12) month period, or

          3.5.2.  die;

                  then the Company shall have the right to terminate this
                  Agreement on thirty (30) days written notice to the Executive
                  or his personal representative(s).

    3.6.  Severance Payment
          -----------------
          3.6.1.  In the event that

                  3.6.1.1.  the Company terminates this Agreement without Cause
                            (i.e. other than pursuant to Clause 3.5 or Clause 4
                            hereof) at any time (including during the Extended
                            Employment Period): or

                  3.6.1.2.  the Executive terminates his employment for Good
                            Reason following a Change in Control of the Company;
                            or

                  3.6.1.3.  the Company fails to renew this Agreement within two
                            (2) years following the occurrence of a Change in
                            Control;


                            the Company shall pay the Executive a severance
                            payment, equal to the Executive's then current Base
                            Salary multiplied by 2.

                  3.6.2.    "Good Reason" shall mean, during the nine (9) month
                            period following a Change in Control:

                                       6
<PAGE>
 
                  3.6.2.1.  a determination in good faith by the Executive that
                            as a result of such Change in Control he is not able
                            to discharge his duties effectively or

                  3.6.2.2.  without the Executive's express written consent, the
                            occurrence of any of the following circumstances:
                            (a) the assignment to the Executive of any duties
                            inconsistent (except in the nature of a promotion)
                            with the position in the Company the he held
                            immediately prior to the Change in Control or a
                            substantial adverse alteration in the nature or
                            status of his position or responsibilities or the
                            conditions of his employment from those in effect
                            immediately prior to the Change in Control; (b) a
                            reduction by the Company in the Base Salary as in
                            effect on the date of the Change in Control; (c) the
                            Company's requiring the Executive to be based more
                            than twenty-five (25) miles from the Company's
                            offices at which he was principally employed
                            immediately prior to the date of the Change in
                            Control except for required travel on the Company's
                            business to an extent substantially consistent with
                            his present business travel obligations; or (d) the
                            failure by the Company to continue in effect any
                            material compensation or benefit plan in which the
                            Executive participates immediately prior to the
                            Change in Control unless an equitable arrangement
                            (embodied in art ongoing substitute or alternative
                            plan) has been made with respect to such plan, or
                            the failure by the Company to continue the
                            Executive's participation therein (or in such
                            substitute or alternative plan) on a basis not
                            materially less favorable, both in terms of the
                            amount of benefits provided and the level of his
                            participation relative to other participants, than
                            existed at the time of the Change in Control.

                                       7
<PAGE>
 
                  3.6.2.3.  The Executive's continued employment shall not
                            constitute consent to, or a waiver of rights with
                            respect to any circumstance constituting Good Reason
                            hereunder.


          3.6.3.  For purposes of this Agreement, a "Change in Control" shall
                  occur or be deemed to have occurred only if any of the
                  following events occur:

                  3.6.3.1.  any "person" as such term is used in Clauses 13(d)
                            and 14(d) of the United States' Securities Exchange
                            Act of 1934, as amended ("the Exchange Act"), (other
                            than the Parent, any majority owned subsidiary
                            thereof, any trustee or other fiduciary holding
                            securities under an employee benefit plan of the
                            Parent, any trustee or other fiduciary of a trust
                            treated for tax purposes in the United States as a
                            grantor trust of which the Parent is the grantor, or
                            any corporation owned directly or indirectly by the
                            shareholders of the Parent in substantially the same
                            proportion as their ownership of shares in the
                            Parent) is or becomes the beneficial owner (as
                            defined in Rule 13d-3 under the Exchange Act),
                            directly or indirectly, of securities of the Company
                            representing 50% or more of the combined voting
                            power of the Company's then outstanding securities
                            on any matter which could come before its
                            shareholders for approval;

                  3.6.3.2.  individuals who, as of the date of this Agreement,
                            constitute the Board (the "Incumbent Board") cease
                            for any reason to constitute at least a majority of
                            the Board, provided that any person becoming a
                            director subsequent to the date hereof whose
                            election, or nomination for election by the
                            Company's shareholders, was approved by a vote of at
                            least a majority of the directors then comprising
                            the Incumbent Board shall be, for purposes of this

                                       8
<PAGE>
 
                            Agreement, considered as though such person were a
                            member of the Incumbent Board;

                  3.6.3.3.  the shareholders of the Company approve a merger or
                            consolidation of the Company with any other company
                            or corporation, other than (A) a merger or
                            consolidation which would result in the voting
                            securities of the Company outstanding immediately
                            prior thereto continuing to represent (either by
                            remaining outstanding or by being converted into
                            voting securities of the surviving entity) more than
                            80% of the combined voting power of the voting
                            securities of the Company or such surviving entity
                            outstanding immediately after such merger or
                            consolidation or (B) a merger or consolidation
                            effected to implement a recapitalization of the
                            Company (or similar transaction) in which no
                            "person" (as herein above defined) acquires more
                            than 50% of the combined voting power of the
                            Company's then outstanding securities; or

                  3.6.3.4.  the shareholders of the Company approve a plan of
                            complete liquidation of the Company or an agreement
                            for the sale or disposition by the Company of all or
                            substantially all of the Company's assets.

    3.7.  Benefits After Termination
          --------------------------

          Other than as required by law, the Executive shall not be entitled to
          any employee benefits provided under Clause 3.3 hereof after
          termination of the employment of the Executive, whether or not
          severance pay is being provided, except that if the Executive is
          entitled to the severance payment described in Clause 3.6 of this
          Agreement:

                                       9
<PAGE>
 
          3.7.1.  the Company shall continue in full force and effect, at its
                  expense, the life insurance provided for in Clause 3.3.2
                  hereof for a period of one (1) year after termination of the
                  Executive's employment hereunder or until the Executive
                  becomes employed, whichever first occurs; and

          3.7.2.  during the six (6) month period following the termination of
                  the Executive's employment, the Company shall reimburse the
                  Executive for out-of-pocket health insurance expenses incurred
                  by the Executive. If the Executive elects not to maintain
                  health insurance, the Company is under no obligation to
                  reimburse the Executive for his otherwise elected coverage.

          3.7.3.  The Executive shall be obliged to give the Company prompt
                  notice of his re-employment.

4.  Discharge for Cause
    -------------------

    4.1.  The Company may discharge the Executive and terminate his employment
          under this Agreement for Cause without further liability to the
          Company by a majority vote of the Board, except that Executive, if a
          Director, shall not be entitled to vote thereon. As used in this
          Agreement, "Cause" shall mean any or all of the following:

          4.1.1.  misconduct of the Executive during the course of his
                  employment which is materially injurious to the Company and
                  which is brought to the attention of the Executive promptly
                  after discovery by the Company, including but not limited to,
                  theft or embezzlement from the Company, the intentional
                  provision of services to competitors of the Company, or
                  improper disclosure of proprietary information, but not
                  including any act or failure to act by the Executive that he
                  believed in good faith to be proper conduct not adverse to his
                  duties hereunder;

                                       10
<PAGE>
 
          4.1.2.  willful disregard or neglect by the Executive of his duties or
                  of the Company's interests that continues after being brought
                  to the attention of the Executive;

          4.1.3.  unavailability (except as provided in Clause 3.5 hereof) of
                  the Executive substantially to perform the duties provided for
                  herein;

          4.1.4.  conviction of a fraud or transgression or any criminal offence
                  involving dishonesty, breach of trust or moral turpitude
                  during the Executive's employment;

          4.1.5.  the Executive's breach of any of the material terms of this
                  Agreement (including the failure of the Executive to discharge
                  his duties in a competent manner) or any of the collateral
                  agreements executed in connection herewith as enumerated in
                  Clause 10.1 hereof.

    4.2.  In the event the Company exercises its rights to termination the
          Executive's employment under this Clause 4, the Executive shall not be
          entitled to receive any severance pay or other termination benefits,
          except as required by law.

5.  Termination Without Cause
    -------------------------


    The Company may terminate this Agreement without Cause, and without further
    liability to the Company except as set out in Clauses 3.6 and 3.7 hereof.
    by a majority vote of the Board. The Executive, if a Director, shall not be
    entitled to vote on the termination of this Agreement without Cause.

6.  Expenses
    --------


    Pursuant to the Company's customary policies in force at the time of
    payment, the Executive shall be promptly reimbursed, against presentation
    of vouchers or receipts

                                       11
<PAGE>
 
    therefor, for all authorized expenses properly incurred by him on the
    Company's behalf in the performance of his duties hereunder.

7.  Additional Agreements
    ---------------------

    Upon execution of this Agreement, the Executive shall execute and deliver
    to the Company an Agreement Not to Compete (the "Non-Competition
    Agreement") and a Confidential and Proprietary Information Agreement (the
    "Confidential and Proprietary Information Agreement"), substantially in the
    forms attached hereto as Schedules A and B.  The agreements attached hereto
    as Schedules A and B shall survive the expiration of or termination of this
    Agreement and the termination of Executive's employment with the Company.

8.  Dispute Resolution
    ------------------

    In case of dispute the parties hereby agree to submit to the non-exclusive
    jurisdiction of the English courts.

9.  Notices
    -------

    Any notice of communication given by either party hereto to the other party
    shall be in writing and personally delivered, posted by recorded delivery,
    postage prepaid, or delivered by a recognized overnight carrier, to the
    addresses provided above. All notices shall be deemed given when actually
    received. Any person entitled to receive notice (or a copy thereof) may
    designate in writing, any notice to the others, another address to which
    notices to such person shall thereafter be sent.

10. Miscellaneous
    -------------

    10.1. Entire Agreement
          ----------------

          This Agreement contains the entire understanding of the parties in
          respect of its subject matter and supersedes all prior agreements and
          understandings between the parties with respect to such subject
          matter; provided however that nothing in 

                                       12
<PAGE>
 
          this Agreement shall affect the Executive's or the Company's
          obligations under the Non Competition Agreement or the Confidential
          and Proprietary Information Agreement attached as Schedules A and B.

    10.2. Amendment: Waiver
          -----------------

          This Agreement may not be amended, supplemented, cancelled or
          discharged except by written instrument executed by the party affected
          thereby. No failure to exercise, and no delay in exercising, any
          right, power or privilege hereunder shall operate as a waiver thereof.
          No waiver of any breach of any provision of this Agreement shall be
          deemed to be a waiver of any preceding or succeeding breach of the
          same or any other provisions.

    10.3. Binding Effect: Assignment
          --------------------------

          The rights and obligations of this Agreement shall bind and inure to
          the benefit of any successor of the Company by reorganization, merger
          or consolidation or any assignee of all or substantially all of the
          Company's business and properties. The Executive's rights or
          obligations under this Agreement may not be assigned by the Executive;
          except that the Executive's right to compensation to the earlier of
          the date of death, disability pursuant to Clause 3.5 hereof, or
          termination of actual employment, shall pass to the Executive's
          personal representative(s).

    10.4. Headings
          --------

          The headings contained in this Agreement are for reference purposes
          only and shall not affect the meaning or interpretation of this
          Agreement.

    10.5. Governing Law: Interpretation
          -----------------------------

          This Agreement shall be construed in accordance with and governed for
          all purposes by the laws and public policy of England applicable to
          contracts executed and to be wholly performed within such
          jurisdiction. Service of process in any dispute shall be effective (a)
          upon the Company, if service is made on any officer of the Company
          other than the Executive; (b) upon the Executive, if served 

                                       13
<PAGE>
 
          at the Executive's residence last known to the Company with an
          information copy to the Executive at any otter residence, or in care
          of a subsequent employer of which the Company may be aware.

    10.6. Further Assurances
          ------------------

          Each of the parties agrees to execute, acknowledge, deliver and
          perform, or cause to be executed, acknowledged, delivered or
          performed, at any time, or from time to time, as the case may be, all
          such further acts, deeds, assignments, transfers, conveyances, powers
          of attorney, and assurances as may be necessary or proper to carry out
          the provisions or intent of this Agreement.

    10.7. Severability
          ------------

          If any one or more of the terms, provisions, covenants or restrictions
          of this Agreement shall be determined by a court of competent
          jurisdiction to be invalid, void or unenforceable, the remainder of
          the terms, provisions, covenants and restrictions of this Agreement
          shall remain in full force and effect and shall in no way be affected,
          impaired or invalidated. If, moreover, any one or more of the
          provisions contained in this Agreement shall for any reason be
          determined by a court of competent jurisdiction to be excessively
          broad as to duration, geographical scope, activity or subject, it
          shall be construed by limiting or reducing it so as to be enforceable
          to the extent compatible with then applicable law.

     IN WITNESS whereof the parties have set their hands this _____ day of
     _______ for and on behalf of


CARDIOTECH INTERNATIONAL LIMITED

/s/ Michael Szycher, Ph.D.
--------------------------
MICHAEL SZYCHER Ph.D.
Chairman of the Board

                                       14
<PAGE>
 
EXECUTIVE


/s/ Alan Edwards
----------------
ALAN EDWARDS

                                       15
<PAGE>
 
                                   SCHEDULE A
                                        
                            AGREEMENT NOT TO COMPETE
                            ------------------------

I recognize that CardioTech International Ltd. a company incorporated under
English law (the "Company" which term shall include its subsidiaries and
affiliated entities) desires to retain me in its employ and that the Company
wishes to ensure that I do not compete with the Company, as specified below, in
the event my employment with the Company is terminated.

In consideration of the Company's employment or continued employment of me, I
agree as follows:

1.   I will not, for a period of one (1) year commencing with the termination of
     my employment with the Company, engage (directly or indirectly) in any
     activities or render any services similar or reasonably related to those in
     which I shall be engaged or those reasonably related to those in which I
     shall have engaged or those which I shall have rendered as an employee of
     the Company during any part of the two year period preceding my termination
     for any trade or business which directly competes with the Company in any
     place where the Company does or may do business in any line of business
     engaged in (or planned to be engaged in) by the Company, where now existing
     or hereafter established, nor shall I engage in such activities nor render
     such services for any other person or entity engaged or about to become
     engaged in such activities to, for or on behalf of any such trade or
     business.

2.   I agree that for a period of one (1) year following termination of my
     employment with the Company, I will not solicit or in any manner encourage
     employees of the Company to leave their employ. I further agree that during
     such period I will not offer or cause to be offered employment to any
     person who was employed by the Company at any time during the six (6)
     months prior to the termination of my employment with the Company.

                                       16
<PAGE>
 
3.   For the purposes of this Agreement. "termination of employment" shall mean
     voluntary termination by me or termination by the Company for "Cause" (as
     that term is defined in an Employment Agreement of even date herewith
     between me and the Company).

4.   I understand that nothing in this Agreement shall affect my obligations
     under the "Confidential and Proprietary Information Agreement" between the
     Company and myself of even date herewith.

5.   I understand that in addition to any other rights and remedies available to
     the Company for any breach by me of my obligations hereunder, the Company
     shall be entitled to seek enforcement of my obligations hereunder by court
     injunction.

6.   If any provision of this Agreement shall be declared invalid, illegal or
     unenforceable, then such provision shall be enforceable to the extent that
     a court shall deem it reasonable to enforce such provision. If such
     provision shall be unreasonable to enforce to any extent, such provision
     shall be severed from this Agreement and all remaining provisions shall
     continue in full force and effect.

7.  This Agreement shall be governed in all respects by the laws of England.

IN WITNESS WHEREOF I have executed this Agreement.

/s/   Alan Edwards                  Date
-------------------                      ---------   
Alan Edwards

ACCEPTED AND AGREED TO:
CardioTech International, Ltd

By: /s/Michael Szycher, Ph.D.       Date:  3/24/98
   -------------------------              -------
Michael Szycher, Ph.D.
Chairman of the Board

                                       17
<PAGE>
 
                                  SCHEDULE B

                                 FOR EMPLOYEES
                                 -------------
              CONFIDENTIAL AND PROPRIETARY INFORMATION AGREEMENT
               --------------------------------------------------

In consideration of my employment by CardioTech International, Ltd. a company
incorporated under English law (the "Company", which term shall include its
subsidiaries and affiliated entities), I hereby agree as follows:

1.   I will make full and prompt disclosure to the Company of all inventions,
     improvements, modification, discoveries, methods, data, ideas and
     developments (all of which are collectively -termed "Developments"
     hereinafter), whether patentable or not, made or conceived or reduced to
     practice or learned by me either alone or jointly with others or under my
     direction during the period of my employment, whether or not made or
     conceived during normal working hours or on the premises of the Company.  I
     do not have any Developments other than those I have already disclosed to
     the Company.

2.   I agree that all Developments covered by paragraph 1 shall be the sole
     property of the Company and its assigns, and the Company and its assigns
     shall be the sole owner of all patents and other rights in connection
     therewith. I hereby assign to the Company any rights in connection
     therewith. I hereby assign to the Company any rights I may have or acquire
     in all Developments. I further agree as to all Developments to assist the
     Company in every proper way (but at the Company's expense) to obtain and
     from time to time enforce patents in Developments in any and all countries,
     and to that end I will execute all documents for use in applying for and
     obtaining such patents thereon and enforcing same as the Company may
     desire, together with any assignments thereof to the Company or persons
     designated by it. My obligation to assist the Company in obtaining and
     enforcing patents for Developments in any and all countries shall continue
     beyond the termination of my employment, but the Company shall compensate
     me at a reasonable rate after such termination for time actually spent by
     me at the Company's request on such assistance.

                                       18
<PAGE>
 
     I understand that this paragraph 2 does not apply to Developments for which
     no equipment. supplies, facility or trade secret information of the Company
     was used and which were developed entirely on my own time, and (a) which do
     not relate (1) to the business of the Company or (2) to the Company's
     actual or demonstrable anticipated research or Development, and (b) which
     do not result from any work performed by me for the Company, but I agree
     that the Company shall have a non-exclusive royalty free license to use
     such Developments far all purposes.

3.   I hereby represent that, to the best or my knowledge, I have no present
     obligation to assign to any former employer or any other person,
     corporation or firm, any Development covered by paragraph 2.  I represent
     that my performance of all the terms of this Agreement as an employee of
     the Company does not and will not breach any agreement to keep in
     confidence proprietary information acquired by me in confidence or in trust
     prior to my employment by the Company. I have no entered into, and I agree
     I will not enter into, any agreement (either written or oral) in conflict
     herewith.

4.   I will also assign to the Company and all copyrights and reproduction
     rights to any material prepared by me in connection with my employment.

5.   I understand as part of the consideration for the offer or employment
     extended to me by the Company and of my employment or continued employment
     by the Company that I have not brought and will not bring with me to the
     Company or use in the performance of my responsibilities at the Company any
     materials or documents of a former employer which are not generally
     available to the public, unless I have obtained written authorization from
     the former employer for their possession and use.

6.   During the course of my employment by the Company, I may learn of the
     Company's confidential information or confidential information entrusted to
     the Company by other persons, corporations, or firms. The Company's
     confidential information includes matters 

                                       19
<PAGE>
 
     not generally known outside the Company, such as Developments relating to
     existing and future products and services marketed or used by the Company
     and data relating to the general business operations of the Company (e.g.
     concerning sales, costs, profits, organizations, customer lists, pricing
     methods etc.). I agree not to disclose any confidential information of the
     Company or of such other persons, corporations, or firms to others or to
     make use of it, except on the Company's behalf, whether or not such
     information is produced by my own efforts. Also, I may learn of
     Developments, ways of business, etc. which in themselves are generally
     known, but whose use by the Company is not generally known, and I agree not
     to disclose to other such use, whether or not such use is due to my own
     efforts.

7.   At the time I begin my employment and during the term of my employment by
     the Company, I will not become employed by or act on behalf of any other
     person, company, or firm which is engaged in any business or activity
     similar to or competitive with that of the Company, unless such employment
     has been approved by the Company in writing and signed by an appropriate
     personnel manager of the Company.

8.   In the event that my employment is transferred by the Company to a
     subsidiary or affiliated company (as the case may be), my employment by
     such company will, for the purposes of this Agreement, be considered as
     continued employment by the Company, unless I execute an agreement
     substantially similar in substance to this Agreement, in which event my
     employment by the Company shall be deemed to continue until the effective
     date of said agreement in any such company for which I become employed.

9.   I hereby give the Company and its assigns permission to reasonably use
     photographs of me, either during or after my employment, with or without
     using my name, for whatever purposes it deems necessary.

10.  Upon termination of my employment, unless my employment is transferred to a
     subsidiary or affiliated company of the Company, I agree to leave with the
     Company all

                                       20
<PAGE>
 
     records, drawings, notebooks and other documents permitting to the
     Company's confidential information, whether prepared by me or others, and
     also any equipment, tools or other devices owned by the Company, then in my
     possession however such items are obtained, and I agree not to reproduce
     any document or data relating thereto.

11.  My obligations under this Agreement shall survive the termination of my
     employment regardless of the manner of such termination, and shall be
     binding upon my heirs, executors, and administrators.

12.  Contemporaneously with entering the employ of the Company I have terminated
     employment with all past employers.

13.  I represent that I have made no Developments relevant to the subject matter
     of my employment by the Company that have been made or conceived or first
     reduced to practice by me alone or jointly with others prior to my
     engagement by the Company.

14.  I agree that in addition to any other rights and remedies available to the
     Company for any breach by me of my obligations hereunder, the Company shall
     be entitled to seek enforcement of my obligations hereunder by court
     injunction.

15.  If any provision of this Agreement shall be declared invalid, illegal or
     unenforceable, then such provision shall be enforceable to the extent that
     a court shall deem it reasonable to enforce such provision. If such
     provision shall be unreasonable to any extent, such provision shall be
     severed from this Agreement and all remaining provisions shall continue in
     full force and effect.

16.  This Agreement shall be effective as of the date set forth below next to my
     signature.

17.  This Agreement shall be governed in all respects by the laws of England.

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<PAGE>
 
     IN WITNESS WHEREOF I have executed this Agreement.


 /s/ Alan Edwards
-------------------
Alan Edwards


ACCEPTED AND AGREED TO:
Cardiotech International, Ltd.


By:  /s/Michael Szycher, Ph.D.              Date:  3/24/98
     -------------------------                     -------
     Michael Szycher, Ph.D.
     Chairman of the Board

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