Exhibit
10.1


TRANSITION
AGREEMENT


This Transition Agreement (the “Agreement”) is entered into as of
August 11, 2006 (the “Effective Date”), by and between CardioTech
International, Inc. (“CardioTech” or the “Company”) and Michael Szycher (“Szycher”)
(collectively, the “Parties”).


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


1.             Transition Period.  Effective August 7, 2006 (the “Transition
Date”), Szycher has resigned from (i) his positions as President, Chief
Executive Officer and Treasurer of CardioTech, (ii) the Company’s Board of
Directors, and (iii) all positions, offices and directorships with any
subsidiaries of CardioTech.  Beginning on
the Transition Date and ending on the earlier of August 6, 2007 or a
termination of Szycher’s employment pursuant to Paragraph 2 below (the “Transition
Period”), Szycher shall be employed by CardioTech in a non-executive capacity
as its Special Science Advisor.  In that
capacity, he shall report solely to CardioTech’s President and Chief Executive
Officer (“CEO”).  During the Transition
Period, Szycher shall meet and/or communicate with Company management and
senior Company technical personnel and provide such information and expertise
as he may possess for the purpose of transitioning to senior Company technical
personnel his knowledge and expertise relating to polymer development and
related activities conducted by the Company, upon the CEO’s reasonable
request.  The Parties agree that Szycher
shall not perform any work or take any action on behalf of the Company during
the Transition Period except as explicitly directed and authorized by the CEO
and, except for reasonable transition assistance as specifically set forth above,
agreed to by Szycher.  The Parties
further agree that Szycher shall perform all work and provide all assistance
hereunder at such times and locations as are mutually agreed to by the CEO and
Szycher.  It is understood that Szycher’s
position is not full-time and that, with the exception of the transition
assistance specifically set forth above, his services will be subject to his
availability and other obligations he may then have.


During the Transition
Period, the Company shall compensate Szycher at the annual rate of $325,000,
less applicable taxes and withholdings, to be paid at a monthly rate of $23,000
with a Final Payment of $49,000 due upon execution, delivery and non-revocation
of the Release of Claims attached hereto as Exhibit A (the “Release”), as
further described in Paragraph 4.  For
the duration of the Transition Period, the Company shall continue to provide
Szycher with insurance coverage under its group health, dental, life and other
plans, under the same terms that applied to Szycher on the Transition Date,
subject to the terms of those plans. 
During the Transition Period, Szycher shall not be eligible for a bonus
or other incentive compensation, nor shall he accrue vacation or sick time.


2.             Termination During the Transition
Period.  The Company
may not terminate Szycher’s employment during the Transition Period other than
for Cause, which shall be defined as (a) material breach of any of the material
terms of this Agreement or the agreements set forth in Section 9 herein after a
30-day notice and opportunity to cure period; (b) willful misconduct which is
materially injurious to the Company; or (c) the conviction of a fraud or felony
or criminal offense involving dishonesty or moral turpitude or breach of trust.  If the Company terminates Szycher’s
employment during the Transition Period with Cause, Szycher shall not be 



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entitled to receive the
Final Payment set forth below, and any entitlement(s) Szycher has, might have,
had, or might have had to compensation,
bonuses, wages, or participation in any benefit plan, policy, program,
compensation agreement or practice of the Company, shall terminate immediately,
except as required by law and provided that his stock options shall be governed
by the terms thereof.


3.             Separation From Employment.  Effective on the earlier of Szycher’s
termination in accordance with Paragraph 2 or August 7, 2007 (the “Separation
Date”), Szycher’s employment with the Company shall cease.  The Parties agree that this cessation of
employment shall constitute a “voluntary termination” by Szycher as that term
is defined in Section 3 of the Noncompetition Agreement executed by the Parties
on or about March 27, 1998 (the “Noncompetition Agreement”).  On the Separation Date, the Company shall pay
to Szycher all salary earned and all unused vacation time as of the Separation
Date.  On or shortly after the Separation
Date, the Parties agree to execute the Release, which shall cover the duration
of the Transition Period.


4.             Final Payment.  Following the Separation Date, following the
Company’s receipt of the fully-executed Release, and provided Szycher’s
employment was not terminated for Cause, the Company will issue to Szycher a
one-time payment of $49,000, less applicable taxes and withholdings (the “Final
Payment”).  The Final Payment will be
paid in a lump sum, no later than ten (10) days following expiration of the
Revocation Period set forth in Paragraph 5 of the Release.


5.             Health
and Life Insurance Benefits.  Szycher
may elect to continue his current group medical and/or dental insurance
coverage following the Separation Date, provided he or his eligible
dependent(s) remain eligible for such coverage under the federal law known as
COBRA.  If Szycher elects such
continuation coverage, and provided Szycher’s employment was not terminated for
Cause, the Company will continue to pay on his behalf the same portion of
premiums that it pays for active employees with the same coverage, through the
earlier of (i) February 28, 2008 or (ii) the date Szycher becomes ineligible
for COBRA coverage.  Information
outlining Szycher’s rights and responsibilities under COBRA will be forwarded
to him on or near the Separation Date.


For 12 months following
the Separation Date, and provided Szycher’s employment was not terminated for
Cause, the Company further agrees to provide Szycher with life insurance in the
amount of 150% of $325,000, the full premium of which shall be paid by the
Company.


Following the Separation
Date, any entitlement Szycher has, might have, had, or might have had to compensation, bonuses, wages, or
participation in any benefit plan, policy, program, contract or practice of the
Company, shall terminate, except as required by federal or state law, by
applicable plan terms, or by the express terms of this Agreement.


6.             Stock Options.  The
Parties acknowledge that Szycher has been awarded options to purchase 3,230,743
shares of the Company’s common stock, all of which options are fully
vested.  The grant dates and exercise
prices of such options are set forth in Exhibit B hereto.  Szycher shall have the right to exercise any
or all of his option shares until the earlier of (a) ninety (90) days from the
Separation Date or (b) the date they would otherwise expire by their 



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terms.  The options shall terminate on the earlier of
(i) the close of business on the ninetieth (90th) day following the Separation Date, or
(ii) the close of business on the date they would otherwise expire by their
terms.


7.             Property;
Computers.  Szycher represents and warrants that no later
than August 21, 2006, he will return to the CFO any and all documents,
products, files, notes, memoranda, records, reports, materials and information
related to the Company and its business that may be at his home or in his
possession, including all copies, extracts and summaries thereof, whether in
hard copy or electronic format.  He
further agrees that prior to returning these items, he will not disclose them
or their contents to any person or entity or use them or their contents for any
purpose except for the benefit of the Company. 
Szycher also agrees that he will not attempt at any time in the future,
for any purpose, to access or use any of Company’s computers or computer
networks or systems, including their servers and electronic mail system, unless
authorized to do so by the CEO.


Szycher
further agrees to return, no later than August 21, 2006, to the CFO all
property and equipment of the Company in his possession, including but not
limited to computer equipment, cellular phones, PDAs, access cards and/or keys,
passwords or access codes, calling cards and credit cards.  In turn, the Company agrees that it shall
return to Szycher, no later than August 21, 2006, any personal effects
remaining in his CardioTech office.


For
the duration of the Transition Period, the Company shall make available to
Szycher such information and Company equipment as may be reasonably required to
perform his services for the Company during that Period.


8.             Cooperation.  From the execution of this
Agreement forward, Szycher agrees to reasonably cooperate with the Company in
the defense or prosecution of any threatened or actual claims or actions which
may be brought by, against or on behalf of the Company, its predecessors or any
of its current or former partners, agents, employees, directors or affiliates
and which relate to events or occurrences that transpired or are alleged to
have transpired during his tenure with the Company.  Such cooperation shall include, without
implication of limitation, being available to meet with the Company’s counsel
to prepare for discovery or trial and to testify truthfully as a witness when
reasonably requested by the Company at reasonable times and for reasonable time
periods.


9.             Confidentiality of Company
Information; Restrictive Covenants.  The Parties agree that both the
Noncompetition Agreement and the Confidential and Proprietary Information
Agreement which Szycher and the Company entered into on or about March 27, 1998
(the “Confidentiality Agreement”) are incorporated herein by reference and
shall remain in full force and effect following the execution of this
Agreement.


10.          Accord and Satisfaction.  Szycher agrees that the payments and benefits
set forth in this Agreement, together with all other payments and benefits
previously provided to him by the Company, are complete payment, settlement,
satisfaction and accord with respect to all obligations and liabilities of the
Releasees to Szycher, and with respect to all Claims that could be asserted by
Szycher against any of the Releasees regarding any relationship between Szycher
and the Company, and any change in or cessation of any such relationship,
including, without 



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limitation, all claims
for wages, salary, expenses, incentive pay, bonuses, business expenses, paid
time off, equity interests, severance pay, attorneys’ fees, compensatory
damages, exemplary damages, or other compensation, benefits, costs or
sums.  The Company agrees that Szycher’s
undertakings in this Agreement, and the performance of such undertakings, are
complete payment, settlement, satisfaction and accord with respect to all
obligations and liabilities of Szycher to the Company.  Provided, however, that nothing in this
Agreement is intended to release or discharge any of the Company’s insurance or
indemnity obligations to Szycher regarding Szycher’s service as President,
Chief Executive Officer and Treasurer and member of the Board of the Company or
any other position with the Company he may have held.


11.          Non-Disparagement;
References and Other Communications.  From the
execution of this Agreement forward, Szycher agrees not to make any
statement, written or oral, which disparages the Company, its business and
services, or any of its partners, members, directors, officers, employees, or
agents.  Szycher further agrees not to
make any statement or take any action which has the intended or foreseeable
effect of harming the business interests of the Company, and to refrain from
engaging in any communications regarding the Company with shareholders,
research analysts or others in the financial community.   In addition, Szycher agrees that he will
refrain from speaking to third parties on behalf of the Company unless
requested to do so by the CEO.


For its part, the Company
agrees that its senior executive officers and the members of the Company’s
Board of Directors will not make any statement, written or oral, to any person
or entity not affiliated with the Company (excluding agents of the Company)
which disparages Szycher, his business reputation and qualifications, or his
employment as Chief Executive Officer of the Company.


Nothing in this Paragraph
shall prohibit or bar the Parties from providing truthful testimony in any
legal proceeding or in communicating with any governmental agency or
representative or from making any truthful disclosure required under law;
provided, however, that advance written notice is provided by either party of
the intent to make such disclosures and provided that best efforts will be used
to ensure that this Paragraph is complied with to the maximum extent possible.  Moreover, nothing herein shall prevent
Szycher from participating in any proceeding before any federal or state
administrative agency to the fullest extent permitted by applicable law,
provided that he will be prohibited to the fullest extent authorized by law
from obtaining monetary damages in any agency proceeding in which he does so
participate.


The parties agree to
issue a press release in the form attached hereto as Exhibit C and agree that
any public statements will be in accordance with Exhibit C and/or with any SEC
filings.


12.          General
Release by Szycher. 
Szycher, on behalf of himself and his spouse, heirs, children,
successors, current and former agents, representatives, executors,
beneficiaries, administrators, trustees, attorneys and assigns, voluntarily
releases and discharges the Company and its predecessors, successors,  and current and former assigns, agents,
officers, partners, members, directors, shareholders, employees,
representatives, insurers, investors, attorneys, affiliates, and any other
related entities; and all persons acting by, through, under, or in concert with
any of them (any and all of which are referred to as “Releasees”), from any and
all charges, 



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complaints,
claims, liabilities, obligations, promises, agreements, causes of action,
damages, losses, expenses, and debts of any nature whatsoever, known or unknown
(“Claims”), which Szycher has, claims to have, ever had, or ever claimed to
have had against Releasees through the Effective Date.  This general release of Claims includes,
without implication of limitation, all Claims relating to Szycher’s employment
and separation from employment with the Company; all Claims relating to Szycher’s
relationship to, interest, equity or investment in, memberships in, or
partnerships with the Company; all Claims of discrimination, harassment and
retaliation prohibited by any federal, state, or local statute, regulation, or
ordinance, including without implication of limitation, Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, the Americans
With Disabilities Act, the Family and Medical Leave Act, the Employee
Retirement Income Securities Act and Massachusetts General Laws Chapter 151B;
and all other statutory or common law Claims. 
Szycher also waives any Claim for reinstatement, attorneys’ fees,
interest, or costs, and all Claims for wages or other compensation, provided that this Release shall not
be construed to (a) impair his right to enforce the terms of the Agreement, or
(b) release or discharge any of CardioTech’s insurance or indemnity obligations
to Szycher regarding Szycher’s service as President, Chief Executive Officer,
Treasurer and member of the Board of the Company and such other positions with
the Company as he may have held. 
Additionally, nothing in this Agreement shall be interpreted to prohibit
Szycher from filing an age discrimination claim with any anti-discrimination
agency, or from participating in an age discrimination investigation or
proceeding conducted by any such agency. 
However, by signing this Agreement, Szycher acknowledges that he is
waiving any and all rights to money damages and any other relief that might
otherwise be available should he or any other entity pursue claims arising out
of or relating to his employment with the Company against the Releasees.


13.          General Release by the Company.  The Company, on behalf of itself and its
predecessors, successors, current and former assigns, agents, officers,
partners, members, directors, shareholders, employees, representatives,
insurers, investors, attorneys, affiliates, and any other related entities; and
all persons acting by, through, under, or in concert with any of them,
voluntarily releases and discharges Szycher and his spouse, heirs, children,
successors, current and former agents, representatives, executors,
beneficiaries, administrators, trustees, attorneys and assigns, from any and
all charges, complaints, claims, liabilities, obligations, promises,
agreements, causes of action, damages, losses, expenses, and debts of any
nature whatsoever, known or unknown, which the Company has, claims to have,
ever had, or ever claimed to have had against Szycher, through the Effective
Date, arising out of (a) Szycher’s employment relationship with or service as
an employee, officer or director of the Company or the termination of such
relationship or service or (b) any event, condition, circumstance or obligation
that occurred, existed or arose on or prior to the date the Company signs this
Agreement; provided that this
release of claims shall not (i) include or extend to any claim based upon,
arising out of, or relating to any act or omission by Szycher about which the
Company did not know as of the date the Company signs this Agreement; or (ii)
include or extend to any shareholder derivative claims against Szycher; or
(iii) be construed to impair the Company’s right to enforce the terms of this
Agreement.


14.          Non-Filing of Complaints or Charges.  By signing this Agreement, the Parties
represent that they have not filed any complaint or charge against each other
or against any of the Releasees with any local, state or federal agency or
court, or assigned any of the released Claims to any third party.



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15.          Binding Nature of Agreement.  This Agreement shall be
binding upon, and inure to the benefit of, the Parties and their respective
heirs, administrators, representatives, executors, successors and assigns.  This Agreement may be assigned by the
Company, but may not be assigned by Szycher.


16.          Remedy for
Breach.  Szycher understands
and agrees that CardioTech may seek to recover the Final Payment if he
materially violates this Agreement.  In addition, Szycher understands and
agrees that a material breach of Paragraphs
7, 8, 9, 11, 12 and/or 14 herein could result in irreparable harm to the
Company and that money damages would not provide an adequate remedy.  Therefore, Szycher agrees that in addition to
any other rights that the Company may have, the Company shall have the right to
seek specific performance and injunctive relief in the event Szycher materially
breaches any of those Paragraphs of this Agreement.


17.          Use of the Agreement as Evidence.  This Agreement may not be used as evidence in
any subsequent proceeding of any kind, except one in which the Releasees or
Szycher allege a breach of the terms of this Agreement or elect to use this
Agreement as a defense to any claim.


18.          Entire Agreement; Modifications.  With the exception of the Noncompetition
Agreement, the Confidentiality Agreement, the Parties’ Indemnification
Agreement dated June 10, 1996, and the stock option agreements applicable to
the grants set forth in Exhibit B hereto, which will survive and remain in full
force and effect, this Agreement contains the entire agreement among the
Parties hereto with respect to the matters covered hereby, and supersedes all
prior and contemporaneous communications, e-mails, agreements, representations,
understandings or negotiations between Szycher, the Company and/or their agents
and attorneys, including but not limited to the Employment Agreement between
the Parties dated January 1, 2005 and all prior employment agreements.  This Agreement may be modified only by a
written agreement signed by an authorized representative of each of the Parties
hereto.  No waiver of this Agreement or
any provision hereof shall be binding upon the Party against whom enforcement
of such waiver is sought unless it is made in writing and signed by or on
behalf of such Party.


19.          Further Assurances.  The Parties agree to execute, acknowledge (if
necessary), and deliver such documents, certificates or other instruments and
take such other actions as may be reasonably required from time to time to
carry out the intents and purposes of this Agreement, provided they do not
create any material additional obligations upon either Party.


20.          Notice and Right to Consider.  Szycher has been advised to
consult with and has consulted with an attorney before executing this
Agreement.  He acknowledges that he has
been given the opportunity, if so desired, to consider this Agreement for
twenty-one (21) days before executing it. 
The Parties agree that any changes to this Agreement, whether material
or not, will not re-start the 21-day period. 
If Szycher does not sign this Agreement and return it to the Company so
that it is received within the 21-day period, it will not be valid.  In the event that Szycher executes this
Agreement within less than twenty-one (21) days, he acknowledges that such
decision was entirely voluntary and that he had the opportunity to consider
this Agreement for the entire 21-day period. 
The Parties acknowledge that, for a period of seven (7) days from the
date that Szycher signs this Agreement (the “Revocation Period”), he will
retain the right to 



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revoke this Agreement by
written notice to the Company received before the end of the Revocation Period,
and that this Agreement will not become effective or enforceable until the
expiration of the Revocation Period.


21.          Acknowledgments and Other Terms.  Szycher agrees that he has
carefully read and understands all of the provisions of this Agreement, that he
has been advised to consult with and has consulted with an attorney, and that
he is voluntarily entering this Agreement. 
Szycher further represents and acknowledges that in executing this
Agreement, he is not relying and has not relied upon any representation or
statement made by the Company (including its partners, members, agents,
representatives, directors, employees and attorneys) with regard to the subject
matter, basis or effect of this Agreement.


22.          Interpretation.  The language of all parts
of this Agreement shall in all cases be construed as a whole, according to its
fair meaning, and not strictly for or against any of the Parties.  This Agreement shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision
hereof shall be prohibited or invalid under any such law, such provision shall
be ineffective to the extent of such prohibition or invalidity without
invalidating or nullifying the remainder of such provision or any other
provisions of this Agreement.  The
captions of the sections of this Agreement are for convenience of reference
only, and in no way define, limit or affect the scope or substance of any section
of this Agreement.


23.          Counterparts.  This Agreement may be
executed in any number of counterparts and may be delivered by facsimile, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.


24.          Governing Law.  This Agreement shall take
effect as an instrument under seal and shall be governed and construed in
accordance with the laws of Massachusetts, without regard to its conflicts of
laws principles.  Except as otherwise
provided in Paragraph 12 of this Agreement, any disputes and claims arising
under or relating to this Agreement and/or the rights, obligations and
performance of the Parties hereunder shall be settled by a single arbitrator
sitting in Boston, Massachusetts under the applicable Employment Arbitration
Rules and Procedures of



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the American Arbitration Association.  In the
event arbitration is brought with respect to this Agreement by either Party,
the prevailing Party shall be entitled to recover from the losing Party his or
its reasonable attorneys’ fees and expenses.


IN WITNESS WHEREOF, the Parties hereto have executed
this Agreement as an instrument under seal as of August 11, 2006.


	
  

  CARDIOTECH INTERNATIONAL, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael F. Adams

  	
   

  
	
   

  	
   

  	
   

  
	
  Name and Title:

  	
  CEO and President

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Michael Szycher

  	
   

  
	
  MICHAEL SZYCHER

  	
   

  
				



 



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Exhibit A


RELEASE
OF CLAIMS


This Release of Claims
(this “Release”) is entered into as of the last date indicated on the
signature page of this Release by and between CardioTech International Inc. (“CardioTech”
or the “Company”) and Michael Szycher (“Szycher”).  Szycher and CardioTech agree as follows:


1.    Release by Szycher.  For and in consideration of the receipt of
the Final Payment and other benefits set forth in the August 11, 2006
Transition Agreement between Szycher and CardioTech (the “Agreement”), which is
hereby incorporated by reference, the sufficiency of which is hereby
acknowledged, Szycher, on behalf of himself and his spouse, heirs, children,
successors, current and former agents, representatives, executors,
beneficiaries, administrators, trustees, attorneys and assigns, voluntarily
releases and discharges Cardiotech and its predecessors, successors,  and current and former assigns, agents,
officers, partners, members, directors, shareholders, employees,
representatives, insurers, investors, attorneys, affiliates, and any other
related entities; and all persons acting by, through, under, or in concert with
any of them (any and all of which are referred to as “Releasees”), from any and
all charges, complaints, claims, liabilities, obligations, promises,
agreements, causes of action, damages, losses, expenses, and debts of any
nature whatsoever, known or unknown (“Claims”), which Szycher has, claims to
have, ever had, or ever claimed to have had against Releasees through the date
last written below.  This general release
of Claims includes, without implication of limitation, all Claims relating to
Szycher’s employment and separation from employment with CardioTech; all Claims
relating to Szycher’s relationship to, interest, equity or investment in,
memberships in, or partnerships with CardioTech; all Claims of discrimination,
harassment and retaliation prohibited by any federal, state, or local statute,
regulation, or ordinance, including without implication of limitation, Title
VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act,
the Americans With Disabilities Act, the Family and Medical Leave Act, the
Employee Retirement Income Securities Act and Massachusetts General Laws
Chapter 151B; and all other statutory or common law Claims.  Szycher also waives any Claim for
reinstatement, attorneys’ fees, interest, or costs, and all Claims for wages or
other compensation, provided that
this Release shall not be construed to (a) impair his right to enforce the
terms of the Agreement and this Release, or (b) release or discharge any of
CardioTech’s insurance or indemnity obligations to Szycher regarding Szycher’s
service as President, Chief Executive Officer, Treasurer and member of the
Board of the Company and such other positions with the Company as he may have
held.  Additionally, nothing in this
Release shall be interpreted to prohibit Szycher from filing an age
discrimination claim with any anti-discrimination agency, or from participating
in an age discrimination investigation or proceeding conducted by any such
agency.  However, by signing this
Release, Szycher acknowledges that he is waiving any and all rights to money
damages and any other relief that might otherwise be available should he or any
other entity pursue claims arising out of or relating to his employment with
CardioTech against the Releasees.


2.    Release by CardioTech.  The Company, on behalf of itself and its
predecessors, successors, current and former assigns, agents, officers,
partners, members, directors, shareholders, employees, representatives,
insurers, investors, attorneys, affiliates, and any other 



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related entities; and all
persons acting by, through, under, or in concert with any of them, voluntarily
releases and discharges Szycher and his spouse, heirs, children, successors,
current and former agents, representatives, executors, beneficiaries,
administrators, trustees, attorneys and assigns, from any and all charges,
complaints, claims, liabilities, obligations, promises, agreements, causes of
action, damages, losses, expenses, and debts of any nature whatsoever, known or
unknown, which the Company has, claims to have, ever had, or ever claimed to
have had against Szycher, through the date last written below, arising out of
(a) Szycher’s employment relationship with or service as an employee, officer
or director of the Company or the termination of such relationship or service
or (b) any event, condition, circumstance or obligation that occurred, existed
or arose on or prior to the date the Company signs this Agreement; provided that this release of claims shall not (i) include
or extend to any claim based upon, arising out of, or relating to any act or
omission by Szycher about which the Company did not know as of the date the
Company signs this Release; (ii) include or extend to any shareholder
derivative claims against Szycher; or (iii) be construed to impair the Company’s
right to enforce the terms of this Release or the Agreement.


3.      Consideration.  In consideration of Szycher’s execution of
this Release, the Company will provide him with the consideration set forth in
the Agreement, which consideration Employee would not otherwise be entitled to
receive.  Except as set forth in this
Paragraph 3, and subject to any right or claim Employee may have under
Paragraph 1, it is expressly agreed that the Company does not have any
obligation to provide Employee at any time in the future with any payments,
benefits or other consideration.  This
Release shall not supersede any continuing obligations the Employee may have
under the terms of the Agreement.


4.    Non-Filing of Complaint or Charges.  By signing this Agreement, the Parties
represent that they have not filed any complaint or charge against each other
or against any of the Releasees with any local, state or federal agency or
court, or assigned any of the released Claims to any third party.


5.    Voluntary Waiver and Acknowledgement.  Szycher acknowledges that he has consulted
with the attorney of his choice in connection with executing this Release, and
that he has been given the opportunity, if so desired, to consider this Release
for twenty-one (21) days before executing it. 
If Szycher does not sign this Agreement and return it to the CEO at
CardioTech so that it is received within twenty-one (21) days of the Separation
Date as defined in the Agreement, it will not be valid.  In the event that Szycher executes this
Release within less than 21 days, he acknowledges that such decision was
entirely voluntary and that he had the opportunity to consider this Release for
the entire 21-day period.  The Parties
acknowledge that, for a period of seven (7) days from the date that Szycher
signs this Release (the “Revocation Period”), he will retain the right to
revoke this Release by written notice to the CEO at CardioTech, received before
the end of the Revocation Period, and that this Release will not become
effective or enforceable until the expiration of the Revocation Period.


6.    Other Terms. 
The Parties acknowledge that the performance of the promises of each are
contingent upon the fulfillment of the obligations of the other Party as set
forth in this Release and the Agreement. 
The Parties agree that this Release is not, and shall not be construed
to be, an admission of any violation of any federal, state or local statute or
regulation, or of any duty owed by either Party.  This Release shall take effect as an
instrument under seal and shall be 



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governed and construed in accordance with
Massachusetts law.  If any provision of
this Release is deemed invalid, the remaining provisions shall not be affected
and shall be enforced to the maximum extent permitted by law.


IN WITNESS WHEREOF, the
Parties have executed this Release as of the date last written below.


	
  

  	
   

  	
   

  
	
  MICHAEL SZYCHER

  	
   

  	
  DATE

  
	
   

  	
   

  	
   

  
	
  CARDIOTECH
  INTERNATIONAL, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  DATE

  
					



 



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Exhibit B


Szycher
Stock Option Grants


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  total

  	
   

  
	
  grant date

  	
   

  	
  options

  	
   

  	
  price

  	
   

  	
  vested

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10/1/96

  	
   

  	
  206,184

  	
   

  	
  1.9400

  	
   

  	
  206,184

  	
   

  
	
  10/1/96

  	
   

  	
  218,228

  	
   

  	
  1.9400

  	
   

  	
  218,228

  	
   

  
	
  5/17/98

  	
   

  	
  20,000

  	
   

  	
  2.1900

  	
   

  	
  20,000

  	
   

  
	
  9/3/98

  	
   

  	
  15,000

  	
   

  	
  1.1250

  	
   

  	
  15,000

  	
   

  
	
  9/3/98

  	
   

  	
  5,000

  	
   

  	
  1.1250

  	
   

  	
  5,000

  	
   

  
	
  11/14/98

  	
   

  	
  50,000

  	
   

  	
  1.8250

  	
   

  	
  50,000

  	
   

  
	
  1/26/99

  	
   

  	
  1,000

  	
   

  	
  1.8130

  	
   

  	
  1,000

  	
   

  
	
  7/16/99

  	
   

  	
  37,037

  	
   

  	
  0.8100

  	
   

  	
  37,037

  	
   

  
	
  1/1/00

  	
   

  	
  50,000

  	
   

  	
  0.5000

  	
   

  	
  50,000

  	
   

  
	
  3/31/00

  	
   

  	
  152,794

  	
   

  	
  3.0600

  	
   

  	
  152,794

  	
   

  
	
  3/31/00

  	
   

  	
  8,170

  	
   

  	
  3.0600

  	
   

  	
  8,170

  	
   

  
	
  10/20/00

  	
   

  	
  100,000

  	
   

  	
  2.2500

  	
   

  	
  100,000

  	
   

  
	
  12/31/00

  	
   

  	
  125,000

  	
   

  	
  0.8750

  	
   

  	
  125,000

  	
   

  
	
  4/30/01

  	
   

  	
  500,000

  	
   

  	
  1.1000

  	
   

  	
  500,000

  	
   

  
	
  1/1/02

  	
   

  	
  125,000

  	
   

  	
  1.8000

  	
   

  	
  125,000

  	
   

  
	
  4/11/03

  	
   

  	
  1,017,330

  	
   

  	
  0.9200

  	
   

  	
  1,017,330

  	
   

  
	
  4/1/04

  	
   

  	
  250,000

  	
   

  	
  5.1500

  	
   

  	
  250,000

  	
   

  
	
  2/14/05

  	
   

  	
  350,000

  	
   

  	
  2.6000

  	
   

  	
  350,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Totals

  	
   

  	
  3,230,743

  	
   

  	
   

  	
   

  	
  3,230,743

  	
   

  



 



 12














 


 


Exhibit C


FOR
IMMEDIATE RELEASE


CARDIOTECH
APPOINTS DR. SZYCHER AS SPECIAL SCIENCE ADVISOR


WILMINGTON,
MA, August 11, 2006.
CardioTech International, Inc. (AMEX: CTE), a developer and manufacturer of
advanced medical device products for the treatment of cardiovascular and other
diseases, today reported the appointment of Dr. Michael Szycher, 68, as Special
Science Advisor for a period of one year. 
Dr. Szycher has resigned from his prior positions as the Company’s
Chairman, President, CEO and Treasurer and as a director of the Company.


CardioTech’s
President and CEO Michael Adams said: “Michael Szycher is the founder of our
Company and for the past 10 years has made major contributions. With the
process now beginning for clinical trials of our CardioPassÔ synthetic coronary artery bypass graft in
Europe, we are entering a new stage in our Company’s development. We are
pleased that our founder can continue as an advisor.”


Commenting
on his new role at the Company, Dr. Szycher noted, “I am looking forward to
working with the Company’s dedicated and talented scientific team. CardioTech
is at an exciting stage of its history and I am very pleased to participate in
its growth.”


About CardioTech International:


CardioTech International, Inc. is a medical device
company that designs, develops, manufactures and sells innovative products for
the treatment of cardiovascular, orthopedic, oncological and other diseases.
The Company provides its customers access to a range of proprietary and novel
polymer and surface modification technologies. 
CardioPassTM is CardioTech’s proprietary, synthetic coronary artery
bypass graft (SynCAB).  The Company
generates revenues from sales of advanced medical devices, as well as from
contracted product design and development services. More information about
CardioTech is available at its website: http://www.cardiotech-inc.com


CardioTech International believes that this press release contains
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995.  Such
forward-looking statements are subject to risks and uncertainties.  Such statements are based on management’s
current expectations and are subject to facts that could cause results to
differ materially from the forward-looking statements.  For further information you are encouraged to
review CardioTech’s filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the period ended March 31,
2006.  The Company assumes no obligation
to update the information contained in this press release.


For Further Information Contact:


	
  Eric Walters

  	
  Sylvia Dresner

  
	
  Vice President
  & Chief Financial Officer

  	
  Senior Vice President

  
	
  CardioTech
  International, Inc

  	
  VMW Corporate & Investor Relations

  
	
  978-657-0075

  	
  212-616-6161

  
	
  general-info@cardiotech-inc.com

  	
  info@vmwcom.com

  



 



 13