<PAGE>
 
                                                                   EXHIBIT  99.3
                                                                   -------------

                               WARRANT AGREEMENT
                                        

WARRANT AGREEMENT dated as of December 15, 1998 between CARDIOTECH
INTERNATIONAL, INC., a Massachusetts corporation (the "Company"), FECHTOR,
DETWILER & Co., INC. (the "Agent") and the Holders (as defined herein) listed on
Schedule I hereto.

                                 W I T N E S S E T H :
                                 -------------------  

     WHEREAS, the Company proposes to issue to the Agent warrants (the
"Warrants") to purchase 170,600 shares of Common Stock of the Company, $.01 par
value per share (the "Common Stock"), such number being equal to 10% of the
number of units, each unit consisting of one share of Common Stock and a warrant
to purchase one share of Common Stock (the "Units"), sold by the Company to
investors in the Private Placement (as defined below) through the Agent's
efforts;

     WHEREAS, the Agent has advised the Company that it intends to immediately
transfer the Warrants to those Holders and in such amounts as indicated on
Schedule I hereto;

     WHEREAS, the Agent agreed pursuant to the Engagement Letter dated as of
August 18, 1998, between the Agent and the Company (the "Engagement Letter") to
act as a placement agent in connection with the Company's private placement of
the Units (the "Private Placement"); and

     WHEREAS, the Warrants to be issued pursuant to this Agreement will be
issued by the Company to the Agent and the Holders in consideration for, and as
part of the Agent's compensation in connection with, the Agent's acting as a
placement agent pursuant to the Engagement Letter.

     NOW, THEREFORE, in consideration of these premises, the agreements herein
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

     1.  Grant.  The Agent, the Holders or their registered assigns (the
         -----                                                          
"Registered Holders") are hereby granted the right to purchase, at any time or
from time to time on or before the earlier of  December 15, 2003, at no later
than 5:00 p.m. (Eastern Standard Time) and the termination of this Agreement as
provided in Section 12 below, an aggregate of up to 170,600 shares of Common
Stock, at an initial exercise price (subject to adjustment as provided in
Section 4 hereof) of $1.475 per share of Common Stock, subject to the terms and
conditions of this Agreement.  The number of shares purchasable upon exercise of
the Warrants, and the purchase price per share, each as adjusted from time to
time pursuant to the provisions of this Agreement, are hereinafter referred to
as the "Warrant Stock" and the "Purchase Price," respectively.


     2.  Warrant Certificates.  The warrant certificates (the "Warrant
         --------------------                                         
Certificates") delivered pursuant to this Agreement are attached hereto and are
made a part hereof.
<PAGE>
 
     3.  Exercise.
         -------- 

         (a)   The Warrants may be exercised by a Registered Holder, in whole or
in part, by surrendering a Warrant Certificate, with the form of election to
purchase appended hereto as Exhibit I duly completed and executed by
                            ---------
such Registered Holder, at the principal office of the Company, or at such other
office or agency as the Company may designate, accompanied by payment in full of
the Purchase Price payable in respect of the number of shares of Warrant Stock
purchased upon such exercise in lawful money of the United States of America.
Any exercise of the Warrants may be made subject to the satisfaction of one or
more conditions (including, without limitation, the consummation of a sale of
the capital stock of the Company or a merger or other business combination
involving the Company) which are set forth in a writing which is made a part of
or is appended to the aforementioned form of election to purchase notice by the
Registered Holder.


         (b)   Each exercise of the Warrants shall be deemed to have been
effected immediately prior to the close of business on the day on which a
Warrant Certificate shall have been surrendered to the Company as provided in
subsection 3(a) above. At such time, the person or persons in whose name or
names any certificates for Warrant Stock shall be issuable upon such exercise as
provided in subsection 3(c) below shall be deemed to have become the holder or
holders of record of the Warrant Stock represented by such certificates.

         (c)   As soon as practicable after the exercise of the Warrants in full
or in part, and in any event within 10 days thereafter, the Company at its
expense will cause to be issued in the name of, and delivered to, the Registered
Holder, or, subject to the terms and conditions hereof, as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct:

               (i)   a certificate or certificates for the number of full shares
     of Warrant Stock to which such Registered Holder shall be entitled upon
     such exercise plus, in lieu of any fractional share to which such
     Registered Holder would otherwise be entitled, cash in an amount determined
     pursuant to Section 5 hereof; and

               (ii)  in case such exercise is in part only, a new warrant
     certificate or warrant certificates (dated the date hereof) of like tenor,
     calling in the aggregate on the face or faces thereof for the number of
     shares of Warrant Stock equal (without giving effect to any adjustment
     therein) to the number of such shares called for on the face of the Warrant
     minus the number of such shares purchased by the Registered Holder upon
     such exercise as provided in subsection 3(a) above.

     4.  Adjustments.
         ----------- 

         (a)   If outstanding shares of the Company's Common Stock shall be
subdivided into a greater number of shares or a dividend in Common Stock shall
be paid in respect of Common Stock, the Purchase Price in effect immediately
prior to such subdivision or

                                      -2-
<PAGE>
 
at the record date of such dividend shall simultaneously with the effectiveness
of such subdivision or immediately after the record date of such dividend be
proportionately reduced. If outstanding shares of Common Stock shall be combined
into a smaller number of shares, the Purchase Price in effect immediately prior
to such combination shall, simultaneously with the effectiveness of such
combination, be proportionately increased. When any adjustment is required to be
made in the Purchase Price, the number of shares of Warrant Stock purchasable
upon the exercise of the Warrants shall be changed to the number determined by
dividing (i) an amount equal to the number of shares issuable upon the exercise
of the Warrants immediately prior to such adjustment, multiplied by the Purchase
Price in effect immediately prior to such adjustment, by (ii) the Purchase Price
in effect immediately after such adjustment.

         (b)   If there shall occur any capital reorganization or
reclassification of the Company's Common Stock (other than a change in par value
or a subdivision or combination as provided for in subsection 4(a) above), then,
as part of any such reorganization or reclassification, lawful provision shall
be made so that a Registered Holder of the Warrants shall have the right
thereafter to receive upon the exercise thereof the kind and amount of shares of
stock or other securities or property which such Registered Holder would have
been entitled to receive if, immediately prior to any such reorganization or
reclassification, such Registered Holder had held the number of shares of Common
Stock which were then purchasable upon the exercise of the Warrants. In any such
case, appropriate adjustment (as reasonably determined by the Board of Directors
of the Company) shall be made in the application of the provisions set forth
herein with respect to the rights and interests thereafter of the Registered
Holder of the Warrants such that the provisions set forth in this Section 4
(including provisions with respect to adjustment of the Purchase Price) and in
Section 11 hereof shall thereafter be applicable, as nearly as is reasonably
practicable, in relation to any shares of stock or other securities or property
thereafter deliverable upon the exercise of the Warrants.

         (c)   When any adjustment is required to be made in the Purchase Price,
the Company shall promptly mail to the Registered Holder a certificate setting
forth the Purchase Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Such certificate shall also
set forth the kind and amount of stock or other securities or property into
which the Warrants shall be exercisable following the occurrence of any of the
events specified in subsection 4(a) or (b) above.

     5.  Fractional Shares.  The Company shall not be required upon the 
         -----------------
exercise of the Warrants to issue any fractional shares, but shall make an
adjustment therefor in cash on the basis of the mean between the low bid and
high asked prices of the Common Stock on the American Stock Exchange on the
trading day immediately prior to the date of exercise.
 
     6.  Limitation on Sales, etc.
         -------------------------

     The Registered Holder is aware that the Warrants and the Common Stock
underlying the Warrants have not been registered under the Securities Act of
1933, as amended (the "1933 Act") or any state securities laws.  The Registered
Holder understands that the reliance by the Company on exemptions under the 1933
Act is predicated in part upon the truth and accuracy of the statements of the
Registered Holder in this Agreement.

                                      -3-
<PAGE>
 
     Each Registered Holder represents and warrants that: (1) he has been
furnished with all information which he deems necessary to evaluate the merits
and risks of the Warrants and a purchase of the Common Stock upon exercise of
the Warrants; (2) if he is not an accredited investor, as that term is defined
in Section 501 of Regulation D promulgated under the 1933 Act, he has received
and reviewed the Offering Memorandum dated October 22, 1998, distributed to each
of the investors in the Private Placement, along with a copy of the Company's
Form 10-K for the fiscal year ended March 31, 1998 and Forms 10-Q for the fiscal
quarters ended June 30, 1998 and September 30, 1998; (3) he has had the
opportunity to ask questions concerning the Common Stock and the Company and all
questions posed have been answered to his satisfaction; (4) he has been given
the opportunity to obtain any additional information he deems necessary to
verify the accuracy of any information obtained concerning the Common Stock and
the Company; (5) he has such knowledge and experience in financial and business
matters that he is able to evaluate the merits and risks of the Warrants and of
purchasing the Common Stock and to make an informed investment decision relating
thereto; and (6) he will be holding the Warrants and the Common Stock underlying
the Warrants for his own account for investment and it will not resell the
Warrants or the Common Stock in violation of the 1933 Act. The Registered Holder
understands that because the Warrants and the Common Stock will not have been
registered under the 1933 Act, he will be required to bear the economic risk of
the investment for an indefinite time and that the Warrants and the Common Stock
cannot be resold unless the transfer is registered under applicable federal and
state securities laws or an exemption from such registration is available.

     The Registered Holder agrees that it will in no event sell or distribute or
otherwise dispose of all or any part of the Warrants or the Common Stock
underlying the Warrants unless (1) there is an effective registration statement
under the 1933 Act and applicable state securities laws covering any such
transaction involving the Warrants or the Common Stock or (2) the Company
receives an opinion of its legal counsel (concurred in by legal counsel for the
Company) stating that such transaction is exempt from registration or the
Company otherwise satisfies itself that such transaction is exempt from
registration.
 
     The Registered Holder covenants and agrees that he shall be bound by the
provisions of the following legend or a legend in substantially similar form
which shall be endorsed upon the certificate(s) evidencing the Warrant Stock
issued pursuant to exercise of the Warrants:

          THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
          SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS.  THESE
          SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED BY ANY PERSON
          UNLESS (1) EITHER (A) A REGISTRATION STATEMENT WITH RESPECT TO SUCH
          SECURITIES SHALL BE EFFECTIVE UNDER THE SECURITIES ACT OF 1933, OR (B)
          THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO
          IT THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS THEN
          AVAILABLE, AND (2) THERE SHALL HAVE BEEN COMPLIANCE WITH ALL
          APPLICABLE STATE SECURITIES LAWS.

                                      -4-
<PAGE>
 
     7.  "Piggy Back" Registration.
         -------------------------- 


         (a)   If the Company shall determine to register the sale of its Common
Stock either for its own account or the account of a security holder or holders
exercising their respective registration rights (other than a registration
relating solely to employee benefit plans or a Rule 145 (under the Securities
Act of 1933 (the "Act")) transaction or a registration on any registration form
that does not permit secondary sales), the Company agrees that it will: (1)
promptly give to the Registered Holders written notice thereof; and (2) use its
best efforts to include in such registration (and any related qualification
under blue sky laws or other compliance), except as set forth in Section 7(b)
below, and in any underwriting involved therein, all or any part of the Warrant
Stock which has been purchased on exercise of the Warrant (the "Registrable
Securities") specified in writing by a Registered Holder and received by the
Company within 15 days after the written notice from the Company described in
clause (1) above is mailed or delivered by the Company; provided, however, that
this Section 7 shall not apply to any Registrable Securities if such Registrable
Securities may then be sold under Rule 144 of the Act, assuming the Registered
Holder's compliance with the provisions of the Rule. The Company shall have the
right to postpone or withdraw any registration effected without obligation to a
Registered Holder.


         (b)   If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the right to registration
hereunder shall be conditioned upon the Registered Holder's participation in
such underwriting, the inclusion of such Registered Holder's Registrable
Securities in the underwriting to the extent provided herein and the Registered
Holder entering into an underwriting agreement in customary form with the
representative of the underwriter selected by the Company.


          If the representative of the underwriters advises the Company that a
limitation on the number of shares to be underwritten is advisable to facilitate
the success of the offering, the representative may (subject to the limitations
set forth below) exclude the Registrable Securities from, or limit the number of
Registrable Securities to be included in, the registration and underwriting. The
Company shall so advise all holders of securities requesting registration, and
the number of Registrable Securities that are entitled to be included in the
registration and underwriting shall be allocated first to the Company for
securities being sold for its own account and thereafter as set forth in Section
7(c).  If any person does not agree to the terms of any such underwriting, he
shall be excluded therefrom by written notice from the Company or the
underwriter.


         (c)   In any circumstance in which all of the Registrable Securities
and other shares of Common Stock with registration rights (including any
security convertible into Common Stock) ("Other Shares") requested to be
included in a registration cannot be so included, the number of shares of
Registrable Securities and Other Shares that may be so included shall be
allocated among the Registered Holder and other selling stockholders requesting
inclusion of 

                                      -5-
<PAGE>
 
shares such that the selling holders of the Registrable Securities and Other
Shares shall have their shares included pro rata on the basis of the number of
shares of Registrable Securities and Other Shares that would be held by such
Registered Holders and other selling stockholders, assuming conversion, that
such Registered Holders and other selling stockholders had requested to be
included in the registration.


     8.  Liquidating Dividends.  If the Company pays a dividend or makes a
         ---------------------                                            
distribution on the Common Stock payable otherwise than in cash out of earnings
or earned surplus (determined in accordance with generally accepted accounting
principles) except for a stock dividend payable in shares of Common Stock (a
"Liquidating Dividend"), then the Company will pay or distribute to the
Registered Holders of the Warrants, upon the exercise hereof, in addition to the
Warrant Stock purchased upon such exercise, the Liquidating Dividend which would
have been paid to such Registered Holder if it had been the owner of record of
such shares of Warrant Stock immediately prior to the date on which a record is
taken for such Liquidating Dividend or, if no record is taken, the date as of
which the record holders of Common Stock entitled to such dividends or
distribution are to be determined.

     9.  Notices of Record Date, etc.  In case:
         ---------------------------           

         (a)   the Company shall take a record of the holders of its Common
     Stock (or other stock or securities at the time deliverable upon the
     exercise of the Warrant) for the purpose of entitling or enabling them to
     receive any dividend or other distribution, or to receive any right to
     subscribe for or purchase any shares of stock of any class or any other
     securities, or to receive any other right, or

         (b)   of any capital reorganization of the Company, any
     reclassification of the capital stock of the Company, any consolidation or
     merger of the Company with or into another corporation (other than a
     consolidation or merger in which the Company is the surviving entity), or
     any transfer of all or substantially all of the assets of the Company, or

         (c)   of the voluntary or involuntary dissolution, liquidation or
     winding-up of the Company, then, and in each such case, the Company will
     mail or cause to be mailed to the Registered Holders of the Warrants a
     notice specifying, as the case may be, (i) the date on which a record is to
     be taken for the purpose of such dividend, distribution or right, and
     stating the amount and character of such dividend, distribution or right,
     or (ii) the effective date on which such reorganization, reclassification,
     consolidation, merger, transfer, dissolution, liquidation or winding-up is
     to take place, and the time, if any is to be fixed, as of which the holders
     of record of Common Stock (or such other stock or securities at the time
     deliverable upon the exercise of the Warrant) shall be entitled to exchange
     their shares of Common Stock (or such other stock or securities) for
     securities or other property deliverable upon such reorganization,
     reclassification, consolidation, merger, transfer, dissolution, liquidation
     or winding-up. Such notice shall be mailed at least 10 days prior to the
     record date or effective date for the event specified in such notice.

                                      -6-
<PAGE>
 
     10.  Reservation of Stock.  The Company will at all times reserve and keep
          --------------------                                                 
available, solely for issuance and delivery upon the exercise of the Warrant,
such shares of Warrant Stock and other stock, securities and property, as from
time to time shall be issuable upon the exercise of the Warrant.

     11.  Replacement of Warrants.  Upon receipt of evidence reasonably
          -----------------------                                      
satisfactory to the Company of the loss, theft, destruction or mutilation of the
Warrant Certificate and (in the case of loss, theft or destruction) upon
delivery of an indemnity agreement (with surety if reasonably required) in an
amount reasonably satisfactory to the Company, or (in the case of mutilation)
upon surrender and cancellation of the Warrant Certificate, the Company will
issue, in lieu thereof, a new Warrant Certificate of like tenor.

     12.  Termination In Certain Events.  In the event of a sale of 
          -----------------------------   
substantially all the assets of the Company or a merger or consolidation of the
Company with or into any other entity (other than a merger the sole purpose of
which is to change the state of incorporation of the Company) or a dissolution
or the adoption of a plan of liquidation of the Company, the Warrant shall
terminate on the effective date of such sale, merger, consolidation, dissolution
or adoption (the "Effective Date") and become null and void; provided, however,
that if the Warrant shall not have otherwise terminated or expired, the
Registered Holder hereof shall have the right until 5:00 p.m, Eastern Standard
Time, on the day immediately prior to the Effective Date to exercise its rights
hereunder to the extent not previously exercised.


     13.  Transfers, etc.
          -------------- 
          (a)  The Company will maintain a register containing the names and
     addresses of the Registered Holders of the Warrant. Any Registered Holder
     may change its, his or her address as shown on the warrant register by
     written notice to the Company requesting such change.

          (b)  Until any transfer of the Warrant is made in the warrant
     register, the Company may treat the Registered Holder of the Warrant as the
     absolute owner hereof for all purposes; provided, however, that if and when
     the Warrant is properly assigned in blank, the Company may (but shall not
     be obligated to) treat the bearer hereof as the absolute owner hereof for
     all purposes, notwithstanding any notice to the contrary.


          14.  Mailing of Notices, etc.  All notices and other communications 
               -----------------------   
from the Company to the Registered Holder of the Warrant shall be mailed by
first-class certified or registered mail, postage prepaid, to the address
furnished to the Company in writing by the last Registered Holder of the Warrant
who shall have furnished an address to the Company in writing. All notices and
other communications from the Registered Holder of the Warrant or in connection
herewith to the Company shall be mailed by first-class certified or registered
mail, postage prepaid, to the Company at its offices at 78E Olympia Avenue,
Woburn, Massachusetts 01801, Attn: John E. Mattern, Chief Financial Officer, or
such other address as the Company shall so notify the Registered Holder.

                                      -7-
<PAGE>
 
     15.  No Rights as Stockholder.  Until the exercise of the Warrant, a
          ------------------------                                       
Registered Holder of the Warrant shall not have or exercise any rights by virtue
hereof as a stockholder of the Company.

     16.  Change or Waiver.  Any term of this Agreement may be changed or waived
          ----------------                                                      
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.

     17.  Headings.  The headings in this Agreement are for purposes of 
          -------- 
reference only and shall not limit or otherwise affect the meaning of any
provision of this Agreement.


     18.  Governing Law.  This Agreement will be governed by and construed in
          -------------                                                      
accordance with the laws of the Commonwealth of Massachusetts.

                                      -8-
<PAGE>
 
     IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be duly
executed, as of the day and year first above written.


                                       CARDIOTECH INTERNATIONAL, INC.


                                           By                              
                                             ------------------------------ 



                                            Its

                                          FECHTOR DETWILER & Co., INC.


                                            By                              
                                              ------------------------------ 

                                            Its

                                            ------------------------------------
                                              Richard Fechtor                  
                                                                               
                                            ------------------------------------
                                              Sheldon Fechtor                  
                                                                               
                                            ------------------------------------
                                              Robert Detwiler                  
                                                                               
                                            ------------------------------------
                                              Peter Fenton                     
                                                                               
                                            ------------------------------------
                                              Jeffrey R. Power                 
                                                                               
                                            ------------------------------------
                                              Randy Fill                       
                                                                               
                                            ------------------------------------
                                              David McShane                    
                                                                               
                                            ------------------------------------
                                              Michael Wood                     
                                                                               
                                            ------------------------------------
                                              Jacob Golbitz                     


                                      -9-
<PAGE>
 
                              SCHEDULE I
                              ----------

                            WARRANT HOLDERS
                            ---------------
                                                                  
                                                                  
                                                                  
          NAME                                 NUMBER OF WARRANTS
          ----                                 ------------------
                                                                  
          Richard Fechtor                              22,800     
                                                                  
          Sheldon Fechtor                              22,800     
                                                                  
          Robert Detwiler                              40,000     
                                                                  
          Peter Fenton                                 55,000     
                                                                  
          Jeffrey R. Power                              4,000     
                                                                  
          Randy Fill                                    5,000     
                                                                  
          David McShane                                 8,000     
                                                                  
          Michael Wood                                  8,000     
                                                                  
          Jacob Golbitz                                 5,000      
                                                                  
          Total                                       170,600     
          -----                                       -------             

                                      -10-
<PAGE>
 
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS.  THESE SECURITIES MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED BY ANY PERSON UNLESS (1) EITHER (A) A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES SHALL BE EFFECTIVE UNDER THE
SECURITIES ACT OF 1933, OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO IT THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
THEN AVAILABLE, AND (2) THERE SHALL HAVE BEEN COMPLIANCE WITH ALL APPLICABLE
STATE SECURITIES LAWS.


                                                     For the Purchase of
                                                            shares of 
                                                     Common Stock

No. W-
                    WARRANT CERTIFICATE FOR THE PURCHASE OF
                            SHARES OF COMMON STOCK
                                      OF
                        CARDIOTECH INTERNATIONAL, INC.
                         (A Massachusetts Corporation)

      VOID AFTER 5:00 P.M., EASTERN STANDARD TIME, ON DECEMBER 15, 2003.

  CardioTech International, Inc., a Massachusetts Corporation (the "Company"),
hereby certifies that ____________, or his registered assigns (the "Registered
Holder"), is entitled, subject to the terms set forth below and in the Warrant
Agreement dated as of December 15, 1998 among the Company, Fechtor, Detwiler &
Co., Inc. and the undersigned (the "Warrant Agreement"), to purchase from the
Company, at any time or from time to time on or before the earlier of December
15, 2003, at not later than 5:00 p.m. (Eastern Standard Time), and the
termination of this Warrant as provided in Section 12 of the Warrant Agreement,
_____ shares of Common Stock, $.01 par value, of the Company ("Common Stock"),
at a purchase price of $1.475 per share.  The purchase price per share, as
adjusted from time to time pursuant to the provisions of the Warrant Agreement,
is hereinafter referred to as the "Purchase Price."


  The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Company and the holders (the words "holders" or "holder" meaning the registered
holder or registered holders) of the Warrants.


  The Warrant Agreement provides that upon the occurrence of certain events the
Purchase Price and the type and/or number of the Company's securities issuable
upon exercise of the 

                                      -11-
<PAGE>
 
Warrants may, subject to certain conditions, be adjusted. In such event, the
Company will, at the request of the holder and upon surrender of the holder's
Warrant Certificate, issue a new Warrant Certificate evidencing the adjustment
in the purchase price and the number and/or type of securities issuable upon the
exercise of the Warrants; provided, however, that the failure of the Company to
issue such new Warrant Certificates shall not in any way change, alter, or
otherwise impair, the rights of the holder as set forth in the Warrant
Agreement.

  Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall issue to the holder hereof a new Warrant
Certificate representing such number of unexercised Warrants.

  The Company may deem and treat the registered holder(s) hereof as the absolute
owner(s) of this Warrant Certificate (notwithstanding any notation of ownership
or other writing hereon made by anyone), for the purpose of an exercise hereof,
and of any distribution to the holder(s) hereof, and for all other purposes, and
the Company shall not be affected by any notice to the contrary.

  All terms used in this Warrant Certificate which are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.

  IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
executed under its corporate seal.


  Dated as of February ___, 1999.
                                               CARDIOTECH INTERNATIONAL, INC.


                                               By
                                                  --------------------------

                                                  Its

                                      -12-
<PAGE>
 
                                   EXHIBIT I

                         FORM OF ELECTION TO PURCHASE

                   (To be executed upon exercise of Warrant)


To:  CardioTech International, Inc.
     78 East Olympia Avenue
     Woburn, MA 01801                               Dated:
                                                          ---------

     The undersigned, pursuant to the provisions set forth in the Warrant
Agreement dated as of December 15, 1998 among CardioTech International, Inc., a
Massachusetts corporation, Fechtor, Detwiler & Co., Inc. and the Holders listed
on Schedule I thereto, hereby irrevocably elects to purchase ____ shares of the
Common Stock (the "Common Stock") covered by the attached Warrant Certificate
(Certificate No. __) and herewith makes payment of $______, representing the
full purchase price for such shares at the price per share provided for in such
Agreement.

     The undersigned is aware that the issuance of the Common Stock has not been
registered under the Securities Act of 1933, as amended (the "1933 Act") or any
state securities laws.  The undersigned understands that the reliance by the
Company on exemptions under the 1933 Act is predicated in part upon the truth
and accuracy of the statements of the undersigned in this Purchase Form.

     The undersigned represents and warrants that: (1) it has been furnished
with all information which it deems necessary to evaluate the merits and risks
of the purchase of the Common Stock; (2) it has had the opportunity to ask
questions concerning the Common Stock and the Company and all questions posed
have been answered to its satisfaction; (3) it has been given the opportunity to
obtain any additional information it deems necessary to verify the accuracy of
any information obtained concerning the Common Stock and the Company; (4) it has
such knowledge and experience in financial and business matters that it is able
to evaluate the merits and risks of purchasing the Common Stock and to make an
informed investment decision relating thereto; and (5) it is purchasing the
Common Stock for its own account for investment and it will not resell the
Common Stock in violation of the 1933 Act. The undersigned understands that
because the Common Stock has not been registered under the 1933 Act, it must
continue to bear the economic risk of the investment for an indefinite time and
the Common Stock cannot be resold unless the Common Stock is registered under
applicable federal and state securities laws or an exemption from such
registration is available.

     The undersigned agrees that it will in no event sell or distribute or
otherwise dispose of all or any part of the Common Stock unless (1) there is an
effective registration statement under the 1933 Act and applicable state
securities laws covering any such transaction involving the Common Stock or (2)
the Company receives an opinion of its legal counsel (concurred in by legal
counsel for the Company) stating that such transaction is exempt from
registration or the Company otherwise satisfies itself that such transaction is
exempt from registration.

                                     II-1
<PAGE>
 
     The undersigned consents to the placing of a legend on its certificate for
the Common Stock stating that the Common Stock has not been registered and
setting forth the restriction on transfer contemplated hereby and to the placing
of a stop transfer order on the books of the Company and with any transfer
agents against the Common Stock until the Common Stock may be legally resold or
distributed without restriction.

     The undersigned has considered the Federal and state income tax
implications of the exercise of the Warrant and the purchase and subsequent sale
of the Common Stock.

 
                                             -----------------------------
                                             Name:

                                             Dated:
                                                   -----------------------

                                      -2-