FIRST AMENDMENT TO
AMENDED AND RESTATED PREFERRED SHARES RIGHTS AGREEMENT
This Amendment to Amended and Restated Preferred Shares Rights
Agreement (this "Amendment") is made as of August 30, 1999 by and between
CardioThoracic Systems, Inc., a Delaware corporation (the "Company"), and
Norwest Bank Minnesota, N.A., a national banking association (the "Rights
Agent").
Pursuant to Section 27 of the Amended and Restated Preferred Shares
Rights Agreement (the "Agreement"), dated as of August 30, 1999, by and between
the Company and the Rights Agent, this Amendment is being executed by the
Company and the Rights Agent for the purpose of amending the Agreement as set
forth below:
The Agreement is hereby amended as follows:
1. Section 1(a) shall be amended by inserting the following at
the end of Section 1(a):
"Notwithstanding the foregoing or any provision to the
contrary in this Agreement, none of Guidant Corporation
("Guidant"), its subsidiaries, Affiliates or Associates or
permitted assignees or transferees under that certain Support
Agreement dated August 30, 1999, between Guidant and certain
stockholders of the Company (the "Support Agreement") is an
Acquiring Person pursuant to this Agreement by virtue of the
execution of the Agreement and Plan of Merger dated August 30,
1999 among Guidant, Clydesdale Acquisition Corp. and the
Company (the "Merger Agreement"), the Stock Option Agreement
dated August 30, 1999 among Guidant and the Company (the
"Option Agreement") and/or the Support Agreement or the
consummation of the Merger (as defined in the Merger
Agreement) or the other transactions contemplated by the
Option Agreement and/or the Support Agreement."
2. Section 1(l) shall be amended by inserting the following at
the end of Section 1(l):
"Notwithstanding the foregoing or any provision to the
contrary in this Agreement, a Distribution Date shall not
occur by reason of the execution of the Merger Agreement, the
Option Agreement and/or the Support Agreement, the
consummation of the Merger, or the consummation of the other
transactions contemplated by the Option Agreement and/or the
Support Agreement."
3. Section 1(hh) shall be amended by inserting the following at
the end of Section 1(hh):
"Notwithstanding the foregoing or any provision to the
contrary in this Agreement, a Shares Acquisition Date shall
not occur by reason of the execution of the Merger Agreement,
the Option Agreement and/or the Support Agreement, the
consummation
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of the Merger, or the consummation of the other
transactions contemplated by the Option Agreement and/or the
Support Agreement."
4. Section 1(oo) shall be amended by inserting the following at
the end of Section 1(oo):
"Notwithstanding the foregoing or any provision to the
contrary in this Agreement, a Triggering Event shall not occur
by reason of the execution of the Merger Agreement, the Option
Agreement and/or the Support Agreement, the consummation of
the Merger, or the consummation of the other transactions
contemplated by the Option Agreement and/or the Support
Agreement."
5. Section 1(r) shall be amended and restated in its entirety to
read as follows:
"(r) 'FINAL EXPIRATION DATE' shall mean the earlier of (i)
immediately prior to the Effective Time (as defined in the
Merger Agreement) of the Merger or (ii) January 28, 2007."
6. A new Section 35 shall be added to the Agreement to read as
follows:
"This Agreement shall be inapplicable to the Merger."
7. (a) This Amendment may not be further amended without
the prior consent of Guidant in its sole discretion.
(b) This Amendment shall be deemed to be entered into
under the laws of the State of Delaware and for all
purposes shall be governed by and construed in
accordance with the laws of such State applicable to
contracts to be made and performed entirely within
such State.
(c) This Amendment may be executed in any number of
counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all
such counterparts shall together constitute but one
and the same instrument.
8. As amended hereby, the Agreement shall remain in full force
and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
CARDIOTHORACIC SYSTEMS, INC. NORWEST BANK MINNESOTA, N.A.
By: /s/ RICHARD M. FERRARI By: /s/ JOHN BAKER
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Name: Richard M. Ferrari Name: John Baker
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Title: President and CEO Title: Officer
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