8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 18, 2005

Novoste Corporation

(Exact name of registrant as specified in its charter)

Florida	0-20727	59-2787476
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4350 International Blvd. Norcross, GA	30093
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (770) 717-0904

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

a. Executive Termination Agreements

On May 18, 2005, Novoste Corporation (“Novoste” or the “Company”) and its executive officers entered into amendments (the “Termination Agreement Amendments”) to those certain Amended and Restated Termination Agreements between Novoste and its executive officers previously filed by Novoste with the Securities and Exchange Commission as Exhibits 99.1 and 99.2 to the Current Report on Form 8-K of the Company filed on May 20, 2003. The Termination Agreement Amendments provide that in the case of a Change in Control (as described in the Amended and Restated Termination Agreements) of Novoste involving ONI Medical Systems, Inc. or certain other parties, but only in such cases, the severance payment payable to such executive officers currently equal to three times annual salary and bonus shall be reduced as follows:

(A) to 1.75 times annualized salary (as calculated pursuant to the terms of the Amended and Restated Termination Agreements and the Termination Agreement Amendments) for executive officers other than Alfred J. Novak, the president and chief executive officer of Novoste; and

(B) to two times salary and performance bonus (as calculated pursuant to the terms of the Amended and Restated Termination Agreements and the Termination Agreement Amendments) for Alfred J. Novak, the president and chief executive officer of Novoste.

The above description of the Termination Agreement Amendments does not purport to be a complete statement of the parties’ rights and obligations under those agreements. The above description is qualified in its entirety by reference to the forms of the Termination Agreements Amendments, copies of which are attached to this Current Report on Form 8-K as Exhibits 10.1 and 10.2 and are incorporated herein by reference.

b. Execution of Indemnification Agreements

On May 18, 2005, each of the directors and executive officers of the Company entered into an Indemnification Agreement (the “Indemnification Agreement”) in the form of Exhibit 10.3 attached hereto. The Indemnification Agreement establishes indemnification rights that are not exclusive of, and are in addition to, the rights set forth in the Company’s Amended and Restated Articles of Incorporation, as amended, and Bylaws.

Each Indemnification Agreement provides that the Company shall indemnify the applicable officer or director made party to the Indemnification Agreement (each, an “Indemnitee”) to the fullest extent permitted by applicable law as currently in effect (or as such law shall be amended in the future, provided that such future law expands, and does not limit, an Indemnitee’s rights as set forth in the Indemnification Agreement). Specifically, the Company, except in the limited circumstances described below, must indemnify an Indemnitee in the event that he or she is a party to or is involved or becomes involved in any manner (including as a witness), or is threatened to be made so involved, in any proceeding by reason of the fact that he or she is or was a director, officer, employee or agent of the Company, against all losses (including legal expenses) actually and reasonably incurred in connection with such proceeding.

The Company will not indemnify or advance expenses to an Indemnitee to the extent that (i) a final court decision finds that such indemnification or advancement of expenses is unlawful or (ii) a judgment or other final adjudication establishes that an Indemnitee’s actions, or omissions to act, were material to the cause of action adjudicated and constitute (A) a violation of criminal law, (B) a transaction from which an Indemnitee derived an improper personal benefit, (C) a circumstance under which a director is liable for authorizing an unlawful distribution under the Florida Business Corporations Act, or (D) willful misconduct or a conscious disregard for the best interests of the Company in a shareholder derivative suit.

The above description of the Indemnification Agreement does not purport to be a complete statement of the rights and obligations of the parties under the Indemnification Agreement. The above description is qualified in its entirety by reference to the form of the Indemnification Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.3 and is incorporated herein by reference.

c. Amendment to Rights Plan

On May 18, 2005, in connection with the Company’s entering into a definitive merger agreement with ONI Medical Systems, Inc. (the “Merger Agreement”), the Board of Directors adopted Amendment No. 1 (the “Amendment”) to the Company’s Amended and Restated Rights Agreement dated as of July 29, 1999 between the Company and American Stock Transfer & Trust Company, as the rights agent (the “Rights Agreement”). The Amendment amends various provisions of the Rights Agreement to provide, among other things, that, notwithstanding anything in the Rights Agreement that might otherwise be deemed to the contrary:

(i) neither ONI Medical Systems, Inc. nor any of its affiliates or associates shall be deemed to be an “Acquiring Person” under the Rights Agreement,

(ii) no Distribution Date under the Rights Agreement shall be deemed to have occurred, and

(iii) no Share Acquisition Date under the Rights Agreement shall be deemed to have occurred,

solely by reason of the approval, execution, delivery, announcement or consummation of the Merger (as defined in the Merger Agreement) and any of the transactions contemplated by the Merger Agreement.

In addition, the Rights Agreement has been amended to provide that Galen Partners IV, LP, Galen Partners International IV, LP, Galen Employee Fund IV, LP and Claudius IV, LLC, together with their affiliates and associates shall not be deemed an “Acquiring Person” under the Rights Agreement as a result of the approval, execution or consummation of the merger with ONI Medical Systems, Inc. Rather, such persons shall be deemed a “Qualified Exempt Person” under the Rights Agreement and shall remain a “Qualified Exempt Person” until such person acquires beneficial ownership of an additional 2% of the Company’s common shares then outstanding in excess of the amount of the common shares such “Qualified Exempt Person” owned as of the Effective Time (as defined in the Merger Agreement) of the merger with ONI Medical Systems, Inc.

The above description of the Amendment does not purport to be a complete description of the Amendment. The above description is qualified in its entirety by reference to the Amendment, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.4, and is incorporated herein by reference.

*         *         *

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

10.1	Form of Amendment to the Amended and Restated Termination Agreements for Executive Officers other than Alfred J. Novak
10.2	Form of Amendment to the Amended and Restated Termination Agreement with Alfred J. Novak
10.3	Form of Indemnification Agreement
10.4	Amendment No. 1, dated May 18, 2005, to the Amended and Restated Rights Agreement, dated as of July 29, 1999, between Novoste Corporation and American Stock Transfer & Trust Company, as the rights agent.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

NOVOSTE CORPORATION
By:	/s/ Daniel G. Hall
	Daniel G. Hall Vice President, Secretary and General Counsel

Date: May 24, 2005

EXHIBIT INDEX

10.1	Form of Amendment to the Amended and Restated Termination Agreements for Executive Officers other than Alfred J. Novak
10.2	Form of Amendment to the Amended and Restated Termination Agreement with Alfred J. Novak
10.3	Form of Indemnification Agreement
10.4	Amendment No. 1, dated May 18, 2005, to the Amended and Restated Rights Agreement, dated as of July 29, 1999, between Novoste Corporation and American Stock Transfer & Trust Company.

EX-10.1

Exhibit 10.1

AMENDMENT, WAIVER AND RELEASE AGREEMENT

THIS AGREEMENT, made this «Execution_DAY» day of «Execution_MONTH», 2005, by and between Novoste Corporation, a Florida corporation, with its principal offices at 4350 International Boulevard, Norcross, Georgia 30093 (the “Company”) and «FirstName» «LastName» (the “Executive”) residing at «Address1»«Address2», «City», «State» «PostalCode».

WHEREAS, the Company and the Executive entered into an Amended and Restated Termination Agreement (the “Termination Agreement”) on or about the «Termination_Agmt_DAY» day of «Termination_Agmt_MONTH», «Termination_Agmt_YEAR», whereby the Company agreed to provide certain benefits to the Executive in the event that there was a change of control during the term of the Termination Agreement, as such term was defined in the Termination Agreement; and

WHEREAS, the management and Board of Directors of the Company are engaged in the analysis and consideration of certain strategic alternatives for the Company, which strategic alternatives may result in a change in control, as such term is defined in the Termination Agreement; and

WHEREAS, in order to successfully complete the transactions being reviewed and considered by the Company it will be necessary to reduce the amount of money paid to executives in the event of a change in control; and

WHEREAS, in the event that a strategic transaction is not completed by the Company, it is the belief of the Executive that s/he may, therefore, not have the ability or opportunity to be paid any amounts of compensation as a change of control payment, and would instead, in the event of her/his termination by the Company, receive a substantially smaller amount as severance pay; and

WHEREAS, the Executive desires to amend the Termination Agreement, waive a portion of her/his change in control payment thereunder and release the Company from its obligation under the Termination Agreement for the specific purpose of enabling the Company to negotiate a strategic transaction with Best Medical International, Inc. (“Best”) or Eckert & Ziegler, AG (“Eckert & Ziegler”), in the form of any acquisition by Eckert & Ziegler of a majority of the Company’s common stock through a tender offer, or the acquisition by Best of the assets of the Company’s vascular brachytherapy business, or with ONI Medical Systems, Inc. (“ONI”), in the form of the Company’s acquisition, by merger, of ONI, (collectively, the “Transaction”).

NOW, THEREFORE, in order to assure the Company that it will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a bid to takeover the Company, or other change of control of the Company, and to assure the Company that it has the power to negotiate a Transaction with certain strategic partners so as to maximize the potential success of such Transaction, and to induce the Executive to continue to cooperate with and assist, as needed, the management

of the Company, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Executive and the Company, the Company and the Executive agree as follows:

1. That if the transaction or event that constitutes the “Change in Control” (as defined in the Termination Agreement) that triggers the Executive’s right to receive amounts pursuant to Section 4 of the Termination Agreement is one of the Transactions, then the Termination Agreement shall be, and is hereby amended as follows:

a. Paragraph 3(g) of the Termination Agreement shall be amended as follows:

3.(g) “Service Multiple” shall mean 1.75.

b. Paragraph 4(a)(ii) of the Termination Agreement shall be deleted in its entirety.

c. Paragraph 4(a)(iii) of the Termination Agreement shall be amended as follows:

4.(a)(iii) in lieu of any further base salary payments to the Executive for periods subsequent to the date that the termination of the Executive’s employment becomes effective, the Company shall pay as severance pay to the Executive a lump-sum cash amount equal to the Service Multiple (as defined in Section 3(g), as amended by the terms of this Agreement, Waiver and Release Agreement) times the Executive’s Annualized Salary. The severance pay due pursuant to this section shall be the total amount of severance pay payable to Executive subsequent to a change of control and shall be in lieu of any other severance payment granted or promised to Executive under any other agreements or policies of the Company, and, in the event Executive has been paid any severance payment prior to the time the severance pay under this section 4(a)(iii) becomes due and payable, the previous payment shall be deducted from the severance pay due hereunder.

d. The paragraph reference “4(a)(ii)” shall be deleted from the fifth line of Paragraph 4(d).

2. All other terms, provisions, conditions and obligations of the Termination Agreement, not specifically amended hereby, shall remain in full force and effect.

3. The Executive hereby expressly releases the Company from obligations to the Executive which were eliminated, terminated or otherwise modified by the terms of this Amendment, Waiver and Release Agreement.

4. The parties hereby affirm and acknowledge that the amendments, waivers, and releases set forth, established by, and contained herein are for the limited purpose of enabling the Company to negotiate and enter into the Transaction specifically described above, and for no other purpose or transaction, and, in the event that the Transaction is not consummated by December 31, 2005, this Amendment, Waiver and Release Agreement shall automatically terminate and be of no further force or effect thereafter.

5. This Amendment, Waiver and Release Agreement is irrevocable to the fullest extent provided under the laws of the State of Georgia and may not be amended or otherwise modified without the prior written consent of the Company.

6. This Amendment, Waiver and Release Agreement shall be governed by and construed in accordance with the laws of the State of Georgia.

IN WITNESS WHEREOF, the Parties have caused this Amendment, Waiver and Release Agreement to be executed this «Execution_DAY» day of «Execution_MONTH», 2005.

NOVOSTE CORPORATION
By:
Its:
EXECUTIVE
Name:	«FIRSTNAME»«LASTNAME»

EX-10.2

Exhibit 10.2

AMENDMENT, WAIVER AND RELEASE AGREEMENT

THIS AGREEMENT, made this «Execution_DAY» day of «Execution_MONTH», 2005, by and between Novoste Corporation, a Florida corporation, with its principal offices at 4350 International Boulevard, Norcross, Georgia 30093 (the “Company”) and «FirstName» «LastName» (the “Executive”) residing at «Address1»«Address2», «City», «State» «PostalCode».

WHEREAS, the Company and the Executive entered into an Amended and Restated Termination Agreement (the “Termination Agreement”) on or about the «Termination_Agmt_DAY» day of «Termination_Agmt_MONTH», «Termination_Agmt_YEAR», whereby the Company agreed to provide certain benefits to the Executive in the event that there was a change of control during the term of the Termination Agreement, as such term was defined in the Termination Agreement; and

WHEREAS, the management and Board of Directors of the Company are engaged in the analysis and consideration of certain strategic alternatives for the Company, which strategic alternatives may result in a change in control, as such term is defined in the Termination Agreement; and

WHEREAS, in order to successfully complete the transactions being reviewed and considered by the Company it will be necessary to reduce the amount of money paid to executives in the event of a change in control; and

WHEREAS, in the event that a strategic transaction is not completed by the Company, it is the belief of the Executive that s/he may, therefore, not have the ability or opportunity to be paid any amounts of compensation as a change of control payment, and would instead, in the event of her/his termination by the Company, receive a substantially smaller amount as severance pay; and

WHEREAS, the Executive desires to amend the Termination Agreement, waive a portion of her/his change in control payment thereunder and release the Company from its obligation under the Termination Agreement for the specific purpose of enabling the Company to negotiate a strategic transaction with Best Medical International, Inc. (“Best”) or Eckert & Ziegler, AG (“Eckert & Ziegler”), in the form of any acquisition by Eckert & Ziegler of a majority of the Company’s common stock through a tender offer, or the acquisition by Best of the assets of the Company’s vascular brachytherapy business, or with ONI Medical Systems, Inc. (“ONI”), in the form of the Company’s acquisition, by merger, of ONI, (collectively, the “Transaction”).

NOW, THEREFORE, in order to assure the Company that it will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a bid to takeover the Company, or other change of control of the Company, and to assure the Company that it has the power to negotiate a Transaction with certain strategic partners so as to maximize the potential success of such Transaction, and to induce the Executive to continue to cooperate with and assist, as needed, the management

of the Company, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Executive and the Company, the Company and the Executive agree as follows:

1. That if the transaction or event that constitutes the “Change in Control” (as defined in the Termination Agreement) that triggers the Executive’s right to receive amounts pursuant to Section 4 of the Termination Agreement is one of the Transactions, then the Termination Agreement shall be, and is hereby amended as follows:

a. Paragraph 3(g) of the Termination Agreement shall be amended as follows:

3.(g) “Service Multiple” shall mean 2.0.

b. Paragraph 4(a)(ii) of the Termination Agreement shall be deleted in its entirety.

c. Paragraph 4(a)(iii) of the Termination Agreement shall be amended as follows:

4.(a)(iii) in lieu of any further base salary payments to the Executive for periods subsequent to the date that the termination of the Executive’s employment becomes effective, the Company shall pay as severance pay to the Executive a lump-sum cash amount equal to the Service Multiple (as defined in Section 3(g), as amended by the terms of this Agreement, Waiver and Release Agreement) times the sum of the average of the Executive’s combined annual salary and annual performance bonus for the two fiscal years immediately preceding the year in which the change in control occurs. The severance pay due pursuant to this section shall be the total amount of severance pay payable to Executive subsequent to a change of control and shall be in lieu of any other severance payment granted or promised to Executive under any other agreements or policies of the Company, and, in the event Executive has been paid any severance payment prior to the time the severance pay under this section 4(a)(iii) becomes due and payable, the previous payment shall be deducted from the severance pay due hereunder.

d. The paragraph reference “4(a)(ii)” shall be deleted from the fifth line of Paragraph 4(d).

2. All other terms, provisions, conditions and obligations of the Termination Agreement, not specifically amended hereby, shall remain in full force and effect.

3. The Executive hereby expressly releases the Company from obligations to the Executive which were eliminated, terminated or otherwise modified by the terms of this Amendment, Waiver and Release Agreement.

4. The parties hereby affirm and acknowledge that the amendments, waivers, and releases set forth, established by, and contained herein are for the limited purpose of enabling the Company to negotiate and enter into the Transaction specifically described above, and for no other purpose or transaction, and, in the event that the Transaction is not consummated by December 31, 2005, this Amendment, Waiver and Release Agreement shall automatically terminate and be of no further force or effect thereafter.

5. This Amendment, Waiver and Release Agreement is irrevocable to the fullest extent provided under the laws of the State of Georgia and may not be amended or otherwise modified without the prior written consent of the Company.

6. This Amendment, Waiver and Release Agreement shall be governed by and construed in accordance with the laws of the State of Georgia.

IN WITNESS WHEREOF, the Parties have caused this Amendment, Waiver and Release Agreement to be executed this «Execution_DAY» day of «Execution_MONTH», 2005.

NOVOSTE CORPORATION
BY:
Its:
EXECUTIVE
Name:	«FIRSTNAME»«LASTNAME»

EX-10.3

Exhibit 10.3

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made as of                              , 2005 by and between Novoste Corporation, a Florida corporation (the “Company”), and                      (the “Indemnitee”), a director and/or officer of the Company.

WHEREAS, the Board of Directors of the Company (the “Board of Directors”) has determined that the Company should act to assure its directors and officers that there will be adequate certainty of protection through indemnification against risks of claims and actions against them arising out of their service to and activities on behalf of the Company;

WHEREAS, the Company has adopted provisions in its Amended and Restated Articles of Incorporation, as amended (the “Articles of Incorporation”), and Fourth Amended and Restated By-Laws (the “By-Laws”) providing for indemnification of its officers and directors, and the Company wishes to supplement the rights and obligations of the Company and the Indemnitee with respect to indemnification;

WHEREAS, Section 607.0850 of the Florida Business Corporation Act, as amended (the “FBCA”), specifically contemplates that agreements may be entered into between the Company and its directors and officers with respect to indemnification of such directors and officers;

WHEREAS, in order to induce and encourage highly experienced and capable persons such as the Indemnitee to serve and continue to serve as directors and officers of the Company and in any other capacity with respect to the Company, and to otherwise promote the desirable end that such persons will resist what they consider unjustified lawsuits and claims made against them in connection with the good faith performance of their duties to the Company, with the knowledge that certain costs, judgments, penalties, fines, liabilities and expenses incurred by them in their defense of such litigation are to be borne by the Company and they will receive maximum protection against such risks and liabilities as may be afforded by law, the Board of Directors has determined that the following Agreement is reasonable and prudent to promote and ensure the best interests of the Company and its shareholders; and

WHEREAS, the Company desires to have the Indemnitee continue to serve as a director or officer of the Company and in such other capacity with respect to the Company as the Company may request, as the case may be, free from undue concern for unpredictable, inappropriate or unreasonable legal risks and personal liabilities by reason of the Indemnitee acting in good faith in the performance of Indemnitee’s duty to the Company; and the Indemnitee desires to continue so to serve the Company, provided, and on the express condition, that he or she is furnished with the indemnity set forth hereinafter;

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

SECTION 1. Definitions. For the purposes of this Agreement, the terms below shall have the indicated meanings except where the context in which such term is used in this Agreement clearly indicates otherwise:

(a) “Change in Control” shall be deemed to have occurred if: (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the total voting power represented by the Company’s then outstanding Voting Securities; (ii) during any period of 24 consecutive calendar months, beginning on the date of this Agreement, those individuals (the “Continuing Directors”), who (A) were directors of the Company on the first day of any such period or (B) subsequently became directors of the Company and whose initial election or initial nomination for election subsequent to that date was approved by a majority of the Continuing Directors then on the Board of Directors, cease to constitute a majority of the Board of Directors; (iii) the shareholders of the Company approve a merger or consolidation of the Company or any subsidiary of the Company with any other corporation or entity, other than a merger or consolidation that 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) at least 80% of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; (iv) the shareholders of the Company approve a proposal to dissolve the Company or a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company (in one transaction or a series of transactions) of all or substantially all of the Company’s assets; or (v) a liquidator, trustee or other similar person is appointed for all, or substantially all, of the assets of the Company.

(b) “Disinterested Director” means a director of the Company who is not or was not a party to the Proceeding in respect of which indemnification or advancement of Expenses is sought by the Indemnitee.

(c) “Disinterested Shareholder” means a shareholder of the Company who is not or was not a party to the Proceeding in respect of which indemnification or advancement of Expenses is sought by the Indemnitee.

(d) “Expenses” means any and all costs and expenses (other than Liabilities), including but not limited to attorney’s fees, witness fees and expenses, fees and expenses of accountants and other advisors, retainers and disbursements and advances thereon, the premium, security for, and other costs relating to any bond (including cost bonds, appraisal bonds or their equivalents), actually and reasonably paid or incurred by the Indemnitee on account of or in connection with any Proceeding.

(e) “Independent Counsel” means a law firm or a member of a law firm that is experienced in matters of corporation and securities law and neither presently is, nor in the past five (5) years has been, retained to represent (i) the Company or the Indemnitee in any matter material to either such party (other than with respect to matters concerning (A) the

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Indemnitee under this Agreement or (B) other individuals who are “indemnitees” under similar indemnification agreements with the Company) or (ii) any other party to the Proceeding giving rise to a claim for indemnification under this Agreement. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing under the laws of the State of Florida or any other applicable law, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all expenses, claims, liabilities and damages arising or relating to this Agreement or its engagement pursuant hereto.

(f) “Liabilities” means any and all liabilities of every type whatsoever (other than Expenses), including but not limited to, judgments, assessments, fines, penalties, excise or other taxes (including any excise tax assessed with respect to any employee benefit plan) and amounts paid in settlement, and including interest on any of the foregoing, actually and reasonably paid, incurred or suffered by the Indemnitee on account of or in connection with any Proceeding.

(g) “Losses” mean Expenses and Liabilities.

(h) “Proceeding” means any threatened, pending or completed investigation, claim, action, suit, appeal, arbitration, alternate dispute resolution mechanism, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether civil, criminal, administrative or investigative (including without limitation, any action, suit or proceeding by or in the right of the Company to procure a judgment in its favor) and whether formal or informal.

(i) “Voting Securities” means any securities of the Company that vote generally in the election of directors.

SECTION 2. Right to Indemnification. The Company shall indemnify to the fullest extent permitted by applicable law in effect on the date hereof or as such law may from time to time be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than said law permitted the Company to provide prior to such amendment). Without in any manner limiting the generality of the immediately preceding sentence, but subject to and upon the terms and conditions of this Agreement, the Company shall indemnify and hold harmless the Indemnitee in the event that he or she was or is a party to or is involved or becomes involved in any manner (including, without limitation, as a party, intervenor or a witness) or is threatened to be made so involved in any Proceeding by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent or fiduciary of any other entity (including but not limited to, another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise or entity), against all Losses, actually and reasonably incurred by him or her in connection with such Proceeding. Such indemnification

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shall be a contract right and shall include the right to receive payment in advance of any Expenses reasonably incurred by the Indemnitee in connection with such Proceeding, consistent with the provisions of applicable law as then in effect.

SECTION 3. Indemnification for Expenses of Successful Party. Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee has been successful, on the merits or otherwise, in whole or in part, in defense of any Proceeding or in defense of any claim, issue or matter therein, including, without limitation, the dismissal of any action without prejudice, or if it is ultimately determined that the Indemnitee is otherwise entitled to be indemnified against Expenses, the Indemnitee shall be indemnified against all Expenses actually and reasonably incurred in connection therewith.

SECTION 4. Partial Indemnification. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Losses actually and reasonably incurred by the Indemnitee in a Proceeding, but not, however, for the total amount thereof, the Company shall indemnify the Indemnitee for the portion of such Losses to which the Indemnitee is entitled.

SECTION 5. Indemnification; Not Exclusive Right. The right of indemnification provided in this Agreement shall not be exclusive of and shall be in addition to, and not in lieu of, any other rights to which the Indemnitee may otherwise be entitled under applicable law, the Articles of Incorporation, the By-Laws or otherwise. Nothing in this Agreement shall diminish or otherwise restrict the Indemnitee’s right to indemnification under applicable law, the Articles of Incorporation, By-Laws or otherwise.

SECTION 6. Limitation on Indemnification. Notwithstanding Section 2 of this Agreement, no indemnification or advancement of Expenses shall be made under this Agreement to or on behalf of the Indemnitee to the extent that:

(a) a judgment or other final adjudication establishes that his or her actions, or omissions to act, were material to the cause of action so adjudicated and constitute:

(i) a violation of the criminal law, unless the Indemnitee had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful;

(ii) a transaction from which the Indemnitee derived an improper personal benefit;

(iii) if the Indemnitee is a director, a circumstance under which the liability provisions of Section 607.0834 of the FBCA are applicable to the Indemnitee; or

(iv) willful misconduct or a conscious disregard for the best interests of the Company in a proceeding by or in the right of the Company to procure a judgment in its favor or in a proceeding by or in the right of a shareholder; or

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(b) a final decision by a court having jurisdiction in the matter shall determine that such indemnification or advancement of Expenses is not lawful.

SECTION 7. Procedures for Advancement of Expenses and Indemnification; Presumptions and Effect of Certain Proceedings; Remedies. In furtherance, but not in limitation of the foregoing provisions, the following procedures, presumptions and remedies shall apply with respect to the advancement of Expenses and the right to indemnification under this Agreement:

(a) Advancement of Expenses. All Expenses reasonably incurred by or on behalf of the Indemnitee in the defense of or other involvement in or otherwise in connection with any Proceeding shall be advanced to the Indemnitee by the Company within twenty (20) days after the receipt by the Company of a statement or statements from the Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by the Indemnitee and shall include or be accompanied by an undertaking by or on behalf of the Indemnitee to repay the amounts advanced if it should ultimately be determined that the Indemnitee is not entitled to be indemnified against such Expenses pursuant to this Agreement. The Company shall not require Indemnitee to secure Indemnitee’s undertaking to reimburse any such amounts.

(b) Procedure for Determination of Entitlement to Indemnification.

(i) To obtain indemnification under this Agreement, the Indemnitee shall submit to the Corporate Secretary of the Company a written request, including such documentation and information as is reasonably available to the Indemnitee and reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification (the “Supporting Documentation”). The determination of the Indemnitee’s entitlement to indemnification shall be made not later than thirty (30) days after receipt by the Company of the written request for indemnification together with the Supporting Documentation. The Corporate Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that the Indemnitee has requested indemnification.

(ii) Unless pursuant to a determination by a court, the Indemnitee’s entitlement to indemnification under this Agreement prior to any Change in Control shall be determined in one of the following ways:

(A) by the Board of Directors by a majority vote of a quorum consisting of the Disinterested Directors;

(B) by a majority vote of a committee duly designated by the Board of Directors (in which designation the directors who are not Disinterested Directors may participate) consisting solely of two or more Disinterested Directors;

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(C) by Independent Counsel, to which the Indemnitee does not reasonably object, (x) selected by the Board of Directors or a committee thereof as prescribed in Sections 7(b)(ii)(A) and (B), respectively, or (y) if such quorum of Disinterested Directors cannot be obtained or the committee cannot be designated, selected by a majority vote of the full Board of Directors (in which directors who are not Disinterested Directors may participate);

(D) by the shareholders of the Company by a majority vote of a quorum consisting of Disinterested Shareholders or, if such quorum is not obtainable, by a majority vote of Disinterested Shareholders; or

(E) as provided in Section 7(c).

(iii) If a Change in Control shall have occurred, the Indemnitee’s entitlement to indemnification under this Agreement shall be determined by Independent Counsel, to which the Board of Directors (or the board of directors of the surviving entity or the successor entity if the Company does not survive the Change in Control) does not reasonably object, selected by the Indemnitee.

(c) Presumptions and Effect of Certain Proceedings.

(i) Except as otherwise expressly provided in this Agreement, the Indemnitee shall be presumed to be entitled to indemnification under this Agreement upon submission of a request for indemnification together with the Supporting Documentation in accordance with Section 7(b)(i), and thereafter the Company shall have the burden of proof to overcome that presumption in reaching a contrary determination. In any event, if the person or persons empowered under Section 7(b) to determine entitlement to indemnification shall not have been appointed or shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor together with the Supporting Documentation, the Indemnitee shall be deemed to be entitled to indemnification and shall be entitled to such indemnification unless (A) the Indemnitee misrepresented or failed to disclose a material fact in making the request for indemnification or in the Supporting Documentation or (B) such indemnification is prohibited by law.

(ii) For purposes of this Agreement, the termination of any Proceeding, or of any claim, issue or matter herein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, adversely affect the right of the Indemnitee to indemnification or create a presumption that the Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.

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(d) Remedies of Indemnitee.

(i) In the event that a determination is made pursuant to Section 7(b) that the Indemnitee is not entitled to indemnification under this Agreement, the Indemnitee shall be entitled to seek an adjudication of his or her entitlement to such indemnification either at the Indemnitee’s sole option, in (A) an appropriate court of the State of Florida or any other court of competent jurisdiction or (B) an arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association; it being understood that any such judicial proceeding or arbitration shall be de novo and the Indemnitee shall not be prejudiced by reason of such adverse determination; and in any such judicial proceeding or arbitration the Company shall have the burden of proving that the Indemnitee is not entitled to indemnification under this Agreement.

(ii) If a determination shall have been made or deemed to have been made, pursuant to Sections 7(b) or (c), that the Indemnitee is entitled to indemnification, the Company shall be obligated to pay the amounts constituting such indemnification within five (5) days after such determination has been made or deemed to have been made and shall be conclusively bound by such determination unless (A) the Indemnitee misrepresented or failed to disclose a material fact in making the request for indemnification or in the Supporting Documentation or (B) such indemnification is prohibited by law. In the event that advancement of Expenses is not timely made pursuant to Section 7(a) or payment of indemnification is not made within five (5) days after a determination of entitlement to indemnification has been made or deemed to have been made pursuant to Section 7(b) or (c), the Indemnitee shall be entitled to seek judicial enforcement of the Company’s obligation to pay to the Indemnitee such advancement of Expenses or indemnification. Notwithstanding the foregoing, the Company may bring an action in an appropriate court of the State of Florida or any other court of competent jurisdiction contesting the right of the Indemnitee to receive indemnification hereunder due to the occurrence of an event described in subclause (A) or (B) of this clause (ii) (a “Disqualifying Event”); provided, however, that in any such action the Company shall have the burden of proving the occurrence of such Disqualifying Event.

(iii) The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 7(d) that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.

(iv) In the event that the Indemnitee, pursuant to this Section 7(d), seeks a judicial adjudication of or an award in arbitration to enforce his or her rights under, or to recover damages for breach of, this Agreement, the Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any expenses (including attorneys’ fees) actually and

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reasonably incurred by him or her if the Indemnitee prevails in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that the Indemnitee is entitled to receive part but not all of the indemnification or advancement of Expenses sought, all such expenses (including attorneys’ fees) actually and reasonably incurred by the Indemnitee in connection with such judicial adjudication or arbitration shall be paid.

SECTION 8. Notification and Defense of Claim. Promptly after receipt of notice of the commencement of any Proceeding, the Indemnitee will, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof, but the omission so to notify the Company will not relieve the Company from any liability that the Company may have to the Indemnitee under this Agreement unless the Company is materially prejudiced thereby. With respect to any such Proceeding as to which the Indemnitee notifies the Company of the commencement thereof:

(a) The Company will be entitled to participate therein at its own expense.

(b) Except as otherwise provided below, the Company jointly with any other indemnifying party similarly notified will be entitled to assume the defense thereof, with counsel reasonably satisfactory to the Indemnitee. After notice from the Company to the Indemnitee of the Company’s election so to assume the defense thereof, the Company will not be liable to the Indemnitee under this Agreement for any legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. The Indemnitee shall have the right to employ the Indemnitee’s own counsel in such Proceeding, but the fees and disbursements of such counsel incurred after notice from the Company of the Company’s assumption of the defense thereof shall be at the expense of the Indemnitee unless (i) the engagement of counsel by the Indemnitee has been authorized by the Company, (ii) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and the Indemnitee in the conduct of the defense of such Proceeding, (iii) such Proceeding seeks penalties or other relief against the Indemnitee with respect to which the Company could not provide monetary indemnification to the Indemnitee (such as injunctive relief or incarceration) or (iv) the Company shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases the fees and disbursements of counsel shall be at the expense of the Company. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company, or as to which the Indemnitee shall have reached the conclusion specified in (ii) above, or which involves penalties or other relief against the Indemnitee of the type referred to in (iii) above.

(c) The Company shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any action or claim effected without the Company’s prior written consent; provided, however, that if a Change in Control has occurred, the Company shall be liable for indemnification of the Indemnitee for amounts paid by the Indemnitee in settlement if Independent Counsel has approved the settlement. The Company shall not settle any action or claim in any manner that would impose any fine, penalty, limitation or obligation on Indemnitee without the Indemnitee’s prior written consent. Neither the Company nor the Indemnitee will unreasonably withhold its, or his or her, respective consent to any proposed settlement.

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SECTION 9. Continuation of Indemnity. All agreements and obligations of the Company contained herein shall continue during the period the Indemnitee is a director, officer, employee or agent of the Company or is serving at the request of the Company as a director, officer, employee or agent or fiduciary of any other entity (including, but not limited to, another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise or entity) and shall continue thereafter with respect to any possible claims based on the fact that the Indemnitee was a director, officer, employee or agent of the Company or was serving at the request of the Company as a director, officer, employee or agent or fiduciary of any other entity (including, but not limited to, another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise or entity). This Agreement shall be binding upon all successors and assigns of the Company (including any transferee of all or substantially all of its assets and any successor by merger or operation of law or otherwise) and shall inure to the benefit of and be enforceable by the heirs, executors, administrators, estate or other legal representatives of the Indemnitee. The Company shall require and cause any successor (including any such transferee or any successor by merger or operation of law or otherwise) by written agreement in form and substance satisfactory to the Indemnitee, expressly to assume and agree to perform the obligations of the Company pursuant to this Agreement.

SECTION 10. Contribution. If the indemnification provided for in this Agreement is unavailable and may not be paid to the Indemnitee for any reason, then in respect of any Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such Proceeding), the Company shall contribute, to the extent it is not prohibited from doing so, to the amount of Losses paid or payable by the Indemnitee in such proportion as is appropriate to reflect (a) the relative benefits received by the Company on the one hand and the Indemnitee on the other hand from the transaction from which such Proceeding arose and (b) the relative fault of the Company on the one hand and of the Indemnitee on the other in connection with the events which resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Indemnitee on the other shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such expenses, judgments, fines or settlement amounts. The Company agrees that it would not be just and equitable if contribution pursuant to this Section 10 were determined by pro rata allocation or any other method of allocation that does not take account of the foregoing equitable considerations.

SECTION 11. Severability; Prior Indemnification Agreements. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid,

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illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. This Agreement shall supersede and replace any prior indemnification agreements entered into by and between the Company and the Indemnitee and any such prior agreements shall be deemed automatically terminated upon execution and delivery of this Agreement by the Company and the Indemnitee; provided, however, that the contract rights conferred upon the Indemnitee in this Agreement shall be in addition to, and shall not replace or extinguish, the indemnification rights conferred upon the Indemnitee in the Articles of Incorporation and the By-Laws, as well as any indemnification rights conferred upon the Indemnitee as a third party or other intended beneficiary of an agreement and plan of merger or similar agreement.

SECTION 12. Company’s Right to Indemnification. Nothing in this Agreement shall diminish, limit or otherwise restrict or modify in any way the Company’s right to indemnification or contribution from an Indemnitee or an Indemnitee’s obligation to indemnify or hold harmless the Company under any agreement, instrument, commitment or understanding now or hereafter in effect.

SECTION 13. Amendments and Waiver. No amendment, modification or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and duly executed by both of the parties hereto. Neither the waiver by any of the parties hereto of a breach of or a default under any of the provisions of this Agreement, nor the failure of any of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder shall thereafter be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any of such provisions, rights or privileges hereunder. No delay or failure on the part of any party in exercising any right, power or privilege under this Agreement or under any other instruments given in connection with or pursuant to this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence therein. No single or partial exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege, or the exercise of any other right, power or privilege.

SECTION 14. Liability Insurance. To the extent that the Company maintains an insurance policy providing liability insurance for directors and officers of the Company or for directors, officers, employees, agents or fiduciaries of any other corporation, partnership, joint venture, limited liability company, trust, employee benefit plan or other enterprise that such person serves at the request of the Company, the Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies (as applicable to the capacity(ies) in which such Indemnitee serves). If, at the time of the receipt of a notice of a Proceeding pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

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SECTION 15. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution and delivery of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

SECTION 16. No Duplication of Payment. The Company shall not be liable under this Agreement to make any payment in connection with any Proceeding to the extent the Indemnitee has otherwise actually received payment (under any insurance policy or under a valid and enforceable indemnity clause, by-law or agreement of the Company or otherwise) of the amounts otherwise indemnifiable hereunder.

SECTION 17. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Florida applicable to contracts made and to be performed in such State without giving effect to the principles of conflicts of laws.

SECTION 18. Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning of interpretation of this Agreement.

SECTION 19. Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be delivered by hand or sent by facsimile or sent, postage prepaid, by registered, certified or express mail or overnight courier service and shall be deemed given upon receipt by the parties at the following (or at such other address for a party as shall be specified by like notice):

(a) if to the Indemnitee:

___________________                            

___________________                            

___________________                            

Fax:                     

(b) if to the Company:

Novoste Corporation

4350 International Blvd.

Norcross, GA, 30093

Attention: General Counsel and Corporate Secretary

Fax: (770) 717-0673

SECTION 20. Counterparts. This Agreement may be executed and delivered in or more counterparts, each of which shall constitute an original.

[Remainder of the page intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement or have caused this Agreement to be executed and delivered as of the day and year first above written.

NOVOSTE CORPORATION

By:

Name:

Title:

INDEMNITEE

By:

Name:

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EX-10.4

Exhibit 10.4

AMENDMENT NO. 1

TO

AMENDED AND RESTATED RIGHTS AGREEMENT

THIS AMENDMENT NO. 1 (this “Amendment”) to the Amended and Restated Rights Agreement (the “Rights Agreement”) dated as of July 29, 1999 between NOVOSTE CORPORATION, a Florida corporation (the “Company”), and AMERICAN STOCK TRANSFER & TRUST COMPANY, a banking corporation organized under the laws of New York, as rights agent (the “Rights Agent”), is entered into this 18th day of May, 2005.

WHEREAS, the Company and the Rights Agent are currently parties to the Rights Agreement and desire to amend the Rights Agreement on the terms and conditions hereinafter set forth;

WHEREAS, the Company, ONI Medical Systems, Inc., a Delaware corporation (“ONI”), and ONIA Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of the Company (the “Merger Subsidiary”), have entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which, among other things, the Merger Subsidiary will merge with and into ONI with ONI becoming a wholly owned subsidiary of the Company;

WHEREAS, on May 17, 2005 the Board of Directors of the Company resolved to amend the Rights Agreement to render it inapplicable to the Merger Agreement, the Merger and other transactions specifically contemplated thereby; and

WHEREAS, for purposes of this Amendment, capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Rights Agreement, as amended by this Amendment;

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

1. Amendment to Section 1.

(a) Section 1(a) of the Rights Agreement is hereby amended by adding the following new paragraph to the end of Section 1(a):

“Notwithstanding anything in this Agreement that might otherwise be deemed to the contrary, and provided that the Merger Agreement has not been terminated pursuant to its terms, neither ONI, the Merger Subsidiary, nor any of either such parties’ Affiliates or Associates shall be deemed to be an Acquiring Person solely by reason of: (i) the approval, execution or delivery of the Merger Agreement, including any amendment or supplement thereto; (ii) the announcement or consummation of the Merger; or (iii) the consummation of any of the transactions specifically contemplated by the Merger Agreement, each upon the terms and subject to the conditions of the Merger Agreement.

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In addition, notwithstanding anything in this Agreement that might otherwise be deemed to the contrary, and provided that (i) the Merger Agreement has not been terminated pursuant to its terms, and (ii) as a result of the approval, execution or consummation of the Merger and/or the transactions contemplated thereby, Galen Partners IV, LP, Galen Partners International IV, LP, Galen Employee Fund IV, LP and Claudius IV, LLC, together with their Affiliates and Associates, becomes the Beneficial Owner of 15% or more of the outstanding Common Shares at the Effective Time, Galen Partners IV, LP, Galen Partners International IV, LP, Galen Employee Fund IV, LP and Claudius IV, LLC, together with their Affiliates and Associates, shall be deemed to be a “Qualified Exempt Person” and shall not be deemed an “Acquiring Person”; provided however, that if after the Effective Time, the Qualified Exempt Person becomes at any time the Beneficial Owner of an additional 2% of the Common Shares then outstanding in excess of the amount of the Common Shares such Qualified Exempt Person beneficially owned as of the Effective Time, then such Qualified Exempt Person shall be deemed an “Acquiring Person” hereunder as to all of their Common Shares beneficially owned. Notwithstanding the foregoing, a Qualified Exempt Person shall not become an “Acquiring Person” as a result of an acquisition of Common Shares by the Company which, by reducing the number of Common Shares outstanding, increases the proportionate number of Common Shares beneficially owned by a Qualified Exempt Person as of the Effective Time by an additional 2%, provided however, that if by reason of share purchases by the Company the proportionate number of Common Shares beneficially owned by a Qualified Exempt Person as of the Effective Time increases by an additional 2% of the outstanding Common Shares, and thereafter the Qualified Exempt Person shall become the Beneficial Owner of an additional 1% of the outstanding Common Shares, then the Qualified Exempt Person shall be deemed to be an “Acquiring Person” if such Qualified Exempt Person is then the Beneficial Owner of 15% or more of the outstanding Common Shares.”

(b) Section 1(i) of the Rights Agreement is hereby amended by adding the following new paragraph to the end of Section 1(i):

“Notwithstanding anything in this Agreement that might otherwise be deemed to the contrary, and provided that the Merger Agreement has not been terminated pursuant to its terms, no Distribution Date shall be deemed to have occurred solely by reason of: (i) the approval, execution or delivery of the Merger Agreement, including any amendment or supplement thereto; (ii) the announcement or consummation of the Merger; or (iii) the consummation of the transactions specifically contemplated by the Merger Agreement, each upon the terms and subject to the conditions of the Merger Agreement.”

(c) Section 1 of the Rights Agreement is hereby amended by inserting the following text after section 1(i) but before Section 1(j):

“(i-1) “Effective Time” shall mean the date that the Merger becomes effective pursuant to the terms and conditions of the Merger Agreement.”

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(d) Section 1(l) of the Rights Agreement is hereby amended by adding the following sentence to the end of Section 1(l):

“Notwithstanding anything in this Agreement that might otherwise be deemed to the contrary, and provided that the Merger Agreement has not been terminated pursuant to its terms, the term “Interested Shareholder” shall not include ONI or any of its Affiliates and Associates.”

(e) Section 1 of the Rights Agreement is hereby amended by inserting the following text after section 1(l) but before Section 1(m):

“(l-1) “Merger” shall mean the merger of the Merger Subsidiary with and into ONI pursuant to the terms and conditions of the Merger Agreement with ONI becoming a wholly owned subsidiary of the Company.”

(l-2) “Merger Agreement” shall mean the Agreement and Plan of Merger by and among the Company, the Merger Subsidiary and ONI, dated as of May 18, 2005, which sets forth the terms and conditions of the Merger.

(l-3) “Merger Subsidiary” shall mean ONIA Acquisition Corp., a wholly owned subsidiary of the Company.

(l-4) “ONI” shall mean ONI Medical Systems, Inc., a Delaware corporation.”

(f) Section 1(v) of the Rights Agreement is hereby amended by adding the following new paragraph to the end of Section 1(v):

“Notwithstanding anything in this Agreement that might otherwise be deemed to the contrary, and provided that the Merger Agreement has not been terminated pursuant to its terms, no Shares Acquisition Date shall be deemed to have occurred solely by reason of: (i) the approval, execution or delivery of the Merger Agreement, including any amendment or supplement thereto; (ii) the announcement or consummation of the Merger; or (iii) the consummation of the transactions specifically contemplated thereby, each upon the terms and subject to the conditions of the Merger Agreement.”

(g) Section 1(x) of the Rights Agreement is hereby amended by adding the following new paragraph to the end of Section 1(x):

“Notwithstanding anything in this Agreement that might otherwise be deemed to the contrary, and provided that the Merger Agreement has not been terminated pursuant to its terms, no Transaction shall be deemed to have occurred solely by reason of: (i) the approval, execution or delivery of the Merger

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Agreement, including any amendment or supplement thereto; (ii) the announcement or consummation of the Merger; or (iii) the consummation of the transactions specifically contemplated thereby, each upon the terms and subject to the conditions of the Merger Agreement.”

2. Amendment to Section 11(a)(ii). Section 11(a)(ii) of the Rights Agreement is amended by adding the following sentence at the end thereof:

“Notwithstanding anything in this Agreement that might otherwise be deemed to the contrary, and provided that the Merger Agreement has not been terminated pursuant to its terms, none of the (i) approval, execution, delivery or performance of the Merger Agreement, (ii) the consummation of the Merger in accordance with the provisions of the Merger Agreement, (iii) the acquisition of Common Shares in accordance with the Merger Agreement pursuant to the Merger or (iv) the consummation of any other transaction to be effected pursuant to the Merger Agreement in accordance with the provisions of the Merger Agreement shall cause the Rights to be adjusted or become exercisable in accordance with this Section 11(a)(ii).”

3. Amendment to Section 13(e). Section 13(e) of the Rights Agreement is amended by adding the following sentence at the end thereof:

“Notwithstanding anything in this Agreement that might otherwise be deemed to the contrary, and provided that the Merger Agreement has not been terminated pursuant to its terms, the provisions of this Section 13 shall not be applicable to the Merger.”

4. Effective Date. This Amendment shall become effective as of the date first above written.

5. Other Terms Unchanged. The Rights Agreement, as amended by this Amendment, shall remain and continue in full force and effect and is in all respects agreed to, ratified and confirmed hereby. Any reference to the Rights Agreement after the date first set forth above shall be deemed to be a reference to the Rights Agreement, as amended by this Amendment.

6. Benefits. Nothing in the Rights Agreement, as amended by this Amendment, shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock) any legal or equitable right, remedy or claim under the Rights Agreement, as amended by this Amendment; but the Rights Agreement, as amended by this Amendment, shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock).

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7. Descriptive Headings. Descriptive headings of the several Sections of this Amendment are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

8. Governing Law. This Amendment shall be deemed to be a contract made under the laws of the State of Florida and for all purposes shall be governed by and construed in accordance with the laws of such State.

9. Counterparts. This Amendment may be executed in any number of counterparts. It shall not be necessary that the signature of or on behalf of each party appears on each counterpart, but it shall be sufficient that the signature of or on behalf of each party appears on one or more of the counterparts. All counterparts shall collectively constitute a single agreement. It shall not be necessary in any proof of this Amendment to produce or account for more than a number of counterparts containing the respective signatures of or on behalf of all of the parties.

10. Fax Transmission. A facsimile, telecopy or other reproduction of this Amendment may be executed by one or more parties hereto, and an executed copy of this Amendment may be delivered by one or more parties hereto by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties agree to execute an original of the Amendment as well as any facsimile, telecopy or other reproduction thereof.

[Signatures on Next Page]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and attested, all as of the day and year first above written.

NOVOSTE CORPORATION
By:	/s/ Alfred J. Novak
Name:	Alfred J. Novak
Title:	President and Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY, as Rights Agent
By:	/s/ Isaac J. Kagan
Name:	Isaac J. Kagan
Title:	Vice President

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