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                                                                     EXHIBIT 4.3


                   FIRST AMENDMENT TO STOCKHOLDERS' AGREEMENT

         This First Amendment (this "Amendment"), dated as of June 1, 2001,
amends that certain Stockholders' Agreement (the "Agreement"), dated as of July
31, 1998, by and among MedCath Holdings, Inc., a Delaware corporation ("MedCath
Holdings"), the KKR Fund and the WCAS Stockholders (the KKR Fund and the WCAS
Stockholders, together, the "Stockholders"). Capitalized terms used in this
Amendment, but not otherwise defined in this Amendment, shall have the meanings
ascribed thereto in the Agreement.

         WHEREAS, MedCath Holdings and MedCath Corporation ("MedCath
Corporation" or the "Company") plan to complete an internal reorganization (the
"Reorganization") by effecting (i) the exchange of the issued and outstanding
shares of MedCath Holdings' common stock, $.01 par value per share for an
equivalent number of shares of MedCath Corporation's common stock, $.01 par
value per share ("MedCath Corporation Common Stock") (the "MedCath Holdings
Exchange"); and (ii) the exchange of a portion of the interests held by
investors in certain heart hospitals for shares of MedCath Corporation Common
Stock (the "Hospitals Exchange" and, together with the MedCath Holdings
Exchange, the "Exchanges"), among other things;

         WHEREAS, contemporaneous with the consummation of the Reorganization
and the Exchanges, the Company plans to make an underwritten initial public
offering of shares of MedCath Corporation Common Stock (the "IPO"); and

         WHEREAS, MedCath Holdings, the Company and each of the Stockholders
desire to amend the Agreement to make certain arrangements among themselves with
respect to the matters set forth therein and herein.

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto, intending to be
legally bound, hereby agree as follows:

         1.       Amendments

                  1.1      The parties hereby amend the Agreement to provide
         that from and after the date on which this Amendment is effective
         pursuant to Section 3 of this Amendment, all references to the
         "Company" in the Agreement shall mean MedCath Corporation and the term
         "Common Stock" used therein shall mean MedCath Corporation Common
         Stock.

                  1.2      The parties hereby amend Section 1(b)(i) of the
         Agreement to read in its entirety as follows:

                           "(i)     four directors designated by KKR Fund (each,
                  a "KKR Designee"), subject to the provisions immediately
                  following clause (d) below; and"


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                  1.3      The parties hereby amend Section 1(b)(ii) of the
         Agreement to read in its entirety as follows:

                           "(ii)    three directors designated by the WCAS
                  Stockholders (each, a "WCAS Designee"), it being understood
                  that the WCAS Designee shall be selected by the holders of
                  record of a majority of the Common Stock then held by the WCAS
                  Stockholders, subject to the provisions immediately following
                  clause (d) below."

                  1.4      The parties hereby further amend Section 1 of the
         Agreement by deleting in their entirety Section (1)(b)(iii) and Section
         1(b)(iv) thereof.

                  1.5      The parties hereby further amend Section 1 of the
         Agreement by inserting two new paragraphs therein immediately after
         clause (d) thereof to read in their entirety as follows:

                  "Notwithstanding anything in this Agreement to the contrary,
         based on their respective percentages of ownership of the issued and
         outstanding shares of Common Stock as of and immediately upon the
         consummation of the IPO (the "Initial Percentage Owned"), KKR Fund and
         the WCAS Stockholders will have the rights to designate directors as
         set forth above in this Section 1; provided that such rights shall be
         reduced at any time KKR Fund or the WCAS Stockholders owns less than
         its Initial Percentage Owned for certain incremental ranges below which
         its percentage ownership of the issued and outstanding shares of Common
         Stock may fall, such increments to be determined in accordance with the
         following formula, down to an ownership of 5% of the issued and
         outstanding shares of Common Stock (the "Floor"), below which Floor KKR
         Fund or the WCAS Stockholders (as the case may be) shall have no right
         to designate a director. The aforementioned ranges shall be a spread of
         equal increments from the Initial Percentage Owned to the Floor, such
         increment being equal to the difference between the Initial Percentage
         Owned and the numeral five (5), divided by three (3) in the case of KKR
         Fund and two (2) in the case of the WCAS Stockholders, rounded up to
         the nearest whole number (in each case, hereinafter, the "Increment").
         The right of KKR Fund and the WCAS Stockholders, as the case may be, to
         designate directors hereunder shall be reduced by one director with
         each Increment drop in their respective Initial Percentage Owned. For
         example in the case of KKR Fund, assuming their Initial Percentage
         Owned is 28%, the applicable Increment would be eight (8) (28 - 5 = 23;
         23 / 3 = 7.6; rounded up to 8), so that at any time KKR Fund owns (v)
         more than or equal to 28% of the issued and outstanding shares of
         Common Stock, KKR Fund will have the right to designate four (4)
         directors; (w) less than 28% but more than or equal to 20% of the
         issued and outstanding shares of Common Stock, KKR Fund will have the
         right to designate three directors; (x) less than 20% but more than or
         equal to 12% of the issued and outstanding shares of Common Stock, KKR
         Fund will have the right to designate two directors; (y) less than 12%
         but more than or equal to 5% of the issued and outstanding shares of
         Common Stock, KKR Fund will have the right to designate one director,
         and (z) less than 5% of the issued and outstanding shares of Common
         Stock, KKR Fund will have no right


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         to designate a director. In the event that either the KKR Fund or the
         WCAS Stockholders, as the case may be, shall cease to be entitled to
         designate any of a number of directors to which either is entitled to
         designate, the Company agrees that the KKR Fund or the WCAS
         Stockholders, as the case may be, shall be entitled to determine which
         of its existing Board of Director designees are to be removed from the
         Board of Directors upon their replacement in accordance with the bylaws
         of the Company.

                  "The bylaws of the Company will establish a board of directors
         who will fill staggered terms. The parties hereby agree that effective
         upon the consummation of the IPO the board of directors of the Company
         will be established so that subject to the other provisions of Section
         1, KKR Fund and the WCAS Stockholders will have two directors and one
         director, respectively in the class of directors having the longest
         term before the election of new directors to such class and the
         remaining directors designated by KKR Fund and the WCAS Stockholders
         shall be divided equally among the remaining classes of directors.
         Subject to the immediately preceding sentence, the Company agrees that
         the KKR Fund or the WCAS Stockholders, as the case may be, shall be
         entitled to determine which KKR Designees or WCAS Designees, as the
         case may be, shall serve in each class of directors."

                  1.6      The parties hereby further amend Section 1 of the
         Agreement by modifying second clause (a) thereof to read in its
         entirety as follows:

                  "(a)     an Executive Committee of the Board, consisting of at
         least five directors, one of whom is a KKR Designee, one of whom is a
         WCAS Designee, which Executive Committee shall exercise such powers as
         may be provided in resolutions of the Board and permitted by applicable
         law;"

                  1.7      The parties hereby further amend Section 1 of the
         Agreement by modifying second clause (b) thereof to read in its
         entirety as follows:

                  "(b)     a Compensation Committee of the Board, consisting of
         at least four directors, one of whom is a KKR Designee, one of whom is
         a WCAS Designee, which Compensation Committee shall exercise such
         powers as may be provided in resolutions of the Board and permitted by
         applicable law;"

                  1.8      The parties hereby further amend Section 1 of the
         Agreement by modifying second clause (c) thereof to read in its
         entirety as follows:

                  "(b)     an Audit Committee of the Board, consisting of 3
         independent directors, which Audit Committee shall review and approve
         the financial statements of the Company as audited by the Company's
         independent certified public accountants and exercise such other powers
         as may be provided in resolutions of the Board and permitted by
         applicable law;"

                  1.9      The parties hereby further amend Section 1 of the
         Agreement by inserting a carry-over sentence immediately after the
         second clause (c) thereof beginning with the


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         words "an Audit Committee" and ending with the words "independent
         certified public accountant" such carry-over sentence to read in its
         entirety as follows:

                  "Notwithstanding anything to the contrary herein, the
                  aforementioned rights of KKR Fund or the WCAS Stockholders, as
                  the case may be, with regard to the creation and maintenance
                  of an Executive Committee, a Compensation Committee and an
                  Audit Committee pursuant to the immediately preceding clauses
                  (a), (b) and (c), shall expire at any time after KKR Fund or
                  the WCAS Stockholders, as the case may be, together with their
                  respective Affiliates, own less than 10% of the issued and
                  outstanding shares of Common Stock."

                  1.10     The parties hereby further amend Section 1 of the
         Agreement to delete from the fifth through the eighth lines of the last
         paragraph of said Section 1, the following sentence in its entirety:

                           "The Company shall also pay the Stockholders
                  monitoring fees in the aggregate amount of $300,000 per annum,
                  subject to annual adjustment based on the Company's size, to
                  be allocated pro rata among the Stockholders based on their
                  ownership of the Company."

         The parties hereby acknowledge and agree that no fees shall be due to
         the Stockholders as a result of the consummation of the IPO and that
         there is no agreement to provide further management, monitoring,
         success, transaction or other similar fees of any type or nature to the
         Stockholders; provided, however, that nothing herein shall prohibit the
         payment to Affiliates of the Stockholders serving as directors of the
         Company of such director's fees, options and reimbursements to which
         all directors who are not employees of the Company are entitled to
         receive for serving as directors of the Company.

                  1.11     The parties hereby further amend Section 1 of the
         Agreement by inserting at the end of Section 1 the following new
         paragraph:

                           "For purposes of this Agreement, where any reference
                  is made to a percentage of ownership of shares of Common
                  Stock, ownership of shares of Common Stock on a percentage
                  basis shall be determined on a fully diluted basis as of the
                  date of such determination."

                  1.12     The parties hereby amend Section 2 of the Agreement
         to read in its entirety as follows:

                           "Section 2. Stockholder Voting Rights. (a) Without
                  obtaining the approval of each of (i) a majority of the shares
                  held of record by KKR Fund and its Affiliates (as defined
                  below) and (ii) a majority of the shares held of record by the
                  WCAS Stockholders and their Affiliates (as defined), the
                  Company shall not and shall not permit any subsidiary of the
                  Company to:


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                           (i)      appoint, dismiss or replace the Chief
                                    Executive Officer of the Company;
                           (ii)     merge or consolidate with or into another
                                    corporation unless a wholly-owned subsidiary
                                    of the Company;
                           (iii)    sell, transfer or dispose of all or
                                    substantially all of its assets other than a
                                    wholly-owned subsidiary of the Company; and
                           (iv)     acquire, purchase or invest in any material
                                    assets, other than in the ordinary course of
                                    business, or dispose of material any assets,
                                    other than in the ordinary course of
                                    business.

                  (b)      Notwithstanding anything to the contrary herein, the
                  approval of KKR Fund or the WCAS Stockholders, as the case may
                  be, pursuant to Section 2(a) shall not be required with
                  respect to any actions by the Company (other than to the
                  extent required under applicable law) at any time after KKR
                  Fund or the WCAS Stockholders, as the case may be, together
                  with its respective Affiliates, own less than 20% of the
                  issued and outstanding shares of Common Stock."

                  1.13     The parties hereby amend Section 3 of the Agreement
         by inserting at the beginning of the third sentence thereof the
         following:

                  "Except for a transferee in a transfer made pursuant to clause
                  (z) of the immediately preceding sentence,"

                  1.14     The parties hereby amend Section 10 of the Agreement
         to read in its entirety as follows: "Section 10. Intentionally
         omitted."

                  1.15     The parties hereby amend Section 15 of the Agreement
         by deleting therefrom the semicolon and the proviso thereof beginning
         in line six thereof as follows:

                  "; provided, however, that the Management Contributors shall
                  be entitled to rights as third-party beneficiaries with
                  respect to the provisions of Section 1 hereof (other than the
                  provisos in clauses (b)(i) and (b)(ii) of Section 1)"

                  1.16     The parties hereby further amend Section 15 of the
         Agreement by inserting in the seventh line from the bottom thereof,
         after the words "provided, however, that the rights of a Stockholder to
         designate directors pursuant to Section 1 hereof" the following words:
         "and a Stockholder's voting rights pursuant to Section 2 hereof other
         than to any Affiliate".

                  1.17     The parties hereby amend Section 17 of the Agreement
         to read in its entirety as follows:

                           "Section 17. Modification. Neither this Agreement nor
                  any provision hereof may be modified, changed, discharged or
                  terminated except by an instrument in writing signed by the
                  Stockholders and the Company."


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         2.       Ratification and Assumption. Except to the extent amended
hereby, the terms and provisions of the Agreement shall remain in full force and
effect and are ratified, confirmed and approved in all respects. MedCath
Corporation hereby accepts, agrees to, and acknowledges all such terms and
provisions, and agrees to assume all obligations of the Company under the
Agreement as if MedCath Corporation were the "Company" under the Agreement.

         3.       Effectiveness of Amendment. This Amendment shall become
effective as of the date on which the IPO is consummated and shall have no force
and effect unless and until the consummation of the IPO.

         4.       Reference. From and after the date hereof, each reference in
the Agreement and any other document describing or referencing the Agreement to
the "Agreement," "hereunder," "hereof," "herein," or words of like import
referring to the Agreement, shall mean and be a reference to the Agreement as
amended by this Amendment.

         5.       Binding Effect. This Amendment shall be binding upon and inure
to the benefit of the respective successors and assigns of the parties hereto.

         6.       Governing Law. This Amendment shall be governed by and
construed in accordance with New York law.

         7.       Counterparts. This Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together only one instrument.

                [Remainder of this page is intentionally blank.]


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           IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as a sealed instrument, all as of the day and year first above
written.

                                       MEDCATH HOLDINGS, INC.


                                       By:      /s/ David Crane
                                          --------------------------------------
                                       Name:
                                       Title:

                                       MEDCATH CORPORATION


                                       By:      /s/ David Crane
                                          --------------------------------------
                                       Name:
                                       Title:

                                       MEDCATH 1998 LLC


                                       By:      /s/ David H. S. Chung
                                          --------------------------------------
                                       Name:    David H. S. Chung
                                       Title:   Vice President

                                       WELSH, CARSON, ANDERSON
                                         & STOWE VII, L.P.
                                       By WCAS VII Partners, L.P.
                                       General Partner


                                       By:      /s/ Jonathan M. Rather
                                          --------------------------------------
                                       Name: Jonathan M. Rather
                                       Title: General Partner


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                                       WCAS HEALTHCARE PARTNERS, L.P.
                                       By: WCAS HP Partners
                                       General Partner


                                       By:      /s/ Jonathan M. Rather
                                          --------------------------------------
                                                     General Partner

                                       Patrick J. Welsh
                                       Russell L. Carson
                                       Bruce K. Anderson
                                       Richard H. Stowe
                                       Andrew M. Paul
                                       Thomas E. McInerney
                                       Robert A. Minicucci
                                       Anthony J. de Nicola
                                       Paul B. Queally

                                       By:      /s/ Jonathan M. Rather
                                          --------------------------------------
                                       Name: Jonathan M. Rather
                                       Individually and as Attorney-in-Fact


                                       -----------------------------------------
                                       Lawrence B. Sorrell


                                       -----------------------------------------
                                       Rudolph E. Rupert


                                       -----------------------------------------
                                       D. Scott Mackesy


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