AMENDMENT,  dated  as of  July  9,  1997,  to  that  certain  International
Distributorship  Agreement,  dated as of January 22, 1997 (the  "Distributorship
Agreement") between Arterial Vascular Engineering,  Inc., a Delaware corporation
("AVE") and Japan  Lifeline  Co.,  Ltd., a company  organized  under the laws of
Japan (the "Distributor").

     WHEREAS,  AVE and the Distributor desire to amend certain provisions of the
Distributorship Agreement;

     NOW,  THEREFORE,  in  consideration  of the premises and for other valuable
consideration,  receipt  of which is hereby  acknowledged,  the  parties  hereto
hereby agree as follows:

     1.  Section  4.1 is hereby  amended by  deleting  the proviso in the second
sentence of such Section 4.1

      2.  Schedule  E of the  Distributorship  Agreement  is hereby  amended  by
deleting the text in the third  paragraph of Schedule E beginning with the words
"provided  however," and ending with the end of such paragraph (i.e. ending with
the words "the quarterly period ending December 31, 1997."),  and replacing such
text with the following:  "provided,  however, that during the period commencing
with the  three-month  anniversary  of the date  that  distributor  obtains  the
necessary  governmental  registrations,  licenses and permits to market and sell
such coronary  stent  Products in the Territory and ending on the earlier of (i)
the six-month anniversary of such date and (ii) the date that Japanese insurance
reimbursement  is granted  for such  Products,  the  purchase  price for up to *
coronary  stent systems per month shall be * per coronary stent system (it being
understood and agreed that Distributor  shall use its best efforts to market and
sell such coronary stent systems during the pre-reimbursement  period and not to
accumulate them in its inventory).

     3. A new Section 3.6 is hereby created that shall be and read as follows:

        "3.6 Marketing Assistance

     AVE shall * on  October  1,  1997,  for use by the  Distributor  during the
     period  between  October 1, 1997 and September 30, 1998 in connection  with
     sales and marketing relating to the Products."

     4. This  Amendment  is  limited as  specified  and shall not  constitute  a
modification, acceptance or waiver of any other provision of the Distributorship
Agreement.

     5. From and after the date hereof,  all  references in the  Distributorship
Agreement shall be deemed to be references to the  Distributorship  Agreement as
modified hereby.

--------------

*    Certain  confidential  information  contained in this  document,  marked by
     asterisks,  has been omitted and filed  separately  with the Securities and
     Exchange  Commission  pursuant to Rule 24b-2 of the Securities Exchange Act
     of 1934, as amended.

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<PAGE>


     6. This Amendment  shall be governed by, and construed in accordance  with,
the laws of the State of California  applicable to contracts  executed in and to
be performed in that State.

     IN WITNESS  WHEREOF,  AVE and the Distributor have caused this Amendment to
be duly executed as of the date first written above by their respective officers
thereunto duly authorized.

ARTERIAL VASCULAR ENGINEERING, INC.               JAPAN LIFELINE CO., LTD.


By  /s/John D. Miller                             /S/Takeshi Mashumoto
    -----------------------                       --------------------------
    Name: John D. Miller                          Name: Takeshi Mashumoto
    Title: V.P. Finance, C.F.O                    Title: President



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