QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.35


KAISHA BUNKATSU

AND

STOCK PURCHASE AGREEMENT

July 25, 2002

among

       

BAXTER HOLDINGS LIMITED

and

BAXTER LIMITED

and

EDWARDS LIFESCIENCES LIMITED

and

EDWARDS LIFESCIENCES AG

TABLE OF CONTENTS

 
    
   Page
    ARTICLE I
DEFINITIONS		    

1.1
 
Definitions
 
1

 
 
ARTICLE II
BUNKATSU ASSETS AND BUNKATSU LIABILITIES
 
 

2.1
 
Japanese Edwards Business and Bunkatsu Assets
 
6
2.2   Excluded Assets   7
2.3   Bunkatsu Liabilities   8
2.4   Excluded Liabilities   9

 
 
ARTICLE III
KAISHA BUNKATSU OF THE JAPANESE EDWARDS BUSINESS
 
 

3.1
 
The Kaisha Bunkatsu Process
 
10
3.2   Kaisha Bunkatsu   10
3.3   Conditions Precedent to Consummation of Kaisha Bunkatsu   11

 
 
ARTICLE IV
SALE AND PURCHASE OF COMMON STOCK
 
 

4.1
 
Sale and Purchase of Common Stock
 
13
4.2   Closing Date   13
4.3   Conditions Precedent to Closing of Stock Purchase   13
4.4   Purchase Price Adjustment   14

 
 
ARTICLE V
REPRESENTATIONS AND WARRANTIES
 
 

5.1
 
Representations and Warranties of BKK and BHL
 
16
5.2   Representations and Warranties of ELL   17
5.3   No Other Representations or Warranties   17

 
 
ARTICLE VI
COVENANTS
 
 

6.1
 
Operation of Japanese Edwards Business
 
18
6.2   Consents of Third Parties; Governmental Approvals   19
6.3   Transition Services   19
6.4   Real Estate Matters   20
6.5   Deliveries   20
6.6   Financial Statements   20
6.7   Collection of Accounts Receivable   20
6.8   Agreements Relating to ELL and BKK   21
6.9   Non-Assignable Contracts   22
6.10   Filing of Report on Kaisha Bunkatsu   22
6.11   Approval of Stock Purchase   22
6.12   Further Assurances   22
6.13   Access   23
6.14   Notice of Changes   23
6.15   Novation of Bunkatsu Liabilities   23

i


 
 
ARTICLE VII
TERMINATION OF OPTION AGREEMENT AND TK AGREEMENT
 
 

7.1
 
Termination of Option Agreement
 
24
7.2   Termination of the TK Agreement   24

 
 
ARTICLE VIII
TERMINATION OF AGREEMENT
 
 

8.1
 
Termination of Agreement
 
24
8.2   Effect of Termination   25
8.3   Impossibility to consummate the transactions contemplated hereby   25

 
 
ARTICLE IX
EMPLOYEES AND EMPLOYEE BENEFIT MATTERS
 
 

9.1
 
Employment of Transferred Employees
 
25
9.2   Terminations/Layoff/Severance   26
9.3   Employee Benefit Plans   26
9.4   Transfer of Account Balances and Accrued Benefits   26
9.5   Stock Purchase Plans   26
9.6   Workers' Compensation   27
9.7   Vacation Pay Policy   27
9.8   Information to be Provided to BKK and ELL   27
9.9   Transfer of Employee Files   27
9.10   Employment Solicitation   27

 
 
ARTICLE X
INSURANCE MATTERS
 
 

10.1
 
Insurance Prior to the Bunkatsu Date
 
27
10.2   Ownership of Existing Policies and Programs   28
10.3   Procurement of Insurance for ELL   28
10.4   Acquisition and Maintenance of ELL's Insurance Policies and Programs after Bunkatsu Date   28
10.5   ELL Directors' and Officers' Insurance   28
10.6   Pre-Bunkatsu Date Insurance Claims Administration   29
10.7   Post-Bunkatsu Date Insurance Claims Administration   29
10.8   Non-Waiver of Rights to Coverage   30
10.9   Scope of Affected Policies of Insurance   30

 
 
ARTICLE XI
INDEMNIFICATION
 
 

11.1
 
Indemnification by ELL
 
30
11.2   Indemnification by BKK   31
11.3   Applicability of and Limitation on Indemnification   31
11.4   Adjustment of Indemnifiable Losses   32
11.5   Procedures for Indemnification of Third Party Claims   32
11.6   Procedures for Indemnification of Direct Claims   33
11.7   Remedies Cumulative   34

 
 
ARTICLE XII
DISPUTE RESOLUTION
 
 

12.1
 
General
 
34

ii

12.2   Escalation   34
12.3   Arbitration   34
12.4   Procedures   35
12.5   Injunctive Relief   35

 
 
ARTICLE XIII
INTELLECTUAL PROPERTY
 
 

13.1
 
Grant of License
 
35
13.2   Use by ELL of Baxter Parties' Trademarks   36

 
 
ARTICLE XIV
GENERAL PROVISIONS
 
 

14.1
 
Notices
 
37
14.2   Successors and Assigns   37
14.3   Access to Records after Closing   38
14.4   Entire Agreement; Amendments   38
14.5   Interpretation   38
14.6   Waivers   38
14.7   Expenses   38
14.8   Partial Invalidity   38
14.9   Execution in Counterparts   39
14.10   Choice of Law and Forum   39
14.11   Survival of Obligations   39
14.12   Confidentiality   39
14.13   Non-waiver of Claims   39
14.14   Currency   39

EXHIBITS

A   Description of Japanese Edwards Business
B   Description of IV Business
C   Bunkatsu Agreement
D   Transition Services Agreement
E   Miyazaki Services Agreement
F   Miyazaki Plant Lease Agreement
G   Memorandum of Understanding for Sales Office Arrangements
H   Option Termination Agreement
I   Agreement on Surviving Clauses of the Option Agreement
J   TK Termination Agreement
K   Baxter World Trade Guaranty

 
 
SCHEDULES

1.1
 
Agreed Accounting Policies and Allocation Methodology
2.1(iv)   Governmental Permits
2.1(v)   Real Estate Leases
    •   Addendum 2.1(v)-A   Individual Employee Housing and Individual Parking Contracts List
2.1(vi)   Machinery, Equipment and Personal Property
    •   Addendum 2.1(vi)-A   Miyazaki Plant Assets
    •   Addendum 2.1(vi)-B   General & Sales Office Assets
    •   Addendum 2.1(vi)-C   Inventory Product Categories
    •   Addendum 2.1(vi)-D   Assets Leased to Third Parties

iii

    •   Addendum 2.1(vi)-E   TDC Transferred Assets
    •   Addendum 2.1(vi)-F   TSC Transferred Assets
2.1(vii)   Contracts
    •   Addendum 2.1(vii)-A   Exclusive Dealer Contracts
    •   Addendum 2.1(vii)-B   Exclusive Non-dealer Contracts
2.1(xiv)   Transferred Assets
2.3   Facilities
3.1(b)   Third Party Consents, Approvals and Waivers
4.4(a)(ii)   Opening Balance Sheet
5.1(iv)   Shared Agreements
    •   Addendum 5.1(iv)-A   Allocation of Individual Cars Subject to GE Fleet and Toyopet Lease Agreements
5.1(v)   Retained Business Liabilities
5.1(vii)   Pending Orders and Actions
6.1(iii)   Capital Expenditure Changes
6.4(iii)   Sales Office Plans
9.4   Actuarial Methodology
13.1   Intellectual Property
14.7   Spinoff Expenses

iv


KAISHA BUNKATSU AND STOCK PURCHASE AGREEMENT

        THIS KAISHA BUNKATSU AND STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of July 25, 2002, entered into by and among Baxter Limited, a Japanese kabushiki kaisha ("BKK"); Baxter Holdings Limited, a Japanese yugen kaisha ("BHL"; collectively with BKK, the "Baxter Parties"); Edwards Lifesciences Limited, a Japanese kabushiki kaisha ("ELL"); and Edwards Lifesciences AG, a Swiss aktiengesellschaft ("Edwards AG") ("Edwards AG"; collectively with ELL, the "Edwards Parties").

        WHEREAS, BKK currently conducts all of the business of the Cardiovascular Group in Japan, as more specifically described in Exhibit A hereto (the "Japanese Edwards Business");

        WHEREAS, BKK and ELL have entered into that certain Bunkatsu Agreement (as defined herein) as of July 25, 2002;

        WHEREAS, the parties hereto desire to set out the details necessary or desirable for the implementation of the transfer of the Japanese Edwards Business from BKK to ELL in accordance with the Bunkatsu Agreement governed by the Kaisha Bunkatsu Procedure of the Japanese Commercial Code (as such term is defined herein); and

        WHEREAS, the parties hereto desire to set out the terms and conditions for BHL's sale to Edwards AG of certain common stock of ELL issued to BHL in connection with the Kaisha Bunkatsu of the Japanese Edwards Business.

        NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, it is hereby agreed among the parties as follows:


ARTICLE I
DEFINITIONS

        1.1    Definitions.    

        For all purposes of this Agreement, except as otherwise expressly provided,

1

2

3

4

5


ARTICLE II
BUNKATSU ASSETS AND BUNKATSU LIABILITIES

        2.1    Japanese Edwards Business and Bunkatsu Assets.    Upon the terms and subject to the conditions of this Agreement and the Bunkatsu Agreement, and in accordance with the terms of the Kaisha Bunkatsu Procedure of the Japan Commercial Code, on the Bunkatsu Date, BKK shall transfer, assign, convey and deliver to ELL, on a going concern basis, all of BKK's right, title and interest in and under the Japanese Edwards Business and all of the assets and properties of BKK of every kind and description, wherever located, real, personal or mixed, tangible or intangible, relating exclusively to the Japanese Edwards Business as the same shall exist on the Bunkatsu Date (collectively, the "Bunkatsu Assets"), including, without limitation, all right, title and interest of BKK in, to and under:

6

        2.2    Excluded Assets.    Notwithstanding the provisions of Section 2.1, the Japanese Edwards Business shall not include the following (the "Excluded Assets"):

7

        2.3    Bunkatsu Liabilities.    On the Bunkatsu Date, ELL shall assume and agree to discharge, in accordance with their respective terms and subject to the respective conditions thereof, all contractual and other Liabilities of BKK arising out of or related to the Japanese Edwards Business, and/or any of the past or present facilities of BKK during the period any such facilities were used primarily in connection with the Japanese Edwards Business, as such facilities and specified time periods are set forth on Schedule 2.3 attached hereto, including, without limitation:

8

All of the foregoing liabilities and obligations to be assumed by ELL hereunder (excluding any Excluded Liabilities) are referred to herein as the "Bunkatsu Liabilities."

        2.4    Excluded Liabilities.    ELL shall not assume or be obligated to pay, perform or otherwise discharge any Liability of BKK not expressly assumed by ELL pursuant to Section 2.3 (all such liabilities and obligations not being assumed being herein called the "Excluded Liabilities") and, notwithstanding anything to the contrary in Section 2.3, none of the following shall be Bunkatsu Liabilities for purposes of this Agreement:

9


ARTICLE III
KAISHA BUNKATSU OF THE JAPANESE EDWARDS BUSINESS

        3.1    The Kaisha Bunkatsu Process.    

        3.2    Kaisha Bunkatsu.    BKK shall transfer and assign to ELL the Bunkatsu Assets and Bunkatsu Liabilities of the Japanese Edwards Business by way of a Kaisha Bunkatsu in accordance with the terms and conditions herein.

10

        3.3    Conditions Precedent to Consummation of Kaisha Bunkatsu.    The Kaisha Bunkatsu shall not be consummated unless the following conditions are met:

11

Notwithstanding anything to the contrary contained herein, the obligations of ELL to effect the Kaisha Bunkatsu shall not be subject to any action or inaction taken by BKK in connection with delivery or non-delivery of notice of the Kaisha Bunkatsu to any plaintiff involved in any Action relating to the pending litigation described on Schedule 5.1(vii), including any refusal by BKK to provide information to any Edwards Party with respect to BKK's actions in connection thereto. For the avoidance of doubt, the parties agree that nothing contained in the preceding sentence shall effect the indemnity obligations of BKK and BHL in Section 11.2(e) herein.

12


ARTICLE IV
SALE AND PURCHASE OF COMMON STOCK

        4.1    Sale and Purchase of Common Stock.    As soon as possible following completion of the Kaisha Bunkatsu, BHL shall sell to Edwards AG and Edwards AG shall purchase from BHL the Common Stock (the "Stock Purchase"). As consideration for the Common Stock, Edwards AG shall pay to BHL an aggregate amount equal to 16,500,000,000 Japanese Yen (the "Purchase Price"), by wire transfer of immediately available funds to such bank account of BHL as BHL shall designate in writing to Edwards AG at least two days prior to the Closing.

        4.2    Closing Date.    The closing of the Stock Purchase (the "Closing") shall be consummated on the Bunkatsu Date or as soon as possible thereafter upon the satisfaction or waiver of the conditions set forth in Section 4.3. The time and date on which the Closing is actually held are referred to herein as the "Closing Date." On the Closing Date: (i) Edwards AG shall remit the Purchase Price in accordance with Section 4.1; (ii) BHL shall deliver to Edwards AG a written receipt for the Purchase Price; (iii) BHL shall deliver the Common Stock to Edwards AG by delivering certificates evidencing the Common Stock to Edwards AG and properly endorsing the certificates for transfer to Edwards AG or its nominee and otherwise in a form to effect a legally valid transfer; (iv) Edwards AG shall deliver to BHL a written receipt for the share certificates delivered by Edwards AG; and (v) ELL shall record Edwards AG as a shareholder in the shareholder registry (kabunushi meibo) of ELL.

        4.3    Conditions Precedent to Closing of Stock Purchase.    The Closing of the Stock Purchase shall not be consummated unless the following conditions are met:

13

        Notwithstanding anything to the contrary contained herein, the obligations of ELL to effect the Stock Purchase shall not be subject to any action or inaction taken by BKK in connection with delivery or non-delivery of notice of the Kaisha Bunkatsu to any plaintiff involved in any Action relating to the pending litigation described on Schedule 5.1(vii); including any refusal by BKK to provide information to any Edwards Party with respect to BKK's actions in connection thereto. For the avoidance of doubt, the parties agree that nothing contained in the preceding sentence shall effect the indemnity obligations of BKK and BHL in Section 11.2(e) herein.

        4.4    Purchase Price Adjustment.    An adjustment to the Purchase Price (the "Adjustment") equal to (i) the Closing Date Net Worth (as defined below) minus (ii) the Opening Date Net Worth (as defined below) shall be paid by the parties in accordance with the following terms and conditions:

14

15


ARTICLE V
REPRESENTATIONS AND WARRANTIES

        5.1    Representations and Warranties of BKK and BHL.    BKK and BHL hereby represent and warrant to ELL and Edwards AG as of the date hereof, the Bunkatsu Date and the Closing Date, unless otherwise specified, as follows:

16

        5.2    Representations and Warranties of ELL.    ELL and Edwards AG represent and warrant to BKK and BHL as of the date hereof, the Bunkatsu Date and the Closing Date, unless otherwise specified, as follows:

        5.3    No Other Representations or Warranties.    BKK does not represent or warrant in any way (i) as to the value or freedom from any encumbrance or any other matter concerning, any of the Japanese Edwards Business and Bunkatsu Assets or (ii) as to the legal sufficiency to convey title to any part of the Bunkatsu Assets. ALL ASSETS INCLUDED IN THE BUNKATSU ASSETS ARE BEING TRANSFERRED ON AN "AS IS, WHERE IS" BASIS WITHOUT ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, MARKETABILITY, TITLE, VALUE, FREEDOM FROM ENCUMBRANCE OR ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, and ELL shall bear the economic and legal risks that any conveyances of such assets shall prove to be insufficient or that ELL's title to any such assets shall be other than good and marketable and free of encumbrances. BKK does not make any representation or warranty with respect to whether the consents, approvals, or filings and applications obtained or made prior to consummation of the transactions contemplated by this Agreement shall satisfy the provisions of all applicable agreements or the requirements of all applicable laws or judgments. Except as otherwise set forth in Section 6.9, Section 8.3 and Article 11 or otherwise in this Agreement, ELL shall bear its own economic and legal risk that any necessary consents or

17

approvals are not obtained or that any requirements of law or judgments are not complied with; provided, however, for the avoidance of doubt, ELL shall bear no economic and legal risk for BKK's failure to comply with the Kaisha Bunkatsu Procedure of the Japanese Commercial Code.


ARTICLE VI
COVENANTS

        6.1    Operation of Japanese Edwards Business.    Until the Bunkatsu Date, BKK shall operate and carry on, or cause to be operated or carried on, the Japanese Edwards Business only in the ordinary course and in accordance with the terms of the TK Agreement (and any act taken by BKK to comply with the requirements of the Kaisha Bunkatsu Procedure of the Japanese Commercial Code or necessary in order to implement the Stock Purchase shall be deemed to have been taken in the "ordinary course") and substantially as presently operated and shall not, without the express written approval of ELL or Edwards AG:

18

        From and on the Bunkatsu Date until and including the Closing Date, BHL shall not, without the express written approval of ELL or Edwards AG, exercise any voting right as a shareholder of ELL (including but not limited to exercising any right to appoint or remove any director and approve any payment of dividends), and shall, in accordance with written instructions from ELL or Edwards AG, exercise all voting rights as a shareholder of ELL as so directed by ELL or Edwards AG.

        6.2    Consents of Third Parties; Governmental Approvals.    

        6.3    Transition Services.    From the date hereof, ELL and BKK will work together to identify any services (including those relating to occupation and use of facilities) that are needed to assure a smooth and orderly transition of the Japanese Edwards Business and negotiate and prepare mutually acceptable agreements to govern the provision of such services after the Bunkatsu Date. By the

19

Bunkatsu Date, unless otherwise agreed in writing by the parties, ELL and BKK shall have entered into the transition services agreement (the "Transition Services Agreement") as set forth as Exhibit D and the Miyazaki plant services agreement (the "Miyazaki Services Agreement") as set forth as Exhibit E.

        6.4    Real Estate Matters.    Notwithstanding anything to the contrary contained in Section 2.1(v) or otherwise as stated herein, ELL and BKK agree to certain real estate matters relating to the Japanese Edwards Business as follows:

        6.5    Deliveries.    On or prior to the Closing Date, at the other party's request ELL shall deliver to BKK, on behalf of the Edwards Parties, and BKK shall deliver to ELL, on behalf of the Baxter Parties, certified copies of all documents evidencing the due incorporation, organization and authority of each of the respective parties hereto to enter into this Agreement and the other agreements referred to herein, and all other agreements, documents and instruments related thereto and to perform their respective obligations thereunder in accordance with the terms thereof, including, without limitation, certified copies of articles of incorporation or other applicable charter documents, by-laws, authorizing resolutions and certificates of incumbency.

        6.6    Financial Statements.    Until the Closing Date, BKK will deliver to ELL, within 25 days after the end of each month, financial statements with respect to the Japanese Edwards Business, consistent with past practice, all prepared in accordance with the Agreed Accounting Policies and Allocation Methodology. Within 25 days of the date hereof, ELL shall provide BKK with unaudited balance sheets of ELL evidencing the increase in capital of ELL effected during June 2002.

        6.7    Collection of Accounts Receivable.    

20

        6.8    Agreements Relating to ELL and BKK.    

21

        6.9    Non-Assignable Contracts.    In the event and to the extent that the parties are unable to obtain any consent, approval or amendment to any Contract, lease, license or other rights relating to the Japanese Edwards Business that otherwise would be transferred or assigned to ELL or one of its Subsidiaries as contemplated by this Agreement or any other agreement or document contemplated hereby, (i) BKK shall continue to be bound thereby and the purported transfer or assignment to ELL shall automatically be deemed deferred until such time as all legal impediments are removed and/or all necessary consents have been obtained, and (ii) unless not permitted by the terms thereof or by law, ELL shall pay, perform and discharge fully all the obligations of BKK thereunder from and after the Bunkatsu Date, and indemnify BKK and its Affiliates for all indemnifiable Losses arising out of such performance by ELL. BKK shall, without further consideration therefor, pay and remit to ELL promptly all monies, rights and other considerations received in respect of such performance. BKK shall exercise or exploit its rights and options under all such Contracts, leases, licenses and other rights and commitments referred to in this Section 6.9 only as reasonably directed by ELL and at ELL's expense. If and when any such consent shall be obtained or such Contract, lease, license or other right shall otherwise become assignable or be able to be novated, BKK shall promptly assign and novate (to the extent permissible) all of its rights and obligations thereunder to ELL without payment of further consideration, and ELL shall, without the payment of any further consideration therefor, assume such rights and obligations. To the extent that the assignment of any Contract, lease, license or other rights (or the proceeds thereof) pursuant to this Section 6.9 is prohibited by law, the assignment provisions of this Section 6.9 shall operate to create a subcontract with ELL to perform each relevant unassignable Contract, lease or license of BKK at a subcontract price equal to the monies, rights and other considerations received by BKK with respect to the performance by ELL under such subcontract.

        6.10    Filing of Report on Kaisha Bunkatsu.    As soon as practicable after the date hereof, BKK and ELL shall file a pre-closing report on the Kaisha Bunkatsu with the Fair Trade Commission of Japan.

        6.11    Approval of Stock Purchase.    BHL and ELL shall take all actions necessary to receive shareholder and board of director approval, if necessary, to approve the Stock Purchase before the Closing Date.

        6.12    Further Assurances.    

22

        6.13    Access.    Until the Closing Date, BKK shall authorize and permit ELL and Edwards AG and their representatives (including but not limited to independent accountants, environmental consultants, legal counsel and occupational health and safety consultants) to have reasonable access during normal business hours, upon reasonable notice and in such manner as will not unreasonably interfere with the conduct of its business, to all of its properties, books and records and all other information with respect to the Bunkatsu Assets and the Japanese Edwards Business, including but not limited to monitoring actions being taken, in connection with notifying Baxter Creditors and any employee intended to be transferred to ELL of the Kaisha Bunkatsu, as ELL and Edwards AG may from time to time reasonably request.

        6.14    Notice of Changes.    Prior to the Closing Date, each Baxter Party and Edwards Party shall promptly advise each of the other parties hereto in writing with respect to any matter arising after execution of this Agreement of which any such party obtains knowledge and which, if existing or occurring at the date of this Agreement, would have been required to be set forth in this Agreement to make any statement herein true, including any of the schedules hereto.

        6.15    Novation of Bunkatsu Liabilities.    

23


ARTICLE VII
TERMINATION OF OPTION AGREEMENT AND TK AGREEMENT

        7.1    Termination of Option Agreement.    On the Bunkatsu Date, ELL and BKK shall enter into a termination agreement in form and substance substantially as set forth in Exhibit H (the "Option Termination Agreement"), providing for the confirmation by ELL and BKK of the termination of the Option Agreement on the date the Kaisha Bunkatsu takes place. Prior to the Bunkatsu Date, ELL and BKK shall enter into an agreement with respect to the survival of certain claims under and several provisions of the Option Agreement in form and substance substantially as set forth in Exhibit I (the "Agreement on Surviving Clauses of the Option Agreement").

        7.2    Termination of the TK Agreement.    On the Bunkatsu Date, Edwards YK and BKK shall enter into a termination agreement in form and substance substantially as set forth in Exhibit J (the "TK Termination Agreement"), providing for the termination of the TK Agreement on the date the Kaisha Bunkatsu takes place but immediately before the Kaisha Bunkatsu becomes effective. BKK shall distribute to Edwards YK, or any other Person designated in writing by Edwards YK, the original Tokumei Kumiai Capital Contribution (as such terms are defined in the TK Agreement) in cash in an amount equal to ¥23,200,000,000 on the Bunkatsu Date in accordance with the terms and conditions of the TK Termination Agreement. All other monies required to be paid by BKK to Edwards YK in connection with the termination of the TK Agreement shall be paid in accordance with the terms and conditions of the TK Termination Agreement. In the event that the TK Agreement terminates prior to the date the Kaisha Bunkatsu takes place, the parties agree to take all actions necessary to create the same economic effect for each party as if the TK Agreement were in full force and effect through and including the date the Kaisha Bunkatsu takes place.


ARTICLE VIII
TERMINATION OF AGREEMENT

        8.1    Termination of Agreement.    

        Anything herein to the contrary notwithstanding, this Agreement may be terminated at any time before the Closing as follows and in no other manner:

24

Notwithstanding anything to the contrary contained herein, no action or inaction taken by BKK in connection with delivery or non-delivery of notice of the Kaisha Bunkatsu to any plaintiff involved in any Action relating to the pending litigation described on Schedule 5.1(vii), including any refusal by BKK to provide information to any Edwards Party with respect to BKK's actions in connection thereto, shall constitute any event or cause enabling Edwards AG or ELL to terminate this Agreement. For the avoidance of doubt, the parties agree that nothing contained in the preceding sentence shall effect the indemnity obligations of BKK and BHL in Section 11.2(e) herein.

        8.2    Effect of Termination.    If this Agreement shall be terminated pursuant to Section 8.1, except as may otherwise be agreed in writing by the parties, all further obligations of the parties under this Agreement shall terminate without further liability of any party to another; provided that the obligations of the parties contained in Articles XI, XII and XIV shall survive any such termination. In accordance with Section 12.5, nothing contained herein shall prevent ELL, Edwards AG, BKK or BHL from resorting to injunctive or other equitable relief from a court.

        8.3    Impossibility to consummate the transactions contemplated hereby.    If it becomes impossible for the parties to transfer the Japanese Edwards Business by way of the Kaisha Bunkatsu, complete the Stock Purchase or otherwise consummate the transactions contemplated hereby, on the terms and conditions contained herein, due to factors beyond their control, including but not limited to any such case where it becomes impossible for the parties to obtain necessary Governmental Permits despite complying with the terms and conditions contained herein, with commercially reasonable best efforts, the parties shall negotiate in good faith any changes to the structure or other aspects of the transactions contemplated hereby necessary to allow the parties to effect the transfer of the Japanese Edwards Business and the Bunkatsu Assets to ELL or an Affiliate thereof at a purchase price not exceeding the Purchase Price and otherwise on substantially the same economic terms and conditions reflected herein. If any such negotiations do not yield results reasonably satisfactory to ELL, ELL shall, in its sole discretion, have the right to exercise its Option (as defined in the Option Agreement) and acquire the Japanese Edwards Business and the Bunkatsu Assets and assume the Bunkatsu Liabilities in accordance with the terms and conditions of the Option Agreement; provided, however, that in the event the Option Agreement is no longer in effect, ELL or Edwards AG, shall, in its sole discretion, have the right to acquire from BKK or ELL, as appropriate, the Japanese Edwards Business and the Bunkatsu Assets and assume the Bunkatsu Liabilities on the same terms and conditions as set forth in the Option Agreement as if the Option Agreement was still in effect.


ARTICLE IX
EMPLOYEES AND EMPLOYEE BENEFIT MATTERS

        9.1    Employment of Transferred Employees.    

        Prior to the Bunkatsu Date, BKK shall explain in writing to the Japanese Edwards Business employees and other employees designated to be transferred to ELL regarding the transfer of employment of each such employee in connection with the Kaisha Bunkatsu. The final list of Transferred Employees as agreed upon by ELL and BKK has been delivered by BKK to ELL as of the date hereof. Any changes to the list must be mutually agreed in writing by BKK and ELL. Each Transferred Employee shall be compensated by ELL at the same salary and wage rate levels (including

25


comparable bonus programs) paid by BKK prior to the Kaisha Bunkatsu. Notwithstanding the foregoing, after the Bunkatsu Date, nothing shall prevent ELL from changing salary and wage rate levels for any Transferred Employee, provided that for the first twelve months following the Bunkatsu Date any such changes are in accordance with past practice and in compliance with applicable law and company rules and regulations. BKK shall use its commercially reasonable efforts to ensure that no Transferred Employee will make an objection under Article 4 of the Law Concerning Succession of Employment Contracts under Corporate Bunkatsu. BKK and ELL shall use their commercially reasonable efforts to take all procedures necessary or otherwise advisable to transfer the Transferred Employees on the Bunkatsu Date.

        9.2    Terminations/Layoff/Severance.    Transferred Employees shall not be eligible for any severance benefits from BKK as a result of either their employment by ELL or its Affiliates or any subsequent termination of employment with ELL or its Affiliates.

        9.3    Employee Benefit Plans.    

        9.4    Transfer of Account Balances and Accrued Benefits.    Subject to applicable law and the provisions of the Baxter Tax Qualified Pension Plan (the "BKK Pension Plan"), on the Bunkatsu Date, or effective as of any other date as agreed to in writing by the plan administrator for the BKK Pension Plan and the plan administrator for the ELL Pension Plan, the accrued benefits (the "Transferred Accrued Benefits") of all BKK Pension Plan participants who are Transferred Employees shall be transferred from the BKK Pension Plan to the ELL Pension Plan. The amount of Transferred Accrued Benefits shall be determined by the actuaries for the respective plans by the Closing Date in accordance with the methodology described in Schedule 9.4. Each Transferred Employee shall receive credit for all purposes under the ELL Pension Plan for the periods of service with BKK or any of its Subsidiaries or Affiliates. The plan administrator for the ELL Pension Plan shall take any other action reasonably requested by the plan administrator for the BKK Pension Plan that is necessary or advisable, in the opinion of the plan administrator for the Baxter Pension Plan, to maintain the tax-qualified status of the BKK Pension Plan or to avoid the imposition of any penalties with respect to such plan.

        9.5    Stock Purchase Plans.    Except as otherwise provided in the Baxter Stock Purchase Plan, on the Bunkatsu Date, all Transferred Employees shall cease to be eligible to purchase Baxter Common

26


Stock under the terms of the Baxter International Inc. Employees Stock Purchase Plan for International Employees.

        9.6    Workers' Compensation.    As soon as administratively practicable, but no later than the Bunkatsu Date, a risk management representative for each of the parties shall agree upon the allocation between the parties of responsibility and liability for workers' compensation claims and expenses relating to current and former Transferred Employees.

        9.7    Vacation Pay Policy.    After the Bunkatsu Date, it is expected that ELL shall maintain for its employees a vacation pay policy, and ELL shall be responsible for costs incurred to provide vacation pay to Transferred Employees following such date. ELL shall assume any and all BKK Liabilities to provide to Transferred Employees vacation that such persons accrued under the BKK vacation pay policy as of the Bunkatsu Date, provided, however, that any such accrued vacation is properly reflected on the books and records of BKK in accordance with Japan GAAP. BKK shall not be obligated to pay for any such accrued vacation pay.

        9.8    Information to be Provided to BKK and ELL.    On and after the Bunkatsu Date, ELL (or its applicable Affiliate) shall provide to BKK any information that BKK may reasonably request, including but not limited to information relating to dates of termination of employment, in order to provide benefits to any eligible Transferred Employee under the terms and conditions described herein or under the applicable Baxter Plans. Any information relating to an employee's termination of employment shall be provided as soon as available, but in any event no later than 30 days after such information is made available to ELL or any such Affiliate. BKK shall provide to ELL any information that ELL may reasonably request relating to any Transferred Employee's employment with BKK prior to the Bunkatsu Date, including but not limited to any employee-related insurance policies. Any such information shall be provided to ELL as soon as reasonably possible after request by ELL.

        9.9    Transfer of Employee Files.    On or after the Bunkatsu Date, BKK shall transfer to ELL complete copies of the personnel files relating to all Transferred Employees.

        9.10    Employment Solicitation.    During the period beginning on the Bunkatsu Date and ending one year after the Bunkatsu Date, neither BKK nor ELL shall, nor shall they permit any of their respective Subsidiaries, Affiliates or agents to, directly or indirectly, except as provided in the following sentence, actively solicit or recruit for employment any then current employee of the other or of any of the other's Subsidiaries. Nothing contained in this Section 9.10 shall (i) prohibit the hiring of any employee who in good faith is believed to be actively seeking employment, on his or her own initiative without prior contact initiated by any employee or agent of the company where employment is sought, or any of such company's Affiliates; provided, however, that such employee or the hiring company has obtained authorization from the Department Manager of Human Resources of his or her current employer; or (ii) prohibit BKK or ELL or any of their respective Subsidiaries from hiring any person who has terminated employment with the other company. The foregoing restriction shall cease to apply one year after the Bunkatsu Date.


ARTICLE X
INSURANCE MATTERS

        10.1    Insurance Prior to the Bunkatsu Date.    ELL does hereby agree that neither Baxter nor BKK shall have any Liability whatsoever as a result of the insurance policies and practices of Baxter or BKK in effect at any time prior to the Bunkatsu Date, including any assistance rendered to ELL by Baxter or BKK in the placement of its insurance program, including as a result of the level or scope of any such insurance, the creditworthiness of any insurance carrier, the terms and conditions of any policy and the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim or otherwise.

27

        10.2    Ownership of Existing Policies and Programs.    Unless otherwise agreed by the parties, BKK shall, and BKK ensures that Baxter shall, as the case may be, continue to own all property, casualty and liability insurance policies and programs, including primary and excess general liability, errors and omissions, automobile, workers' compensation, property, fire, crime, surety and other similar insurance policies, in effect on or before the Bunkatsu Date relating to the Japanese Edwards Business (collectively, the "Baxter Insurance Policies" and individually, a "Baxter Insurance Policy"). Between the date hereof and the Bunkatsu Date, BKK shall not, and BKK ensures that Baxter shall not, discriminate between the insurance coverage applicable to the Japanese Edwards Business and similar coverage applicable to BKK's other businesses. Nothing contained herein shall be construed to be an attempt to assign or to change the ownership of the Baxter Insurance Policies.

        10.3    Procurement of Insurance for ELL.    To the extent not already provided for by the terms of the Baxter Insurance Policies, BKK shall, and BKK ensures that Baxter shall, as the case may be, use commercially reasonable efforts to cause ELL and its Affiliates to be named as additional insureds under Baxter Insurance Policies whose effective policy periods include the Bunkatsu Date, in respect of claims for which coverage is available under the terms and conditions of the Baxter Insurance Policies, arising out of or relating to periods prior to the Bunkatsu Date; provided, however, that nothing contained herein shall be construed to require BKK or Baxter to pay any additional premium or other charges in respect to, or waive or otherwise limit any of its rights, benefits or privileges under, any Baxter Insurance Policy in order to effect the naming of ELL or its Affiliates as such additional insureds.

        10.4    Acquisition and Maintenance of ELL's Insurance Policies and Programs after Bunkatsu Date.    Commencing on and as of the Bunkatsu Date, ELL shall be responsible for establishing and maintaining separate property, casualty and liability insurance policies and programs (including primary and excess general liability, errors and omissions, automobile, workers' compensation, property, fire, crime, surety and other similar insurance policies) for activities and claims involving ELL and the Japanese Edwards Business. ELL will exercise commercially reasonable efforts to secure liability insurance to avoid potential gaps in coverage for claims arising from events occurring prior to the Bunkatsu Date, which gap would not exist had the Japanese Edwards Business continued to be covered with the same retroactive dates existing in the Baxter Insurance Policies in effect on the Bunkatsu Date. ELL shall be responsible for all administrative and financial matters relating to insurance policies established and maintained by ELL for claims incurred in any period on or after the Bunkatsu Date involving ELL. Notwithstanding any other agreement or understanding to the contrary, except as set forth in Sections 10.6 and 10.7 with respect to claims administration and financial administration of the Baxter Insurance Policies, neither Baxter nor BKK shall have any responsibility for or obligation to ELL or any of its Affiliates relating to property and casualty insurance matters for any period, whether prior to, on or after the Bunkatsu Date.

        10.5    ELL Directors' and Officers' Insurance.    BKK shall, and BKK ensures that Baxter shall, as the case may be, use commercially reasonable efforts to cause the persons serving as officers and/or directors of BKK at the Bunkatsu Date to be covered for a period of six (6) years from the Bunkatsu Date by the directors' and officers' liability insurance policy maintained by Baxter as of the Bunkatsu Date (including corporate reimbursement) (provided that Baxter may substitute therefor policies of at least the same coverage and amounts containing terms and conditions that are not less advantageous than such policy) with respect to matters covered under the existing policy occurring prior to the Bunkatsu Date that were committed by such officers and/or directors in their capacity as such; provided, however, that in no event shall Baxter be required to expend with respect to any year more than 200% of the current annual premium expended by Baxter (the "Insurance Amount") to maintain or procure insurance coverage pursuant hereto; and provided, further, that if Baxter is unable to maintain or obtain the insurance called for by this Section 10.5, BKK shall, and BKK ensures that Baxter shall, as the case may be, use commercially reasonable efforts to obtain as much comparable insurance as available for

28


the Insurance Amount. In the event Baxter or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, to the extent necessary, proper provision shall be made so that the successors and assigns of Baxter assume the obligations set forth in this Section 10.5. The provisions of this Section 10.5 are intended to be for the benefit of and shall be enforceable by, each such officer and director and his or her heirs and representatives. As provided in Section 11.4, any amount ELL or Edwards AG is required to pay to any BKK Group Member as an indemnity under this Agreement is reduced to the extent Baxter or BKK receives insurance proceeds from the above coverage, but only to the extent such proceeds are actually received by Baxter or BKK.

        10.6    Pre-Bunkatsu Date Insurance Claims Administration.    ELL acknowledges that Baxter and BKK have and will continue to experience losses and receive claims that are, or might be, covered by one or more Baxter Insurance Policies, and prior to the Bunkatsu Date will make decisions and commitments regarding the administration of such claims, including reaching agreements and stipulations regarding such claims (collectively, "Pre-Bunkatsu Date Claims Administration"). ELL covenants not to contest or challenge in any manner any action taken by Baxter or BKK prior to the Bunkatsu Date in connection with or relating to Pre-Bunkatsu Date Claims Administration, or to interfere with the performance of any agreement, commitment or stipulation so made by Baxter or BKK in connection with or relating to Pre-Bunkatsu Date Claims Administration.

        10.7    Post-Bunkatsu Date Insurance Claims Administration.    Baxter shall have the primary right, responsibility and authority for claims administration and financial administration of claims that relate to or affect the Baxter Insurance Policies. Upon notification by ELL of a claim relating to ELL or an Affiliate thereof under one or more of the Baxter Insurance Policies, BKK shall, and BKK ensures that Baxter shall, as the case may be, cooperate with ELL in asserting and pursuing coverage and payment for such claim by the appropriate insurance carrier(s). In asserting and pursuing such coverage and payment for claims valued at less than U.S. $25,000, BKK and ELL agree that Baxter shall have sole power and authority to make binding decisions, determinations, commitments and stipulations on its own behalf and on behalf of ELL, which decisions, determinations, commitments and stipulations shall be final and conclusive if made to maximize the overall economic benefit of the Baxter Insurance Policies. In asserting and pursuing such coverage and payment for claims valued at more than U.S. $25,000, BKK and ELL agree that Baxter shall not have the power or authority to make binding decisions, determinations, commitments and stipulations on its own behalf and on behalf of ELL without the prior written consent of ELL. ELL assumes responsibility for, and shall pay to the appropriate insurance carriers or otherwise, any premiums, retrospectively-rated premiums, defense costs, indemnity payments, deductibles, retentions or other charges (collectively, "Insurance Charges"), whenever arising, which shall become due and payable under the terms and conditions of any applicable Baxter Insurance Policy in respect of any liabilities, losses, claims, actions or occurrences, whenever arising or becoming known, involving or relating exclusively to any of the assets, businesses, operations or liabilities of the Japanese Edwards Business, whether the same relate to the period prior to, on or after the Bunkatsu Date; provided, however, BKK and Baxter have acted in accordance with the terms and conditions contained herein. To the extent that the terms of any applicable Baxter Insurance Policy provide that Baxter shall have an obligation to pay or guarantee the payment of any Insurance Charges relating to ELL, Baxter shall be entitled to demand that ELL make such payment directly to the Person or any of its Affiliates entitled thereto, subject to the terms and conditions contained herein. In connection with any such demand, BKK ensures that Baxter shall submit to ELL a copy of any invoice received by Baxter pertaining to such Insurance Charges together with appropriate supporting documentation, to the extent available. In the event that ELL fails to pay any such Insurance Charges when due and payable, in accordance with the terms and conditions contained herein, whether at the request of the party entitled to payment or upon demand by Baxter, Baxter may (but shall not be required to) pay such insurance charges for and on behalf of ELL and, thereafter,

29


ELL shall forthwith reimburse Baxter for such payment. Subject to the other provisions of this Article X, the retention by Baxter of the Baxter Insurance Policies and the responsibility for claims administration and financial administration of such policies are in no way intended to limit, inhibit or preclude any right of ELL, Baxter or any other insured to insurance coverage for any claims insured under the Baxter Insurance Policies.

        10.8    Non-Waiver of Rights to Coverage.    An insurance carrier that otherwise would be obligated to pay any claim shall not be relieved of the responsibility with respect thereto, or, solely by virtue of the provisions of this Article X, have any subrogation rights with respect thereto, it being expressly understood and agreed that no insurance carrier or any third-party shall be entitled to a windfall (i.e., a benefit they would not be entitled to receive had the Kaisha Bunkatsu not occurred or in the absence of the provisions of this Article X) by virtue of the provisions hereof.

        10.9    Scope of Affected Policies of Insurance.    The provisions of this Article X relate solely to matters involving liability, casualty and workers' compensation insurance, and shall not be construed to affect any obligation of or impose any obligation on the parties with respect to any life, health and accident, dental or medical insurance policies applicable to any of the officers, directors, employees or other representatives of the parties or their Affiliates.


ARTICLE XI
INDEMNIFICATION

        11.1    Indemnification by ELL.    From and after the Bunkatsu Date, ELL and Edwards AG shall, on a joint and several basis, indemnify and hold harmless each BKK Group Member from and against any and all Losses and Expenses incurred or suffered by such BKK Group Member in connection with, relating to, arising out of or due to, directly or indirectly, any of the following items:

30

        11.2    Indemnification by BKK.    From and after the Bunkatsu Date, BKK and BHL shall, on a joint and several basis, indemnify and hold harmless each ELL Group Member from and against any and all Losses and Expenses incurred or suffered by such ELL Group Member in connection with, relating to, arising out of or due to, directly or indirectly, any of the following items:

        11.3    Applicability of and Limitation on Indemnification.    

31

        11.4    Adjustment of Indemnifiable Losses.    

        11.5    Procedures for Indemnification of Third Party Claims.    

32

        If the Indemnifying Party shall not have undertaken the conduct and control of the defense of the Third Party Claim as provided above, the Indemnifying Party shall nevertheless be entitled through counsel chosen by the Indemnifying Party and reasonably acceptable to the Indemnified Party to monitor the conduct or settlement of such claim by the Indemnified Party, and the Indemnified Party shall provide the Indemnifying Party and such counsel with such information regarding such Third Party Claim as either of them may reasonably request (which request may be general or specific), but all costs and expenses incurred in connection with such monitoring shall be borne by the Indemnifying Party.

        If the Indemnifying Party shall have undertaken the conduct and control of the defense of any Third Party Claim as provided above, the Indemnified Party, on not less than 30 days prior written notice to the Indemnifying Party, may make settlement (including payment in full) of such Third Party Claim and such settlement shall be binding upon the parties for the purposes hereof, unless within said 30-day period the Indemnifying Party shall have requested the Indemnified Party to contest such Third Party Claim at the expense of the Indemnifying Party. In such event, the Indemnified Party shall promptly comply with such request and the Indemnifying Party shall have the right to direct the defense of such claim or any litigation based thereon subject to all the conditions of Section 11.5(b). Notwithstanding anything in this Section 11.5(c) to the contrary, if the Indemnified Party, in the belief that a claim may materially and adversely affect it other than as a result of money damages or other money payments, advises the Indemnifying Party that it has determined to settle a claim, the Indemnified Party shall have the right to do so at its own cost and expense, without any requirement to contest such claim at the request of the Indemnifying Party, but without any right under the provisions of this Section 11.5(c) for indemnification by the Indemnifying Party.

        11.6    Procedures for Indemnification of Direct Claims.    Any claim for indemnification on account of an Expense or a Loss made directly by the Indemnified Party against the Indemnifying Party and

33


that does not result from a Third Party Claim shall be asserted by written notice from the Indemnified Party to the Indemnifying Party specifically claiming indemnification hereunder. Such Indemnifying Party shall have a period of 30 business days after the receipt of such notice within which to respond thereto. If such Indemnifying Party does not respond within such 30-business-day period, such Indemnifying Party shall be deemed to have accepted responsibility to make payment and shall have no further right to contest the validity of such claim. If such Indemnifying Party does respond within such 30-business-day period and rejects such claim in whole or in part, such Indemnified Party shall be free to pursue resolution as provided in Article XI.

        11.7    Remedies Cumulative.    The remedies provided in this Article XI shall be cumulative and, subject to the provisions of Article XII below, shall not preclude assertion by an Indemnified Party of any other rights or the seeking of any and all other remedies against any Indemnifying Party.


ARTICLE XII
DISPUTE RESOLUTION

        12.1    General.    Any dispute arising out of or relating to this Agreement, or any other agreement entered into in connection herewith, shall be solved in accordance with the procedures specified in this Article XII which shall be the sole and exclusive procedures for the resolution of any such disputes.

        12.2    Escalation.    The parties will attempt in good faith to resolve expeditiously any dispute, claim or controversy arising out of or relating to the execution, interpretation and performance of this Agreement, or any other agreement entered into in connection herewith, (including the validity, scope and enforceability of this arbitration provision) promptly by negotiations between executives who have authority to settle the controversy and who are at a higher level of management than the persons with direct responsibility for the administration of this Agreement, or any such other agreement entered into in connection herewith. Either party may give the other party written notice (an "Escalation Notice") of any dispute not resolved in the normal course of business. Within fifteen days after delivery of the Escalation Notice, the receiving party shall submit to the other a written response. The Escalation Notice and the response thereto shall include (a) a statement of each party's position and a summary of arguments supporting that position, and (b) the name and title of the executive who will represent that party and of any other person who will accompany the executive. Within 30 days after delivery of the Escalation Notice, the executives of both parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to attempt to resolve the dispute. All reasonable requests for information made by one party to the other will be honored. All negotiations pursuant to this clause are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence.

        12.3    Arbitration.    Any dispute, claim or controversy arising out of or relating to this Agreement, or any other agreement entered into in connection herewith, or the breach, termination or validity of this Agreement, or any other agreement entered into in connection herewith, which has not been resolved by the specified non-binding procedure set forth in Section 12.2 within 90 days of the date of delivery of the Escalation Notice shall be settled by binding arbitration in accordance with the CPR Non-Administered Arbitration Rules in effect on the date of this Agreement, by three independent and impartial arbitrators, none of whom shall be appointed by either party. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. §§ 1-16, as the same may be amended from time to time, and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of the arbitration shall be Lake County, Illinois or Orange County, California, and shall be determined by the party that initiated the dispute resolution process. The arbitrators may award attorneys' fees in their discretion. Otherwise, the arbitrators are not empowered to award damages in excess of compensatory damages, and each party hereby irrevocably waives any right to recover such damages.

34


        12.4    Procedures.    The parties may request limited discovery in accordance with the Federal Rules of Civil Procedure of the United States (the "F.R.C.P.") for a period of 120 days after the initiation of the arbitration process. All issues regarding compliance with discovery requests shall be decided by the arbitrators pursuant to the F.R.C.P. The parties agree that the recipient of a discovery request shall have 10 business days after the receipt of such request to object to any or all portions of such request and shall respond to any portions of such request not so objected within 30 business days of the receipt of such request. All objections shall be in writing and shall indicate the reasons for such objections. The objecting party shall ensure that all objections and responses are received by the other party within the above time periods; failure to comply with the specified time period shall be addressed as set forth in F.R.C.P. 37. Any party seeking to compel discovery following receipt of an objection shall file with the other party and the arbitrators a motion to compel, including a copy of the initial request and the objection. The arbitrators shall allow 10 business days for the responses to the motion to compel before ruling. Claims of privilege and other objections shall be determined as they would be in United States federal court in a case applying Illinois law. The arbitrators may grant or deny the motion to compel, in whole or in part, concluding that the discovery request is or is not appropriate under the circumstances, taking into account the needs of the parties and the desirability of making discovery expeditious and cost-effective. The statute of limitations of the State of Illinois applicable to the commencement of a lawsuit shall apply to the date of initial written notification of a dispute and shall be extended until commencement of arbitration if all interim deadlines have been complied with by the notifying party.

        12.5    Injunctive Relief.    Nothing contained in this Article XII shall prevent either party from resorting to judicial process if injunctive or other equitable relief from a court is necessary to prevent serious and irreparable injury to one party or to others. The use of arbitration procedures will not be construed under the doctrine of laches, waiver or estoppel to affect adversely either party's right to assert any claim or defense.


ARTICLE XIII
INTELLECTUAL PROPERTY

        13.1    Grant of License.    

35

        13.2    Use by ELL of Baxter Parties' Trademarks.    ELL and its Affiliates shall not use the name "Baxter" or any related or similar trade names, service marks or logos to the extent the same incorporate the name "Baxter" or any variation thereof (collectively, the "Baxter Marks"), except as provided below:

36


ARTICLE XIV
GENERAL PROVISIONS

        14.1    Notices.    All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered when delivered personally, or when sent by registered or certified mail or by private courier or facsimile transmission (provided that in the case of facsimile transmission, a confirmation copy of the notice shall be delivered by hand or sent by courier within two days of transmission) addressed as follows:

or to such other address as such party may indicate by a notice delivered to the other party hereto.

        14.2    Successors and Assigns.    

37

        14.3    Access to Records after Closing.    

        14.4    Entire Agreement; Amendments.    This Agreement, the Bunkatsu Agreement, and the Exhibits and Schedules referred to herein and therein, and the documents delivered pursuant hereto and thereto, contain the entire understanding of the parties hereto with regard to the subject matter contained herein or therein, and supersede all prior agreements, understandings or letters of intent between or among any of the parties hereto. This Agreement shall not be amended, modified or supplemented except by a written instrument signed by the parties hereto. ELL and BKK agree that the references to a separate agreement by the parties in Section 6.1(3) and Article 12 of the Bunkatsu Agreement refer solely to this Agreement.

        14.5    Interpretation.    Article titles and headings to sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. The Schedules and Exhibits referred to herein shall be construed with and as an integral part of this Agreement to the same extent as if they were set forth verbatim herein.

        14.6    Waivers.    Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the party or parties entitled to the benefit thereof. Any such waiver shall be validly and sufficiently authorized for the purposes of this Agreement if, as to any party, it is authorized in writing by an authorized representative of such party. The failure of any party hereto to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor in any way to affect the validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.

        14.7    Expenses.    Each party will pay all costs and expenses as set forth on Schedule 14.7.

        14.8    Partial Invalidity.    Wherever possible, each provision hereof shall be interpreted in such manner as to be effective and valid under applicable law, but in case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such provision shall be ineffective to the extent, but only to the extent, of such invalidity, illegality or unenforceability without invalidating the remainder of such invalid, illegal or unenforceable provision or provisions or any other provisions hereof unless such a construction would be unreasonable.

38


        14.9    Execution in Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall be considered an original instrument, but all of which shall be considered one and the same agreement, and shall become binding when one or more counterparts have been signed by each of the parties hereto and delivered to each of the parties hereto.

        14.10    Choice of Law and Forum.    This Agreement shall be governed by and construed and enforced in accordance with the substantive laws (except for any otherwise applicable conflicts of law provisions) of the State of Illinois and the federal laws of the United States of America applicable therein, as though all acts and omissions related hereto occurred in Illinois. Subject to Article XII, any lawsuit arising from or related to this Agreement, or any other agreement entered into in connection herewith, shall be brought only in the United States District Court for the Northern District of Illinois, the Circuit Court of Lake County, Illinois, the United States District Court for the Central District of California or the Superior Court of Orange County, California, and the specific choice from among the foregoing shall be determined by the party initiating such lawsuit. To the extent permissible by law, the parties hereby consent to the jurisdiction and venue of such courts. Each party hereby waives, releases and agrees not to assert, and agrees to cause its Affiliates to waive, release and no to assert, any rights such party or its Affiliates may have under any foreign law or regulation that would be inconsistent with the terms of this Agreement, or any other agreement entered into in connection herewith, as governed by Illinois law.

        14.11    Survival of Obligations.    All representations, warranties, covenants and obligations contained in this Agreement shall survive the consummation of the transactions contemplated by this Agreement.

        14.12    Confidentiality.    Each of the Baxter Parties and Edwards Parties shall use reasonable efforts, consistent with its standard policies with respect to the preservation and disclosure of confidential information concerning itself, to keep confidential and, without the prior written consent of the party to whom the information relates, not to disclose to any Person, nor exploit commercially for its own purposes, any information obtained relating to the subject matter or performance of this Agreement; provided, however, that any Baxter Party and Edwards Party may each disclose such information (i) to their Affiliates for any purpose reasonably incidental to the purposes of this Agreement and (ii) as is required to be disclosed by law, legal process or the requirements of any stock exchange. Anything to the contrary contained in the foregoing notwithstanding, the provisions of Section 14.12 shall not apply to information:

        14.13    Non-waiver of Claims.    The parties acknowledge and agree that the parties are currently disputing certain matters in respect of, and may have certain claims under, various other agreements between the parties. The parties agree to resolve any such disputes and claims outside of this Agreement. The parties acknowledge and agree that neither the execution nor consummation of this Agreement shall, in any way, be construed as an admission of any kind, or as compromising or otherwise affecting the position of any party in any such dispute, or preclude any party from continuing to assert against the other party any and all of its rights with respect to any such claims.

        14.14    Currency.    All payments under this Agreement shall be denominated in Japanese Yen.

* * * * * *

39

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

  BAXTER LIMITED
        

 
By:
 
 
     
Name:    Kyoji Hoshikawa
Title:    Representative Director

 
BAXTER HOLDINGS LIMITED
        

 
By:
 
 
     
Name:    Kyoji Hoshikawa
Title:    Director

 
EDWARDS LIFESCIENCES LIMITED
        

 
By:
 
 
     
Name:    Takashi Tsumori
Title:    Representative Director

 
EDWARDS LIFESCIENCES AG
        

 
By:
 
 
     
Name: Peter Wiget
Title: Chairman

 
By:
 
 
     
Name: Kieran J. Tuite
Title: Director


QuickLinks

KAISHA BUNKATSU AND STOCK PURCHASE AGREEMENT
KAISHA BUNKATSU AND STOCK PURCHASE AGREEMENT
ARTICLE I DEFINITIONS
ARTICLE II BUNKATSU ASSETS AND BUNKATSU LIABILITIES
ARTICLE III KAISHA BUNKATSU OF THE JAPANESE EDWARDS BUSINESS
ARTICLE IV SALE AND PURCHASE OF COMMON STOCK
ARTICLE V REPRESENTATIONS AND WARRANTIES
ARTICLE VI COVENANTS
ARTICLE VII TERMINATION OF OPTION AGREEMENT AND TK AGREEMENT
ARTICLE VIII TERMINATION OF AGREEMENT
ARTICLE IX EMPLOYEES AND EMPLOYEE BENEFIT MATTERS
ARTICLE X INSURANCE MATTERS
ARTICLE XI INDEMNIFICATION
ARTICLE XII DISPUTE RESOLUTION
ARTICLE XIII INTELLECTUAL PROPERTY
ARTICLE XIV GENERAL PROVISIONS