REORGANIZATION AGREEMENT
Dated as of March 15, 2000
by and between
BAXTER INTERNATIONAL INC.
and
EDWARDS LIFESCIENCES CORPORATION
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ARTICLE I - DEFINITIONS AND INTERPRETATION................................................... 2
1.1. Definitions.......................................................................... 2
1.2. Interpretation....................................................................... 19
ARTICLE II - THE DISTRIBUTION................................................................. 21
2.1. Issuance and Delivery of Edwards Shares.............................................. 21
2.2. Distribution of Edwards Shares....................................................... 21
2.3. Treatment of Fractional Shares....................................................... 21
2.4. Baxter Board Action.................................................................. 21
2.5. Additional Approvals................................................................. 22
ARTICLE III - FOREIGN TRANSFERS............................................................... 22
3.1. Edwards World Trade.................................................................. 22
3.2. Puerto Rico (936).................................................................... 22
3.3. Puerto Rico (MS&P)................................................................... 23
3.4. Dominican Republic................................................................... 24
3.5. Intentionally Omitted................................................................ 24
3.6. Brazil............................................................................... 25
3.7. Canada............................................................................... 25
3.8. China................................................................................ 26
3.9. Taiwan............................................................................... 26
3.10. Singapore and the Philippines........................................................ 27
3.11. Malaysia............................................................................. 28
3.12. Thailand............................................................................. 28
3.13. Korea................................................................................ 29
3.14. India................................................................................ 29
3.15. Latin America........................................................................ 30
3.16. Switzerland.......................................................................... 33
3.17. EU Holdings (Denmark)................................................................ 35
3.18. Germany.............................................................................. 35
3.19. Austria.............................................................................. 36
3.20. France............................................................................... 37
3.21. Italy................................................................................ 37
3.22. Belgium/Luxembourg................................................................... 38
3.23. Netherlands.......................................................................... 39
3.24. Uden................................................................................. 40
3.25. Spain................................................................................ 40
3.26. United Kingdom....................................................................... 41
3.27. Restrictions on Intercompany Debt.................................................... 41
3.28. Transfer of Assets................................................................... 41
3.29. Transfer of Liabilities.............................................................. 41
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3.30. Transfer of Edwards World Trade to Baxter........................................ 42
3.31. Edwards Holdings Switzerland..................................................... 42
3.32. Transfer of Inventory............................................................ 42
ARTICLE IV - TRANSFERS TO EDWARDS U.S. OPERATING SUBSIDIARY.............................. 42
4.1. Organization of Edwards U.S. Operating Subsidiary................................ 42
4.2. Transfer of Assets............................................................... 42
4.3. Transfer of Third-Party Distribution Contracts................................... 43
4.4. Assumption of Liabilities........................................................ 43
4.5. Transfer of Intangibles and Operating Subsidiaries............................... 43
ARTICLE V - ORGANIZATION OF EDWARDS LIFESCIENCES CORPORATION............................. 43
5.1. Organization of Edwards.......................................................... 43
5.2. Transfer of Certain Subsidiaries................................................. 44
5.3. Transfer of Assets............................................................... 44
5.4. Transfer of Liabilities.......................................................... 44
ARTICLE VI - EXCLUSIONS FROM TRANSFERS................................................... 44
6.1. Retained Assets.................................................................. 44
6.2. Retained Liabilities............................................................. 45
6.3. Termination of Existing Intercompany Agreements.................................. 46
ARTICLE VII - ASSET SEPARATION CLOSING MATTERS........................................... 46
7.1. Delivery of Instruments of Conveyance............................................ 46
7.2. Delivery of Other Agreements..................................................... 46
7.3. Non-Assignable Contracts......................................................... 46
7.4. Further Assurances............................................................... 47
7.5. Novation of Assumed Liabilities.................................................. 48
7.6. Nominee Shares................................................................... 49
7.7. Provision of Corporate Records................................................... 49
ARTICLE VIII - REPRESENTATIONS AND WARRANTIES............................................ 49
8.1. Organization, Good Standing and Authority of Baxter.............................. 49
8.2. Organization, Good Standing and Authority of Edwards............................. 49
8.3. No Other Representations and Warranties.......................................... 49
ARTICLE IX - CERTAIN COVENANTS........................................................... 50
9.1. Conduct of Edwards Business Pending the Distribution Date........................ 50
9.2. Registration and Listing......................................................... 50
9.3. Funds Distributed to Baxter...................................................... 51
9.4. Post-Distribution Tax-Related Restrictions....................................... 51
9.5. Intercompany Receivables and Payables, Cash Management and True-Up............... 52
9.6. Intercompany Debt True-Up........................................................ 53
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9.7. Collection of Accounts Receivable.................................................. 56
9.8. Agreements Relating to Baxter and Edwards.......................................... 58
9.9. Certain Releases................................................................... 59
9.10. Litigation......................................................................... 59
9.11. Liability for Previously Delivered Products........................................ 59
9.12. Edwards Bank Accounts.............................................................. 60
9.13. Informal, Nondocumented Real Estate Leases......................................... 61
9.14. Third Party Consents............................................................... 61
9.15. Material Governmental Approvals and Consents....................................... 61
9.16. Late Payments...................................................................... 61
ARTICLE X - INTELLECTUAL PROPERTY LICENSES.................................................. 62
10.1. License to Baxter of Transferred Intellectual Property............................. 62
10.2. License to Edwards of Retained Baxter Intellectual Property........................ 63
10.3. Licenses Related to Interlink...................................................... 65
10.4. Use by Edwards of Baxter's Trademarks.............................................. 65
10.5. Limitations on Requirements to Supply.............................................. 66
10.6. Fair Market Value.................................................................. 66
ARTICLE XI - CONDITIONS TO THE DISTRIBUTION................................................. 67
11.1. Approval by Baxter Board of Directors.............................................. 67
11.2. Receipt of IRS Private Letter Tax Ruling........................................... 67
11.3. Compliance with State and Foreign Securities and................................... 67
11.4. SEC Filings and Approvals.......................................................... 67
11.5. Filing and Effectiveness of Registration Statement; No Stop Order.................. 67
11.6. Approval of NYSE Listing Application............................................... 67
11.7. Receipt of Fairness Opinions of Financial Advisors................................. 67
11.8. Ancillary Agreements............................................................... 68
11.9. Resignations....................................................................... 68
11.10. Election of Edwards Board.......................................................... 68
11.11. Consents........................................................................... 68
11.12. No Actions......................................................................... 68
11.13. New Credit Facility................................................................ 68
11.14. Consummation of Pre-Distribution Transactions...................................... 68
11.15. No Other Events.................................................................... 68
11.16. Satisfaction of Conditions......................................................... 68
ARTICLE XII - EMPLOYEES AND EMPLOYEE BENEFIT MATTERS........................................ 69
12.1. Edwards Employees.................................................................. 69
12.2. Employment of Edwards Employees.................................................... 69
12.3. Terminations/Layoff/Severance...................................................... 69
12.4. International Edwards Employees.................................................... 69
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12.5. Employment Solicitation................................................................... 70
12.6. WARN Act.................................................................................. 70
12.7. Leave of Absence Policies................................................................. 70
12.8. Withdrawal from Participation in Baxter Plans and Establishment of Edwards Plans.......... 71
12.9. Transfer of Account Balances and Accrued Benefits......................................... 71
12.10. Entitlement to Distributions Under Pension Plan........................................... 73
12.11. Welfare Benefits Provided Under Edwards Plans............................................. 73
12.12. Stock Purchase Plans...................................................................... 73
12.13. Workers' Compensation..................................................................... 74
12.14. Vacation Pay Policy....................................................................... 74
12.15. Non-Qualified Deferred Compensation Plans................................................. 74
12.16. Split-Dollar Life Insurance............................................................... 74
12.17. Restricted Stock.......................................................................... 74
12.18. Information to be Provided to Baxter...................................................... 74
12.19. Corporate Action; Delegation of Authority................................................. 75
12.20. Transfer of Employee Files................................................................ 75
ARTICLE XIII - INSURANCE MATTERS.................................................................. 75
13.1. Insurance Prior to the Distribution Date.................................................. 75
13.2. Ownership of Existing Policies and Programs............................................... 75
13.3. Procurement of Insurance for Edwards...................................................... 75
13.4. Acquisition and Maintenance of Post-Distribution Edwards Insurance Policies and Programs.. 76
13.5. Edwards Directors' and Officers' Insurance................................................ 76
13.6. Pre-Distribution Insurance Claims Administration.......................................... 77
13.7 Post-Distribution Insurance Claims Administration......................................... 77
13.8. Non-Waiver of Rights to Coverage.......................................................... 78
13.9. Scope of Affected Policies of Insurance................................................... 78
ARTICLE XIV - EXPENSE AND TAX MATTERS............................................................. 78
14.1. Allocation of Expenses.................................................................... 78
14.2. Allocation of Taxes....................................................................... 79
ARTICLE XV - RELEASE AND INDEMNIFICATION.......................................................... 79
15.1. Release of Pre-Distribution Claims........................................................ 79
15.2. Indemnification by Edwards................................................................ 81
15.3. Indemnification by Baxter................................................................. 82
15.4. Applicability of and Limitation on Indemnification........................................ 82
15.5. Adjustment of Indemnifiable Losses........................................................ 83
15.6. Procedures for Indemnification of Third Party Claims...................................... 84
15.7. Procedures for Indemnification of Direct Claims........................................... 86
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15.8. Contribution......................................................................... 86
15.9. No Third-Party Beneficiaries......................................................... 86
15.10. Remedies Cumulative.................................................................. 87
15.11. Survival............................................................................. 87
ARTICLE XVI - DISPUTE RESOLUTION.............................................................. 87
16.1. General.............................................................................. 87
16.2. Escalation........................................................................... 87
16.3. Arbitration.......................................................................... 87
16.4. Procedures........................................................................... 88
16.5. Injunctive Relief.................................................................... 88
ARTICLE XVII - ACCESS TO INFORMATION AND SERVICES............................................. 88
17.1. Access to Financial Information...................................................... 88
17.2. Ownership of Information............................................................. 89
17.3. Compensation for Providing Information............................................... 89
17.4. Retention of Records................................................................. 89
17.5. Limitations.......................................................................... 90
17.6. Production of Witnesses.............................................................. 90
17.7. Confidentiality...................................................................... 90
17.8. Privileged Matters................................................................... 91
ARTICLE XVIII - MISCELLANEOUS 92
18.1. Entire Agreement..................................................................... 92
18.2. Choice of Law and Forum.............................................................. 92
18.3. Amendment............................................................................ 93
18.4. Waiver............................................................................... 93
18.5. Partial Invalidity................................................................... 93
18.6. Execution in Counterparts............................................................ 93
18.7. Successors and Assigns............................................................... 93
18.8. Third Party Beneficiaries............................................................ 93
18.9. Notices.............................................................................. 93
18.10. Performance.......................................................................... 94
18.11. Force Majeure........................................................................ 94
18.12. No Public Announcement............................................................... 94
18.13. Termination.......................................................................... 95
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<PAGE>
EXHIBITS
--------
Exhibit A - Edwards Business
Exhibit B - Operating Agreements
Exhibit C - Tax Sharing Agreement
Exhibit D - Transferred Subsidiaries
Exhibit E - Amended and Restated Certificate of Incorporation of Edwards
Exhibit F - Amended and Restated By-laws of Edwards
Exhibit G - Form of Edwards Stockholder Rights Plan
Exhibit H - Board of Directors of Edwards
SCHEDULES
---------
Schedule 1.1(b) - BHC Loans
Schedule 1.1(f) - CERCLA and OSHA Liabilities
Schedule 1.1(g) - Other Assumed Environmental Liabilities
Schedule 1.1(l) - Guarantees and Letters of Credit
Schedule 1.1(m) - Indemnification Agreements
Schedule 1.2(d) - Owned Real Property
Schedule 1.2(e) - Real Property Leases
Schedule 1.2(f) - Aircraft
Schedule 1.2(g)(ii) - Patents
Schedule 1.2(g)(iv) - Trademarks
Schedule 1.2(h)(i) - Contracts Related to Acquisitions or Divestitures
Schedule 1.2(h)(ii) - Customer Contracts
Schedule 1.2(h)(iv) - Government Contracts
Schedule 1.2(h)(v) - Supplier Contracts
Schedule 1.2(h)(vi) - Joint Development and Confidentiality Contracts
Schedule 1.2(h)(vii) - Consulting Contracts
Schedule 1.2(h)(viii) - Distribution Contracts
Schedule 1.2(h)(xi) - Personal Property Leases
Schedule 1.2(h)(xii) - Derivatives Contracts
Schedule 1.2(h)(xiii) - Other Contracts
Schedule 1.2(i) - Permits and Licenses
Schedule 1.2(j) - Claims and Indemnities
Schedule 1.2(k) - Subsidiaries, Joint Ventures and Minority Interests
Schedule 1.2(n) - Intellectual Property Licenses
Schedule 1.2(o) - Software and Software Contracts
Schedule 1.2(p) - Internet Protocol Addresses
Schedule 1.2(q) - Other Assets
Schedule 3.1 - Timing of Foreign Transfers
Schedule 4.3 - Foreign Subsidiaries' Third-Party Distribution Contracts
Schedule 6.1(h) - Baxter Distribution Countries
Schedule 6.2 - Retained Liabilities
Schedule 6.3 - Surviving Intercompany Agreements
Schedule 9.3 - Use of Proceeds Summary
Schedule 9.6(g) - Transfers
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<PAGE>
Schedule 9.8 - Shared Agreements
Schedule 9.10(a) - Assumed Actions
Schedule 9.10(b) - Transferred Actions
Schedule 9.12 - Transferred Bank Accounts
Schedule 10.2(a) - Licensed Baxter Intellectual Property
Schedule 12.1 - Edwards Employees
Schedule 12.4 - Calculation of Edwards Foreign and Puerto Rico Employees'
Pension Benefits
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<PAGE>
REORGANIZATION AGREEMENT
------------------------
REORGANIZATION AGREEMENT, dated as of March 15, 2000 (this
"Agreement"), by and between Baxter International Inc., a Delaware corporation
---------
("Baxter"), and Edwards Lifesciences Corporation, a Delaware corporation
------
("Edwards") which is, as of the date hereof, a wholly-owned Subsidiary (as
-------
hereinafter defined) of Baxter.
WHEREAS, Baxter, through its Subsidiaries, provides, inter alia, a
comprehensive line of therapies and services to treat cardiovascular disease (as
more fully described in Exhibit A hereto, the "Edwards Business");
--------- ----------------
WHEREAS, the Board of Directors of Baxter has determined that it would
be advisable and in the best interests of Baxter and its stockholders for Baxter
to transfer to Edwards and/or one or more of its Subsidiaries the business,
operations, assets and liabilities related to the Edwards Business;
WHEREAS, Baxter has agreed to transfer and assign, or cause to be
transferred and assigned, to Edwards or one or more of its Subsidiaries
substantially all of the assets and properties related to the Edwards Business
held by Baxter, Baxter Healthcare Corporation, a Delaware corporation ("BHC")
---
and a wholly-owned Subsidiary of Baxter, and, subject to certain exceptions,
certain other Subsidiaries of Baxter, and Edwards has agreed to assume, or cause
to be assumed by one or more of its Subsidiaries, certain liabilities and
obligations arising out of or relating to the Edwards Business;
WHEREAS, the Board of Directors of Baxter has determined that it would
be advisable and in the best interests of Baxter and its stockholders for Baxter
to distribute on a pro-rata basis to the holders of record of Baxter common
stock, par value $1.00 per share (the "Baxter Common Stock"), without any
-------------------
consideration being paid by such holders, all of the outstanding shares of
Edwards common stock, par value $1.00 per share (the "Edwards Common Stock"),
--------------------
owned directly and indirectly by Baxter (the "Distribution");
------------
WHEREAS, for United States federal income tax purposes, the
Distribution is intended to qualify as a tax-free spin-off within the meaning of
Sections 355 and 368(a)(1)(D) of the United States Internal Revenue Code of
1986, as amended (the "Code"); and
----
WHEREAS, it is appropriate and desirable to set forth the principal
corporate transactions required to effect the Distribution and certain other
agreements that will govern the relationship of Baxter and Edwards following the
Distribution;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Baxter and Edwards
agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
------------------------------
1.1. Definitions. In this Agreement, the following terms have the
-----------
meanings specified or referred to in this Section 1.1:
-----------
"Accounts Payable Amount" has the meaning specified in Section 9.6(g).
----------------------- --------------
"Accounts Receivable Amount" has the meaning specified in Section
-------------------------- -------
9.6(g).
------
"Accounts Receivable Report" has the meaning specified in Section
-------------------------- -------
9.7(f).
------
"Act" has the meaning specified in Section 9.11(a).
--- ---------------
"Action" means any action, claim, suit, arbitration, inquiry,
------
subpoena, discovery request, proceeding or investigation by or before any court
or grand jury, any governmental or other regulatory or administrative entity,
agency or commission or any arbitration tribunal.
"Active Edwards Employees" means any regular full-time or part-time
------------------------
employee of Baxter or one of its Subsidiaries who commences employment with
Edwards or one of its Subsidiaries immediately following the Distribution Date.
"Actual Balance Sheet" has the meaning specified in Section 9.6(g).
-------------------- --------------
"Actually Using" has the meaning specified in Section 10.1(a).
-------------- ---------------
"Affiliate" means, with respect to any Person, any other Person that
---------
directly or indirectly controls, is controlled by or is under common control
with such Person. For the purpose of this definition, the term "control" means
the power to direct the management of an entity, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
term "controlled" has the meaning correlative to the foregoing. After the
Distribution Date, Edwards and Baxter shall not be deemed to be under common
control for purposes hereof due solely to the fact that Edwards and Baxter have
common stockholders.
"Aggregate Amount Received" has the meaning specified in Section
------------------------- -------
9.6(g).
------
"Anasco Division" has the meaning specified in Section 3.2.
--------------- -----------
"Asset Transfer Amount" has the meaning specified in Section 9.6(g).
--------------------- --------------
"Assumed Actions" has the meaning specified in Section 9.10(a).
--------------- ---------------
"Assumed Liabilities" means all contractual and other Liabilities of
-------------------
Baxter or any of its Subsidiaries (excluding the Retained Liabilities) arising
out of or relating to (but only to the extent relating to) the Edwards Business
any Divested Business and/or any of the past or present facilities of Baxter or
any of its Subsidiaries used primarily in connection with the Edwards Business
or any Divested Business, whether due or to become due, including:
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<PAGE>
(a) All Liabilities (excluding, except as provided in subparagraph
(b) below, Loans owed to Baxter or any of its Subsidiaries) that are reflected,
disclosed or reserved for on the Balance Sheet, as such Liabilities may be
increased or decreased in the operation of the Edwards Business from the date of
the Balance Sheet through the Distribution Date in the ordinary course of
business consistent with past practice;
(b) The Loans set forth on Schedule 1.1(b) hereto;
---------------
(c) All Liabilities under or related to the Real Estate Leases and
the Edwards Contracts, such assumption to occur as (i) assignee if such Real
Estate Leases and Edwards Contracts are assignable and are assigned or otherwise
transferred to Edwards or one of its Subsidiaries, or (ii) subcontractor,
sublessee or sublicensee as provided in Section 7.3 below if assignment of such
-----------
Real Estate Leases and Edwards Contracts and/or the proceeds thereof is
prohibited by law or by the terms thereof or is not permitted by the other
contracting party;
(d) All warranty, performance and similar obligations entered into or
made prior to the Distribution Date with respect to the products or services of
the Edwards Business;
(e) All Liabilities related to any and all Actions asserting a
violation of any law, rule or regulation related to or arising out of the
operations of the Edwards Business, whether before or after the Distribution
Date and the Liabilities relating to any Assumed Actions;
(f) All Liabilities arising under (i) CERCLA and any other foreign,
federal, state or local laws regarding the management, control and clean-up of
hazardous materials (including off-site waste disposal liabilities) or (ii) the
Occupational Safety and Health Act or similar state laws or regulations, in
either case relating to or arising out of the operations of the Edwards
Business, whether before or after the Distribution Date, including those set
forth on Schedule 1.1(f) hereto;
---------------
(g) All environmental Liabilities relating to facilities transferred
to Edwards or one of its Subsidiaries in fee or by way of an assignment of a
lease or sublease from a third party, including those set forth on Schedule
--------
1.1(g) hereto;
------
(h) All Liabilities in connection with claims of past, current or
prospective employees of the Edwards Business, including claims related to any
Baxter Plans, except as otherwise provided in Article XII, whether incurred
-----------
prior to, on or after the Distribution Date;
(i) All Liabilities under any mortgage interest subsidy program on
behalf of any Edwards Employee;
(j) All Liabilities associated with the transfer of assets from the
Baxter Savings Plan to the Edwards Savings Plan;
(k) All Liabilities related to the Transferred Intellectual Property
included as part of the Transferred Assets;
(l) All Liabilities under each of the guarantees and letters of
credit set forth on Schedule 1.1(l) hereto;
---------------
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(m) All Liabilities under the indemnification agreements set forth on
Schedule 1.1(m);
---------------
(n) All Liabilities for property taxes with respect to any of the
Transferred Assets;
(o) All Liabilities for deferred taxes with respect to the Edwards
Business consistent with FAS 109;
(p) All Liabilities related to Governmental Permits; and
(q) All other Liabilities (other than the Retained Liabilities)
relating to the Edwards Business or any Divested Business, whether existing on
the date hereof or arising at any time or from time to time after the date
hereof, and whether based on circumstances, events or actions arising heretofore
or hereafter, whether or not such Liabilities shall have been disclosed herein,
and whether or not reflected on the books and records of Baxter or Edwards or
the Balance Sheet.
"Balance Sheet" has the meaning specified in paragraph (a) of the
-------------
definition of "Transferred Assets."
"Baxter" has the meaning specified in the first paragraph of this
------
Agreement.
"Baxter Alaska" has the meaning specified in Section 3.2.
------------- -----------
"Baxter Austria" has the meaning specified in Section 3.19.
-------------- ------------
"Baxter Asia" has the meaning specified in Section 3.10.
----------- ------------
"Baxter Belgium" has the meaning specified in Section 3.22.
-------------- ------------
"Baxter Canada" has the meaning specified in Section 3.7.
------------- -----------
"Baxter Chile" has the meaning specified in Section 3.15(b).
------------ ---------------
"Baxter China" has the meaning specified in Section 3.8.
------------ -----------
"Baxter Colombia" has the meaning specified in Section 3.15(a).
--------------- ---------------
"Baxter Common Stock" has the meaning specified in the fifth paragraph
-------------------
of this Agreement.
"Baxter Edwards" means Baxter Edwards AG, a company organized under
--------------
the laws of Switzerland.
"Baxter Export Corporation" means Baxter Export Corporation, a Nevada
-------------------------
corporation.
"Baxter Foreign Pension Plan" has the meaning specified in Section
--------------------------- -------
12.4.
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"Baxter France" has the meaning specified in Section 3.20.
-------------- ------------
"Baxter Germany" means Baxter Deutschland GmbH, a German limited
--------------
company and a wholly-owned Subsidiary of Baxter Germany Holdings.
"Baxter Germany Holdings" means Baxter Deutschland Holding GmbH, a
-----------------------
German limited company and a wholly-owned Subsidiary of Baxter World Trade.
"Baxter Group Member" means Baxter and (a) any corporation that is a
-------------------
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as Baxter; (b) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with Baxter; (c) any organization (whether or not incorporated) that is a
member of an affiliated service group (within the meaning of Section 414(m) of
the Code) that includes Baxter, a corporation described in clause (a) of this
definition or a trade or business described in clause (b) of this definition or
(d) any other entity that is required to be aggregated with Baxter pursuant to
regulations promulgated under Section 414(o) of the Code.
"Baxter Hong Kong" has the meaning specified in Section 3.8.
---------------- -----------
"Baxter Hospitalar" means Baxter Hospitalar Ltda., a company organized
-----------------
under the laws of Brazil.
"Baxter Indemnified Parties" has the meaning specified in Section
-------------------------- -------
9.11(b).
-------
"Baxter Italy" has the meaning specified in Section 3.21.
------------ ------------
"Baxter Japan" means Baxter Limited, a Japanese corporation.
------------
"Baxter Korea" has the meaning specified in Section 3.13.
------------ ------------
"Baxter Marks" has the meaning specified in Section 10.4.
------------ ------------
"Baxter Mexico" has the meaning specified in Section 3.15(e).
------------- ---------------
"Baxter Netherlands" has the meaning specified in Section 3.23.
------------------ ------------
"Baxter Panama" has the meaning specified in Section 3.4.
------------- -----------
"Baxter Pension Plan" has the meaning specified in Section 12.10.
------------------- -------------
"Baxter Peru" has the meaning specified in Section 3.15(d).
----------- ---------------
"Baxter Pharmacy Services" means Baxter Pharmacy Services Corporation,
------------------------
a Delaware corporation.
"Baxter Philippines" has the meaning specified in Section 3.10.
------------------ ------------
"Baxter Plans" has the meaning specified in Section 12.8(a).
------------ ---------------
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"Baxter Policy" and "Baxter Policies" have the meanings specified in
------------- ---------------
Section 13.2.
------------
"Baxter PR Pension Plan" has the meaning specified in Section 12.9(c).
---------------------- ---------------
"Baxter PR Savings Plan" has the meaning specified in Section 12.9(b).
---------------------- ---------------
"Baxter Products" means those products manufactured by Baxter or its
---------------
Subsidiaries (as they would exist immediately following the Distribution Date)
(except for products manufactured by Baxter or its Subsidiaries for the Edwards
Business, but including those products manufactured for Baxter and its
Subsidiaries by Edwards or its Subsidiaries pursuant to the Manufacturing
Contracts).
"Baxter Retiree Welfare Plan" means the Baxter Retiree Medical Plan
---------------------------
and the post-retirement life insurance portion of the Baxter Group Term Life
Insurance Plan.
"Baxter Sales and Distribution" shall have the meaning specified in
-----------------------------
Section 3.3.
-----------
"Baxter Savings Plan" has the meaning specified in Section 12.9(a).
------------------- ---------------
"Baxter Severance Pay Plan" means the Baxter International Inc. and
-------------------------
Subsidiaries Severance Pay Plan.
"Baxter Share" means one share of Baxter Common Stock.
------------
"Baxter Spain" has the meaning specified in Section 3.25.
------------ ------------
"Baxter Stock Purchase Plans" means the Baxter International Inc.
---------------------------
Employee Stock Purchase Plan for United States Employees and the Baxter
International Inc. Employee Stock Purchase Plan for International Employees.
"Baxter Taiwan" has the meaning specified in Section 3.9.
------------- -----------
"Baxter Thailand" has the meaning specified in Section 3.12.
--------------- ------------
"Baxter U.K." has the meaning specified in Section 3.26.
----------- ------------
"Baxter Venezuela" has the meaning specified in Section 3.15(c).
---------------- ---------------
"Baxter Woodlands" means Baxter Healthcare Pte. Ltd. (Singapore), a
----------------
company organized under the laws of Singapore.
"Baxter World Trade" has the meaning specified in Section 3.1.
------------------ -----------
"BHC" has the meaning specified in the fourth paragraph of this
---
Agreement.
"BIPL" means Baxter (India) Private Limited, a company organized under
----
the laws of India.
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"BPCL" means Baxter Participacoes e Commercial Ltda., a company
----
organized under the laws of Brazil.
"BRL" means Baxter Representacoes Ltda., a company organized under the
---
laws of Brazil.
"Board of Directors" means the board of directors of the referenced
------------------
corporation or any duly authorized committee thereof.
"CERCLA" means the Comprehensive Environmental Response, Compensation
------
and Liability Act, as amended.
"Code" has the meaning specified in the sixth paragraph of this
----
Agreement.
"Contracts" means contracts, agreements, arrangements, leases (other
---------
than Real Estate Leases), manufacturers' warranties, memoranda, understandings
and offers open for acceptance of any nature, whether written or oral.
"Conveyancing Instruments" has the meaning specified in Section 7.1.
------------------------ -----------
"Copyrights" means United States and foreign copyrights, both
----------
registered and unregistered, along with the registrations and applications to
register any such copyrights.
"CPR" means the Center for Public Resources Institute for Dispute
---
Resolution.
"Debt True-Up Amount" has the meaning specified in Section 9.6(g).
------------------- --------------
"Debt True-Up Notice" has the meaning specified in Section 9.6(g).
------------------- --------------
"Dispute" has the meaning specified in Section 16.2.
------- ------------
"Distribution" has the meaning specified in the fifth paragraph of
------------
this Agreement.
"Distribution Date" means the date and time determined by the Board of
-----------------
Directors of Baxter, or a duly authorized committee thereof, as the date on
which the Edwards Shares are distributable to holders of record of Baxter Common
Stock as of the Record Date.
"Divested Business" means any business primarily related to the
-----------------
Edwards Business that was divested by Baxter or any of its Subsidiaries at any
time prior to the Distribution Date, including any business divested pursuant to
any of the agreements listed on Schedule 1.2(h)(i) as "Divestitures."
------------------
"Edwards" has the meaning specified in the first paragraph of this
-------
Agreement.
"Edwards Austria" has the meaning specified in Section 3.19(a).
--------------- ---------------
"Edwards Belgium" has the meaning specified in Section 3.22(a).
--------------- ---------------
-7-
<PAGE>
"Edwards Business" has the meaning specified in the second paragraph
----------------
of this Agreement.
"Edwards Canada" has the meaning specified in Section 3.7(a).
-------------- --------------
"Edwards Common Stock" has the meaning specified in the fifth
--------------------
paragraph of this Agreement.
"Edwards Contracts" has the meaning specified in paragraph (h) of the
-----------------
definition of "Transferred Assets".
"Edwards Credit Facility" has the meaning specified in Section 9.3.
----------------------- -----------
"Edwards Deferred Compensation Plan" has the meaning specified in
----------------------------------
Section 12.8(b).
---------------
"Edwards Distributable Share" means for each holder of record of
---------------------------
Baxter Common Stock as of the Record Date one (1) Edwards Share for every five
(5) Baxter Shares outstanding and held of record by such holder as of the Record
Date.
"Edwards Employees" has the meaning specified in Section 12.1.
----------------- ------------
"Edwards EU Holdings" has the meaning specified in Section 3.17(a).
------------------- ---------------
"Edwards Foreign Employees" has the meaning specified in Section 12.4.
------------------------- ------------
"Edwards Foreign Entity" means any Subsidiary of Baxter that is
----------------------
located or incorporated in a jurisdiction outside the United States and will,
upon consummation of the transactions contemplated by this Agreement, become a
Subsidiary of Edwards.
"Edwards France" has the meaning specified in Section 3.20(a).
-------------- ---------------
"Edwards Germany" has the meaning specified in Section 3.18(b)(i).
--------------- ------------------
"Edwards Germany Holdings" has the meaning specified in Section
------------------------ -------
3.18(a)(i).
----------
"Edwards Holdings Switzerland" has the meaning specified in Section
---------------------------- -------
3.31.
----
"Edwards Indemnified Parties" has the meaning specified in Section
--------------------------- -------
15.3.
----
"Edwards Italy" has the meaning specified in Section 3.21(a).
------------- ---------------
"Edwards Korea" has the meaning specified in Section 3.13(a).
------------- ---------------
"Edwards Lifesciences AG" has the meaning specified in Section
----------------------- -------
3.16(a)(i).
----------
"Edwards LLC" has the meaning specified in Section 4.1(a).
----------- --------------
"Edwards Mexico" has the meaning specified in Section 3.15(e).
-------------- ---------------
-8-
<PAGE>
"Edwards Netherlands" has the meaning specified in Section 3.23(a).
------------------- ---------------
"Edwards PR Employees" has the meaning specified in Section 12.9(b).
-------------------- ---------------
"Edwards PR Pension Plan" has the meaning specified in Section
----------------------- -------
12.9(c).
-------
"Edwards PR Savings Plan" has the meaning specified in Section
----------------------- -------
12.9(b).
-------
"Edwards Products" means those products manufactured by Edwards or its
----------------
Subsidiaries (as they would exist immediately following the Distribution Date)
(excluding products manufactured by Edwards or its Subsidiaries for the Retained
Business but including those products manufactured for Edwards and its
Subsidiaries by Baxter or its Subsidiaries pursuant to the Manufacturing
Contracts).
"Edwards Puerto Rico (936)" has the meaning specified in Section
------------------------- -------
3.2(a).
------
"Edwards Puerto Rico (MS&P)" has the meaning specified in Section
-------------------------- -------
3.3(a).
------
"Edwards Savings Plan" has the meaning specified in Section 12.8(b).
-------------------- ---------------
"Edwards Severance Pay Plan" has the meaning specified in Section
-------------------------- -------
12.8(b).
-------
"Edwards Share" means one share of Edwards Common Stock.
-------------
"Edwards Spain" has the meaning specified in Section 3.25(a).
------------- ---------------
"Edwards Stock Purchase Plans" means the Edwards Lifesciences
----------------------------
Corporation Employee Stock Purchase Plan for United States Employees and the
Edwards Lifesciences Corporation Stock Purchase Plan for International
Employees.
"Edwards Swiss Commissionaire" has the meaning specified in Section
---------------------------- -------
3.16(c)(i).
----------
"Edwards Uden" has the meaning specified in Section 3.24(a).
------------ ---------------
"Edwards UK" has the meaning specified in Section 3.26(a).
---------- ---------------
"Edwards U.S." has the meaning specified in Section 4.1(b).
------------ --------------
"Edwards U.S. Employees" has the meaning specified in Section 12.9.
---------------------- ------------
"Edwards Welfare Plans" has the meaning specified in Section 12.9.
--------------------- ------------
"Edwards World Trade" has the meaning specified in Section 3.1.
------------------- -----------
"ELIPL" means Edwards Lifesciences (India) Private Limited, a company
-----
organized under the laws of India.
"Escalation Notice" has the meaning specified in Section 16.2.
----------------- ------------
-9-
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
(together with the rules and regulations promulgated thereunder).
"Exclusively" (and, with correlative meaning, "Exclusive") means, when
----------- ---------
used in connection with the Edwards Business, used only with or relating only to
the Edwards Business.
"Expenses" means any and all expenses incurred in connection with
--------
investigating, defending or asserting any claim, action, suit or proceeding
incident to any matter indemnified against hereunder (including court filing
fees, court costs, arbitration fees or costs, witness fees, and reasonable fees
and disbursements of legal counsel, investigators, expert witnesses,
consultants, accountants and other professionals).
"FESCO" has the meaning specified in Section 3.8(d).
----- --------------
"F.R.C.P." has the meaning specified in Section 16.4.
-------- ------------
"Foreign Exchange Rate" means, with respect to any currency other than
---------------------
United States dollars, as of any date of determination, the average of the
opening bid and asked rates on such date at which such currency may be exchanged
for United States dollars as quoted by Bank One, NA.
"Foreign Subsidiaries" has the meaning specified in Section 4.3.
-------------------- -----------
"German Accounts Payable Amount" has the meaning specified in Section
------------------------------ -------
9.6(g).
------
"German Accounts Receivable Amount" has the meaning specified in
---------------------------------
Section 9.6(g).
--------------
"Governmental Authority" means any foreign, federal, state, local or
----------------------
other government, governmental, statutory or administrative authority,
regulatory body or commission or any court, tribunal or judicial or arbitral
body.
"Governmental Permits" has the meaning specified in paragraph (i) of
--------------------
the definition of "Transferred Assets."
"Implementation Agreements" means the agreements implementing the
-------------------------
transactions referred to in Articles III, IV and V, including the agreements set
------------ -- -
forth on the closing lists with respect to the transactions described in
Articles III, IV and V.
------------ -- -
"Indemnified Party" has the meaning specified in Section 15.5(a).
----------------- ---------------
"Indemnifying Party" has the meaning specified in Section 15.5(a).
------------------ ---------------
"Indemnity Payment" has the meaning specified in Section 15.5(a).
----------------- ---------------
"Information" has the meaning specified in Section 17.1(a).
----------- ---------------
-10-
<PAGE>
"Information Statement" has the meaning specified in Section 9.2(a).
--------------------- --------------
"Insurance Amount" has the meaning specified in Section 13.5.
---------------- ------------
"Insurance Charges" has the meaning specified in Section 13.7.
----------------- ------------
"Insurance Proceeds" means those monies (i) received by an insured
------------------
from an insurance carrier, (ii) paid by an insurance carrier on behalf of the
insured or (iii) received from any third Person in the nature of insurance,
contribution or indemnification in respect of any Liability, in each such case
net of any applicable premium adjustments (including reserves and
retrospectively rated premium adjustments) and net of any costs or expenses
(including allocated costs of in-house counsel and other personnel) incurred in
the collection thereof.
"Insured Claims" means those liabilities that, individually or in the
--------------
aggregate, are covered within the terms and conditions of any of the Baxter
Policies, whether or not subject to deductibles, co-insurance, uncollectability,
premium adjustments (including reserves), retrospectively-rated premium
adjustments or retentions, but only to the extent that such liabilities are
within applicable Baxter Policy limits, including aggregates and deductibles.
"Intellectual Property" means (a) Copyrights, (b) Patents, (c)
---------------------
Trademarks, (d) business and non-technical information, (e) non-patented or non-
patentable technical information, inventions, processes and formulations and (f)
discoveries, trade secrets, know-how and technical data.
"Intercompany Agreements" means any Contract between Baxter and
-----------------------
Edwards entered into on or before the Distribution Date.
"Intercompany Receivables and Payables" means any intercompany
-------------------------------------
receivables and payables (other than Loans) arising in the ordinary course of
business.
"Inventory Amount" has the meaning specified in Section 9.6(g).
---------------- --------------
"IRS" means the Internal Revenue Service.
---
"Liability" means any and all debts, liabilities and obligations,
---------
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising (unless otherwise
specified in this Agreement), including all costs and expenses relating thereto,
and including those debts, liabilities and obligations arising under any law,
rule, regulation, Action, threatened Action, order or consent decree of any
Governmental Authority or any award of any arbitrator of any kind, and those
arising under any contract, commitment or undertaking.
"Licensed Baxter Intellectual Property" has the meaning specified in
-------------------------------------
Section 10.2(a).
---------------
"Licensed Edwards Intellectual Property" has the meaning specified in
--------------------------------------
Section 10.1(a).
---------------
-11-
<PAGE>
"Loan" means any intercompany indebtedness for borrowed money.
----
"Losses" means any and all losses, costs, obligations, liabilities,
------
settlement payments, awards, judgments, fines, penalties, damages, fees,
expenses, deficiencies, claims or other charges, absolute or contingent, matured
or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown
(including the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
"Macchi" has the meaning specified in Section 3.6.
------ -----------
"Manufacturing Contracts" means the agreements set forth in Exhibit C
----------------------- ---------
hereto under the caption "Manufacturing Agreements."
"Material Governmental Approvals and Consents" means any material
--------------------------------------------
notices, reports or other filings to be made with or to, or any consents,
registrations, approvals, permits, clearances or authorizations to be obtained
from, any Governmental Authority.
"New Product" means a product that is either (a) based upon the design
-----------
of a product that is manufactured and distributed prior to the Distribution
Date, but the design of which is modified from such pre-existing product by
changing the size or other dimensions, the materials or the manufacturing
process; or (b) a replacement for a product that is manufactured and distributed
prior to the Distribution Date but has an improved feature or property while
retaining the overall functionality of such pre-existing product.
"NYSE" means the New York Stock Exchange, Inc. or any successor
----
thereto.
"Operating Agreements" means the agreements set forth in Exhibit B
-------------------- ---------
hereto and any other agreements between Baxter and Edwards and their respective
Affiliates regarding their ongoing business and service relationships following
the Distribution entered into in contemplation of the Distribution.
"Party" means Baxter or Edwards.
-----
"Pas Palzer KG" has the meaning specified in Section 3.18.
------------- ------------
"Pas Palzer Verwaltungs" has the meaning specified in Section 3.18.
---------------------- ------------
"Patents" means United States and foreign patents and applications for
-------
patents, including any continuations, continuations-in-part, re-examinations,
patents by addition, Supplemental Protection Certificates, patent term
extensions, divisions, renewals, reissues and extensions thereof.
"Person" means any individual, corporation, partnership, joint
------
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization or Governmental Authority.
-12-
<PAGE>
"Personal Property Leases" has the meaning specified in paragraph
------------------------
(h)(xi) of the definition of "Transferred Assets."
"PR Transferred Accounts" has the meaning specified in Section
----------------------- -------
12.9(b).
-------
"PR Transferred Accrued Benefits" has the meaning specified in Section
------------------------------- -------
12.9(c).
-------
"Pre-Distribution Claims Administration" has the meaning specified in
--------------------------------------
Section 13.6.
------------
"Prime Rate" means the rate that Bank One, NA (or any successor
----------
thereto or other major money center commercial bank agreed to by the Parties)
announces from time to time as its prime lending rate, as in effect from time to
time.
"Privilege" or "Privileges" has the meaning specified in Section
--------- ---------- -------
17.8(a).
-------
"Privileged Information" has the meaning specified in Section 17.8(a).
---------------------- ---------------
"Products" has the meaning specified in Section 9.11.
-------- ------------
"Real Estate Leases" has the meaning specified in paragraph (e) of the
------------------
definition of "Transferred Assets."
"Receivables" has the meaning specified in paragraph (b)(i) of the
-----------
definition of "Transferred Assets."
"Record Date" means the date determined by the Board of Directors of
-----------
Baxter, or a duly authorized committee thereof, as the record date for
determining stockholders of Baxter entitled to receive shares of Edwards Common
Stock in the Distribution.
"Refund Amount" has the meaning specified in Section 9.7(f).
------------- --------------
"Refund Notice" has the meaning specified in Section 9.7(f).
------------- --------------
"Registration Statement" has the meaning specified in Section 9.2(a).
---------------------- --------------
"Retained Assets" has the meaning specified in Section 6.1.
--------------- -----------
"Retained Baxter Intellectual Property" means all of the Intellectual
-------------------------------------
Property owned by Baxter or its Subsidiaries as of the Distribution Date other
than the Transferred Intellectual Property.
"Retained Business" means those portions of the business of Baxter and
-----------------
its current Subsidiaries that are not part of the Edwards Business.
"Retained Liabilities" has the meaning specified in Section 6.2.
-------------------- -----------
"Rights Plan" means the rights plan referred to in Section 5.1.
----------- -----------
-13-
<PAGE>
"SEC" means the United States Securities and Exchange Commission.
---
"Shared Agreements" has the meaning specified in Section 9.8(a).
----------------- --------------
"Software" means computer software programs, in source code and object
--------
code form, including all related source diagrams, flow charts, specifications,
documentation and all other materials necessary to allow a reasonably skilled
third-party programmer or technician to maintain, support and enhance the
Software.
"Subsidiary" means, when used with reference to any Person, any
----------
corporation or other organization whether incorporated or unincorporated of
which at least a majority of the securities or interests having by the terms
thereof ordinary voting power to elect at least a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such Person or by any one or more of its Subsidiaries, or by such Person and
one or more of its Subsidiaries; provided, however, that no Person that is not
-------- -------
directly or indirectly wholly-owned by any other Person shall be a Subsidiary of
such other Person unless such other Person controls, or has the right, power or
ability to control, that Person.
"Swiss Sales Branch" has the meaning, specified in Section 3.16.
------------------ ------------
"Tax" (and, with correlative meaning, "Taxes" and "Taxable") means:
--- ----- -------
(i) any federal, state, local or foreign net income, gross income,
gross receipts, windfall profit, severance, property, production, sales,
use, license, excise, franchise, employment, payroll, withholding,
alternative or add-on minimum, ad valorem, value-added, transfer, stamp, or
environmental tax, or any other tax, custom, duty, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest or penalty, addition to tax or additional amount imposed by any
Governmental Authority; and
(ii) any liability of either Party for the payment of amounts with
respect to payments of a type described in clause (i) as a result of being
a member of an affiliated, consolidated, combined or unitary group, or as a
result of any obligation of either Party under any Tax sharing arrangement
or Tax indemnity arrangement.
"Tax Sharing Agreement" means the tax sharing agreement in
---------------------
substantially the form of Exhibit C hereto.
---------
"Third Party Claim" has the meaning specified in Section 15.6(a).
----------------- ---------------
"Third Party Consents" has the meaning specified in Section 9.14.
-------------------- ------------
"Trademarks" means all United States, state and foreign trademarks,
----------
service marks, trade names and service names (including all assumed or
fictitious names under which Baxter is conducting the Edwards Business), whether
registered or unregistered, including all common law rights in and all goodwill
associated with the foregoing, and all registrations and pending applications to
register the foregoing.
-14-
<PAGE>
"Transfer Agent" means First Chicago Trust Company of New York, a
--------------
division of EquiServe, the distribution agent appointed by Baxter to distribute
shares of Edwards Common Stock pursuant to the Distribution.
"Transferred Accounts" has the meaning specified in Section 12.9(a).
-------------------- ---------------
"Transferred Actions" has the meaning specified in Section 9.10(b).
------------------- ---------------
"Transferred Assets" means the tangible and intangible assets,
------------------
properties, rights and interests relating Exclusively to the Edwards Business
(excluding the Retained Assets), including the following:
(a) Balance Sheet Assets. All assets reflected or disclosed on the
--------------------
audited balance sheet of the Edwards Business as of December 31, 1999 contained
in the Registration Statement (the "Balance Sheet"), including all machinery,
-------------
equipment, furniture and other tangible personal property, whether owned or
leased, used Exclusively in the operation of the Edwards Business, subject to
acquisitions, dispositions and adjustments in the ordinary course of the Edwards
Business, consistent with past practice, after such date;
(b) Receivables.
-----------
(i) All accounts receivable, notes receivable, lease receivables,
prepayments (other than prepaid insurance), advances and other receivables
arising out of or produced by the Edwards Business and owing by any Persons
(the "Receivables");
-----------
(ii) all payments received after the Distribution Date on account of
the Receivables ;
(iii) all manufacturers' warranties or guarantees related to the
Transferred Assets or related to any of the Assumed Liabilities; and
(iv) any and all manufacturers' or third-party service or replacement
programs relating to the Transferred Assets;
(c) Inventories.
-----------
(i) All work-in-process, finished goods and spare parts inventory of
Edwards Products, other than (x) finished goods inventory (including
inventory in transit) in the jurisdictions set forth in Schedule 6.1(h) and
---------------
(y) Edwards Products manufactured by Baxter or one of its Subsidiaries and
with respect to which title has not yet passed to Edwards or one of its
Subsidiaries pursuant to the terms of the Manufacturing Contracts or
Baxter's past practices;
(ii) all raw materials inventory related to Edwards Products other
than Edwards Products manufactured by Baxter or one of its Subsidiaries
pursuant to the Manufacturing Contracts;
-15-
<PAGE>
(iii) all supplies, packaging and other inventories related to the
Edwards Business but excluding any such items in the possession of Baxter
or one of its Subsidiaries that relate to Edwards Products manufactured by
Baxter or one of its Subsidiaries pursuant to the Manufacturing Contracts;
and
(iv) rights with respect to consignment inventory of Edwards
Products held by others;
(d) Owned Real Property. Those certain parcels of land set forth
-------------------
on Schedule 1.2(d) hereto, together with any and all buildings and other
---------------
structures and improvements thereon, any and all rights and privileges
pertaining thereto or to any of such buildings or other structures or
improvements, including all ownership interests, oil and mineral interests,
water rights, easements, permits, licenses, rights of way, leases, and purchase
and option agreements with respect to real property, and, to the extent
constituting real property, any and all fixtures, machinery, equipment and other
property attached thereto or located thereon (other than equipment and furniture
located in property to be retained by Baxter or its Subsidiaries hereunder) and
all other rights and interests of any nature in and to any such real estate or
other real estate of the Edwards Business;
(e) Real Property Leases. Those certain real estate leases set
--------------------
forth on Schedule 1.2(e) hereto including any amendments thereto (collectively
the "Real Estate Leases") and all rights to use the leased premises including
------------------
any and all improvements, fixtures, machinery, equipment and other property
located on the premises demised under such Real Estate Leases (other than
equipment and furniture located in property to be retained by Baxter or its
Subsidiaries hereunder);
(f) Vehicles and Aircraft. All vehicles and aircraft used
---------------------
Exclusively in connection with the Edwards Business, whether owned or leased,
including the interests in the aircraft set forth on Schedule 1.2(f) hereto;
---------------
(g) Intellectual Property. All of the following Intellectual
---------------------
Property (collectively, the "Transferred Intellectual Property") along with (1)
---------------------------------
the right to sue, recover and retain such recoveries for infringement of the
Transferred Intellectual Property occurring prior to the Distribution Date, and
(2) the right to continue in the name of Baxter any actions for infringement of
the Transferred Intellectual Property pending as of the Distribution Date and to
recover and retain such recoveries therefrom:
(i) All business and non-technical information; non-patented or
non-patentable technical information, inventions, processes and
formulations; and discoveries, trade secrets, know-how and technical data
(A) used Exclusively in connection with the Edwards Business as of the
Distribution Date and made or conceived by employees, consultants or
contractors of Baxter or its Subsidiaries or any third-party; or (B) to be
used Exclusively in connection with the Edwards Business and to be made or
conceived by third parties pursuant to Contracts with said third parties;
(ii) All Patents used Exclusively in connection with the Edwards
Business as of the Distribution Date (including all such Patents set forth
on Schedule 1.2(g)(ii)
-------------------
-16-
<PAGE>
hereto), all other Patents set forth on Schedule 1.2(g)(ii) hereto that are
-------------------
not used Exclusively in connection with the Edwards Business (if any), and
all invention records set forth on Schedule 1.2(g)(ii) hereto;
-------------------
(iii) All Copyrights used Exclusively in connection with the Edwards
Business as of the Distribution Date; and
(iv) All Trademarks used Exclusively in connection with the Edwards
Business as of the Distribution Date (including all such Trademarks set
forth on Schedule 1.2(g)(iv)), all other Trademarks set forth on Schedule
------------------- --------
1.2(g)(iv) that are not used Exclusively in connection with the Edwards
----------
Business (if any), and all common law rights in the EDWARDS, EDWARDS
LABORATORIES, EDLABS, EDWARDS CARDIOVASCULAR SYSTEM, EDWARDS CVS, EDWARDS
CARDIOVASCULAR SURGERY, EDWARDS CRITICAL CARE, EDWARDS LIS and EDWARDS LESS
INVASIVE SURGERY marks (whether used Exclusively in connection with the
Edwards Business or not);
(h) Contracts. All of the following Contracts (such Contracts being
---------
referred to as the "Edwards Contracts"):
-----------------
(i) all Contracts related Exclusively to the Edwards Business
related to acquisitions or divestitures of assets or stock, including
Contracts related to the transactions set forth on Schedule 1.2(h)(i)
------------------
hereto, except to the extent any such Contracts relate to the Retained
Business;
(ii) all Contracts with customers Exclusive to the Edwards Business,
including those set forth on Schedule 1.2(h)(ii) hereto but only if the
-------------------
Contracts so set forth are actually Exclusive to the Edwards Business;
(iii) all customer leases under which the underlying equipment is the
Exclusive marketing responsibility of Edwards;
(iv) all government Contracts Exclusive to the Edwards Business,
including those set forth on Schedule 1.2(h)(iv) hereto;
-------------------
(v) all supplier Contracts Exclusive to the Edwards Business
relating either to raw materials or distributed products, including those
set forth on Schedule 1.2(h)(v) hereto;
------------------
(vi) all joint development and confidentiality Contracts Exclusive
to the Edwards Business, including those set forth on Schedule 1.2(h)(vi)
------------------
hereto but only if the Contracts so set forth are actually Exclusive to the
Edwards Business;
(vii) all consulting Contracts Exclusive to the Edwards Business,
including those set forth on Schedule 1.2(h)(vii) hereto but only if the
--------------------
Contracts so set forth are actually Exclusive to the Edwards Business;
-17-
<PAGE>
(viii) all third-party distribution Contracts Exclusive to the Edwards
Business, including those set forth on Schedule 1.2(h)(viii) hereto but only if
---------------------
the Contracts so set forth are actually Exclusive to the Edwards Business;
(ix) all manufacturing Contracts Exclusive to the Edwards Business;
(x) the Shared Agreements, if any, set forth on Schedule 9.8 hereto
------------
that are specifically designated on such Schedule 9.8 as being assigned to
------------
Edwards;
(xi) those certain machinery, equipment or other tangible personal
property leases Exclusive to the Edwards Business (the "Personal Property
-----------------
Leases") set forth on Schedule 1.2(h)(xi) hereto but only if the Contracts
------ -------------------
so set forth are actually Exclusive to the Edwards Business;
(xii) the portion of the Contracts related to derivatives set forth
on Schedule 1.2(h)(xii) equal to the amount set forth on such Schedule
-------------------- --------
1.2(h)(xii); and
-----------
(xiii) all other Contracts Exclusive to the Edwards Business,
including those set forth on Schedule 1.2(h)(xiii) hereto but only if the
---------------------
Contracts so set forth are actually Exclusive to the Edwards Business;
(i) Permits and Licenses. All permits, approvals, licenses,
--------------------
franchises, authorizations, product registrations or other rights granted by any
Governmental Authority held or applied for and that are used Exclusively in the
Edwards Business or that relate Exclusively to the Transferred Assets or any of
the Transferred Subsidiaries, and all other consents, grants and other rights
that are used Exclusively for the lawful ownership of the Transferred Assets or
the operation of the Edwards Business (collectively, "Governmental Permits")
--------------------
including, in each case, those set forth on Schedule 1.2(i) hereto;
---------------
(j) Claims and Indemnities. All rights, claims, demands, causes of
----------------------
action, judgments, decrees, general releases, settlement agreements and rights
to indemnity or contribution, whether contractual or otherwise, in favor of
Baxter or any of its Subsidiaries relating Exclusively to the Edwards Business
or the Transferred Assets, including those set forth on Schedule 1.2(j) hereto,
---------------
including the right to sue, recover and retain such recoveries and the right to
continue in the name of Baxter and its Subsidiaries any pending actions relating
to the foregoing, and to recover and retain any damages therefrom, but not
including any such rights, claims, demands, causes of action, judgments, decrees
and rights to indemnity or contribution relating to the Retained Assets,
including in particular any third-party distribution agreements that are
excluded from the Transferred Assets because Baxter or one of its Subsidiaries
is retaining it in its capacity as distributor for Edwards after the
Distribution Date;
(k) Subsidiaries, Joint Ventures and Minority Interests. All shares
---------------------------------------------------
of capital stock or equity or debt or other interests owned by Baxter or its
Subsidiaries in the Subsidiaries, joint ventures and minority investments set
forth on Schedule 1.2(k) hereto;
---------------
-18-
<PAGE>
(l) Books And Records. All books and records (including all records
-----------------
pertaining to customers, suppliers and personnel), wherever located, that
relate Exclusively to the Edwards Business;
(m) Supplies. All office supplies, production supplies, spare parts,
--------
purchase orders, forms, labels, shipping material, art work, catalogues, sales
brochures, operating manuals and advertising and promotional material and all
other printed or written material that relate Exclusively to the Edwards
Business;
(n) Intellectual Property Licenses. All permits, grants, contracts,
agreements and licenses running to or from Baxter or its Subsidiaries relating
to the Transferred Intellectual Property, including those set forth on Schedule
--------
1.2(n) hereto;
------
(o) Software. All (i) Software set forth on Schedule 1.2(o) hereto,
-------- ---------------
(ii) shrink-wrapped Software located on hardware included in the Transferred
Assets and (iii) any Contracts related to the aforementioned Software
including those set forth on Schedule 1.2(o) hereto;
---------------
(p) Internet Protocol Addresses. All Class "C" Internet Protocol
---------------------------
addresses set forth on Schedule 1.2(p) hereto; and
---------------
(q) Other Assets. All other assets, tangible or intangible,
------------
including all goodwill, that are Exclusive to the operations of, or otherwise
relate Exclusively to, the Edwards Business, including those set forth on
Schedule 1.2(q) hereto.
---------------
"Transferred Intellectual Property" means the Intellectual Property
---------------------------------
described in paragraph (g) of the definition of "Transferred Assets."
"Transferred Subsidiaries" means the Subsidiaries of Baxter set forth
------------------------
on Exhibit D hereto, the issued and outstanding shares of which will be
---------
transferred to Edwards or one or more of its Subsidiaries.
"True-Up Balance Sheet" has the meaning specified in Section 9.6(g).
--------------------- --------------
"Uden Manufacturing Facility" has the meaning specified in Section
--------------------------- -------
3.24.
----
"Unbudgeted Transfer Adjustment" has the meaning specified in Section
------------------------------ -------
9.6(a).
------
"Under Development" has the meaning specified in Section 10.1(a).
----------------- ---------------
"Variance Amount" has the meaning specified in Section 9.6(g).
--------------- --------------
"WARN Act" has the meaning specified in Section 12.6.
-------- ------------
"Xenomedica" has the meaning specified in Section 3.16.
---------- ------------
1.2. Interpretation. (a) In this Agreement, unless the context
--------------
clearly indicates otherwise:
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(i) words used in the singular include the plural and words in the
plural include the singular;
(ii) reference to any Person includes such Person's successors and
assigns, but only if such successors and assigns are permitted by this
Agreement;
(iii) reference to any gender includes the other gender;
(iv) the word "including" (and with correlative meaning "include")
means "including but not limited to";
(v) reference to any Article, Section, Exhibit or Schedule means
such Article or Section of, or such Exhibit or Schedule to, this Agreement,
as the case may be, and references in any Section or definition to any
clause means such clause of such Section or definition;
(vi) the words "herein," "hereunder," "hereof," "hereto" and words
of similar import shall be deemed references to this Agreement as a whole
and not to any particular Section or other provision hereof;
(vii) reference to any agreement, instrument or other document means
such agreement, instrument or other document as amended, supplemented and
modified from time to time to the extent permitted by the provisions thereof and
by this Agreement;
(viii) reference to any law (including statutes and ordinances) means
such law (including all rules and regulations promulgated thereunder) as
amended, modified, codified or reenacted, in whole or in part, and in effect at
the time of determining compliance or applicability;
(ix) relative to the determination of any period of time, "from"
means "from and including," "to" means "to but excluding" and "through" means
"through and including";
(x) accounting terms used herein shall have the meanings
historically ascribed to them by Baxter and its Subsidiaries based upon Baxter's
internal financial policies and procedures in effect prior to the date of this
Agreement;
(xi) in the event of any conflict between the provisions of the body
of this Agreement and the Exhibits or Schedules hereto, the provisions of the
body of this Agreement shall control;
(xii) the titles to Articles and headings of Sections contained in
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be a part of or to affect the meaning or interpretation of this
Agreement; and
(xiii) references to "dollars" or "$" shall mean United States Dollars
unless otherwise indicated.
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(b) This Agreement was negotiated by the Parties with the benefit of
legal representation, and no rule of construction or interpretation otherwise
requiring this Agreement to be construed or interpreted against either Party
shall apply to any construction or interpretation hereof. Subject to Section
-------
18.5, this Agreement shall be interpreted and construed to the maximum extent
----
possible so as to uphold the enforceability of each of the terms and provisions
hereof, it being understood and acknowledged that this Agreement was entered
into by the Parties after substantial negotiations and with full awareness by
the Parties of the terms and provisions hereof and the consequences thereof.
ARTICLE II
THE DISTRIBUTION
----------------
2.1. Issuance and Delivery of Edwards Shares. Edwards shall issue
---------------------------------------
to Baxter the number of Edwards Shares required so that the total number of
Edwards Shares held by Baxter on the Distribution Date is equal to the total
number of Edwards Shares distributable pursuant to Section 2.2. Baxter shall
-----------
deliver to the Transfer Agent one or more stock certificates representing all
the Edwards Shares then issued and outstanding, together with one or more stock
power(s) duly endorsed in blank. The Transfer Agent will then transfer and
distribute such shares in the manner described in Section 2.2 below.
-----------
2.2. Distribution of Edwards Shares. Edwards shall provide to the
------------------------------
Transfer Agent sufficient certificates in such denominations as the Transfer
Agent may request in order to effect the Distribution. Promptly following the
Distribution Date, Baxter shall instruct the Transfer Agent to distribute to all
holders of record of Baxter Common Stock as of the Record Date the Edwards
Distributable Share. All the distributed Edwards Shares shall be validly issued,
fully paid and nonassessable and shall be free of any preemptive rights.
2.3. Treatment of Fractional Shares. No certificates or scrip
------------------------------
representing fractional Edwards Shares shall be issued in the Distribution. In
lieu of receiving fractional shares, each holder of Baxter Common Stock who
otherwise would be entitled to receive a fractional Edwards Share pursuant to
the Distribution will receive cash (rounded to the nearest cent) for such
fractional share. Baxter and Edwards shall instruct the Transfer Agent to
determine the number of whole Edwards Shares and fractional Edwards Shares
(rounded to the eighth decimal place) allocable to each holder of record of
Baxter Common Stock as of the Record Date, to aggregate all such fractional
shares into whole shares and to sell the whole shares obtained thereby in the
open market at the then prevailing prices on behalf of holders who otherwise
would be entitled to receive fractional share interests, and the Transfer Agent
shall distribute to each such holder such holder's ratable share of the total
proceeds of such sale after making appropriate deductions of any amounts
required for federal tax withholding purposes and after deducting any taxes
attributable to the sale of such fractional share interests. Baxter shall bear
the costs of commissions incurred in connection with such sales.
2.4. Baxter Board Action. The Board of Directors of Baxter, or a
-------------------
duly authorized committee of the Board of Directors, shall, in its sole
discretion, determine the
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Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution. The Board of Directors of Baxter or such
committee also shall have the right to adjust at any time prior to the
Distribution Date the Edwards Distributable Share. The consummation of the
transactions provided for in this Article II shall be effected only after the
----------
Distribution has been declared by the Board of Directors of Baxter or such
committee and after all of the conditions set forth in Article XI hereof shall
----------
have been satisfied or waived by Baxter.
2.5. Additional Approvals. Baxter shall cooperate with Edwards in
--------------------
effecting, and if so requested by Edwards, Baxter shall, as the sole stockholder
of Edwards prior to the Distribution, ratify all actions that are reasonably
necessary or desirable to be taken by Edwards to effectuate, the transactions
referenced in or contemplated by this Agreement in a manner consistent with the
terms of this Agreement.
ARTICLE III
FOREIGN TRANSFERS
-----------------
3.1. Edwards Lifesciences World Trade. Baxter has caused to be
--------------------------------
incorporated, under the General Corporation Law of Delaware, Edwards
Lifesciences World Trade Corporation ("Edwards World Trade") as a wholly-owned
-------------------
Subsidiary of Baxter World Trade Corporation, a Delaware corporation and a
wholly-owned Subsidiary of Baxter ("Baxter World Trade"). Edwards World Trade
------------------
has been qualified as a foreign corporation under the General Corporation Law of
California. Subject to the terms and conditions of this Agreement, Baxter and
Edwards hereby agree to take, or cause to be taken, any and all actions
necessary to effect the transactions described in this Article III, with each
-----------
transaction occurring at the approximate times and/or in the order described in
Schedule 3.1 hereto.
------------
3.2. Puerto Rico (936). Baxter and Edwards hereby agree to take any
-----------------
and all actions necessary to effect the transfer to Edwards World Trade of all
of the right, title and interest of Baxter Healthcare Corporation of Puerto
Rico, an Alaska corporation and a wholly-owned Subsidiary of Baxter Pharmacy
Services ("Baxter Alaska"), in and to the Anasco division of Baxter Alaska which
-------------
is engaged in the Edwards Business, and all of the Transferred Assets and the
Assumed Liabilities related thereto (the "Anasco Division"), as follows:
---------------
(a) Edwards Lifesciences Corporation of Puerto Rico ("Edwards Puerto
--------------
Rico (936)") shall be incorporated as a Delaware corporation;
----------
(b) Edwards Puerto Rico (936) shall be qualified as a foreign
corporation under the laws of Puerto Rico;
(c) Baxter Alaska shall transfer to Edwards Puerto Rico (936) all of
its right, title and interest in and to the Anasco Division in return for 100
shares of capital stock of Edwards Puerto Rico (936);
(d) Baxter Alaska shall transfer to Baxter Pharmacy Services all of
its right, title and interest in and to the capital stock of Edwards Puerto Rico
(936);
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(e) Baxter Pharmacy Services shall transfer to Baxter World Trade as
a dividend, all of its right, title and interest in and to the capital stock of
Edwards Puerto Rico (936) as described in Section 3.3(e) below;
--------------
(f) Baxter World Trade shall transfer to Edwards World Trade as a
contribution to capital, all of its right, title and interest in and to the
capital stock of Edwards Puerto Rico (936) as described in Section 3.3(f) below;
--------------
(g) Edwards World Trade shall transfer to Edwards Puerto Rico (MS&P)
as a contribution to capital, all of its right, title and interest in and to the
capital stock of Edwards Puerto Rico (936) as described in Section 3.3(g)
--------------
below; and
(h) After the Distribution Date, at the option of Edwards, Edwards
Puerto Rico (936) shall transfer to Edwards Lifesciences AG or its designated
affiliate, by novation, all of its right, title and interest in and to certain
Transferred Assets and the Assumed Liabilities transferred to Edwards Puerto
Rico (936) by Baxter Alaska as part of the Anasco Division, which assets and
liabilities relate to the Edwards Business conducted in the Dominican Republic
prior to the Distribution Date, in return for cash or other consideration equal
to the fair market value of such Transferred Assets net of such Assumed
Liabilities, plus the assumption of such Assumed Liabilities.
3.3. Puerto Rico (MS&P). Baxter and Edwards hereby agree to take any
------------------
and all actions necessary to effect the transfer to Edwards World Trade of all
of the right, title and interest in and to the Transferred Assets and the
Assumed Liabilities held by Baxter Pharmacy Services, Baxter Sales and
Distribution Corp., a Delaware corporation and a wholly-owned Subsidiary of
Baxter Pharmacy Services ("Baxter Sales and Distribution"), and Edwards
-----------------------------
Lifesciences Cardiovascular Resources, Inc., a Pennsylvania corporation, as
follows:
(a) Edwards Lifesciences Sales Corporation ("Edwards Puerto Rico
-------------------
(MS&P)") shall be incorporated as a Delaware corporation and a wholly-owned
------
Subsidiary of Edwards World Trade;
(b) Edwards Puerto Rico (MS&P) shall be qualified as a foreign
corporation under the laws of Puerto Rico;
(c) Baxter Sales and Distribution shall transfer to Edwards Puerto
Rico (MS&P) all of its right, title and interest in and to the Transferred
Assets and the Assumed Liabilities, including those assets and liabilities
relating to the marketing and sales business conducted in Puerto Rico, in return
for cash or other consideration equal to the fair market value of such
Transferred Assets net of such Assumed Liabilities, plus the assumption of such
Assumed Liabilities;
(d) Baxter Pharmacy Services shall transfer to Edwards Puerto Rico
(MS&P) all of its right, title and interest in and to the Transferred Assets and
the Assumed Liabilities, including those assets, if any, liabilities and
employees relating to the perfusion business conducted in Puerto Rico in return
for cash or other consideration equal to the fair market value
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<PAGE>
of such Transferred Assets net of such Assumed Liabilities, plus the assumption
of such Assumed Liabilities;
(e) Baxter Pharmacy Services shall transfer to Baxter World Trade as
a dividend, all of its right, title and interest in and to the capital stock of
Edwards Puerto Rico (936) as described in Section 3.2(e) above;
--------------
(f) Baxter World Trade shall transfer to Edwards World Trade as a
contribution to capital, all of its right, title and interest in and to the
capital stock of Edwards Puerto Rico (936) as described in Section 3.2(f) above;
--------------
(g) Edwards World Trade shall transfer to Edwards Puerto Rico (MS&P)
as a contribution to capital, all of its right, title and interest in and to the
capital stock of Edwards Puerto Rico (936) as described in Section 3.2(g)
--------------
above; and
(h) Edwards Lifesciences Cardiovascular Resources, Inc., a
Pennsylvania corporation, shall transfer to Edwards Puerto Rico (MS&P) all of
its right, title and interest in and to the Transferred Assets and Assumed
Liabilities, if any, relating to the perfusion business conducted in Puerto
Rico, in exchange for cash or other consideration equal to the fair market value
of such Transferred Assets net of such Assumed Liabilities, plus the assumption
of such Assumed Liabilities.
3.4. Dominican Republic. Baxter and Edwards hereby agree to take
------------------
any and all actions necessary to effect the transfer to Edwards Lifesciences AG
of all of the right, title and interest of Baxter Healthcare S. de R.L., a
company organized under the laws of Panama ("Baxter Panama"), in and to the
-------------
Transferred Assets and the Assumed Liabilities, consisting of contracts for the
construction and leasing of a manufacturing facility located in the Dominican
Republic, as follows:
(a) A branch office of Edwards Lifesciences AG shall be established
in the Dominican Republic and Edwards Lifesciences AG shall be qualified as a
foreign corporation under the laws of the Dominican Republic;
(b) Baxter Panama shall transfer to Edwards Lifesciences AG all of
its right, title and interest in and to the Transferred Assets and the Assumed
Liabilities, consisting of contracts for the construction and leasing of a
manufacturing facility located in the Dominican Republic; and
(c) After the Distribution Date, at the option of Edwards, Edwards
Puerto Rico (936) shall transfer to Edwards Lifesciences AG or its designated
affiliate, by novation, all of its right, title and interest in and to certain
Transferred Assets and the Assumed Liabilities transferred to Edwards Puerto
Rico (936) by Baxter Alaska as described in Section 3.2(h) above in return for
--------------
cash or other consideration equal to the fair market value of such Transferred
Assets net of such Assumed Liabilities, plus the assumption of such Assumed
Liabilities.
3.5. Intentionally Omitted.
---------------------
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<PAGE>
3.6. Brazil. Baxter and Edwards hereby agree to take any and all
------
actions necessary to effect the transfer to Edwards World Trade of all the
right, title and interest in Edwards Lifesciences Macchi Ltda., a Brazilian
corporation ("Macchi"), held by BPCL and BRL, as follows:
------
(a) BRL shall transfer to BPCL all of its right, title and interest
in and to 6,750,947 quotas of Macchi, together with all of its right, title and
interest in the Agreement for the Assignment and Transfer of Quotas of Macchi
and other Covenants dated December 22, 1993, in exchange for the transfer by
BPCL to BRL of all of BPCL's right, title and interest in and to 17,448,432
quotas of Baxter Hospitalar;
(b) BRL shall transfer to Edwards all of its right, title and
interest in and to 1 quota of Macchi;
(c) BPCL shall transfer to Baxter Export Corporation all of its
right, title and interest in and to 1 quota of Baxter Hospitalar;
(d) Baxter World Trade shall transfer to Edwards World Trade as a
contribution to capital all of its right, title and interest in and to
25,158,211 quotas of BPCL;
(e) Baxter Export Corporation shall transfer (i) to Edwards World
Trade all of its right, title and interest in and to 764 quotas of BPCL and (ii)
to Edwards all of its right, title and interest in and to 1 quota of BPCL; and
(f) Baxter World Trade, S.A., a company organized under the laws of
Belgium, shall transfer to Edwards Lifesciences Japan Holdings, Inc. all of
their right, title and interest in and to debt of Macchi owing to such company
in exchange for cash or other consideration equal to the face value of such debt
plus accrued interest thereon;
(g) Macchi shall repay debt, together with accrued interest thereon,
owing to Baxter Uruguay, S.A., a company organized under the laws of Uruguay, in
the amount of $5,643,000; and
(h) Edwards World Trade shall pay $2,380,000 to Baxter World Trade,
S.A. as a reduction of the debt owing to Baxter World Trade, S.A. by Baxter
Uruguay, S.A.
3.7. Canada. Baxter and Edwards hereby agree to take any and all
------
actions necessary to effect the transfer to Edwards World Trade of all of the
right, title and interest of Baxter Corporation, a company organized under the
laws of Ontario ("Baxter Canada"), in and to the Transferred Assets and the
-------------
Assumed Liabilities, which constitutes the Edwards Business conducted in Canada,
as follows:
(a) Edwards Lifesciences (Canada) Inc. ("Edwards Canada") shall be
--------------
incorporated as a Canadian corporation and a wholly-owned Subsidiary of Edwards
World Trade; and
(b) Baxter Canada shall transfer to Edwards Canada all of its right,
title and interest in and to the Transferred Assets and the Assumed Liabilities
for cash equal to the fair
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<PAGE>
market value of the Transferred Assets net of such Assumed Liabilities, plus the
assumption of such Assumed Liabilities.
3.8. China. Baxter and Edwards hereby agree to take any and all
-----
actions necessary to effect the transfer to Edwards World Trade and Edwards LLC
of all of the right, title and interest of Baxter Healthcare Limited, a company
organized under the laws of Hong Kong ("Baxter Hong Kong"), and Baxter (China)
----------------
Investment Co. Ltd., a company organized under the laws of the People's Republic
of China ("Baxter China"), in and to the Transferred Assets and the Assumed
------------
Liabilities, which constitutes the Edwards Business conducted in Hong Kong and
the People's Republic of China, as follows:
(a) A representative office of Edwards World Trade shall be
established in Shanghai, China;
(b) Baxter Hong Kong and Baxter China shall each directly or
indirectly transfer to Edwards World Trade all of its respective right, title
and interest in and to the Transferred Assets and the Assumed Liabilities
(except for third-party distribution agreements, inventory and accounts
receivable and accounts payable relating to the purchase of products) in return
for cash or other consideration equal to the fair market value of such
Transferred Assets net of such Assumed Liabilities, plus the assumption of such
Assumed Liabilities;
(c) Baxter Hong Kong and Baxter China shall each directly or
indirectly transfer to Edwards LLC all of its respective right, title and
interest in and to all third-party distribution agreements relating to the
purchase of products in U.S. dollars in its name but relating Exclusively to the
Edwards Business and all accounts receivable and accounts payable relating to
such sales activity in return for cash or other consideration equal to the fair
market of such agreements and accounts receivable net of such accounts payable
and the Assumed Liabilities under such agreements, plus the assumption of such
accounts payable and the Assumed Liabilities under such agreements; and
(d) Baxter Hong Kong shall terminate the Labor Supply Contracts by
and between Baxter Hong Kong and Foreign Enterprise Services Corporation
("FESCO") or another government agency, relating to the contracting from FESCO
-----
or such other government agency of Baxter Hong Kong employees transferred to
Edwards World Trade, and Edwards World Trade shall enter into agreements with
FESCO or such other government agency providing for the same.
3.9. Taiwan. Baxter and Edwards hereby agree to take any and all
------
actions necessary to effect the transfer to Edwards World Trade and Edwards LLC
of all of the right, title and interest of Baxter Healthcare Limited, a company
organized under the laws of Taiwan ("Baxter Taiwan"), in and to the Transferred
-------------
Assets and the Assumed Liabilities, which constitutes the Edwards Business
conducted in Taiwan, as follows:
(a) A branch office of Edwards World Trade shall be established in
Taipei, Taiwan;
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<PAGE>
(b) Baxter Taiwan shall transfer to Edwards World Trade all of its
right, title and interest in and to the product registrations relating
Exclusively to the Edwards Business;
(c) Baxter Taiwan shall transfer all third-party distribution
agreements relating to the purchase of products relating Exclusively to the
Edwards Business to Edwards LLC; and
(d) Edwards World Trade Taiwan branch shall enter into an agreement
with Edwards LLC whereby the Taiwan branch of Edwards World Trade shall provide,
for a fee, certain sales and promotion activities on behalf of Edwards LLC in
connection with the distribution of Edwards Products by third-party distributors
in Taiwan.
3.10. Singapore and the Philippines. Baxter and Edwards hereby
-----------------------------
agree to take any and all actions necessary to effect the transfer to Edwards
World Trade and Edwards LLC of all of the right, title and interest of Baxter
Healthcare (Asia) Pte. Ltd., a company organized under the laws of Singapore
("Baxter Asia"), in and to the Transferred Assets and the Assumed Liabilities,
-----------
which constitutes the Edwards Business conducted in Singapore, and of Baxter
Healthcare Philippines Inc., a company organized under the laws of the
Philippines ("Baxter Philippines"), in and to the Transferred Assets and the
------------------
Assumed Liabilities, which constitutes the Edwards Business conducted in the
Philippines, as follows :
(a) A representative office of Edwards World Trade shall be
established in Singapore;
(b) Baxter Asia shall transfer to Edwards World Trade all of its
right, title and interest in and to the Transferred Assets and the Assumed
Liabilities relating Exclusively to the Edwards Business conducted in Singapore
(except for public hospital contracts, third-party distribution agreements,
inventory and accounts receivable and accounts payable relating to the purchase
of products) in return for cash or other consideration equal to the fair market
value of such Transferred Assets net of such Assumed Liabilities, plus the
assumption of such Assumed Liabilities;
(c) Baxter Asia shall transfer all of its right, title and interest
in and to certain public hospital contracts relating Exclusively to the Edwards
Business conducted in Singapore to a third-party distributor in return for its
release from its obligations under such contracts;
(d) Baxter Philippines shall transfer to third-party distributors
all of its right, title and interest in and to the product registrations in its
name but relating Exclusively to the Edwards Business conducted in the
Philippines;
(e) Baxter Asia shall transfer all of its right, title and interest
in and to the third-party distribution agreements related to the purchase of
products relating Exclusively to the