CONVERTIBLE PREFERRED

                            SHARES PURCHASE AGREEMENT

                                 by and between

                         EDWARDS LIFESCIENCES (US) INC.

                                       and

                             WORLD HEART CORPORATION



                                   Dated as of

                                  May 24, 2000





<PAGE>


                              CONVERTIBLE PREFERRED
                            SHARES PURCHASE AGREEMENT

          CONVERTIBLE  PREFERRED SHARES PURCHASE AGREEMENT,  dated as of May 24,
2000 (this  "Agreement"),  by and  between  Edwards  Lifesciences  (US) Inc.,  a
Delaware  corporation  ("Edwards US"), and World Heart  Corporation,  an Ontario
corporation ("World Heart").

          WHEREAS,  World Heart  desires to sell to Edwards US 1,374,570  shares
(the  "Shares")  of Series A  convertible  preferred  shares of World Heart (the
"World  Heart  Preferred")  having  the  rights,  privileges,  restrictions  and
conditions  set  forth in  Exhibit  I  attached  hereto,  and upon the terms and
subject to the conditions set forth herein;

          WHEREAS, Edwards US desires to purchase the Shares;

          WHEREAS,  Edwards LLC, a Delaware limited liability  company,  Edwards
Novacor LLC, a Delaware  limited  liability  company,  World Heart and Valentine
Acquisition  Corp.,  a  Delaware  corporation  ("Newco"),  have  entered  into a
contribution agreement, dated May 24, 2000 (the "Contribution Agreement"); and

          WHEREAS,  Edwards US and World  Heart have  entered  into an  exchange
agreement, dated May 24, 2000 (the "Exchange Agreement");

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


                                    ARTICLE I
                                   DEFINITIONS

          As used  in  this  Agreement,  the  following  terms  shall  have  the
following meanings:

          "accredited  investor"  shall  have the  meaning  set forth in Section
3.1(c) below.

          "Business Day" shall mean any day other than a Saturday, a Sunday or a
day when  banks in the city of New York,  New York are  authorized  by law to be
closed.

          "Canadian Securities  Commissions" shall have the meaning set forth in
Section 3.2(f) below.

          "Code" shall mean the Internal Revenue Code of 1986, as amended.

          "Closing" shall mean the closing of the purchase and sale contemplated
by Section 2.2.

          "Closing Date" shall have the meaning set forth in Section 2.2(a).

          "Confidentiality  Agreement"  shall  have  the  meaning  set  forth in
Section 4.2(b) below.

          "Contract" shall have the meaning set forth in Section 3.2(e) below.

          "Contribution  Agreement"  shall  have the  meaning  set  forth in the
Recitals.

          "controlled  foreign  corporation" shall have the meaning set forth in
Section 3.2(m) below.

          "Damages" shall have the meaning set forth in Section 6.2 below.

          "Environmental  Laws"  shall  have the  meaning  set forth in  Section
3.2(k) below.

          "Exchange  Act" shall mean the  Securities  Exchange  Act of 1934,  as
amended, and the rules and regulations of the SEC thereunder.

          "Exchange Agreement" shall have the meaning set forth in the Recitals.

          "foreign personal holding company" shall have the meaning set forth in
Section 3.2(m) below.

          "GAAP" shall have the meaning set forth in Section 3.2(f) below.

          "HSR Act" shall mean the Hart-Scott-Rodino  Antitrust Improvements Act
of 1976, as amended,  and applicable rules and regulations and any similar state
acts.

          "Indemnified  Party"  shall have the  meaning set forth in Section 6.3
below.

          "Indemnifying  Party"  shall have the meaning set forth in Section 6.3
below.

          "Liens" shall have the meaning set forth in Section 3.2(b) below.

          "Newco" shall have the meaning set forth in the Recitals.

          "PFIC Annual  Information  Statement" shall have the meaning set forth
in Section 4.7 below.

          "Person" shall mean any individual, partnership,  corporation, limited
liability  company,  joint venture,  association,  joint-stock  company,  trust,
unincorporated  organization,  government  or  agency or  political  subdivision
thereof, or other entity.

          "Purchase  Price"  shall mean Twenty  Million  Dollars  ($20,000,000).
Unless  otherwise  indicated,  all references to "dollars" or "$" shall mean the
lawful currency of the United States.

          "SEC" shall have the meaning set forth in Section 3.2(f) below.

          "Securities  Act" shall mean the  Securities  Act of 1933, as amended,
and the rules and regulations of the SEC thereunder..

          "Shares" shall have the meaning set forth in the Recitals.

          "Taxes" shall mean all United States federal, state, local and foreign
taxes, assessments,  levies, duties, imports or similar charges (whether imposed
directly or through  withholding),  including any interest,  additions to tax or
penalties applicable thereto.

          "Tax Returns" shall mean all United States federal,  state,  local and
foreign tax returns,  declarations,  statements,  reports,  schedules, forms and
information returns relating to Taxes, including any amendments thereof.

          "Transactions"  shall have the meaning  set forth in the  Contribution
Agreement.

          "Transaction  Agreements"  shall  have the  meaning  set  forth in the
Contribution Agreement.

          "World Heart  Balance  Sheet Date" shall have the meaning set forth in
Section 3.2(g) below.

          "World  Heart  Common  Shares"  shall  have the  meaning  set forth in
Section 4.1(c) below.

          "World Heart  Intellectual  Property" shall have the meaning set forth
in Section 3.2(n) below.

          "World Heart Option"  shall mean options to purchase  common shares of
World Heart granted by the Board of Directors.

          "World  Heart  Preferred"  shall  have the  meaning  set  forth in the
Recitals.

          "World  Heart  Reports"  shall have the  meaning  set forth in Section
3.2(f) below.

          "World Heart Subsidiaries" shall have the meaning set forth in Section
3.2(b) below.

          "World Heart Material Adverse Effect" shall have the meaning set forth
in Section 3.2(a) below.

          "Edwards US Material  Adverse Effect" shall have the meaning set forth
in Section 3.1(a) below.

          "Voting  Debt" means bonds,  debentures,  notes or other  indebtedness
having  general  voting  rights (or  convertible  into  securities  having  such
rights).


                                   ARTICLE II
                                SALE AND PURCHASE

          SECTION II.1. Agreement to Sell and to Purchase.  On the Closing Date,
upon the terms and subject to the  conditions set forth in this Agreement and in
reliance  on the  representations  and  warranties  contained  herein  and other
actions  being  taken by Edwards US and World  Heart  hereunder  at the  Closing
described in Section 2.2 hereof, World Heart shall issue and sell to Edwards US,
and Edwards US shall  purchase  and accept from World Heart,  the Shares,  for a
purchase price,  payable in immediately  available funds,  equal to the Purchase
Price.

          SECTION II.2. Closing.

          (a) The  consummation  of the  transactions  contemplated  under  this
Agreement,  (the  "Closing")  shall take place at the offices of Skadden,  Arps,
Slate,  Meagher & Flom LLP,  300 South Grand  Avenue,  Suite 3400,  Los Angeles,
California  90071,  or such other place as the  parties  hereto  shall  mutually
agree, at 10:00 a.m. (local time) on the fifth Business Day after the conditions
set forth in Article V shall have been  satisfied or waived,  or such other time
and date upon which the parties hereto may agree (the "Closing Date").

          (b) At the Closing:

               (i) Edwards US shall deliver to World Heart:

                    (A)  against  delivery  of  a  certificate  or  certificates
          representing  the Shares,  an amount equal to the  Purchase  Price via
          wire transfer of immediately  available funds to the bank account that
          World Heart shall have  designated at least three  Business Days prior
          to the Closing Date; and

                    (B) the other documents required by Article V hereof.

               (ii) World Heart shall deliver to Edwards US:

                    (A)  against  payment  of the  Purchase  Price  therefor,  a
          certificate or certificates representing the Shares, which shall be in
          definitive  form  and  registered  in the  name of  Edwards  US or its
          nominee  or  designee  and in a single  certificate  or in such  other
          denominations as Edwards US has requested;

                    (B) an opinion of McCarthy Tetrault, counsel to World Heart,
          dated as of the Closing Date attached hereto as Exhibit II;

                    (C) a  certificate  of the  Secretary of World Heart in form
          and substance reasonably satisfactory to Edwards US;

                    (D) a  certificate  of  status  for  World  Heart  dated the
          Closing  Date,  issued by the  Ministry  of  Consumer  and  Commercial
          Relations (Ontario); and

                    (E) a  certified  copy  of  the  articles  of  World  Heart,
          including,  without limitation, the articles of amendment creating the
          Shares; and

                    (F) the other documents required by Article V hereof.


                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

          SECTION III.1.  Representations  and Warranties of Edwards US. Edwards
US represents and warrants to World Heart as follows:

          (a) Organization,  Standing and Power. Edwards US (i) is a corporation
duly formed and in good standing  under the laws of the State of Delaware,  (ii)
has all requisite power and authority to own, lease or operate the assets it now
owns,  leases or operates and (iii) is duly qualified or licensed to do business
in each  jurisdiction  in which the ownership or use of its assets or conduct of
its  business  requires  it to be so  qualified,  in each case  except  for such
failures  that  would  not  reasonably  be  expected,  individually  or  in  the
aggregate,  to result in a material  adverse effect on the business or financial
condition of Edwards US (a "Edwards US Material Adverse Effect").

          (b) Authority.  The execution and delivery of this Agreement,  and the
performance  by  Edwards  US  of  its  obligations  hereunder,  have  been  duly
authorized by all necessary action on the part of Edwards US. This Agreement has
been duly executed and  delivered by Edwards US and,  assuming the due execution
and  delivery  hereof by World Heart,  this  Agreement  constitutes  a valid and
binding obligation of Edwards US,  enforceable  against Edwards US in accordance
with its terms,  except as such  enforcement  may be limited by (i)  bankruptcy,
insolvency, reorganization,  moratorium (whether general or specific) or similar
laws now or hereafter in effect relating to creditors' rights generally and (ii)
general  principles of equity  (regardless of whether such enforcement is sought
in a proceeding in equity or at law).

          (c)  Purchase  For  Investment.  Edwards  US is  acquiring  the Shares
hereunder  for  investment  (for its own account or for  accounts  over which it
exercises investment  control),  and not with a view to, or for offer or sale in
connection  with, any distribution  thereof,  which would be in violation of the
Securities  Act of 1933, as amended (the  "Securities  Act"),  or any applicable
state  securities  law.  Edwards  US is  (i)  knowledgeable,  sophisticated  and
experienced  in  business  and  financial  matters  and  fully  understands  the
limitations on transfer  described above;  and (ii) an "accredited  investor" as
such term is defined in Rule 501(a) of Regulation D under the Securities Act.

          (d)  Brokers,  Finders,  etc.  Except for Credit  Suisse  First Boston
Corporation,  Edwards  US is not  subject  to any  valid  claim  of any  broker,
investment  banker,   finder  or  other  intermediary  in  connection  with  the
transactions  contemplated by this Agreement.  Edwards US is solely  responsible
for any payment, fee or commission that may be due to Credit Suisse First Boston
in connection with the transactions contemplated hereby.

          SECTION III.2.  Representations  and Warranties of World Heart.  World
Heart hereby represents and warrants to Edwards US as follows:

          (a) Organization  and Standing.  World Heart (i) is a corporation duly
organized,  validly existing and in good standing under the laws of the Province
of Ontario,  (ii) has all requisite power and authority to own, lease or operate
the  assets  it now owns,  leases or  operates  and (iii) is duly  qualified  or
licensed to do business in each  jurisdiction  in which the  ownership or use of
its assets or conduct of its business  requires it to be so  qualified,  in each
case  except  for  such  failures   that  would  not   reasonably  be  expected,
individually or in the aggregate,  to result in (i) a material adverse effect on
the  business  or  financial  condition  of  World  Heart  and the  World  Heart
Subsidiaries (as defined herein), taken as a whole or (ii) a material impairment
of the ability of World Heart to perform its  obligations  under this  Agreement
(each, a "World Heart Material Adverse Effect").

          (b)  Subsidiaries.  The only direct or indirect  subsidiaries of World
Heart is Newco. Except as set forth on Schedule 3.2(b),  neither World Heart nor
Newco owns,  directly or  indirectly,  any of the capital  stock or other equity
securities  of any other  Person.  All of the issued and  outstanding  shares of
capital stock of Newco are duly authorized,  have been validly issued, are fully
paid and  nonassessable,  and are  owned by World  Heart  free and  clear of all
liens, pledges and encumbrances (collectively, "Liens").

          (c) Authority.  The execution and delivery of this Agreement,  and the
performance  by  World  Heart  of its  obligations  hereunder,  have  been  duly
authorized by all necessary  action on the part of World Heart.  This  Agreement
has been duly  executed  and  delivered  by World  Heart and,  assuming  the due
execution and delivery hereof by Edwards US, this Agreement  constitutes a valid
and  binding  obligation  of World  Heart,  enforceable  against  World Heart in
accordance  with its  terms,  except as such  enforcement  may be limited by (i)
bankruptcy,  insolvency,  reorganization,  moratorium  or  similar  laws  now or
hereafter in effect  relating to  creditors'  rights  generally and (ii) general
principles  of equity  (regardless  of whether such  enforcement  is sought in a
proceeding in equity or at law).

          (d) Capital  Stock.  (i) The  capitalization  of World Heart is as set
forth on  Schedule  3.2(d)  and there are no shares of World  Heart  authorized,
issued  or  outstanding  other  than as set  forth on  Schedule  3.2(d)(i).  The
outstanding  World Heart Common  Shares are duly  authorized,  have been validly
issued  and are  fully  paid and  nonassessable  and have  not  been  issued  in
violation of, and are not subject to, any preemptive rights.

               (ii)  Except as set  forth in  Section  3.2(d)(ii),  there are no
existing  options,   warrants,   calls,   preemptive  rights,   Voting  Debt  or
subscriptions  or other rights,  agreements,  arrangements or commitments of any
character,  relating  to the issued or  unissued  capital  stock of World  Heart
obligating  World  Heart to  issue,  transfer  or sell or  cause  to be  issued,
transferred  or sold any shares or Voting Debt of, or other equity  interest in,
World Heart or securities  convertible  into or exchangeable  for such shares or
equity interests,  or obligating World Heart to grant,  extend or enter into any
such option, warrant, call, subscription or other right, agreement,  arrangement
or commitment.

               (iii) There are no outstanding  contractual  obligations of World
Heart to repurchase,  redeem or otherwise acquire any shares of capital stock of
World Heart,  or to provide funds to make any investment (in the form of a loan,
capital contribution or otherwise) in any other entity.

               (iv)  Except as set  forth in  Section  3.2(d)(iv),  there are no
voting trusts or other  agreements,  or understandings to which World Heart is a
party or of which World Heart has  knowledge  with  respect to the voting of the
capital stock of World Heart.

          (e)  Consents;  No  Conflict.  The  consummation  of the  transactions
hereunder  will not require the consent of any party to any  material  contract,
lease,  agreement,  mortgage or indenture  ("Contract") to which World Heart, or
any of its affiliates,  is a party or by which any of them is bound,  or, to the
knowledge of World Heart, the consent,  approval,  order or authorization of, or
the registration, declaration or filing with, any governmental authority, except
for those (i) set forth on Schedule 3.2(e) or (ii) that become applicable solely
as a result of the actions or status of Edwards US and its affiliates. Except as
set  forth  on  Schedule  3.2(e),  assuming  the  consents,  approvals,  orders,
authorizations,  registrations,  declarations  and filings  contemplated  by the
immediately  preceding  sentence  are  obtained  or  made,  as  applicable,  the
execution,  delivery and  performance  by World Heart of this Agreement will not
(i)  violate  any  material  law  applicable  to  World  Heart  or any of  their
respective  affiliates,  (ii) result in a breach or  violation  of any  material
provision of, or constitute a material default under, any such Contract or (iii)
conflict with any provision of the articles or by-laws of World Heart.

          (f) SEC Reports and Financial Statements. Each form, report, schedule,
registration  statement,  definitive  proxy statement or other document filed by
World  Heart  with the  Securities  and  Exchange  Commission  (the  "SEC") or a
Canadian provincial  securities  regulatory  authority (the "Canadian Securities
Commissions")  since October 8, 1996 (as such  documents  have since the time of
their filing been  amended,  the "World Heart  Reports"),  which include all the
documents  (other than  preliminary  material)  that World Heart was required to
file with the SEC or the Canadian Securities  Commissions since such date, as of
their respective dates,  complied in all material respects with the requirements
of the  Securities  Act or the Exchange Act or  applicable  Canadian  securities
legislation (as such term is defined in National Instrument 14-101 issued by the
Canadian  Securities  Commissions),  as the  case  may  be,  and the  rules  and
regulations of the SEC thereunder  applicable to such World Heart Reports.  None
of the World Heart Reports and Canadian  Securities  directions (as such term is
defined in National  Instrument  14-101)  contained  any untrue  statement  of a
material fact or omitted to state a material fact required to be stated  therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not  misleading,  except for such  statements,  if any, as
have been modified by subsequent filings prior to the date hereof. The financial
statements  of World  Heart  included in such  reports  comply as to form in all
material respects with applicable accounting requirements and with the published
rules and regulations of the SEC and the Canadian  Securities  Commissions  with
respect  thereto,  have been  prepared in  accordance  with  Canadian  generally
accepted accounting principles applied on a consistent basis ("GAAP") during the
periods  involved  (except as may be indicated  in the notes  thereto or, in the
case of the  unaudited  statements,  as permitted by the  Securities  Act or the
Exchange Act) and  reconciled to U.S.  GAAP and fairly  present  (subject in the
case of the unaudited  statements,  to normal,  recurring audit adjustments) the
financial position of World Heart as at the dates thereof and the results of its
operations and cash flows for the periods then ended.

          (g) No Undisclosed  Liabilities.  As of the date hereof, neither World
Heart nor Newco has any  liabilities  of a nature  required  by Canadian or U.S.
GAAP, as  applicable,  to be reflected on a balance  sheet or in notes  thereto,
except (i) as set forth or reflected in the World Heart Reports (or described in
the notes  thereto),  (ii) as disclosed in the  Schedules  hereto,  or (iii) for
liabilities  incurred in the ordinary  course of business  since the date of the
last  audited  balance  sheet  filed  with the SEC and the  Canadian  Securities
Commissions (the "World Heart Balance Sheet Date").

          (h)  Absence of  Certain  Changes  or  Events.  Since the World  Heart
Balance  Sheet Date,  there has been no loss,  occurrence  or event that,  after
taking into account any insurance  recoveries payable in respect thereof,  would
reasonably be expected to result in a World Heart Material Adverse Effect.

          (i) Compliance  with  Applicable  Laws.  Since the World Heart Balance
Sheet Date,  World Heart and Newco have  complied in all material  respects with
all statutes,  laws, regulations and ordinances applicable to them, except where
the failure to so comply would not  reasonably  be expected to result in a World
Heart Material Adverse Effect.

          (j) Litigation; Decrees. Except as set forth on Schedule 3.2(j), as of
the date hereof (i) there is no suit,  action or  proceeding  pending or, to the
knowledge of World Heart,  threatened against World Heart in any federal, state,
provincial  or local  court or  agency  that  seeks (A) more  than  $250,000  in
damages, or (B) any material injunctive relief, and World Heart has not received
written  notice that any such suit,  action or proceeding is threatened and (ii)
neither  World  Heart  nor  any of its  Subsidiaries  is in  default  under  any
judgment, order or decree of any governmental authority applicable to it, except
for any such default which would not reasonably be expected to result in a World
Heart Material Adverse Effect.

          (k)  Environmental  Matters.  To the  knowledge of World Heart,  World
Heart is in substantial compliance with all Canadian federal and provincial laws
governing  pollution or the protection of human health or the  environment  (the
"Environmental Laws"), except where the failure to comply with the Environmental
Laws  would not  reasonably  be  expected  to result in a World  Heart  Material
Adverse Effect.

          (l) Government  Regulations.  World Heart is not subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended,  the Federal Power Act, the Interstate Commerce
Act or any federal or state statute or regulation  limiting its ability to incur
or assume indebtedness for borrowed money.

          (m) Taxes.

               (i) World  Heart is not,  and will not  become as a result of the
transactions  contemplated under this Agreement or other Transaction Agreements,
a  "controlled  foreign  corporation"  within the  meaning of section 957 of the
Code.

               (ii) World  Heart is not,  and will not become as a result of the
transactions  contemplated under this Agreement or other Transaction Agreements,
a "foreign  personal  holding  company" within the meaning of section 552 of the
Code.

               (iii)  World  Heart  has duly  filed on a  timely  basis  all Tax
Returns required to be filed by it and has paid all Taxes due and payable by it.
All  such  Tax  Returns  properly  reflect  and do not in any  material  respect
understate  the  income,  taxable  income or the  liability  for Taxes.  Without
limiting the generality of the foregoing,  World Heart is in compliance with all
registration,   timely  reporting  and  remittance   (including   remittance  of
installments)  obligations  in respect of all such  Taxes.  World  Heart has not
incurred any undisclosed  liability for Taxes in excess of the amounts  reserved
therefor in the books and records of World  Heart.  World Heart has not incurred
any liability for Taxes other than Taxes directly  arising from the operation of
its business in the ordinary course.

               (iv) There are no actions, suits, proceedings,  investigations or
claims  pending or threatened  against World Heart in respect of Taxes,  nor are
any material matters under discussion with any governmental  authority  relating
to Taxes asserted by any such authority, and there are no agreements, waivers or
other arrangements providing for an extension of time with respect to the filing
of any Tax Return by, or payment of any Taxes, governmental charge or deficiency
against, World Heart.

               (v) World Heart has withheld from each payment made to any of its
past or present  employees,  officers or directors,  and to any  non-resident of
Canada,  the amount of all applicable Taxes and other deductions  required to be
withheld  therefrom  and has paid the same to the proper tax or other  receiving
officers within the time required under any applicable  legislation.  (vi) World
Heart has remitted to the  appropriate  tax authority when required by law to do
so all amounts  collected  by it on account of goods and services or other sales
or use taxes.

          (n)  Intellectual  Property.  Except as set forth in  Section  3.2(n),
there are no existing, or, to the knowledge of World Heart,  threatened,  claims
based  on the use by,  or  challenging  the  ownership  of,  World  Heart of any
material trademarks,  copyrights and other intellectual  property rights used or
held for use primarily in World Heart's business (the "World Heart  Intellectual
Property"),  owned,  or  licensed  for use, by World Heart as of the date hereof
that would  reasonably be expected to result in a World Heart  Material  Adverse
Effect.  Except as set forth on Schedule  3.2(n),  World Heart does not have any
knowledge of any infringing use of any World Heart Intellectual  Property by any
other Person.

          (o)  Stockholder  Approval.  All  actions  required to be taken by the
shareholders  of World Heart to approve the  transactions  contemplated  by this
Agreement,  the Transaction Agreements and the Transactions (each, as defined in
the Contribution Agreement) have been taken or will be taken prior to Closing.

          (p) Brokers, Finders, etc. Except for Merrill Lynch & Co., World Heart
is not subject to any valid claim of any broker,  investment  banker,  finder or
other  intermediary  in connection  with the  transactions  contemplated by this
Agreement.  World Heart is solely responsible for any payment, fee or commission
that may be due to  Merrill  Lynch & Co.  in  connection  with the  transactions
contemplated hereby.

          (q) Labor  Matters.  World Heart has no  knowledge  of any  actionable
violation of any Canadian  federal or provincial  law relating to employment and
employment  practices,  discrimination  in  the  hiring,  promotion  or  pay  of
employees,  nor any applicable wage or hour laws, which,  individually or in the
aggregate, would result in a World Heart Material Adverse Effect.

                                   ARTICLE IV
                                    COVENANTS

          SECTION  IV.1.  Conduct of Business of World  Heart.  From the date of
this  Agreement  through the Closing,  World Heart  agrees  that,  except (i) as
disclosed in Schedule 4.1 hereof or (ii) as approved by Edwards US:

          (a) the  business  of  World  Heart  shall  be  conducted  only in the
ordinary and usual course  consistent with past practice,  and World Heart shall
use its reasonable  commercial  efforts to preserve intact the present  business
organization,  to keep  available  the services of its present  officers and key
employees, and preserve the goodwill of those having business relationships with
it;

          (b) World Heart shall not (i) amend its articles or by-laws  except to
create the Shares by filing the articles of  amendment;  (ii) split,  combine or
reclassify any shares of its outstanding  capital stock;  or (iii) declare,  set
aside  or pay any  dividend  or other  distribution  payable  in cash,  stock or
property; and

          (c) World Heart shall not  authorize  for  issuance,  issue or sell or
agree to issue or sell any  shares  of,  or  rights to  acquire  or  instruments
convertible  into any shares of, its capital stock,  except for (i) the issuance
of common  shares of World Heart  ("World  Heart  Common  Shares")  (x) upon the
exercise of World Heart stock options or other rights outstanding on the date of
this  Agreement  (y) upon the exercise of rights  described  in the  immediately
following clause,  and (ii) the issuance of rights pursuant to existing employee
benefit plans or arrangements in a manner consistent with past practice.

          SECTION IV.2. Access to Information.

          (a) During the period  prior to the  Closing  Date,  World Heart shall
afford to the representatives of Edwards US and counsel, accountants,  financial
advisors and lenders,  reasonable access during normal business hours during the
period prior to the Closing Date to all the  properties,  books,  Contracts  and
records of World Heart. Edwards US shall indemnify and hold harmless World Heart
with  respect  to all  liabilities,  and for all  losses,  arising  out of their
respective  representatives'  acts or omissions in  connection  with such access
and, after making any  investigation  of such  properties,  books,  Contracts or
records, Edwards US shall promptly restore such properties, books, Contracts and
records to their condition prior to such investigation.

          (b)  Each  of  World  Heart  and  Edwards  US  acknowledges  that  the
information   being   provided   hereunder   is   subject  to  the  terms  of  a
confidentiality agreement between Edwards US and World Heart, dated February 15,
2000 (the "Confidentiality  Agreement"),  which terms are incorporated herein by
reference.

          SECTION IV.3. Transaction Agreements;  Consents.  Subject to the terms
and  conditions  hereof,  each of Edwards US and World  Heart agree to use their
reasonable  commercial efforts to take, or cause to be taken, all actions and to
do, or cause to be done, all things necessary, proper or advisable to consummate
and make effective as promptly as practicable the  transactions  contemplated by
this  Agreement and to cooperate  with each party hereto in connection  with the
foregoing,  including,  without limitation, (a) the execution of the Transaction
Agreements  and (b) using its  reasonable  commercial  efforts (i) to obtain all
necessary  waivers,  consents  and  approvals  from other  parties to  contracts
material  to  World  Heart,   (ii)  to  obtain  all   consents,   approvals  and
authorizations that are required to be obtained under any federal,  state, local
or  foreign  law or  regulations,  (iii) to  prevent  the  entry,  enactment  or
promulgation  of any  threatened  or  pending  injunction  or order  that  would
adversely   affect  the  ability  of  the  parties   hereto  to  consummate  the
transactions  contemplated  hereby,  (iv) to lift or rescind any  injunction  or
order  adversely  affecting the ability of the parties  hereto to consummate the
transactions  contemplated hereby and (v) to effect all necessary  registrations
and filings, including filings under the HSR Act, and submissions of information
requested by governmental authorities.

          SECTION IV.4. Further  Assurances.  From time to time, whether before,
at, or after the Closing, each party hereto, shall execute and deliver, or cause
to be executed and delivered, all such documents and instruments and shall take,
or cause to be taken,  all such other actions as may be reasonably  necessary to
consummate the transactions contemplated by this Agreement.

          SECTION IV.5. Publicity.  Edwards US and World Heart agree that, prior
to the Closing,  no public release or announcement  concerning the  Transactions
shall be issued by any party without the prior written  consent  (which  consent
shall not be unreasonably  withheld) of the other party,  except as such release
or announcement  may be required by law.  Edwards US and World Heart agree that,
prior to the Closing, no disclosure (other than a public release or announcement
pursuant to the previous sentence) of the terms or provisions of the Transaction
Agreements  shall be made without the prior written consent (which consent shall
not be  unreasonably  withheld) of the other party,  except to  representatives,
advisors,  counsel,  and  lenders  to the  parties  hereto who  acknowledge  the
confidentiality hereof, and except as required by law.

          SECTION IV.6. Required Notices. Between the date of this Agreement and
the Closing Date, World Heart will notify Edwards US of any event of which World
Heart obtains  knowledge  (i) which would  reasonably be expected to result in a
World Heart Material  Adverse Effect (ii) which, if known as of the date hereof,
would have been required  under this  Agreement to be disclosed to Edwards US or
(iii) which  constitutes  notice from any third person alleging that the consent
of such third person is or may be required in connection  with the  transactions
contemplated by this Agreement.

          SECTION IV.7.  Qualified  Electing Fund.  World Heart shall furnish at
its own expense prior to April 30 of each year in respect of the preceding  full
year to Edwards US an annual information statement (the "PFIC Annual Information
Statement") for such taxable year consistent with the  requirements set forth in
Treasury  Regulation  Section  1.1295-1  and  any  successor  provision  that is
prepared  by  PricewaterhouseCoopers   LLP  or  a  similar  accounting  firm  of
international  reputation with comparable  United States tax expertise.  Without
limiting the foregoing,  the PFIC Annual  Information  Statement shall set forth
(A) the  first  and last days of the  taxable  year of World  Heart to which the
information  statement applies, (B) sufficient  information to enable Edwards US
to calculate its pro rata share of the ordinary earnings and net capital gain of
World  Heart,  and (C) the  amount  of cash and the fair  market  value of other
property  distributed  or deemed  distributed  on a per share  basis  during the
taxable year of World Heart, and shall include a statement that World Heart will
permit Edwards US to inspect and copy World Heart's  permanent books of account,
records,  and such other  documents as may be maintained by World Heart that are
necessary to establish that the ordinary  earnings and net capital gain referred
to in (B) above are  computed  in  accordance  with  United  States  income  tax
principles  and to verify these amounts and Edwards US's pro rata share thereof.
World Heart  shall also  provide  such other  information  as (i) is  reasonably
requested  by Edwards US and (ii) as  required  by the  United  States  Internal
Revenue  Service  to  enable  Edwards  US to make a  "qualified  electing  fund"
election under Section 1295 of the Code.


                                    ARTICLE V
                              CONDITIONS PRECEDENT

          SECTION V.1.  Conditions  Precedent to Obligations of World Heart. The
obligation  of  World  Heart  to  issue  the  Shares  shall  be  subject  to the
satisfaction  or  waiver  on  the  Closing  Date  of  the  following  conditions
precedent:

          (a) No Injunctions or Restraints.  No temporary  restraining  order or
preliminary  or permanent  injunction of any court or  administrative  agency of
competent  jurisdiction  prohibiting  the  transactions   contemplated  by  this
Agreement shall be in effect.

          (b) Representations and Warranties. The representations and warranties
of Edwards US set forth in this Agreement (i) which are qualified by materiality
shall be true and  correct in all  respects  or (ii) which are not so  qualified
shall be true and  correct in all  material  respects,  in each case,  as of the
Closing  Date with the same effect as though made on and as of the Closing  Date
and without giving effect to notifications made pursuant to Section 4.6.

          (c)  Performance  of  Obligations of Edwards US. Edwards US shall have
performed  in all  material  respects  its  obligations  under  the  Transaction
Agreements on or prior to the Closing Date.

          (d)  Certificate.  Edwards US shall have  delivered  to World  Heart a
certificate,  dated the Closing Date and signed by a duly  authorized  executive
officer of Edwards  US, to the effect that the  conditions  set forth in Section
5.1(b) and (c) have been satisfied.

          (e) Transaction Agreements. Edwards US shall have entered into each of
the Transaction Agreements.

          SECTION V.2.  Conditions  Precedent to Edwards  US's  Obligation.  The
obligation of Edwards US to consummate the transactions  contemplated  hereunder
is  subject to the  satisfaction  or waiver on the  Closing  Date of each of the
following conditions precedent:

          (a) No Injunctions or Restraints.  No temporary  restraining  order or
preliminary  or permanent  injunction of any court or  administrative  agency of
competent   jurisdiction   prohibiting  the  consummation  of  the  transactions
contemplated hereunder shall be in effect.

          (b) Consents.  All consents,  approvals and waivers from third parties
and  governmental  authorities  and other  parties set forth on Schedule  3.2(e)
shall have been  obtained,  except where the failure to obtain any such consent,
approval or waiver would not  reasonably  be expected to result in a World Heart
Material Adverse Effect.

          (c) Representations and Warranties. The representations and warranties
of  World  Heart  set  forth  in this  Agreement  (i)  which  are  qualified  by
materiality  shall be true and correct in all  respects or (ii) which are not so
qualified shall be true and correct in all material  respects,  in each case, as
of the Closing Date with the same effect as though made on and as of the Closing
Date.

          (d) Performance of Obligations of World Heart.  World Heart shall have
performed in all material  respects its  obligations  under this Agreement on or
prior to the Closing Date.

          (e)  Certificate.  World  Heart shall have  delivered  to Edwards US a
certificate,  dated the Closing Date and signed by a duly  authorized  executive
officer,  to the effect that the conditions set forth in Section 5.2(b), (c) and
(d) have been satisfied.

          (f)  Transaction  Agreements.  World Heart shall have entered into the
Transaction  Agreements  and the  transactions  contemplated  thereby  shall  be
consummated on the Closing Date.

          (g)  Listing.  The  World  Heart  Common  Shares  to  be  issued  upon
conversion  of the World Heart  Preferred  shall have been reserved for issuance
and approved for listing on The Nasdaq  National  Market  System and The Toronto
Stock Exchange,  subject to official  notice of issuance,  the delivery of final
documentation and similar customary listing conditions.


                                   ARTICLE VI
                            SURVIVAL; INDEMNIFICATION

          SECTION VI.1.  Survival.  The representations and warranties contained
in or made  pursuant to this  Agreement  shall survive for a period of 12 months
after  the  Closing  Date;  provided,   however  that  the  representations  and
warranties  set forth in Section  3.2(m) shall  survive  until 60 days after the
expiration of the statute of limitations  applicable thereto. From and after the
Closing, World Heart hereby agrees to indemnify and hold harmless Edwards US, in
each case against  certain  liabilities,  in  accordance  with the terms of this
Article VI. The Indemnifying  Party (as defined below) shall not be obligated to
provide such  indemnification  with respect to representations and warranties to
the  Indemnified  Party (as defined below) unless the  Indemnifying  Party shall
have  received   written  notice  thereof   (including  a  reasonably   detailed
description  of the basis of the claim)  within the  applicable  time period for
survival of such representations or warranty, as set forth above.

          SECTION VI.2. Indemnification. Subject to the other provisions of this
Article VI, from and after the  Closing,  World Heart shall  indemnify  and hold
harmless Edwards US and its employees,  directors and agents,  in each case from
and against any costs or expenses  (including,  without  limitation,  reasonable
attorneys'  fees,  and the reasonable  out-of-pocket  expenses of testifying and
preparing  for  testimony  and  responding  to  document  and other  information
requests, whether or not a party to such litigation),  judgments, fines, losses,
claims (whether or not meritorious) and damages  (collectively,  "Damages"),  as
incurred,  to the extent they  relate to,  arise out of or are the result of any
breach or alleged breach of any representation, warranty or covenant.

          SECTION VI.3. Claims.

          (a) If an indemnified  party (an "Indemnified  Party") intends to seek
indemnification  pursuant  to this  Article  VI,  such  Indemnified  Party shall
promptly notify the indemnifying party (the "Indemnifying  Party"),  in writing,
of such claim  describing such claim in reasonable  detail,  provided,  that the
failure  to  provide  such  notice  shall  not  affect  the  obligations  of the
Indemnifying  Party  unless  and only to the  extent it is  actually  prejudiced
thereby,  subject, however, to the time periods specified in Section 6.1 hereof.
In the event  that such  claim  involves  a claim by a third  party  against  an
Indemnified  Party, the  Indemnifying  Party shall have 30 days after receipt of
such notice to decide whether it will  undertake,  conduct and control,  through
counsel of its own choosing and at its own expense,  the  settlement  or defense
thereof,  and if it so decides, the Indemnified Party shall cooperate with it in
connection  therewith,  provided,  that the Indemnified Party may participate in
such settlement or defense  through counsel chosen by it, and provided  further,
that the  reasonable  fees and  expenses of such  counsel  shall be borne by the
Indemnified Party. The Indemnifying Party shall not, without the written consent
of the  Indemnified  Party (which consent shall not be  unreasonably  withheld),
settle or compromise any action.  If the Indemnifying  Party does not notify the
Indemnified  Party  within  30 days  after the  receipt  of notice of a claim of
indemnity  hereunder  that it elects  to  undertake  the  defense  thereof,  the
Indemnified  Party shall have the right to  contest,  settle or  compromise  the
claim but shall not pay or settle  any such  claim  without  the  consent of the
Indemnifying Party (which consent shall not be unreasonably withheld).

          (b) Edwards US and World Heart shall cooperate fully in all aspects of
any investigation,  defense, pre-trial activities, trial, compromise, settlement
or  discharge of any claim in respect of which  indemnity is sought  pursuant to
Article VI,  including,  but not limited to, by  providing  the other party with
reasonable  access to employees and officers  (including as witnesses) and other
information.

          SECTION VI.4. Duplication. Any liability for indemnification hereunder
shall be determined  without  duplication  of recovery by reason of the state of
facts  giving  rise to such  liability  constituting  a breach  of more than one
representation, warranty, covenant or agreement; provided, however, that subject
to there  being no  duplication  of  recovery,  the  Indemnified  Party shall be
entitled to recover to the maximum extent provided in this Agreement.


                                   ARTICLE VII
                                  MISCELLANEOUS

          SECTION VII.1.  Governing  Law. This  agreement  shall be governed by,
interpreted  under,  and construed in  accordance  with the internal laws of the
State of New York, including, without limitation, Sections 5-1401, 5-1402 of the
New York  General  Obligations  Law and New York Civil  Practice  Laws and Rules
327(b).

          SECTION VII.2. Jurisdiction and Consent to Service. In accordance with
the laws of the State of New York,  and without  limiting  the  jurisdiction  or
venue of any  other  court,  the  parties  (a) agree  that any  suit,  action or
proceeding  arising out of or relating to this  Agreement  may be brought in the
state  or  federal  courts  of  New  York;  (b)  consent  to  the  non-exclusive
jurisdiction of each such court in any suit, action or proceeding relating to or
arising out of this  Agreement;  (c) waive any  objection  which any of them may
have to the laying of venue in any such suit,  action or  proceeding in any such
court and waive any defense of forum non conveniens;  and (d) agree that service
of any court  paper in any such suit,  action or  proceeding  may be made in the
same  manner in which  notices  may be given  pursuant  to  Section  7.3 of this
Agreement.

          SECTION VII.3.  Notices.  All notices,  demands,  requests,  consents,
approvals or other communications required or permitted to be given hereunder or
which are given with respect to this Agreement  shall be in writing and shall be
delivered  (charges  prepaid,  receipt confirmed or return receipt requested (if
available)) by hand, by nationally  recognized air courier service, by certified
mail or facsimile, addressed as set forth below or to such other address as such
party shall have  specified  most  recently by written  notice.  Notice shall be
deemed given and effective (i) if delivered by hand or by nationally  recognized
courier service, when delivered at the address specified in this Section 7.3 (or
in accordance with the latest unrevoked written direction from such party), (ii)
if by certified  mail,  upon  mailing or (iii) if given by  facsimile  when such
facsimile is transmitted to the fax number  specified in this Section 7.3 (or in
accordance  with the  latest  unrevoked  written  direction  from  such  party),
provided the appropriate confirmation is received.


                  To World Heart:

                           World Heart Corporation
                           1 Laser Street
                           Nepean, Ontario
                           K2E 7V1
                           Attn: Chief Financial Officer
                           Fax: (613) 226-4744

                  with a copy (which shall not constitute notice) to:

                           McCarthy Tetrault
                           The Chambers
                           1400-40 Elgin Street
                                    Ottawa, Ontario K1P 5K6
                           Attn:  Robert D. Chapman
                           Fax:  (613) 563-9386

                  To Edwards US:

                           Edwards Lifesciences (US) Inc.
                           One Edwards Way
                           Irvine, California 92614
                           Attn:  Associate General Counsel
                           Fax: (949) 250-2525

                  with a copy (which shall not constitute notice) to:

                           Skadden, Arps, Slate, Meagher & Flom LLP
                           300 South Grand Avenue, Suite 3400
                           Los Angeles, California  90071-3144
                           Attn: Joseph J. Giunta, Esq.
                           Fax:   (213) 687-5600


          SECTION  VII.4.  Interpretation.  When a  reference  is  made  in this
Agreement  to a Section,  Schedule  or  Exhibit,  such  reference  shall be to a
Section,  Schedule or Exhibit of this Agreement unless otherwise indicated. When
a reference is made in this  Agreement to a specific  Schedule,  such  reference
shall be deemed to include,  to the extent applicable,  all the other Schedules.
The table of contents,  table of definitions,  titles and headings  contained in
this  Agreement are for reference  purposes only and shall not affect in any way
the meaning or  interpretation  of this Agreement.  When the words "includes" or
"including" are used in this  Agreement,  they shall be deemed to be followed by
the  words  "without  limitation."  All  accounting  terms not  defined  in this
Agreement shall have the meanings  determined by generally  accepted  accounting
principles  as of the date hereof.  All  capitalized  terms  defined  herein are
equally applicable to both the singular and plural forms of such terms.

          SECTION VII.5. Severability.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held  invalid,  illegal or  unenforceable  in any respect  for any  reason,  the
parties shall negotiate in good faith with a view to the  substitution  therefor
of a suitable  and  equitable  solution  in order to carry out, so far as may be
valid and  enforceable,  the  intent  and  purpose  of such  invalid  provision;
provided,  however,  that the validity,  legality and enforceability of any such
provision  in every other  respect  and of the  remaining  provisions  contained
herein shall not be in any way impaired  thereby,  it being intended that all of
the rights and  privileges  of the parties  hereto shall be  enforceable  to the
fullest extent permitted by law.

          SECTION VII.6. Counterparts.  This Agreement may be executed in one or
more  counterparts,  each of which shall be deemed an original  and all of which
shall,  taken  together,  be  considered  one and the same  agreement,  it being
understood that both parties need not sign the same counterpart.

          SECTION VII.7. Entire Agreement;  No Third Party  Beneficiaries.  This
Agreement and the other  Transaction  Agreements,  including all exhibits hereto
and thereto, by and between Edwards US and World Heart,

          (a) constitute the entire agreement of the parties with respect to the
subject  matter hereof and supersede all prior and  contemporaneous  agreements,
representations,   understandings,  negotiations  and  discussions  between  the
parties, whether oral or written, with respect to the subject matter hereof; and

          (b) this Agreement and the provisions hereof shall be binding upon and
shall  inure  to the  benefit  of  each  of the  parties  and  their  respective
successors  and  permitted  assigns  and is not  intended  to confer any rights,
remedies or benefits on any Persons  other than as  expressly  set forth in this
Section 7.7.

          SECTION VII.8. Further Assurances. Each party hereto shall do all such
further  acts and  execute,  acknowledge,  deliver  and  file  all such  further
instruments and documents as may be necessary or desirable to give effect to and
carry out the  transactions  contemplated by this Agreement,  including,  in the
case of World Heart, such acts, instruments and documents as may be necessary or
desirable  to convey and  transfer  to  Edwards  US the  Shares to be  purchased
hereunder.

          SECTION VII.9. Amendments and Modifications; Waivers and Extensions.

          (a) No amendment,  modification or termination of this Agreement shall
be binding upon any other party unless executed in writing by the parties hereto
intending to be bound thereby.

          (b) Any party to this Agreement may waive any right, breach or default
which such party has the right to waive;  provided  that such waiver will not be
effective  against the waiving party unless it is in writing,  is signed by such
party, and specifically refers to this Agreement. Waivers may be made in advance
or after the right  waived  has  arisen or the  breach  or  default  waived  has
occurred.  Any  waiver  may be  conditional.  No  waiver  of any  breach  of any
agreement  or  provision  herein  contained  shall be  deemed  a  waiver  of any
preceding or succeeding  breach thereof nor of any other  agreement or provision
herein  contained.  No  failure  or  delay in  exercising  any  right,  power or
privilege  hereunder  shall  be  deemed a waiver  or  extension  of the time for
performance  of any other  obligations  or acts nor shall any  single or partial
exercise  thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

          SECTION  VII.10.  Assignment.  Neither this  Agreement  nor any of the
rights,  duties or obligations  hereunder may be assigned or delegated by any of
the parties hereto  without the prior written  consent of World Heart or Edwards
US, as the case may be, which may be withheld in its sole discretion except that
Edwards US may assign all its rights and  obligations to (a) the acquiror of all
or  substantially  all of the  assets of  Edwards US  including  an  acquisition
through merger,  provided that Edwards US shall in no event be released from its
obligations  hereunder  without the prior written consent of World Heart and (b)
the transferee of any of the Shares.  Any attempted  assignment or delegation of
rights,  duties or obligations  hereunder in contravention  hereof shall be void
and of no effect.

          SECTION  VII.11.  Remedies  Cumulative.  The remedies  provided herein
shall be cumulative  and shall not preclude the assertion by any party hereto of
any other  rights or the seeking of any other  remedies  against the other party
hereto.


          SECTION VII.12.  Exhibits. Each of the exhibits referred to herein and
attached hereto is an integral part of this Agreement and is incorporated herein
by reference.

          SECTION  VII.13.  Expenses.  Except  as  otherwise  provided  in  this
Agreement,  each  party to this  Agreement  shall bear its  respective  expenses
incurred in connection with the preparation,  execution, and performance of this
Agreement  and the  transactions  contemplated  hereby,  including  all fees and
expenses of agents, representations, counsel and accountants; provided, however,
the prevailing  party in any legal action brought by one party against the other
party and arising out of this  Agreement  shall be entitled,  in addition to any
other  rights and  remedies  it may have,  to  reimbursement  for its  expenses,
including court costs and reasonable attorneys' fees.

          SECTION VII.14.  Press Releases and Public  Announcements.  All public
announcements or disclosures  relating to the transactions  contemplated  hereby
shall be made only if mutually agreed upon by World Heart and Edwards US, except
to the extent  such  disclosure  is, in the  opinion  of  counsel,  required  by
applicable law;  provided that any such required  disclosure shall only be made,
to the extent consistent with applicable law, after  consultation with the other
party.


          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.


                             WORLD HEART CORPORATION


                             By:   /s/ Roderick M. Bryden
                                ------------------------------------------------
                                Name:   Roderick M. Bryden
                                Title:  President and Chief Executive Officer




                             EDWARDS LIFESCIENCES (US) INC.



                             By:      /s/ Michael A. Mussallem
                                ------------------------------------------------
                                Name:   Michael A. Mussallem
                                Title:  President and Chief Executive Officer




<PAGE>

                                                                 Schedule 3.2(b)


WorldHeart and/or Newco Subsidiaries (other than Newco)

None.



<PAGE>


                                                                 Schedule 3.2(d)
Capital Stock

Capitalization of WorldHeart (In Canadian S)

                                                                  March 31, 2000
                                                                    (Unaudited)


Shareholders' equity
         Common shares - unlimited number authorized                  72,879,220
                                                                     (15,023,402
                                                                  common shares)

         Preferred shares - issuable in series, unlimited
         number authorized, none issued


<PAGE>

                                                     Schedule Schedule 3.2(d)(i)

Common shares authorized, issued and outstanding

(a) Authorized

Authorized  capital stock of the Corporation  consists of an unlimited number of
common shares and an unlimited number of preferred shares issuable in series.

(b) Outstanding

There are 15,023,751 common shares outstanding.


<PAGE>

                                                    Schedule Schedule 3.2(d)(ii)


Options,   Warrants,   Calls,   Pre-emptive  rights,   Voting  debts,  or  other
arrangements

Warrants

                                           Issued        Exercised       Balance

IPO-1996
                Cdn Underwriter             75,000                       75,000
                US Underwriter             200,000   (50,729)           149,271

Special Warrants - 1998
                US IPO Underwriter          35,000                       35,000
                Cdn. Underwriter            83,720   (83,720)                 0
                Cdn. Underwriter           125,580   (36,400)            89,180

Bought deal - 2000
                Cdn Underwriter             85,000                       85,000
                                           519,300   (170,849)          348,451

Stock Options
                             1996                                        37,800
                             1997                                        36,500
                             1998                                       140,002
                             1999                                       258,901
                             2000                                       182,288

                                                                        -------
                                                                        655,491
                                                                        -------

No other arrangements exist relating to the issued or unissued capital stock of
WorldHeart.



<PAGE>
                                                             Schedule 3.2(d)(iv)

Voting Trusts or other agreements

Shareholders  Agreement  dated April 1, 1996 among  Roderick M. Bryden,  Michael
C.J. Cowpland, Dr. Tofy Mussivand,  Ottawa Heart Institute Research Corporation,
and World Heart Corporation.



<PAGE>

                                                                 Schedule 3.2(e)

Material Contracts re - consent

None.



<PAGE>


                                                                 Schedule 3.2(j)


Litigation

The Corporation filed a complaint against Abiomed,  Inc. in the Federal District
Court for the District of Delaware on January 20, 1998.  The complaint was based
on alleged breach of contract,  misappropriation of trade secrets, conversion of
trade secrets and patent  infringement  relating to the  Corporation's  patented
transcutaneous  energy  transfer  technology.  Abiomed,  Inc.  filed a motion to
include a counterclaim  alleging that the Corporation  misappropriated its trade
secrets.  Prior to the trial, the Corporation dropped its claim against Abiomed,
Inc.  for  patent   infringement.   On  February  4,  2000,  the  trial  of  the
Corporation's  complaint  concluded  with the jury finding in favour of Abiomed,
Inc.  The  effect  of  the  decision  is  to  determine  that  Abiomed,   Inc.'s
transcutaneous  energy  transfer  system does not incorporate or rely upon trade
secrets  which  belong to the  Corporation.  The  decision  does not  affect the
Corporation's  ownership of its own TET technology.  The Corporation has filed a
motion to set aside the decision,  sanction Abiomed,  Inc. and seek a new trial.
As of March 3, 2000, Abiomed,  Inc. has withdrawn all counterclaims  against the
Corporation.



<PAGE>

                                                                 Schedule 3.2(n)

Infringement of intellectual property

See schedule 3.2(j).


<PAGE>
                                                                    Schedule 4.1

Conduct of Business of WorldHeart

Special grant of 150,000 options for common shares to WorldHeart and Novacor LLC
employees.


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                                    EXHIBIT I

          The first series of preferred  shares shall be  designated  Cumulative
Redeemable  Convertible  Preferred Shares,  Series A (the "Series A Shares") and
shall  have   attached   thereto,   in  addition  to  the  rights,   privileges,
restrictions,  conditions and limitations attaching to the Preferred Shares as a
class,  the following  rights,  privileges,  restrictions  and  conditions  (the
"Series A Provisions"):

1 General

1.1 Definitions

          Where  used in these  Series A  Provisions,  the  following  words and
phrases shall,  unless there is something in the context otherwise  inconsistent
therewith, have the following meanings, respectively:

          (1)  "business  day" means a day other than a Saturday,  Sunday or any
               other day when banks in the  municipality  in Canada in which the
               Corporation's  registered  office is then situated are authorized
               by applicable laws to be closed;

          (2)  "Common  Shares" means common shares of the  Corporation  as such
               shares  were  constituted  on o, 2000,  or as such  shares may be
               changed from time to time,  provided  that any  adjustment in the
               Conversion Rate required by clause 3.5 hereof has been made;

          (3)  "close  of  business"  means  the  normal  closing  hour  of  the
               principal  office of the  transfer  agent for the  Common  Shares
               located nearest to the registered office of the Corporation;

          (4)  "Conversion  Rate" at any time means the number of Common  Shares
               into  which one Series A Share may be  converted  at such time in
               accordance with the provisions of section 3;

          (5)  "Current Market Price" of the Common Shares on any date means the
               arithmetic  weighted  average  of board lot  prices  for sales of
               Common  Shares  on The  Toronto  Stock  Exchange  and the  Nasdaq
               National  Market  (with  prices  on The  Toronto  Stock  Exchange
               converted  into  United  States  dollars at the noon  buying rate
               certified  by the New  York  Federal  Reserve  Bank  for  customs
               purposes  on such  date) or, if the  Common  Shares  are not then
               listed and posted for  trading on The Toronto  Stock  Exchange or
               the Nasdaq National Market,  on such stock exchange on which such
               shares are listed and posted for trading and on which such shares
               are most actively traded,  during the 20 consecutive trading days
               ending on a date not earlier  than the 5th trading day  preceding
               such date,  provided  that in the event the Common Shares are not
               listed on any stock  exchange  the Current  Market Price shall be
               determined by an independent  investment  dealer  selected by the
               directors which determination shall be conclusive;

          (6)  "Deferred  Dividend  Amount" in respect of a Series A Share means
               an amount calculated and compounded semi-annually on the dividend
               payment  dates  determined  at a rate of 5% per annum  during the
               Initial  Dividend  Period and at a rate 10% per annum  during the
               Subsequent  Dividend Period on the aggregate of (i) the amount of
               all preferential  cumulative dividends that have not been paid on
               such Series A Share on the  scheduled  dividend  payment  date or
               dividend  payment  dates,  whether  or not  such  dividends  were
               declared, for so long as such dividends remain accrued and unpaid
               from time to time and (ii) the Deferred  Dividend Amount that has
               accumulated in prior calculation  periods and remains unpaid; the
               period  from and  including a dividend  payment  date to, but not
               including,  the  next  dividend  payment  date is a  "calculation
               period" for the purposes of this definition;

          (7)  "director" means a director of the Corporation for the time being
               and  "directors"  or  "board  of  directors"  means  the board of
               directors  of  the  Corporation  or,  if  duly   constituted  and
               empowered,  the executive  committee of the board of directors of
               the  Corporation  for the  time  being,  and  reference,  without
               further  elaboration,  to action by the  directors  means  either
               action by the directors of the  Corporation  as a board or action
               by the said executive committee as such committee;

          (8)  "herein", "hereto",  "hereunder",  "hereof", "hereby" and similar
               expressions mean or refer to these Series A Provisions and not to
               any particular section, clause, subclause, subdivision or portion
               hereof, and the expressions  "section",  "clause" and "subclause"
               followed by a number or a letter mean and refer to the  specified
               section, clause or subclause hereof;

          (9)  "Initial  Issue  Date" means the first date on which any Series A
               Shares are issued and outstanding;

          (10) "Junior Shares" means any shares of the Corporation ranking after
               or  subordinate  to the  Series A  Shares  as to the  payment  of
               dividends or the return of capital,  including,  without limiting
               the generality of the foregoing, the Common Shares;

          (11) "Liquidation Distribution" means the liquidation,  dissolution or
               winding-up of the Corporation,  whether voluntary or involuntary,
               or any other  distribution of assets of the Corporation among its
               shareholders for the purpose of winding up its affairs;

          (12) "ranking as to capital" means ranking or priority with respect to
               the  distribution  of  assets  in  the  event  of  a  Liquidation
               Distribution;

          (13) "Series  A  Holder"  means a person  recorded  on the  securities
               register of the Corporation as being the registered holder of one
               or more Series A Shares;

          (14) "trading day" means any day on which The Toronto  Stock  Exchange
               or the Nasdaq  National Market are open for business and on which
               one or more  board  lots of the  relevant  class of shares of the
               Corporation are traded on either or both such exchanges; and

          (15) "transfer agent" means the corporation or corporations  from time
               to time  appointed by the directors as the transfer agent for the
               Series  A  Shares  and,  in the  event  that  no such  person  is
               appointed, "transfer agent" means the Corporation.

1.2 Gender, etc.

          Words  importing only the singular  number include the plural and vice
versa and words importing any gender include all genders.

1.3 Currency

          All  monetary  amounts  referred to herein shall be in lawful money of
the United States of America.

1.4 Headings

          The  division of these  Series A Provisions  into  sections,  clauses,
subclauses  or  other  subdivisions  and  the  insertion  of  headings  are  for
convenience  of  reference  only  and  shall  not  affect  the  construction  or
interpretation hereof.

1.5  Business Day

          In the event  that any date upon which any  dividends  on the Series A
Shares are payable by the  Corporation,  or upon or by which any other action is
required to be taken by the Corporation or any Series A Holder hereunder, is not
a business day,  then such dividend  shall be payable or such other action shall
be  required  to be taken on or by the next  succeeding  day which is a business
day.

1.6 Business  Corporations Act (Ontario)

          These Series A Provisions  shall be governed by and are subject to the
applicable  provisions  of the  Business  Corporations  Act  (Ontario),  as such
statute may from time to time be amended,  varied,  replaced or re-enacted  (the
"OBCA") and all other laws binding upon the Corporation and, except as otherwise
expressly  provided herein,  all terms used herein which are defined in the OBCA
shall have the respective meanings ascribed thereto in the said Act.

2 Dividends

2.1 Declaration and Payment of Dividends

2.2 The  holders  of  Series  A Shares  shall be  entitled  to  receive  and the
Corporation  shall pay thereon,  as and when declared by the board of directors,
preferential cumulative cash dividends at the rate per Series A Share (a) during
the period from the Initial Issue Date to the third  anniversary  of the Initial
Issue Date (the  "Initial  Dividend  Period")  at a rate per annum  equal to the
greater of (i) $0.7275 and (ii) the amount that would have been paid during such
period  if such  Series A Share had been  converted  into  Common  Shares at the
Conversion  Rate  immediately  prior  to the  start  of  such  period,  and  (b)
thereafter (the "Subsequent  Dividend  Period") at a rate per annum equal to the
greater of (iii)  $1.455 and (iv) the  amount  that would have been paid  during
such period if such Series A Share had been  converted into Common Shares at the
Conversion  Rate  immediately  prior to the start of such period.  To the extent
that non-cash dividends have been paid on the Common Shares during a period, the
amount payable under (ii) and (iv) above shall include the cash equivalent value
of such  non-cash  dividends  determined  as of the date payment was made to the
holders of Common  Shares.  Such  dividends  shall accrue from and including the
date of issue of such  shares and,  subject as  hereinafter  provided,  shall be
payable  semi-annually  on the o day of each of o and o in each  year  (each  of
which dates is hereinafter  referred to as a "dividend payment date"). The first
dividend payment date shall be ___, 2000.

2.3 Amount of Dividend

          The amount of the  dividend  for any period  which is less than a full
half-year with respect to any Series A Share:

          (i)  which is issued, redeemed or purchased; or

          (ii) where assets of the  Corporation  are distributed to the Series A
               Holders pursuant to section 7 hereof;

shall be equal to the amount calculated by multiplying the annual dividend
entitlement contemplated in section 2.1 for the relevant period by a fraction
the numerator of which is the number of days in such half-year for which such
share has been outstanding (including the dividend payment date at the beginning
of such half-year if such share was outstanding on that date and excluding the
next succeeding dividend payment date if such share was outstanding on that
date), and the denominator of which is 365.

          The amount of the  dividend  payable in respect of each Series A Share
on the first  dividend  payment date  following  the Initial Issue Date shall be
that  proportion  of $0.36375  which the number of days from and  including  the
Initial Issue Date to but excluding  such dividend  payment date is to the total
number of days in the six  month  period  immediately  preceding  such  dividend
payment  date.

2.4  Cumulation  of Dividends

          If on any dividend  payment date a dividend  accrued to and payable on
such  date  is not  paid  in  full  on the  Series  A  Shares  then  issued  and
outstanding,  the  dividend  or the  unpaid  part  thereof  shall  be  paid on a
subsequent  date as determined  by the board of directors.  The Series A Holders
shall  not  be  entitled  to  any  dividends  other  than  or in  excess  of the
preferential  cumulative dividends provided for in this section 2.

2.5 Method of Payment

          Any  dividends  declared  on the  Series  A  Shares  shall  be paid by
forwarding  by  pre-paid  first  class  mail,  mailed on or before the  dividend
payment date,  addressed to each Series A Holder at its address as it appears on
the books of the Corporation or, in the case of joint holders, to the address of
that one of the  joint  holders  whose  name  stands  first in the  books of the
Corporation, a cheque for such dividends (less the amount of any tax required to
be deducted or withheld by the  Corporation)  payable to or to the order of such
holder (or, in the case of joint  holders,  registered  in the name of, all such
holders,   failing   written   instructions   from   them   to  the   contrary).
Notwithstanding the foregoing,  any dividend cheque may be delivered to a Series
A Holder at its address as aforesaid. The mailing or delivery of any such cheque
in the foregoing  manner shall  satisfy such  dividends to the extent of the sum
represented  by such cheque  (plus the amount of any tax required to be deducted
or withheld as aforesaid)  unless such cheque is not paid on presentation.  Each
dividend  on the  Series  A  Shares  shall  be  paid to the  registered  holders
appearing on the registers at the close of business on such day (which shall not
be more than 30 days  preceding the date fixed for payment of such  dividend) as
may be  determined in advance from time to time by the  directors.

3 Conversion

3.1 Right to Convert

          Upon and subject to the terms and  conditions  hereinafter  set forth,
the holders of Series A Shares  shall have the right,  at any time and from time
to time,  commencing on the earlier of (i) the sixth  anniversary of the Initial
Issue  Date  and (ii) the  third  anniversary  of the  Initial  Issue  Date if a
take-over bid (as defined in the  Securities Act (Ontario)) is announced for the
Common  Shares  or  if  the  Corporation  agrees  to  participate  in a  Capital
Reorganization  (as defined in  subclause  3.5.4.  below),  and ending up to the
close of business on ___,  2007,  or, in the case of Series A Shares  called for
redemption  after the Series A Shares have become  convertible,  to the close of
business  on  the  business  day  immediately   preceding  the  date  fixed  for
redemption,  whichever is earlier  (provided,  however,  that if the Corporation
shall  fail to redeem  such  Series A Shares in  accordance  with the  notice of
redemption the right of conversion  shall  thereupon be restored as if such call
for redemption had not been made),  to convert all or any part of their Series A
Shares into fully paid and non-assessable  Common Shares, at the Conversion Rate
in effect on the date of  conversion.  Unless and until  adjusted in  accordance
with these Series A Provisions,  the  Conversion  Rate shall be one Common Share
for each Series A Share to be converted.

3.2 Conversion Procedure

          The  conversion  right  provided for in clause 3.1 may be exercised by
completing  and  executing  the  notice  of  conversion  on the  certificate  or
certificates  representing  the  Series A Shares in  respect of which the holder
thereof  desires to exercise such right of conversion and by delivering the said
certificate or certificates to the transfer agent for the Series A Shares at any
office for the  transfer of the Series A Shares.  The said notice of  conversion
shall be signed by such holder or by his duly authorized attorney or agent, with
signature  guaranteed in a manner  satisfactory  to the transfer agent and shall
specify the number of Series A Shares which the Series A Holder  desires to have
converted. The transfer form in the certificate or certificates in question need
not be endorsed, except in the circumstances contemplated by clause 3.3. If less
than all the Series A Shares represented by a certificate or certificates are to
be converted,  the Series A Holder shall be entitled to receive,  at the expense
of  the  Corporation,  a  new  certificate  representing  the  Series  A  Shares
represented by the  certificate or  certificates  surrendered as aforesaid which
are not to be converted.

3.3 Person to Whom Common Shares Will be Issued

          On any conversion of Series A Shares the share certificates for Common
Shares resulting  therefrom shall be issued at the expense of the Corporation in
the name of the  registered  holder of the Series A Shares  converted or in such
name or names as such  registered  holder may direct in writing,  provided  that
such registered holder shall pay any applicable  security transfer taxes. In any
case where the Common Shares are to be issued in the name of a person other than
the holder of the  converted  Series A Shares,  the transfer form on the back of
the  certificates in question shall be endorsed by the registered  holder of the
Series A  Shares  or its duly  authorized  attorney  or  agent,  with  signature
guaranteed in a manner satisfactory to the transfer agent.

 3.4 Effective Date of Conversion

          Each Series A Holder  whose  shares are to be converted in whole or in
part (or any other  person or persons  in whose  name or names any  certificates
representing Common Shares are issued as provided in clause 3.3) shall be deemed
to have become the holder of record of the Common  Shares into which such Series
A Shares are converted,  for all purposes, on the respective dates of receipt by
the transfer agent of the certificate or certificates  representing the Series A
Shares to be converted as provided in clause 3.2,  notwithstanding  any delay in
the delivery of the certificate or certificates  representing  the Common Shares
into which such Series A Shares have been  converted  and,  effective  as of and
throughout  such  respective  dates,  the  Series  A  Holder  shall  cease to be
registered  as the  holder of record of the  Series A Shares so  converted.

3.5  Adjustment of Conversion Rate

     3.5.1 If and  whenever  at any time and from  time to time the  Corporation
shall: (i) subdivide, redivide or change its then outstanding Common Shares into
a greater number of Common Shares; (ii) reduce, combine or consolidate or change
its then  outstanding  Common Shares into a lesser number of Common  Shares;  or
(iii) issue Common Shares (or securities exchangeable or convertible into Common
Shares)  to the  holders  of all or  substantially  all of its then  outstanding
Common Shares by way of stock dividend or other distribution (other than a stock
dividend paid in the ordinary  course) (any of such events being herein called a
"Common Share Reorganization"),  the Conversion Rate shall be adjusted effective
immediately  after the record  date at which the  holders  of Common  Shares are
determined for the purpose of the Common Share Reorganization by multiplying the
Conversion Rate in effect on such record date by the quotient obtained when:

          (A)  the number of Common Shares  outstanding  after the completion of
               such Common Share Reorganization (but before giving effect to the
               issue  of  any  Common  Shares  issued  after  such  record  date
               otherwise  than  as part of  such  Common  Share  Reorganization)
               including,   in  the  case  where   securities   exchangeable  or
               convertible  into Common  Shares are  distributed,  the number of
               Common  Shares  that  would  have  been   outstanding   had  such
               securities  been exchanged for or converted into Common Shares on
               such record date, is divided by

          (B)  the  number of Common  Shares  outstanding  on such  record  date
               before giving effect to the Common Share Reorganization.

     3.5.2 If and whenever at any time the Corporation shall fix the record date
for the  issuance  of  rights,  options  or  warrants  to the  holders of all or
substantially  all of its outstanding  Common Shares entitling them for a period
expiring  no more than 45 days after such  record  date to  subscribe  for or to
purchase Common Shares (or securities of the Corporation convertible into Common
Shares) at a price per Common  Share (or  having a  conversion  price per Common
Share) of less than 95% of the Current  Market  Price of a Common  Share on such
record date (any such event being  herein  referred to as a "Rights  Offering"),
then the Conversion Rate then in effect shall be adjusted immediately after such
record date by multiplying  the Conversion Rate in effect on such record date by
the quotient obtained when:

          (A)  the sum of the number of Common Shares outstanding on such record
               date and the  number of  additional  Common  Shares  offered  for
               subscription or purchase under the Rights Offering (or the number
               of  Common  Shares  into  which the  securities  so  offered  are
               convertible)  is  divided  by

          (B)  the sum of the number of Common Shares outstanding on such record
               date and a number  determined by dividing the aggregate  price of
               the  total  number  of  additional   Common  Shares  offered  for
               subscription  or  purchase  under  the  Rights  Offering  (or the
               aggregate  conversion  price  of the  convertible  securities  so
               offered) by the Current  Market Price of a Common  Shares on such
               record date.

          Any Common Shares owned by or held for the account of the  Corporation
shall be deemed not to be outstanding  for the purpose of any such  computation.
If such  rights,  options  or  warrants  are not so issued or if, at the date of
expiry of the rights,  options or warrants subject to the Rights Offering,  less
than  all the  rights,  options  or  warrants  have  been  exercised,  then  the
Conversion  Rate shall be  readjusted  effective  immediately  after the date of
expiry to the  Conversion  Rate which  would have been in effect if such  record
date had not been fixed or to the Conversion  Rate which would then be in effect
on the date of expiry if the only  rights,  options or warrants  issued had been
those that were exercised, as the case may be.

     3.5.3 If and whenever at any time the  Corporation  shall fix a record date
for the  making of a  distribution  (including  a  distribution  by way of stock
dividend)  to the holders of all or  substantially  all its  outstanding  Common
Shares of: (i) shares of the  Corporation  of any class other than Common Shares
(and shares convertible into Common Shares referred to in subclause 3.5.1); (ii)
rights,  options or warrants  (excluding a Rights Offering,  rights,  options or
warrants exercisable within 45 days of the record date having a conversion price
per Common Share equal to or greater than 95% of the then Current Market Price);
(iii) evidences of its  indebtedness  (excluding  indebtedness  convertible into
Common Shares referred to in subclause  3.5.1);  or (iv) assets (other than with
respect to (i),  (ii),  (iii) and (iv)  above,  dividends  paid in the  ordinary
course and a Common Share  Reorganization) (any such event being herein referred
to as a "Special  Distribution")  then, in each such case, the  Conversion  Rate
shall be  adjusted  effective  immediately  after the  record  date at which the
holders  of  Common  Shares  are  determined  for the  purposes  of the  Special
Distribution by multiplying the Conversion Rate in effect on such record date by
the quotient obtained when:

          (A)  the product obtained when the number of Common Shares outstanding
               on the record date is multiplied by the Current Market Price of a
               Common Share on such date, is divided by

          (B)  the  difference  obtained  when the amount by which the aggregate
               fair market value (as determined by the board of directors, which
               determination  shall  be  conclusive)  of  the  shares,   rights,
               options,  warrants,  evidences of indebtedness or assets,  as the
               case may be, distributed in the Special  Distribution exceeds the
               fair market value (as determined by the board of directors, which
               determination shall be conclusive) of the consideration,  if any,
               received  therefor by the  Corporation,  is  subtracted  from the
               product obtained when the number of Common Shares  outstanding on
               the record date is  multiplied  by the Current  Market Price of a
               Common Share on such date,

provided that no such adjustment  shall be made if the result of such adjustment
would be to  decrease  the  Conversion  Rate in effect  immediately  before such
record  date.  Any  Common  Shares  owned  by or  held  for the  account  of the
Corporation  shall be deemed not to be  outstanding  for the purpose of any such
computation.  Such adjustment shall be made successively  whenever such a record
date is  fixed.  To the  extent  that  such  distribution  is not so  made,  the
Conversion Rate shall be readjusted effective immediately to the Conversion Rate
which  would  then be in effect  based upon such  shares or  rights,  options or
warrants or evidences of indebtedness or assets actually  distributed.

     3.5.4 If and whenever there is a capital  reorganization of the Corporation
not  otherwise  provided  for in this  clause  3.5 or a  consolidation,  merger,
arrangement or amalgamation  (statutory or otherwise) of the Corporation with or
into   another  body   corporate   (any  such  event  being  called  a  "Capital
Reorganization"),  any  Series  A  Holder  who has not  exercised  its  right of
conversion  prior to the record date for such  Capital  Reorganization  shall be
entitled to receive  and shall  accept,  upon the  exercise of such right at any
time  after the  record  date for such  Capital  Reorganization,  in lieu of the
number of Common Shares to which it was  theretofore  entitled upon  conversion,
the aggregate  number of shares or other securities of the Corporation or of the
corporation  or body  corporate  resulting,  surviving  or  continuing  from the
Capital Reorganization that such holder would have been entitled to receive as a
result of such Capital  Reorganization  if, on the record date,  it had been the
registered  holder of the  number of Common  Shares to which he was  theretofore
entitled upon  conversion,  subject to adjustment  thereafter in accordance with
provisions the same, as nearly as may be possible, as those contained in clauses
3.5 and 3.6; provided that no such Capital  Reorganization shall be carried into
effect  unless all  necessary  steps  shall have been taken so that the Series A
Holders  shall  thereafter be entitled to receive such number of shares or other
securities of the Corporation or of the corporation or body corporate resulting,
surviving or continuing from the Capital Reorganization.

     3.5.5 In the case of any  reclassification  of,  or other  change  in,  the
outstanding Common Shares other than a Common Share  Reorganization or a Capital
Reorganization,  the right of conversion shall be adjusted immediately after the
record date for such  reclassification  or other change so that Series A Holders
shall be entitled to receive,  upon the exercise of such right at any time after
the  record  date  of  such  reclassification  or  other  change,  such  shares,
securities  or rights as they would have  received had such Series A Shares been
converted  into Common Shares  immediately  prior to such record date subject to
adjustment  thereafter in accordance with provisions,  the same as nearly may be
possible, as those contained in clauses 3.5 and 3.6.

     3.5.6 In the event that one or more preferential  cumulative  dividends are
not paid on the Series A Shares on the scheduled  dividend payment date, whether
or not such dividend or dividends were declared,  and such dividend or dividends
remain accrued but unpaid or there is a Deferred  Dividend  Amount in respect of
such Series A Share,  at the time that a Series A Holder  exercises his right to
convert  such Share,  the  Conversion  Rate for each Series A Share so converted
shall be adjusted  effective on the base of  conversion by  multiplying  (a) the
Conversion Rate in effect immediately prior to the time of conversion by (b) the
quotient  obtained when (i) the sum of (A)$14.55  plus (B) the amount of accrued
but  unpaid  dividends  on such  Series A Share plus (C) the  Deferred  Dividend
Amount in respect of such Series A Share, is divided by (ii) $14.55.

3.6 Rules for Adjustment of Conversion  Rate

          The  following  rules  and  procedures  shall  be  applicable  to  the
adjustments  of the  Conversion  Rate made pursuant to clause 3.5:

     3.6.1 If the purchase price provided for in any rights, options or warrants
(the  "Rights  Offering  Price")  referred  to in  subclauses  3.5.2 or 3.5.3 is
decreased,  the Conversion Rate shall forthwith be changed so as to increase the
Conversion  Rate to such  Conversion  Rate as would have been  obtained  had the
adjustment to the Conversion Rate made pursuant to subclauses 3.5.2 or 3.5.3, as
the case may be with respect to such rights,  options or warrants been made upon
the  basis of the  Rights  Offering  Price as so  decreased,  provided  that the
provisions of this subclause 3.6.1 shall not apply to any decrease in the Rights
Offering Price resulting from provisions in any such rights, options or warrants
designed to prevent  dilution if the resulting  increase in the Conversion  Rate
under this  subclause  3.6.1 is not greater  than the  increase,  if any, in the
Conversion  Rate to be made  pursuant  to the  provisions  of this  section 3 by
virtue of the occurrence of the event giving rise to such decrease in the Rights
Offering  Price;

     3.6.2 No  adjustment  in the  Conversion  Rate shall be required  unless an
increase or decrease of at least one per cent of the prevailing  Conversion Rate
would result;  provided,  however,  that any  adjustment  which,  except for the
provisions  of this  subclause  3.6.2 would  otherwise  have been required to be
made,  shall be  carried  forward  and  taken  into  account  in any  subsequent
adjustment;

     3.6.3 No  adjustment  in the  Conversion  Rate  shall be made  pursuant  to
subclauses  3.5.2  or 3.5.3 in  respect  of any  rights,  options,  warrants  or
distributions if identical rights, options, warrants or shares are issued to the
holders of the  Series A Shares as though and to the same  effect as if they had
converted  their  Series A Shares into Common  Shares prior to the issue of such
rights, options, warrants or shares;

     3.6.4 In the absence of a resolution of the directors  fixing a record date
for a Special Distribution or a Rights Offering, the Corporation shall be deemed
to have  fixed  as the  record  date  therefor  the date on  which  the  Special
Distribution  or  Rights  Offering  is  effected;

     3.6.5  Forthwith   after  any  adjustment  in  the  Conversion   Rate,  the
Corporation shall file with the transfer agent of the Corporation for the Series
A Shares a  certificate  of an officer of the  Corporation  certifying as to the
amount of such adjustment and, in reasonable detail, the event requiring and the
manner of computing such  adjustment;  the  Corporation  shall also at such time
mail,  by prepaid first class mail, a copy of such  certificate  to the Series A
Holders;  and

     3.6.6  Any  question  that at any  time or from  time to time  arises  with
respect to the Conversion Rate or any adjustment in the amount of the Conversion
Rate or the  amount of any cash  payment  made in lieu of  issuing a  fractional
share shall be conclusively  determined by the auditors from time to time of the
Corporation  and shall be binding  upon the  Corporation  and all  shareholders,
transfer  agents  and  registrars  of Series A Shares  and  Common  Shares.

3.7  Entitlement  to  Dividends

          Each  Series A Holder on the  record  date for any  dividend  declared
payable  on  the  Series  A  Shares   shall  be   entitled   to  such   dividend
notwithstanding  that any Series A Share  owned by him is  converted  after such
record date and before the payment date of such dividend.  The registered holder
of any Common Share  resulting  from any  conversion  effected  pursuant to this
section 3 shall be entitled to rank equally with the  registered  holders of all
other Common Shares in respect of all dividends  declared  payable to holders of
Common Shares of record on or after the date of  conversion.  Except as provided
in clauses 3.5 and 3.7, no  adjustment  will be made on account of any  dividend
declared  or  accrued  prior to the date of  conversion,  on the Series A Shares
converted or the Common  Shares  resulting  from any  conversion.

3.8 Notice of Certain  Events

          If the  Corporation  intends to fix a record date for any Common Share
Reorganization  (other than a subdivision,  consolidation or  reclassification),
Rights Offering, Special Distribution or Capital Reorganization, the Corporation
shall,  not less than 21 days prior to such  record  date,  notify each Series A
Holder of such intention by written notice setting forth the particulars of such
Common Share  Reorganization,  Rights Offering,  Special Distribution or Capital
Reorganization  in reasonable  detail,  to the extent that such particulars have
been determined at the time of giving of the notice.

3.9 Avoidance of Fractional Shares

          In any case where a fraction of a Common  Shares  would  otherwise  be
issuable on conversion of one or more Series A Shares, the Corporation shall, at
its option,  either: (i) adjust such fractional interest by payment by cheque in
an amount equal to the then current market value of such fractional interest; or
(ii) issue in  respect of such  fraction  a scrip  certificate  transferable  by
delivery  entitling  the  holder  thereof  and  of  other  similar  certificates
aggregating one full Common Share,  upon surrender of such  certificates at such
place as may be designated therein, to obtain from the Corporation a full Common
Share and to receive a share certificate therefor; such cheques shall be payable
to the holders thereof in lawful money of the United States of America at par at
any  branch of the  Corporation's  bankers  for the time  being  and such  scrip
certificates  shall be in such  form and  shall be  subject  to such  terms  and
conditions  as the  directors  may  determine  and shall provide that the holder
thereof shall not thereby be a shareholder  and shall not be entitled to receive
dividends  or to any  other  rights  of a  shareholder.  The  amount of any cash
adjustment  shall equal the Current  Market Price of such  fractional  interest.
When scrip certificates are issued such scrip certificates may contain,  without
limitation, provisions to the effect that, after the expiration of one year from
their date of  issuance,  the  Corporation  may sell or cause to be sold all the
shares then represented by unsurrendered  scrip certificates and the sole rights
of the holders of the scrip  certificates  after the  expiration  of said period
shall be, against surrender of their scrip  certificates,  to receive payment of
their  proportionate  amount of the net  proceeds  of such sale,  less taxes and
costs of sale, payable by cheque in lawful money of the United States of America
at par at any branch of the Corporation's  bankers for the time being. If a cash
adjustment or a proportionate amount of the net proceeds of a sale is to be paid
pursuant to the  provisions  of this clause  3.9,  the mailing by prepaid  first
class  mail  from the  Corporation's  registered  office  or any  office  of the
registrar  for the  Series A Shares to a Series A Holder who has  exercised  its
right to convert,  at its last address as shown on the books of the Corporation,
shall be deemed to be payment of the cash adjustment or the proportionate amount
of the  net  proceeds  of a  sale,  as the  case  may be,  resulting  from  such
fractional interest,  unless the cheque is not paid upon due presentation.  Cash
adjustments or proportionate  amounts that are represented by a cheque which has
not been  presented to the  Corporation's  bankers for payment or that otherwise
remain  unclaimed  for a period  of six  years  from the date on which  the same
became  payable  shall be forfeited to the  Corporation.

3.10  Postponement  of Issuance  of Shares upon  Conversion

          In any case where the application of the foregoing  provisions results
in an increase of the Conversion Rate taking effect immediately after the record
date for a  specific  event,  if any Series A Shares  are  converted  after that
record date and prior to completion of the event,  the  Corporation may postpone
the issuance to the Series A Holder of the additional  Common Shares to which it
is entitled by reason of the increase of the Conversion Rate but such additional
Common  Shares shall be issued and  delivered to that holder upon  completion of
the  event and the  Corporation  shall  deliver  to the  holder  an  appropriate
instrument  evidencing its right to receive such additional Common Shares.

3.11  Reservation  of  Common  Shares

          So long as any of the Series A Shares are  outstanding and entitled to
the right of  conversion  herein  provided,  the  Corporation  will at all times
reserve  and hold out of its  unissued  Common  Shares a  sufficient  number  of
unissued  Common Shares to enable all of the Series A Shares  outstanding  to be
converted  upon the basis and upon the terms and conditions  herein  provided in
this section 3; provided that nothing contained in this clause 3.11 shall affect
or restrict the right of the  Corporation  to issue  Common  Shares from time to
time.

4 Redemption

4.1 Optional and Mandatory Redemption

          The  Corporation,  upon giving  notice as  hereinafter  provided,  may
redeem all at any time and part from time to time of the then outstanding Series
A  Shares,  and on o,  2007  the  Corporation  shall  redeem  all  of  the  then
outstanding  Series A Shares on payment  for each share to be redeemed of $14.55
together  in each  case  with an (i)  amount  equal to all  accrued  and  unpaid
cumulative  preferential  dividends thereon calculated to but excluding the date
fixed for  redemption and (ii) the Deferred  Dividend  Amount in respect of such
Series A Share, the whole constituting and herein referred to as the "Redemption
Price".

4.2 Partial  Redemption

          If less than all the Series A Shares  are at any time to be  redeemed,
the shares to be redeemed  shall be  selected on a pro rata basis,  disregarding
fractions,  according  to the  number  of  Series A  Shares  held by each of the
registered  holders thereof.  If less than all of the Series A Shares are at any
time to be  redeemed  and a Series A Holder  has  duly  exercised  his  right to
convert into Common Shares all or any part of the number of Series A Shares held
by such  holder  which have been called for  redemption,  the number of Series A
Shares  held by such  Series A Holder to be  redeemed  shall be  reduced  by the
number  (but not  exceeding  the number of Series A Shares held by such Series A
Holder  called  for  redemption)  of Series A Shares in  respect  of which  such
registered holder has duly exercised its right to convert into Common Shares. If
a part  only of the  Series A Shares  represented  by any  certificate  shall be
redeemed,  a new  certificate  representing  the balance of such shares shall be
issued to the holder thereof at the expense of the Corporation upon presentation
and surrender of the first mentioned certificate.

4.3 Method of Redemption

     4.3.1 In any case of redemption of Series A Shares,  the Corporation  shall
not less than 30 days and not more than 60 days  before the date  specified  for
redemption send by prepaid first class mail or deliver to the registered address
of each  person  who at the date not more than  seven  days prior to the date of
mailing or delivery is a Series A Holder to be redeemed,  a notice in writing of
the intention of the Corporation to redeem the Series A Shares registered in the
name of such holder.  Accidental  failure or omission to give such notice to one
or more holders shall not affect the validity of such redemption,  but upon such
failure or omission  being  discovered  notice shall be given  forthwith to such
holder or  holders  and such  notice  shall have the same force and effect as if
given in due time.  Such notice shall set out the number of Series A Shares held
by the person to whom it is addressed  which are to be redeemed,  the Redemption
Price,  the date  specified for redemption and the place or places within Canada
at which  holders of Series A Shares may present and  surrender  such shares for
redemption.  If the date specified for such  redemption is a date on or after o,
2006, such notice shall also set forth the then  applicable  Conversion Rate (as
defined  in  section 3 hereof)  and shall  state that the right of the holder to
convert the shares so to be redeemed  will cease and  terminate  at the close of
business on the  business  day  immediately  preceding  the date  specified  for
redemption.

     4.3.2 On and after the date so specified for  redemption,  the  Corporation
shall pay or cause to be paid to or to the order of the  Series A Holders  to be
redeemed the Redemption  Price of such shares on  presentation  and surrender of
the certificate or certificates representing the Series A called for redemption,
at the registered  office of the Corporation or any other place or places within
Canada  specified  in the notice of  redemption.  Payment in respect of Series A
Shares being  redeemed  shall be made by cheque payable to the holder thereof in
lawful money of the United States of America at any branch of the  Corporation's
bankers  for the time  being.

     4.3.3 From and after the date  specified for  redemption in any such notice
of  redemption,  the Series A Shares  called for  redemption  shall  cease to be
entitled  to  dividends  or  any  other  participation  in  the  assets  of  the
Corporation  and the holders  thereof  shall not be entitled to exercise  any of
their other rights as  shareholders  in respect  thereof  unless  payment of the
Redemption  Price  shall  not be made upon  presentation  and  surrender  of the
certificates  in  accordance  with the foregoing  provisions,  in which case the
rights of the holders shall remain unaffected.

     4.3.4  The  Corporation  shall  have the  right at any time on or after the
mailing or  delivery  of notice of its  intention  to redeem  Series A Shares to
deposit the Redemption Price of the Series A Shares so called for redemption, or
of such of the Series A Shares which are represented by certificates  which have
not at the date of such  deposit  been  surrendered  by the  holders  thereof in
connection with such redemption,  to a special account in any specified Canadian
chartered  bank named in such notice of redemption or in a subsequent  notice to
the registered holders of the shares in respect of which the deposit is made, to
be paid without  interest to or to the order of the respective  Series A Holders
whose shares have been called for redemption, upon presentation and surrender to
such  chartered bank of the  certificates  representing  such shares.  Upon such
deposit  being made or upon the date  specified  for  redemption in such notice,
whichever is later,  the Series A Shares in respect of which such deposit  shall
have been made  shall be deemed  to have  been  redeemed  and the  rights of the
holders thereof after such deposit or such  redemption  date, as the case may be
shall be limited to  receiving  their  proportion  (less any tax  required to be
deducted or withheld  therefrom)  of the amount so deposited  without  interest,
upon presentation and surrender of the certificate or certificates  representing
the Series A Shares being  redeemed.  Any  interest  allowed on any such deposit
shall belong to the Corporation.

     4.3.5 Redemption moneys that are represented by a cheque which has not been
presented  to the  Corporation's  bankers for payment or that  otherwise  remain
unclaimed (including moneys held on deposit in a special account as provided for
above) for a period of six years from the date specified for redemption shall be
forfeited to the Corporation.

5  Purchase for Cancellation

          Subject  to the  provisions  of  section 5 hereof  and the  provisions
attaching to the Preferred  Shares as a class,  the  Corporation may at any time
and from  time to time  purchase  for  cancellation  all or any part of the then
outstanding  Series A Shares in the open market (including  purchases through or
from an  investment  dealer or a member of a  recognized  stock  exchange) or by
invitation  for tenders  addressed to all of the holders of Series A Shares then
outstanding, at the lowest price or prices at which, in the opinion of the board
of  directors,  such shares are then  obtainable,  but not exceeding a price per
share  equal to the then  applicable  Redemption  Price.  If, in  response to an
invitation  for tenders  under the  provisions  of this section 5, more Series A
Shares are tendered at a price or prices  acceptable to the Corporation than the
Corporation is prepared to purchase,  the Series A Shares to be purchased by the
Corporation  shall be  purchased  from holders  tendering at the same price,  as
nearly as may be possible,  pro rata according to the number of shares  tendered
by each  holder  who  submits a tender to the  Corporation,  provided  that when
shares are tendered at different  prices,  the pro rating shall be effected only
with  respect to the shares  tendered  at the price at which  more  shares  were
tendered than the  Corporation is prepared to purchase after the Corporation has
purchased all the shares tendered at lower prices.

6   Restrictions on Dividends, Retirement and Issuance of Shares

          While any Series A Shares are outstanding,  the Corporation shall not,
without  the  approval of the  holders of Series A Shares  given as  hereinafter
specified:

          (a)  call for  redemption,  redeem,  purchase,  retire or acquire  for
               value or distribute  in respect of any Junior  Shares  (except to
               the  extent  and  out  of  net  cash  proceeds  received  by  the
               Corporation  from a  substantially  concurrent  issue  of  Junior
               Shares); or

          (b)  except  pursuant  to  any  purchase  obligation,   sinking  fund,
               retraction privilege or mandatory redemption provisions attaching
               to any series of Preferred Shares,  call for redemption,  redeem,
               purchase or otherwise  retire for value any other shares  ranking
               as to capital or dividends on a parity with the Series A Shares.

     While any  Series A Shares  are  outstanding,  the  Corporation  shall not,
without  the  approval of the  holders of Series A Shares  given as  hereinafter
provided:

          (a)  declare,  set aside for payment or pay any  dividends  on or make
               distributions  on or in respect of any Junior  Shares (other than
               dividends consisting of Junior Shares);

          (b)  reserve,  set  aside,  allot or issue any  shares  ranking  as to
               capital or  dividends  prior to or on a parity  with the Series A
               Shares or any securities  convertible  into or  exchangeable  for
               such shares;

unless,  in each such case,  all  dividends  then payable on the Series A Shares
then  outstanding  accrued  up to and  including  the  dividends  payable on the
immediately  preceding  respective  date or dates for the  payment of  dividends
thereon  shall have been  declared  and paid or set apart for  payment or unless
such  action  has  been  approved  by  the  Series  A  Holders.

7  Liquidation, Dissolution  or Winding-Up

          In the event of any  Liquidation  Distribution,  each  Series A Holder
shall be entitled to receive before any amount shall be paid by the  Corporation
or any assets of the Corporation  shall be distributed to registered  holders of
shares  ranking as to capital  junior to the Series A Shares in connection  with
the Liquidation  Distribution,  an amount equal to the greater of (a) the stated
capital per share of all Series A Shares held by such holder,  together with (i)
an amount equal to all accrued but unpaid cumulative dividends thereon plus (ii)
the Deferred Dividend Amount and (b) the distribution which such Series A Holder
would have been entitled to receive if the Series A Holder's Series A Shares had
been converted into Common Shares at the Conversion  Rate  immediately  prior to
the  Liquidation  Distribution.  After  payment  to the  Series A Holders of the
amount so payable to them,  they shall not be  entitled  to share in any further
distribution  of assets of the  Corporation.

8 Voting Rights

8.1 The holders of Series A Shares shall be entitled to receive notice of and to
attend all  meetings of the  shareholders  of the  Corporation  but shall not be
entitled  (except as hereinafter  specifically  provided and except as otherwise
provided by the OBCA) to vote at any such meeting;  provided,  however, that the
holders of Series A Shares shall be entitled,  voting exclusively and separately
as a class, to elect one director of the Corporation.

8.2 A meeting of the  holders of the Series A Shares for the purpose of electing
a director may be held upon not less that 21 days' written notice to the holders
of the Series A Shares and such meeting  shall be called by the Secretary of the
Corporation upon the written request of the holders of record of at least 10 per
cent of the issued and outstanding Series A Shares; in default of the calling of
such meeting by the Secretary within five days after the making of such request,
such  meeting may be called by any holder of record of Series A Shares.

8.3 Any vacancy  occurring in the director  elected to represent  the holders of
Series A Shares in accordance with the foregoing  provisions of this section may
be filled by the board of  directors  of the  Corporation  with the  consent and
approval of the holders of record of a majority of the Series A Shares.  Whether
or not such  vacancy  is so filled by the board of  directors,  when there is no
director  in office who has been  elected to  represent  the holders of Series A
Shares the holders of record of at least ten per cent of the outstanding  Series
A Shares  shall have the right to require the  Secretary of the  Corporation  to
call a meeting of the  holders of Series A Shares for the purpose of filling the
vacancy or replacing the person  filling such vacancy who has been  appointed by
the board of directors and the  provisions of the last  preceding  section shall
apply in  respect of the  calling  of such  meeting.

9  Amendments To Series A Provisions

          These Series A Provisions may be repealed,  altered, modified, amended
or varied  only with the prior  approval  of the  holders of the Series A Shares
given in the  manner  provided  in section  10 hereof in  addition  to any other
approval  required  by the  OBCA or any  other  statutory  provision  of like or
similar effect  applicable to the  Corporation,  from time to time in force.

10  Consents and Approvals

10.1 The consent or approval of the Series A Holders with respect to any and all
matters  may be given by one or more  instruments  signed by the  holders  of at
least  two-thirds  of  the  issued  and  outstanding  Series  A  Shares  or by a
resolution  passed by at least  two-thirds of the votes cast at a meeting of the
Series A Holders  duly  called for that  purpose and held upon at least 21 days'
notice,  at which the holders of a majority of the  outstanding  Series A Shares
are present or  represented  by proxy.  If at any such  meeting the holders of a
majority of the  outstanding  Series A Shares are not present or  represented by
proxy within  one-half hour after the time appointed for such meeting,  then the
meeting may be  adjourned  to such date being not less than 30 days later and to
such time and place as may be  appointed  by the chairman of the meeting and not
less than 21 days'  notice  shall be given of such  adjourned  meeting.  At such
adjourned  meeting the holders of the Series A Shares  present or represented by
proxy may transact the business for which the meeting was originally  called and
the  consent or  approval  of the  holders of the Series A Shares  with  respect
thereto may be given by at least  two-thirds of the votes cast at such adjourned
meeting.

10.2 The  formalities to be observed with respect to the giving of notice of any
such meeting and the conduct thereof shall be those from time to time prescribed
by the OBCA and the  by-laws of the  Corporation  with  respect to  meetings  of
shareholders.

10.3 On every poll taken at every such meeting or adjourned meeting every Series
A Holder  shall be  entitled  to one vote in respect  of each  Series A Share of
which he is the  registered  holder.

11  Notices

11.1 Any notice  required or  permitted to be given to any Series A Holder shall
be sent by first class mail, postage prepaid, or delivered to such holder at his
address as it appears on the records of the  Corporation or, in the event of the
address of any such  shareholder not so appearing,  to the last known address of
such shareholder.  The accidental  failure to give notice to one or more of such
shareholders shall not affect the validity of any action requiring the giving of
notice by the  Corporation.  Any notice given as aforesaid shall be deemed to be
given on the date upon which it is mailed or delivered.

11.2 If the directors of the  Corporation  determine  that mail service is or is
threatened to be  interrupted  at the time when the  Corporation  is required or
elects to give any notice  hereunder,  or is  required to send any cheque or any
share  certificate  to any  Series A  Holder,  whether  in  connection  with the
redemption or conversion of Series A Shares or otherwise,  the Corporation  may,
notwithstanding  the  provisions  hereof:

          (a)  give such notice by  publication  thereof once in a daily English
               language  newspaper of national  circulation  and once in a daily
               French language  newspaper  published in Montreal and such notice
               shall  be  deemed  to have  been  validly  given  on the day next
               succeeding its publication in all of such cities;  or

          (b)  fulfill  the  requirement  to send  such  cheque  or  such  share
               certificate by arranging for the delivery  thereof to such holder
               by the  transfer  agent for the Series A Shares at its  principal
               offices  located  nearest to the head office of the  Corporation,
               and such cheque and/or  certificate  shall be deemed to have been
               sent on the date on which notice of such  arrangement  shall have
               been given as provided in (a) above, provided that as soon as the
               directors of the  Corporation  determine  that mail service is no
               longer interrupted or threatened to be interrupted such cheque or
               share certificate,  if not theretofore  delivered to such holder,
               shall be sent by mail as herein provided.



<PAGE>



                                   EXHIBIT II


              OPINIONS TO BE GIVEN AT CLOSING BY McCARTHY TETRAULT


1.       Due incorporation, valid existence and good standing of World Heart;

2.       Due qualification in foreign jurisdictions of World Heart;

3.       World Heart Preferred duly authorized,  validly issued, fully paid and
          non-assessable; and

4.       Enforceability of Convertible Preferred Shares Purchase Agreement.





<PAGE>

                                   EXHIBIT III


                             CONTRIBUTION AGREEMENT




<PAGE>



                             CONTRIBUTION AGREEMENT

                                       by
                                       and
                                      among


                            EDWARDS LIFESCIENCES LLC,

                              EDWARDS NOVACOR LLC,

                             WORLD HEART CORPORATION

                                       and

                           VALENTINE ACQUISITION CORP.


                            Dated as of May 24, 2000





<PAGE>
                              TABLE OF DEFINITIONS


Defined Term                                           Initial Section Reference

Affected Persons.........................................................3.1(n)
Amendment................................................................2.2(a)
Applicable Contracts.....................................................3.1(e)
Assignment Agreement...................................................Recitals
Balance Sheet Date.......................................................3.1(f)
Business Day................................................................2.1
Business License Agreements..........................................3.3(p)(ii)
Business Material Adverse Effect.........................................3.1(a)
Canadian Securities Commissions..........................................2.2(d)
Certificate of Designation.............................................Recitals
Closing.....................................................................2.1
Closing Date................................................................2.1
Code.....................................................................3.1(n)
Confidentiality Agreement................................................4.3(b)
Contribution................................................................2.1
Damages.....................................................................7.2
Distribution Agreement.................................................Recitals
Edwards................................................................Recitals
Edwards Option..............................................................1.3
Edwards's Contribution...................................................1.1(a)
Employee Benefit Plans...................................................3.1(n)
Employees................................................................3.1(n)
Environmental Laws.......................................................3.1(r)
ERISA....................................................................3.1(n)
Exchange Agreement.....................................................Recitals
GAAP.....................................................................3.1(f)
HSR Act..................................................................3.1(e)
Indemnified Party..........................................................7.4
Indemnifying Party.........................................................7.4
Intellectual Property Rights..........................................2.3(p)(i)
Labor Dispute............................................................3.3(o)
Liens.................................................................3.3(d)(i)
LLC Interests..........................................................Recitals
Newco..................................................................Recitals
Newco Common Shares......................................................1.2(b)
Newco Common Stock.....................................................Recitals
Newco Plans..............................................................4.8(a)
Newco Preferred........................................................Recitals
Newco Preferred Shares...................................................1.2(a)
Newco Shares.............................................................1.2(b)
Novacor LLC............................................................Recitals
Novacor LLC Agreement....................................................2.2(a)
Novacor LLC Intellectual Property........................................3.1(p)
Novacor Patient...........................................................4.17
Other Shareholders....................................................Recitals
Overlap Period.......................................................4.9(e)(ii)
Payroll Taxes....................................... ....................4.8(e)
Person...................................................................3.1(b)
Pre-Closing Period...................................................3.3(m)(iv)
Pro Forma Balance Sheet..................................................3.1(f)
Purchase Agreement.....................................................Recitals
SEC......................................................................3.2(a)
Securities Act...........................................................3.2(d)
Shareholders Agreement.................................................Recitals
Sub Common Stock.......................................................Recitals
Supply Agreement.......................................................Recitals
Taxes....................................................................3.3(m)
Tax Matter..............................................................(4.9)b)
Tax Returns.............................................................4.10(a)
Transaction Agreements.................................................Recitals
Transactions...........................................................Recitals
Transfer Taxes..........................................................4.10(b)
Transferred Assets.......................................................3.1(a)
Transferred Business.....................................................3.1(a)
Transition Agreement...................................................Recitals
U.S. GAAP................................................................3.3(f)
Voting Debt..........................................................3.1(d)(ii)
WARN Act....................................................................4.9
World Heart............................................................Recitals
World Heart Contribution.................................................1.1(b)
World Heart Material Adverse Effect......................................3.2(a)
World Heart Preferred Agreement........................................Recitals
World Heart Reports......................................................3.2(d)
World Heart SEC Reports..................................................3.2(c)
World Heart Subsidiaries.................................................3.2(a)


<PAGE>


                             CONTRIBUTION AGREEMENT


          CONTRIBUTION AGREEMENT, dated as of May 24, 2000, by and among Edwards
Lifesciences  LLC, a Delaware limited  liability  company  ("Edwards"),  Edwards
Novacor LLC, a Delaware limited liability company and wholly owned subsidiary of
Edwards ("Novacor LLC"),  Valentine  Acquisition  Corp., a Delaware  corporation
("Newco") and World Heart Corporation, an Ontario corporation ("World Heart").

          WHEREAS, Edwards is the sole member of Novacor LLC;

          WHEREAS, Edwards desires to contribute to Newco its equity interest in
Novacor  LLC (the  "LLC  Interests")  in  exchange  for  Series A  Participating
Preferred Stock of Newco (the "Newco Preferred") having the rights, preferences,
privileges  and  terms   substantially  as  set  forth  in  the  Certificate  of
Designation  attached hereto as Exhibit A (the  "Certificate  of  Designation"),
upon the terms and subject to the conditions set forth herein;

          WHEREAS,  Newco is a newly formed  corporation  organized and existing
under the laws of the State of Delaware;

          WHEREAS,  World Heart desires to  contribute  cash in exchange for the
issuance to World Heart,  of common stock,  of Newco (the "Newco Common Stock"),
upon the terms and subject to the conditions set forth herein;

          WHEREAS,  Edwards  and  World  Heart  have  entered  into,  and,  as a
condition to closing of the Transactions  (as defined herein),  shall consummate
the transactions  contemplated by the exchange  agreement,  dated as of the date
hereof,  substantially  in the form attached  hereto as Exhibit B (the "Exchange
Agreement");

          WHEREAS, Edwards and World Heart have entered into, and as a condition
to closing of the Transactions,  shall consummate the transactions  contemplated
by the Series A convertible preferred shares purchase agreement, dated as of the
date hereof,  substantially in the form attached hereto as Exhibit C (the "World
Heart Preferred Agreement");

          WHEREAS,  as a condition to closing of the  Transactions,  Edwards and
World Heart,  Roderick M. Bryden,  Tofy Mussivand and the Ottawa Heart Institute
Research  Corporation  (together with Mr. Bryden and Dr.  Mussivand,  the "Other
Shareholders") shall enter into the shareholders agreement, substantially in the
form attached hereto as Exhibit D (the "Shareholders Agreement");


          WHEREAS,  as a condition to closing of the  Transactions,  Edwards and
Edwards Lifesciences  Corporations ("Edwards Parent") and Novacor LLC shall have
entered into and  consummated  the  transactions  contemplated  by the transfer,
assignment and assumption agreement substantially in the form attached hereto as
Exhibit E (the "Assignment Agreement").

          WHEREAS, as a condition to closing of the Transactions, Edwards, World
Heart and Newco shall enter into the  distribution  agreement,  substantially in
the form  attached  hereto as  Exhibit  F (the  "Distribution  Agreement"),  the
transition  services  agreement  substantially  in the form  attached  hereto as
Exhibit G (the "Transition  Agreement"),  the supply agreement  substantially in
the form attached hereto as Exhibit H (the "Supply  Agreement") and the purchase
agreement  substantially in the form attached hereto as Exhibit I (the "Purchase
Agreement");

          WHEREAS,  this Agreement,  the Exchange  Agreement,  the  Shareholders
Agreement,  the Assignment Agreement, the Distribution Agreement, the Transition
Agreement,  the Supply Agreement and the Purchase Agreement shall be referred to
collectively as the "Transaction  Agreements" and the transactions  contemplated
hereby and thereby as the "Transactions";

          WHEREAS,  the Board of Directors  of each of Edwards,  World Heart and
Newco  deem  it  advisable  and  in  the  best  interest  of  their   respective
stockholders that Novacor LLC become a subsidiary of Newco; and

          WHEREAS,  it is intended that,  for U.S.  Federal income tax purposes,
the  transaction  contemplated  by this  Agreement  shall  constitute a tax-free
exchange described in section 351 of the Code (as defined herein).

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


                                    ARTICLE I
                                  CONTRIBUTION

          SECTION I.1 Contribution.

          (a) Upon the terms and  subject to the  conditions  set forth  herein,
Edwards agrees to contribute to Newco,  on the Closing Date (as defined  below),
all of  Edwards's  rights,  title and interest in and to the LLC  Interests  (as
defined herein), constituting all of the outstanding equity interests in Novacor
LLC (the "Edwards Contribution");

          (b) Upon the terms and  subject to the  conditions  set forth  herein,
World Heart  agrees to  contribute  to Newco,  on the  Closing  Date (as defined
below),   cash  in  the  amount  of  $3.5  million  dollars  (the  "World  Heart
Contribution").  Unless otherwise indicated, all references in this Agreement to
"dollars" or "$" shall mean the lawful currency of the United States.

          SECTION I.2 Issuance of Capital Stock.

          (a) In exchange for the Edwards  Contribution,  Newco shall (and World
Heart  shall  cause  Newco to) issue to Edwards on the  Closing  Date  4,981,128
shares of Newco Preferred (the "Newco Preferred Shares"); and

          (b) In  exchange  for the World Heart  Contribution,  Newco shall (and
World Heart  shall  cause  Newco to) issue to World  Heart on the  Closing  Date
shares of Newco Common Stock (the "Newco Common  Shares" and,  together with the
Newco Preferred Shares, the "Newco Shares").

          SECTION  I.3 Stock  Options.  World  Heart  and  Edwards  shall  fully
cooperate to (i) obtain,  effective as of the Closing Date,  the consent of each
Employee to the  termination  of any option to purchase  common stock of Edwards
Parent granted to such Employee  pursuant to Edwards'  Long-Term Stock Incentive
Compensation  Plan (an "Edwards  Option")  (other than an Employee who qualifies
for retirement vesting under the terms of the Edwards "converted options" or the
Edwards "founder's options"), which is unvested as of the Closing Date, and (ii)
provide,  effective  as of the Closing  Date,  such  Employee  with an option to
purchase  shares of World Heart in an amount to be determined in accordance with
the guidelines set forth in Schedule 1.3.


                                   ARTICLE II
                                   THE CLOSING

          SECTION  II.1  Closing   Date.   The   consummation   of  the  Edwards
Contribution,  the World Heart Contribution  (together,  the "Contribution") and
the issuance of the Newco Shares (the "Closing") shall take place at the offices
of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400,
Los Angeles,  California  90071, or such other place as the parties hereto shall
mutually  agree,  at 10:00 a.m.  (local  time) on the fifth day (other  than any
Saturday, Sunday or day when banks in the city of New York, New York or Ontario,
Canada  are  authorized  by law to be  closed  (a  "Business  Day"))  after  the
conditions set forth in Article V shall have been  satisfied or waived,  or such
other  time and date upon  which the  parties  hereto  may agree  (the  "Closing
Date").

          SECTION  II.2  Transactions  To Be  Effected  at the  Closing.  At the
Closing:

          (a) Edwards shall (i) execute Amendment No. 1 (the "Amendment") to the
limited liability company agreement (the "Novacor LLC Agreement")  effecting the
substitution  of Newco as the sole member and managing member of Novacor LLC and
(ii) deliver such other documents as provided in Section 5.1 hereof;

          (b) World  Heart shall pay $3.5  million to Newco by wire  transfer or
otherwise in immediately available funds;

          (c) Newco shall deliver to World Heart (i)  certificates  representing
the Newco Common Shares and (ii) such other documents as provided in Section 5.2
hereof; and

          (d) Newco shall deliver to Edwards (i)  certificates  representing the
Newco Preferred  Shares and (ii) such other documents as provided in Section 5.2
hereof.


                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

          SECTION III.1  Representations  and  Warranties of Edwards and Novacor
LLC.  Each of Edwards  and Novacor LLC  jointly  and  severally  represents  and
warrants to World Heart and Newco as follows:

          (a)  Organization,  Standing  and Power.  Novacor LLC (i) is a limited
liability  company duly formed and in good standing  under the laws of the State
of Delaware and has all requisite  power and authority to own,  lease or operate
the assets it will own,  lease or operate as of the Closing  Date and (ii) as of
the  Closing  Date,  will be duly  qualified  or licensed to do business in each
jurisdiction  in which the  ownership  or use of its  assets or  conduct  of its
business  require it to be so  qualified,  in each case except for such failures
that would not  reasonably be expected,  individually  or in the  aggregate,  to
result in (i) a  material  adverse  effect on the  assets to be  transferred  to
Novacor LLC pursuant to the Assignment  Agreement (the "Transferred  Assets") or
the business  related  thereto (the  "Transferred  Business") or (ii) a material
impairment of the ability of Edwards or Novacor LLC to perform their  respective
obligations under the Transaction Agreements (each, a "Business Material Adverse
Effect").

          (b) Subsidiaries. Novacor LLC (i) will not have any direct or indirect
subsidiaries and (ii) will not own,  directly or indirectly,  any of the capital
stock  or  other  equity  securities  of  any  other  individual,   partnership,
corporation, limited liability company, joint venture, association,  joint-stock
company, trust, unincorporated  organization,  government or agency or political
subdivision thereof, or other entity (each, a "Person").

          (c) Authority.

                    (i) The execution and delivery of the Transaction Agreements
          to which  Edwards is a party,  and the  performance  by Edwards of its
          obligations hereunder and thereunder, have been duly authorized by all
          necessary action on the part of Edwards. This Agreement has been, and,
          at the Closing, the Transaction Agreements to which Edwards is a party
          shall have been, duly executed and delivered by Edwards and,  assuming
          the due execution and delivery hereof and thereof by the other parties
          thereto,  this Agreement  constitutes and, at the Closing, each of the
          Transaction Agreements to which Edwards is a party shall constitute, a
          valid and binding obligation of Edwards,  enforceable  against Edwards
          in  accordance  with its  terms,  except  as such  enforcement  may be
          limited  by (i)  bankruptcy,  insolvency,  reorganization,  moratorium
          (whether  general or  specific)  or similar  laws now or  hereafter in
          effect  relating  to  creditors'  rights  generally  and (ii)  general
          principles of equity (regardless of whether such enforcement is sought
          in a proceeding in equity or at law).

                    (ii)  The   execution   and  delivery  of  the   Transaction
          Agreements to which  Novacor LLC is a party,  and the  performance  by
          Novacor LLC of its obligations  hereunder and  thereunder,  shall have
          been duly  authorized by all  necessary  action on the part of Novacor
          LLC. At the Closing,  the Transaction  Agreements to which Novacor LLC
          is a party shall have been duly  executed and delivered by Novacor LLC
          and, assuming the due execution and delivery hereof and thereof by the
          other parties  thereto,  each of the  Transaction  Agreements to which
          Novacor  LLC  is  a  party  shall  constitute,  a  valid  and  binding
          obligation  of  Novacor  LLC,   enforceable  against  Novacor  LLC  in
          accordance with its terms,  except as such  enforcement may be limited
          by (i) bankruptcy,  insolvency,  reorganization,  moratorium  (whether
          general  or  specific)  or  similar  laws now or  hereafter  in effect
          relating to creditors' rights generally and (ii) general principles of
          equity  (regardless  of  whether  such  enforcement  is  sought  in  a
          proceeding in equity or at law.)

          (d) Equity Interests.

                    (i)  Edwards  is the sole  member  of  Novacor  LLC and such
          membership  interest is subject to no liens,  pledges or  encumbrances
          (collectively, "Liens").

                    (ii) There are no existing  preemptive rights,  indebtedness
          having  general  voting  rights or debt  convertible  into  securities
          having such rights ("Voting Debt") or  subscriptions  or other rights,
          agreements,  arrangements or commitments of any character, relating to
          the equity  interest of Novacor LLC  obligating  Novacor LLC to issue,
          transfer or sell or cause to be issued, transferred or sold any equity
          interests in or Voting Debt of Novacor LLC or  securities  convertible
          into  or  exchangeable  for  such  shares  or  equity  interests,   or
          obligating  Novacor  LLC to  grant,  extend  or  enter  into  any such
          subscription or other right, agreement, arrangement or commitment.

                    (iii) There are no  outstanding  contractual  obligations of
          Novacor  LLC to make any  investment  (in the form of a loan,  capital
          contribution or otherwise) in any other entity.

                    (iv)  There are no  voting  trusts  or other  agreements  or
          understandings to which Novacor LLC is a party or of which Novacor LLC
          has  knowledge  with  respect to the voting of the  members of Novacor
          LLC.

          (e) Consents;  No Conflict.  The  consummation of the  Transactions by
Edwards  and  Novacor  LLC will not  require  the  consent  of any  party to any
contract,  lease,  agreement,  mortgage or indenture ("Contracts") (i) listed on
Schedule 3.1(l) (the "Applicable Contracts") or (ii) any other contract to which
Edwards  is a  party  the  subject  matter  of  which  relates  in  whole  or in
substantial part to the Transferred Business or the consent,  approval, order or
authorization  of,  or  the  registration,   declaration  or  filing  with,  any
governmental   authority,    except   for   those   (i)   required   under   the
Hart-Scott-Rodino  Antitrust  Improvements  Act of 1976,  as  amended  (the "HSR
Act"), (ii) set forth on Schedule 3.1(e), (iii) that become applicable solely as
a result  of the  specific  regulatory  status of  Newco,  World  Heart or their
respective  affiliates  or (iv) the failure of which to make or obtain would not
reasonably be expected to result in a Business  Material Adverse Effect.  Except
as set forth on Schedule  3.1(e),  assuming  the  consents,  approvals,  orders,
authorizations,  registrations,  declarations  and filings  contemplated  by the
immediately  preceding  sentence  are  obtained  or  made,  as  applicable,  the
execution, delivery and performance by Edwards and Novacor LLC of this Agreement
will not (i) violate any material law applicable to Edwards or Novacor LLC, (ii)
result in a breach or violation of any material  provision  of, or  constitute a
material  default  under,  any  Applicable  Contract or (iii)  conflict with any
provision  of the  certificate  of  incorporation  or  by-laws of Edwards or the
Certificate  of Formation of Novacor LLC or the Novacor LLC  Agreement,  in each
case except for any such violation,  breach, default or conflict which would not
reasonably be expected to result in a Business Material Adverse Effect.

          (f) Pro Forma Balance Sheet.  Attached  hereto as Schedule 3.1(f) is a
copy of the unaudited pro forma balance sheet (the "Pro Forma Balance Sheet") of
Novacor LLC as of April 30, 2000 (the  "Balance  Sheet Date") which gives effect
to the transfer of assets and  liabilities to Novacor LLC by Edwards and Edwards
Parent immediately prior to the Closing pursuant to the Assignment Agreement, as
if such transfer had occurred as of April 30, 2000.  The Pro Forma Balance Sheet
presents  fairly on a pro forma basis, in all material  respects,  the financial
position  of Novacor LLC as of the Balance  Sheet Date in  accordance  with U.S.
generally accepted  accounting  principles  consistently  applied ("U.S.  GAAP")
except as otherwise  indicated therein or in the notes thereto subject to normal
year-end audit adjustments (the effect of which would not reasonably be expected
to be materially adverse) and any other adjustments described therein and to the
lack of all notes thereto.

          (g) No Undisclosed  Liabilities.  As of the Closing, Novacor LLC shall
have no  liabilities  of a nature  required by U.S.  GAAP to be  reflected  on a
balance sheet or in notes  thereto,  except (i) as set forth or reflected on the
Pro Forma Balance Sheet (or described in the notes  thereto),  (ii) as disclosed
in the  Schedules  hereto,  or (iii) for  liabilities  incurred in the  ordinary
course of business since the Balance Sheet Date.

          (h)  Absence of Certain  Changes or Events.  Since the  Balance  Sheet
Date, there has been no physical damage, destruction or loss with respect to the
Transferred  Assets that,  after taking into  account any  insurance  recoveries
payable in respect thereof, would reasonably be expected to result in a Business
Material Adverse Effect.

          (i) Compliance with Applicable Laws. Since March 31, 2000, Edwards has
and as of the Closing  Novacor LLC shall have complied in all material  respects
with  all  statutes,   laws,   regulations  and  ordinances  applicable  to  the
Transferred Business of Novacor LLC, except where the failure to so comply would
not  reasonably  be expected to result in a Business  Material  Adverse  Effect;
provided,  however,  Edwards makes no representation or warranty in this Section
3.1(i)  with  respect  to  laws  relating  to  matters  with  respect  to  which
representations  or  warranties  are  made in  Subsections  (m) -  Taxes,  (n) -
Employee Benefit Plans, (o) - Labor Matters, (p) - Intellectual  Property, (q) -
Environmental Matters and (r) - Government Relations of this Section 3.1.

          (j) Litigation; Decrees. Except as set forth on Schedule 3.1(j), as of
the date hereof (i) there is no suit, action or proceeding  pending,  or, to the
knowledge of Edwards,  threatened  against  Edwards  relating to the Transferred
Business in any federal, state or local court or agency that seeks (A) more than
$250,000 in damages,  or (B) any material injunctive relief, and Edwards has not
received  written notice that any such suit,  action or proceeding is threatened
and (ii) neither Edwards nor Novacor LLC is in default under any judgment, order
or decree of any governmental  authority applicable to the Transferred Business,
except for any such default which would not  reasonably be expected to result in
a Business Material Adverse Effect.

          (k) Assets. As of the Closing, Novacor LLC shall have (i) title to all
the personal property (tangible, intangible or mixed) reflected in the Pro Forma
Balance Sheet and Transferred Assets as owned, free and clear of all Liens other
than with  respect to all such  personal  property  Liens shown on the Pro Forma
Balance  Sheet as  securing  specified  liabilities  or  obligations  and  liens
incurred in connection with the purchase of such property,  if such purchase was
effected after the date of the Pro Forma Balance Sheet, with respect to which no
default exists,  and (ii) an enforceable,  valid and binding leasehold  interest
under all leases of real property included in the Transferred Assets to which it
is a party as  lessee.  No  personal  property  or asset,  the value of which is
reflected in the Pro Forma Balance Sheet or Transferred  Assets, is held or will
be held as of the Closing  under any lease (other than a  capitalized  lease) or
under any  conditional  sale or other  title  retention  agreement.  Except  for
leasehold  interests  described in clause (ii) in the second preceding sentence,
as of the  Closing  Novacor  LLC shall  own no real  property.  Except  for such
assets,  plants  and  facilities  as  are  immaterial  in the  aggregate  to the
Transferred Business, all tangible assets, plants and facilities owned or leased
by Novacor  LLC as of the Closing  shall be adequate  for the uses to which they
are  currently  being put by Edwards or would be put in the  ordinary  course of
business and the Transferred Assets shall be sufficient to permit Novacor LLC to
carry on the Transferred Business,  excluding the international operations to be
conducted by Edwards  after the Closing Date, in the manner in which it has been
carried on by Edwards  since  January 1,  2000.

          (l) Contracts.  Except for the Applicable Contracts listed in Schedule
3.1(l),  as of the  Closing,  Novacor LLC shall not be a party to or bound by or
entitled to the benefit of:

               (i) any Contract  relating to the borrowing or lending of $25,000
     or more by Novacor LLC;

               (ii) any employment  agreement with any person requiring payments
     of base  compensation in excess of $50,000 per year unless  terminable with
     payment or penalty of less than $50,000 upon no more than 60 days' notice;

               (iii) any Contract  not made in the  ordinary  course of business
     involving  an  estimated  total  future  payment or  payments  in excess of
     $25,000 unless terminable with payment or penalty of less than $25,000 upon
     no more than 60 days' notice;

               (iv) a  Contract  for the  sale of any of  Novacor  LLC's  assets
     (other than  inventory  sales in the ordinary  course of business),  or the
     grant of any  preferential  rights to purchase any of Novacor LLC's assets,
     having a value in the aggregate in excess of $250,000; or

               (v) a  Contract  relating  to  the  Transferred  Business  and is
     terminable  by  the  other  party  thereto  upon  the   occurrence  of  the
     transactions  contemplated hereby that, if terminated,  would reasonably be
     expected to result in a Business Material Adverse Effect.

          Except as disclosed in Schedule  3.1(l),  to the knowledge of Edwards,
as of the date hereof,  no party is in breach or default in any material respect
under any Applicable Contract, except for such breaches and defaults which would
not  reasonably  be expected to result in a Business  Material  Adverse  Effect.
Complete  and correct  copies of all  Applicable  Contracts,  together  with all
modifications  and  amendments  thereto,  have been  delivered  to World  Heart;
provided,  that to the extent any of such  Contracts  are items  susceptible  to
duplication  and  are  either  (i)  used in  connection  with  any of  Edwards's
businesses other than the Transferred Business or (ii) are required by law to be
retained  by  Edwards,   Edwards  may  deliver   photostatic   copies  or  other
reproductions  from which Edwards may delete  information  concerning  Edwards's
businesses other than the Transferred Business.  For purposes of this subsection
3.1(l), the term "Contract" shall not include Employee Benefit Plans referred to
in Section 3.1(n).

          (m) Taxes.

                    (i) Novacor LLC is a  disregarded  entity for U.S.  Federal,
          state and local income tax purposes in each state or locality in which
          it is engaged in the conduct of a trade or business.

                    (ii) There are no Liens for Taxes (as defined  below) on any
          of the Transferred Assets,  other than Liens for taxes not yet due and
          payable and those  being  contested  in good faith for which  adequate
          reserves have been established in accordance with U.S. GAAP.

                    (iii)  Novacor  LLC has timely  filed  with the  appropriate
          taxing  authorities  all Tax Returns  that are required to be filed by
          Novacor  LLC on or  prior  to  the  Closing  Date.  Such  Tax  Returns
          accurately  reflect all of Novacor  LLC's  liabilities  for Taxes with
          regard to its assets and its business for the periods covered thereby.

                    (iv) All Tax  liabilities  of  Novacor  LLC for all  taxable
          years or periods  that end on or before  the  Closing  Date and,  with
          respect  to any  taxable  year or period  beginning  before and ending
          after the Closing  Date,  the portion of such  taxable  year or period
          ending on and  including  the  Closing  Date  ("Pre-Closing  Period"),
          whether or not shown on any Tax Return,  have been timely paid in full
          on or prior to the Closing  Date or accrued and  adequately  disclosed
          and fully  provided  for on the books and  records of  Novacor  LLC in
          accordance with GAAP.

                    (v) There is no  action,  suit,  proceeding,  investigation,
          audit,  or claim now  pending  or, to the  knowledge  of Novacor  LLC,
          threatened by any authority regarding any Taxes of Novacor LLC for any
          Pre-Closing Period.

                    (vi)  Novacor LLC (A) has not entered  into an  agreement or
          waiver  or been  requested  to  enter  into  an  agreement  or  waiver
          extending  any  statute  of  limitation  relating  to the  payment  or
          collection of Taxes, (B) is not presently contesting any Tax liability
          before  any court,  tribunal  or agency  and (C) has not  applied  for
          and/or  received  a ruling or  determination  from a taxing  authority
          regarding a past or prospective transaction.

                    (vii) All Taxes which  Novacor  LLC is (or was)  required by
          law to withhold or collect have been duly withheld or  collected,  and
          have been timely paid over to the proper authorities to the extent due
          and payable.

                    (viii)  Except for this  Agreement,  there are no written or
          other  binding tax  sharing,  allocation,  indemnification  or similar
          agreements or  arrangements  in effect as between  Novacor LLC and any
          other entity.

                    (ix) No claim has ever been made by any taxing  authority in
          a  jurisdiction  where  Novacor  LLC does not  file Tax  Returns  that
          Novacor LLC is or may be subject to taxation by that jurisdiction.


          "Taxes" shall mean all United States federal, state, local and foreign
taxes assessments,  levies,  duties, imposts or similar charges (whether imposed
directly or through  withholding),  including any interest,  additions to tax or
penalties applicable thereto.

          "Tax Returns" shall mean all United States federal,  state,  local and
foreign tax returns,  declarations,  statements,  reports,  schedules, forms and
information returns relating to Taxes, including any amendments thereof.

          (n) Employee  Benefit Plans. Set forth on Schedule 3.1(n) is a list of
each material bonus, deferred compensation, pension, profit sharing, retirement,
stock purchase or stock option,  hospitalization or other medical, life or other
insurance plan relating to the Transferred Business, including any policy, plan,
program or agreement that provides for the payment of severance benefits, salary
continuation,  salary in lieu of notice or similar benefits  (collectively,  the
"Employee  Benefit Plans"),  maintained,  sponsored or contributed to by Novacor
LLC or Edwards or under  which  Novacor LLC or Edwards has any present or future
material  obligations or material  liability on behalf of the employees who will
be assigned to work at Novacor LLC  pursuant to the  Assignment  Agreement  (the
"Employees")  or  former   employees  or  their   dependents  or   beneficiaries
(collectively,  the  "Affected  Persons").  The Employee  Benefit Plans that are
subject to the  Employee  Retirement  Income  Security  Act of 1974,  as amended
("ERISA"), or the Internal Revenue Code of 1986, as amended (the "Code"), are in
compliance in all material respects with ERISA and the Code and other applicable
law.

          All contributions made or required to be made by Novacor LLC under any
Employee Benefit Plan meet the requirements for deductibility  under the Code in
all material respects, and all contributions that are required but have not been
made have been  properly  recorded on the books of Novacor LLC and  reflected in
the Pro Forma Balance Sheet to the extent required under U.S. GAAP.

          No  Employee  Benefit  Plan is a  "multiemployer  plan" (as defined in
section  4001(a)(3) of ERISA) or a "multiple  employer plan" (within the meaning
of section 413(c) of the Code) or an "employee pension benefit plan" (within the
meaning of Section 3(2) of ERISA)  subject to Section 412 of the Code or Section
302 of Title IV of ERISA.  No event has occurred  with respect to Novacor LLC or
any Employee  Benefit Plan in connection with which Novacor LLC could be subject
to any material  liability  or Lien with  respect to any  Employee  Benefit Plan
under ERISA or the Code.

          Neither  Edwards nor Novacor LLC maintains  any Employee  Benefit Plan
which is a "group  health  plan" (as such term is defined  in Section  607(1) of
ERISA or  Section  5000(b)(1)  of the Code) that has not been  administered  and
operated in all respects in compliance with the applicable  requirements of Part
6 of  Subtitle B of Title I of ERISA and  Section  4980B of the Code and neither
Edwards nor Novacor LLC is subject to any material liability, including, without
limitation,  additional  contributions,  fines, taxes,  penalties or loss of tax
deduction as a result of such administration and operation.  No Employee Benefit
Plan  which  is  such a  group  health  plan  is a  "multiple  employer  welfare
arrangement,"  within the meaning of Section 3(40) of ERISA.  Except as required
by law,  neither  Edwards nor Novacor LLC  maintains  any Employee  Benefit Plan
(whether qualified or non-qualified  under Section 401(a) of the Code) providing
for  post-employment  or retiree  health,  life  insurance  and/or other welfare
benefits and having  unfunded  liabilities,  and neither Edwards nor Novacor LLC
have any  obligation  to  provide  any such  benefits  to any  retired or former
employees  or  active   employees   following  such  employees'   retirement  or
termination of service.

          Each  Employee  Benefit Plan  intended to be qualified  under  Section
401(a)  of the  Code  has,  as  currently  in  effect,  been  determined  (or an
application  for such  determination  has been filed) to be so  qualified by the
Internal Revenue Service. Each trust established in connection with any Employee
Benefit Plan which is intended to be exempt from Federal  income  taxation under
Section  501(a)  of the Code has been  determined  (or an  application  for such
determination  has been filed) to be so exempt by the Internal  Revenue Service.
Since  the  date  of  each  most  recent   determination   (or  application  for
determination)  referred  to in this  paragraph,  no event has  occurred  and no
condition or  circumstance  has existed that  resulted or is likely to result in
the  revocation of any such  determination  or that could  adversely  affect the
qualified status of any such Employee Benefit Plan.

          Novacor LLC does not sponsor any Employee Benefit Plan.

          (o) Labor Matters.  Set forth on Schedule  3.1(o) are (i) the names of
the Employees,  their salaries, wage rates (as of the date hereof), vacation pay
accrual  schedule  (as of May 31,  2000),  positions  and length of service with
Edwards,  Novacor LLC and Baxter International Inc. as applicable,  and (ii) all
agreements  with labor  unions or  associations  representing  the  Employees in
effect  as of the date  hereof.  As of the date  hereof,  there is and as of the
Closing  Date there will be (i) no  material  unfair  labor  practice  complaint
pending or threatened  against  Novacor LLC, or against Edwards which relates in
whole or in part to the Transferred Business before the National Labor Relations
Board  or any  state  or  local  labor  relations  board,  nor are any  material
grievance or arbitration  proceedings  arising under any  collective  bargaining
agreement  pending or threatened  against  Novacor LLC, or against Edwards which
relates in whole or in part to the Transferred  Business,  (ii) no labor strike,
dispute,  slowdown or stoppage ("Labor Dispute") in which Novacor LLC or Edwards
is involved  which relates in whole or in  substantial  part to the  Transferred
Business, nor, to the knowledge of Edwards is any Labor Dispute imminent,  other
than  routine   disciplinary  and  grievance  matters,  and  (iii)  no  question
concerning  union  representation  within  the  meaning  of the  National  Labor
Relations  Act  existing  with  respect to the  Employees  of Novacor LLC or the
Transferred  Business  and, to the  knowledge  of Edwards,  no union  organizing
activities  are taking  place,  which (with  respect to any matter  specified in
clauses  (i),  (ii) or (iii)  above,  singly or in the  aggregate)  would have a
Business Material Adverse Effect.  Except as set forth on Schedule 3.1(o), as of
the date hereof,  Edwards has no knowledge  of any  actionable  violation of any
federal,  state or local law relating to employment  and  employment  practices,
discrimination in the hiring,  promotion or pay of Employees, nor any applicable
wage or hour laws, which, individually or in the aggregate,  would reasonably be
expected to result in a Business Material Adverse Effect.

          (p) Intellectual Property.

                    (i) To Edwards' knowledge, Edwards or Edwards Parent has all
          right,  title and interest in, or a valid and binding  license to use,
          all patents and patent rights,  trademarks and trademark rights, trade
          names and trade name  rights,  service  marks and service mark rights,
          service names and service name rights, copyrights and copyright rights
          and other  proprietary  intellectual  property  rights and all pending
          applications   for  and   registrations   of  any  of  the   foregoing
          individually  or in  the  aggregate  material  to the  conduct  of the
          Transferred  Business  ("Intellectual  Property Rights").  To Edwards'
          knowledge,  neither  Edwards nor Edwards Parent is in default (or with
          the  giving of notice or lapse of time or both  would be in  default),
          under any license to use such Intellectual  Property Rights and to its
          knowledge such Intellectual Property Rights are not being infringed by
          any third party.

                    (ii) Schedule  3.1(p)(ii)  contains (or will be supplemented
          prior to Closing to contain) an accurate and  complete  list as of the
          date of this Agreement of all licenses,  sublicenses,  assignments and
          other  agreements under which Edwards or Edwards Parent is licensed to
          use third party Intellectual Property Rights which are material to the
          Transferred  Business as currently  conducted (the  "Business  License
          Agreements").

                    (iii) Except as set forth in Schedule 3.1(p)(iii) (including
          as it  may be  supplemented  prior  to  Closing),  Novacor  LLC is not
          required to pay any royalties,  fees or other amounts to any Person in
          connection with the Business License Agreements.

                    (iv) Schedule  3.1(p)(iv)  contains an accurate and complete
          list as of the  date  of this  Agreement  of all  registered  patents,
          registered  trademarks,  trade  names,  registered  service  marks and
          registered  copyrights  (in each case that are  currently in use),  as
          well as all applications for any and all of the foregoing, included in
          the Intellectual  Property Rights (excluding third party  Intellectual
          Property  Rights),  including  the  jurisdiction  in which  each  such
          Intellectual  Property Right has been issued or registered or in which
          any such  application for such issuance,  approval or registration has
          been  filed.  Except  as set  forth  on  Schedule  3.1(p)(iv),  to its
          knowledge, all registered patents, registered trademarks, trade names,
          registered service marks and registered copyrights owned by Edwards or
          Edwards   Parent  and  which  are  material  to  the  conduct  of  the
          Transferred Business as currently conducted are valid and enforceable.
          Except as set forth on Schedule  3.1(p)(vii),  to Edwards'  knowledge,
          the  products  of  the  Transferred   Business  do  not  infringe  the
          intellectual property rights of any third party.

                    (v)  Schedule  3.1(p)(v)  contains an accurate  and complete
          list as of the date of this Agreement of all licenses and  sublicenses
          under  which  Edwards  or  Edwards  Parent  has  granted  the right to
          manufacture, reproduce, market or exploit any material products of the
          Transferred  Business  or  any  material  adaptation,   derivative  or
          reformulation based on any such product or any portion thereof.

                    (vi) To its  knowledge,  Edwards is not and will not be as a
          result  of  the  execution  and  delivery  of  this  Agreement  or the
          performance of its obligations under this Agreement,  in breach of any
          Business License Agreements.  To its knowledge,  neither the execution
          or delivery of this Agreement nor the consummation of the transactions
          contemplated  hereby will cause or will result in a material change to
          the  terms  of any  material  license,  sublicense  or  other  similar
          agreement.

                    (vii) Except as set forth in Schedule  3.1(p)(vii),  neither
          Edwards nor Edwards Parent has (A) to Edwards'  knowledge,  been named
          as a party in any suit, action or proceeding which involves a claim of
          infringement  or violation of any  Intellectual  Property Right of any
          third party or (B) has received any written claim or  allegation  that
          the manufacturing,  importation, marketing, licensing, sale, offer for
          sale, or use of any of its products  infringes  Intellectual  Property
          Rights of any third party.

                    (viii)  Edwards  and Edwards  Parent  have taken  reasonable
          steps to protect and  preserve  the  confidential  information,  trade
          secrets  and   know-how  of  the   Transferred   Business,   including
          appropriate non-disclosure agreements with employees and third persons
          having access to confidential  information,  trade secrets or know-how
          of the Transferred Business.

                    (ix) Neither Edwards nor Edwards Parent has made any written
          claim or allegation  that any person has  infringed,  misappropriated,
          breached or violated the rights of the Transferred  Business in any of
          the Intellectual Property Rights which are material to the Transferred
          Business as currently conducted.

          (q) Environmental  Matters.  To the knowledge of Edwards,  Novacor LLC
and the  Transferred  Business is in  substantial  compliance  with all federal,
state and local laws  governing  pollution or the  protection of human health or
the environment (the "Environmental  Laws"),  except where the failure to comply
with the  Environmental  Laws would not  reasonably  be  expected to result in a
Business  Material  Adverse Effect.  Edwards is not aware of any notice or claim
received by Edwards from any governmental authority or third party alleging that
the Transferred  Business is not currently in compliance with any  Environmental
Law.  To the  knowledge  of  Edwards,  there has been no release of a  Hazardous
Substance, as that term is defined in the Comprehensive  Environmental Response,
Compensation  and Liability Act, 42 U.S.C.  ss.ss.  9601 et seq., in excess of a
reportable  quantity on any of the real  properties  comprising the  Transferred
Business.

          (r)  Government  Regulations  and  Approvals.  As of the Closing Date,
Novacor LLC will not be subject to regulation  under the Investment  Company Act
of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended,
the Federal Power Act, the Interstate  Commerce Act, the Commodity  Exchange Act
or any federal or state statute or  regulation  limiting its ability to incur or
assume indebtedness for borrowed money. As of the Closing Date, Novacor LLC will
have obtained all  governmental  approvals  necessary to conduct the Transferred
Business as presently conducted and as it will be conducted on the Closing Date.

          (s) Purchase For Investment.  Edwards is acquiring the Newco Preferred
Shares  hereunder for investment (for its own account or for accounts over which
it exercises investment  control),  and not with a view to, or for offer or sale
in connection with, any distribution thereof, which would be in violation of the
Securities  Act,  or  any  applicable  state  securities  law.  Edwards  is  (i)
knowledgeable,  sophisticated  and experienced in business and financial matters
and fully  understands the limitations on transfer  described above; and (ii) an
"accredited  investor"  as such term is defined in Rule 501(a) of  Regulation  D
under the Securities Act.

          (t)  Stockholder  Approval.  No action is  required  by the members of
Edwards to approve the Transactions contemplated by the Transaction Agreements.

          (u)  Brokers,  Finders,  etc.  Except for Credit  Suisse  First Boston
Corporation, Edwards is not subject to any valid claim of any broker, investment
banker,  finder  or other  intermediary  in  connection  with  the  transactions
contemplated by this Agreement.  Edwards is solely  responsible for any payment,
fee or  commission  that may be due to Credit  Suisse First Boston in connection
with the transactions contemplated hereby.

          (v) Information  Provided.  All information provided to World Heart by
Edwards  regarding the Transferred  Business is true and correct in all material
respects  and no  material  facts have been  omitted  therefrom  which make such
information misleading as of the date hereof.

          (w) Edwards. Edwards is the principal U.S. operating entity of Edwards
Lifesciences Corporation.

          SECTION III.2  Representations  and  Warranties of World Heart.  World
Heart hereby represents and warrants to Edwards as follows:

          (a) Organization  and Standing.  World Heart (i) is a corporation duly
organized,  validly existing and in good standing under the laws of the Province
of Ontario,  (ii) has all requisite power and authority to own, lease or operate
the  assets  it now owns,  leases or  operates  and (iii) is duly  qualified  or
licensed to do business in each  jurisdiction  in which the  ownership or use of
its assets or conduct of its business  requires it to be so  qualified,  in each
case  except  for  such  failures   that  would  not   reasonably  be  expected,
individually or in the aggregate,  to result in (i) a material adverse effect on
the business or  financial  condition of World Heart and the direct and indirect
subsidiaries of World Heart (as set forth on Schedule  3.2(a)) (the "World Heart
Subsidiaries"), taken as a whole or (ii) a material impairment of the ability of
World Heart to perform its obligations under the Transaction Agreements (each, a
"World Heart Material Adverse Effect").

          (b)  Authority.   The  execution  and  delivery  of  the   Transaction
Agreements,  and the performance by World Heart of its obligations hereunder and
thereunder,  have been duly  authorized by all  necessary  action on the part of
World Heart.  This Agreement has been and as of the Closing Date the Transaction
Agreements to which it is a party shall have been duly executed and delivered by
World Heart and, assuming the due execution and delivery hereof by Edwards, this
Agreement  constitutes  and, as of the  Closing  Date,  each of the  Transaction
Agreements  shall  constitute  a valid and binding  obligation  of World  Heart,
enforceable  against  World Heart in accordance  with its terms,  except as such
enforcement  may be  limited  by  (i)  bankruptcy,  insolvency,  reorganization,
moratorium  or similar laws now or hereafter  in effect  relating to  creditors'
rights  generally and (ii) general  principles of equity  (regardless of whether
such enforcement is sought in a proceeding in equity or at law).

          (c)  Consents;  No  Conflict.  The  consummation  of the  transactions
hereunder  will not require  the  consent of any party to any  Contract to which
World  Heart,  or any of its  affiliates,  is a party or by which any of them is
bound, or the consent, approval, order or authorization of, or the registration,
declaration or filing with,  any  governmental  authority,  except for those (i)
required under the HSR Act, or (ii) that become applicable solely as a result of
the  actions  or status of  Edwards  or its  affiliates.  Except as set forth on
Schedule  3.2(c),  assuming the  consents,  approvals,  orders,  authorizations,
registrations,   declarations  and  filings   contemplated  by  the  immediately
preceding sentence are obtained or made, as applicable, the execution,  delivery
and  performance  by World  Heart of this  Agreement  will not (i)  violate  any
material  law  applicable  to World  Heart or Newco,  (ii) result in a breach or
violation of any material  provision of, or constitute a material default under,
any such Contract which is material, or (iii) conflict with any provision of the
articles or by-laws of World Heart,  in each case except for any such violation,
breach,  default or conflict which would not reasonably be expected to result in
a World Heart Material Adverse Effect.

          (d) SEC Reports and Financial Statements. Each form, report, schedule,
registration  statement,  definitive  proxy statement or other document filed by
World  Heart  with the  Securities  and  Exchange  Commission  (the  "SEC") or a
Canadian provincial  securities  regulatory  authority (the "Canadian Securities
Commissions")  since October 8, 1996 (as such  documents  have since the time of
their filing been  amended,  the "World Heart  Reports"),  which include all the
documents  (other than  preliminary  material)  that World Heart was required to
file with the SEC or the Canadian Securities  Commissions since such date, as of
their respective dates,  complied in all material respects with the requirements
of the  Securities  Act or the Exchange Act or  applicable  Canadian  securities
legislation (as such term is defined in National Instrument 14-101 issued by the
Canadian  Securities  Commissions),  as the  case  may  be,  and the  rules  and
regulations  of the SEC  and  the  Canadian  Securities  Commissions  thereunder
applicable  to such  World  Heart  Reports.  None  of the  World  Heart  Reports
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements  therein,
in light of the circumstances under which they were made, not misleading, except
for such statements,  if any, as have been modified by subsequent  filings prior
to the date hereof.  The  financial  statements  of World Heart  included in the
World Heart reports comply as to form in all material  respects with  applicable
accounting  requirements and with the published rules and regulations of the SEC
with respect  thereto,  have been  prepared in  accordance  with  Canadian  GAAP
applied on a  consistent  basis  during the periods  involved  (except as may be
indicated in the notes thereto or, in the case of the unaudited  statements,  as
permitted by the Securities Act or the Exchange Act) and reconciled to U.S. GAAP
and fairly present (subject in the case of the unaudited statements,  to normal,
recurring  audit  adjustments)  the financial  position of World Heart as at the
dates  thereof  and the  results  of the its  operations  and cash flows for the
periods then ended.

          (e) Purchase For Investment. World Heart is acquiring the Newco Common
Shares  hereunder for investment (for its own account or for accounts over which
it exercises investment  control),  and not with a view to, or for offer or sale
in connection with, any distribution thereof, which would be in violation of the
Securities  Act or any  applicable  state  securities  law.  World  Heart is (i)
knowledgeable,  sophisticated  and experienced in business and financial matters
and fully  understands the limitations on transfer  described above; and (ii) an
"accredited  investor"  as such term is defined in Rule 501(a) of  Regulation  D
under the Securities Act.

          (f) Stockholder  Approval.  Each of the Other Shareholders and Michael
C.J. Cowpland, who in the aggregate hold 41% of the voting power of World Heart,
have approved the Transaction  Agreements and the Transactions and such approval
has not been withdrawn, terminated or amended in any manner whatsoever by any of
the Other Shareholders.

          (g) Brokers, Finders, etc. Except for Merrill Lynch & Co., World Heart
is not subject to any valid claim of any broker,  investment  banker,  finder or
other  intermediary  in connection  with the  transactions  contemplated by this
Agreement.  World Heart is solely responsible for any payment, fee or commission
that may be due to  Merrill  Lynch & Co.  in  connection  with the  transactions
contemplated hereby.

          SECTION III.3 Representations and Warranties of Newco. Newco and World
Heart represent and warrant to Edwards as follows:

          (a)  Organization,  Standing and Power.  Newco is a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
Delaware.

          (b) Subsidiaries.  Newco has no direct or indirect subsidiaries. Newco
does not own,  directly or indirectly,  any of the capital stock or other equity
securities of any other Person.

          (c)  Authority.   The  execution  and  delivery  of  the   Transaction
Agreements, and the performance by Newco of its obligations hereunder, have been
duly authorized by all necessary action on the part of Newco. This Agreement has
been and, as of the Closing Date,  the  Transaction  Agreements to which it is a
party shall have been,  duly executed and  delivered by Newco and,  assuming the
due  execution and delivery  hereof by Edwards and Novacor LLC,  this  Agreement
constitutes  and, as of the Closing Date, each of the Transaction  Agreements to
which it is a party shall  constitute a valid and binding  obligation  of Newco,
enforceable  against  Newco  in  accordance  with  its  terms,  except  as  such
enforcement  may be  limited  by  (i)  bankruptcy,  insolvency,  reorganization,
moratorium  (whether  general or  specific)  or similar laws now or hereafter in
effect relating to creditors'  rights  generally and (ii) general  principles of
equity  (regardless  of whether such  enforcement  is sought in a proceeding  in
equity or at law).

          (d)  Capital  Stock.  The  capitalization  of Newco is as set forth on
Schedule  3.3(d).  All of the outstanding  shares of Newco Common Stock are duly
authorized,  have been validly issued and are fully paid and  nonassessable.  At
the Closing,  the Newco Shares will be duly  authorized,  and,  assuming payment
therefor in  accordance  with this  Agreement,  validly  issued,  fully paid and
nonassessable.  The outstanding  shares of Newco Common Stock have not been, and
the Newco Shares will not be,  issued in violation  of, and are not and will not
be, as the case may be, subject to, any preemptive rights.  Upon consummation of
the Edwards  Contribution,  Edwards  will acquire  title to the Newco  Preferred
Shares,  free and clear of all Liens,  other than those arising  solely from the
actions or status of Edwards.

          (e)  No  Prior  Activities.  Except  for  obligations  or  liabilities
incurred in connection with its incorporation or organization or the negotiation
and consummation of the Transaction  Agreements and the Transactions,  Newco has
not  incurred  any  obligations  or  liabilities  nor engaged in any business or
activities  of any type or kind  whatsoever  or entered into any  agreements  or
arrangements with any person or entity.


                                   ARTICLE IV
                                    COVENANTS

          SECTION IV.1 Conduct of Business by Edwards and Novacor LLC.  From the
date of this  Agreement  through  the  Closing,  each of Edwards and Novacor LLC
agrees  that,  except (i) as  disclosed  in  Schedule  4.1  hereof or  otherwise
provided  for in, or  contemplated  by,  the  Transaction  Agreements,  (ii) the
execution and delivery of, and the consummation of the transactions contemplated
by, the Assignment Agreement or (iii) as approved by World Heart:

          (a)  Edwards  shall  conduct  the  Transferred  Business  only  in the
ordinary and usual course  consistent with past practice,  and Edwards shall use
its  reasonable  commercial  efforts to  preserve  intact the  present  business
organization of Novacor LLC, keep available the services of the present officers
and key  employees  of the  Transferred  Business,  and preserve the goodwill of
those having business relationships with the Transferred Business;

          (b) Edwards shall not (i) amend Novacor LLC's Certificate of Formation
or the Novacor LLC Agreement or (ii)  declare,  set aside or pay any dividend or
other distribution to its members payable in cash, equity interests or property;

          (c) Novacor LLC shall not, nor shall  Edwards  permit  Novacor LLC to,
(i) merge or consolidate with another entity; (ii) acquire or purchase an equity
interest  in or a  substantial  portion of the  assets of  another  corporation,
partnership  or other  business  organization  or  otherwise  acquire any assets
outside the  ordinary  and usual  course of business  and  consistent  with past
practice  or  otherwise  enter  into  any  material   contract,   commitment  or
transaction  outside the ordinary and usual course of business  consistent  with
past practice; (iii) sell, lease, license, waive, release, transfer, encumber or
otherwise  dispose of any of its assets outside the ordinary and usual course of
business and  consistent  with past practice;  (iv) incur,  assume or prepay any
material  indebtedness  or any  other  material  liabilities  other  than in the
ordinary  course of business  and  consistent  with past  practice;  (v) assume,
guarantee,  endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person other than in
the ordinary course of business and consistent with past practice; (vi) make any
loans,  advances  or  capital  contributions  to, or  investments  in, any other
person;  (vii)  authorize or make capital  expenditures in excess of the amounts
currently  budgeted therefor as set forth on Schedule 4.1(c);  (viii) permit any
insurance  policy  relating  to the  Transferred  Business  naming  Edwards as a
beneficiary  or a loss payee to be  cancelled  or  terminated  other than in the
ordinary  course  of  business;  or (ix)  enter  into any  contract,  agreement,
commitment or arrangement with respect to any of the foregoing;

          (d) Except in the  ordinary  course of business  consistent  with past
practice or otherwise as may be required by applicable law, Edwards shall not as
it relates to the Employees, nor shall Edwards permit Novacor LLC to, (i) adopt,
enter into,  terminate or amend any plan or other arrangement for the current or
future  benefit  or  welfare  of any  director,  officer  or  current  or former
employee, (ii) increase in any manner the compensation or fringe benefits of, or
pay any bonus to, any  director,  officer or employee,  (iii) take any action to
fund  or  in  any  other  way  secure,  or to  accelerate  or  otherwise  remove
restrictions  with respect to, the payment of compensation or benefits under any
employee plan, agreement, contract, arrangement or other Edwards plan (including
Edwards stock options);

          (e) Novacor LLC shall not, nor shall  Edwards  permit  Novacor LLC to,
take any action with respect to, or make any material  change in, its accounting
or tax policies or procedures,  except as required by law or to comply with U.S.
GAAP; and

          (f) Neither  Novacor  LLC nor Edwards  shall take or allow to be taken
any action which would jeopardize  qualification of the transaction contemplated
by this Agreement under section 351 of the Code.

          (g) It is  understood  that  Novacor  LLC was  formed  solely  for the
purpose of acquiring the Transferred Business, and that Novacor LLC will have no
material  assets and no material  liabilities  prior to the  consummation of the
transactions contemplated by the Assignment Agreement.

          SECTION IV.2 Conduct of Business of Newco.  During the period from the
date of this Agreement to the Closing,  Newco shall not engage in any activities
of  any  nature  except  as  provided  in or  contemplated  by  the  Transaction
Agreements.  It is  understood  that Newco was formed  solely for the purpose of
effecting the  Transactions,  and that Newco will have no material assets and no
material liabilities prior to the consummation of the transactions  contemplated
by the Assignment Agreement.

          SECTION IV.3 Access to Information.

          (a) During the period prior to the Closing Date,  Edwards shall afford
to  representatives  of  World  Heart,  and  World  Heart  shall  afford  to the
representatives of Edwards,  including,  in each case, their respective counsel,
accountants,  financial  advisors and lenders,  reasonable  access during normal
business  hours  during  the  period  prior  to the  Closing  Date  to  all  the
properties,  books,  Contracts and records of the Transferred Business and World
Heart,  respectively.  World Heart shall indemnify and hold harmless Edwards and
Edwards  shall  indemnify  and hold  harmless  World  Heart with  respect to all
liabilities,   and  for   all   losses,   arising   out  of   their   respective
representatives'  acts or omissions in  connection  with such access and,  after
making any investigation of such properties,  books, Contracts or records, World
Heart and Edwards shall promptly restore such properties,  books,  Contracts and
records to their condition prior to such investigation.

          (b) Each of World Heart and Edwards  acknowledges that the information
being provided hereunder is subject to the terms of a confidentiality  agreement
between Edwards and World Heart,  dated February 15, 2000 (the  "Confidentiality
Agreement"), the terms of which are incorporated herein by reference.

          SECTION IV.4 Transaction Agreements.  At the Closing, each of Edwards,
Novacor  LLC,  Newco and  World  Heart  will  enter  into the other  Transaction
Agreements  to which it is a party  and,  subject  to the terms  and  conditions
hereof,  each of  Edwards,  Newco and World Heart  agrees to use its  reasonable
commercial  efforts to take,  or cause to be taken,  all  actions  and to do, or
cause to be done,  all things  necessary,  proper or advisable to consummate and
make effective as promptly as practicable the Transactions and to cooperate with
each  party  hereto  in  connection  with  the  foregoing,   including,  without
limitation, (i) the execution of the other Transaction Agreements and (ii) using
its reasonable commercial efforts (v) to obtain all necessary waivers,  consents
and  approvals  from other  parties  to  material  Contracts,  (w) to obtain all
consents,  approvals and  authorizations  that are required to be obtained under
any federal,  state,  provincial,  local or foreign law or  regulations,  (x) to
prevent  the entry,  enactment  or  promulgation  of any  threatened  or pending
injunction  or order that would  adversely  affect  the  ability of the  parties
hereto  to  consummate  the  transactions  contemplated  hereby,  (y) to lift or
rescind any injunction or order  adversely  affecting the ability of the parties
hereto to consummate the transactions  contemplated hereby and (z) to effect all
necessary  registrations  and filings,  including filings under the HSR Act, and
submissions of information requested by governmental authorities.

          SECTION IV.5 HSR Act.  Each of Edwards,  Novacor LLC,  Newco and World
Heart agrees to use its  reasonable  commercial  efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary,  proper
or advisable to file as soon as practicable  notifications under the HSR Act and
respond as promptly as  practicable  to any inquiries  received from the Federal
Trade  Commission  and the Antitrust  Division of the  Department of Justice for
additional  information or documentation  and respond as promptly as practicable
to all inquiries and requests  received from any state Attorney General or other
Governmental Entity in connection with antitrust matters.  Concurrently with the
filing of notifications  under the HSR Act or as soon thereafter as practicable,
Edwards, Novacor LLC, Newco and World Heart shall each request early termination
of the HSR Act waiting period.

          SECTION IV.6 Further  Assurances.  From time to time,  whether before,
at, or after the Closing, each party hereto, shall execute and deliver, or cause
to be executed and delivered, all such documents and instruments and shall take,
or cause to be taken,  all such other actions as may be reasonably  necessary to
consummate the Transactions. SECTION IV.7 Employee Benefit Plans.

          (a) Except in accordance  with  applicable law (i) effective as of the
Closing Date, the Employees shall cease  participation  in the Employee  Benefit
Plans as active employees and (ii) as soon as reasonably  practicable  following
the Closing Date,  the Employees  shall commence  participation  in the employee
benefits plans maintained or established by Newco (the "Newco Plans"). The Newco
Plans  shall  provide  benefits  which,  together  with total cash  compensation
(including bonus) and options,  shall be substantially  similar in the aggregate
to those provided by Edwards and Novacor LLC to the Employees  immediately prior
to the Closing Date.

          (b)  Newco  and  World  Heart  shall be  responsible  for,  and  fully
indemnify  Edwards,  Novacor LLC and their  subsidiaries from any and all claims
made by or on behalf of any  Employee  in  respect  of (i)  termination  pay and
similar  obligations  relating  to  termination  of  employment  on or after the
Closing Date, and (ii) accrued vacation pay, bonus and other liabilities arising
under the Employee Benefits Plans (other than liabilities  arising in connection
with  any  "frozen   vacation"   entitlement  and  any  payment  under  Edwards'
Performance  Bonus Plan  accrued by or  otherwise  payable to certain  Employees
prior to the Closing Date as set forth on Schedule  4.7(b),  which amounts shall
be fully paid by Edwards to such Employees prior to the Closing Date).

          (c) Newco shall  recognize all service by Employees  with Novacor LLC,
Edwards, Baxter International Inc. and its related subsidiaries,  as applicable,
for  purposes of vesting,  eligibility  and accrual of benefits  under the Newco
Plans.  The Newco  Plans  shall  not,  with  respect to any  Employee,  limit or
otherwise  restrict  participation  thereunder  for  reason  of any  preexisting
condition  limitation  in such plan to the extent that such  Employee (i) is not
subject to any preexisting condition limitation under a similar Employee Benefit
Plan, or (ii)  currently  participates  under a similar  Employee  Benefit Plan.
Newco shall credit the Employees with any amounts paid prior to the Closing Date
under any Employee  Benefit Plan which is an "employee  welfare plan" within the
meaning of Section 3(1) of ERISA with respect to  satisfaction of any applicable
deductible amounts and copayment minimums under the Newco Plans.

          (d) Edwards,  Novacor LLC, Newco and World Heart agree to cooperate in
carrying out the duties and  responsibilities  contained in this Section 4.7. In
addition,  Edwards and Novacor  LLC agree to make  available  to Newco and World
Heart  such  information  as Newco and World  Heart may  reasonably  request  to
facilitate the  determination of (i) the period of service of any Employees with
Novacor LLC, Edwards, Baxter International Inc. and its related subsidiaries, as
applicable,  prior to the Closing Date,  (ii)  individual  service  accruals and
salary  histories of  Employees,  and (iii) such other  information  as Newco or
World Heart may  reasonably  request to carry out the provisions of this Section
4.7.

          SECTION IV.8 Employees.

          (a) Offer of  Employment.  On or before the Closing Date but effective
as of the Closing Date,  World Heart and/or Newco agrees to offer to continue to
employ each  full-time or regular  part-time  active  Employee of Novacor LLC on
such terms and conditions of employment  that are  substantially  similar to the
terms and conditions of such  Employees'  employment with Novacor LLC, in a form
substantially similar to that set forth on Schedule 4.8. Moreover,  Newco agrees
(i) to  assume  any and all  liability  with  respect  to  each  such  Employee,
including, without limitation, any liability for earned but unpaid salary, wages
and benefits,  and any other  liability to the extent such liability is properly
accrued on the Pro Forma Balance Sheet of Novacor LLC or otherwise identified in
the  Schedules  to this  Agreement,  and (ii) to provide  severance  benefits in
accordance with Edwards's  Severance Pay Plan in effect immediately prior to the
Closing in the event that the  Employee's  employment  with Newco  and/or  World
Heart is terminated within one year of Closing;

          (b) Non-Transferred Employees.  Except with respect to any Employee on
an  authorized  leave of absence as of the  Closing  Date who does not return to
active employment with Edwards within one year following the Closing Date, World
Heart and/or Newco agrees to retain all liability,  if any, for any Employee who
is not offered continued employment with Newco or who is offered a position with
Newco but rejects that employment  offer. Any Employee on an authorized leave of
absence as of the Closing  Date shall  remain an employee of Edwards;  provided,
however,  that should such  Employee  return to active  employment  with Edwards
within one year  following  the Closing  Date,  Newco  and/or  World Heart (upon
receipt of written notice from Edwards  advising that such Employee has returned
to  active  employment)  shall  offer to  employ  such  Employee  on  terms  and
conditions  of  employment  that are  substantially  similar  to the  terms  and
conditions of such Employee's employment with Edwards as of the Closing Date, in
a form substantially similar to that set forth on Schedule 4.8.

          (c) WARN Act. During the ninety-day period following the Closing Date,
Newco  shall not  effectuate  (i) a "plant  closing"  as  defined  in the Worker
Adjustment  and  Retraining  Notification  Act of 1988 ("WARN  Act"),  29 U.S.C.
ss.ss. 2101 et seq.,  affecting any site of employment or one or more facilities
or operating units within any site of employment of the business of Novacor LLC,
or (ii) a "mass  layoff"  as  defined  in the  WARN  Act  affecting  any site of
employment of the business of Novacor LLC, without complying fully with the WARN
Act and any other applicable state or local law requiring notice to employees in
the event of a plant closing or layoff.

          (d) Newco  acknowledges and agrees that any employment loss within the
meaning of the WARN Act, suffered by any Employee  immediately upon or within 90
days of the Closing,  shall have been caused by Newco's decision not to continue
the  employment  of such  Employee,  and not by the  transfer of Novacor LLC. In
addition,  World Heart and Newco shall  indemnify and hold Edwards,  Novacor LLC
and their  affiliates  harmless  from and against  any and all  claims,  losses,
damages,  expenses,  obligations and liabilities (including costs of collection,
attorneys' fees and other costs of defense) which Edwards,  Novacor LLC or their
affiliates may incur in connection  with any suit or claim of violation  brought
against  Edwards,  Novacor LLC or any of their  affiliates under the WARN Act or
any  similar  state or local law that  relates to actions  taken by World  Heart
and/or Newco on or after the Closing Date with regard to any site of  employment
or one or more  facilities  or operating  units within any site of employment of
the business of Novacor  LLC.  For purposes of the WARN Act and this  Agreement,
the Closing  Date is and shall be the same as the  "effective  date"  within the
meaning of the WARN Act.

          (e) Transferred  Employees.  Edwards shall transfer to Novacor LLC any
records  (including,  but not limited to, Internal Revenue Service Forms W-4 and
California Employee Withholding Allowance  Certificates) relating to withholding
and  payment  of United  States  federal,  state and local  income,  disability,
unemployment,  FICA and similar  taxes  ("Payroll  Taxes") with respect to wages
paid by Edwards  during the 2000 calendar year to the  Employees.  In accordance
with Revenue  Procedure  96-60,  1996-2 C.B.399,  and comparable state and local
Payroll Tax laws, (i) Newco agrees to provide the Employees with Forms W-2, Wage
and Tax  Statements,  for the 2000  calendar  year setting  forth the  aggregate
amount of wages paid,  and Payroll  Taxes  withheld in respect  thereof,  to the
Employees  for the 2000 taxable year by Edwards,  Novacor LLC and Newco and (ii)
Edwards agrees to cooperate fully with Newco in connection therewith.

          SECTION IV.9 Certain Tax Matters.

          (a) Each of Edwards,  World  Heart,  Newco and Novacor LLC shall,  and
shall cause its  subsidiaries  to,  cooperate with each other with regard to (i)
the  preparation,  execution  and filing of Tax  Returns and (ii) any tax audit,
administrative  or court  proceeding and any other matter  relating to Taxes, in
each case,  relating to or arising out of Novacor LLC, the Transferred Assets or
the  Transferred  Business or its assets or its  business  and the  transactions
contemplated by this Agreement or any of the other Transaction Agreements.  Such
cooperation  shall include the provision of all relevant  information to another
party, including the provision of reasonable access to employees, books, records
and other data with  respect  to Novacor  LLC,  the  Transferred  Assets and the
Transferred Business.

          (b) World Heart shall promptly  notify Edwards in writing upon receipt
by World Heart or any affiliate of World Heart  (including  Newco or Novacor LLC
after the Closing Date) of notice of any inquiries, claims, assessments,  audits
or similar  events with respect to Taxes  relating to a taxable period ending on
or  prior to the  Closing  Date for  which  Edwards  may be  liable  under  this
Agreement (any such inquiry, claim,  assessment,  audit or similar event, a "Tax
Matter").  Edwards,  at its sole  expense,  shall  have the  sole  authority  to
represent  the  interests  of Novacor  LLC and Newco,  as the case may be,  with
respect to any Tax Matter  before  any taxing  authority  or any court and shall
have the sole right to control the defense,  compromise  or other  resolution of
any Tax  Matter,  including  responding  to  inquiries,  filing Tax  Returns and
settling  audits.  Edwards shall keep World Heart fully and timely informed with
respect to the commencement, status and nature of any Tax Matter. Edwards shall,
in good  faith,  allow World Heart to make  comments  to Edwards  regarding  the
conduct of or positions taken with respect to any Tax Matter.  World Heart shall
have the sole right to control any audit or examination by any taxing authority,
initiate any claim for refund or amend any Tax Return, and contest,  resolve and
defend against any assessment for additional Taxes,  notice of Tax deficiency or
other  adjustment of Taxes of, or relating to, the income,  assets or operations
of Novacor LLC or Newco for all taxable  periods  ending after the Closing Date,
provided,  however,  that neither  World Heart nor any of its  affiliates  shall
enter into any settlement of any contest or otherwise  compromise any issue with
respect to the portion of the Overlap Period (as defined below) that ends on the
Closing Date without the prior written  consent of Edwards,  which consent shall
not be  unreasonably  withheld.  World Heart shall keep Edwards fully and timely
informed  with  respect  to the  commencement,  status  and nature of any audit,
examination  or other  claim by a taxing  authority  with  regard to an  Overlap
Period.  World  Heart  shall,  in good  faith,  allow  Edwards to make  comments
regarding  the  conduct  of  or  position  taken  with  respect  to  any  audit,
examination  or other  claim by a taxing  authority,  Tax  Return  and claim for
refund of Taxes,  with regard to any Overlap Period.  All Tax Returns of or with
respect to Novacor LLC for an Overlap  Period  shall be prepared  and filed in a
manner consistent with the past practices of Edwards and its affiliates.

          (c) Edwards shall  furnish to World Heart,  on or prior to the Closing
Date, a non-foreign  person  affidavit  which complies with the  requirements of
Code section 1445.

          (d) Neither  Edwards nor Novacor LLC shall take any action on or prior
to the Closing  Date that would cause  Novacor LLC to be treated as other than a
disregarded  entity for U.S. federal,  state or local tax purposes.  (e) All Tax
liabilities  with respect to the income,  property or  operations of Novacor LLC
that relate to taxable  periods  beginning  before the  Closing  Date and ending
after the Closing  Date (the  "Overlap  Period")  shall be  apportioned  between
Edwards and World Heart as follows:  (A) in the case of Taxes other than income,
sales and use and withholding Taxes, on a per diem basis, and (B) in the case of
income,  sales and use and  withholding  Taxes, as determined from the books and
records of Novacor LLC as though the taxable year of Novacor LLC  terminated  at
the close of business on the Closing Date; provided, however, that Edwards shall
not be liable for any such Taxes  incurred on the Closing Date due to any action
or inaction of or caused by World Heart, Newco or Novacor LLC after the Closing.

          SECTION IV.10 Financial Information.

          (a) Newco shall and World  Heart  shall cause Newco to,  retain all of
the books and records of Novacor LLC for a period of ten years after the Closing
Date or  such  longer  time as may be  required  by law.  After  the end of such
period,  before  disposing of such books or records,  Newco shall give notice to
such effect to Edwards and give Edwards an  opportunity to remove and retain all
or any part of such books or records as Edwards may select.

          (b) After the  Closing,  and for so long as Edwards  has any  material
contingent  or other  obligation  under any of the  Contracts  or owns any Newco
Shares, Newco shall and World Heart shall cause Newco to, provide to Edwards (i)
within  90 days  after  the end of each  fiscal  year of  Newco,  any  financial
statements of Newco  prepared for such fiscal year and (ii) within 45 days after
the end of each fiscal quarter (other than the last fiscal quarter of any fiscal
year) of Newco,  any  financial  statements  of Newco  prepared  for such fiscal
quarter.  Edwards shall not disclose such  information  to any person other than
its affiliates, accountants, counsel or representatives or any lessor, mortgagee
or prospective purchaser who agrees to keep such information  confidential.  The
confidentiality  restrictions  of  this  Section  4.10(c)  shall  not  apply  to
information  which (x) was or becomes  generally  available  to the public other
than as a result of a disclosure  by Edwards or (y) was or becomes  available to
Edwards  on a  nonconfidential  basis  from a  source  other  than  Newco or its
affiliates,  accountants,  counsel or  representatives  or any  person  known by
Edwards to be bound by a confidentiality agreement with Newco.

          (c) Within 60 days of the Closing Date, Edwards shall deliver to World
Heart audited balance sheets of Novacor LLC for December 31, 1997, 1998 and 1999
and the related statements of results of operations and statements of cash flows
for the periods then ended, including the notes thereto.

          SECTION IV.11 Insurance.  Newco shall secure insurance with respect to
Novacor  LLC's  business  from  the  Closing  Date  covering  general  liability
(including,  without  limitation,  premises  liability),  products liability and
workers  compensation  in  amounts,   determined  by  Newco  acting  reasonably,
customary for the industries in which Novacor LLC operates and  satisfactory  to
meet World Heart's obligations under the Distribution Agreement.

          SECTION IV.12  Publicity.  Edwards,  World Heart and Newco agree that,
prior  to  the  Closing,  no  public  release  or  announcement  concerning  the
Transactions  shall be issued by any party  without  the prior  written  consent
(which consent shall not be unreasonably withheld) of the other party, except as
such release or announcement  may be required by law.  Edwards,  World Heart and
Newco agree  that,  prior to the  Closing,  no  disclosure  (other than a public
release or  announcement  pursuant  to the  previous  sentence)  of the terms or
provisions of the Transaction Agreements shall be made without the prior written
consent (which consent shall not be  unreasonably  withheld) of the other party,
except to representatives,  advisors, counsel, and lenders to the parties hereto
who acknowledge the confidentiality hereof, and except as required by law.

          SECTION IV.13 Certain Understandings.

          (a)  World  Heart  and  Newco  have  received  from  Edwards   certain
projections, forecasts and other forward-looking information relating to Novacor
LLC. Each of World Heart and Newco acknowledges that (i) there are uncertainties
inherent in  attempting to make such  projections  and  forecasts,  (ii) each of
World Heart and Newco is familiar  with such  uncertainties  and are taking full
responsibility  for making their own  evaluation of the adequacy and accuracy of
all projections, forecasts and other forward-looking information so furnished to
them and  (iii)  neither  World  Heart nor Newco  shall  have any claim  against
Edwards or its agents with respect thereto.  Accordingly,  without derogation of
any of the representations  and warranties of Edwards set forth herein,  Edwards
makes no representation or warranty with respect to such projections,  and other
forward-looking information.

          (b) Each of  World  Heart  and  Newco  acknowledges  that,  except  as
expressly set forth herein,  neither Edwards, nor any other person, has made any
representation  or  warranty,   express  or  implied,  as  to  the  accuracy  or
completeness of any information  regarding Novacor LLC, the Transferred Business
or the  Transferred  Assets,  and neither  Edwards nor any other  person will be
subject to any  liability to World Heart or Newco or any other person  resulting
from  the  distribution  to  World  Heart  or  Newco,  or the use of,  any  such
information. Each of World Heart and Newco acknowledges that, should the Closing
occur,  Newco will acquire the Transferred  Business in an "as is" condition and
on a "where is" basis,  without  any  representation  or  warranty  of any kind,
express or implied,  except such  representations  and warranties  expressly set
forth herein and subject to the indemnification obligations set forth in Article
VII of this Agreement.

          (c) Each of  World  Heart  and  Newco  acknowledges  that,  except  as
expressly set forth herein,  neither Edwards, nor any other person, has made any
representation or warranty, express or implied, as to (i) the physical condition
or state of repair of the real property included in the Transferred  Assets, the
improvements   constituting  a  part  thereof  or  the  equipment  and  fixtures
appurtenant thereto,  (ii) the gross or net income derived therefrom,  (iii) the
cost, book value or market value thereof, (iv) the use or potential use thereof,
or (v) any  other  matter  affecting,  or  relating  to,  such  property  or the
operation or management thereof.

          SECTION IV.14 Required Notices. (a) Between the date of this Agreement
and the Closing Date,  Edwards will notify World Heart and Newco of any event of
which Edwards obtains knowledge (i) which would reasonably be expected to result
in a  Business  Material  Adverse  Effect  (ii)  which,  if known as of the date
hereof,  would have been required  under this Agreement to be disclosed to World
Heart and Newco or (iii) which constitutes notice from any third person alleging
that the consent of such third person is or may be required in  connection  with
the Transactions other than those set forth on Schedule 3.1(e).

          (b) Between the date of this  Agreement  and the Closing  Date,  World
Heart and Newco will  notify  Edwards of any event of which Newco or World Heart
obtains  knowledge  (i) which would  reasonably be expected to result in a World
Heart Material Adverse Effect,  (ii) which, if known as of the date hereof would
have been required  under this  Agreement to have been  disclosed to Edwards and
(iii) which  constitutes  notice from any third person alleging that the consent
of such third person is or may be required in connection  with the  transactions
contemplated by the Transaction Agreements.

          SECTION  IV.15  Patient  Service.  Newco shall,  and World Heart shall
cause  Newco to,  continue to provide  service  and  support to (a)  patients of
Edwards or Novacor LLC who have Novacor  implants as of the date hereof or prior
to the Closing Date and (b) those  patients who have a Novacor's  left ventricle
assist device  implanted  after the Closing Date (each patient  referred to as a
"Novacor  Patient")  in each  case,  in a manner at least as  favorable  to such
individuals,  for so long as  clinically  necessary,  as has  been  provided  by
Edwards or Novacor LLC prior to the date hereof.

          SECTION IV.16 Post Closing Capital Contribution Obligations. Until the
third  anniversary of the Closing,  World Heart shall acquire Newco Common Stock
and/or  junior  preferred  stock of Newco for cash in such  amounts  and at such
times as  necessary  so that the sum of the common  equity  and any such  junior
preferred equity remains at all times greater than zero under U.S. GAAP.

          SECTION  IV.17  Outstanding  Consents.   Edwards  agrees  to  use  its
reasonable  commercial  efforts to obtain  the  consents  set forth on  Schedule
3.1(e)  hereto,  none of which each of World Heart and Newco  acknowledges  have
been obtained as of the date hereof.

          SECTION IV.18  Governmental  Approvals.  Edwards  agrees to deliver to
World Heart  prior to the Closing  Date,  copies of all  governmental  approvals
which  Edwards  currently  has to conduct the  Transferred  Business,  including
without limitation, FDA approvals.

          SECTION IV.19  Transfer  Restrictions.  So long as Edwards holds Newco
Preferred Shares,  Edwards shall not sell,  transfer or otherwise dispose of any
Newco Preferred Shares, except in accordance with one of the following:

          (a) pursuant to a merger,  consolidation or other business combination
of  Edwards,  where  Edwards is not the  surviving  entity,  or a sale of all or
substantially all of Edwards's assets; provided,  however, that the surviving or
purchasing  entity agrees in writing to be bound by the terms of this Agreement;
or

          (b) pursuant to a transfer of Newco Preferred Shares, by Edwards to an
affiliate  of  Edwards,  from an  affiliate  of  Edwards  to  Edwards or between
affiliates  of Edwards  (any such  transferee  shall be  referred to herein as a
"Permitted Transferee"), provided that in the case of any such transfer, Edwards
or a Permitted  Transferee,  as the case may be, shall have provided World Heart
with  written  notice of such  proposed  transfer  at least  five days  prior to
consummating  such  transfer  stating the name and the address of the  Permitted
Transferee and the relationship between the transferring party and the Permitted
Transferee and the Permitted Transferee shall have agreed in writing to be bound
by the terms of this  Agreement.  If any  Permitted  Transferee to whom Series A
Preferred Stock have been transferred pursuant to this Section 4.19 ceases to be
a Permitted Transferee,  such Series A Preferred Stock shall be transferred back
to the transferor or another Permitted Transferee  immediately prior to the time
such Person  ceases to be a  Permitted  Transferee.  Edwards  and any  Permitted
Transferee  shall  be  jointly  and  severally  liable  for any  breach  of this
Agreement by such Permitted Transferee.

          (c)  Legends  on  Shares.   Edwards   agrees  that  the   certificates
representing  the Newco  Preferred  Shares  may bear a legend  referring  to the
transfer restrictions of this Section 4.19.

          SECTION  IV.20  Shareholder  Approval.  World Heart shall (a) take all
actions  necessary  or prudent to obtain the  approval of the  Transactions  and
Transaction  Agreements by the requisite vote of the holders of voting shares of
World Heart (b) if necessary,  acting  through its Board of Directors,  promptly
and duly call, give notice of, convene and hold as soon as practicable a meeting
of the  holders  of voting  shares of World  Heart for the  purpose of voting to
approve and adopt the Transaction  Agreements and the Transactions and recommend
approval and adoption of the Transaction Agreements and the Transactions, by the
stockholders  of World Heart and include in any public  disclosure  statement in
connection  therewith such recommendation and (c) take all reasonable and lawful
action to solicit and obtain such approval.

                                    ARTICLE V
                              CONDITIONS PRECEDENT

          SECTION V.1  Conditions  Precedent to  Obligations  of Newco and World
Heart. The obligation of World Heart to consummate the World Heart  Contribution
and of Newco to issue the Newco Shares shall be subject to the  satisfaction  or
waiver on the Closing Date of the following conditions precedent:

          (a) HSR Act.  The waiting  period  under the HSR Act,  if  applicable,
shall have expired or been terminated.

          (b) No Injunctions or Restraints.  No temporary  restraining  order or
preliminary  or permanent  injunction of any court or  administrative  agency of
competent jurisdiction prohibiting any of the Transactions shall be in effect.

          (c) Consents.  All consents,  approvals and waivers from third parties
and  governmental  authorities and other parties set forth on Schedule 3.1(e) or
necessary  to permit  the  consummation  of the  Transactions,  shall  have been
obtained,  except  where the  failure to obtain any such  consent,  approval  or
waiver would not reasonably be expected to result in a Edwards  Material Adverse
Effect.

          (d) Representations and Warranties. The representations and warranties
of Edwards set forth in this  Agreement (i) which are  qualified by  materiality
shall be true and  correct in all  respects  or (ii) which are not so  qualified
shall be true and  correct in all  material  respects,  in each case,  as of the
Closing  Date with the same effect as though made on and as of the Closing  Date
and without giving effect to notifications made pursuant to Section 4.14.

          (e) Performance of Obligations of Edwards and Novacor LLC. Edwards and
Novacor LLC shall have  performed  in all  material  respects  their  respective
obligations under the Transaction Agreements on or prior to the Closing Date.

          (f)  Certificate.  Edwards  shall  have  delivered  to  World  Heart a
certificate,  dated the Closing Date and signed by a duly  authorized  executive
officer of  Edwards,  to the effect  that the  conditions  set forth in Sections
5.1(d), (e) and (f) have been satisfied.

          (g)  Transaction  Agreements.  Edwards shall have entered into each of
the other Transaction  Agreements to which it is a party and Edwards and Novacor
LLC shall  have  entered  into the  Assignment  Agreement  and the  Transactions
contemplated thereby shall have been consummated.

          (h)  Legal  Opinion.  Counsel  to  Edwards  (which  may be an  Edwards
employee)  shall have  delivered a legal  opinion as to the matters set forth in
Exhibit J hereto, subject to usual qualifications and exceptions.

          SECTION  V.2  Conditions  Precedent  to  Edwards's   Obligation.   The
obligation  of  Edwards  to make the  Edwards  Contribution  is  subject  to the
satisfaction  or waiver on the Closing Date of each of the following  conditions
precedent:

          (a)  Stockholder   Approval.   The  Transaction   Agreements  and  the
Transactions  shall have been approved and adopted by the requisite  vote of the
holders of outstanding capital stock of World Heart entitled to vote thereon;

          (b) HSR Act.  The waiting  period  under the HSR Act,  if  applicable,
shall have expired or been terminated.

          (c) No Injunctions or Restraints.  No temporary  restraining  order or
preliminary  or permanent  injunction of any court or  administrative  agency of
competent jurisdiction prohibiting any of the Transactions shall be in effect.

          (d) Consents.  All consents,  approvals and waivers from third parties
and  governmental  authorities and other parties set forth on Schedule 3.2(c) or
necessary  (i) to permit  Edwards to  contribute  the LLC Interests to Newco and
(ii) World Heart to contribute cash to Newco as  contemplated  hereby shall have
been obtained,  except where the failure to obtain any such consent, approval or
waiver  would not  reasonably  be expected  to result in a World Heart  Material
Adverse Effect.

          (e) Representations and Warranties. The representations and warranties
of Newco and World Heart set forth in this  Agreement (i) which are qualified by
materiality  shall be true and correct in all  respects or (ii) which are not so
qualified shall be true and correct in all material  respects,  in each case, as
of the Closing Date with the same effect as though made on and as of the Closing
Date.

          (f)  Performance of  Obligations  of Newco and World Heart.  Newco and
World Heart shall have  performed  in all  material  respects  their  respective
obligations under the Transaction Agreements on or prior to the Closing Date.

          (g) Certificate. Each of Newco and World Heart shall have delivered to
Edwards a  certificate,  dated the Closing Date and signed by a duly  authorized
executive  officer,  (i) to the effect that the conditions set forth in Sections
5.2(d),  (e) and (f) have been  satisfied  and (ii)  certifying to and attaching
evidence of the insurance obtained in compliance with Section 4.12 hereof.

          (h) Transaction  Agreements.  Newco and World Heart shall have entered
into the other Transaction  Agreements and the Transactions and the transactions
contemplated by the World Heart Preferred  Agreement shall be consummated on the
Closing Date.

          (i) Listing. The World Heart Common shares to be issued upon Edwards's
exercise of its rights under the Exchange Agreement shall have been reserved for
issuance and approved for listing on The Nasdaq  National  Market System and The
Toronto Stock Exchange,  subject to official notice of issuance, the delivery of
final documentation and similar customary listing conditions.

          (j) Legal Opinion.  Counsel to World Heart (which may be a World Heart
employee) shall have delivered an opinion as to the matters set forth in Exhibit
K hereto, subject to usual qualifications and exceptions.


                                   ARTICLE VI
                           TERMINATION AND AMENDMENT

          SECTION VI.1  Termination.  This  Agreement may be terminated  and the
Transactions may be abandoned at any time prior to the Closing:

          (a) by mutual written consent of Edwards and World Heart;

          (b) by either  Edwards or by World  Heart,  by  written  notice to the
other,  if there has been a  material  violation  or  breach  of the  covenants,
agreements,  or representations or warranties of World Heart or Newco on the one
hand or  Edwards  on the  other  (if  such  representation  or  warranty  is not
qualified  by  materiality)  or any  violation  or  breach  of  such  other  the
representations or warranties of World Heart or Newco on the one hand or Edwards
on the other (if so  qualified)  or if there has been a failure  on a  scheduled
Closing Date of  satisfaction of any of the conditions to the obligations of the
terminating  party or  parties  which has not been  cured  within 20 days  after
written notice thereof by the  terminating  party to World Heart or Edwards,  as
the case may be;

          (c) by either Edwards or World Heart,  by written notice to the other,
if the  Transactions  and  the  transactions  contemplated  by the  World  Heart
Preferred  Agreement  have not been  consummated by July 31, 2000 (or such later
date,  as is  agreed  to by  Edwards  and  World  Heart),  and such  failure  to
consummate is not caused by a breach of this  Agreement (or any  representation,
warranty,  covenant,  or  agreement  included  herein)  by the party or  parties
electing to terminate pursuant to this clause (c); or

          (d) by either Edwards or World Heart,  by written notice to the other,
if  there  shall  be any  law  or  regulation  that  makes  consummation  of the
Transactions  or the  transactions  contemplated  by the World  Heart  Preferred
Agreement illegal or otherwise prohibited or if any judgment,  injunction, order
or decree  enjoining  Edwards  or Newco or World  Heart  from  consummating  the
Transactions  or the  transactions  contemplated  by the World  Heart  Preferred
Agreement is entered and such judgment, injunction, order or decree shall become
final and nonappealable.

          SECTION VI.2 Effect of  Termination.  In the event of  termination  of
this Agreement in accordance  with Section 6.1, this Agreement  shall  forthwith
become void and have no effect,  except (a) to the extent that such  termination
results from the material breach by a party hereto of its obligations  hereunder
(in which case such breaching party shall be liable for all damages allowable at
law and any relief  available  at  equity),  (b) as  otherwise  set forth in any
written termination agreement and (c) that Sections 4.3(b), 4.12, 6.2, 8.1, 8.2,
8.11 and 8.12 shall survive termination of this Agreement.


                                   ARTICLE VII
                            SURVIVAL; INDEMNIFICATION

          SECTION VII.1 Survival.  The representations and warranties  contained
in or made  pursuant to this  Agreement  shall survive for a period of 12 months
after  the  Closing  Date;  provided,  however,  that  the  representations  and
warranties  contained in Section 3.1(m) of this Agreement shall survive until 60
days after the expiration of the  applicable  statute of  limitations.  From and
after the Closing,  Edwards  hereby agrees to indemnify and hold harmless  World
Heart,  Newco,  and Novacor LLC, and World Heart hereby  agrees to indemnify and
hold harmless Edwards, in each case against certain  liabilities,  in accordance
with the terms of this Article VII. The  Indemnifying  Party (as defined  below)
shall  not  be  obligated  to  provide  such  indemnification  with  respect  to
representations  and  warranties  to the  Indemnified  Party (as defined  below)
unless  the  Indemnifying  Party  shall have  received  written  notice  thereof
(including a reasonably  detailed  description of the basis of the claim) within
the applicable time period for survival of such representations or warranty,  as
set forth above.

          SECTION VII.2 Indemnification.

          (a) Subject to the other  provisions  of this  Article  VII,  from and
after the Closing,  Edwards shall indemnify and hold harmless World Heart, Newco
and Novacor LLC, and their respective  employees,  directors and agents (i) from
and against any costs or expenses  (including,  without  limitation,  reasonable
attorneys'  fees,  and the reasonable  out-of-pocket  expenses of testifying and
preparing  for  testimony  and  responding  to  document  and other  information
requests, whether or not a party to such litigation),  judgments, fines, losses,
claims (whether or not meritorious) and damages  (collectively,  "Damages"),  as
incurred,  to the extent they  relate to,  arise out of or are the result of any
breach or alleged breach of any representation, warranty or pre-Closing covenant
of Edwards or Novacor LLC, and any  post-Closing  covenant of Edwards,  (ii) for
any liabilities  arising from actions of Edwards or Novacor LLC prior to Closing
which are not disclosed on the Pro Forma Balance Sheet,  the Schedules hereto or
in the notifications provided under Section 4.14 hereof except those incurred in
the ordinary course of business, (iii) any failure by Edwards to obtain consents
of third parties to the Transactions  required by the Applicable  Contracts,  or
(iv)  for  any  and  all  Taxes,   including,   without  limitation,   transfer,
documentary, sales, use, stamp, registration and other similar Taxes, imposed on
or with  respect to Novacor  LLC,  the  Transferred  Assets and the  Transferred
Business,  including,  without  limitation,  as  a  result  of  the  transaction
contemplated by this Agreement, for all Pre-Closing Periods; provided,  however,
that Edwards shall not be liable for any such Taxes incurred on the Closing Date
after the Closing due to any action or inaction  of, or caused by,  World Heart,
Newco or Novacor LLC. For purposes of  clarification  of the preceding  sentence
and  Section  3.1(g),  "liabilities  ...  incurred  in the  ordinary  course  of
business" shall not include  liabilities  arising from tort claims or claims for
breach of contract.

          (b) Subject to the other  provisions  of this  Article  VII,  from and
after the Closing,  World Heart shall  indemnify and hold  harmless  Edwards and
Novacor LLC and Newco and their respective employees,  directors and agents from
and against any Damages, as incurred, to the extent they relate to, arise out of
or are the  result of (i) any breach or  alleged  breach of any  representation,
warranty  or covenant of World Heart or Newco (ii) any action or inaction on the
part of World Heart or Newco (or Novacor LLC post-Closing) relating to a Novacor
Patient.

          SECTION VII.3 Indemnification  Amounts. Except for any indemnification
with respect to Taxes,  notwithstanding  any provision to the contrary contained
in this  Agreement,  Edwards shall not be obligated to indemnify  World Heart or
Newco or  Novacor  LLC and  World  Heart and Newco  shall  not be  obligated  to
indemnify Edwards,  in each case for any Damages with respect to the matters set
forth in  Section  7.2(a)  and (b) hereof (i) unless and until the amount of all
such respective Damages shall equal $250,000 in the aggregate,  and then only to
the extent of such excess or (ii) to the extent such Damages exceed $10 million.

          SECTION VII.4 Claims.  (a) If an  indemnified  party (an  "Indemnified
Party")  intends to seek  indemnification  pursuant to this  Article  VII,  such
Indemnified   Party  shall   promptly   notify  the   indemnifying   party  (the
"Indemnifying  Party"),  in  writing,  of such  claim  describing  such claim in
reasonable detail,  provided,  that the failure to provide such notice shall not
affect the obligations of the  Indemnifying  Party unless and only to the extent
it is  actually  prejudiced  thereby,  subject,  however,  to the  time  periods
specified in Section 7.1 hereof.  Except for claims with respect to Taxes, which
shall be governed by Section 4.9(a), (i) in the event that such claim involves a
claim by a third party against an  Indemnified  Party,  the  Indemnifying  Party
shall  have 30 days  after  receipt  of such  notice to decide  whether  it will
undertake,  conduct and control,  through counsel of its own choosing and at its
own  expense,  the  settlement  or defense  thereof,  and if it so decides,  the
Indemnified  Party shall  cooperate with it in connection  therewith,  provided,
that the Indemnified Party may participate in such settlement or defense through
counsel  chosen  by it,  and  provided  further,  that the  reasonable  fees and
expenses  of  such  counsel  shall  be  borne  by  the  Indemnified  Party.  The
Indemnifying  Party shall not,  without the written  consent of the  Indemnified
Party (which consent shall not be unreasonably  withheld),  settle or compromise
any action.  If the  Indemnifying  Party does not notify the  Indemnified  Party
within 30 days  after the  receipt of notice of a claim of  indemnity  hereunder
that it elects to undertake the defense  thereof,  the  Indemnified  Party shall
have the right to contest,  settle or compromise  the claim but shall not pay or
settle any such claim  without  the  consent of the  Indemnifying  Party  (which
consent shall not be unreasonably withheld).

          (b) Edwards,  Novacor LLC, Newco and World Heart shall cooperate fully
in all  aspects of any  investigation,  defense,  pre-trial  activities,  trial,
compromise,  settlement or discharge of any claim in respect of which  indemnity
is sought pursuant to Article VII,  including,  but not limited to, by providing
the other party with reasonable  access to employees and officers  (including as
witnesses) and other information.

          SECTION VII.5  Exclusive  Remedy.  Absent fraud,  the  indemnification
provisions  of this  Article VII shall be the  exclusive  remedy  following  the
Closing for any breaches or alleged breaches of any  representation  or warranty
contained in the Transaction  Agreements.  Neither party shall have the right to
set-off against any payments to be made by such party pursuant to this Agreement
or the other  Transaction  Agreements or otherwise.  Each of the parties  hereto
agrees not to bring any actions or  proceedings,  at law,  equity or  otherwise,
against any other party or its direct or indirect partners or securityholders in
respect of any breaches or alleged  breaches of any  representation  or warranty
except  pursuant to the express  provisions  of this  Article  VII.  The parties
hereby agree that no party has made any  representations or warranties,  express
or implied,  with respect to this Agreement or the matters  contemplated hereby,
except as  explicitly  set  forth in this  Agreement  or the  other  Transaction
Agreements.

          SECTION VII.6 Duplication. Any liability for indemnification hereunder
shall be determined  without  duplication  of recovery by reason of the state of
facts  giving  rise to such  liability  constituting  a breach  of more than one
representation, warranty, covenant or agreement; provided, however, that subject
to there  being no  duplication  of  recovery,  the  Indemnified  Party shall be
entitled to recover to the maximum extent provided in this Agreement.


                                  ARTICLE VIII
                                  MISCELLANEOUS

          SECTION VIII.1  Governing  Law. This  agreement  shall be governed by,
interpreted  under,  and construed in  accordance  with the internal laws of the
State of New York, including, without limitation,  Sections 5-1401 and 5-1402 of
the New York General  Obligations Law and New York Civil Practice Laws and Rules
327(b).

          SECTION VIII.2 Jurisdiction and Consent to Service. In accordance with
the laws of the State of New York,  and without  limiting  the  jurisdiction  or
venue of any  other  court,  the  parties  (a) agree  that any  suit,  action or
proceeding  arising out of or relating to this  Agreement  may be brought in the
state  or  federal  courts  of  New  York;  (b)  consent  to  the  non-exclusive
jurisdiction of each such court in any suit, action or proceeding relating to or
arising out of the Transaction Agreements;  (c) waive any objection which any of
them may have to the laying of venue in any such suit,  action or  proceeding in
any such court and waive any defense of forum non conveniens; and (d) agree that
service of any court paper in any such suit, action or proceeding may be made in
the same manner in which  notices  may be given  pursuant to Section 8.3 of this
Agreement.

          SECTION VIII.3  Notices.  All notices,  demands,  requests,  consents,
approvals or other communications required or permitted to be given hereunder or
which are given with respect to this Agreement  shall be in writing and shall be
delivered  (charges  prepaid,  receipt confirmed or return receipt requested (if
available)) by hand, by nationally  recognized air courier service, by certified
mail or facsimile, addressed as set forth below or to such other address as such
party shall have  specified  most  recently by written  notice.  Notice shall be
deemed given and effective (i) if delivered by hand or by nationally  recognized
courier service, when delivered at the address specified in this Section 8.3 (or
in accordance with the latest unrevoked written direction from such party), (ii)
if by certified  mail,  upon  mailing or (iii) if given by  facsimile  when such
facsimile is transmitted to the fax number  specified in this Section 8.3 (or in
accordance  with the  latest  unrevoked  written  direction  from  such  party),
provided the appropriate confirmation is received.

                  (a)  if to World Heart, to

                      World Heart Corporation
                      1 Laser Street
                      Nepean, Ontario
                      K2E 7V1
                      Attn:  Chief Financial Officer
                      Fax:  (613) 226-4744

                      with a copy (which shall not constitute notice) to:

                      McCarthy Tetrault
                      The Chambers
                      1400-40 Elgin Street
                      Ottawa, Ontario K1P 5K6
                      Attn:  Robert D. Chapman
                      Fax:  (613) 563-9386

                  (b)  if to Edwards, to

                      Edwards Lifesciences LLC
                      One Edwards Way
                      Irvine, California  92614
                      Attn:  Associate General Counsel
                      Fax:  (949) 250-2525

                      with a copy (which shall not constitute notice) to:

                      Skadden, Arps, Slate, Meagher & Flom LLP
                      300 South Grand Avenue, Suite 3400
                      Los Angeles, California 90071
                      Attention:  Joseph J. Giunta, Esq.
                      Fax:  (213) 687-5600


<PAGE>


          SECTION  VIII.4  Interpretation.  When a  reference  is  made  in this
Agreement  to a Section,  Schedule  or  Exhibit,  such  reference  shall be to a
Section,  Schedule or Exhibit of this Agreement unless otherwise indicated. When
a reference is made in this  Agreement to a specific  Schedule,  such  reference
shall be deemed to include,  to the extent applicable,  all the other Schedules.
The table of  contents,  table of  definitions  and  headings  contained in this
Agreement  are for  reference  purposes only and shall not affect in any way the
meaning  or  interpretation  of this  Agreement.  When the words  "includes"  or
"including" are used in this  Agreement,  they shall be deemed to be followed by
the  words  "without  limitation."  All  accounting  terms not  defined  in this
Agreement shall have the meanings  determined by generally  accepted  accounting
principles  as of the date hereof.  All  capitalized  terms  defined  herein are
equally applicable to both the singular and plural forms of such terms.

          SECTION VIII.5 Severability. If any provision of this Agreement or the
application   of  any  such  provision   shall  be  held  invalid,   illegal  or
unenforceable in any respect for any reason, the parties shall negotiate in good
faith  with a view to the  substitution  therefor  of a suitable  and  equitable
solution  in order to carry  out,  so far as may be valid and  enforceable,  the
intent and  purpose  of such  invalid  provision;  provided,  however,  that the
validity,  legality  and  enforceability  of any such  provision  in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.

          SECTION VIII.6 Counterparts.  This Agreement may be executed in one or
more  counterparts,  each of which shall be deemed an original  and all of which
shall, taken together, be considered one and the same agreement and shall become
effective when one or more  counterparts have been signed by each of the parties
and delivered to the other parties.

          SECTION VIII.7 Entire Agreement;  No Third Party  Beneficiaries.  This
Agreement and the other  Transaction  Agreements,  including all exhibits hereto
and thereto and the Confidentiality Agreement,

          (a) constitute the entire agreement of the parties with respect to the
subject  matter hereof and supersede all prior and  contemporaneous  agreements,
representations,   understandings,  negotiations  and  discussions  between  the
parties, whether oral or written, with respect to the subject matter hereof; and

          (b) shall be binding  upon and shall  inure to the  benefit of each of
the parties and their  respective  successors and permitted  assigns and are not
intended to confer any rights, remedies or benefits on any Persons other than as
expressly set forth in this Section 8.7.

          SECTION VIII.8 Further Assurances. Each party hereto shall do all such
further  acts and  execute,  acknowledge,  deliver  and  file  all such  further
instruments and documents as may be necessary or desirable to give effect to and
carry out the transactions contemplated by this Agreement.

          SECTION VIII.9 Amendments and Modifications; Waivers and Extensions.

          (a) No amendment,  modification or termination of this Agreement shall
be binding upon any other party unless executed in writing by the parties hereto
intending to be bound thereby.

          (b) Any party to this Agreement may waive any right, breach or default
which such party has the right to waive;  provided  that such waiver will not be
effective  against the waiving party unless it is in writing,  is signed by such
party, and specifically refers to this Agreement. Waivers may be made in advance
or after the right  waived  has  arisen or the  breach  or  default  waived  has
occurred.  Any  waiver  may be  conditional.  No  waiver  of any  breach  of any
agreement  or  provision  herein  contained  shall be  deemed  a  waiver  of any
preceding or succeeding  breach thereof nor of any other  agreement or provision
herein  contained.  No  failure  or  delay in  exercising  any  right,  power or
privilege  hereunder  shall  be  deemed a waiver  or  extension  of the time for
performance  of any other  obligations  or acts nor shall any  single or partial
exercise  thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

          SECTION  VIII.10  Assignment.  Neither this  Agreement  nor any of the
rights or obligations  hereunder  shall be assigned by any of the parties hereto
without the prior written  consent of the other  parties,  except that any party
may  assign  all  its  rights  and   obligations  to  the  assignee  of  all  or
substantially  all of the assets of such party including an acquisition  through
merger,  provided  that  such  party  shall  in no event  be  released  from its
obligations  hereunder  without the prior written  consent of the other parties.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.  Any attempted assignment in contravention hereof shall be null and
void.

          SECTION  VIII.11  Equitable  Remedies.  The parties  hereto agree that
irreparable  damage would occur in the event that any of the  provisions of this
Agreement  were not performed in accordance  with their  specific  terms or were
otherwise  breached.  It is accordingly  agreed that the parties hereto shall be
entitled to equitable relief, including in the form of injunctions,  in order to
enforce specifically the provisions of this Agreement,  in addition to any other
remedy to which they are entitled at law or in equity.

          SECTION  VIII.12  Expenses.  Except  as  otherwise  provided  in  this
Agreement,  whether or not the Closing takes place, each party to this Agreement
shall bear its respective  expenses incurred in connection with the preparation,
execution,  and performance of this Agreement and the transactions  contemplated
hereby, including all fees and expenses of agents, representations,  counsel and
accountants;  provided,  however, that each of Edwards and World Heart shall pay
one-half of the costs incurred by Edwards in connection  with the preparation of
the financial  statements,  pursuant to Section 4.10(c);  and provided,  further
that the  prevailing  party in any legal action brought by one party against the
other party and arising out of this Agreement shall be entitled,  in addition to
any other rights and remedies it may have,  to  reimbursement  for its expenses,
including court costs and reasonable attorneys' fees.



<PAGE>


          IN WITNESS WHEREOF,  this Agreement has been signed by or on behalf of
Edwards and World Heart, all as of the date first written above.


                                         EDWARDS LIFESCIENCES LLC


                                        By:___________________________________
                                           Name:
                                           Title:


                                         EDWARDS NOVACOR LLC



                                        By:___________________________________
                                           Name:
                                           Title:


                                         WORLD HEART CORPORATION



                                         By:___________________________________
                                             Name:
                                             Title:



                                          VALENTINE ACQUISITION CORP.



                                          By:___________________________________
                                             Name:
                                             Title: