<PAGE>

                                                                   EXHIBIT 10.16


                            TOKUMEI KUMIAI AGREEMENT

This Tokumei Kumiai Agreement is made this 1st day of April, 2000, between
Baxter Limited, a company organized under the laws of Japan having its head
office at 4, Rokubancho, Chiyoda-ku, Tokyo, Japan (the "Operator"), and Edwards
Lifesciences Finance Limited, a company established under the laws of Japan
having its head office at __________________ (the "Investor").

                                  WITNESSETH:

WHEREAS, the Operator has been engaged in various businesses in Japan,
including: (i) the cardiovascular business described in Exhibit A hereto("CV
                                                        ---------
Business"); (ii) the renal business to manufacture, import, and distribute
products and provide services to improve therapies to treat and combat kidney
disease; (iii) the biotechnology business to import and distribute products and
therapies and to provide services in transfusion medicine; and (iv) the
intravenous business described in Exhibit B hereto ("IV Business").
                                  ---------

AND WHEREAS, the Operator has established the CV Business in Japan, possesses
all relevant CV Business import licenses in Japan, has established effective
distribution channels in Japan, has employees fully dedicated to the success of
the CV
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Business in Japan, and desires to increase the value of the CV Business
in Japan;

AND WHEREAS, the Operator has established the IV Business in Japan, possesses
all relevant IV Business import licenses in Japan, has established effective
distribution channels in Japan, has employees fully dedicated to the success of
the IV Business in Japan, and desires to increase the value of the IV Business
in Japan but such business is currently too small to operate economically unless
it can share staff and other resources with the CV Business;

AND WHEREAS, the Operator desires current access to capital, for purposes of the
CV Business and IV Business and for purposes of a one-time loan of unused funds
to certain Affiliates of Operator, in a form which will complement its future
financing options and decisions, and which will not inhibit its ability to
engage in future financings related to any of its businesses;

AND WHEREAS, the Operator wishes to increase the value of its CV Business and IV
Business in Japan, but also desires to reduce its overall exposure to the annual
variability in the profitability of the CV Business, and wishes to grow the
small IV Business to a size where it can economically operate as a stand alone
division independent of the CV Business;

AND WHEREAS, as an eigyo sha of a tokumei kumiai ("TK") as described in Articles
535 through 542 of the Japanese Commercial Code, the Operator is willing to (i)
contribute the IV Business for a period of no less than 21 months,

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subject to Article 11 hereof, and (ii) provide the Investor, as a tokumei
kumiai'in of a TK, with a share of the annual profits or losses of the CV
Business and the IV Business, in recognition of the following consideration from
the Investor:

* the amount of the TK contribution under this Agreement;

* the willingness of the Investor to forego any right to share in any
appreciation in the value of the CV Business and the IV Business over the term
of this Agreement;

* the willingness of the Investor to grant the Operator the right to exclude the
IV Business from the definition of TK Business pursuant to Article 11 hereof;

AND WHEREAS, the Investor desires to provide financing, through the contribution
as the Investor, to the Operator and to receive profits or losses realized from
the CV Business and IV Business, subject to the risks and rewards of the CV
Business and IV Business, in accordance with the terms of this Agreement;

NOW, THEREFORE, in consideration of the promises and mutual covenants contained
herein and other good consideration, the parties hereto agree as follows:

Article 1.  Definitions
            -----------
In this Agreement the following expressions shall, except where the context
otherwise requires, have the following respective meanings:

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"Account" shall mean the deposit account in the name of the Operator established
at the head office of Bank of Tokyo-Mitsubishi or such other bank accounts as
may be established by the Operator from time to time and notified to the
Investor.

"Affiliate" shall mean, with respect to either party, a juridical person (i)
that owns, directly or indirectly, at least fifty percent (50%) of the voting
shares or ownership interest in such party, or (ii) at least fifty percent (50%)
of the voting shares or ownership interest of which are owned, directly or
indirectly, by an Affiliate as defined in item (i).

"Agreement" shall mean this Tokumei Kumiai Agreement, as originally executed by
the parties hereto and as the same may be amended, modified or supplemented from
time to time in accordance with the terms hereof.

"Auditor" shall mean PricewaterhouseCoopers or such successor firm (also serving
as general corporate auditor for the Operator) as may be appointed by the
Operator.

"Capital Contribution" shall mean the amount that the Investor shall contribute
to the Operator pursuant to Article 4 herein. The parties hereto hereby confirm
that the Capital Contribution has been determined after considering (i) the fair
market value of the CV Business and the IV Business of the Operator, which have
been appraised by PricewaterhouseCoopers as of February 29, 2000,

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and (ii) the value of the one time loans included within the TK Business.

"CV Business" shall have the meaning set forth in the first recital and shall
include, after the date hereof, all activities conducted by Operator pursuant to
the Japan Distribution Agreement.

"Effective Date" shall mean the date first written above or such other date as
the parties hereto agree.

"Fiscal Period" shall mean each month following the Effective Date.  The first
Fiscal Period shall commence on the Effective Date and end on April 30, 2000.

"IV Business" shall have the meaning set forth in the first recital.

"Investor's Allocation Formula" shall mean 90% of the "Net Profits" or "Net
Losses", as the case may be, plus 10% of the

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"Notional Yield" and, in accordance with Article 5, Paragraph 3, below, shall
not include Profits or Losses attributable to realized or unrealized
appreciation or depreciation of the TK Business or the Property upon expiration
or termination of this Agreement.

"Japan Distribution Agreement" shall mean the Japan Distribution Agreement dated
as of March 31, 2000 between Operator and Edwards Lifesciences LLC, an Affiliate
of Investor, as the same may be amended from time to time.

"Losses" shall mean the net Loss Before Income Tax, if any, of the Operator
arising from the operation of the TK Business as shall be determined by the
Operator in accordance with generally accepted accounting principles applicable
in Japan, subject to audit review rights as set forth in Article 8 below.

"Net Losses" shall mean, for any Fiscal Period, (i) the excess, if any, of the
"Notional Yield" over the "Profits" for such Fiscal Period or (ii) the "Losses",
less the "Notional Yield" (i.e. the Notional Yield amount will increase the Net
Losses) for such Fiscal Period.

"Net Profits" shall mean, for any Fiscal Period, the excess, if any, of the
"Profits", over the "Notional Yield" for such Fiscal Period.

"Notional Yield" shall mean the monthly return on a notional investment of
[(Yen) 23.2 billion], paying a rate of return equivalent to the annual coupon
rate as of the Effective Date on ten-year Japanese Government Bond plus [50]
basis points.

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"Operator's Allocation Formula" shall mean 10% of the "Net Profits" or "Net
Losses", as the case may be, plus 90% of the "Notional Yield".

"Payment Date" shall mean April 3, 2000.

"Profits" shall mean the net Income Before Income Taxes, if any, of the Operator
arising from the operation of the TK Business as shall be determined by the
Operator in accordance with generally accepted accounting principles applicable
in Japan, subject to audit review rights as set forth in Article 8 below.

"Property" shall mean all of the assets and property of the Operator which are
utilized by the Operator in the operation of the TK Business.

"TK Business" shall mean the CV Business, the IV Business and the one-time loan
of unused funds to certain Affiliates of Operator.

"Tokumei Kumiai" shall mean the tokumei kumiai relationship established pursuant
to the terms of this Agreement and Articles 535 through 542 of the Commercial
Code of Japan.

Article 2.  The Tokumei Kumiai
            ------------------

(1)  The purpose of the Tokumei Kumiai shall be to achieve the business
     objectives of the Operator and the Investor as summarized above, and to
     allocate and distribute the  Profits or Losses of the TK Business between
     the Investor and the Operator in accordance with the terms of this
     Agreement.

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(2)  The Operator shall use the Capital Contribution for purposes of the TK
     Business.

(3)  The Operator shall  use reasonable care in the conduct the TK Business with
     the intention of preserving the Property and maximizing the Profits, but
     shall not be liable to the Investor in the absence of gross negligence or
     willful or wanton misconduct.

(4)  The TK Business shall be conducted by and under the name of the Operator as
     a separate division.

(5)  The Investor acknowledges and agrees that it shall have no ownership rights
     or claims whatsoever in respect of the Property and shall have no right to
     participate in the operation or management of the TK Business, which in all
     respects shall be conducted solely by the Operator, except to give consent
     to the appointment of the managers of the TK Business, and to participate
     in the results thereof in the manner and to the extent as provided herein.

(6)  The Operator acknowledges and agrees that this Agreement does not
     constitute the Operator as an agent or legal representative of the Investor
     for any purpose and that the Operator is not authorized to assume or create
     any obligation or responsibility, expressed or implied, on behalf or in the
     name of the Investor, or to bind the Investor in any manner.

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Article 3.  Representations and Warranties of the Operator
            ----------------------------------------------

The Operator hereby represents and warrants to the Investor as follows:

(1)  Authority of Operator
     ---------------------

The Operator has full power, authority and legal right to enter into this
Agreement, to perform its obligations hereunder and to conduct the TK Business.

(2)  Government and Third Party Consents
     -----------------------------------

No material consent, authorization, license, permit, registration or approval
of, or other action by, or notice to, any governmental or public body or
authority or any other party is required in connection with the Operator's
execution and delivery of this Agreement or the performance by the Operator of
its obligations hereunder.

(3)  Effect of Agreement
     -------------------

The Operator's execution and delivery of this Agreement, performance of the
Operator's obligations hereunder and consummation of the transactions
contemplated hereby will not (a) violate any provision of any material statute,
law, act, ordinance, or other code, decree, order, rule, regulation, license,
permit, authorization of any governmental body or court to which Operator is
subject; or (b) violate any material judgment, order, writ, injunction or decree
of any court applicable to the Operator.

(4)  Restrictive Documents
     ---------------------

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The Operator is not subject to, or a party to, any material mortgage, lien,
lease, license, permit, agreement, contract, instrument, law, rule, ordinance,
regulation, order, judgment or decree, or any other material restriction of any
kind or character, which would prevent consummation of the transactions
contemplated by this Agreement, compliance by the Operator with the terms,
conditions and provisions hereof or the continued operation of the Operator's
business after the date hereof on substantially the same basis as heretofore
operated, aside from that certain Option Agreement dated March 31, 2000 between
Operator and Edwards Lifesciences Limited, which has been disclosed to the
Investor.

(5)  Financial Statements
     --------------------

The Operator has heretofore furnished the Investor with copies of (1) the income
statements of the Operator for the period from April 1, 1998 through March 31,
1999 and for the period from April 1, 1999 through December 31, 1999, and (2)
the balance sheets of the Operator as of March 31, 1999 and December 31, 1999,
all of which financial statements have been attached as Exhibit C hereto (the
"Financial Statements").  The Financial Statements fairly present the financial
condition and results of operations of the Operator as of the dates and for the
periods therein specified in conformity with generally accepted accounting
principles applicable in Japan, except, in the case of unaudited Financial
Statements, for the absence of footnotes and for normal year-end audit
adjustments.

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(6)  No Adverse Changes
     ------------------

Since December 31, 1999 there has not been (a) any material adverse change in
the financial condition or in the results of operations, business, prospects,
Property or assets of the Operator; (b) any material loss, damage, destruction
or other casualty to the Property or assets of the Operator not covered by
insurance; (c) any material change in any material method of accounting or
accounting practice; (d) any material adverse change in the relationships of the
Operator with its principal suppliers, customers or employees; (e) any material
capital expenditure by the Operator or commitment therefore not provided for in
the Operator's business plan provided to the Investor; (f) any amendment or
termination of any material contract, lease or other instrument to which it is a
party or any agreement to amend or terminate any such contract, lease or
instrument; and (g) any sale, assignment or transfer of any material asset or
Property of the Operator.

(7)  Litigation
     ----------

Except for the case of Nippon Zion v. Baxter Limited, currently pending in the
                       -----------------------------
Tokyo District Court and previously disclosed to Investor, there are no material
actions, suits, proceedings or investigations pending or, to the best knowledge
of the Operator, threatened against the Operator which might materially
adversely affect the CV Business, the IV Business, the Property, or any other
assets or rights of the Operator.

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Article 4.  Capital Contributions
            ---------------------

(1)  The Investor shall transfer 23.2 billion yen ((Yen) 23,200,000,000) in
     immediately available funds to the Account as its Capital Contribution to
     the Operator on the Payment Date.

(2)  The Investor shall make additional Capital Contributions to the Operator on
     a monthly basis, if and as required by Article 5(5), such that the
     remaining balance of the Investor's original Capital Contribution shall not
     be diminished by the portion of Net Losses allocable to the Investor under
     the Investor's Allocation Formula.

Article 5.  Distribution and Allocation of Profits and Losses
            -------------------------------------------------

(1)  The Operator shall compute the Profits or Losses, as the case may be, and
     Notional Yield for each Fiscal Period, and notify the Investor of the same.
     The Profits and Losses shall include actual interest earned from the one-
     time loan of unused funds to certain Affiliates and shall be determined
     after allocating the costs and expenses of the Operator between the CV
     Business, the IV Business and its other businesses in a reasonable manner
     to be separately determined between the Operator and the Investor.  If any
     subsequent adjustments are required (by reason of audit or otherwise) to
     the Net Profits or Net Losses computed for any particular Fiscal Period,
     those adjustments shall be taken into account in

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     determining Net Profits or Net Losses for the Fiscal Period in which such
     adjustments are made.

(2)  Subject to Article 6, the Operator shall allocate the Net Profits, Net
     Losses, and Notional Yield for each Fiscal Period to the Investor in
     accordance with the Investor's Allocation Formula.

(3)  Profits or Losses attributable to unrealized appreciation or depreciation
     of the CV Business, the IV Business or the Property (or to appreciation or
     depreciation realized as a result of the expiration or termination, or any
     event that causes the expiration or termination, of this Tokumei Kumiai
     Agreement, or as a result of a disposition event described in Article 12(3)
     below), shall, upon expiration or termination of this Tokumei Kumiai
     Agreement pursuant to Article 12, be allocated wholly to the Operator.

(4)  The amount of the Net Profits and Notional Yield allocated to the Investor
     pursuant to Article 5(2) shall be distributed to the Investor within 25
     days after the end of the applicable Fiscal Period, by remitting cash to
     the bank account of the Investor notified to the Operator.  For avoidance
     of doubt, unused funds lent out under the TK Business shall be deemed
     available for remittance up to the amount of any such distribution. The
     remaining Net Profits and Notional Yield, being those allocated to the
     Operator, shall be deemed to be distributed to the Operator at the same
     time.

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(5)  If, for any Fiscal Period, Net Losses are allocated to the Investor
     pursuant to Article 5(2), the Investor shall make an additional Capital
     Contribution equal to the amount of such allocated Net Loss to the Operator
     within [25] days after the end of the applicable Fiscal Period.

Article 6.  Liability of the Operator
            -------------------------

All obligations and liabilities of any kind incurred with respect to the CV
Business and IV Business shall be liabilities of the Operator and not the
Investor. However, liabilities incurred by the Operator with respect to the CV
Business or IV Business, including product liabilities attributable to the CV
Business or IV Business, will be included within the computation of Profits and
Losses herein for the periods in which they accrue.

Article 7.  Rights of Investor
            ------------------

The Investor, its employees, directors or agents, may after giving prior written
notice to the Operator, during the Operator's regular business hours, examine
the condition of the Property and the activities of the Tokumei Kumiai and audit
the Tokumei Kumiai's books of account and other records at its own cost.

Article 8.  Accounting
            ----------

(1)  The Operator shall prepare and maintain accurate books of account and
     records covering all transactions relating to the TK Business.

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(2)  The Operator shall, within 10 days after the end of each Fiscal Period,
     prepare and deliver to the Investor a report concerning the TK Business for
     the relevant Fiscal Period.

(3)  The Operator shall, within 90 days after the end of each calendar year,
     provide to the Investor audited financial statements of the Tokumei Kumiai
     for that calendar year.

(4)  The Operator shall, within 90 days after the expiration or the termination
     of this Agreement, provide to the Investor audited financial statements
     with respect to the Tokumei Kumiai for the period commencing the day
     following the end of its immediately preceding calendar year and ending as
     of the date of the expiration or the termination.

(5)  The Investor shall be entitled to request the production of audited
     financial statements for any Fiscal Period or Fiscal Periods.  If the
     Operator does not agree with the results of any such audit, such dispute
     will be resolved pursuant to Article 21.  The cost of any such additional
     audits shall be charged to the Tokumei Kumiai; provided, however that if a
     discrepancy of more than 5% of the reported Profit or Loss for the Fiscal
     Period or Fiscal Periods subject to audit is ultimately found to exist
     between the audit performed by the Investor (as adjusted pursuant to the
     dispute resolution procedures of Article 21) and the financial information
     provided to the Investor by the Operator, the cost of the audit shall be
     borne by the Operator.

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Article 9.   Assignment
             ----------
(1)  The Operator shall not be permitted to assign any of its rights, duties or
     obligations under this Agreement to any non-Affiliates without the prior
     written consent of the Investor.

(2)  The Investor shall be permitted to assign any or all of its rights under
     this Agreement to any third party without the consent of the Operator.

Article 10.  Term
             ----

This Agreement shall take effect on the Effective Date and shall continue in
force for a period of ten years, subject to the termination provisions described
in Article 12, below. At the expiration of such term, the parties may mutually
agree to renew this Agreement with such changes as may be warranted by changes
in circumstances during the initial ten year term.

Article 11.  Modification of TK Business
             ---------------------------

(1)  The Operator retains the right, within its sole discretion, to modify the
     definition of the TK business to exclude the IV Business.  If the Operator
     does not exercise such rights under this Article, the IV Business will
     continue to be part of the definition of the TK Business.

(2)  The Operator will not modify the definition of the TK Business to exclude
     the IV Business for a period of twenty-one (21) months from the Effective
     Date of this

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     Agreement, except subject to the notice and modification fee clauses
     described within this Article.

(3)  If the Operator wishes to modify the definition of the TK Business to
     exclude the IV Business, it must provide written notice to the Investor at
     least six months prior to the effective date of such modification under
     this Article.

(4)  If the Operator provides such notice such that the effective date of such
     modification is within the period described in Clause 2 of this Article,
     the Operator will pay to Investor a modification fee equal to the expected
     allocation to Investor related to the IV Business for the remaining portion
     of the twenty-one month period, based on an expected allocation of [20
     million Yen] per month.

(5)  The expenses relating to the modification of the TK Business pursuant to
     this Article will not be reflected in the financial statements of the TK
     Business.

Article 12.  Termination
             -----------
(1)  The Investor may terminate this Agreement in the event any material breach
     by the Operator of a term of this Agreement occurs which is not rectified
     within 60 days after receipt by Operator of written notice of breach from
     the Investor; provided, however, that if Operator disputes such
     termination, this Agreement shall remain in full force and effect until
     completion of the dispute resolution procedures in Article 21.

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(2)  The Agreement shall terminate in the event either party 1) enters
     bankruptcy, corporate reorganization or similar proceedings or 2) is
     dissolved or liquidated, unless the relevant party assigns its rights and
     obligations to another entity as permitted under the terms of Article 9.

(3)  This Agreement shall terminate immediately prior to the disposition by the
     Operator of any substantial portion of the CV Business outside of the
     ordinary course of business, unless the Investor provides written consent
     to an assignment of the Operator's rights and obligations under this
     Agreement to the Purchaser pursuant to the terms of Article 9.

(4)  The provisions of Article 10 of this Agreement notwithstanding, if Operator
     shall provide notice in writing of a desire to terminate this Agreement at
     any time prior to the tenth anniversary of the Effective Date, then this
     Agreement shall be terminated on the date that falls six months following
     the Investor's receipt of such notice.

(5)  The provisions of Article 10 of this Agreement notwithstanding, this
     Agreement may be terminated at any time by the written mutual agreement of
     the parties specifying the effective date of such termination.

Article 13.  Consequences of Expiration or Termination
             -----------------------------------------

(1)  In the event of the expiration of this Agreement or the termination of this
     Agreement pursuant to Article 10 or

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     12 herein, the Operator shall (i) distribute to the Investor, within five
     [(5)] days after such expiration or termination, cash in an amount equal to
     the Capital Contribution, less any Net Losses allocated to the Investor
     pursuant to this Agreement which have not been followed by additional
     Capital Contributions, as prescribed in Article 4, above, and (ii) provide
     to the Investor, within ninety (90) days after the date of such expiration
     or termination, audited financial statements with respect to the Tokumei
     Kumiai and a full and proper accounting of Profits, Losses and Notional
     Yield as of the date of the expiration or the termination in accordance
     with Article 8(4). At the time the audited financial statements are
     provided pursuant to the preceding sentence, the Operator shall distribute
     to the Investor its share of Net Profits (excluding any and all unrealized
     appreciation or depreciation in the value of the CV Business and the IV
     Business) and Notional Yield accrued under the principles of Article 5(2)
     as of the date of such expiration or termination and to the extent not
     previously distributed to the Investor. In no event shall the Investor
     acquire any right or interest in the Property (including any appreciation
     in the value thereof) or in the CV Business or the IV Business.

(2)  If, at any time following the expiration or termination of this Agreement,
     the Operator shall pay any liability arising from the operation of the TK
     Business during the term of this Agreement (including, without limitation,
     contingent liabilities incurred during the term this

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     Agreement) and that was not taken into account in determining Net Profits
     and Net Losses hereunder, the Investor shall reimburse the Operator for 90%
     of such amount within ten (10) business days after receipt of notice
     thereof from the Operator.

(3)  If, at any time following the expiration or termination of this Agreement,
     the Operator shall receive any payment that results from the operation of
     the TK Business (other than the one-time loan of cash to Affiliates of the
     Operator) during the term of this Agreement (including, without limitation,
     any reimbursement of liabilities pursuant to the Japan Distribution
     Agreement) and that was not taken into account in determining Net Profits
     and Net Losses hereunder, the Operator shall pay 90% of such amount to
     Investor within [ten (10) business days] after Operator's receipt of such
     payments.

(4)  The provisions of Clauses (2) and (3) of this Article 13 shall survive the
     expiration or termination of this Agreement.

Article 14.  Notices
             -------

All notices, requests, demands or other communications that shall or may be
given hereunder shall be in writing in the English language and shall be deemed
to have been duly given or made:

(a)  at the time of delivery to a duly authorized person, if delivered by hand;

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    (b)  upon receipt, if made by letter, or

    (c)  if given by telefax when confirmed by telephone or return telefax.

Such notices, requests, demands or other communications shall be dispatched to
or given at:

If to Investor:

         Baxter Limited
         4, Rokubancho, Chiyoda-ku
         Tokyo 102-8468 Japan
         Attention:________________
         Telefax: 81-3-5213-5111

If to Operator:

         [Edwards - Please provide]

              Telefax:  ____________

or such other person, address or number as either party may designate in writing
to the other by a similar notice.

Article 15.  Amendments
             ----------

This Agreement may not be renewed, amended or modified in any manner, except by
an instrument in writing signed by an authorized representative of Investor and
the President of Operator.

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Article 16.  Waiver
             ------

The waiver, express or implied, by either of the parties hereto of any right
hereunder or of any failure to perform any term of this Agreement or breach
hereof by the other party hereto shall not constitute or be deemed a waiver of
any other right hereunder or of any other failure to perform any term of this
Agreement or breach hereof by such other party, whether of a similar or
dissimilar nature thereto.

Article 17.  Severability
             ------------

Should any provision of this Agreement be held in whole or in part invalid or
unenforceable, such provision or part thereof shall be deemed deleted from this
Agreement and, to the extent not so held invalid or unenforceable, each
provision hereof shall remain in full force and effect.  In the event any
provision deleted hereunder is deemed by either party to be a material provision
hereof, the parties shall negotiate in good faith a mutually acceptable
substitute provision that gives full effect to the spirit and intent of this
Agreement.

Article 18.  Confidentiality
             ---------------

Neither the Operator nor the Investor may divulge the contents of this Agreement
or any information with respect to the operation of the Tokumei Kumiai or the
other party; provided that this restriction shall not apply, (i) in the event
disclosure is requested by appropriate authorities pursuant to statutory
authority or (ii) either party determines, with the advice of counsel, that such
disclosure

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<PAGE>

is desirable or required pursuant to applicable securities laws.

Article 19.  Late Interest
             -------------

In the event the Operator or the Investor shall be late in the payment of money
provided for in this Agreement, such party shall pay interest at the rate of 3%
over the then-effective Japanese long-term prime rate per annum in respect to
the relevant outstanding amount for the period from and including the date
payment thereof was due until and including the date full payment thereof is
made.

Article 20.  Governing Law
             -------------

This Agreement shall be executed in the English language and shall be governed
by and construed in accordance with the laws of Japan.

Article 21.  Dispute Resolution
             ------------------

(1)  Any dispute arising out of or relating to this Agreement shall be resolved
     in accordance with the procedures specified in this Article XXI which shall
                                                         -----------
     be the sole and exclusive procedures for the resolution of any such
     disputes.

(2)  The parties will attempt in good faith to resolve expeditiously any
     dispute, claim or controversy arising out of or relating to the execution,
     interpretation and performance of this Agreement (including the validity,
     scope and enforceability of this arbitration provision) promptly by
     negotiations between executives who have

                                     - 23 -
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     authority to settle the controversy and who are at a higher level of
     management than the persons with direct responsibility for the
     administration of this Agreement. Either party may give the other party
     written notice (an "Escalation Notice") of any dispute not resolved in the
                         -----------------
     normal course of business. Within fifteen days after delivery of the
     Escalation Notice, the receiving party shall submit to the other a written
     response. The Escalation Notice and the response thereto shall include (a)
     a statement of each party's position and a summary of arguments supporting
     that position, and (b) the name and title of the executive who will
     represent that party and of any other person who will accompany the
     executive. Within 30 days after delivery of the Escalation Notice, the
     executives of both parties shall meet at a mutually acceptable time and
     place, and thereafter as often as they reasonably deem necessary, to
     attempt to resolve the dispute. All reasonable requests for information
     made by one party to the other will be honored. All negotiations pursuant
     to this clause are confidential and shall be treated as compromise and
     settlement negotiations for purposes of applicable rules of evidence.

(3)  Any dispute, claim or controversy arising out of or relating to this
     Agreement or its breach, termination or validity which has not been
     resolved by the specified  non-binding procedure set forth in clause (2)
     above within 90 days of the date of delivery of the Escalation Notice shall
     be finally settled by arbitration in Tokyo

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     pursuant to the Commercial Arbitration Rules of the Japan Commercial
     Arbitration Association

Article 22.  Section Headings
             ----------------

The headings in this Agreement are inserted for convenience and identification
only, and are in no way intended to describe, interpret, define, or limit the
scope, extent, or intent of this Agreement or any provision thereof.

Article 23.  Copies
             ------

This Agreement shall be executed in two (2) original copies, with the Operator
and the Investor each retaining one original.

                                     - 25 -
<PAGE>

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

Baxter Limited                             Edwards Lifesciences
                                           Finance Limited



______________________                     _________________________
Name:                                      Name:
Title:                                     Title:

                                     - 26 -
<PAGE>

                                                                       Exhibit A
                                                                       ---------

                                  CV Business
                                  -----------

The Cardiovascular Group sells or is engaged in the development of following
product categories in Japan through its three business units (Cardiovascular
Surgery, or CVS, Anesthesia and Medication Delivery, or AMD, and Vascular and
Interventional Cardiology, or VIC):

 .  Tissue and mechanical heart valves and rings, pericardial patches,
   oxygenators, and cardiopulmonary bypass circuits including reservoirs and
   arterial filters, cardioplegia devices, heart-lung machines, centrifugal
   pumps, arterial and venous cannulae, CDI oxygen monitor cells, Novacor left
   ventricular assist devices

 .  Thermo-dilution (Swan-Ganz) catheters, pacing catheters, central venous
   catheters, venous introducers, Invos cerebral tissue oxygen monitor devices,
   VIA continuous arterial blood gas monitor devices

 .  Direct blood pressure monitor kit, disposable pressure transducers,
   Embolectomy (Fogarty) catheters, Lifepath abdominal aortic aneurysm
   endovascular graft system, Datascope intra-aortic balloon pumps and
   catheters, VasoSeal collagen hemostasis devices, UniCath percutaneous
   transluminal coronary angioplasty balloon catheters and stents, Medtronic
   pacemakers

                                     - 27 -
<PAGE>

The Cardiovascular Group in Japan also manufacturers Custom Pac cardiopulmonary
circuits and direct blood pressure monitor kits at the Miyazaki plant.

                                     - 28 -
<PAGE>

                                                                       Exhibit B
                                                                       ---------


                                  IV Business
                                  -----------

The IV Business consists of the importation and distribution of the following
products and product categories (as the same exist on the date hereof) in Japan:

 .  Infusors, TUR solutions and sets, EIS infusion pumps and Interlink products,
   epidural trays [and Sabratek pumps]