WWW.EXFILE.COM, INC. -- 14526 -- BOSTON SCIENTIFIC CORP. -- EXHIBIT 10.5 TO FORM 10-Q


    EXHIBIT
      10.5


    


    SUBSCRIPTION
      AND STOCKHOLDER AGREEMENT

     

    THIS
      SUBSCRIPTION AND STOCKHOLDER AGREEMENT (this “Agreement”)
      dated
      as of April 21, 2006, is by and between BOSTON SCIENTIFIC CORPORATION, a
      Delaware corporation (“Boston
      Scientific”)
      and
      ABBOTT LABORATORIES, an Illinois corporation (“Abbott”).

     

    WHEREAS,
      Boston Scientific and Abbott are parties to that certain Transaction Agreement
      dated as of January 8, 2006 (as amended to date and as may be further amended,
      restated, supplemented or otherwise modified from time to time, the
“Transaction
      Agreement”),
      pursuant to which Abbott agreed, through itself or one if its affiliates, to
      acquire the vascular intervention and endovascular solutions businesses of
      Guidant Corporation (“Guidant”)
      on the
      terms and subject to the conditions set forth in the Transaction Agreement
      and
      the Purchase Agreement (as hereinafter defined);

     

    WHEREAS,
      the Transaction Agreement provides that, at the Closing, Abbott shall purchase
      from Boston Scientific, and Boston Scientific shall issue and sell to Abbott,
      shares of common stock, par value $0.01 per share (the “Common
      Stock”),
      of
      Boston Scientific; 

     

    WHEREAS,
      Abbott desires to purchase from Boston Scientific, and Boston Scientific desires
      to sell to Abbott, the Shares (as hereinafter defined) upon the terms and
      subject to the conditions set forth herein; and

     

    WHEREAS,
      the parties hereto desire to restrict the sale or transfer of the Shares and
      to
      provide for certain rights and obligations in respect of the Shares, all as
      hereinafter provided.

     

    NOW,
      THEREFORE, in consideration of the promises and the mutual agreements and
      covenants set forth herein, and intending to be legally bound, the parties
      hereto agree as follows:

     

    ARTICLE I

     

    DEFINITIONS

    Section 1.1  Definitions.
      (a)
      Capitalized terms used herein and not defined shall have the meanings ascribed
      to them in that Purchase Agreement, dated as of the date hereof, between Guidant
      and Abbott (the “Purchase
      Agreement”),
      unless otherwise indicated. 

     

    (b)  For
      purposes of this Agreement, all references to “Abbott” shall refer to Abbott
      Laboratories and any of its Affiliates that Abbott Laboratories designates
      to
      purchase Shares in lieu of Abbott in accordance with Section 7.9.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE II

     

    SALE
      OF STOCK; SHARE CLOSING; ADDITIONAL ISSUANCES

     

    Section 2.1  Purchase
      and Sale.
      (a)
      On the
      basis of the representations, warranties, covenants and agreements herein,
      at
      the
      Share Closing (as defined below), Abbott shall purchase from Boston Scientific,
      and Boston Scientific shall issue and sell to Abbott, 56,000,000 shares of
      Common Stock (the “Shares”)
      at a
      purchase price of $25.00 per Share, for an aggregate purchase price of
      $1,400,000,000 (the “Aggregate
      Stock Purchase Price”);
      provided
      that if
      the average of the per share closing prices of the shares of Common Stock on
      the
      New York Stock Exchange during the five consecutive trading days ending (and
      including) the date that is three trading days prior to the Share Closing Date
      (as defined below) is less than $25.00, Abbott shall purchase from Boston
      Scientific, and Boston Scientific shall issue and sell to Abbott, the number
      of
      shares of Common Stock (which shall be deemed to be Shares for purposes of
      this
      Agreement) that is equal to the quotient obtained by dividing $1,400,000,000
      by
      such average per share closing price (the per Share purchase price payable
      by
      Abbott or the applicable Purchaser under this Section 2.1(a) being, the
“Stock
      Purchase Price”).
      In no
      event shall the number of Shares acquired by Abbott pursuant to this Section
      2.1(a) equal or exceed 5% of the number of shares of Common Stock outstanding
      immediately following the issuance of Shares pursuant to this Section 2.1 and
      the consummation of the Merger, and, in such event, the number of Shares to
      be
      purchased by Abbott hereunder and the Aggregate Stock Purchase Price shall
      be
      reduced accordingly.

     

    (b)  
      At the
      Share Closing, (i) Abbott shall pay the Aggregate Stock Purchase Price by wire
      transfer of immediately available funds to a bank account designated in writing
      by Boston Scientific to Abbott not fewer than three Business Days prior to
      the
      Share Closing Date, and (ii) Boston Scientific shall deliver to Abbott the
      Shares in either book entry form or evidenced by stock certificates having
      the
      legend described in Section 3.3, as determined by Boston Scientific not fewer
      than ten business days prior to the Share Closing Date; provided,
      however,
      that in
      the event that Boston Scientific determines to issue the Shares evidenced by
      stock certificates, Boston Scientific shall deliver such stock certificates
      to
      Abbott or an agent of Abbott (which agent shall be designated by Abbott not
      fewer than five business days prior to the Share Closing Date), and Boston
      Scientific shall bear any risk of loss related to such delivery.

     

    Section 2.2  Time
      and Place of Share Closing; Conditions Precedent.
      (a)
      The
      closing with respect to the purchase and sale of the Shares (the “Share
      Closing”)
      shall
      take place simultaneously with, and at the same location as, the Closing
      contemplated by the Purchase Agreement, or on such other date and at such other
      location as mutually agreed between the parties (the date of the Share Closing,
      the “Share
      Closing Date”),
      provided that the conditions set forth in Section 2.2(b) and 2.2(c) have been
      satisfied or waived.

     

    (b)  The
      obligation of Boston Scientific to consummate the transactions contemplated
      by
      this Agreement is subject to the satisfaction or written waiver by Boston
      Scientific, at or prior to the Share Closing, of the following
      conditions:

     

    (i)  each
      of
      the representations and warranties of Abbott contained in this Agreement shall
      be true and correct in all material respects as of the Share 

     

     

    
      
        
        

      

      
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    Closing
      Date, with the same force and effect as if made as of the Share Closing Date
      (other than such representations and warranties as are made as of another date,
      which shall be true and correct in all material respects as of such date),
      except in either case where any failure of such representations and warranties
      to be so true and correct would not materially delay or prevent the consummation
      of the transactions contemplated hereby, and the covenants and agreements
      contained in this Agreement to be complied with by Abbott on or before the
      Share
      Closing Date shall have been complied with in all material respects;


     

    (ii)  all
      of
      the respective conditions to Boston Scientific’s, Sub’s and Guidant’s
      obligations to consummate the Merger, as set forth in the Merger Agreement,
      shall have been satisfied or waived, and each of Boston Scientific and Sub
      shall
      have notified Guidant, and Guidant shall have notified Boston Scientific and
      Sub, in writing (with copies of such notices having been delivered to Abbott)
      that it is ready, willing and able to consummate the Merger and that it intends
      to consummate the Merger immediately following the consummation of the
      transactions contemplated by this Agreement, the Purchase Agreement and the
      Transaction Agreement; and 

     

    (iii)  all
      of
      the respective conditions to Abbott’s and Guidant’s obligations to consummate
      the transactions contemplated by the Purchase Agreement, as set forth in the
      Purchase Agreement, shall have been satisfied or waived, and each party thereto
      shall have notified the other party in writing (with copies of such notices
      having been delivered to Boston Scientific) that it is ready, willing and able
      to consummate the transactions contemplated by the Purchase Agreement and that
      it shall consummate such transactions simultaneously with the consummation
      of
      the transactions contemplated by this Agreement.

     

    (c)  The
      obligation of Abbott to consummate the transactions contemplated by this
      Agreement is subject to the satisfaction or written waiver by Abbott, at or
      prior to the Share Closing, of the following conditions:

     

    (i)  each
      of
      the representations and warranties of Boston Scientific contained in this
      Agreement shall be true and correct in all material respects as of the Share
      Closing Date, with the same force and effect as if made as of the Share Closing
      Date (other than such representations and warranties as are made as of another
      date, which shall be true and correct in all material respects as of such date),
      except in either case where any failure of such representations and warranties
      to be so true and correct would not materially delay or prevent the consummation
      of the transactions contemplated hereby, and the covenants and agreements
      contained in this Agreement to be complied with by Boston Scientific on or
      before the Share Closing Date shall have been complied with in all material
      respects; 

     

    (ii)  all
      of
      the respective conditions to Boston Scientific’s, Sub’s and Guidant’s
      obligations to consummate the Merger, as set forth in the Merger Agreement,
      shall have been satisfied or waived, and each of Boston Scientific and


     

     

    
      
        
        

      

      
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    Sub
      shall
      have notified Guidant, and Guidant shall have notified Boston Scientific and
      Sub, in writing (with copies of such notices having been delivered to Abbott)
      that it is ready, willing and able to consummate the Merger and that it intends
      to consummate the Merger immediately following the consummation of the
      transactions contemplated by this Agreement, the Purchase Agreement and the
      Transaction Agreement; and 

     

    (iii)  all
      of
      the respective conditions to Abbott’s and Guidant’s obligations to consummate
      the transactions contemplated by the Purchase Agreement, as set forth in the
      Purchase Agreement, shall have been satisfied or waived, and Guidant shall
      have
      notified Abbott in writing that it is ready, willing and able to consummate
      the
      transactions contemplated by the Purchase Agreement and that it shall consummate
      such transactions simultaneously with the consummation of the transactions
      contemplated by this Agreement.

     

    (d)  In
      the
      event that Boston Scientific, Sub and Guidant do not complete the Merger on
      the
      same day as, or on the first Business Day following, the Share Closing Date,
      then on the second Business Day following the Share Closing Date, Boston
      Scientific shall repurchase all of the Shares sold to Abbott pursuant to Section
      2.1 for an amount equal to the Aggregate Stock Purchase Price plus interest
      compounded daily on such amount for the period from and including the Share
      Closing Date and ending on the date of repayment at the rate publicly announced
      by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office
      in New York City.

     

    Section 2.3  Additional
      Issuance of Common Stock; Interest Reimbursement.
      (a)
      On the
      date (such date, the “Interest
      Reimbursement Issuance Date”)
      that
      is eighteen months following the Share Closing Date, Boston Scientific shall
      issue to Abbott a number of shares of Common Stock, as calculated by Abbott
      and
      set forth in a written notice sent by Abbott to Boston Scientific within three
      Business Days prior to the Interest Reimbursement Issuance Date (which notice
      shall set forth any relevant calculations), that is equal to the quotient
      obtained by dividing the Cost of Borrowing (as defined below) by the average of
      the per share closing prices of shares of Common Stock on the New York Stock
      Exchange during the twenty consecutive trading days ending (and including)
      the
      date that is five trading days prior to the Interest Reimbursement Issuance
      Date
      (and such shares of Common Stock shall be included in the definition of “Shares”
herein (other than with respect to Section 3.5)) (such price, the “Interest
      Reimbursement Share Price”).
      Any
      Shares issued to Abbott pursuant to this Section 2.3 shall, at the time of
      issuance to Abbott, be registered under the Securities Act (as defined below).
      For purposes of this Section 2.3, the “Cost
      of Borrowing”
means
      Abbott’s weighted average actual cost of borrowing on a principal amount equal
      to the Aggregate Stock Purchase Price during the period commencing on the Share
      Closing Date and ending on the Interest Reimbursement Issuance Date, using
      for
      purposes of determining the weighted average actual cost of borrowing the
      interest rates payable by Abbott pursuant to borrowings incurred by it during
      the period commencing 30 days prior to the Share Closing Date and ending 30
      days
      prior to the Interest Reimbursement Issuance Date; provided
      that
      Boston Scientific will only be required to reimburse Abbott pursuant to this
      Section 2.3 with respect to any Cost of Borrowing greater than $10 million
      and
      less than or equal to $70 million; provided further
      that,
      for purposes of calculating the Cost of Borrowing, (i) the Net Proceeds (as
      defined below) to Abbott or any of its 

     

     

    
      
        
        

      

      
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    Affiliates
      from sales of Shares that are retained by Abbott as described in Section 3.5
      shall be deemed to have been applied by Abbott (minus any Taxes) to reduce
      the
      amount of Abbott’s borrowing in respect of the Aggregate Stock Purchase Price,
      and (ii) such calculation shall be based solely on the actual cost of borrowing
      and shall not be offset by any earnings or other interest income received by
      or
      due to Abbott in respect of any investments or otherwise. Nothing contained
      in
      this Section 2.3 shall require Abbott to make any actual payment with respect
      to
      such borrowing.

     

    (b)  Each
      fiscal quarter following the Share Closing, Abbott shall notify Boston
      Scientific in writing of its Cost of Borrowing during the immediately preceding
      fiscal quarter. The calculation of the Cost of Borrowing shall be subject to
      a
      one-time audit on or after the Interest Reimbursement Issuance Date by a third
      party designated by Boston Scientific and reasonably acceptable to Abbott.
      The
      costs of any such third party audit shall be shared equally by Boston Scientific
      and Abbott. In the event the audit discloses that too many or too few Shares
      were issued by Boston Scientific pursuant to this Section 2.3 as the result
      of a
      miscalculation of the Cost of Borrowing, Abbott (in the case of an overissuance
      of Shares) or Boston Scientific (in the case of an underissuance of Shares),
      as
      applicable, shall make a cash payment to the other party, calculated based
      on
      the Interest Reimbursement Share Price and the number of excess or shortfall
      Shares, as applicable, to account for such miscalculation.

     

    ARTICLE III

     

    CERTAIN
      RESTRICTIONS ON TRANSFER AND VOTING; USE OF PROCEEDS ON TRANSFER OF
      SHARES

    


    Section 3.1  Sale
      Restrictions.
      (a)
      Neither
      Abbott nor any of its Affiliates shall sell, transfer, assign or otherwise
      dispose of, directly or indirectly (“Transfer”),
      any
      Shares during the six-month period following the Share Closing; provided
      that if
      the average of the per share closing prices of shares of Common Stock on the
      New
      York Stock Exchange during any consecutive twenty trading days during the
      six-month period following the Share Closing is greater than $30.00, Abbott
      may
      sell Shares in accordance with Article IV during such six-month period. Subject
      to the second proviso in Section 4.2(b), neither Abbott nor any of its
      Affiliates shall Transfer, during any one-month period following the Share
      Closing, a number of Shares that is greater than 8.33% of the Shares acquired
      by
      Abbott at the Share Closing (such number of Shares, the “Monthly
      Sale Volume Limitation”);
      provided,
      however,
      that
      such restrictions on the ability of Abbott or any of its Affiliates to Transfer
      Shares shall terminate on the date that is eighteen months following the Share
      Closing Date. The provisions of this Section 3.1(a) may be amended or waived
      at
      any time in accordance with Section 7.11.

     

    (b)  Nothing
      in Section 3.1(a) shall prevent Abbott from Transferring any of its Shares
      in
      any change of control transaction involving Boston Scientific or from tendering
      its Shares into any tender offer for the Shares commenced by Boston Scientific
      or any other Person.

     

    Section 3.2  Violation
      of Transfer Restrictions.
      Notwithstanding anything herein to the contrary, Abbott shall not Transfer
      any
      Shares unless such Transfer is made in accordance with applicable securities
      laws. Any attempt to Transfer any Shares in violation of the terms of this
      Agreement shall be null and void, and neither Boston Scientific nor any transfer
      agent 

     

    
      
        
        

      

      
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    shall
      register upon its books any Transfer of Shares by Abbott to any Person except
      a
      Transfer in accordance with this Agreement.

     

    Section 3.3  Legends.
      (a)Each
      certificate representing Shares shall, except as otherwise provided in this
      Section 3.3, be stamped or otherwise imprinted with a legend substantially
      in the following form:

     

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS
      ON
      DISPOSITION OF A SUBSCRIPTION AND STOCKHOLDER AGREEMENT DATED AS OF [______]
      [__], 2006, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, BETWEEN ABBOTT
      LABORATORIES AND BOSTON SCIENTIFIC CORPORATION.”

     

    (b)  Each
      certificate representing shares of Registrable Stock (as defined below) shall,
      except as otherwise provided in this Section 3.3, be stamped or otherwise
      imprinted with legends substantially in the following form:

     

    (i) “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS
      ON
      DISPOSITION OF A SUBSCRIPTION AND STOCKHOLDER AGREEMENT DATED AS OF [______]
      [__], 2006, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, BETWEEN ABBOTT
      LABORATORIES AND BOSTON SCIENTIFIC CORPORATION.”;
      and

     

    (ii) “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF
      UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM
      REGISTRATION IS AVAILABLE.”

     

    (c)  Boston
      Scientific shall, at the request of Abbott, (i) remove from each certificate
      evidencing Shares or Registrable Stock the legend described in Section 3.3(a)
      and 3.3(b)(i), as applicable, on the earlier to occur of (A) such time as Abbott
      and its Affiliates own fewer than 8.33% of the Shares acquired by Abbott at
      the
      Share Closing, and (B) the 18 month anniversary of the Share Closing, and (ii)
      remove from each certificate evidencing Registrable Stock the legend described
      in Section 3.3(b)(ii) if in the opinion of counsel satisfactory to Boston
      Scientific Registrable Stock evidenced thereby may be publicly sold without
      registration under the Securities Act or if it is registered. Boston Scientific
      shall reasonably cooperate with Abbott to remove the legends described in
      Section 3.3(a) and (b) so as to allow Abbott or its Affiliates to Transfer
      Shares as permitted by Section 3.1.

     

    Section 3.4  Agreement
      to Vote; Proxies.
      As of
      the Share Closing, Abbott shall grant to Boston Scientific or any of its
      designees an irrevocable proxy and shall appoint Boston Scientific or any of
      its
      designees as attorney-in-fact for Abbott and each of its Affiliates that
      beneficially owns Shares received pursuant to Sections 2.1 and 2.3, for so
      long
      as Abbott and 

     

    
      
        
        

      

      
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    such
      Affiliates beneficially own such Shares, with respect to any matter to be voted
      on by stockholders of Boston Scientific. All such Shares shall be voted
      proportionately with the vote cast by all other stockholders of Boston
      Scientific entitled to vote and voting on such matter. Upon the sale, transfer,
      assignment or other disposition of such Shares by Abbott or any Affiliate to
      an
      unaffiliated third party, the proxy granted pursuant to this Section 3.4 with
      respect to such Shares so transferred, assigned or disposed shall be
      automatically revoked, and the appointment pursuant to this Section 3.4 as
      attorney-in-fact with respect to such Shares shall be automatically
      terminated.

     

    Section 3.5  Use
      of
      Proceeds on Sale; Loan Prepayment.
      (a)If,
      at
      any time during the term of the Note, Abbott or any of its Affiliates sells
      any
      Shares issued pursuant to Section 2.1 to any unaffiliated third party, then
      Abbott and Boston Scientific shall share in the proceeds per share (net of
      any
      underwriting discounts and commissions) (the "Net
      Proceeds")
      as
      follows: 

     

    (i)  if
      the
      Net Proceeds to Abbott or such Affiliates from any such sales are less than
      or
      equal to 110% of the Stock Purchase Price, Abbott shall retain all of such
      Net
      Proceeds; 

     

    (ii)  if
      the
      Net Proceeds to Abbott or such Affiliates from any such sales are greater than
      110% but equal to or less than 120% of the Stock Purchase Price, Abbott shall
      retain the portion of the Net Proceeds equal to 110% of the Stock Purchase
      Price, and the portion of the Net Proceeds in excess of 110% of the Stock
      Purchase Price (minus any Taxes imposed on Abbott on or with respect to gain
      on
      the Net Proceeds in excess of 110% of the Stock Purchase Price) shall be
      immediately applied by Abbott to reduce any amounts then outstanding under
      the
      Note in accordance with Section 3(a) thereof; and 

     

    (iii)  if
      the
      Net Proceeds to Abbott or such Affiliates from any such sales are greater than
      120% of the Stock Purchase Price, Abbott shall retain the portion of the Net
      Proceeds equal to 110% of the Stock Purchase Price, the portion of the Net
      Proceeds in excess of 110% but less than or equal to 120% of the Stock Purchase
      Price (minus any Taxes imposed on Abbott on or with respect to gain on the
      Net
      Proceeds in excess of 110% of the Stock Purchase Price but less than or equal
      to
      120% of the Stock Purchase Price) shall be immediately applied by Abbott to
      reduce any amounts then outstanding under the Note in accordance with Section
      3(a) thereof, and, with respect to all Net Proceeds in excess of 120% of the
      Stock Purchase Price, 50% of such excess amount shall be retained by Abbott,
      and
      the remaining 50% (minus any Taxes imposed on Abbott on or with respect to
      gain
      on the remaining 50% of the Net Proceeds in excess of 120% of the Stock Purchase
      Price) shall be immediately applied by Abbott to reduce any amounts then
      outstanding under the Note in accordance with Section 3(a) thereof.


     

    (b)  Abbott
      shall determine the amount of such Taxes due any Governmental Authority with
      respect to any such sale referred to in Section 3.5(a) above (using for this
      purpose the highest marginal tax rate under applicable Law) and shall notify
      Boston Scientific in writing 

     

    
      
        
        

      

      
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    within
      three Business Days of any sale of Shares by it or any of its Affiliates, and
      shall include in such notice the number of Shares sold by it or such Affiliates,
      the selling price for such Shares and Net Proceeds for such Shares and the
      amount of Taxes payable by Abbott or its Affiliates with respect to such sale
      (collectively, the "Sales
      Information").
      

     

    (c)  If
      a
      Governmental Authority ultimately determines that the amount of Taxes imposed
      on
      a sale of the Shares is greater than the amount computed by Abbott, the
      principal amount of the Note shall be increased to reflect the increase in
      Taxes
      attributable to proceeds applied by Abbott to reduce amounts outstanding under
      the Note (including any Taxes attributable to the increase of the Note). If
      the
      Note is no longer outstanding at the time when Abbott becomes liable for such
      increase in Taxes, Boston Scientific shall indemnify Abbott for any such
      increase in Taxes, including such Taxes attributable to any such indemnity
      payment. 

     

    (d)  Boston
      Scientific may request that Abbott provide access to its books and records
      to an
      internationally recognized accounting firm reasonably acceptable to Abbott
      for
      the purpose of verifying the Sales Information. In the event that the results
      of
      any such verification indicate that the aggregate amount of Net Proceeds applied
      by Abbott in accordance with this Section 3.5 and pursuant to Section 3(a)
      of
      the Note to reduce amounts outstanding under the Note is 

     

    (i)  less
      than
      the amount calculated by such third party to be so applied by Abbott,
      then

     

    
      	 	
              (A)

            	
              the
                principal amount of the Note shall be decreased by an amount equal
                to such
                difference, or 

            


    

     

    
      	 	
              (B)
                

            	
              if
                the Note is no longer outstanding at the time such verification is
                completed, Abbott shall pay in cash to Boston Scientific an amount
                equal
                to such difference within three Business Days of the delivery to
                each of
                Boston Scientific and Abbott of the final determination by such third
                party of the results of its verification; or


            


    

     

    (ii)  greater
      than the amount calculated by such third party to be so applied by Abbott,
      then


     

    
      	 	
              (A)
                

            	
              the
                principal amount of the Note shall be increased by an amount equal
                to such
                difference (taking into account any adjustments previously made due
                to the
                imposition of increased Tax liability by a Governmental Authority
                as
                provided above), or 

            


    

     

    
      	 	
              (B)
                

            	
              if
                the Note is no longer outstanding at the time such verification is
                completed, Boston Scientific shall pay in cash to Abbott an amount
                equal
                to such difference (taking into account any adjustments or indemnity
                payments previously made due to the imposition of increased Tax liability
                by a Governmental Authority as provided above) within three Business
                Days
                of the delivery to each of Boston Scientific and Abbott of the final
                determination by such third party of the results of its verification.
                Any
                costs associated with
                verification of the Sales Information by the accounting firm shall
                be
                borne equally by Boston Scientific and
                Abbott.

            


    

     

    
      
        
        

      

      
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    Section 3.6  Full
      Sale and Divestiture of Shares.
      Subject
      to Section 3.1(a), Abbott agrees to Transfer all Shares received pursuant to
      Sections 2.1 and 2.3 hereof to an unaffiliated third party no later than 30
      months following the Share Closing.

     

    Section 3.7  Consistent
      Reporting for Tax Purposes.
      Consistent with the provisions of Section 3.5 regarding the use of the Net
      Proceeds from the sale of the Shares, Boston Scientific and Abbott agree that
      for Tax purposes, Boston Scientific is selling a partial interest in the Shares
      to Abbott, and Boston Scientific is retaining the residual interest in the
      Shares. Accordingly, upon a sale of the Shares, Abbott and Boston Scientific
      agree that each party will report a sale of the Shares on its Tax returns in
      the
      following manner: (a) Abbott will treat as its amount realized from the sale
      of
      the Shares the amount that corresponds to the Net Proceeds it is entitled to
      retain under Section 3.5 (not including the amounts that are required under
      Section 3.5 to be applied to reduce the outstanding amounts under the Note),
      (b)
      Boston Scientific will treat as its amount realized from the sale of Shares
      the
      amount that corresponds to the Net Proceeds it is entitled to receive under
      Section 3.5 and that is applied to reduce the outstanding amounts under the
      Note, and (c) both Abbott and Boston Scientific agree to treat the portion
      of
      the Net Proceeds that are applied to reduce the amounts outstanding under the
      Note pursuant to Section 3.5 as having been received by Boston Scientific in
      exchange for its residual interest in the Shares and then transferred to Abbott
      as payment of the amounts outstanding under the Note. The parties further agree
      not to take any Tax position that is inconsistent with the foregoing, provided,
      however, that Boston Scientific shall bear all costs of defending such Tax
      position on audit and in litigation.

     

    ARTICLE IV

     

    REGISTRATION
      RIGHTS

     

    Section 4.1  Definition
      of Registrable Stock.
      For
      purposes of this Agreement, “Registrable
      Stock”
means
      the Shares acquired by Abbott pursuant to Section 2.1 or 2.3 as to which the
      Registration Statement (as defined in Section 4.2) has not become effective
      prior to the Share Closing Date, and any securities issued or issuable with
      respect to such Shares by way of conversion, exchange, replacement, stock
      dividend, stock split or other distribution or in connection with a combination
      of shares, recapitalization, merger, consolidation or other reorganization
      or
      otherwise. Any Registrable Stock shall cease to be Registrable Stock when
      (i) a registration statement covering such Registrable Stock has been
      declared or automatically becomes effective and such Registrable Stock has
      been
      disposed of pursuant to such effective registration statement, (ii) such
      Registrable Stock is sold by a Person in a transaction in which the rights
      of
      Abbott under this Article IV are not assigned, or (iii) such Registrable
      Stock is sold pursuant to Rule 144(k) (or any similar provision then in
      force, but not Rule 144A) under the Securities Act of 1933, as amended (the
“Securities
      Act”)
      without registration under the Securities Act.

     

    Section 4.2  Registration
      Rights; Registration Procedures.
      (a)Boston
      Scientific shall (i) file with the Securities and Exchange Commission (the
      “SEC”)
      on or
      prior to 

     

    
      
        
        

      

      
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    the
      Share
      Closing Date an automatic shelf registration statement (as defined in Rule
      405
      of the Securities Act) on Form S-3 under the Securities Act (the “Registration
      Statement”)
      which
      in addition to other securities of Boston Scientific, shall include shares
      of
      Common Stock for the issuance of the Shares issuable by Boston Scientific to
      Abbott pursuant to this Agreement and (ii) prior to each of the Share Closing
      Date and the Interest Reimbursement Issuance Date, shall pay the required SEC
      filing fees relating the Shares issuable by Boston Scientific to Abbott pursuant
      to this Agreement on such dates, respectively, within the time required by
      Rule
      456(b)(1) under the Securities Act in accordance with Rules 456(b) and 457(r)
      under the Securities Act. To the extent such issuance of the Shares has not
      been
      registered pursuant to an effective Registration Statement on or prior to the
      Share Closing Date, Boston Scientific shall, as promptly as practicable on
      or
      following the Share Closing Date, file with the SEC a “shelf” registration
      statement on Form S-3 pursuant to Rule 415 under the Securities Act (including
      the Registration Statement, to the extent it is used as a resale shelf
      registration statement for the Shares, the “Shelf
      Registration”)
      with
      respect to the Shares issuable by Boston Scientific to Abbott pursuant to this
      Agreement, and thereafter shall (x) use its reasonable best efforts to (A)
      have
      the Shelf Registration declared effective (or take such steps to make it
      automatically effective) as soon as reasonably practicable thereafter, and
      (B)
      keep the Shelf Registration continuously effective from the date such Shelf
      Registration is declared effective until at least the second anniversary of
      such
      effective date (the “Effectiveness
      Period”)
      in
      order to permit the prospectus forming a part thereof to be usable by Abbott
      and
      its Affiliates during such period and (y) pay the required SEC filing fees
      relating to the Shares issuable by Boston Scientific to Abbott pursuant to
      this
      Agreement within the time required by Rule 456(b)(1) under the Securities Act
      in
      accordance with Rules 456(b) and 457(r) under the Securities Act. Boston
      Scientific shall use its reasonable best efforts to list the Shares issuable
      by
      Boston Scientific to Abbott pursuant to this Agreement on the New York Stock
      Exchange. 

     

    (b)  Notwithstanding
      anything to the contrary contained herein, Boston Scientific shall have the
      right to defer or delay filing the Shelf Registration for a period of not more
      than 60 days, or suspend sales under the Shelf Registration filed hereunder
      or
      defer the updating of such filed Shelf Registration during no more than two
      periods aggregating not more than 60 days, in the event that Boston Scientific
      furnishes to Abbott a certificate signed by an authorized officer of Boston
      Scientific stating that, in the good faith opinion of the Board of Directors
      of
      Boston Scientific, such filing, sale or update would interfere with any material
      transaction then being pursued by Boston Scientific or would otherwise require
      disclosure of any material event that Boston Scientific would not otherwise
      be
      required to disclose; provided,
      however,
      that
      Boston Scientific shall extend the Effectiveness Period by the number of days,
      if any, during with the registration rights contemplated hereunder are subject
      to a deferral or suspension as set forth in this Section 4.2(b); and
provided further
      that in
      the event of any such deferral or suspension set forth in this Section 4.2(b),
      the Monthly Sale Volume Limitation for each month during the period commencing
      on the end of such deferral or suspension and ending on the date on which the
      Monthly Sale Volume Limitation is terminated pursuant to Section 3.1 (such
      period, the “Post-Suspension
      Period”)
      (treating any partial month period and the next full month following the end
      of
      such deferral or suspension as one month) shall be increased proportionately
      so
      that the aggregate number of Shares which Abbott may sell during the
      Post-Suspension Period is equal to the number of Shares which Abbott otherwise
      would have been able to sell pursuant to Section 3.1 during the Post-Suspension
      Period and the period of such deferral or suspension had such deferral or
      suspension not occurred.

     

    
      
        
        

      

      
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    (c)  Subject
      to Section 4.2(b), if Boston Scientific files a Shelf Registration pursuant
      to
      Section 4.2(a), Boston Scientific shall, as promptly as
      practicable:

     

    (i)  supplement
      or amend the Shelf Registration and the prospectus used in connection therewith
      (A) as required by the registration form utilized by Boston Scientific or by
      the
      instructions applicable to such registration form or by the Securities Act,
      (B)
      as required for any given offering or to correct any untrue statement of a
      material fact or to remedy any omission of a material fact required to be stated
      therein or necessary to make the statements therein not misleading in light
      of
      the circumstances under which they were made and (C) to include in such Shelf
      Registration any additional securities that become Registrable Stock by
      operation of the definition thereof; 

     

    (ii)  notify
      Abbott (A) when the Shelf Registration or any amendment thereto has been
      filed or becomes effective, the prospectus or any amendment or supplement to
      the
      prospectus has been filed, (B) of any request by the SEC for amendments or
      supplements to the Shelf Registration or the prospectus or for additional
      information, (C) of the issuance by the SEC of any stop order or cease
      trade order suspending the effectiveness of the Shelf Registration or any order
      preventing or suspending the use of any preliminary prospectus or prospectus,
      including the receipt of any notice of objection by the SEC to the use of the
      Shelf Registration or any post-effective amendment thereto pursuant to Rule
      401(g)(2) under the Securities Act or the initiation or, to the extent known
      by
      Boston Scientific, threatening, of any proceedings for such purposes, and
      (D) of the receipt by Boston Scientific of any written notification with
      respect to the suspension of the qualification of the Registrable Stock for
      offering or sale in any jurisdiction or the initiation or threatening of any
      proceedings for such purposes;

     

    (iii)  use
      its
      reasonable best efforts to obtain the withdrawal of any stop order, cease trade
      order or other order suspending the use of any preliminary prospectus or
      prospectus or suspending any qualification of the Registrable Stock covered
      by
      the Shelf Registration or the resolution of any objection of the SEC pursuant
      to
      Rule 401(g)(2) and provide prompt notice to Abbott of such withdrawal or
      resolution;

     

    (iv)  furnish
      to Abbott such numbers of copies of the Shelf Registration and the prospectus
      included therein, including each preliminary prospectus and any amendments
      or
      supplements thereto in conformity with the requirements of the Securities Act,
      any exhibits filed therewith and such other documents and information as Abbott
      may reasonably request;

     

    (v)  use
      all
      reasonable best efforts to register or qualify the Registrable Stock covered
      by
      the Shelf Registration under such other securities or blue sky Laws of such
      jurisdiction within the United States as shall be reasonably appropriate for
      the
      distribution of the Registrable Stock covered by the Shelf Registration;
provided,
      however,
      that
      Boston Scientific shall not be required in connection therewith or as a
      condition thereto to qualify to do business in or to 

     

    
      
        
        

      

      
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    file
      a
      general consent to service of process in any jurisdiction wherein it would
      not
      but for the requirements of this paragraph 4.2(c)(v) be obligated to do so;
      and provided further,
      that
      Boston Scientific shall not be required to qualify such Registrable Stock in
      any
      jurisdiction in which the securities regulatory authority requires that Abbott
      or any of its Affiliates submit any Registrable Stock to the terms, provisions
      and restrictions of any escrow, lockup or similar agreement(s) for consent
      to
      sell Registrable Stock in such jurisdiction unless Abbott or such Affiliate
      agrees to do so;

     

    (vi)  promptly
      notify Abbott upon becoming aware of the happening of any event as a result
      of
      which the prospectus included in such Shelf Registration, as then in effect,
      includes an untrue statement of a material fact or omits to state any material
      fact required to be stated therein or necessary to make the statements therein
      not misleading in light of the circumstances under which they were made, and,
      at
      the request of Abbott, promptly prepare and furnish to Abbott (and file such
      supplement or amendment with the SEC if required) a reasonable number of copies
      of a supplement to or an amendment of such prospectus as may be necessary so
      that, as thereafter delivered to the purchasers of such securities, such
      prospectus shall not include an untrue statement of a material fact or omit
      to
      state a material fact required to be stated therein or necessary to make the
      statements therein not misleading in light of the circumstances under which
      they
      were made. In the event Boston Scientific shall give such notice, Boston
      Scientific shall extend the Effectiveness Period by the number of days during
      the period from and including the date of the giving of such notice to the
      date
      when Boston Scientific shall make available to Abbott such supplemented or
      amended prospectus; and

     

    (vii)  enter
      into customary agreements and take such other actions as are reasonably required
      in order to expedite or facilitate the disposition of the Registrable Stock
      to
      be so included in the Shelf Registration. Boston Scientific shall take any
      such
      other actions as are necessary to otherwise comply with all applicable rules
      and
      regulations of the SEC.

     

    (d)  It
      shall
      be a condition precedent to the obligations of Boston Scientific to take any
      action pursuant to this Section 4.2 that Abbott and its Affiliates shall furnish
      to Boston Scientific such information regarding themselves, the Registrable
      Stock held by them, and the intended method of disposition of such securities
      as
      Boston Scientific shall reasonably request and as shall be required in
      connection with the action to be taken by Boston Scientific
      hereunder.

     

    (e)  All
      expenses incurred in connection with the Registration Statement and Shelf
      Registration, if any, excluding underwriters’ discounts and commissions, but
      including all registration, filing and qualification fees (including SEC and
      New
      York Stock Exchange fees and expenses), word processing, duplicating, printers’
and accounting fees, listing fees, messenger and delivery expenses, all fees
      and
      expenses of complying with state securities or blue sky Laws and the fees and
      disbursements of counsel for Boston Scientific, shall be paid by Boston
      Scientific. Abbott shall bear and pay the underwriting commissions and discounts
      applicable to Registrable Stock offered for its account and the fees and
      disbursements of its counsel in connection with any registrations, filings
      and
      qualifications made pursuant to this Agreement.

     

    
      
        
        

      

      
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    (f)  Boston
      Scientific shall indemnify and hold harmless Abbott and its Affiliates, officers
      and directors against any losses, claims, damages or liabilities, joint or
      several, to which they may become subject under the Securities Act or otherwise,
      insofar as such losses, claims, damages or liabilities (or proceedings in
      respect thereof) arise out of or are based on any untrue or alleged untrue
      statement of any material fact contained in the Registration Statement or the
      Shelf Registration, as applicable, including any prospectus filed under
      Rule 424 under the Securities Act, any preliminary prospectus, any free
      writing prospectus (as defined in Rule 405 under the Securities Act) or any
      “issuer information” filed or required to be filed pursuant to Rule 433(d) under
      the Securities Act or any amendments or supplements thereto or arise out of
      or
      are based upon the omission or alleged omission to state therein a material
      fact
      required to be stated therein or necessary to make the statements therein not
      misleading, and shall reimburse Abbott and its Affiliates, officers and
      directors for any legal or other expenses reasonably incurred by them (but
      not
      in excess of expenses incurred in respect of one counsel for all of them (in
      addition to local counsel)) in connection with investigating or defending any
      such loss, claim, damage, liability or action; provided,
      however,
      that
      the indemnity agreement contained in this Section 4.2(f) shall not apply to
      amounts paid in settlement of any such loss, claim, damage, liability or action
      if such settlement is effected without the consent of Boston Scientific (which
      consent shall not be unreasonably withheld); provided,
      further,
      that
      Boston Scientific shall not be liable to Abbott or its Affiliates, officers
      or
      directors in any such case for any such loss, claim, damage, liability or action
      to the extent that it arises out of or is based upon an untrue statement or
      alleged untrue statement or omission or alleged omission made in connection
      with
      such Registration Statement, Shelf Registration, preliminary prospectus, final
      prospectus or amendments or supplements thereto, in reliance upon and in
      conformity with written information furnished to Boston Scientific or its
      representatives expressly for use in connection with such registration by Abbott
      or any of its Affiliates or representatives. 

     

    (g)  Abbott
      shall indemnify and hold harmless Boston Scientific, its Affiliates, officers
      and directors and each agent and any underwriter for Boston Scientific (within
      the meaning of the Securities Act) against any losses, claims, damages or
      liabilities, joint or several, to which Boston Scientific or any such Affiliate,
      officer, director, agent or underwriter may become subject, under the Securities
      Act or otherwise, insofar as such losses, claims, damages or liabilities (or
      proceedings in respect thereof) arise out of or are based upon any untrue
      statement or alleged untrue statement of any material fact contained in the
      Registration Statement or Shelf Registration, as applicable, including any
      prospectus filed under Rule 424 under the Securities Act, any preliminary
      prospectus, any free writing prospectus (as defined in Rule 405 under the
      Securities Act) or any “issuer information” filed or required to be filed
      pursuant to Rule 433(d) under the Securities Act or any amendments or
      supplements thereto or arise out of or are based upon the omission or alleged
      omission to state therein a material fact required to be stated therein or
      necessary to make the statements therein not misleading, in each case to the
      extent that such untrue statement or alleged untrue statement or omission or
      alleged omission was made in such Registration Statement, Shelf Registration,
      preliminary or final prospectus, or amendments or supplements thereto, in
      reliance upon and in conformity with written information furnished to Boston
      Scientific or its representatives by or on behalf of Abbott or any of its
      Affiliates expressly for use in connection with such registration; and Abbott
      shall reimburse any legal or other expenses reasonably incurred by Boston
      Scientific or any such Affiliate, officer, director, agent or underwriter in
      connection with investigating or defending any such loss, claim, damage,
      liability or action; provided,
      however,
      that
      the indemnity agreement contained in this

     

    
      
        
        

      

      
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     Section 4.2(g)
      shall not apply to amounts paid in settlement of any such loss, claim, damage,
      liability or action if such settlement is effected without the consent of Abbott
      (which consent shall not be unreasonably withheld). 

     

    (h)  Promptly
      after receipt by an indemnified party under Section 4.2(f) or (g), as
      applicable, of notice of the commencement of any action, such indemnified party
      shall, if a claim in respect thereof is to be made against any indemnifying
      party under Section 4.2(f) or (g), as applicable, notify the indemnifying party
      in writing of the commencement thereof, and the indemnifying party shall have
      the right to participate in and assume the defense thereof with counsel selected
      by the indemnifying party and reasonably satisfactory to the indemnified party
      (unless (i) such indemnified party reasonably objects to such assumption on
      the grounds that there may be defenses available to it which are different
      from
      or in addition to those available to such indemnifying party, (ii) the
      indemnifying party and such indemnified party shall have mutually agreed to
      the
      retention of such counsel or (iii) in the reasonable opinion of such
      indemnified party, representation of such indemnified party by the counsel
      retained by the indemnifying party would be inappropriate due to actual or
      potential differing interests between such indemnified party and any other
      party
      represented by such counsel in such proceeding, in which case the indemnified
      party shall be reimbursed by the indemnifying party for the reasonable expenses
      incurred in connection with retaining separate legal counsel); provided,
      however,
      that an
      indemnified party shall have the right to retain its own counsel, with all
      fees
      and expenses thereof to be paid by such indemnified party, and to be apprised
      of
      all progress in any proceeding the defense of which has been assumed by the
      indemnifying party, it being understood that the indemnifying party will control
      such defense. The failure to notify an indemnifying party promptly of the
      commencement of any such action shall not relieve the indemnifying party from
      any liability in respect of such action which it may have to such indemnified
      party on account of the indemnity contained in Section 4.2(f) or (g), as
      applicable, unless (and only to the extent) the indemnifying party was
      prejudiced by such failure, and in no event shall such failure relieve the
      indemnifying party from any other liability which it may have to such
      indemnified party. No indemnifying party shall, without the prior written
      consent of the indemnified party (which consent will not be unreasonably
      withheld), effect any settlement, compromise or discharge of any claim or
      pending or threatened proceeding in respect of which the indemnified party
      is or
      could have been a party and indemnity could have been sought hereunder by such
      indemnified party, unless such settlement, compromise or discharge includes
      an
      unconditional release of such indemnified party from all liability arising
      out
      of such claim or proceeding. 

     

    (i)  To
      the
      extent any indemnification by an indemnifying party is prohibited or limited
      by
      Law, the indemnifying party, in lieu of indemnifying such indemnified party,
      shall contribute to the amount paid or payable by such indemnified party as
      a
      result of such losses, claims, damages or liabilities in such proportion as
      is
      appropriate to reflect the relative fault of the indemnifying party and
      indemnified party in connection with the actions which resulted in such losses,
      claims, damages or liabilities, as well as any other relevant equitable
      considerations. The relative fault of such indemnifying party and indemnified
      party shall be determined by reference to, among other things, whether any
      action in question, including any untrue or alleged untrue statement of material
      fact or omission or alleged omission to state a material fact, has been made
      by,
      or relates to information supplied by, such indemnifying party or indemnified
      party, and the parties’ relative intent, knowledge, access to information and
      opportunity to 

     

    
      
        
        

      

      
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    correct
      or prevent such action. The amount paid or payable by a party as a result of
      the
      losses, claims, damages or liabilities referred to above shall be deemed to
      include any legal or other fees or expenses reasonably incurred by such party
      in
      connection with any investigation or proceeding. In no event shall the liability
      of any indemnifying party be greater in amount than the amount for which such
      indemnifying party would have been obligated to pay by way of indemnification
      if
      the indemnification provided for under Section 4.2(f) or (g) hereof had been
      available under the circumstances. The parties hereto agree that it would not
      be
      just and equitable if contribution pursuant to this Section 4.2(i) were
      determined by pro rata allocation or by any other method of allocation which
      does not take account of the equitable considerations referred to in this
      Section 4.2(i). No person guilty of fraudulent misrepresentation (within the
      meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any person who was not guilty of such fraudulent
      misrepresentation.

     

    (j)  The
      indemnification provided in this Agreement will remain in full force and effect
      regardless of any investigation made by or on behalf of the indemnified party
      or
      any officer, director or Affiliate of such indemnified party and will survive
      the Transfer of the securities.

     

    (k)  The
      obligations in Sections 4.2(f) through (i) shall be in addition to any liability
      that any party may otherwise have to any party.

     

    Section 4.3  Rule
      144 Sales.
      If the
      issuance of the Shares has not been registered pursuant to an effective
      Registration Statement on or prior to the Share Closing, then, following the
      expiration of the Effectiveness Period of the Shelf Registration, Boston
      Scientific shall (a) timely file with the SEC all reports and other filings
      required under the Exchange Act for Abbott or its Affiliates to sell Shares
      pursuant to Rule 144 or any similar rule or regulation hereafter adopted by
      the
      SEC, and (b) take such further action and shall offer all reasonable and
      necessary assistance including, without limitation, the delivery of a legal
      opinion letter and instructions to Boston Scientific’s stock transfer agent to
      enable the sale by Abbott or its Affiliates of Registrable Stock pursuant to
      said Rule 144 or any similar rule or regulation.

     

    ARTICLE V

     

    REPRESENTATIONS,
      WARRANTIES AND AGREEMENTS OF BOSTON
      SCIENTIFIC

     

    Boston
      Scientific hereby represents and warrants to Abbott as follows:

     

    (a)  Boston
      Scientific is a corporation duly incorporated, validly existing and in good
      standing under the Laws of the State of Delaware.

     

    (b)  Boston
      Scientific has all requisite corporate power and authority to execute and
      deliver this Agreement and to perform its obligations hereunder and to
      consummate the transactions contemplated hereby. The execution and delivery
      by
      Boston Scientific of this Agreement, the performance by Boston Scientific of
      its
      obligations hereunder and the consummation by Boston Scientific of the
      transactions contemplated hereby have been duly and validly authorized by all
      necessary corporate proceedings on the part of Boston Scientific and no other
      corporate action on the part of Boston Scientific is necessary for the
      execution, delivery 

     

    
      
        
        

      

      
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    and
      performance by Boston Scientific of this Agreement and the consummation by
      Boston Scientific of the transactions contemplated hereby. This Agreement has
      been duly executed and delivered by Boston Scientific, and assuming the due
      authorization, execution and delivery hereof by Abbott, constitutes a legal,
      valid and binding obligation of Boston Scientific, enforceable against it in
      accordance with its terms except to the extent that its enforceability may
      be
      limited by bankruptcy, insolvency, reorganization, moratorium or other laws
      relating to or affecting creditors’ rights generally and by general equity
      principles.

     

    (c)  (i)
      At
      the time of filing the Registration Statement (or the Shelf Registration, to
      the
      extent an automatic shelf registration statement (as defined in Rule 405 of
      the
      Securities Act)), (ii) at the time of the most recent amendment thereto for
      the
      purposes of complying with Section 10(a)(3) of the Securities Act (whether
      such
      amendment was by post-effective amendment, incorporated report filed pursuant
      to
      Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
      “Exchange
      Act”)
      or
      form of prospectus), and (iii) at the time Boston Scientific or any person
      acting on its behalf (within the meaning, for this clause only, of Rule 163(c)
      under the Securities Act) made any offer relating to the Shares in reliance
      on
      the exemption of Rule 163 under the Securities Act, Boston Scientific was,
      or is
      (as the case may be), a “well-known seasoned issuer” as defined in Rule 405
      under the Securities Act; and (B) at the earliest time after the filing of
      the
      Registration Statement (or the Shelf Registration, to the extent an automatic
      shelf registration statement (as defined in Rule 405 of the Securities Act))
      that Boston Scientific or another offering participant made a bona fide offer
      (within the meaning of Rule 164(h)(2) under the Securities Act) of the Shares,
      Boston Scientific was not an “ineligible issuer” as defined in Rule 405 under
      the Securities Act.

     

    (d)  All
      Shares issued pursuant to Sections 2.1 and 2.3 shall, when issued, be validly
      issued, fully paid and nonassessable, and shall be free and clear of any liens,
      claims, charges and encumbrances other than those imposed as a result of any
      action by Abbott or any of its Affiliates.

     

    ARTICLE VI

     

    REPRESENTATIONS,
      WARRANTIES AND AGREEMENTS OF ABBOTT

     

    Abbott
      hereby represents and warrants to Boston Scientific as follows:

     

    (a)  Abbott
      is
      a corporation duly incorporated, validly existing and in good standing under
      the
      Laws of the State of Illinois.

     

    (b)  Abbott
      has all requisite corporate power and authority to execute and deliver this
      Agreement and to perform its obligations hereunder and to consummate the
      transactions contemplated hereby. The execution and delivery by Abbott of this
      Agreement, the performance by Abbott of its obligations hereunder and the
      consummation by Abbott of the transactions contemplated hereby have been duly
      and validly authorized by all necessary corporate proceedings on the part of
      Abbott and no other corporate action on the part of Abbott is necessary for
      the
      execution, delivery and performance by Abbott of this Agreement and the
      consummation by Abbott of the transactions contemplated hereby. This Agreement
      has been duly executed and delivered by Abbott, and assuming the due
      authorization, execution and 

     

    
      
        
        

      

      
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    delivery
      hereof by Boston Scientific, constitutes a legal, valid and binding obligation
      of Abbott, enforceable against it in accordance with its terms except to the
      extent that its enforceability may be limited by bankruptcy, insolvency,
      reorganization, moratorium or other laws relating to or affecting creditors’
rights generally and by general equity principles. 

     

    ARTICLE VII

     

    MISCELLANEOUS

     

    Section 7.1  Acknowledgement.
      The
      parties hereby acknowledge that this Agreement is being entered into by the
      parties pursuant to Article VI of the Transaction Agreement. The parties further
      acknowledge and agree that the entry of the parties hereto into this Agreement
      shall in no way affect the effectiveness of the Transaction Agreement and the
      Transaction Agreement shall remain in full force and effect pursuant to the
      terms thereof; provided,
      however,
      that to
      the extent that any of the provisions of this Agreement conflict with any
      provisions of the Transaction Agreement, the provisions herein shall
      control.

     

    Section 7.2  No
      Inconsistent Agreements.
      Boston
      Scientific will not hereafter enter into any agreement with respect to its
      securities that would materially impede the rights granted to Abbott in this
      Agreement.

     

    Section 7.3  Recapitalization,
      Exchanges, etc.
      In the
      event that any capital stock or other securities issued in respect of, in
      exchange for, or in substitution of, any Shares by reason of any reorganization,
      recapitalization, reclassification, merger, consolidation, spin-off, partial
      or
      complete liquidation, stock dividend, split-up, sale of assets, distribution
      to
      stockholders or combination of the Shares or any other change in capital
      structure of Boston Scientific, appropriate adjustments shall be made with
      respect to the relevant provisions of this Agreement so as to fairly and
      equitably preserve, as far as practicable, the original rights and obligations
      of the parties hereto under this Agreement, and the term “Shares,” as used
      herein, shall be deemed to include shares of such capital stock or other
      securities, as appropriate.

     

    Section 7.4  Expenses.
      Except
      as otherwise specified in this Agreement, all costs and expenses, including
      fees
      and disbursements of counsel, incurred in connection with this Agreement and
      the
      transactions contemplated hereby shall be borne by the party incurring such
      costs and expenses, whether or not the Share Closing shall have
      occurred.

    


    Section 7.5  Notices.
      All
      notices, requests, claims, demands and other communications hereunder shall
      be
      in writing and shall be given or made (and shall be deemed to have been duly
      given or made upon receipt) by delivery in person, by an internationally
      recognized overnight courier service, by facsimile, by e-mail or by registered
      or certified mail (postage prepaid, return receipt requested) to the respective
      parties hereto at the following addresses (or at such other address for a party
      as shall be specified in a notice given in accordance with this
      Section 7.5):

    


    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (i)  if
      to
      Abbott:

    


    Abbott
      Laboratories

    Dept.
      0392, Bldg. AP6D 

    100
      Abbott Park Road

    Abbott
      Park, Illinois 60064-3500

    Fax:
      (847)
      935-8207

    Attention:
      Chief Operating Officer, Medical Products Group

    


    with
      a
      copy to:

    


    Abbott
      Laboratories

    Dept.
      364, Bldg. AP6D

    100
      Abbott Park Road

    Abbott
      Park, Illinois 60064-6020 USA

    Fax:
      (847) 938-6277

    Attention:
      General Counsel

    


    and

    


    Abbott
      Laboratories

    Dept.
      312, Bldg. AP6D

    100
      Abbott Park Road 

    Abbott
      Park, Illinois 60064-6028 USA

    Fax:
      (847) 938-6307

    Attention:
      Treasurer

    


    and
      a
      copy to:

    


    Simpson
      Thacher & Bartlett LLP

    425
      Lexington Avenue

    New
      York,
      NY 10017-3903

    Fax:
      (212)
      455-2502

    Attention:
      Charles I. Cogut

       
      William E. Curbow

    


    (ii)  if
      to
      Boston Scientific:

    


    Boston
      Scientific Corporation

    One
      Boston Scientific Place

    Natick,
      Massachusetts 01760

    Fax:
      (508)
      650-8960

    Attention:
      General Counsel

     

    
      
        
        

      

      
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    with
      a
      copy to:

    


    Shearman
      & Sterling LLP

    599
      Lexington Avenue

    New
      York,
      NY 10022-6069

    Fax:
      (212)
      848-7179

    Attention:
      Peter D. Lyons

       
      Clare O’Brien

    


    Section 7.6  Public
      Announcements.
      Each
      party to this Agreement shall consult with the other party before issuing,
      and
      shall provide the other party the opportunity to review and comment upon, any
      press release or other public announcement in respect of this Agreement or
      the
      transactions contemplated hereby and shall not issue any press release or other
      public statements or otherwise communicate with any news media regarding this
      Agreement and/or the transactions contemplated hereby without the consultation
      and prior written consent of the other party unless otherwise required by Law
      or
      applicable stock exchange regulation and then only with such advance notice
      to
      and consultation with the other party as is practical. The parties to this
      Agreement shall cooperate as to the timing and contents of any such press
      release, public announcement or communication. Notwithstanding
      the foregoing, neither party shall have any obligation to consult with the
      other
      party or provide the other party with an opportunity to review and comment
      upon
      any press release or other public announcement announcing a termination of
      this
      Agreement, and such party may issue such press release or public announcement
      or
      otherwise communicate with any news media regarding such termination without
      the
      consent of the other party; provided, however, that the non-terminating party
      shall have received advance written notice of the other party’s intention to
      terminate this Agreement. 

    


    Section 7.7  Term;
      Termination.
      This
      Agreement shall terminate in full on the earlier of (i) the fifth anniversary
      of
      the date hereof; or (ii) that time when Abbott ceases to beneficially own any
      Shares purchased pursuant to this Agreement (or other securities issued in
      substitution or exchange therefor pursuant to Section 7.3). This Agreement
      will
      also terminate at any time prior to the Share Closing:

     

    (a)  by
      mutual
      written consent of Boston Scientific and Abbott;

     

    (b)  by
      either
      Boston Scientific or Abbott, if the Share Closing shall not have occurred by
      September 30, 2006; provided,
      however,
      that
      the right to terminate this Agreement under this Section 7.7(b) shall not be
      available to any party whose failure to fulfill any obligation under this
      Agreement shall have been the cause of, or shall have resulted in the failure
      of
      the Share Closing to occurring prior to such date;

     

    (c)  by
      either
      Boston Scientific or Abbott in the event that any Governmental Order
      restraining, enjoining or otherwise prohibiting the transactions contemplated
      by
      this Agreement and/or the Purchase Agreement shall have become final and
      non-appealable; or

     

    (d)  immediately,
      without any action by either Boston Scientific or Abbott, upon any termination
      of the Merger Agreement.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    Notwithstanding
      the foregoing, any termination pursuant to this Section 7.6 will not relieve
      any
      party for any liability arising from a breach of representation, warranty,
      covenant or agreement in this Agreement occurring prior to such
      termination.

     

    Section 7.8  Severability.
      If any
      term or other provision of this Agreement is invalid, illegal or incapable
      of
      being enforced by any Law or public policy, all other terms and provisions
      of
      this Agreement shall nevertheless remain in full force and effect for so long
      as
      the economic or legal substance of the transactions contemplated by this
      Agreement is not affected in any manner materially adverse to either party
      hereto. Upon such determination that any term or other provision is invalid,
      illegal or incapable of being enforced, the parties hereto shall negotiate
      in
      good faith to modify this Agreement so as to effect the original intent of
      the
      parties as closely as possible in an acceptable manner in order that the
      transactions contemplated by this Agreement are consummated as originally
      contemplated to the greatest extent possible.

    


    Section 7.9  Entire
      Agreement.
      This
      Agreement, the Transaction Agreement and the Purchase Agreement constitute
      the
      entire agreement of the parties hereto with respect to the subject matter hereof
      and thereof and supersede all prior agreements and undertakings, both written
      and oral, between Boston Scientific and Abbott with respect to the subject
      matter hereof and thereof.

    


    Section 7.10  Assignment.
      This
      Agreement may not be assigned without the express written consent of Boston
      Scientific and Abbott (which consent may be granted or withheld in the sole
      discretion of Boston Scientific or Abbott), as the case may be; provided,
      however,
      that
      Abbott may, without the consent of Boston Scientific, assign its rights and
      obligations, in whole or in part, under this Agreement to one or more of its
      controlled Affiliates, except that no such assignment shall relieve Abbott
      from
      the performance of its obligations hereunder. Any purported assignment in
      contravention of this provision shall be null and void.

    


    Section 7.11  Amendment.
      This
      Agreement may not be amended or modified except (a) by an instrument in
      writing signed by, or on behalf of, Boston Scientific and Abbott or (b) by
      a waiver in accordance with Section 7.12.

    


    Section 7.12  Waiver.
      Each
      party to this Agreement may (a) extend the time for the performance of any
      of the obligations or other acts of the other party, (b) waive any
      inaccuracies in the representations and warranties of the other party contained
      herein or (c) to the extent permitted by applicable Law, waive compliance
      with any of the agreements of the other party or conditions to such party’s
      obligations contained herein. Any such extension or waiver shall be valid only
      if set forth in an instrument in writing signed by the party to be bound
      thereby. Any waiver of any term or condition shall not be construed as a waiver
      of any subsequent breach or a subsequent waiver of the same term or condition,
      or a waiver of any other term or condition of this Agreement. The failure of
      either party hereto to assert any of its rights hereunder shall not constitute
      a
      waiver of any of such rights.

    


    Section 7.13  No
      Third Party Beneficiaries.
      This
      Agreement shall be binding upon and inure solely to the benefit of the parties
      hereto and their respective successors and permitted assigns and nothing herein
      is intended to or shall confer upon any other Person any legal 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    or
      equitable right, benefit or remedy of any nature whatsoever, including any
      rights of employment for any specified period, under or by reason of this
      Agreement.

    


    Section 7.14  Other
      Remedies; Specific Performance.
      Except
      as otherwise provided herein, any and all remedies herein expressly conferred
      upon a party will be deemed cumulative with and not exclusive of any other
      remedy conferred hereby, or by Law or equity upon such party, and the exercise
      by a party of any one remedy will not preclude the exercise of any other remedy.
      The parties hereto agree that irreparable damage would occur in the event that
      any provision of this Agreement is not performed in accordance with its specific
      terms or is otherwise breached. It is accordingly agreed that the parties shall
      be entitled to seek an injunction or injunctions to prevent breaches of this
      Agreement and to enforce specifically the terms and provisions hereof in any
      court of the United States or any state having jurisdiction, this being in
      addition to any other remedy to which they are entitled at Law or in
      equity.

    


    Section 7.15  Interpretive
      Rules.
      The
      words “hereof,” “herein” and “hereunder” and words of similar import when used
      in this Agreement refer to this Agreement as a whole and not to any particular
      provision of this Agreement, and all Article and Section references are to
      this
      Agreement unless otherwise specified. The words “include,” “includes” and
“including” will be deemed to be followed by the phrase “without limitation.”
The table of contents 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. No provision of this Agreement shall be construed to require
      either party or their respective officers, directors, subsidiaries or Affiliates
      to take any action which would violate or conflict with any applicable Law.
      The
      word “if” means “if and only if.” The word “or” shall not be exclusive. The
      meanings given to terms defined herein will be equally applicable to both the
      singular and plural forms of such terms. Whenever the context may require,
      any
      pronoun includes the corresponding masculine, feminine and neuter forms. Except
      as otherwise expressly provided herein, all references to “$” will be deemed
      references to the lawful money of the United States of America. 

    


    Section 7.16  Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of New York. All Actions arising out of or relating to this Agreement
      shall be heard and determined exclusively in any New York federal court sitting
      in the Borough of Manhattan of The City of New York; provided, however, that
      if
      such federal court does not have jurisdiction over such Action, such Action
      shall be heard and determined exclusively in any New York state court sitting
      in
      the Borough of Manhattan of The City of New York. Consistent with the preceding
      sentence, the parties hereto hereby (a) submit to the exclusive jurisdiction
      of
      any federal or state court sitting in the Borough of Manhattan of The City
      of
      New York for the purpose of any Action arising out of or relating to this
      Agreement brought by either party hereto and (b) irrevocably waive, and
      agree not to assert by way of motion, defense, or otherwise, in any such Action,
      any claim that it is not subject personally to the jurisdiction of the
      above-named courts, that its property is exempt or immune from attachment or
      execution, that the Action is brought in an inconvenient forum, that the venue
      of the Action is improper, or that this Agreement or the transactions
      contemplated by this Agreement may not be enforced in or by any of the
      above-named courts. Each party further irrevocably consents to the service
      of
      process out of any of the aforementioned courts in any such Action by the
      mailing of copies thereof by mail to such party at its address set forth in
      this


     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    Agreement,
      such service of process to be effective upon acknowledgment of receipt by
      registered mail; provided, however, that nothing in this Section 7.16 shall
      affect the right of any party to serve legal process in any other manner
      permitted by law. The consent to jurisdiction set forth in this Section 7.16
      shall not constitute a general consent to service of process in the State of
      New
      York and shall have no effect for any purpose except as provided in this Section
      7.16.

    


    Section 7.17  Waiver
      of Jury Trial.
      EACH OF
      THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
      LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION
      DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
      AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE
      PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
      OF
      THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
      WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER,
      AND
      (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
      THE
      TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER
      THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.17.

    


    Section 7.18  Counterparts.
      This
      Agreement may be executed and delivered (including by facsimile transmission)
      in
      one or more counterparts, and by the different parties hereto in separate
      counterparts, each of which when executed shall be deemed to be an original,
      but
      all of which taken together shall constitute one and the same
      agreement.

    


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    IN
      WITNESS WHEREOF, this Agreement has been signed by or on behalf of each of
      the
      parties as of the day first above written.

     

    
      	 	 	 
	 	BOSTON
              SCIENTIFIC
              CORPORATION 
	 
 	 
 	 
 
	 	By:  	/s/  Lawrence
              C. Best
	 	
              
Name:
 Lawrence
              C. Best
	 	Title:    Executive
              Vice President and Chief Financial
              Officer


    

    
       

      
        	 	 	 
	 	ABBOTT
                LABORATORIES  
	 
 	 
 	 
 
	 	By:  	/s/  Thomas
                C. Freyman
	 	
                

                Name:
                   Thomas
                  C. Freyman

              
	 	Title:  
                  Executive
                Vice President, Finance and  Chief
                Financial Officer


      

       

    

    


    


     

    


    


    


    
      
        
        

      

      
        23