Document:

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                                                                   EXHIBIT 10.22

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                             CONTRIBUTION AGREEMENT

                                       BY
                                       AND
                                      AMONG

                            EDWARDS LIFESCIENCES LLC,

                              EDWARDS NOVACOR LLC,

                             WORLD HEART CORPORATION

                                       AND

                           VALENTINE ACQUISITION CORP.

                            DATED AS OF MAY 24, 2000

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                                TABLE OF CONTENTS
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                                                                                                     PAGE
<S>                   <C>                                                                            <C>
ARTICLE I             CONTRIBUTION....................................................................3
                      SECTION  1.1  CONTRIBUTION......................................................3
                      SECTION  1.2  ISSUANCE OF CAPITAL STOCK.........................................3
                      SECTION  1.3  STOCK OPTIONS.....................................................3

ARTICLE II            THE CLOSING.....................................................................4
                      SECTION  2.1  CLOSING DATE......................................................4
                      SECTION  2.2  TRANSACTIONS TO BE EFFECTED AT THE CLOSING........................4

ARTICLE III           REPRESENTATIONS AND WARRANTIES..................................................4
                      SECTION  3.1  REPRESENTATIONS AND WARRANTIES OF EDWARDS
                               AND NOVACOR LLC........................................................4
                      SECTION  3.2  REPRESENTATIONS AND WARRANTIES OF WORLD HEART....................16
                      SECTION  3.3  REPRESENTATIONS AND WARRANTIES OF NEWCO..........................18

ARTICLE IV            COVENANTS......................................................................19
                      SECTION  4.1  CONDUCT OF BUSINESS BY EDWARDS...................................19
                      SECTION  4.2  CONDUCT OF BUSINESS OF NEWCO AND NOVACOR LLC.....................21
                      SECTION  4.3  ACCESS TO INFORMATION............................................21
                      SECTION  4.4  TRANSACTION AGREEMENTS...........................................21
                      SECTION  4.5  HSR ACT..........................................................22
                      SECTION  4.6  FURTHER ASSURANCES...............................................22
                      SECTION  4.7  EMPLOYEE BENEFIT PLANS...........................................22
                      SECTION  4.8  EMPLOYEES........................................................23
                      SECTION  4.9  CERTAIN TAX MATTERS..............................................25
                      SECTION  4.10 FINANCIAL INFORMATION............................................26
                      SECTION  4.11 INSURANCE........................................................27
                      SECTION  4.12 PUBLICITY........................................................27
                      SECTION  4.13 CERTAIN UNDERSTANDINGS...........................................27
                      SECTION  4.14 REQUIRED NOTICES.................................................28
                      SECTION  4.15 PATIENT SERVICE..................................................29
                      SECTION  4.16 POST CLOSING CAPITAL CONTRIBUTION
                               OBLIGATIONS...........................................................29
                      SECTION  4.17 OUTSTANDING CONSENTS.............................................29
                      SECTION  4.18 GOVERNMENTAL APPROVALS...........................................29
                      SECTION  4.19 TRANSFER RESTRICTIONS............................................29
                      SECTION  4.20 SHAREHOLDER APPROVAL.............................................30

ARTICLE V             CONDITIONS PRECEDENT...........................................................30
                      SECTION  5.1  CONDITIONS PRECEDENT TO OBLIGATIONS OF NEWCO
                               AND WORLD HEART.......................................................30

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<S>                   <C>                                                                            <C>
                      SECTION  5.2  CONDITIONS PRECEDENT TO EDWARDS'S OBLIGATION.....................31

ARTICLE VI            TERMINATION AND AMENDMENT......................................................33
                      SECTION  6.1  TERMINATION......................................................33
                      SECTION  6.2  EFFECT OF TERMINATION............................................33

ARTICLE VII           SURVIVAL; INDEMNIFICATION......................................................34
                      SECTION  7.1  SURVIVAL.........................................................34
                      SECTION  7.2  INDEMNIFICATION..................................................34
                      SECTION  7.3  INDEMNIFICATION AMOUNTS..........................................35
                      SECTION  7.4  CLAIMS...........................................................35
                      SECTION  7.5  EXCLUSIVE REMEDY.................................................36
                      SECTION  7.6  DUPLICATION......................................................36

ARTICLE VIII          MISCELLANEOUS..................................................................36
                      SECTION  8.1  GOVERNING LAW....................................................36
                      SECTION  8.2  JURISDICTION AND CONSENT TO SERVICE..............................36
                      SECTION  8.3  NOTICES..........................................................37
                      SECTION  8.4  INTERPRETATION...................................................38
                      SECTION  8.5  SEVERABILITY.....................................................38
                      SECTION  8.6  COUNTERPARTS.....................................................38
                      SECTION  8.7  ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES...................39
                      SECTION  8.8  FURTHER ASSURANCES...............................................39
                      SECTION  8.9  AMENDMENTS AND MODIFICATIONS; WAIVERS AND EXTENSIONS.............39
                      SECTION  8.10 ASSIGNMENT.......................................................39
                      SECTION  8.11 EQUITABLE REMEDIES...............................................40
                      SECTION  8.12 EXPENSES.........................................................40
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                                       ii

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SCHEDULES

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                  <S>               <C>
                  Schedule 1.3      Stock Option Guidelines
                  Schedule 3.1(e)   Edwards Consents; No Conflict
                  Schedule 3.1(f)   Pro Forma Balance Sheet
                  Schedule 3.1(j)   Litigation; Decrees
                  Schedule 3.1(l)   Applicable Contracts
                  Schedule 3.1(n)   Edwards Employee Benefit Plans
                  Schedule 3.1(o)   Labor Matters
                  Schedule 3.1(p)   Intellectual Property
                  Schedule 3.2(a)   World Heart Subsidiaries
                  Schedule 3.2(c)   World Heart Consents; No Conflicts
                  Schedule 3.3(d)   Newco Capital Stock
                  Schedule 4.1      Conduct of Business by Edwards and Novacor LLC
                  Schedule 4.1(c)   Edwards Capital Expenditures
                  Schedule 4.7(b)   Frozen Vacation
                  Schedule 4.8      Offer of Employment
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EXHIBITS

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<CAPTION>
                  <S>               <C>
                  Exhibit A         Certificate of Designation
                  Exhibit B         Exchange Agreement
                  Exhibit C         World Heart Preferred Agreement
                  Exhibit D         Shareholders Agreement
                  Exhibit E         Assignment Agreement
                  Exhibit F         Distribution Agreement
                  Exhibit G         Transition Agreement
                  Exhibit H         Supply Agreement
                  Exhibit I         Purchase Agreement
                  Exhibit J         Legal Opinion
                  Exhibit K         Legal Opinion
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                                      iii

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                              TABLE OF DEFINITIONS

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<CAPTION>

DEFINED TERM                                                                       INITIAL SECTION REFERENCE
<S>                                                                                <C>
Affected Persons......................................................................................3.1(n)
Amendment.............................................................................................2.2(a)
Applicable Contracts..................................................................................3.1(e)
Assignment Agreement................................................................................Recitals
Balance Sheet Date....................................................................................3.1(f)
Business Day.............................................................................................2.1
Business License Agreements.......................................................................3.3(p)(ii)
Business Material Adverse Effect......................................................................3.1(a)
Canadian Securities Commissions.......................................................................2.2(d)
Certificate of Designation..........................................................................Recitals
Closing..................................................................................................2.1
Closing Date.............................................................................................2.1
Code..................................................................................................3.1(n)
Confidentiality Agreement.............................................................................4.3(b)
Contribution.............................................................................................2.1
Damages..................................................................................................7.2
Distribution Agreement..............................................................................Recitals
Edwards.............................................................................................Recitals
Edwards Option...........................................................................................1.3
Edwards's Contribution................................................................................1.1(a)
Employee Benefit Plans................................................................................3.1(n)
Employees.............................................................................................3.1(n)
Environmental Laws....................................................................................3.1(r)
ERISA.................................................................................................3.1(n)
Exchange Agreement..................................................................................Recitals
GAAP..................................................................................................3.1(f)
HSR Act...............................................................................................3.1(e)
Indemnified Party........................................................................................7.4
Indemnifying Party.......................................................................................7.4
Intellectual Property Rights.......................................................................2.3(p)(i)
Labor Dispute.........................................................................................3.3(o)
Liens..............................................................................................3.3(d)(i)
LLC Interests.......................................................................................Recitals
Newco...............................................................................................Recitals
Newco Common Shares...................................................................................1.2(b)
Newco Common Stock..................................................................................Recitals
Newco Plans...........................................................................................4.8(a)
Newco Preferred.....................................................................................Recitals
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                                       iv

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<TABLE>
<CAPTION>
<S>                                                                                               <C>
Newco Preferred Shares................................................................................1.2(a)
Newco Shares..........................................................................................1.2(b)
Novacor LLC.........................................................................................Recitals
Novacor LLC Agreement.................................................................................2.2(a)
Novacor LLC Intellectual Property.....................................................................3.1(p)
Novacor Patient.........................................................................................4.17
Other Shareholders..................................................................................Recitals
Overlap Period....................................................................................4.9(e)(ii)
Payroll Taxes.........................................................................................4.8(e)
Person................................................................................................3.1(b)
Pre-Closing Period................................................................................3.3(m)(iv)
Pro Forma Balance Sheet...............................................................................3.1(f)
Purchase Agreement..................................................................................Recitals
SEC...................................................................................................3.2(a)
Securities Act........................................................................................3.2(d)
Shareholders Agreement..............................................................................Recitals
Sub Common Stock....................................................................................Recitals
Supply Agreement....................................................................................Recitals
Taxes.................................................................................................3.3(m)
Tax Matter...........................................................................................(4.9)b)
Tax Returns..........................................................................................4.10(a)
Transaction Agreements..............................................................................Recitals
Transactions........................................................................................Recitals
Transfer Taxes.......................................................................................4.10(b)
Transferred Assets....................................................................................3.1(a)
Transferred Business..................................................................................3.1(a)
Transition Agreement................................................................................Recitals
U.S. GAAP.............................................................................................3.3(f)
Voting Debt.......................................................................................3.1(d)(ii)
WARN Act.................................................................................................4.9
World Heart.........................................................................................Recitals
World Heart Contribution..............................................................................1.1(b)
World Heart Material Adverse Effect...................................................................3.2(a)
World Heart Preferred Agreement.....................................................................Recitals
World Heart Reports...................................................................................3.2(d)
World Heart SEC Reports...............................................................................3.2(c)
World Heart Subsidiaries..............................................................................3.2(a)
</TABLE>

                                        v

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                             CONTRIBUTION AGREEMENT

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

                  WHEREAS, Edwards is the sole member of Novacor LLC;

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

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

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

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

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

                  WHEREAS, as a condition to closing of the Transactions,
Edwards and World Heart, Roderick M. Bryden, Tofy Mussivand and the Ottawa Heart
Institute Research Corporation (together with Mr. Bryden and Dr. Mussivand, the
"Other

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Shareholders") shall enter into the shareholders agreement, substantially
in the form attached hereto as Exhibit D (the "Shareholders Agreement");

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

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

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

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

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

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

                                       2

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                                    ARTICLE I
                                  CONTRIBUTION

                  SECTION  1.1  CONTRIBUTION.

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

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

                  SECTION  1.2  ISSUANCE OF CAPITAL STOCK.

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

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

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

                                       3

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                                   ARTICLE II
                                   THE CLOSING

                  SECTION 2.1 CLOSING DATE. The consummation of the Edwards
Contribution, the World Heart Contribution (together, the "Contribution") and
the issuance of the Newco Shares (the "Closing") shall take place at the offices
of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400,
Los Angeles, California 90071, or such other place as the parties hereto shall
mutually agree, at 10:00 a.m. (local time) on the fifth day (other than any
Saturday, Sunday or day when banks in the city of New York, New York or Ontario,
Canada are authorized by law to be closed (a "Business Day")) after the
conditions set forth in Article V shall have been satisfied or waived, or such
other time and date upon which the parties hereto may agree (the "Closing
Date").

                  SECTION 2.2 TRANSACTIONS TO BE EFFECTED AT THE CLOSING. At
the Closing:

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

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

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

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

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

                  SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF EDWARDS AND
NOVACOR LLC. Each of Edwards and Novacor LLC jointly and severally represents
and warrants to World Heart and Newco as follows:

                  (a) ORGANIZATION, STANDING AND POWER. Novacor LLC (i) is a
limited liability company duly formed and in good standing under the laws of the
State of

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

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

                  (c)  AUTHORITY.

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

                           (ii) The execution and delivery of the Transaction
         Agreements to which Novacor LLC is a party, and the performance by
         Novacor LLC of its obligations hereunder and thereunder, shall have
         been duly authorized by all necessary action on the part of Novacor
         LLC. At the Closing, the Transaction Agreements to which Novacor LLC is
         a party shall have been duly executed and delivered by Novacor LLC and,
         assuming the due execution and delivery hereof and thereof by the other
         parties thereto, each of the Transaction Agreements to

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         which Novacor LLC is a party shall constitute, a valid and binding
         obligation of Novacor LLC, enforceable against Novacor LLC in
         accordance with its terms, except as such enforcement may be limited
         by (i) bankruptcy, insolvency, reorganization, moratorium (whether
         general or specific) or similar laws now or hereafter in effect
         relating to creditors' rights generally and (ii) general principles of
         equity (regardless of whether such enforcement is sought in a
         proceeding in equity or at law.)

                  (d)  EQUITY INTERESTS.

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

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

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

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

                  (e) CONSENTS; NO CONFLICT. The consummation of the
Transactions by Edwards and Novacor LLC will not require the consent of any
party to any contract, lease, agreement, mortgage or indenture ("Contracts") (i)
listed on Schedule 3.1(l) (the "Applicable Contracts") or (ii) any other
contract to which Edwards is a party the subject matter of which relates in
whole or in substantial part to the Transferred Business or the consent,
approval, order or authorization of, or the registration, declaration or filing
with, any governmental authority, except for those (i) required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (ii) set forth on Schedule 3.1(e), (iii) that become applicable solely as
a result of the specific regulatory status of Newco, World Heart or their
respective affiliates or (iv) the failure of

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which to make or obtain would not reasonably be expected to result in a Business
Material Adverse Effect. Except as set forth on Schedule 3.1(e), assuming the
consents, approvals, orders, authorizations, registrations, declarations and
filings contemplated by the immediately preceding sentence are obtained or made,
as applicable, the execution, delivery and performance by Edwards and Novacor
LLC of this Agreement will not (i) violate any material law applicable to
Edwards or Novacor LLC, (ii) result in a breach or violation of any material
provision of, or constitute a material default under, any Applicable Contract or
(iii) conflict with any provision of the certificate of incorporation or by-laws
of Edwards or the Certificate of Formation of Novacor LLC or the Novacor LLC
Agreement, in each case except for any such violation, breach, default or
conflict which would not reasonably be expected to result in a Business Material
Adverse Effect.

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

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

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

                  (i) COMPLIANCE WITH APPLICABLE LAWS. Since March 31, 2000,
Edwards has and as of the Closing Novacor LLC shall have complied in all
material respects with all statutes, laws, regulations and ordinances applicable
to the Transferred Business of Novacor LLC, except where the failure to so
comply would not reasonably be expected to result in a Business Material Adverse
Effect; PROVIDED, HOWEVER, Edwards makes no representation or warranty in this
Section 3.1(i) with respect to laws relating to matters

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with respect to which representations or warranties are made in Subsections (m)
- Taxes, (n) - Employee Benefit Plans, (o) - Labor Matters, (p) - Intellectual
Property, (q) - Environmental Matters and (r) - Government Relations of this
Section 3.1.

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

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

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

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

                                       8
<PAGE>

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

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

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

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

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

                 (m)  TAXES.

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

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

                                       9

<PAGE>

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

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

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

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

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

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

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

                  "Taxes" shall mean all United States federal, state, local and
foreign taxes assessments, levies, duties, imposts or similar charges (whether
imposed directly or

                                       10

<PAGE>

through withholding), including any interest, additions to tax or penalties
applicable thereto.

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

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

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

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

                  Neither Edwards nor Novacor LLC maintains any Employee Benefit
Plan which is a "group health plan" (as such term is defined in Section 607(1)
of ERISA or Section 5000(b)(1) of the Code) that has not been administered and
operated in all respects in compliance with the applicable requirements of Part
6 of Subtitle B of Title I of ERISA and Section 4980B of the Code and neither
Edwards nor Novacor LLC is subject to any material liability, including, without
limitation, additional contributions,

                                       11
<PAGE>

fines, taxes, penalties or loss of tax deduction as a result of such
administration and operation. No Employee Benefit Plan which is such a group
health plan is a "multiple employer welfare arrangement," within the meaning of
Section 3(40) of ERISA. Except as required by law, neither Edwards nor Novacor
LLC maintains any Employee Benefit Plan (whether qualified or non-qualified
under Section 401(a) of the Code) providing for post-employment or retiree
health, life insurance and/or other welfare benefits and having unfunded
liabilities, and neither Edwards nor Novacor LLC have any obligation to provide
any such benefits to any retired or former employees or active employees
following such employees' retirement or termination of service.

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

                  Novacor LLC does not sponsor any Employee Benefit Plan.

                  (o) LABOR MATTERS. Set forth on Schedule 3.1(o) are (i) the
names of the Employees, their salaries, wage rates (as of the date hereof),
vacation pay accrual schedule (as of May 31, 2000), positions and length of
service with Edwards, Novacor LLC and Baxter International Inc. as applicable,
and (ii) all agreements with labor unions or associations representing the
Employees in effect as of the date hereof. As of the date hereof, there is and
as of the Closing Date there will be (i) no material unfair labor practice
complaint pending or threatened against Novacor LLC, or against Edwards which
relates in whole or in part to the Transferred Business before the National
Labor Relations Board or any state or local labor relations board, nor are any
material grievance or arbitration proceedings arising under any collective
bargaining agreement pending or threatened against Novacor LLC, or against
Edwards which relates in whole or in part to the Transferred Business, (ii) no
labor strike, dispute, slowdown or stoppage ("Labor Dispute") in which Novacor
LLC or Edwards is involved which relates in whole or in substantial part to the
Transferred Business, nor, to the knowledge of

                                       12
<PAGE>

Edwards is any Labor Dispute imminent, other than routine disciplinary and
grievance matters, and (iii) no question concerning union representation within
the meaning of the National Labor Relations Act existing with respect to the
Employees of Novacor LLC or the Transferred Business and, to the knowledge of
Edwards, no union organizing activities are taking place, which (with respect to
any matter specified in clauses (i), (ii) or (iii) above, singly or in the
aggregate) would have a Business Material Adverse Effect. Except as set forth on
Schedule 3.1(o), as of the date hereof, Edwards has no knowledge of any
actionable violation of any federal, state or local law relating to employment
and employment practices, discrimination in the hiring, promotion or pay of
Employees, nor any applicable wage or hour laws, which, individually or in the
aggregate, would reasonably be expected to result in a Business Material Adverse
Effect.

                  (p)  INTELLECTUAL PROPERTY.

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

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

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

                           (iv) Schedule 3.1(p)(iv) contains an accurate and
         complete list as of the date of this Agreement of all registered
         patents, registered trademarks, trade names, registered service marks
         and registered copyrights (in each case that are currently in use), as
         well as all applications for any and all of the foregoing, included in
         the Intellectual

                                       13

<PAGE>

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

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

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

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

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

                           (ix) Neither Edwards nor Edwards Parent has made any
         written claim or allegation that any person has infringed,
         misappropriated, breached or

                                       14
<PAGE>

         violated the rights of the Transferred Business in any of the
         Intellectual Property Rights which are material to the Transferred
         Business as currently conducted.

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

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

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

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

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

                                       15
<PAGE>

be due to Credit Suisse First Boston in connection with the transactions
contemplated hereby.

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

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

                  SECTION 3.2 REPRESENTATIONS AND WARRANTIES OF WORLD HEART.
World Heart hereby represents and warrants to Edwards as follows:

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

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

                  (c) CONSENTS; NO CONFLICT. The consummation of the
transactions hereunder will not require the consent of any party to any Contract
to which World

                                       16
<PAGE>

Heart, or any of its affiliates, is a party or by which any of them is bound, or
the consent, approval, order or authorization of, or the registration,
declaration or filing with, any governmental authority, except for those (i)
required under the HSR Act, or (ii) that become applicable solely as a result of
the actions or status of Edwards or its affiliates. Except as set forth on
Schedule 3.2(c), assuming the consents, approvals, orders, authorizations,
registrations, declarations and filings contemplated by the immediately
preceding sentence are obtained or made, as applicable, the execution, delivery
and performance by World Heart of this Agreement will not (i) violate any
material law applicable to World Heart or Newco, (ii) result in a breach or
violation of any material provision of, or constitute a material default under,
any such Contract which is material, or (iii) conflict with any provision of the
articles or by-laws of World Heart, in each case except for any such violation,
breach, default or conflict which would not reasonably be expected to result in
a World Heart Material Adverse Effect.

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

                                       17
<PAGE>

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

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

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

                  SECTION 3.3 REPRESENTATIONS AND WARRANTIES OF NEWCO. Newco
and World Heart represent and warrant to Edwards as follows:

                  (a) ORGANIZATION, STANDING AND POWER. Newco is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware.

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

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

                                       18
<PAGE>

equity (regardless of whether such enforcement is sought in a proceeding in
equity or at law).

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

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

                                   ARTICLE IV
                                    COVENANTS

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

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

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

                                       19
<PAGE>

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

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

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

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

                  (g) It is understood that Novacor LLC was formed solely for
the purpose of acquiring the Transferred Business, and that Novacor LLC will
have no material

                                       20
<PAGE>

assets and no material liabilities prior to the consummation of the
transactions contemplated by the Assignment Agreement.

                  SECTION 4.2 CONDUCT OF BUSINESS OF NEWCO. During the period
from the date of this Agreement to the Closing, Newco shall not engage in any
activities of any nature except as provided in or contemplated by the
Transaction Agreements. It is understood that Newco was formed solely for the
purpose of effecting the Transactions, and that Newco will have no material
assets and no material liabilities prior to the consummation of the transactions
contemplated by the Assignment Agreement.

                  SECTION  4.3  ACCESS TO INFORMATION.

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

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

                  SECTION IV.4 TRANSACTION AGREEMENTS. At the Closing, each of
Edwards, Novacor LLC, Newco and World Heart will enter into the other
Transaction Agreements to which it is a party and, subject to the terms and
conditions hereof, each of Edwards, Newco and World Heart agrees to use its
reasonable commercial efforts to take, or cause to be taken, all actions and to
do, or cause to be done, all things necessary, proper or advisable to consummate
and make effective as promptly as practicable the Transactions and to cooperate
with each party hereto in connection with the foregoing, including, without
limitation, (i) the execution of the other Transaction Agreements and (ii) using
its reasonable commercial efforts (v) to obtain all necessary waivers, consents
and approvals from other parties to material Contracts, (w) to obtain all
consents, approvals and authorizations that are required to be obtained under
any federal, state, provincial, local or foreign law or regulations, (x) to
prevent the entry, enactment

                                       21
<PAGE>

or promulgation of any threatened or pending injunction or order that would
adversely affect the ability of the parties hereto to consummate the
transactions contemplated hereby, (y) to lift or rescind any injunction or order
adversely affecting the ability of the parties hereto to consummate the
transactions contemplated hereby and (z) to effect all necessary registrations
and filings, including filings under the HSR Act, and submissions of information
requested by governmental authorities.

                  SECTION 4.5 HSR ACT. Each of Edwards, Novacor LLC, Newco and
World Heart agrees to use its reasonable commercial efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable to file as soon as practicable notifications under the HSR
Act and respond as promptly as practicable to any inquiries received from the
Federal Trade Commission and the Antitrust Division of the Department of Justice
for additional information or documentation and respond as promptly as
practicable to all inquiries and requests received from any state Attorney
General or other Governmental Entity in connection with antitrust matters.
Concurrently with the filing of notifications under the HSR Act or as soon
thereafter as practicable, Edwards, Novacor LLC, Newco and World Heart shall
each request early termination of the HSR Act waiting period.

                  SECTION 4.6 FURTHER ASSURANCES. From time to time, whether
before, at, or after the Closing, each party hereto, shall execute and deliver,
or cause to be executed and delivered, all such documents and instruments and
shall take, or cause to be taken, all such other actions as may be reasonably
necessary to consummate the Transactions.

                  SECTION  4.7  EMPLOYEE BENEFIT PLANS.

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

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

                                       22

<PAGE>

Employees prior to the Closing Date as set forth on Schedule 4.7(b), which
amounts shall be fully paid by Edwards to such Employees prior to the Closing
Date).

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

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

                  SECTION  4.8  EMPLOYEES.

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

                                       23
<PAGE>

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

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

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

                  (e) TRANSFERRED EMPLOYEES. Edwards shall transfer to Novacor
LLC any records (including, but not limited to, Internal Revenue Service Forms
W-4 and California Employee Withholding Allowance Certificates) relating to
withholding and payment of United States federal, state and local income,
disability, unemployment, FICA and

                                       24
<PAGE>

similar taxes ("Payroll Taxes") with respect to wages paid by Edwards during the
2000 calendar year to the Employees. In accordance with Revenue Procedure 96-60,
1996-2 C.B.399, and comparable state and local Payroll Tax laws, (i) Newco
agrees to provide the Employees with Forms W-2, Wage and Tax Statements, for the
2000 calendar year setting forth the aggregate amount of wages paid, and Payroll
Taxes withheld in respect thereof, to the Employees for the 2000 taxable year by
Edwards, Novacor LLC and Newco and (ii) Edwards agrees to cooperate fully with
Newco in connection therewith.

                  SECTION  4.9  CERTAIN TAX MATTERS.

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

                  (b) World Heart shall promptly notify Edwards in writing upon
receipt by World Heart or any affiliate of World Heart (including Newco or
Novacor LLC after the Closing Date) of notice of any inquiries, claims,
assessments, audits or similar events with respect to Taxes relating to a
taxable period ending on or prior to the Closing Date for which Edwards may be
liable under this Agreement (any such inquiry, claim, assessment, audit or
similar event, a "Tax Matter"). Edwards, at its sole expense, shall have the
sole authority to represent the interests of Novacor LLC and Newco, as the case
may be, with respect to any Tax Matter before any taxing authority or any court
and shall have the sole right to control the defense, compromise or other
resolution of any Tax Matter, including responding to inquiries, filing Tax
Returns and settling audits. Edwards shall keep World Heart fully and timely
informed with respect to the commencement, status and nature of any Tax Matter.
Edwards shall, in good faith, allow World Heart to make comments to Edwards
regarding the conduct of or positions taken with respect to any Tax Matter.
World Heart shall have the sole right to control any audit or examination by any
taxing authority, initiate any claim for refund or amend any Tax Return, and
contest, resolve and defend against any assessment for additional Taxes, notice
of Tax deficiency or other adjustment of Taxes of, or relating to, the income,
assets or operations of Novacor LLC or Newco for all taxable periods ending
after the Closing Date, PROVIDED, HOWEVER, that neither World Heart nor any of
its affiliates shall enter into any settlement of any contest or otherwise
compromise any issue with respect to the portion of the Overlap Period (as
defined below) that ends on the Closing Date

                                       25
<PAGE>

without the prior written consent of Edwards, which consent shall not be
unreasonably withheld. World Heart shall keep Edwards fully and timely informed
with respect to the commencement, status and nature of any audit, examination or
other claim by a taxing authority with regard to an Overlap Period. World Heart
shall, in good faith, allow Edwards to make comments regarding the conduct of or
position taken with respect to any audit, examination or other claim by a taxing
authority, Tax Return and claim for refund of Taxes, with regard to any Overlap
Period. All Tax Returns of or with respect to Novacor LLC for an Overlap Period
shall be prepared and filed in a manner consistent with the past practices of
Edwards and its affiliates.

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

                  (d) Neither Edwards nor Novacor LLC shall take any action on
or prior to the Closing Date that would cause Novacor LLC to be treated as other
than a disregarded entity for U.S. federal, state or local tax purposes.

                  (e) All Tax liabilities with respect to the income, property
or operations of Novacor LLC that relate to taxable periods beginning before the
Closing Date and ending after the Closing Date (the "Overlap Period") shall be
apportioned between Edwards and World Heart as follows: (A) in the case of Taxes
other than income, sales and use and withholding Taxes, on a per diem basis, and
(B) in the case of income, sales and use and withholding Taxes, as determined
from the books and records of Novacor LLC as though the taxable year of Novacor
LLC terminated at the close of business on the Closing Date; provided, however,
that Edwards shall not be liable for any such Taxes incurred on the Closing Date
due to any action or inaction of or caused by World Heart, Newco or Novacor LLC
after the Closing.

                  SECTION  4.10  FINANCIAL INFORMATION.

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

                  (b) After the Closing, and for so long as Edwards has any
material contingent or other obligation under any of the Contracts or owns any
Newco Shares, Newco shall and World Heart shall cause Newco to, provide to
Edwards (i) within 90 days after the end of each fiscal year of Newco, any
financial statements of Newco prepared for such fiscal year and (ii) within 45
days after the end of each fiscal quarter

                                       26
<PAGE>

(other than the last fiscal quarter of any fiscal year) of Newco, any financial
statements of Newco prepared for such fiscal quarter. Edwards shall not disclose
such information to any person other than its affiliates, accountants, counsel
or representatives or any lessor, mortgagee or prospective purchaser who agrees
to keep such information confidential. The confidentiality restrictions of this
Section 4.10(c) shall not apply to information which (x) was or becomes
generally available to the public other than as a result of a disclosure by
Edwards or (y) was or becomes available to Edwards on a nonconfidential basis
from a source other than Newco or its affiliates, accountants, counsel or
representatives or any person known by Edwards to be bound by a confidentiality
agreement with Newco.

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

                  SECTION 4.11 INSURANCE. Newco shall secure insurance with
respect to Novacor LLC's business from the Closing Date covering general
liability (including, without limitation, premises liability), products
liability and workers compensation in amounts, determined by Newco acting
reasonably, customary for the industries in which Novacor LLC operates and
satisfactory to meet World Heart's obligations under the Distribution Agreement.

                  SECTION 4.12 PUBLICITY. Edwards, World Heart and Newco agree
that, prior to the Closing, no public release or announcement concerning the
Transactions shall be issued by any party without the prior written consent
(which consent shall not be unreasonably withheld) of the other party, except as
such release or announcement may be required by law. Edwards, World Heart and
Newco agree that, prior to the Closing, no disclosure (other than a public
release or announcement pursuant to the previous sentence) of the terms or
provisions of the Transaction Agreements shall be made without the prior written
consent (which consent shall not be unreasonably withheld) of the other party,
except to representatives, advisors, counsel, and lenders to the parties hereto
who acknowledge the confidentiality hereof, and except as required by law.

                  SECTION  4.13  CERTAIN UNDERSTANDINGS.

                  (a) World Heart and Newco have received from Edwards certain
projections, forecasts and other forward-looking information relating to Novacor
LLC. Each of World Heart and Newco acknowledges that (i) there are uncertainties
inherent in attempting to make such projections and forecasts, (ii) each of
World Heart and Newco is familiar with such uncertainties and are taking full
responsibility for making their own evaluation of the adequacy and accuracy of
all projections, forecasts and other forward-

                                       27
<PAGE>

looking information so furnished to them and (iii) neither World Heart nor Newco
shall have any claim against Edwards or its agents with respect thereto.
Accordingly, without derogation of any of the representations and warranties of
Edwards set forth herein, Edwards makes no representation or warranty with
respect to such projections, and other forward-looking information.

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

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

                  SECTION 4.14 REQUIRED NOTICES. (a) Between the date of this
Agreement and the Closing Date, Edwards will notify World Heart and Newco of any
event of which Edwards obtains knowledge (i) which would reasonably be expected
to result in a Business Material Adverse Effect (ii) which, if known as of the
date hereof, would have been required under this Agreement to be disclosed to
World Heart and Newco or (iii) which constitutes notice from any third person
alleging that the consent of such third person is or may be required in
connection with the Transactions other than those set forth on Schedule 3.1(e).

                       (b) Between the date of this Agreement and the Closing
Date, World Heart and Newco will notify Edwards of any event of which Newco or
World Heart obtains knowledge (i) which would reasonably be expected to result
in a World Heart Material Adverse Effect, (ii) which, if known as of the date
hereof would have been required under this Agreement to have been disclosed to
Edwards and (iii) which constitutes notice from any third person alleging that
the consent of such third person is
                                       28

<PAGE>

or may be required in connection with the transactions contemplated by the
Transaction Agreements.

                  SECTION 4.15 PATIENT SERVICE. Newco shall, and World Heart
shall cause Newco to, continue to provide service and support to (a) patients of
Edwards or Novacor LLC who have Novacor implants as of the date hereof or prior
to the Closing Date and (b) those patients who have a Novacor's left ventricle
assist device implanted after the Closing Date (each patient referred to as a
"Novacor Patient") in each case, in a manner at least as favorable to such
individuals, for so long as clinically necessary, as has been provided by
Edwards or Novacor LLC prior to the date hereof.

                  SECTION 4.16 POST CLOSING CAPITAL CONTRIBUTION OBLIGATIONS.
Until the third anniversary of the Closing, World Heart shall acquire Newco
Common Stock and/or junior preferred stock of Newco for cash in such amounts and
at such times as necessary so that the sum of the common equity and any such
junior preferred equity remains at all times greater than zero under U.S. GAAP.

                  SECTION 4.17 OUTSTANDING CONSENTS. Edwards agrees to use its
reasonable commercial efforts to obtain the consents set forth on Schedule
3.1(e) hereto, none of which each of World Heart and Newco acknowledges have
been obtained as of the date hereof.

                  SECTION 4.18 GOVERNMENTAL APPROVALS. Edwards agrees to
deliver to World Heart prior to the Closing Date, copies of all governmental
approvals which Edwards currently has to conduct the Transferred Business,
including without limitation, FDA approvals.

                  SECTION 4.19 TRANSFER RESTRICTIONS. So long as Edwards holds
Newco Preferred Shares, Edwards shall not sell, transfer or otherwise dispose of
any Newco Preferred Shares, except in accordance with one of the following:

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

                           (b) pursuant to a transfer of Newco Preferred Shares,
by Edwards to an affiliate of Edwards, from an affiliate of Edwards to Edwards
or between affiliates of Edwards (any such transferee shall be referred to
herein as a "Permitted Transferee"), provided that in the case of any such
transfer, Edwards or a Permitted Transferee, as the case may be, shall have
provided World Heart with written notice of such proposed transfer at least five
days prior to consummating such transfer stating the name and the address of

                                       29

<PAGE>

the Permitted Transferee and the relationship between the transferring party and
the Permitted Transferee and the Permitted Transferee shall have agreed in
writing to be bound by the terms of this Agreement. If any Permitted Transferee
to whom Series A Preferred Stock have been transferred pursuant to this Section
4.19 ceases to be a Permitted Transferee, such Series A Preferred Stock shall be
transferred back to the transferor or another Permitted Transferee immediately
prior to the time such Person ceases to be a Permitted Transferee. Edwards and
any Permitted Transferee shall be jointly and severally liable for any breach of
this Agreement by such Permitted Transferee.

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

                  SECTION 4.20 SHAREHOLDER APPROVAL. World Heart shall (a) take
all actions necessary or prudent to obtain the approval of the Transactions and
Transaction Agreements by the requisite vote of the holders of voting shares of
World Heart (b) if necessary, acting through its Board of Directors, promptly
and duly call, give notice of, convene and hold as soon as practicable a meeting
of the holders of voting shares of World Heart for the purpose of voting to
approve and adopt the Transaction Agreements and the Transactions and recommend
approval and adoption of the Transaction Agreements and the Transactions, by the
stockholders of World Heart and include in any public disclosure statement in
connection therewith such recommendation and (c) take all reasonable and lawful
action to solicit and obtain such approval.

                                    ARTICLE V
                              CONDITIONS PRECEDENT

                  SECTION 5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF NEWCO AND
WORLD HEART. The obligation of World Heart to consummate the World Heart
Contribution and of Newco to issue the Newco Shares shall be subject to the
satisfaction or waiver on the Closing Date of the following conditions
precedent:

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

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

                                       30
<PAGE>

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

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

                  (e) PERFORMANCE OF OBLIGATIONS OF EDWARDS AND NOVACOR LLC.
Edwards and Novacor LLC shall have performed in all material respects their
respective obligations under the Transaction Agreements on or prior to the
Closing Date.

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

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

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

                  SECTION 5.2 CONDITIONS PRECEDENT TO EDWARDS'S OBLIGATION. The
obligation of Edwards to make the Edwards Contribution is subject to the
satisfaction or waiver on the Closing Date of each of the following conditions
precedent:

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

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

                                       31
<PAGE>

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

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

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

                  (f) PERFORMANCE OF OBLIGATIONS OF NEWCO AND WORLD HEART. Newco
and World Heart shall have performed in all material respects their respective
obligations under the Transaction Agreements on or prior to the Closing Date.

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

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

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

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

                                       32
<PAGE>

                                 ARTICLE VI
                            TERMINATION AND AMENDMENT

                  SECTION 6.1 TERMINATION. This Agreement may be terminated and
the Transactions may be abandoned at any time prior to the Closing:

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

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

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

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

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

                                       33

<PAGE>

                                   ARTICLE VII
                            SURVIVAL; INDEMNIFICATION

                  SECTION 7.1 SURVIVAL. The representations and warranties
contained in or made pursuant to this Agreement shall survive for a period of 12
months after the Closing Date; PROVIDED, HOWEVER, that the representations and
warranties contained in Section 3.1(m) of this Agreement shall survive until 60
days after the expiration of the applicable statute of limitations. From and
after the Closing, Edwards hereby agrees to indemnify and hold harmless World
Heart, Newco, and Novacor LLC, and World Heart hereby agrees to indemnify and
hold harmless Edwards, in each case against certain liabilities, in accordance
with the terms of this Article VII. The Indemnifying Party (as defined below)
shall not be obligated to provide such indemnification with respect to
representations and warranties to the Indemnified Party (as defined below)
unless the Indemnifying Party shall have received written notice thereof
(including a reasonably detailed description of the basis of the claim) within
the applicable time period for survival of such representations or warranty, as
set forth above.

                  SECTION  7.2  INDEMNIFICATION.

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

                                       34
<PAGE>

"liabilities ... incurred in the ordinary course of business" shall not include
liabilities arising from tort claims or claims for breach of contract.

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

                  SECTION 7.3 INDEMNIFICATION AMOUNTS. Except for any
indemnification with respect to Taxes, notwithstanding any provision to the
contrary contained in this Agreement, Edwards shall not be obligated to
indemnify World Heart or Newco or Novacor LLC and World Heart and Newco shall
not be obligated to indemnify Edwards, in each case for any Damages with respect
to the matters set forth in Section 7.2(a) and (b) hereof (i) unless and until
the amount of all such respective Damages shall equal $250,000 in the aggregate,
and then only to the extent of such excess or (ii) to the extent such Damages
exceed $10 million.

                  SECTION 7.4 CLAIMS. (a) If an indemnified party (an
"Indemnified Party") intends to seek indemnification pursuant to this Article
VII, such Indemnified Party shall promptly notify the indemnifying party (the
"Indemnifying Party"), in writing, of such claim describing such claim in
reasonable detail, PROVIDED, that the failure to provide such notice shall not
affect the obligations of the Indemnifying Party unless and only to the extent
it is actually prejudiced thereby, subject, however, to the time periods
specified in Section 7.1 hereof. Except for claims with respect to Taxes, which
shall be governed by Section 4.9(a), (i) in the event that such claim involves a
claim by a third party against an Indemnified Party, the Indemnifying Party
shall have 30 days after receipt of such notice to decide whether it will
undertake, conduct and control, through counsel of its own choosing and at its
own expense, the settlement or defense thereof, and if it so decides, the
Indemnified Party shall cooperate with it in connection therewith, PROVIDED,
that the Indemnified Party may participate in such settlement or defense through
counsel chosen by it, and PROVIDED FURTHER, that the reasonable fees and
expenses of such counsel shall be borne by the Indemnified Party. The
Indemnifying Party shall not, without the written consent of the Indemnified
Party (which consent shall not be unreasonably withheld), settle or compromise
any action. If the Indemnifying Party does not notify the Indemnified Party
within 30 days after the receipt of notice of a claim of indemnity hereunder
that it elects to undertake the defense thereof, the Indemnified Party shall
have the right to contest, settle or compromise the claim but shall not pay or
settle any such claim without the consent of the Indemnifying Party (which
consent shall not be unreasonably withheld).

                                       35
<PAGE>

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

                  SECTION 7.5 EXCLUSIVE REMEDY. Absent fraud, the
indemnification provisions of this Article VII shall be the exclusive remedy
following the Closing for any breaches or alleged breaches of any representation
or warranty contained in the Transaction Agreements. Neither party shall have
the right to set-off against any payments to be made by such party pursuant to
this Agreement or the other Transaction Agreements or otherwise. Each of the
parties hereto agrees not to bring any actions or proceedings, at law, equity or
otherwise, against any other party or its direct or indirect partners or
securityholders in respect of any breaches or alleged breaches of any
representation or warranty except pursuant to the express provisions of this
Article VII. The parties hereby agree that no party has made any representations
or warranties, express or implied, with respect to this Agreement or the matters
contemplated hereby, except as explicitly set forth in this Agreement or the
other Transaction Agreements.

                  SECTION 7.6 DUPLICATION. Any liability for indemnification
hereunder shall be determined without duplication of recovery by reason of the
state of facts giving rise to such liability constituting a breach of more than
one representation, warranty, covenant or agreement; PROVIDED, HOWEVER, that
subject to there being no duplication of recovery, the Indemnified Party shall
be entitled to recover to the maximum extent provided in this Agreement.

                                  ARTICLE VIII
                                  MISCELLANEOUS

                  SECTION 8.1 GOVERNING LAW. This agreement shall be governed
by, interpreted under, and construed in accordance with the internal laws of the
State of New York, including, without limitation, Sections 5-1401 and 5-1402 of
the New York General Obligations Law and New York Civil Practice Laws and Rules
327(b).

                  SECTION 8.2 JURISDICTION AND CONSENT TO SERVICE. In
accordance with the laws of the State of New York, and without limiting the
jurisdiction or venue of any other court, the parties (a) agree that any suit,
action or proceeding arising out of or relating to this Agreement may be brought
in the state or federal courts of New York; (b) consent to the non-exclusive
jurisdiction of each such court in any suit, action or proceeding relating to or
arising out of the Transaction Agreements; (c) waive any

                                       36

<PAGE>

objection which any of them may have to the laying of venue in any such suit,
action or proceeding in any such court and waive any defense of forum non
conveniens; and (d) agree that service of any court paper in any such suit,
action or proceeding may be made in the same manner in which notices may be
given pursuant to Section 8.3 of this Agreement.

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

          (a)  if to World Heart, to

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

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

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

          (b)  if to Edwards, to

                          Edwards Lifesciences LLC
                          One Edwards Way

                                       37
<PAGE>

                          Irvine, California  92614
                          Attn:  Associate General Counsel
                          Fax:  (949) 250-2525

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

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

                  SECTION 8.4 INTERPRETATION. When a reference is made in
this Agreement to a Section, Schedule or Exhibit, such reference shall be to a
Section, Schedule or Exhibit of this Agreement unless otherwise indicated. When
a reference is made in this Agreement to a specific Schedule, such reference
shall be deemed to include, to the extent applicable, all the other Schedules.
The table of contents, table of definitions and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. When the words "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." All accounting terms not defined in this
Agreement shall have the meanings determined by generally accepted accounting
principles as of the date hereof. All capitalized terms defined herein are
equally applicable to both the singular and plural forms of such terms.

                  SECTION 8.5 SEVERABILITY. If any provision of this
Agreement or the application of any such provision shall be held invalid,
illegal or unenforceable in any respect for any reason, the parties shall
negotiate in good faith with a view to the substitution therefor of a suitable
and equitable solution in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid provision; PROVIDED,
HOWEVER, that the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.

                  SECTION 8.6 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original and all of
which shall, taken together, be considered one and the same agreement and shall
become effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties.

                                       38
<PAGE>

                  SECTION 8.7 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.
This Agreement and the other Transaction Agreements, including all exhibits
hereto and thereto and the Confidentiality Agreement,

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

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

                  SECTION 8.8 FURTHER ASSURANCES. Each party hereto shall do
all such further acts and execute, acknowledge, deliver and file all such
further instruments and documents as may be necessary or desirable to give
effect to and carry out the transactions contemplated by this Agreement.

                  SECTION 8.9 AMENDMENTS AND MODIFICATIONS; WAIVERS AND
EXTENSIONS.

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

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

                  SECTION 8.10 ASSIGNMENT. Neither this Agreement nor any of
the rights or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that any
party may assign all its rights and obligations to the assignee of all or
substantially all of the assets of such party including an acquisition through
merger, provided that such party shall in no event be released from its
obligations hereunder without the prior written consent of the other parties.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be

                                       39

<PAGE>

enforceable by the parties and their respective successors and assigns. Any
attempted assignment in contravention hereof shall be null and void.

                  SECTION 8.11 EQUITABLE REMEDIES. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties hereto shall
be entitled to equitable relief, including in the form of injunctions, in order
to enforce specifically the provisions of this Agreement, in addition to any
other remedy to which they are entitled at law or in equity.

                  SECTION 8.12 EXPENSES. Except as otherwise provided in this
Agreement, whether or not the Closing takes place, each party to this Agreement
shall bear its respective expenses incurred in connection with the preparation,
execution, and performance of this Agreement and the transactions contemplated
hereby, including all fees and expenses of agents, representations, counsel and
accountants; PROVIDED, HOWEVER, that each of Edwards and World Heart shall pay
one-half of the costs incurred by Edwards in connection with the preparation of
the financial statements, pursuant to Section 4.10(c); and PROVIDED, FURTHER
that the prevailing party in any legal action brought by one party against the
other party and arising out of this Agreement shall be entitled, in addition to
any other rights and remedies it may have, to reimbursement for its expenses,
including court costs and reasonable attorneys' fees.

                                       40
<PAGE>

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

                                         EDWARDS LIFESCIENCES LLC

                                         By: /s/ Michael A. Mussallem
                                            ----------------------------------
                                            Name: Michael A. Mussallem
                                            Title: President

                                         EDWARDS NOVACOR LLC

                                         By: /s/ Michael A. Mussallem
                                            -----------------------------------
                                            Name: Michael A. Mussallem
                                            Title: President

                                         WORLD HEART CORPORATION

                                         By: /s/ Roderick Bryden
                                            ----------------------------------
                                            Name: Roderick Bryden
                                            Title: President and CEO

                                         By: /s/ Dr. Tofy Mussivana
                                            ----------------------------------
                                            Name: Dr. Tofy Mussivana
                                            Title: President and CEO

                                         VALENTINE ACQUISITION CORP.

                                         By: /s/ Roderick Bryden
                                            ----------------------------------
                                            Name: Roderick Bryden
                                            Title: President and CEO

                                         By: /s/ Ian Malone
                                            ----------------------------------
                                            Name: Ian Malone
                                            Title: Vice President

                                       41<PAGE>

                                                                  EXHIBIT 10.23

                                                                 CONFORMED COPY

                                    AMENDMENT NO. 1, dated as of June 30, 2000
                                    (this "AMENDMENT"), to the FIVE YEAR CREDIT
                                    AGREEMENT dated as of March 30, 2000 (the
                                    "FIVE YEAR CREDIT AGREEMENT"), among EDWARDS
                                    LIFESCIENCES CORPORATION, a Delaware
                                    corporation (the "COMPANY"); the SWISS
                                    BORROWERS (as defined in the Credit
                                    Agreement); the JAPANESE BORROWERS (as
                                    defined in the Credit Agreement); the
                                    LENDERS from time to time party thereto; THE
                                    CHASE MANHATTAN BANK, as Administrative
                                    Agent; CHASE MANHATTAN INTERNATIONAL
                                    LIMITED, as London Agent; THE FUJI BANK,
                                    LIMITED, as the Tokyo Agent; BANK ONE, N.A.,
                                    as Syndication Agent; and CREDIT SUISSE
                                    FIRST BOSTON, as Documentation Agent, and to
                                    the 364 Day CREDIT AGREEMENT dated as of
                                    March 30, 2000 (the "364 DAY CREDIT
                                    AGREEMENT" and together with the Five Year
                                    Credit Agreement the "CREDIT AGREEMENTS")
                                    among the Company, the Lenders from time to
                                    time party thereto, THE CHASE MANHATTAN
                                    BANK, as Administrative Agent, BANK ONE,
                                    N.A., as Syndication Agent and CREDIT SUISSE
                                    FIRST BOSTON, as Documentation Agent.

         A. Pursuant to the Credit Agreements, the Lenders and the Issuing Bank
have extended, and have agreed to extend, credit to the Borrowers.

         B. The Borrowers have requested that the Required Lenders agree to
amend the Credit Agreements as provided herein. The Required Lenders are willing
to amend the Credit Agreements pursuant to the terms and subject to the
conditions set forth herein.

         C. Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Credit Agreements.

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

         SECTION 1. AMENDMENT TO CREDIT AGREEMENTS. The definition of "Specified
Charges" in Section 1.01 of each Credit Agreement is hereby amended and restated
in its entirety as follows:

                  "SPECIFIED CHARGES" means (i) costs related to the Spin-Off
and related restructuring changes not to exceed $100,000,000 (and the cash
amount of which does not exceed $50,000,000) and (ii) charges for Intangible
Assets and goodwill not to exceed $300,000,000, in each case to the extent such
costs and/or charges shall have been accrued prior to December 31, 2000.

<PAGE>

         SECTION 2. AMENDMENT TO FIVE YEAR CREDIT AGREEMENT. (a) In accordance
with Section 2.21 of the Five Year Credit Agreement, the Five Year Credit
Agreement is hereby amended to add Edwards Lifesciences Japan Holdings, Inc. and
Edwards Lifesciences World Trade Corporation (the "NEW US BORROWERS") as
Borrowers entitled to make US Tranche Revolving Borrowings under Section 2.01(a)
of the Five Year Credit Agreement. The New US Borrowers will have the same right
to borrow under the US Tranche Commitments and, with respect to the US Tranche
Revolving Borrowings made by them, will have the same obligations, as the
Company, and will have all the other obligations of Borrowers under the Five
Year Credit Agreement.

         (b) The definition of "Borrower" in the Five Year Credit Agreement is
hereby amended and restated in its entirety as follows:

                  "BORROWER" means the Company, any Swiss Borrower, any Japanese
Borrower, or any other Subsidiary that becomes a Borrower in accordance with
Section 2.21.

         (c) The Company hereby agrees and confirms that the Guarantee contained
in Article X of the Five Year Credit Agreement will apply to the Obligations of
the New US Borrowers.

         SECTION 3. REPRESENTATIONS AND WARRANTIES. To induce the other parties
hereto to enter into this Amendment, the Company represents and warrants to each
of the Lenders, the Administrative Agent, the Syndication Agent and the
Documentation Agent that, after giving effect to this Amendment, (i) the
representations and warranties set forth in Article III of the Credit Agreements
are true and correct in all material respects on and as of the date hereof,
except to the extent such representations and warranties expressly relate to an
earlier date, and (ii) no Default or Event of Default has occurred and is
continuing.

         SECTION 4. EFFECTIVENESS. This Amendment shall become effective as of
the date first written above when the Administrative Agent shall have received
counterparts of this Amendment that, when taken together, bear the signatures of
the Company and the Required Lenders under each Credit Agreement.

         SECTION 5. EFFECT OF AMENDMENT. Except with respect to any Default or
Event of Default that might have existed but for the amendment to the definition
of "Specified Charges" set forth in Section 1 hereof, which is hereby expressly
waived, and except as expressly set forth herein, this Amendment shall not by
implication or otherwise limit, impair, constitute a waiver of, or otherwise
affect the rights and remedies of, the Lenders, the Administrative Agent, the
Syndication Agent or the Documentation Agent under the Credit Agreements or any
other Loan Document, and shall not alter, modify, amend or in any way affect any
of the terms, conditions, obligations, covenants or agreements contained in the
Credit Agreements or any other Loan Document, all of which are ratified and
affirmed in all respects and shall continue in full force and effect. Nothing
herein shall be deemed to entitle any Loan Party to a consent to, or a waiver,
amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreements or any
other Loan Document in similar or different circumstances. After the date
hereof, any reference to the Credit Agreements shall

<PAGE>

mean the Credit Agreements, as modified hereby. This Amendment shall constitute
a "Loan Document" for all purposes of the Credit Agreements and the other Loan
Documents.

         SECTION 6. COUNTERPARTS. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same contract.
Delivery of an executed counterpart of a signature page of this Amendment by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart hereof.

         SECTION 7. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         SECTION 8. HEADINGS. The headings of this Amendment are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

         SECTION 9. EXPENSES. The Company agrees to reimburse the Administrative
Agent for all out-of-pocket expenses in connection with this Amendment,
including the reasonable fees, charges and disbursements of Cravath, Swaine &
Moore, counsel for the Administrative Agent.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their duly authorized officers, all as of the
date and year first above written.

                                      EDWARDS LIFESCIENCES CORPORATION,

                                         by  /s/ BRUCE J. BENTCOVER
                                             -------------------------
                                             Name:  Bruce J. Bentcover
                                             Title: Corporate Vice President and
                                                    Chief Financial Officer

                                      EDWARDS LIFESCIENCES JAPAN HOLDINGS, INC.,

                                         by  /s/ JAY P. WERTHEIM
                                             -------------------------
                                             Name:  Jay P. Wertheim
                                             Title: Vice President and Secretary

                                      EDWARDS LIFESCIENCES WORLD TRADE
                                      CORPORATION,

                                         by  /s/ JAY P. WERTHEIM
                                             -------------------------
                                             Name:  Jay P. Wertheim
                                             Title: Assistant Secretary

<PAGE>

                                      THE CHASE MANHATTAN BANK,

                                         by  /s/ STEPHEN P. ROCHFORD
                                             -------------------------
                                             Name:  Stephen P. Rochford
                                             Title: Vice President

<PAGE>

                                                         SIGNATURE PAGE TO
                                                         AMENDMENT NO. 1, DATED
                                                         AS OF JUNE 30, 2000
                                                         TO THE EDWARDS
                                                         LIFESCIENCES CREDIT
                                                         AGREEMENTS

           NAME OF INSTITUTION:  THE BANK OF TOKYO-MITSUBISHI, LTD.
                                 CHICAGO BRANCH

                                 by:  /s/ HISASHI MIYASHIRO
                                      ---------------------
                                      Name:  Hisashi Miyashiro
                                      Title:  Deputy General Manager

<PAGE>

                                                         SIGNATURE PAGE TO
                                                         AMENDMENT NO. 1, DATED
                                                         AS OF JUNE 30, 2000
                                                         TO THE EDWARDS
                                                         LIFESCIENCES CREDIT
                                                         AGREEMENTS

           NAME OF INSTITUTION:  FLEET NATIONAL BANK

                                 by: /s/ WALTER J. MARULLO
                                     -------------------------
                                     Name:  Walter J. Marullo
                                     Title:  Vice President

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                                                         AS OF JUNE 30, 2000
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                                                         AGREEMENTS

           NAME OF INSTITUTION:  NATIONAL AUSTRALIA BANK LIMITED
                                 A.C.N. 004044937

                                 by:  /s/ BRUCE T. RICHARDS
                                      -------------------------
                                      Name:  Bruce T. Richards
                                      Title:  Senior Vice President

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                                                         AS OF JUNE 30, 2000
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                                                         AGREEMENTS

           NAME OF INSTITUTION:  BANK OF NOVA SCOTIA,

                                 by: /s/ R.P. REYNOLDS
                                     -------------------------
                                     Name:  R.P. Reynolds
                                     Title:  Director

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                                                         AMENDMENT NO. 1, DATED
                                                         AS OF JUNE 30, 2000
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                                                         AGREEMENTS

           NAME OF INSTITUTION:  DEUTSCHE BANK AG, NEW YORK AND/OR
                                 CAYMAN ISLANDS BRANCH

                                 by:  /s/ IAIN STEWART
                                      -------------------------
                                      Name:  Iain Stewart
                                      Title:  Managing Director

                                 by:  /s/ ANNETTE WALTER
                                      -------------------------
                                      Name: Annette Walter
                                      Title:  Associate

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                                                         AGREEMENTS

           NAME OF INSTITUTION:  THE BANK OF TOKYO-MITSUBISHI, LTD.
                                 ICHIGAYA BRANCH

                                 by:  /s/ HAJIME KANEKO
                                      -------------------------
                                      Name:  Hajimi Kaneko
                                      Title:  General Manager

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           NAME OF INSTITUTION:  BANK ONE, NA

                                 by: /s/ JOSEPH R. PERDENZA
                                     -------------------------
                                     Name:  Joseph R. Perdenza
                                     Title: Assistant Vice President

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                                                         AS OF JUNE 30, 2000
                                                         TO THE EDWARDS
                                                         LIFESCIENCES CREDIT
                                                         AGREEMENTS

           NAME OF INSTITUTION:  CREDIT SUISSE FIRST BOSTON

                                 by: /s/ WILLIAM S. LUTKINS
                                     -------------------------
                                     Name:  William S. Lutkins
                                     Title:  Vice President

                                  by: /s/ THOMAS G. MUOIO
                                     -------------------------
                                      Name:  Thomas G. Muoio
                                      Title:  Vice President

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           NAME OF INSTITUTION:  MORGAN GUARANTY TRUST COMPANY
                                 OF NEW YORK

                                 by:  /s/ ROBERT BOTTAMEDI
                                      -------------------------
                                      Name:  Robert Bottamedi
                                      Title:  Vice President

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                                                         AS OF JUNE 30, 2000
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           NAME OF INSTITUTION:  UBS AG, STAMFORD BRANCH

                                  by: /s/ ROBERT H. RILEY III
                                      -------------------------
                                      Name: Robert H. Riley III
                                      Title: Executive Director

                                  by: /s/ WILFRED SAINT
                                      -------------------------
                                      Name:  Wilfred Saint
                                      Title:  Loan Portfolio Support, US

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                                                         AGREEMENTS

           NAME OF INSTITUTION:  WACHOVIA BANK, N.A.

                                 by: /s/ DEBRA COHELEY
                                     -------------------------
                                     Name:  Debra Coheley
                                     Title:  Senior Vice President

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           NAME OF INSTITUTION:  ABN AMRO BANK

                                  by: /s/ JOHN A. MILLER
                                      -------------------------
                                      Name:  John A. Miller
                                      Title:  Senior Vice President

                                  by: /s/ MITSOO RAVANI
                                      -------------------------
                                      Name:  Mitsoo Ravani
                                      Title: Assistant Vice President

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                                                         AS OF JUNE 30, 2000
                                                         TO THE EDWARDS
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                                                         AGREEMENTS

           NAME OF INSTITUTION:  BANK OF AMERICA

                                 by: /s/ FOREST SCOTT SINGHOFF
                                     ------------------------------
                                     Name:  Forest Scott Singhoff
                                     Title:  Managing Director

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                                                         AS OF JUNE 30, 2000
                                                         TO THE EDWARDS
                                                         LIFESCIENCES CREDIT
                                                         AGREEMENTS

           NAME OF INSTITUTION:  FIRST UNION

                                  by:  /s/ ANN M. DODD
                                       --------------------------------
                                       Name:  Ann M. Dodd
                                       Title:  Sennior Vice President

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