-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OvvZNGpGgDZeMXFYGEQbE9MaEXtYwdqWSyuGjuaTR9e9l2cGXn8qM2tS8qkVchg3 cYUvMBZEJieNRao81H2WNg== 0000950131-02-004256.txt : 20021112 0000950131-02-004256.hdr.sgml : 20021111 20021108185623 ACCESSION NUMBER: 0000950131-02-004256 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20021112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BAXTER INTERNATIONAL INC CENTRAL INDEX KEY: 0000010456 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 360781620 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-101122 FILM NUMBER: 02814920 BUSINESS ADDRESS: STREET 1: ONE BAXTER PKWY STREET 2: DF2-2W CITY: DEERFIELD STATE: IL ZIP: 60015 BUSINESS PHONE: 8479482000 MAIL ADDRESS: STREET 1: ONE BAXTER PARKWAY STREET 2: DF2-2W CITY: DEERFIELD STATE: IL ZIP: 60015 FORMER COMPANY: FORMER CONFORMED NAME: BAXTER LABORATORIES INC DATE OF NAME CHANGE: 19760608 FORMER COMPANY: FORMER CONFORMED NAME: BAXTER TRAVENOL LABORATORIES INC DATE OF NAME CHANGE: 19880522 S-3 1 ds3.txt FORM S-3 As filed with the Securities and Exchange Commission on November 8, 2002. Registration No. 333-_________ ================================================================================ SECURITIES AND EXCHANGE COMMISSION --------------- Washington, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 BAXTER INTERNATIONAL INC. -------------------- (Exact name of registrant as specified in its charter) Delaware 36-0781620 - ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) One Baxter Parkway Deerfield, Illinois 60015 (847) 948-2000 ---------------------------------------------------- (Address, including zip code of registrant's principal executive offices) ---------------------------------------------------- J. Patrick Fitzsimmons Senior Counsel Baxter International Inc. One Baxter Parkway Deerfield, Illinois 60015 (847) 948-2000 --------------------------------------------------------------------- (Name, address, and telephone number, including area code, of agent for service) APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: 1 From time to time after the effective date of this Registration Statement as determined in light of market conditions and other factors. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] The prospectus included in this Registration Statement is a combined prospectus relating also to all the debt securities previously registered pursuant to the Registration Statement on Form S-3 (No. 333-82988), of which $500,000,000 remain available for future sale, and as to which, pursuant to Rule 429 under the Securities Act of 1933, a separate post-effective amendment will not be filed. A filing fee has previously been paid as to these debt securities. If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_]
CALCULATION OF REGISTRATION FEE ==================================================================================================== TITLE OF EACH PROPOSED PROPOSED MAXIMUM PROPOSED AMOUNT CLASS OF AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OF REGIST- SECURITIES TO BE REGISTERED PRICE(1) OFFERING RATION REGISTERED PRICE(1) FEE(3) - ---------------------------------------------------------------------------------------------------- Common Stock, $1 par value (2) (together with the associated Preferred Stock Purchase Rights, traded with the Common Stock) (2) Preferred Stock (2) Stock or Debt Warrants (2) Convertible Preferred Stock (2) Convertible Debt Securities (2) Equity Purchase Contracts (2) Equity Purchase Units (2) Debt Securities $2,000,000,000 100% $2,000,000,000(4) $184,000(5) - ----------------------------------------------------------------------------------------------------
2 ================================================================================ (1) Estimated solely for purposes of calculating the registration fee, and exclusive of any dividends thereon or accrued interest thereon, if any. (2) Registered hereunder are an indeterminate number of shares of common stock, $1 par value per share, an indeterminate amount and number of shares of preferred stock or convertible preferred stock or convertible debt securities as may be sold from time to time, an indeterminate amount and number of equity purchase contracts as may be sold from time to time, an indeterminate amount and number of equity purchase units as may be sold from time to time, an indeterminate amount and number of debt or stock warrants as may be sold from time to time, and an indeterminate amount and number of other securities as may be sold from time to time (collectively the "offered securities"), all as may be sold from time to time by the Registrant, including all such shares as may be issued upon conversion of, or exchange for, any securities being registered hereunder that provide for conversion or exchange into any other offered security. (3) The registration fee has been calculated in accordance with Rule 457(o) under the Securities Act of 1933 in respect of the up to $2,000,000,000 aggregate offering price of securities registered hereunder. An additional aggregate registration fee of $92,000 was paid by the Registrant in connection with an aggregate of $1,000,000,000 principal amount of securities filed March 29, 2002, pursuant to its Registration Statement on Form S-3 (No. 333-82988) (of which $500,000,000 remains available for future sale). (4) Prospectuses included herein relate to $2,500,000,000 of offered securities. Such amount represents the principal amount of any debt securities or convertible debt securities issued at their principal amount, the issue price rather than the principal amount of any debt securities or convertible debt securities issued at an original issue discount, the liquidation preference of any preferred stock, the amount computed pursuant to Rule 457(c) for any common stock, the issue price of any warrants, the exercise price of any offered securities issuable upon the exercise of any warrants and the initial public offering price of any preferred or convertible preferred stock. An indeterminate amount and/or number of each of the offered securities is registered hereunder. Any securities registered hereunder may be sold separately or as units with any other securities registered hereunder. (5) No separate consideration will be received for the debt securities, preferred stock or common stock issuable upon conversion of or in exchange for any securities registered hereunder that provide for conversion or exchange into such securities. - -------------------------------------------------------------------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION EFFECTIVE SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. 3 Prospectus The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. - -------------------------------------------------------------------------------- [LOGO] Baxter International Inc. Up to $2,000,000,000 of Common Stock, $1 Par Value Preferred Stock Convertible Preferred Stock Warrants to Purchase Common Stock or Debt Securities Convertible Debt Securities Equity Purchase Contracts Equity Purchase Units Debt Securities - -------------------------------------------------------------------------------- Baxter International Inc. may offer from time to time up to $2,000,000,000 of any combination of the securities described in this prospectus. The terms of each such offering will be determined when an agreement to sell is made. Securities we may sell include: . common stock . preferred stock . convertible debt securities . convertible preferred stock . stock or debt warrants . debt securities . equity purchase contracts . equity purchase units Unless the context otherwise requires, the terms "Company," "we," "us," and "our" in this prospectus refer to Baxter International Inc., a Delaware corporation, together with its subsidiaries. Unless the context otherwise indicates, "common stock" refers to the common stock, $1 par value per share, of Baxter International Inc. and the associated Series B junior participating preferred stock purchase rights (currently traded with our common stock). Any or all of the above securities are referred to as "offered securities" in this prospectus. We will provide specific terms of the offered securities to be sold in supplements to this prospectus. You should read this prospectus and any supplement carefully before you invest. A supplement may also change or update information contained in this prospectus. We will not use this prospectus to confirm sales of any of our securities unless it is attached to a prospectus supplement. Unless we state otherwise in a prospectus supplement, we will not list any of these securities on any securities exchange. Neither the Securities and Exchange Commission nor any state securities commission has determined whether this prospectus is truthful or complete. They have not made, nor will they 4 make, any determination as to whether anyone should buy these securities. Any representation to the contrary is a criminal offense. The date of this preliminary prospectus is November 11, 2002 5 - -------------------------------------------------------------------------------- NOTICE TO INVESTORS YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED, OR INCORPORATED BY REFERENCE, IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT OR ADDITIONAL INFORMATION. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS. This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the "SEC") utilizing a universal "shelf" registration process for a delayed, or continuous, or intermittent offering process. Under this shelf registration process, we may issue and sell, from time to time, the offered securities in one or more offerings. This prospectus provides you with a general description of the securities which may be offered by us. Each time we sell securities, we are required to provide you with a prospectus and a prospectus supplement containing specific information about us and the terms of that particular offering. That prospectus supplement may include additional risk factors or other special considerations applicable to those offered securities. Any prospectus supplement may also add, update or change information in this prospectus. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement, you should rely on the information in that prospectus supplement. You should read both this prospectus and the applicable prospectus supplement together with additional information described under "Where You Can Find More Information." - -------------------------------------------------------------------------------- WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain further information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the public over the Internet at the SEC's Web site at http://www.sec.gov. Our SEC filings are also available at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. We incorporate by reference in this prospectus the following documents filed by us with the SEC: . our Annual Report on Form 10-K for the year ended December 31, 2001; 6 . our Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30, and September 30, 2002; . our Current Reports on Form 8-K dated August 7, and September 16, 2002; . the description of our common stock in our registration filed with the SEC under Section 12 of the Securities Exchange Act of 1934, including any subsequent amendment or any report filed for the purpose of updating such description; and . the description of our Series B Junior Participating Preferred Stock Purchase Rights (currently traded with our common stock), filed in our Form 8-A dated May 30, 2001. Any statement made in a document incorporated by reference or deemed incorporated herein by reference is deemed to be modified or superseded for purposes of this prospectus if a statement contained in this prospectus or in any other subsequently filed document which also is incorporated or deemed incorporated by reference herein modifies or supersedes that statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. We also incorporate by reference all documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act after the date of this prospectus until we or the underwriters sell all of the offered securities. Statements made in this prospectus or in any document incorporated by reference in this prospectus as to the contents of any contract or other document referred to herein or therein are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the documents incorporated by reference, each such statement being qualified in all material respects by such reference. You may request a copy of these filings at no cost, by writing or calling us at the following address: Corporate Secretary, Baxter International Inc., One Baxter Parkway, Deerfield, Illinois 60015 (847) 948-2000. - -------------------------------------------------------------------------------- CAUTION REGARDING FORWARD-LOOKING STATEMENTS Statements throughout this prospectus that are not historical facts, (including material incorporated herein by reference) are forward-looking statements. These statements are based on our current expectations and involve numerous risks and uncertainties. Some of these risks and uncertainties are factors that affect all international businesses, while some are specific to us and the health care arenas in which we operate. Many factors could affect our actual results, causing results to differ, and possibly differ materially, from those expressed in any such forward-looking statements. These factors include, but are not limited to, interest rates; technological advances in the medical field; economic conditions; demand and market acceptance risks for new and existing products, technologies and health-care services; the impact of competitive products and pricing; manufacturing capacity; new plant start-ups; global regulatory, trade and tax policies; regulatory, legal or other developments relating to the company's Series A, AF and AX dialyzers; continued price 7 competition; product development risks, including technological difficulties; ability to enforce patents; actions of regulatory bodies and other government authorities; reimbursement policies of government agencies; commercialization factors; results of product testing; and other factors described in this prospectus and in our other filings with the SEC. Additionally, as discussed in the "Legal Proceedings" section of our most recently filed Quarterly Report on Form 10-Q, upon the resolution of certain legal matters, we may incur charges in excess of presently established reserves. Any such charge could have a material adverse effect on our results of operations or cash flows in the period in which it is recorded or paid. Currency fluctuations are also a significant variable for global companies, especially fluctuations in local currencies where hedging opportunities are unreasonably expensive or unavailable. If the United States dollar strengthens against most foreign currencies, growth rates in our sales and net earnings could be negatively impacted. We believe that our expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, but there can be no assurance that the actual results or performance of the company will conform to any future results or performance expressed or implied by such forward-looking statements. - -------------------------------------------------------------------------------- ABOUT THE COMPANY Baxter International Inc. and our Subsidiaries We were incorporated under Delaware law in 1931. Throughout the rest of this section, except as otherwise indicated in information incorporated by reference, "we" or "our" means Baxter International Inc., taken together with its subsidiaries as a consolidated enterprise. We engage in the worldwide development, manufacture and distribution of a diversified line of products, systems and services used primarily in the health care field. We manufacture products in 28 countries and sell them in over 100 countries. Health care is concerned with the preservation of health and with the diagnosis, cure, mitigation and treatment of disease and body defects and deficiencies. Our products are used by hospitals, clinical and medical research laboratories, blood and blood dialysis centers, rehabilitation centers, nursing homes, doctors' offices and by patients, at home, under physician supervision. We operate as a global leader in critical therapies for life-threatening conditions. Our continuing operations are comprised of three segments: Medication Delivery, which provides a range of intravenous solutions and specialty products that are used in combination for fluid replenishment, nutrition therapy, pain management, antibiotic therapy and chemotherapy; BioScience, which develops biopharmaceuticals, biosurgery products, vaccines and blood collection, processing and storage products and technologies; and Renal, which develops products and provides services to treat end-stage kidney disease. Our three businesses enjoy leading positions in the medical products and services fields. 8 - -------------------------------------------------------------------------------- USE OF PROCEEDS Except as otherwise set forth in any Prospectus Supplement relating to the Offered Securities, we will use the net proceeds from the sale of the Offered Securities for working capital, to repay our existing debt, to fund acquisitions, for our capital expenditures and for general corporate purposes. We will include a more detailed description of the use of proceeds from any specific offering of securities in the prospectus supplement relating to the offering. - -------------------------------------------------------------------------------- COMMON STOCK In General This description of our common stock is a summary. You should keep in mind, however, that it is our certificate of incorporation and our bylaws, and not this summary, which defines any rights you may acquire as a securityholder. There may be other provisions in these documents which are also important to you. You should read these documents for a full description of the terms of our capital stock. Our certificate of incorporation and our bylaws are incorporated by reference as exhibits to the registration statement that includes this prospectus. See "Where You Can Find More Information" for information on how to obtain copies of these documents. Subject to any preferential rights of any preferred stock created by our board of directors, as a holder of our common stock you are entitled to such dividends as our board of directors may declare from time to time out of funds that we can legally use to pay dividends. The holders of common stock possess exclusive voting rights, except to the extent our board of directors specifies voting power for any preferred stock that, in the future, may be issued. As a holder of our common stock, you are entitled to one vote for each share of common stock and do not have any right to cumulate votes in the election of directors. In the event of our liquidation, dissolution or winding-up, you will be entitled to receive on a proportionate basis any assets remaining after provision for payment of creditors and after payment of any liquidation preferences to holders of preferred stock. Our common stock is listed on the New York Stock Exchange under the symbol "BAX". Rights Plan In November 1998, our board of directors declared a dividend distribution of one right for each outstanding share of common stock. In February 2001, our board of directors declared a two-for-one stock split in the form of a 100% stock distribution to holders of our common stock. 9 As a result of the stock split, our rights plan was adjusted as of the end of May 2001, so that each share of our common stock is now accompanied by one-half of one right. Each full right entitles the holder to purchase from the Company one one-hundredth of a share of series B junior participating preferred stock at a price of $275 per one one-hundredth of a share, subject to adjustment. Initially, the rights are attached to all certificates representing our common stock and no separate rights certificates have been issued. The rights will separate from our common stock upon the earlier of: . ten business days following the public announcement that a person or group has acquired or obtained the right to acquire beneficial ownership of 15% or more of the outstanding shares of our common stock; or . ten business days following the commencement of a tender or an exchange offer that would result in a person or group owning 15% or more of the outstanding shares of our common stock; unless the person or group has offered to acquire all of the outstanding shares of our common stock and our independent directors have determined that such offer is in the best interests of the Company and its stockholders. The rights are not exercisable until one of the two events listed above has occurred and will expire on March 23, 2009. Upon the happening of one of the events listed above, each right (other than rights held by the acquiring person) will be exercisable for our common stock having a value equal to two times the exercise price of the right. If the Company is acquired or sells 50% or more of its assets, then each right will be exercisable for common stock in the surviving or transferee corporation having a value equal to two times the exercise price of the right. At any time up to ten days after the happening of one of the events listed above, Baxter may redeem the rights at a price of $.01 per right. Other Charter and Bylaw Provisions In addition, our restated certificate of incorporation (the "charter") may have anti-takeover effects. Our charter provides, among other things, for a classified board of directors divided into three classes and stockholder action only at a stockholders' meeting and not by written consent. In addition, our bylaws provide, among other things, that stockholders wishing to nominate a director at an annual meeting or at a special meeting called for the purpose of electing directors must comply with strict advance written notice provisions. Our bylaws also provide that special meetings of stockholders may be called only by the chairman of our board of directors, or certain of our officers, or by resolution of our directors. 10 - -------------------------------------------------------------------------------- PREFERRED STOCK We will describe the particular terms of any series of preferred stock in the prospectus supplement relating to the offering of any such offered securities. We will fix or designate the rights, preferences, privileges and restrictions, including any dividend rights, voting rights (if any), terms of redemption, retirement and sinking fund provisions (if any) and liquidation preferences (if any), of any series of preferred stock through a certificate of designation adopted by our board of directors or a duly authorized committee of our board of directors. We will describe the terms, if any, on which shares of any series of preferred stock are redeemable, convertible or exchangeable into common stock in the prospectus supplement relating to the offering. The redemption, conversion or exchange may be mandatory, at your option, or at our option. The applicable prospectus supplement will describe the manner in which the shares of common stock that you will receive as a holder of preferred stock would be converted or exchanged or redeemed. - -------------------------------------------------------------------------------- CONVERTIBLE PREFERRED STOCK We will describe the particular terms of any series of convertible preferred stock in the prospectus supplement relating to the offering of any such offered securities. We will fix or designate the conversion rights, preferences, privileges and restrictions, including any dividend rights, voting rights (if any), terms of redemption, retirement and sinking fund provisions (if any) and liquidation preferences (if any), of any series of convertible preferred stock through a certificate of designation adopted by our board of directors or a duly authorized committee of our board of directors. We will describe the terms, if any, on which shares of any series of preferred stock are convertible or exchangeable into our debt securities or common stock in the prospectus supplement relating to the offering. The conversion, redemption or exchange may be mandatory, at your option, or at our option. The applicable prospectus supplement will describe the manner in which the shares of common stock that you will receive as a holder of convertible preferred stock would be converted or exchanged or redeemed. - -------------------------------------------------------------------------------- STOCK AND DEBT WARRANTS We may issue warrants, including warrants to purchase debt securities, preferred stock, common stock or other securities issued by us. We may issue warrants independently or together with any other securities, and they may be attached to or separate from those securities. We will issue the warrants under warrant agreements between us and a bank or trust company, as warrant agent, that we will describe in the prospectus supplement relating to any warrants that we offer. 11 We will also describe in the applicable prospectus supplement the amount of securities called for by the warrants, any amount of warrants outstanding, and any provisions for a change in the exercise price or the expiration date of the warrants and the kind, frequency and timing of any notice to be given. Prior to the exercise of your warrants, you will not have any of the rights of holders of the preferred stock or common stock purchasable upon any such exercise and will not be entitled to dividend payments, if any, or voting rights of the preferred stock or common stock purchasable upon the exercise. Exercise of Warrants We will describe in the prospectus supplement relating to the warrants the principal amount or the number of shares of our securities that you may purchase for cash upon exercise of a warrant, and the exercise price. Exercise a warrant may occur, as described in the applicable prospectus supplement relating to the warrants, at any time up to the close of business on the expiration date stated in the prospectus supplement. Unexercised warrants will become void after the close of business on the expiration date, or any later expiration date that we determine. We will forward the securities deliverable upon the exercise of any warrant reasonably promptly after receipt of payment and the properly completed and executed warrant certificate at the corporate trust office of the warrant agent or other office stated in the applicable prospectus supplement. If you exercise less than all of the warrants represented by the warrant certificate, we will issue you a new warrant certificate for the remaining warrants. - -------------------------------------------------------------------------------- CONVERTIBLE DEBT SECURITIES We will describe the particular terms of any series of convertible debentures or other convertible debt issuable by us, in the prospectus supplement relating to any such offered securities. We will fix or designate the rights, preferences, privileges and restrictions, including conversion rights, interest rate and other rights, including terms of redemption, retirement and sinking fund provisions (if any) and liquidation preferences, if any, of any series of convertible debt through an instrument adopted by our board of directors or a duly authorized committee of our board of directors. We will describe the terms, if any, on which such instruments are convertible or exchangeable into common stock in the prospectus supplement relating to the applicable offering. The conversion or exchange may be mandatory, at your option, or at our option. The applicable prospectus supplement will describe the manner in which the shares of common stock that you will receive as a holder of the convertible debt would be converted or exchanged or redeemed. - -------------------------------------------------------------------------------- EQUITY PURCHASE CONTRACTS AND EQUITY PURCHASE UNITS We may issue any form of equity purchase contracts, including contracts obligating you to purchase from us, and for us to sell to you, a specific number of shares of common stock or preferred stock, or other equity, at a future date or dates. The price per share of preferred stock or common stock or other equity may be fixed at the time the equity purchase contracts are issued or may be determined by reference to a specific formula described in the equity purchase contracts. We may issue the equity purchase contract separately or as a part of units consisting of an equity purchase contract and debt securities, trust preferred securities or debt obligations of third parties, including U.S. Treasury securities, securing your obligations to purchase the preferred stock or the common stock or other equity under the purchase contracts. The equity purchase contracts may require us to make periodic payments to you or vice versa and the payments may be unsecured or pre-funded on some basis. The equity purchase contracts may require you to secure your obligations in a specified manner. We will describe in the applicable prospectus supplement the terms of any equity purchase contracts or equity purchase units. 12 - -------------------------------------------------------------------------------- DEBT SECURITIES The debt securities will be our unsecured and unsubordinated obligations issued in one or more series and will rank equally with each other and with all of our other unsecured and unsubordinated indebtedness. The debt securities will be issued under an indenture to be entered into between us and Bank One Trust Company, N.A., as trustee. The terms of any series of debt securities will be those specified in the indenture, as amended or supplemented from time to time, and in the certificates evidencing that series of debt securities. The following summary of selected provisions of the indenture and the debt securities is not complete, and the summary of selected terms of a particular series of debt securities included in the applicable prospectus supplement also will not be complete. You should review the indenture and the form of certificate evidencing the applicable debt securities, each of which have been or will be filed as exhibits to the registration statement of which this prospectus is a part or as exhibits to documents which have been or will be incorporated by reference in this prospectus. To obtain a copy of the indenture or the form of certificate for the debt securities, see "Where You Can Find More Information" in this prospectus. The following summary and the summary in the applicable prospectus supplement are qualified in their entirety by reference to all of the provisions of the indenture and the certificates evidencing the debt securities. The provisions of the indenture and the debt certificates, including defined terms, are incorporated by reference in this prospectus. Terms used in this section have the meanings assigned to those terms in the indenture. When we refer to "we", "us" or "our" in this section or when we otherwise refer to ourselves in this section, we mean Baxter International Inc., excluding, unless otherwise expressly stated or the context otherwise requires, our subsidiaries. The following description of debt securities describes general terms and provisions of the series of debt securities to which any prospectus supplement may relate. When we offer to sell a series of debt securities, we will describe the specific terms of the series in the applicable prospectus supplement. If any particular terms of the debt securities described in a prospectus supplement differ from any of the terms described in this prospectus, the terms described in the applicable prospectus supplement will supersede the terms described in this prospectus. General The debt securities may be issued from time to time in one or more series. We can issue an unlimited amount of debt securities under the indenture. The indenture provides that we may issue debt securities of any series in an amount up to the aggregate principal amount which is authorized from time to time by us. Please read the applicable prospectus supplement relating to the series of debt securities being offered for specific terms including, where applicable: . the title of the series of debt securities; 13 . any limit on the aggregate principal amount of debt securities of the series; . the price or prices at which we will issue debt securities of the series; . the date or dates on which we will pay the principal of and premium, if any, on debt securities of the series, or the method or methods, if any, that will used to determine those dates; . the rate or rates, which may be fixed or variable, at which debt securities of the series will bear interest, if any, or the method or methods, if any, that will be used to determine those rates; . the basis used to calculate interest, if any, on the debt securities of the series if other than a 360-day year of twelve 30-day months; . the date or dates, if any, from which interest on the debt securities of the series will accrue, or the method or methods, if any, that will be used to determine those dates; . the dates on which the interest, if any, on the debt securities of the series will commence accruing and will be payable and the record dates for the payment of interest; . the place or places where amounts due on the debt securities of the series will be payable and where the debt securities of the series may be surrendered for registration of transfer and exchange; . the terms and conditions, if any, upon which we may, at our option, redeem debt securities of the series; . the terms and conditions, if any, upon which we will repurchase debt securities of the series at the option of the holders of debt securities of the series; . the terms of any sinking fund or analogous provision; . if other than United States dollars, the currency to be used to purchase the debt securities of the series and the currency to be used for payments on debt securities of the series, and the ability or the ability of the holders of debt securities of the 14 series, if any, to have payments made in any other currency; . any addition to, or modification or deletion of, any covenant or event of default with respect to debt securities of the series; . whether the debt securities of the series are to be issuable in registered or bearer form or both and, if in bearer form, whether we will issue any debt securities of the series in temporary or permanent global form and, if so, the identity of the depositary for the global debt security; . whether and under what circumstances we will pay any additional amounts in respect of certain taxes, assessments or other governmental charges imposed on holders of the series of debt securities who are United States Aliens ("additional amounts") and, if so, whether we will have the option to redeem the series of debt securities rather than pay any additional amounts; . the person to whom any interest on any registered securities of the series of debt securities will be payable, if different than the person in whose name a registered security is registered at the close of business on the regular record date for that payment; . the manner in which, or the person to whom, any interest on any bearer security of the series of debt securities will be payable, if different than upon presentation and surrender of the coupons relating to the bearer security; . the extent to which, or the manner in which, any interest payable on a temporary global debt security will be paid, if other than in the manner provided in the indenture; . the portion of the principal amount of the series of debt securities which will be payable upon acceleration if other than the full principal amount; . the authorized denominations in which the series of debt securities will be issued, if other than denominations of $1,000 and any integral multiple of $1,000, in the case of registered securities, or $5,000, in the case of bearer securities; . if the amount of payments on the series of debt securities may be determined with reference to an index, formula or other 15 method or methods ("indexed securities") and the manner used to determine those amounts; and . any other terms of debt securities of the series. As used in this prospectus and any prospectus supplement relating to the offering of debt securities, references to the principal of and premium, if any, and interest, if any, on the series of debt securities include the payment of additional amounts, if any, required by the series of debt securities in that context. Debt securities may be issued as original issue discount securities to be sold at a substantial discount below their principal amount. In the event of an acceleration of the maturity of any original issue discount security, the amount payable to the holder upon acceleration will be determined in the manner described in the applicable prospectus supplement. Material federal income tax and other considerations applicable to original issue discount securities will be described in the applicable prospectus supplement. If the purchase price of any debt securities is payable in a foreign currency or currency unit or if the principal of, or premium, if any, or interest, if any, on any of the debt securities is payable in a foreign currency or currency unit, the specific terms of those debt securities and the applicable foreign currency or currency unit will be specified in the prospectus supplement relating to those debt securities. The terms of the debt securities of any series may differ from the terms of the debt securities of any other series, and the terms of particular debt securities within any series may differ from each other. If expressly provided in the applicable prospectus supplement, we may, without the consent of the holders of the debt securities of any series, reopen an existing series of debt securities and issue additional debt securities of that series or establish additional or different terms of that series. Registration, transfer, payment and paying agent Unless otherwise indicated in the applicable prospectus supplement, each series of debt securities will be issued in registered form only, without coupons. The indenture, however, provides that we may also issue debt securities in bearer form only, or in both registered and bearer form. Bearer securities may not be offered, sold, resold or delivered in connection with their original issuance in the United States or to any United States person, as defined below, other than offices located outside the United States of specified United States financial institutions. "United States person" means any citizen or resident of the United States, any corporation, partnership or other entity created or organized in or under the laws of the United States, any estate the income of which is subject to United States federal income taxation regardless of its source, or any trust whose administration is subject to the primary supervision of a United States court and which has one or more United States fiduciaries who have the authority to control all substantial decisions of the trust. "United States" means the United States of America, including the states thereof and the District of Columbia, its territories, its possessions 16 and other areas subject to its jurisdiction. Purchasers of bearer securities will be subject to certification procedures and may be affected by limitations under United States tax laws. The applicable procedures and limitations will be described in the prospectus supplement relating to the offering of the bearer securities. Unless otherwise indicated in the applicable prospectus supplement, the debt securities will be payable and may be surrendered for registration of transfer or exchange and, if applicable, for conversion into or exchange for other types of securities, at an office or agency maintained by the trustee in the Borough of Manhattan, The City of New York. However, we, at our option, may make payments of interest on any registered security by check mailed to the address of the person entitled to receive that payment or by wire transfer to an account maintained by the payee with a bank located in the United States. No service charge will be made for any registration of transfer or exchange, redemption or repayment of debt securities, or for any conversion or exchange of debt securities for other types of securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with that transaction. Unless otherwise indicated in the applicable prospectus supplement, payment of principal, premium, if any, and interest, if any, on bearer securities will be made, subject to any applicable laws and regulations, at an office or agency outside the United States. Unless otherwise indicated in the applicable prospectus supplement, payment of interest due on bearer securities on any interest payment date will be made only against surrender of the coupon relating to that interest payment date. Unless otherwise indicated in the applicable prospectus supplement, no payment of principal, premium, if any, or interest, if any, with respect to any bearer security will be made at any office or agency in the United States or by check mailed to any address in the United States or by wire transfer to an account maintained with a bank located in the United States. However, if any bearer securities are payable in United States dollars, payments on those bearer securities may be made at the corporate trust office of the trustee or at any office or agency designated by us in the Borough of Manhattan, The City of New York, if, but only if, payment of the full amount due on the bearer securities for principal, premium, if any, or interest, if any, at all offices outside of the United States maintained for that purpose by us is illegal or effectively precluded by exchange controls or similar restrictions. Unless otherwise indicated in the applicable prospectus supplement, we will not be required to: . issue, register the transfer of or exchange debt securities of any series during a period beginning at the opening of business 15 days before any selection of debt securities of that series having the same terms to be redeemed and ending at the close of business on the day of that selection; . register the transfer of or exchange any registered security, or portion of any registered security, selected for redemption, except the unredeemed portion of any registered security being 17 redeemed in part; . exchange any bearer security selected for redemption, except to exchange a bearer security for a registered security of that series having the same terms that is simultaneously surrendered for redemption; or . issue, register the transfer of or exchange a debt security which has been surrendered for repayment at the option of the holder, except the portion, if any, of the debt security not to be repaid. Book-entry debt securities The debt securities of a series may be issued in whole or in part in the form of one or more global debt securities. Global debt securities will be deposited with, or on behalf of, a depositary identified in the applicable prospectus supplement relating to the series. Global debt securities may be issued in either registered or bearer form and in either temporary or permanent form. Unless and until it is exchanged in whole or in part for individual certificates evidencing debt securities, a global debt security may not be transferred except as a whole by the depositary to its nominee or by the nominee to the depositary, or by the depositary or its nominee to a successor depositary or to a nominee of the successor depositary. We anticipate that global debt securities will be deposited with, or on behalf of, The Depository Trust Company ("DTC"), New York, New York, and that global debt securities will be registered in the name of DTC's nominee, Cede & Co. We also anticipate that the following provisions will apply to the depository arrangements with respect to global debt securities. Additional or differing terms of the depository arrangements will be described in the applicable prospectus supplement. DTC has advised us that it is: . a limited-purpose trust company organized under the New York Banking Law; . a "banking organization" within the meaning of the New York Banking Law; . a member of the Federal Reserve System; . a "clearing corporation" within the meaning of the New York Uniform Commercial Code; and . a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act. 18 DTC holds securities that its participants deposit with DTC. DTC also facilitates the settlement among its participants of securities transactions, including transfers and pledges, in deposited securities through electronic computerized book-entry changes in participants' accounts, which eliminates the need for physical movement of securities certificates. Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and other organizations. DTC is owned by a number of its direct participants and by the New York Stock Exchange, Inc., the American Stock Exchange, LLC. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others, sometimes referred to in this prospectus as indirect participants, that clear transactions through or maintain a custodial relationship with a direct participant either directly or indirectly. Indirect participants include securities brokers and dealers, banks and trust companies. The rules applicable to DTC and its participants are on file with the SEC. Purchases of debt securities within the DTC system must be made by or through direct participants, which will receive a credit for the debt securities on DTC's records. The ownership interest of the actual purchaser or beneficial owner of a debt security is, in turn, recorded on the direct and indirect participants' records. Beneficial owners will not receive written confirmation from DTC of their purchases, but beneficial owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the direct or indirect participants through which they purchased the debt securities. Transfers of ownership interests in debt securities are to be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in the debt securities, except under the limited circumstances described below. To facilitate subsequent transfers, all debt securities deposited by direct participants with DTC will be registered in the name of DTC's nominee, Cede & Co. The deposit of debt securities with DTC and their registration in the name of Cede & Co. will not change the beneficial ownership of the debt securities. DTC has no knowledge of the actual beneficial owners of the debt securities. DTC's records reflect only the identity of the direct participants to whose accounts the debt securities are credited. Those participants may or may not be the beneficial owners. The direct and indirect participants are responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants and by direct and indirect participants to beneficial owners will be governed by arrangements among them, subject to any legal requirements in effect from time to time. Redemption notices will be sent to DTC or its nominee. If less than all of the debt securities of a series are being redeemed, DTC's practice is to determine by lot the amount of the interest of each direct participant in the debt securities to be redeemed. 19 In any case where a vote may be required with respect to the debt securities of any series, neither DTC nor Cede & Co. will give consents for or vote the global debt securities. Under its usual procedures, DTC will mail an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns the consenting or voting rights of Cede & Co. to those direct participants to whose accounts the debt securities are credited on the record date identified in a listing attached to the omnibus proxy. Principal and premium, if any, and interest, if any, on the global debt securities will be paid to Cede & Co., as nominee of DTC. DTC's practice is to credit direct participants' accounts on the relevant payment date unless DTC has reason to believe that it will not receive payments on the payment date. Payments by direct and indirect participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the account of customers in bearer form or registered in "street name." Those payments will be the responsibility of participants and not of DTC or us, subject to any legal requirements in effect from time to time. Payment of principal, premium, if any, and interest, if any, to Cede & Co. is our responsibility, disbursement of payments to direct participants is the responsibility of DTC, and disbursement of payments to the beneficial owners is the responsibility of direct and indirect participants. Except under the limited circumstances described in this prospectus, beneficial owners of interests in a global debt security will not be entitled to have debt securities registered in their names and will not receive physical delivery of debt securities. Accordingly, each beneficial owner must rely on the procedures of DTC to exercise any rights under the debt securities and the indenture. The laws of some jurisdictions may require that some purchasers of securities take physical delivery of securities in definitive form. These laws may impair the ability to transfer or pledge beneficial interests in global debt securities. DTC is under no obligation to provide its services as depositary for the debt securities of any series and may discontinue providing its services at any time by giving reasonable notice to use or the trustee. Neither we nor the trustee will have any responsibility for the performance by DTC or its participants or indirect participants under the rules and procedures governing DTC. As noted above, beneficial owners of debt securities generally will not receive certificates representing their ownership interests in the debt securities. However, if . DTC notifies us that it is unwilling or unable to continue as a depositary for the global debt securities of any series or if DTC ceases to be a clearing agency registered under the Securities Exchange Act and a successor depositary for the debt securities of the series is not appointed within 90 days of the notification or of our becoming aware of DTC's ceasing to be so registered, as the case may be, . we determine, in our sole discretion, not to have the debt 20 securities of any series represented by one or more global debt securities, or . an event of default under the indenture has occurred and is continuing with respect to the debt securities of any series, we will prepare and deliver to the trustee certificates for the debt securities of that series, which will deliver the certificates in exchange for beneficial interests in the global debt securities. Any beneficial interest in a global debt security that is exchangeable under the circumstances described in the preceding sentence will be exchangeable for debt securities in definitive certificated form registered in the names that DTC will direct. It is expected that these directions will be based upon directions received by DTC from its participants with respect to ownership of beneficial interests in the global debt securities. We obtained the information in this section and elsewhere in this prospectus concerning DTC and DTC's book-entry system from sources that we believe to be reliable, but we take no responsibility for the accuracy of this information. Outstanding debt securities In determining whether the holders of the requisite principal amount of outstanding debt securities have given any request, demand, authorization, direction, notice, consent or waiver under the indenture: . the principal amount of an original issue discount security that will be deemed to be outstanding for these purposes will be that portion of the principal amount of the original issue discount security that could be declared to be due and payable upon a declaration of acceleration of the original issue discount security as of the date of the determination; . the principal amount of any indexed security that will be deemed to be outstanding for these purposes will be the principal face amount of the indexed security determined on the date of its original issuance; . the principal amount of a debt security denominated in a foreign currency that will be deemed to be outstanding for these purposes will be the United States dollar equivalent, determined on the date of original issue of the debt security, of the principal amount of the debt security; and . a debt security owned by us or any obligor on the debt security or any affiliate of ours or the other obligor will not be deemed to be outstanding. 21 Redemption and repurchase The debt securities of any series may be redeemable at our option or may be subject to mandatory redemption by us as required by a sinking fund or otherwise. In addition, the debt securities of any series may be subject to repurchase by us at the option of the holders. The applicable prospectus supplement will describe the terms, the times and the prices regarding any optional or mandatory redemption or option to repurchase any series of debt securities. Restrictive Covenants Restrictions on the creation of secured debt. The indenture provides that we will not, and will not cause or permit a restricted subsidiary to, create, incur, assume or guarantee any indebtedness borrowed by us or our restricted subsidiaries that is secured by a security interest in any of our principal facilities or shares of stock owned directly or indirectly by us or a restricted subsidiary or by indebtedness borrowed by one of our restricted subsidiaries from us or another of our restricted subsidiaries ("secured debt") unless the debt securities will be secured equally and ratably with or prior to the secured debt, with exceptions as listed in the indenture. These restrictions do not apply to indebtedness secured by: . security interests on any property, which is a parcel of real property at a manufacturing plant, a warehouse or an office building and which is acquired, constructed, developed or improved by us or a restricted subsidiary, which secures or provides for the payment of all or any part of the acquisition cost of the property or the cost of the construction, development or improvement of the property and which is created prior to, at the same time or within 120 days after the completion of the acquisition of the property or the later to occur of the completion, development or improvement or the commencement or operation, use or commercial production of the property; . security interests on property at the time of its acquisition by us or a restricted subsidiary which secure obligations assumed by us or a restricted subsidiary; . security interests arising from conditional sales agreements or title retention agreements with respect to property acquired by us or any of our restricted subsidiaries; . security interests existing on the property or on the outstanding shares or indebtedness of a corporation or firm at the time the corporation or firm becomes a restricted subsidiary or is merged or consolidated with us or a restricted subsidiary or or sells, leases or otherwise disposes of substantially all of its 22 property to us or one of our restricted subsidiaries; . security interests securing indebtedness of a restricted subsidiary owed to us or to another restricted subsidiary; . mechanics' and other statutory liens in respect of obligations not due or being contested; . security interests for taxes, assessments or governmental changes or levies not yet delinquent or security interests for taxes, assessments or governmental changes or levies already delinquent but which are being contested; . security interests arising in connection with legal proceedings, including judgment liens, so long as the proceedings are being contested and, in the case of judgment liens, the execution has been stayed; . landlords' liens on fixtures; . security interests arising in connection with contracts and subcontracts with or made at the request of the United States, any state, or any department, agency or instrumentality of the Unites States or any state; . security interests that secure an obligation issued by the United States of America or any state, territory or possession of the United States or any of their political subdivisions or the District of Columbia, in connection with the financing of the cost of construction or acquisition of a principal facility or a part of a principal facility; . security interests by reason of deposits to qualify us or a restricted subsidiary to conduct business, to maintain self-insurance, or to comply with law; . the extension of any security interest existing on the date of the indenture on a principal facility to additions, extensions or improvements to the principal facility and not as a result of borrowing money or the securing of indebtedness incurred after the date of the indenture; and . any extension, renewal or refunding, or successive extensions, renewals or refundings, in whole or in part of by secured debt secured by any security interest listed to above, 23 provided that the principal amount of the secured debt does not exceed the principal amount outstanding immediately prior to the extension, renewal or refunding and that the security interest securing the secured debt is limited to the property which, immediately prior to the extension, renewal or reducing, secured the secured debt and additions to the property. For purposes of the indenture, our "principal facilities" are our manufacturing plants, warehouses, office buildings or parcels of real property owned by us or any of our restricted subsidiaries, provided each plant, warehouse, office building or parcel of real property has a gross book value, without deduction for any depreciation reserves, in excess of 2% of consolidated net tangible assets other than any facility which is determined by our board of directors to not be of material importance. For purposes of the indenture, our consolidated net tangible assets are the total amount of assets which would be included on our consolidated balance sheet under generally accepted accounting principles after deducting all short-term liabilities and liability items, except for indebtedness payable more than one year from the date of incurrence and all goodwill, trade names, trademarks, patents, unamortized debt discount, unamortized expense incurred in the issuance of debt and other like intangibles except for prepaid royalties. In addition to the foregoing, we and our restricted subsidiaries may create, incur, assume or guarantee secured debt, without equally and ratably securing the debt securities, if and only to the extent that, the sum of . the amount of secured debt entered into after the date of the indenture, other than secured debt permitted as listed in the preceding paragraph, plus . the aggregate value of sale and leaseback transactions entered into after the date of the indenture, other than sale and leaseback transactions permitted under the second bullet point under "Restrictions on sale and leaseback transactions," does not exceed 5% of our consolidated net tangible assets. For purposes of the indenture, our "restricted subsidiaries" are those corporations in which we own voting securities entitling us to elect a majority of the directors and which are either designated as restricted subsidiaries in accordance with the indenture or: . existed as such on the date of the indenture or is the successor to, or owns, any equity interest in, a corporation which so existed; . has its principal business and assets in the United States; 24 . the business is other than the obtaining of financing in capital markets outside the United States or the financing of the acquisition or disposition of real or personal property or dealing in real property for residential or office building purposes; and . does not have assets substantially all of which consist of securities of one or more corporations which are not restricted subsidiaries. Restrictions on sale and leaseback transactions. The indenture provides that we will not, and will not permit any restricted subsidiary to, enter into any sale or transfer of any principal facility which has been in operation, use or commercial production for more than 120 days prior to the sale or transfer, or which, in the case of a principal facility which is a parcel of real property other than a manufacturing plant, warehouse or office building, has been owned by us or one of our restricted subsidiaries for more than 120 days prior to the sale or transfer, if the sale or transfer is made with the intention of leasing, or as part of an arrangement involving the lease, of the principal facility to us or one of our restricted subsidiaries, except a lease for a period not exceeding 36 months or that secures or relates to obligations issued by the United States, or any state, in connection with the financing of the cost of construction or acquisition of the principal facility ("sale and leaseback transaction"), unless: . we or our restricted subsidiary would be entitled to incur secured debt permitted by the indenture only by reason of the provision described in the second paragraph under the sub-heading "Restrictions on the creation of secured debt" equal in amount to the value of the sale and leaseback transaction without equally and ratably securing the debt securities; or . we or our restricted subsidiary apply within one year, or commit to apply within one year, an amount equal to the net proceeds of the property sold pursuant to the sale and leaseback transaction to: - the acquisition, construction or improvement of properties which are or will be a principal facility, or - the optional redemption of debt securities or to the repayment of other superior indebtedness of us or of any restricted subsidiary. For purposes of the indenture, "superior indebtedness" means any of our obligations, or the obligations of any of our restricted subsidiaries, which: . when created, are payable at least one year later; 25 . should be shown on our consolidated balance sheet in accordance with generally accepted accounting principles; and . are not subordinate and junior in right of payment to the prior payment of our debt securities. Instead of applying all or any part of the proceeds of a sale and leaseback transaction to the redemption of debt securities, we may deliver to the trustee, within one year of the transfer, debt securities for cancellation and thereby reduce the amount to be applied to the redemption of debt securities by an amount equivalent to the aggregate principal amount of the debt securities delivered. Debt securities so redeemed or delivered will not be used as credits against any mandatory sinking fund payments. Restrictions on transfers of principal facilities. The indenture provides that we will not, nor will we permit any restricted subsidiary to, transfer any principal facility to any of our subsidiaries which is not a restricted subsidiary unless we or it apply within one year, or commit to apply within one year, an amount equal to the fair value of the principal facility at the time of the transfer: . to the acquisition, construction, development or improvement of a principal facility or part of a principal facility; or . to the optional redemption of debt securities or to the repayment of our superior indebtedness or the superior indebtedness of any of our restricted subsidiaries. In lieu of applying all or any part of the amount to the redemption of securities, we may deliver to the trustee securities for cancellation and thereby reduce the amount to be applied to the redemption of securities by the principal amount of the securities so delivered. Securities so redeemed or delivered will not be used as credits against any mandatory sinking fund payments. Restrictions on mergers, consolidations and transfers of assets. The indenture provides that we will not consolidate or merge into or transfer or lease all or substantially all of our assets to another person unless: . in the case of a merger, we are the surviving corporation in the merger; or . the person into which we are merged or which acquires all or substantially all of our assets is a corporation organized under the laws of the United States, any state or the District of Columbia, and assumes all of our obligations relating to the securities and the indenture, and immediately after the 26 transaction no default exists. Upon any the consolidation, merger or transfer, the successor corporation will be substituted for us under the indenture. The successor corporation may then exercise all of our powers and rights under the indenture, and we will be released from all of our liabilities and obligations in respect of the securities and the indenture. In the event we lease all or substantially all of our assets, the lessee corporation will be our successor and may exercise all of our powers and rights under the indenture but we will not be released from our obligations to pay the principal of and interest on the securities. Events of default Unless otherwise specified in the applicable prospectus supplement, an "event of default" with respect to the debt securities of any series is defined in the indenture as being: . default in payment of any interest on, or any additional amounts payable with respect to any interest on, any of the debt securities of that series or any coupon relating to the debt securities when due, and continuance of the default for a period of 30 days; . default in payment of any principal of or premium, if any, on, or any additional amounts payable with respect to any principal of or premium, if any, on, any of the debt securities of that series when due, whether at maturity, upon redemption, upon repayment or repurchase at the option of the holder or otherwise; . default in the deposit of any sinking fund payment or payment under any analogous provision when due with respect to any of the debt securities of that series; . default by us in the performance, or breach, of any other covenant or warranty in the indenture or in any debt security of that series, other than a covenant or warranty included in the indenture solely for the benefit of a series of debt securities other than that series, and continuance of that default or breach, without that default or breach having been cured or waived, for a period of 60 days after the trustee or the holders of not less than 25% in aggregate principal amount of the debt securities of that series then outstanding give notice to us, or in the case of notice by the holders, to us and the trustee, specifying the default or breach; . our failure to make any payment when due, including any applicable grace period, relating to our indebtedness which is in an amount in excess of $50,000,000, or our default with respect to 27 any of our indebtedness that results in acceleration of indebtedness which is in an amount in excess of $50,000,000; . specified events of bankruptcy, insolvency or reorganization with respect to us or any of our restricted subsidiaries; or . any other event of default established for the debt securities of that series. No event of default with respect to any particular series of debt securities necessarily constitutes an event of default with respect to any other series of debt securities. The indenture provides that, within 90 days after the occurrence of any default with respect to the debt securities of any series, the trustee will mail to all holders of the debt securities of that series notice of that default, unless that default has been cured or waived. However, the indenture provides that the trustee may withhold notice of a default with respect to the debt securities of that series, except a default in payment of principal, premium, if any, interest, if any, additional amounts, if any, or sinking fund payments, if any, if the trustee considers it in the best interest of the holders to do so. In the case of a default in the performance or the breach of any covenant or warranty in the indenture with respect to debt securities or that series, no notice will be given until at least 30 days after the occurrence of the default or breach. As used in this paragraph, the term "default" means any event which is, or after notice or lapse of time or both would become, an event of default with respect to the debt securities of any series. The indenture provides that if an event of default, other than an event of default relating to events of bankruptcy, insolvency or reorganization with respect to any series of debt securities occurs and is continuing, either the trustee or the holders of at least 25% in principal amount of the debt securities of that series then outstanding may declare the principal of, or if debt securities of that series are original issue discount securities, the lesser amount as may be specified in the terms of that series of debt securities, and accrued and unpaid interest, if any, on all the debt securities of that series to be due and payable immediately. The indenture also provides that if an event of default relating to events of bankruptcy, insolvency or reorganization with respect to any series of debt securities occurs, the principal of, or if debt securities of that series are original issue discount securities, the lesser amount as may be specified in the terms of that series of debt securities, and accrued and unpaid interest, if any, on all the debt securities of that series will automatically become and be immediately due and payable without any declaration or other action on the part of the trustee or any holder of the debt securities of that series. However, upon specified conditions, the holders of a majority in principal amount of the debt securities of a series then outstanding may rescind and annul an acceleration of the debt securities of that series and its consequences. Subject to the provisions of the Trust Indenture Act requiring the trustee, during the continuance of an event of default under the indenture, to act with the requisite standard of care, the trustee is under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any of the holders of debt securities of any series unless those holders have offered the trustee reasonable indemnity. 28 Subject to this requirement, holders of a majority in principal amount of the outstanding debt securities of any series issued under the indenture have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee under the indenture with respect to that series. The indenture requires the annual filing by us with the trustee of a certificate which states whether we are in default under the terms of the indenture. Notwithstanding any other provision of the indenture, the holder of a debt security will have the right, which is absolute and unconditional, to receive payment of the principal of and premium, if any, and interest, if any, on that debt security on the respective due dates for those payments and to institute suit for the enforcement of those payments, and this right will not be impaired without the consent of the holder. Modification and waivers The indenture permits us and the trustee, with the consent of the holders of a majority in principal amount of the outstanding debt securities of each series issued under the indenture and affected by a modification or amendment, to modify or amend any of the provisions of the indenture or of the debt securities of the applicable series or the rights of the holders of the debt securities of that series under the indenture. However, no modification or amendment may, without the consent of the holder of each outstanding debt security issued under the indenture affected by the modification or amendment, among other things: . change the stated maturity of the principal of, or premium, if any, or any installment of interest, if any, on or any additional amounts, if any, with respect to any debt securities issued under the indenture; . reduce the principal of or any premium on any debt securities or reduce the rate of interest on or the redemption or repurchase price of any debt security, or any additional amounts with respect to any debt securities, or change our obligation to pay additional amounts; . reduce the amount of principal of any original issue discount securities that would be due and payable upon an acceleration of the maturity of the debt security; . adversely affect any right of repayment or repurchase at the option of any holder; . change any place where or the currency in which the principal of to, any debt securities are payable; 29 . impair the holder's right to institute suit to enforce the payment of any debt securities on or after their stated maturity or, in the case of redemption, on or after the redemption date; or . reduce the percentage of debt securities of any series issued under the indenture whose holders must consent to any modification or amendment or any waiver of compliance with specific provisions of the indenture or specified defaults under the indenture and their consequences. The indenture also contains provisions permitting us and the trustee, without the consent of the holders of any debt securities issued under the indenture, to modify or amend the indenture, among other things: . to evidence the succession of another person to us under the indenture and the assumption of our obligations contained in the indenture and the debt securities; . to add to our covenants for the benefit of the holders of all or any series of debt securities issued under the indenture or to surrender any right or power conferred upon us in the indenture with respect to all or any series of debt securities issued under the indenture; . to add to or change any provisions of the indenture to facilitate the issuance of bearer securities; . to establish the form or terms of debt securities of any series and any related coupons, including, deletions from or additions or changes to the indenture in connection with the modification or amendment, so long as those deletions, additions and changes are not applicable to any other series of debt securities then outstanding; . to cure any ambiguity or correct or supplement any provision in the indenture which may be defective or inconsistent with other provisions in the indenture, or to make any other provisions with respect to matters or questions arising under the indenture which will not adversely affect the interests of the holders of the debt securities of any series then outstanding; . to add any additional events of default with respect to all or any series of debt securities; or . to amend or supplement any provision contained in the 30 indenture, provided that the amendment or supplement does not apply to any outstanding debt securities issued before the date of the amendment or supplement that is entitled to the benefits of that provision. The holders of a majority in aggregate principal amount of the outstanding debt securities of any series may waive our compliance with some of the restrictive provisions of the indenture, which may include covenants, if any, which are specified in the applicable prospectus supplement. The holders of a majority in aggregate principal amount of the outstanding debt securities of any series may, on behalf of all holders of debt securities of that series, waive any past default under the indenture with respect to debt securities of that series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest, if any, on debt securities of that series or a default in respect of a covenant or provision which cannot be modified or amended without the consent of the holder of each outstanding debt security of the affected series. Discharge, defeasance and covenant defeasance Unless otherwise provided in the applicable prospectus supplement, upon our direction, the indenture will cease to be of further effect with respect to any series of debt securities issued under the indenture specified by us, subject to the survival of specified provisions of the indenture, when: . either - all outstanding debt securities of that series and, in the case of bearer securities, all related coupons, have been delivered to the trustee for cancellation, subject to exceptions, or - all debt securities of that series and, if applicable, any related coupons have become due and payable or will become due and payable at their stated maturity within one year or are to be called for redemption within one year and we have deposited with the trustee, in trust, funds in United States dollars, in the foreign currency in which the debt securities of that series are payable, or direct or indirect obligations of the United States or the government which issued the applicable foreign currency ("government obligations") in an amount sufficient to pay the entire indebtedness on the debt securities of that series in respect of principal, premium, if any, and interest, if any, and, to the extent that the debt securities of that series provide for the payment of additional amounts and the amount of any additional amounts which are or will be 31 payable is at the time of deposit reasonably determinable by us, in the exercise of our sole discretion, those additional amounts, to the date of the deposit, if the debt securities of that series have become due and payable, or to the maturity or redemption date of the debt securities of that series, as the case may be; . we have paid all other sums payable under the indenture with respect to the debt securities of that series; and . the trustee has received an officers' certificate and an opinion of counsel called for by the indenture. If the debt securities of any series provide for the payment of additional amounts, we will remain obligated, following the deposit described above, to pay additional amounts on those debt securities to the extent that they exceed the amount deposited in respect of those additional amounts as described above. Unless otherwise provided in the applicable prospectus supplement, we may elect with respect to any series of debt securities either . to defease and be discharged from all of our obligations with respect to that series of debt securities ("defeasance"), except for, among other things, - the obligation to pay additional amounts with respect to payments on that series of debt securities to the extent that those additional amounts exceed the amount deposited in respect of those amounts as provided below, - the obligation to register the transfer or exchange of those debt securities, - the obligation to replace temporary or mutilated, destroyed, lost or stolen debt securities, - the obligation to maintain an office or agency in respect of that series of debt securities, - the obligation to hold moneys for payment in trust, and - the obligation, if applicable, to repurchase or repay debt securities of that series at the option of the holders in accordance with their terms, or 32 . to be released from our obligations with respect to the debt securities of the series under specified covenants in the indenture including those described under the heading "Restrict Covenants" and, if applicable, other covenants as may be specified in the applicable prospectus supplement, and any omission to comply with those obligations will not constitute a default or an event of default with respect to that series of debt securities ("covenant defeasance"), in either case upon the irrevocable deposit with the trustee, or other qualifying trustee, in trust for that purpose, of an amount in United States dollars or in the foreign currency in which those debt securities are payable at stated maturity or, if applicable, upon redemption, and/or government obligations which, through the payment of principal and interest in accordance with their terms, will provide money in an amount sufficient to pay the principal of and any premium and any interest on, and, to the extent that the debt securities of that series provide for the payment of additional amounts and the amount of the additional amounts which are or will be payable is at the time of deposit reasonably determinable by us, in the exercise of our sole discretion, the additional amounts with respect to, that series of debt securities, and any mandatory sinking fund or analogous payments on that series of debt securities, on the due dates for those payments. The defeasance or covenant defeasance described above will only be effective if, among other things: . it will not result in a breach or violation of, or constitute a default under, the indenture or any other material agreement or instrument to which we are a party or are bound; . in the case of defeasance, we will have delivered to the trustee an opinion of independent counsel confirming that - we have received from or there has been published by the Internal Revenue Service a ruling, or - since the date of the indenture there has been a change in applicable federal income tax law, in either case to the effect that, and based on this ruling or change the opinion of counsel will confirm that, the holders of the debt securities of the applicable series will not recognize income, gain or loss for federal income tax purposes as a result of the defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the defeasance had not occurred; 33 . in the case of covenant defeasance, we will have delivered to the trustee an opinion of independent counsel to the effect that the holders of the debt securities of that series will not recognize income, gain or loss for federal income tax purposes as a result of the covenant defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the covenant defeasance had not occurred; . if the cash and/or government obligations deposited are sufficient to pay the principal of, and premium, if any, and interest and additional amounts, if any, with respect to the debt securities of that series provided those debt securities are redeemed on a particular redemption date, we will have given the trustee irrevocable instructions to redeem those debt securities on that date; and . no event of default or event which with notice or lapse of time or both would become an event of default with respect to debt securities of that series will have occurred and be continuing on the date of the deposit into trust; and, solely in the case of defeasance, no event of default arising from specified events of bankruptcy, insolvency or reorganization with respect to us or any restricted subsidiary or event which with notice or lapse of time or both would become an event of default will have occurred and be continuing during the period through and including the 91st day after the date of the deposit into trust. Unless otherwise provided in the applicable prospectus supplement, if after we have deposited funds and/or government obligations to effect defeasance or covenant defeasance with respect to debt securities of any series, . the holder of a debt security of that series is entitled to, and does, elect under the indenture or the terms of that debt security to receive payment in a currency other than the currency in which the deposit has been made, or . a conversion event, as defined below, occurs in respect of the foreign currency in which the deposit has been made, the indebtedness represented by that debt security will be deemed to have been, and will be, fully discharged and satisfied through the payment of the principal of and premium, if any, and interest, if any, on that debt security as it becomes due out of the proceeds yielded by converting the amount deposited in respect of that debt security into the currency in which that debt security becomes payable as a result of the election or conversion event based on, in the case 34 of payments made under the first bullet above, the applicable market exchange rate for the foreign currency in effect on the second business day before the payment date, or, with respect to a conversion event, the applicable market exchange rate for the foreign currency in effect, as nearly as feasible, at the time of the conversion event. For purposes of the indenture, a "conversion event" is the cessation of the use of a foreign currency both by the government of the country or the confederation which issued the foreign currency and for the settlement of transactions by a central bank or other public institutions of or within the international banking community, or any currency unit or composite currency for the purposes for which it was established. In the event we effect covenant defeasance with respect to debt securities of any series and those debt securities are declared due and payable because of the occurrence of any event of default other than an event of default with respect to the covenants as to which covenant defeasance has been effected, which would no longer be applicable to the debt securities of that series after covenant defeasance, the amount of monies and/or government obligations deposited with the trustee to effect covenant defeasance may not be sufficient to pay amounts due on the debt securities of that series at the time of any acceleration resulting from that event of default. However, we would remain liable to make payment of those amounts due at the time of acceleration. The applicable prospectus supplement may further describe the provisions, if any, permitting or restricting defeasance or covenant defeasance with respect to the debt securities of a particular series. Regarding the trustee We and our subsidiaries may maintain deposit accounts and conduct other banking transactions with the trustee or its affiliates in the ordinary course of business, and the trustee and its affiliates may from time to time in the future provide us with banking and financial services in the ordinary course of their business. - -------------------------------------------------------------------------------- PLAN OF DISTRIBUTION We may sell any or all of the offered securities through agents, underwriters, dealers or directly to purchasers. Agents who we designate may solicit offers to purchase the securities. . We will name any agent involved in offering or selling securities, and any commissions that we will pay to the agent, in our prospectus supplement. . Unless we indicate otherwise in our prospectus supplement, our agents will act on a best efforts basis for the period of their appointment. . Our agents may be deemed to be underwriters under the Securities Act of 35 1933 of any of the securities that they offer or sell. We may use an underwriter or underwriters in the offer or sale of our securities. . If we use an underwriter or underwriters, we will execute an underwriting agreement with the underwriter or underwriters at the time that we reach an agreement for the sale of the securities. . We will include the names of the specific managing underwriter or underwriters, as well as any other underwriters, and the terms of the transactions, including the compensation the underwriters and dealers will receive, in our prospectus supplement. . The underwriters will use our prospectus supplement to sell the securities. We may use a dealer to sell the securities. . If we use a dealer, we, as principal, will sell the securities to the dealer. . The dealer will then sell the securities to the public at varying prices that the dealer will determine at the time it sells our securities. . We will include the name of the dealer and the terms of our transactions with the dealer in our prospectus supplement. We may solicit directly offers to purchase the securities, and we may directly sell the securities to institutional or other investors. We will describe the terms of our direct sales in our prospectus supplement. We may indemnify agents, underwriters, and dealers against certain liabilities, including liabilities under the Securities Act. Our agents, underwriters, and dealers, or their affiliates, may be customers of, engage in transactions with or perform services for us, in the ordinary course of business. We may authorize our agents and underwriters to solicit offers by certain institutions to purchase the securities at the public offering price under delayed delivery contracts. . If we use delayed delivery contracts, we will disclose that we are using them in the prospectus supplement and will tell you when we will demand payment and delivery of the securities under the delayed delivery contracts. . These delayed delivery contracts will be subject only to the conditions that we describe in the prospectus supplement. . We will describe in our prospectus supplement the commission that 36 underwriters and agents soliciting purchases of the securities under delayed contracts will be entitled to receive. In addition, from time to time, underwriters may offer and sell our common stock (or certain of the other offered securities) at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to the prevailing market prices or at negotiated prices. We also may, from time to time, authorize dealers or agents to offer and sell these securities upon such terms and conditions as may be set forth in the applicable prospectus supplement. In connection with the sale of any of these securities, underwriters may also receive commissions from purchasers of the securities for whom they may act as agent. Shares of our common stock may also be sold in one or more of the following transactions: .. block transactions (which may involve crosses) in which a broker-dealer may sell all or a portion of the shares as agent but may position and resell all or a portion of the block as principal to facilitate the transaction; .. purchases by a broker-dealer as principal and resale by the broker-dealer for its own account pursuant to a prospectus supplement; .. a special offering, an exchange distribution or a secondary distribution in accordance with applicable stock exchange rules; .. ordinary brokerage transactions and transactions in which a broker-dealer solicits purchasers; .. sales "at the market" to or through a market maker or into an existing trading market, on an exchange or otherwise, for shares; and .. sales in other ways not involving market makers or established trading markets, including direct sales to purchasers. Broker-dealers may also receive compensation from purchasers of the shares which is not expected to exceed that customary in the types of transactions involved. Offered securities may also be offered and sold, if so indicated in the applicable prospectus supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more remarketing firms, acting as principals for their own accounts or as agents for us. Any remarketing firm will be identified and the terms of its agreements, if any, with us, and any related compensation arrangements contemplated thereby will be described in the applicable prospectus supplement. In connection with the offering of the securities hereby, certain underwriters, and selling group members and their respective affiliates, may engage in transactions that stabilize, maintain or otherwise affect the market price of the applicable securities. These transactions may include stabilization transactions effected in accordance with Rule 104 of Regulation M promulgated by the SEC pursuant to which these persons may bid for or purchase securities for the purpose of stabilizing their market price. The underwriters in an offering of securities may also create a "short position" for their account by selling more securities in connection with the offering than they are committed to purchase from us. In that case, the underwriters could cover all or a portion of the short position 37 by either purchasing securities in the open market following completion of the offering of these securities or by exercising any over-allotment option granted to them by us. In addition, the managing underwriter may impose "penalty bids" under contractual arrangements with other underwriters, which means that they can reclaim from an underwriter (or any selling group member participating in the offering) for the account of the other underwriters, the selling concession for the securities that are distributed in the offering but subsequently purchased for the account of the underwriters in the open market. Any of the transactions described in this paragraph or comparable transactions that are described in any accompanying prospectus supplement may result in the maintenance of the price of the securities at a level above that which might otherwise prevail in the open market. None of the transactions described in this paragraph or in an accompanying prospectus supplement are required to be taken by any underwriters and, if they are undertaken, may be discontinued at any time. Each series of securities, except for our common stock, will be a new issue of securities and will have no established trading market. Any underwriters to whom we sell securities for public offering and sale may make a market in the securities, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. The securities, other than the common stock, may or may not be listed on a national securities exchange. 38 - -------------------------------------------------------------------------------- LEGAL MATTERS The validity of each of the offered securities when, and if issued hereunder will be passed upon for us by our Senior Vice President and General Counsel, Thomas J. Sabatino, Jr. Mr. Sabatino owns shares of, and options on, our common stock, both directly, and as a participant in various stock and employee benefit plans. See our most recent proxy statement for additional details. - -------------------------------------------------------------------------------- INDEPENDENT ACCOUNTANTS The financial statements of Baxter International Inc. incorporated in this prospectus by reference to Baxter's Annual Report on Form 10-K for the year ended December 31, 2001, have been audited by PricewaterhouseCoopers LLP, independent accountants, as stated in their report appearing therein. - -------------------------------------------------------------------------------- 39 - -------------------------------------------------------------------------------- PROSPECTUS DATED NOVEMBER __, 2002 [LOGO] Baxter International Inc. Up to $2,000,000,000 of Common Stock, $1 Par Value Preferred Stock Convertible Preferred Stock Warrants to Purchase Common Stock or Debt Securities Convertible Debt Securities Equity Purchase Contracts Equity Purchase Units Debt Securities - -------------------------------------------------------------------------------- 40 - -------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distributions.* Securities and Exchange Commission registration fee: ......................... $184,000 Accounting fees ........................... 15,000 Legal fees and expenses ................... 10,000 Miscellaneous ............................. 1,000 -------- Total ................................ $210,000 ======== All amounts are estimated except for the Securities and Exchange Commission registration fee. Item 15. Indemnification of Directors and Officers. The registrant, a Delaware corporation, is empowered by section 145 of the Delaware General Corporation Law, subject to the procedures and limitations stated therein, to indemnify any person against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in the defense of any threatened, pending or completed action, suit or proceeding in which such person is made a party by reason of his or her being or having been a director or officer of the registrant. The statute provides that indemnification pursuant to its provisions is not exclusive of other rights of indemnification to which a person may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Restated Certificate of Incorporation of the registrant provides that the registrant shall indemnify its directors and officers substantially to the fullest extent permitted by the Delaware General Corporation Law. The registrant is also empowered by section 102(b) of the Delaware General Corporation Law to include a provision in its certificate of incorporation to limit a director's liability to the registrant or its stockholders for monetary damages for breaches of fiduciary duty as a director. Article Eighth of the Restated Certificate of Incorporation states that directors of the registrant shall not be liable for monetary damages for breach of fiduciary duty "to the fullest extent permitted by the General Corporation Law of Delaware as the same exists or may hereafter be amended." Under currently applicable Delaware law then, directors will remain liable for damages for (i) a breach of their duty of loyalty to the registrant and its stockholders; (ii) their 41 failure to act in good faith; (iii) their intentional misconduct or knowing violation of law; (iv) improper dividend payments, stock repurchases or redemptions; and (v) any transaction from which the director derived an improper personal benefit. Policies of insurance are maintained by the registrant under which the directors and officers of the registrant are insured, within the limits and subject to the limitations of the polices, against certain expenses in connection with the defense of actions, suits or proceedings, and certain liabilities which might be imposed as a result of such actions, suits or proceedings, to which they are parties by reason of being or having been such directors or officers which could include liabilities under the Securities Act of 1933 or the Securities Exchange Act of 1934. The registrant has entered into indemnification agreements with its officers and directors, which its stockholders have approved or ratified. These agreements provide for full indemnification, including indemnification for judgments or settlements against an officer or director in favor of the registrant, with certain exceptions. This indemnity could apply to liabilities under the Securities Act of 1933 in certain circumstances. The proposed form of underwriting agreement filed as Exhibit 1.1 to this registration statement provides for indemnification of directors and officers of the registrant by the underwriters against certain liabilities. Similar indemnification provisions were contained in the underwriting agreements executed in connection with prior offerings and sales of securities by the registrant. Item 16. Exhibits. Exhibits marked with an asterisk (*) are incorporated by reference to documents previously filed by the Registrant with the Securities and Exchange Commission, as indicated. All other documents are filed with this Registration Statement. Number Description ------ ----------- 1.1 Form of underwriting agreement. 4.1* Restated Certificate of Incorporation, as amended, including Certificate of Designation of Series B Junior Participating Preferred Stock filed as Exhibit 3.1. to the Company's Form 10-Q for the quarter ended June 30, 2002 4.2* Amended and Restated Bylaws dated September 24, 2002, filed as Exhibit 3.3. to the Company's Form 10-Q for the quarter ended September 30, 2002. 4.3* Indenture dated as of April 26, 2002 by and among the Company and 42 Bank One Trust Company, N.A. as trustee, filed as Exhibit 4.1 to the Company's registration statement on Form S-3 (No. 333-82988) (the "Debt S-3"). 4.4* Form of Debenture with optional sinking fund and redemption provisions, filed as Exhibit 4.2 to the Company's registration statement on Form S-3 (No. 33-1665) (the "Prior S-3"). 4.5* Form of Note with optional redemption provisions, filed as Exhibit 4.3 to the Prior S-3. 4.6* Form of Deep Discount Note or Debenture, filed as Exhibit 4.4 to the Prior S-3. 4.7* Form of Zero Coupon Note of Debenture, filed as Exhibit 4.5 to the Prior S-3. 4.8* Form of Extendible Note, filed as Exhibit 4.6 to the Prior S-3. 4.9* Form of Floating Rate Note, filed as Exhibit 4.7 to the Prior S-3. 4.10* Form of Medium-Term Note, filed as Exhibit 4.9 to the Prior S-3. 5 Opinion of Thomas J. Sabatino, Jr., Senior Vice President and General Counsel of Registrant. 23.1 Consent of PricewaterhouseCoopers LLP. 23.2 Consent of Thomas J. Sabatino, Jr. (included in Exh. 5). 24 Powers of Attorney (contained in the signature page to this Registration Statement). 25* Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Bank One Trust Company, N.A. as trustee under the Indenture, filed as Exhibit 25 to the Debt S-3. 43 ITEM 17. UNDERTAKINGS. (a) Rule 415 Offering: The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by such registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 44 (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) Filings Incorporating Subsequent Exchange Act Documents by Reference: The undersigned registrant hereby undertakes that, for purpose of determining any liability under the Securities Act of 1933, the filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Acceleration of Effectiveness: Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person, if any, of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (d) Rule 430A Offering: The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 45 (e) Qualification of Trust Indentures for Delayed Offerings: The undersigned registrant hereby undertakes to file an application for the purpose of determining eligibility of the trustee to act under subsection (a) of section 310 of the Trust Indenture Act ("Act") in accordance with the rules and regulations prescribed by the Commission under section 305(b)(2) of the Act. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement or amendment thereto on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Deerfield, State of Illinois, as of November 7, 2002. BAXTER INTERNATIONAL INC. By: /s/ Harry M. Jansen Kraemer, Jr. -------------------------------- Name: Harry M. Jansen Kraemer, Jr. Title: Chief Executive Officer KNOW ALL BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Harry M. Jansen Kraemer, Jr. and Thomas J. Sabatino, Jr., and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, including any filings under Rule 462 promulgated under the Securities Act of 1933, as amended, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement amendment has been signed below by the following persons in the capacities indicated as of November 7, 2002. Signature Title ------------- ----- 46 /s/ Harry M. Jansen Kraemer, Jr. Chairman of the Board of Directors -------------------------------- Executive Officer Harry M. Jansen Kraemer, Jr. (principal executive officer) /s/ Brian P. Anderson Senior Vice President and Chief -------------------------- Financial Officer (principal Brian P. Anderson financial officer and principal accounting officer) /s/ Walter E. Boomer Director ------------------------- Walter E. Boomer /s/ Pei-yuan Chia Director -------------------- Pei-yuan Chia /s/ John W. Colloton Director ------------------------ John W. Colloton /s/ Susan Crown Director ------------------- Susan Crown /s/ Gail D. Fosler Director --------------------- Gail D. Fosler /s/ Martha R. Ingram Director ------------------------- Martha R. Ingram /s/ Joseph Martin Director --------------------- Joseph Martin, M.D., Ph.D. /s/ Thomas T. Stallkamp Director ----------------------- Thomas T. Stallkamp /s/ Monroe E. Trout Director ------------------- Monroe E. Trout /s/ Fred L. Turner Director ------------------ Fred L. Turner 47 EX-1.1 3 dex11.txt FORM OF UNDERWRITING AGREEMENT Exhibit 1.1 BAXTER INTERNATIONAL INC. Securities UNDERWRITING AGREEMENT ________________, 2002 Baxter International Inc. One Baxter Parkway Deerfield, Illinois 60015 Dear Sirs: The underwriter or underwriters named in Schedule I hereto (the "Underwriters"), acting through the firm or firms named in Schedule I-A hereto as representatives (the "Representatives"), understand that Baxter International Inc., a Delaware corporation (the "Company"), proposes to issue and sell $__________ aggregate principal amount of the Company's securities (the "Securities"), registered on Registration Statement No. 333-________ under the Securities Act of 1933, as amended. The Securities are to be issued under the indenture designated in Schedule II hereto (the "Indenture"), between the Company and the trustee designated in such Schedule II. Subject to the terms and conditions set forth herein or incorporated by reference herein and referred to below, the Company hereby agrees to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, the principal amount of such Securities set forth opposite the name of such Underwriter in such Schedule I at the Purchase Price to Underwriters set forth in Schedule II hereto. If the firm or firms named in Schedule I-A hereto include only the firm or firms named as Underwriters in Schedule I hereto, the terms "Underwriters" and "Representatives" shall each be deemed to refer to such firm or firms. The Underwriters will pay for such Securities upon delivery thereof at the Closing Location and Closing Time set forth in Schedule II hereto. The Securities shall have the terms set forth in Schedule II hereto. 48 This Underwriting Agreement consists of the special provisions set forth herein or in the schedules hereto (the "Special Provisions") and such of the provisions contained in the document entitled Baxter International Inc. Debt Securities Underwriting Agreement 2002 Standard Provisions (the "Standard Provisions") as are herein incorporated by reference. A copy of the Standard Provisions was or will be filed as an exhibit to or incorporated by reference into the Registration Statement. Unless otherwise provided in Schedule II hereto, the Standard Provisions are herein incorporated by reference in their entirety and shall be deemed to be a part of this Underwriting Agreement to the same extent as if such provisions had been set forth in full herein. References herein and therein to numbered sections of this Underwriting Agreement shall mean the numbered sections of the Standard Provisions. Please confirm your agreement by (a) having an authorized officer sign a copy of this Underwriting Agreement in the space set forth below, (b) returning the signed copy to us and (c) in addition, having an authorized officer send us no later than 8:00 P.M., Chicago time, on the date hereof, by wire, telex, facsimile transmission or other written means, the following message: "We have entered into the Underwriting Agreement dated April 23, 2002 relating to the Offered Securities referred to therein by signing a copy of the Underwriting Agreement and returning the same or depositing the same in the mail to you." Very truly yours, By: [Underwriter] /s/ ----------------------------- For itself and as Representative of the other Underwriters named above ACCEPTED: BAXTER INTERNATIONAL INC. By: --------------------------- Senior Vice President and Chief Financial Officer 49 SCHEDULE I 50 SCHEDULE I-A Representative(s) 51 SCHEDULE II 52 BAXTER INTERNATIONAL INC. Debt Securities UNDERWRITING AGREEMENT 2002 STANDARD PROVISIONS (Incorporated By Reference) From time to time Baxter International Inc., a Delaware corporation (the "Company"), may enter into one or more underwriting agreements that provide for the sale of designated debt securities to the several underwriters named therein. The standard provisions set forth herein (the "Standard Provisions") may be incorporated by reference in any such underwriting agreement. Such underwriting agreement, which shall consist of the special provisions (the "Special Provisions") set forth in the part of the Underwriting Agreement to be executed by the parties thereto (and accompanying schedules) and the Standard Provisions incorporated therein by reference, is herein called the "Underwriting Agreement" or this "Agreement." Unless otherwise provided, terms defined in the Special Provisions are used in the Standard Provisions as so defined. The Underwriting Agreement shall be in the form of an executed writing (which may be in counterparts) and may be evidenced by an exchange of telegraphic communications or any other rapid transmission device designed to produce a written record of communications transmitted. As used herein, the term "Execution Date" shall mean the date set forth on the first page of the Special Provisions. The Company proposes to issue and sell up to $2,000,000,000 aggregate principal amount of its securities (the "Securities") in one or more offerings on terms determined at or about the time of sale. The Securities to be sold pursuant to the Underwriting Agreement (the "Offered Securities") will be issued under an indenture dated as of April 26, 2002, as supplemented (the "Indenture"), between the Company and Bank One Trust Company, N.A., as trustee (the "Trustee"). Each issue of Securities may vary as to specific designation, aggregate principal amount, maturity date, currency of payment, interest rate or rates and timing of payments thereof, redemption provisions and sinking fund requirements, if any, and any other variable terms which the Indenture contemplates may be set forth in the Securities as issued from time to time. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-____________), including a prospectus relating to the Securities, which relate to the offering from time to time in accordance with Rule 415 under the Securities Act of 1933 (the "1933 Act") of up to $2,000,000,000 aggregate principal amount of Securities, and has filed amendments thereto as may have been required to the Execution Date. Such registration statement, as amended, has been declared effective by the Commission, and the Indenture has been qualified under the Trust Indenture Act of 1939 (the "1939 Act"). The term "Registration Statement" means such registration statement, including all exhibits thereto but excluding Form T-1 (as herein described), as amended to the 53 Execution Date. The term "Basic Prospectus" means the prospectus included in such registration statement, as amended to the Execution Date. The term "Prospectus" means the Basic Prospectus together with the prospectus supplement specifically relating to the Offered Securities, in the definitive form filed or to be filed pursuant to Rule 424(b) under the 1933 Act; and the term "Preliminary Prospectus" means the Basic Prospectus together with a preliminary prospectus supplement specifically relating to the Offered Securities. Any reference herein to the Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents or portions thereof incorporated by reference therein pursuant to the applicable form under the 1933 Act; and any reference to any amendment or supplement to the Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents or portions thereof filed after the Execution Date under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and so incorporated by reference. Notwithstanding the foregoing, any statement contained in a document incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus which is modified by a statement contained in the Prospectus or in any other subsequently filed document which is or is deemed to be incorporated by reference in the Prospectus shall be deemed to constitute part of the Registration Statement and the Prospectus only as so modified, and any statement contained in a document incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus which is superseded or replaced by a statement contained in the Prospectus or in any other subsequently filed document which is or is deemed to be incorporated by reference in the Prospectus shall be deemed not to constitute a part of the Registration Statement and the Prospectus. The term "Underwriters' Securities" means the Offered Securities to be purchased by the Underwriters hereunder. The term "Contract Securities" means the Offered Securities, if any, to be purchased pursuant to the Delayed Delivery Contracts referred to herein. Section 1. Representations and Warranties. The Company represents and warrants to each of the Underwriters as follows: (a) At the time the Prospectus is filed or mailed for filing with the Commission pursuant to Section 3(a), and at the time any further amendments and supplements to the Prospectus become effective or are filed or mailed for filing with the Commission, as the case may be, during the time when a prospectus is required by the 1933 Act to be delivered in connection with sales of the Offered Securities, (i) the Registration Statement and the Prospectus will comply in all material respects with the applicable requirements of the 1933 Act, the rules and regulations thereunder (the "Regulations"), the 1934 Act and the 1939 Act, (ii) the Registration Statement will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) the Prospectus will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter expressly for use in the Registration Statement or Prospectus or to information which shall constitute the Statement of Eligibility and Qualification under the 1939 Act (Form T-1) of the Trustee under the Indenture. 54 (b) The accountants who certified the financial statements and schedules included in the Registration Statement and the Prospectus are independent public accountants with respect to the Company and its subsidiaries as required by the 1933 Act and the Regulations. (c) The financial statements included in the Registration Statement and the Prospectus present fairly the financial position of the Company and its consolidated subsidiaries as at the dates indicated and the results of their operations for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis during the periods involved, except as indicated therein; and the supporting schedules included in the Registration Statement present fairly the information required to be stated therein. (d) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein or contemplated thereby, (i) there has not been any material adverse change in the condition, financial or otherwise, of the Company and its subsidiaries considered as one enterprise, or in the earnings or the ability to continue to conduct business in the usual and ordinary course of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business and (ii) there has not been any material transaction entered into by the Company or any of its subsidiaries other than transactions in the ordinary course of business or transactions which are not material in relation to the Company and its subsidiaries considered as one enterprise. (e) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware with corporate power and authority to own, lease and operate its properties and conduct its business as described in the Registration Statement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which the failure so to qualify would materially adversely affect the conduct of the business, operations, financial condition or income of the Company and its subsidiaries considered as one enterprise. (f) Each active consolidated subsidiary of the Company included in the financial statements included in the Registration Statement and the Prospectus is a corporation duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation, with corporate power and authority to own, lease and operate its properties and conduct its business as now being conducted and is duly qualified as a foreign corporation to transact business and is in good standing except as to subsidiaries or jurisdictions as to which the failure so to qualify would not materially adversely affect the conduct of the business, operations, financial condition or income of the Company and its subsidiaries considered as one enterprise; all of the issued and outstanding capital stock of each such subsidiary has been duly and validly issued and is fully paid and nonassessable; and all of such stock owned by the Company, directly or through subsidiaries, is owned free and clear of any mortgage, pledge, lien, encumbrance, claim or equity. (g) Neither the Company nor any of its subsidiaries is in violation of its charter or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any bond, debenture, note or other evidence of indebtedness or in any 55 contract, indenture, mortgage, loan agreement or lease to which it or any of them is a party or by which it or any of them or their properties is bound; and the execution and delivery of this Agreement and the Delayed Delivery Contracts and the Indenture, the incurrence of the obligations set forth herein and therein and the consummation of the transactions contemplated herein and therein have been duly authorized by all necessary corporate action and will not conflict with or constitute a breach of, or default under, the charter or by-laws of the Company or any bond, debenture, note or other evidence of indebtedness or any contract, indenture, mortgage, loan agreement or lease to which the Company or any of its subsidiaries is a party or by which it or any of them is bound or any law, administrative regulation or administrative or court decree. (h) The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patent rights or licenses or other rights to use patent rights, inventions, trademarks, service marks, trade names and copyrights necessary to conduct the business now operated by them, provided that the loss of any such rights, either alone or in the aggregate, which does not materially adversely affect the conduct of the business, operations, financial condition or income of the Company and its subsidiaries considered as one enterprise shall not be considered a violation of this representation. Neither the Company nor any of its subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect to any patent, patent rights, inventions, trade marks, service marks, trade names or copyrights which, either alone or in the aggregate, might reasonably be expected to materially adversely affect the conduct of the business, operations, financial condition or income of the Company and its subsidiaries considered as one enterprise. (i) Except as set forth in the Prospectus, there is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened against or affecting the Company or any of its subsidiaries, which, either singly or in the aggregate, might reasonably be expected to materially adversely affect the conduct of the business, operations, financial condition or income of the Company and its subsidiaries considered as one enterprise or the consummation of this Agreement. (j) This Agreement has been duly authorized, executed and delivered by the Company. (k) The Company is not required to be registered under the Investment Company Act of 1940, as amended. (l) The Offered Securities are in the form contemplated by the Indenture, have been duly and validly authorized by all necessary corporate action and, when executed and authenticated as specified in the Indenture and delivered against payment pursuant to the Agreement will be valid and binding obligations of the Company, enforceable in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws relating to or affecting enforcement of creditors' rights or by general equity principles. Any certificate signed by any officer of the Company and delivered to any Underwriter or counsel for the Underwriters in connection with an offering of Offered Securities shall be deemed a representation and warranty by the Company, as to the matters covered thereby, to each 56 Underwriter. Section 2. Purchase, Sale and Delivery. The Company is advised by the Representatives that the Underwriters propose to make a public offering of their respective portions of the Underwriters' Securities as soon after this Agreement is entered into as in the Representatives' judgment is advisable. The terms of the public offering of the Underwriters' Securities are set forth in the Prospectus. Payment of the purchase price for, and delivery of, the Underwriters' Securities shall be made in the funds, at the place or places, on the date and at the time (unless postponed in accordance with the provisions of Section 10) specified in Schedule II to the Special Provisions or at such other time or place as shall be agreed upon by the Representatives and the Company (such time and date being referred to as the "Closing Time"). Except as otherwise specified in Schedule II to the Special Provisions, payment shall be made to the Company by certified or official bank check or checks payable to the order of the Company against delivery to the Representatives for the respective accounts of the Underwriters of the Underwriters' Securities to be purchased by them. Such Underwriters' Securities shall be in such denominations and registered in such names as the Representatives may request in writing at least two business days prior to the Closing Time. Such Underwriters' Securities, which may be in temporary form, will be made available for examination and packaging by the Representatives in New York City or at such other place as shall be agreed upon by the Representatives and the Company on or before the first business day prior to the Closing Time. If so provided in Schedule II to the Special Provisions, the Underwriters may solicit offers to purchase Contract Securities from the Company pursuant to delayed delivery contracts ("Delayed Delivery Contracts") substantially in the form of Annex I hereto with such changes therein as the Company may approve. As compensation for arranging Delayed Delivery Contracts, the Company will pay to the Representatives at Closing Time, for the accounts of the Underwriters, the fee set forth in Schedule II to the Special Provisions in respect of the principal amount of Contract Securities. Any Delayed Delivery Contracts are to be with institutional investors of the types set forth in the Prospectus. At Closing Time, the Company will enter into Delayed Delivery Contracts (each for not less than the minimum principal amount of Contract Securities per Delayed Delivery Contract specified in Schedule II to the Special Provisions) with all purchasers proposed by the Underwriters and previously approved by the Company as provided below, but not for an aggregate principal amount of Contract Securities in excess of that specified in Schedule II to the Special Provisions. The Underwriters will not have any responsibility for the validity or performance of Delayed Delivery Contracts. The Representatives will submit to the Company, at least three business days prior to the Closing Time, the names of any institutional investors with which it is proposed that the Company will enter into Delayed Delivery Contracts and the principal amount of Contract Securities to be purchased by each of them, and the Company will advise the Representatives at least two business days prior to Closing Time of the names of the institutions with which the making of Delayed Delivery Contracts is approved by the Company and the principal amount of Contract Securities to be covered by each such Delayed Delivery Contract. 57 The principal amount of Offered Securities agreed to be purchased by the respective Underwriters as set forth in Schedule I to the Special Provisions shall be reduced by the principal amount of Offered Securities covered by Delayed Delivery Contracts, as to each Underwriter as set forth in a written notice delivered by the Representatives to the Company; provided, however, that the total principal amount of Offered Securities to be purchased by all Underwriters shall be the total amount of Offered Securities set forth in Schedule I to the Special Provisions, less the principal amount of Offered Securities covered by Delayed Delivery Contracts. Section 3. Covenants of the Company. The Company covenants with each Underwriter that: (a) Immediately following the execution of this Agreement, the Company will prepare a supplement to the Basic Prospectus setting forth the principal amount of the Offered Securities and their terms not otherwise specified in the Indenture, the names of the Underwriters and the principal amount of Offered Securities which each severally has agreed to purchase, the names of the Representatives, the price at which the Offered Securities are to be purchased by the Underwriters from the Company, the initial public offering price, the selling concession and reallowance, if any, any delayed delivery arrangements, and such other information as the Representatives and the Company deem appropriate in connection with the offering of the Offered Securities. The Company will promptly transmit copies of the Prospectus to the Commission for filing pursuant to Rule 424(b) of the Regulations and will furnish to the Underwriters as many copies of the Prospectus as the Representatives shall reasonably request. (b) If at any time when a prospectus is required by the 1933 Act to be delivered in connection with sales of the Offered Securities any event shall occur or condition exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or counsel for the Company, to further amend or supplement the Prospectus in order that the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in the light of circumstances existing at the time it is delivered to a purchaser or if it shall be necessary, in the opinion of either such counsel, at any such time to amend or supplement the Registration Statement or the Prospectus in order to comply with the requirements of the 1933 Act or the Regulations, the Company will promptly prepare and file with the Commission such amendment or supplement, whether by filing documents pursuant to the 1934 Act or otherwise, as may be necessary to correct such untrue statement or omission or to make the Registration Statement comply with such requirements. (c) The Company will make generally available to its security holders as soon as practicable an earnings statement (in form complying with the provisions of Section 11(a) of the 1933 Act, which need not be certified by independent certified public accountants unless required by the 1933 Act or the Regulations) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the Execution Date. (d) During the period when a prospectus is required by the 1933 Act to be delivered in connection with sales of the Offered Securities, the Company will give the Representatives notice of its intention to file any amendment to the Registration Statement or any amendment or supplement to the Prospectus, whether pursuant to the 1934 Act, the 1933 Act or otherwise, will 58 furnish the Representatives with copies of any such amendment or supplement or other documents proposed to be filed a reasonable time in advance of filing, and will not file any such amendment or supplement or other documents in a form in which the Representatives or counsel for the Underwriters shall reasonably object. (e) During the period when a prospectus is required by the 1933 Act to be delivered in connection with sales of the Offered Securities, the Company will notify the Representatives immediately, and confirm the notice in writing, (i) of the effectiveness of any amendment to the Registration Statement, (ii) of the mailing or the delivery to the Commission for filing of any supplement to the Prospectus or any document to be filed pursuant to the 1934 Act which is incorporated in the Prospectus by reference, (iii) of the receipt of any comments from the Commission with respect to the Registration Statement or the Prospectus, (iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information and (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. (f) The Company has previously delivered to Sidley Austin Brown & Wood, counsel for the Underwriters, signed and conformed copies of the Registration Statement and of each amendment thereto filed prior to the date of this Agreement (including exhibits filed therewith or incorporated by reference therein and documents incorporated by reference in the Prospectus) and will also deliver to Sidley Austin Brown & Wood a copy of each amendment to the Registration Statement filed after the date of this Agreement. (g) The Company will endeavor, in cooperation with the Representatives, to qualify the Offered Securities for offering and sale under the applicable securities laws of such states and other jurisdictions of the United States as the Representatives may designate, and, in cooperation with the Representatives, will maintain such qualifications in effect for as long as may be required for the distribution of the Offered Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not otherwise required to be so qualified. The Company will, upon notice, file such statements and reports as may be required by the laws of each jurisdiction in which the Offered Securities have been qualified as above provided. (h) The Company, during the period when a prospectus is required to be delivered under the 1933 Act in connection with the sale of the Offered Securities, will file promptly all documents required to be filed with the Commission pursuant to Section 13 or 14 of the 1934 Act. (i) Between the Execution Date and termination of any price restrictions on the sale of the Offered Securities or Closing Time, whichever is later, the Company will not, without the prior consent of the Representatives, offer or sell, or enter into any agreement to sell, any debt securities of the Company with a maturity of more than one year, other than such debt securities which the Company has advised the Representatives in writing prior to the Execution Date that it 59 intends to sell or agree to sell during such period. Section 4. Conditions to Underwriters' Obligations. The obligations of the Underwriters to purchase the Underwriters' Securities are subject to the accuracy of the representations and warranties on the part of the Company herein contained, to the accuracy of the statements of the Company's officers made in any certificate furnished pursuant to the provisions hereof, to the performance by the Company of all of its covenants and other obligations hereunder and to the following further conditions: (a) At the Closing Time (i) no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission, (ii) the rating assigned by Standard & Poor's Corporation or Moody's Investors Service, Inc. to any debt securities or preferred stock of the Company as of the Execution Date shall not have been lowered since that date, or any public announcement that any such organization has under surveillance or review its rating of any debt securities or preferred stock of the Company (other than the announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating) and (iii) there shall not have come to the attention of the Representatives any facts that would reasonably cause the Representatives to believe that the Prospectus, at the time it was required to be delivered to a purchaser of the Offered Securities, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at such time, not misleading. (b) At the Closing Time the Representatives shall have received: (i) The favorable opinion, dated as of the Closing Time, of Thomas J. Sabatino, Jr., Senior Vice President and General Counsel of the Company, in form and substance satisfactory to the Representatives, to the effect that: (A) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware. (B) The Company has corporate power and authority to own, lease and operate its properties and conduct its business as described in the Registration Statement. (C) The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which the failure so to qualify would materially adversely affect the conduct of the business, operations, financial condition or income of the Company and its subsidiaries considered as one enterprise. (D) Each of Baxter Healthcare Corporation, a Delaware corporation, and Baxter World Trade Corporation, a Delaware corporation, all of which are wholly-owned by the Company and which, 60 together with the Company, owned more than 80% of the consolidated assets of the Company and its subsidiaries as of December 31, 2001 and contributed at least 80% of the consolidated income from continuing operations of the Company and its subsidiaries for the year ended December 31, 2001 (each such calculation with respect to Baxter World Trade Corporation having been done on a consolidated basis with its subsidiaries) has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, with corporate power and authority to own, lease and operate its properties and conduct its business as now being conducted and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which the failure so to qualify would materially adversely affect the conduct of the business, operations, financial condition or income of the Company and its subsidiaries considered as one enterprise; all of the issued and outstanding capital stock of each such subsidiary has been duly authorized and validly issued and is fully paid and non-assessable; and all of such stock owned by the Company, directly or through subsidiaries, is owned free and clear of any mortgage, pledge, lien, encumbrance, claim or equity. (E) Except as set forth in the Prospectus, there is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending, or to such counsel's knowledge threatened against or affecting, the Company or any of its subsidiaries which, either singly or in the aggregate, might reasonably be expected to materially adversely affect the conduct of the business, operations, financial condition or income of the Company and its subsidiaries considered as one enterprise or the consummation of this Agreement. (F) This Agreement and the Delayed Delivery Contracts, if any, have been duly authorized, executed and delivered by the Company. (G) The Indenture has been duly and validly authorized, executed and delivered by the Company and constitutes the valid and binding agreement of the Company, enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws relating to or affecting enforcement of creditors' rights or by general equity principles. (H) The Offered Securities are in the form contemplated by the Indenture, have been duly and validly authorized by all necessary corporate action and, when executed and authenticated as specified in the Indenture and delivered against payment pursuant to this Agreement or Delayed Delivery Contracts, if any, will be valid and binding obligations of the Company, enforceable in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other 61 laws relating to or affecting enforcement of creditors' rights or by general equity principles, and will be entitled to the benefits of the Indenture. (I) The descriptions of the Indenture and the Offered Securities set forth in the Prospectus are accurate and constitute fair summaries of such documents and instruments. (J) The Indenture is qualified under the 1939 Act. (K) The Registration Statement is effective under the 1933 Act and, to the best of such counsel's knowledge and information, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission. (L) The Registration Statement (other than the financial statements and other financial data included therein, as to which such counsel need not express any opinion and other than the documents incorporated therein by reference) complies as to form in all material respects with the requirements of the 1933 Act, the 1939 Act and the Regulations, and although such counsel is not passing upon, and does not assume responsibility for the accuracy, completeness or fairness of statements contained in the Registration Statement or Prospectus nor make any representation that he has independently verified the accuracy, completeness or fairness of such statements (except as set forth in clause (I) above) nor verified the computation or compilation of financial statements and other financial data, nothing has come to such counsel's attention that would lead him to believe that the Registration Statement (including the documents incorporated therein by reference), at the time it became effective, or if an amendment to the Registration Statement, an annual report on Form 10-K or any other document filed by the Company under the 1934 Act and incorporated by reference in the Registration Statement has been filed by the Company with the Commission subsequent to the effectiveness of the Registration Statement, then at the time of the most recent such filing, contained an 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 not misleading or that the Prospectus (including the documents incorporated therein by reference), as amended or supplemented at Closing Time, contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (M) Each document, if any, filed pursuant to the 1934 Act (other than the financial statements and other financial data included therein, as to which such counsel need not express any opinion) and incorporated by reference in the Prospectus complied when so filed as to form in all material respects with the 1934 Act and the rules and regulations thereunder. 62 (N) No consent, approval, authorization or order of any court or governmental authority or agency is required in connection with the sale of the Offered Securities, except such as may be required under the 1933 Act, the 1939 Act and state securities laws; and the execution and delivery of this Agreement and the Indenture and the consummation of the transactions contemplated herein and therein will not conflict with or constitute a breach of, or default under, or result in any violation of the provisions of, the charter or by-laws of the Company or, to the best of such counsel's knowledge, any bond, debenture, note or other evidence of indebtedness, or any contract, indenture, mortgage, loan agreement or lease to which the Company or any of its subsidiaries is a party or by which it or any of them is bound, nor will such action result in any violation of the provisions of any law, administrative regulation or administrative or court decree. (ii) The favorable opinion or opinions, dated as of the applicable Closing Time, of ___________________, counsel for the Underwriters, with respect to the matters set forth in (A) and (F) to (L), inclusive, of subsection (b)(i) of this Section. (c) At the Closing Time there shall not have been, since the Execution Date or since the respective dates as of which information is given in the Prospectus, any material adverse change in the condition, financial or otherwise, of the Company and its subsidiaries considered as one enterprise, or in the earnings or the ability to continue to conduct business in the usual and ordinary course of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Representatives shall have received a certificate of the President or a Vice President of the Company, dated as of the Closing Time, to the effect that there has been no such material adverse change and to the effect that the representations and warranties of the Company contained in Section 1 are true and correct with the same force and effect as though expressly made at the Closing Time. (d) The Representatives shall have received from PricewaterhouseCoopers LLP a letter, dated as of the Closing Time, covering periods up to a date not more than three business days preceding the date of the letter, in form and substance satisfactory to the Representatives, confirming that they are independent accountants within the meaning of the 1933 Act and the applicable published rules and regulations thereunder and stating in effect (i) that in their opinion the consolidated financial statements of the Company and its subsidiaries examined by them included or incorporated by reference in the Registration Statement and the Prospectus comply as to form in all material respects with the accounting requirements of the 1934 Act and the published rules and regulations thereunder applicable to financial statements included or incorporated in annual reports on Form 10-K under the 1934 Act, (ii) that, based on limited procedures not constituting an examination in accordance with generally accepted auditing standards, consisting of a reading of the unaudited consolidated financial data of the Company and its subsidiaries included or incorporated by reference in the Registration Statement and the Prospectus, reading of the minutes of the board of directors and committees of the board of directors of the Company since December 31, 1991, as set forth in the minute books through a 63 specified date not more than three business days before the date of such letter and inquiries of certain officials of the Company who have responsibility for financial and accounting matters, nothing came to their attention that caused them to believe: (A) that such unaudited consolidated financial data do not comply as to form in all material respects with the accounting requirements of the 1934 Act and the published rules and regulations thereunder applicable to unaudited consolidated financial data or that such unaudited consolidated financial data are not presented on a basis substantially consistent with that of the consolidated financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement and the Prospectus and covered by their opinion and (B) that during the period from the date of the most recent consolidated financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement and the Prospectus to a specified date not more than three business days prior to the date of such letter there was any change in the consolidated capital stock (other than changes occurring as a result of the exercise of outstanding stock options, conversion rights or rights under employee stock purchase plans, grants under any other employee benefit plans, or conversions of preferred stock or debentures or in connection with any dividend reinvestment plan of the Company) or consolidated capitalized lease obligations or consolidated long-term debt (other than through conversions or scheduled payments or differences due to conversion of foreign currency-denominated debt into United States dollars) of the Company or any decreases in consolidated stockholders' equity of the Company as compared with the amounts shown in the most recent consolidated balance sheet included or incorporated by reference in the Registration Statement and the Prospectus, or any decrease, as compared with the corresponding period in the preceding year, in net sales or total operating income, in each case from continuing operations, and net income of the Company and its subsidiaries on a consolidated basis, or, at the date of the latest available balance sheet read by them, any decreases in consolidated net current assets (working capital) as compared with the amounts shown in the most recent consolidated balance sheet included or incorporated by reference in the Registration Statement and the Prospectus, except in all instances for changes, increases or decreases (1) which have been the subject of prior registration statements filed with the Securities and Exchange Commission, (2) which have been disclosed in writing to either the Representatives or to Sidley Austin Brown & Wood, counsel for the Underwriters, prior to the Execution Date or (3) which the Registration Statement and the Prospectus (including the documents incorporated therein by reference) disclose have occurred or may occur and (iii) that certain amounts, percentages and financial information included or incorporated by reference in the Registration Statement and the Prospectus which have been specified by the Representatives and have been obtained or derived from the general accounting records of the Company and its subsidiaries are in agreement with such accounting records or computations made therefrom, or in the case of amounts, percentages and financial information pertaining to periods prior to the year ended December 31, 1985 are in agreement with the audited financial statements or computations made therefrom with respect to such periods. Such letter shall also cover such other matters as the Representatives may reasonably request. (e) Such other closing conditions, if any, as are set forth in the Special Provisions. (f) At the Closing Time counsel for the Underwriters shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Offered Securities as herein contemplated and related 64 proceedings or in order to evidence the accuracy and completeness of any of the representations and warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters. If any condition specified in this Agreement shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representatives by notice to the Company at any time at or prior to the Closing Time, and such termination shall be without liability of any party to any other party except as provided in Section 5. Section 5. Payment of Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (a) the printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and all amendments thereto, and the typing and duplicating or printing of this Agreement and any agreement among the Underwriters, (b) the preparation, issuance and delivery of the Offered Securities to the Underwriters, (c) the fees and disbursements of the Company's counsel and accountants, (d) the qualification of the Offered Securities under securities laws in accordance with the provisions of Section 3(g), including filing fees and the reasonable fee and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of any Blue Sky Survey and Legal Investment Survey, (e) the printing and delivery to the Underwriters in quantities as hereinabove stated of copies of the Registration Statement and all amendments thereto, and of any Preliminary Prospectus and the Prospectus and any amendments or supplements thereto, (f) the printing and delivery to the Underwriters of copies of the Indenture and any Blue Sky Survey and Legal Investment Survey, (g) the fees of rating agencies and (h) the fees and expenses, if any, incurred in connection with the listing of the Offered Securities on the New York Stock Exchange. If this Agreement is terminated by the Representatives in accordance with the provisions of Section 4 or Section 9(i), the Company shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters. Section 6. Indemnification. (a) The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus or the Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the 65 circumstances under which they were made, not misleading; provided, however, (A) that the Company will not be liable in any such case to the extent that any such loss, liability, claim, damage or expense arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto) or any Preliminary Prospectus or the Prospectus (or any amendment or supplement thereto), or contained in that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification under the 1939 Act (Form T-1) of the Trustee under the Indenture; and provided, further, (B) that the foregoing indemnification, to the extent it relates to any actual or alleged untrue statement or omission made in or from any Preliminary Prospectus but eliminated or remedied in the Prospectus, shall not inure to the benefit of any Underwriter or any person who controls such Underwriter from whom the person asserting such untrue statement or omission purchased Offered Securities if a copy of the Prospectus (excluding documents incorporated therein by reference) was not sent or given to such person at or prior to the written confirmation of the sale of such Offered Securities to such person and was required to be delivered by such Underwriter under the 1933 Act, if the Company has previously furnished copies thereof to such Underwriter; (ii) against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and (iii) against any and all expense whatsoever (including the fees and disbursements of counsel chosen by you) reasonably incurred in investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above. (b) Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendments thereto) or any Preliminary Prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto) or any Preliminary Prospectus or the Prospectus (or any amendment or supplement 66 thereto). (c) Each indemnified party shall give prompt notice to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder; failure of an indemnified party to give such notice within a reasonable time after the commencement of such action shall relieve the indemnifying party of all liability on account of this indemnity agreement, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying parties be liable for the fees and expenses of more than one counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. Section 7. Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 6 is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms, the Company and the Underwriters shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and one or more of such Underwriters in such proportions as will reflect the relative benefits from the offering of the Offered Securities received by the Company on the one hand and by such Underwriters on the other hand. If the allocation provided by the immediately preceding sentence is not permitted by applicable law, or if the indemnified party failed to give the notice required under Section 6(c), then the Company and the Underwriters shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and one or more of such Underwriters in such proportions as are appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages and expenses, as well as any other relevant equitable considerations. The relative benefits shall be deemed to be such that the Underwriters shall be responsible for that portion of the aggregate losses, liabilities, claims, damages and expenses represented by the percentage that the underwriting discount appearing in the Prospectus bears to the initial public offering price appearing therein and the Company shall be responsible for the balance. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 7. Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 67 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as the Company. The Underwriters' obligations in this Section 7 to contribute are several in proportion to their respective underwriting obligations and not joint. Section 8. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any termination of this Agreement, or any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Company, and shall survive delivery of any Offered Securities to the Underwriters. Section 9. Termination. The Representatives may also terminate this Agreement, immediately upon notice to the Company, at any time at or prior to the Closing Time (a) if there has been, since the Execution Date or since the respective dates as of which information is given in the Prospectus, any material adverse change in the condition, financial or otherwise, of the Company and its subsidiaries considered as one enterprise, or in the earnings or the ability to conduct business in the usual and ordinary course of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, (b) if there has occurred any outbreak or escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in the judgment of the Representatives, impracticable to market the Offered Securities or enforce contracts for the sale of the Offered Securities or (c) if trading generally on the New York Stock Exchange has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by said exchange or by order of the Commission or any other governmental authority, or if a banking moratorium has been declared by Federal, Illinois or New York authorities. In the event of any such termination, the covenant set forth in Section 3(c), the provisions of Section 5, the indemnity agreement set forth in Section 6, the contribution provisions set forth in Section 7 and the provisions of Sections 8 and 13 shall remain in effect. Section 10. Default. If one or more of the Underwriters shall fail at the Closing Time to purchase the Offered Securities which it or they are obligated to purchase hereunder (the "Defaulted Securities"), then the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth. If, however, during such 24 hours the Representatives shall not have completed such arrangements for the purchase of all of the Defaulted Securities, then: (a) If the aggregate principal amount of Defaulted Securities does not exceed 10% of the aggregate principal amount of the Offered Securities to be purchased pursuant to this Agreement, the non-defaulting Underwriters shall be obligated to purchase the full amount thereof in the 68 proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all such non-defaulting Underwriters, or (b) If the aggregate principal amount of Defaulted Securities exceeds 10% of the aggregate principal amount of the Offered Securities to be purchased pursuant to this Agreement, this Agreement shall terminate, without any liability on the part of any non-defaulting Underwriter or the Company. No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. In the event of a default by any Underwriter or Underwriters as set forth in this Section, either the Representatives or the Company shall have the right to postpone the Closing Time for a period of not exceeding seven days in order that any required change in the Registration Statement or Prospectus or in any other documents or arrangements may be effected. Section 11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representatives at the address or addresses specified in Schedule II to the Special Provisions; notices to the Company shall be directed to it at One Baxter Parkway, Deerfield, Illinois 60015, Attention: Secretary. Section 12. Parties. This Agreement shall inure to the benefit of and be binding upon the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties and their respective successors and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Offered Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase. Section 13. Governing Law. This Agreement shall be governed by the laws of the State of New York, without regard to principles of conflicts of law. 69 Annex I BAXTER INTERNATIONAL INC. _______________________________________ [Insert specific title of securities] FORM OF DELAYED DELIVERY CONTRACT ________________________________________ [Insert date of initial public offering] Baxter International Inc. One Baxter Parkway Deerfield, Illinois 60015 Ladies and Gentlemen: The undersigned hereby agrees to purchase from Baxter International Inc. (the "Company") and the Company agrees to sell to the undersigned [If one delayed closing, insert - as of the date hereof, for delivery on ______, 20__ (the "Delivery Date")] [$]_______________ principal amount of the Company's __________________________ [title of Securities and related Warrants, if any] (the "Securities"), offered by the Company's Prospectus relating thereto, receipt of a copy of which is hereby acknowledged, at a purchase price of ___% of the principal amount thereof plus accrued interest, if any, and on the further terms and conditions set forth in this contract. [If two or more delayed closings, insert the following: The undersigned will purchase from the Company as of the date hereof, for delivery on the dates set forth below, Securities in the principal amounts set forth below: Delivery Date Principal Amount ------------- ---------------- Each of such delivery dates is hereinafter referred to as a "Delivery Date"]. Payment for the Securities which the undersigned has agreed to purchase for delivery on [the] [each] Delivery Date shall be made to the Company or its order by certified or official bank check at _______ , time, on such Delivery Date upon delivery to the undersigned of the Securities to be purchased by the undersigned for delivery on such Delivery Date in definitive form and in such denominations and registered in such names as the undersigned may designate by written or telegraphic communication addressed to the Company not less than five full business days prior to such Delivery Date. If no designation is received, the Securities will be registered in the name of the undersigned and issued in a denomination equal to the aggregate principal amount of securities to be purchased by the undersigned on such Delivery Date. 70 The obligation of the undersigned to take delivery of and make payment for, Securities on [the] [each] Delivery Date shall be subject to only the conditions that (1) investment in the Securities shall not at such Delivery Date be prohibited under the laws of any jurisdiction in the United States to which the undersigned is subject, which investment the undersigned represents is not prohibited on the date hereof, and (2) the Company shall have delivered to the Underwriters the principal amount of the Securities to be purchased by them pursuant to the Underwriting Agreement referred to in the Prospectus mentioned above and received payment therefor. Promptly after completion of the sale to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by a copy of the opinion of counsel for the Company delivered to the Underwriters in connection therewith. This contract will inure to the benefit of an be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. It is understood that the acceptance of this contract and any other similar contracts is in the Company's sole discretion and, without limiting the foregoing, need not be on a first-come, first-served basis. If this contract is acceptable to the Company, it is requested that the Company signed the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract between the Company and the undersigned when such counterpart is mailed or delivered. This contract shall be governed by, and construed in accordance with, the laws of the State of New York. Very truly yours, [NAME OF PURCHASER] By ______________________________ Name Title [Address of Purchaser] Accepted, as of the above date. BAXTER INTERNATIONAL INC. By: _____________________________ Name: Title 71 EX-5 4 dex5.txt OPINION OF THOMAS J. SABATINO, JR. Exhibit 5 November 7, 2002 To the Board of Directors of Baxter International Inc. One Baxter Parkway Deerfield, Illinois 60015 Re: Registration Statement on Form S-3 ---------------------------------- Ladies and Gentlemen: In connection with the filing with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"), of a Registration Statement on Form S-3 (the "Registration Statement"), relating to the public offering by Baxter International Inc., a Delaware Corporation (the "Company"), organized under the General Corporation Law of the State of Delaware (the "Law"), of up to $2,000,000,000 in the aggregate of (i) shares of common stock of the Company, $1 par value per share (the "Common Stock"), (ii) debt securities of the Company (the "Debt Securities") to be issued pursuant to an Indenture (the "Indenture"), dated as of April 26, 2002, between the Company and the trustee named in the prospectus pertaining to the offering of any such debt securities (the "Trustee"), (iii) shares of preferred stock of the Company (the "Preferred Stock"), (iv) warrants representing rights to purchase Debt Securities, Preferred Stock or Common Stock (the "Warrants"), (v) shares of convertible preferred stock of the Company (the "Convertible Preferred Stock"), (vi) convertible preferred debt securities of the Company (the "Convertible Debt Securities"), (vii) equity purchase contracts, representing rights to purchase common stock or preferred stock or other equity (the "Equity Purchase Contracts") and (viii) equity purchase units, representing ownership of Equity Purchase Contracts and Debt Securities, Preferred Stock or debt obligations of third parties, including U.S. Treasury securities (the "Equity Purchase Units") (collectively, (i) through (viii) above, the "Offered Securities"), including up to an additional $500,000,000 aggregate amount of such Offered Securities that have been previously registered in accordance with Rule 462(b) under the Act, I have examined such corporate records, certificates and other documents and such questions of law as I have considered necessary for the purposes of these opinions. On the basis of the above examination, I advise you that, in my opinion: 1. The Company has been duly incorporated and is an existing corporation in good standing under the Law, and the laws of the State of Delaware. 2. When (i) the terms of the issuance and sale of the Common Stock have been duly approved by all necessary action of the board of directors of the Company (the "Board of Directors") (or a duly authorized committee thereof), so as not to violate any applicable law or result in a default under or a breach of any 72 agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company and (ii) certificates for the shares of Common Stock have been duly executed, authenticated, issued and delivered as contemplated by the Registration Statement and any prospectus supplement relating thereto, against payment of the consideration fixed therefor by the Board of Directors (or a duly authorized committee thereof), the Common Stock (including any Common Stock issued upon conversion or exchange under the terms of any other of the Offered Securities) will be, when issued, duly authorized, validly issued, fully paid and non-assessable. 3. The execution and delivery of the Indenture and the Debt Securities have been duly authorized by the Company. The Indenture has been duly executed and delivered by the Company and, assuming the Indenture has been duly executed and delivered by the Trustee, when the Debt Securities have been duly executed, authenticated, issued, delivered and paid for as contemplated by the Registration Statement and any prospectus supplement relating thereto and in accordance with the Indenture, assuming the terms of such Debt Securities have been duly established so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, the Debt Securities (including any Debt Securities issued upon conversion or exchange under the terms of any other of the Offered Securities) will be validly issued and will constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability relating to or affecting the rights of creditors and to general equity principles (whether considered in a proceeding at law or in equity). 4. When (i) the terms of the Preferred Stock and of its issuance and sale have been duly established in conformity with the Company's Certificate of Incorporation, as amended, and approved by all necessary corporate action of the Board of Directors (or a duly authorized committee thereof), so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, (ii) a Certificate of Designation fixing and determining the terms of the Preferred Stock has been filed with the Secretary of State of the State of Delaware and (iii) the Preferred Stock has been duly issued and sold as contemplated by the Registration Statement and any prospectus supplement relating thereto, against payment of the consideration fixed therefore by the Board of Directors (or a duly authorized committee thereof), the Preferred Stock (including any Preferred Stock issued upon conversion or exchange under the 73 terms of any other of the Offered Securities) will be, when issued, duly authorized, validly issued, fully paid and non-assessable. 5. When (i) the issuance and terms of the Warrants, the terms of the offering thereof and related matters have been duly approved by all necessary corporate action of the Board of Directors (or a duly authorized committee thereof) so as not to violate any applicable law or result in a default under or a breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, (ii) the warrant agreement or agreements relating to the Warrants have been duly authorized and validly executed and delivered by the Company and the warrant agent appointed by the Company, and (iii) the Warrants or certificates representing the Warrants have been duly executed, authenticated, issued and delivered as contemplated by the Registration Statement and any prospectus supplement relating thereto, against payment of the consideration fixed therefor by the Board of Directors (or a duly authorized committee thereof), the Warrants (including any Warrants issued upon conversion or exchange under the terms of any other of the Offered Securities) will be, when issued, duly authorized and validly issued. 6. When (i) the issuance and terms of the Convertible Preferred Stock, the terms of the offering thereof and related matters have been duly approved by all necessary corporate action of the Board of Directors (or a duly authorized committee thereof) so as not to violate any applicable law or result in a default under or a breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, (ii) a Certificate of Designation fixing and determining the terms of the Convertible Preferred Stock has been filed with the Secretary of State of the State of Delaware and (iii) the Convertible Preferred Stock has been duly issued and sold as contemplated by the Registration Statement and any prospectus supplement relating thereto, against payment of the consideration fixed therefore by the Board of Directors (or a duly authorized committee thereof), the Convertible Preferred Stock (including any Convertible Preferred Stock issued upon conversion or exchange under the terms of any other of the Offered Securities) will be, when issued, duly authorized, validly issued, fully paid and non-assessable. 7. When (i) the terms of the Convertible Debt Securities, the terms of the offering thereof and related matters have been duly approved by all necessary corporate action of the Board of Directors (or a duly authorized committee thereof), so as not to violate any applicable law or result in a default under or a breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company and (ii) have been validly executed and delivered by the Company as contemplated by the Registration Statement and any 74 prospectus supplement relating thereto, against payment of the consideration fixed therefor by the Board of Directors (or a duly authorized committee thereof), the Convertible Debt Securities (including any Convertible Debt Securities issued upon conversion or exchange under the terms of any other of the Offered Securities) will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability relating to or affecting the rights of creditors and to general equity principles (whether considered in a proceeding at law or in equity). 8. When (i) the terms of the Equity Purchase Contracts, the terms of the offering thereof and related matters have been duly approved by all necessary corporate action of the Board of Directors (or a duly authorized committee thereof), so as not to violate any applicable law or result in a default under or a breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company and (ii) the Equity Purchase Contracts have been validly executed and delivered by the Company as contemplated by the Registration Statement and any prospectus supplement relating thereto, against payment of the consideration fixed therefor by the Board of Directors (or a duly authorized committee thereof), the Equity Purchase Contracts will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability relating to or affecting the rights of creditors and to general equity principles (whether considered in a proceeding at law or in equity). 9. When (i) the creation of and the issuance and terms of the Equity Purchase Units, the terms of the offering thereof and related matters have been duly approved by all necessary corporate action of the Board of Directors (or a duly authorized committee thereof), so as not to violate any applicable law or result in a default under or a breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, (ii) the deposit agreement relating to the Equity Purchase Units has been duly authorized and validly executed and delivered by the Company and the depositary appointed by the Company and (iii) the Equity Purchase Units or certificates representing the Equity Purchase Units have been duly executed, authenticated, issued and delivered as contemplated by the Registration Statement and any prospectus supplement relating thereto, against payment of the consideration fixed therefor by the Board of Directors (or a duly authorized committee thereof), the Equity Purchase Units will be duly authorized and validly issued. The opinions set forth in paragraphs 1 though 9 above are subject to the following additional qualifications: (a) I express no opinion as to (1) any waiver of inconvenient forum set forth in any agreement or (2) any provision relating to judgments in currencies other than United States dollars. I express no opinion concerning whether a United States federal court would accept jurisdiction in any dispute, action, suit or proceeding arising out of, or relating to, any agreement or the transactions contemplated thereby. (b) The opinions expressed above are limited to the federal laws of the United States, the Law of the State of Delaware (and Illinois), and the Act, as currently in effect. In particular (and without limiting the generality of the foregoing) I express no opinion (1) as to the laws of any country (other than the federal laws of the United States of America) or as to the effect of such laws (whether limiting, prohibitive or otherwise) on any of the rights or obligations of any party to or beneficiary of any agreements or (2) concerning the effect (if any) of any law of any jurisdiction (except the States of Illinois and Delaware) in which any holder of any securities issued by the Company is located that limits the rate of interest that such holder may charge or collect. In addition (and without limiting the generality of the foregoing), my opinions are subject to the effects of, and I express no opinion with respect to the application of or compliance with, state securities or "blue sky" laws, statutes, rules or regulations. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to me under the heading "Legal Matters" in the Prospectus. In giving such consent, I do not thereby admit that I am within the category of persons whose consent is required under Section 7 of the Act. Sincerely, /s/ Thomas J. Sabatino, Jr. - -------------------------------- Thomas J. Sabatino, Jr. Senior Vice President and General Counsel 75 EX-23.1 5 dex231.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of Baxter International Inc. of our report dated February 14, 2002 relating to the financial statements, which appears in Baxter International Inc.'s 2001 Annual Report to Shareholders, which is incorporated by reference in its Annual Report on Form 10-K for the year ended December 31, 2001. We also consent to the incorporation by reference of our report dated February 14, 2002 relating to the financial statement schedule, which appears in such Annual Report on Form 10-K. We also consent to the references to us under the heading "Independent Accountants" in such Registration Statement. /s/ PricewaterhouseCoopers LLP Chicago, Illinois November 7, 2002 -----END PRIVACY-ENHANCED MESSAGE-----