exv4w1



 






Exhibit 4.1




EXECUTION COPY




REMARKETING AGREEMENT     




December 17, 2002




Banc of America Securities LLC

9 West 57/th/ Street

New York, New York 10019




Credit Suisse First Boston Corporation

Eleven Madison Avenue

New York, NY 10010




UBS Warburg LLC

299 Park Avenue

New York, NY 10171




Bank One Trust Company, N.A.

1 Bank One Plaza

Suite IL1-0823

Chicago, IL 60670-0823



Ladies and Gentlemen:




     This Agreement is dated as of December 17, 2002 (the “Agreement”) among
Baxter International Inc, a Delaware corporation (the “Company”), Banc of
America Securities LLC (“Banc of America”), Credit Suisse First Boston
Corporation (“CSFB”), UBS Warburg LLC (“UBS”) and Bank One Trust Company, N.A.,
a national banking association, not individually but solely as Purchase Contract
Agent (the “Purchase Contract Agent”) and as attorney-in-fact of the holders of
Purchase Contracts (as defined in the Purchase Contract Agreement referred to
below).




     SECTION 1. Definitions.



     (a) Capitalized terms used and not defined in this Agreement shall have
the meanings set forth in the Purchase Contract Agreement, dated as of December
17, 2002, between the Company and Bank One Trust Company, N.A., as Purchase
Contract Agent, as amended from time to time (the “Purchase Contract
Agreement”).



     (b) As used in this Agreement, the following terms have the following
meanings:



     “Preliminary Prospectus” means any preliminary prospectus relating to the
Remarketed Senior Notes included in the Registration Statement, including the
documents incorporated by


reference therein as of the date of such Preliminary Prospectus; and any
reference to any amendment or supplement to such Preliminary Prospectus shall be


 









 






deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus under the Exchange Act, and incorporated by reference in
such Preliminary Prospectus.




     “Prospectus” means the prospectus relating to the Remarketed Senior Notes
included in the Registration Statement, in the form in which it was first used
by the Remarketing Agent to confirm sales of the Remarketed Senior Notes in the
Remarketing, including the documents incorporated by reference therein as of the
date of such Prospectus; and any reference to any amendment or supplement to
such Prospectus shall be deemed to refer to and include any documents filed
after the date of such Prospectus under the Exchange Act, and incorporated by
reference in such Prospectus.



     “Registration Statement” means a registration statement under the
Securities Act of 1933, as amended (the “Securities Act”) prepared by the
Company pursuant to Section 5 hereunder covering, inter alia, the Remarketing of
the Remarketed Senior Notes, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in such registration
statement, and any post-effective amendments thereto.



     “Remarketed Senior Notes” means the Pledged Senior Notes and the Separate
Senior Notes, if any, subject to Remarketing as identified to the Remarketing
Agent by the Purchase Contract Agent and the Custodial Agent, respectively,
after 11:00 a.m., New York City time, on the Business Day immediately preceding
the applicable Remarketing Date, and shall include: (a) (i) in the case of the
Initial Remarketing, the Pledged Senior Notes and (ii) in the case of the Final
Remarketing, the Senior Notes of the Holders of Corporate Units who have not
notified the Purchase Contract Agent prior to 5:00 p.m. on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date of their
intention to effect a Cash Settlement of the related Purchase Contracts pursuant
to the terms of the Purchase Contract Agreement or who have so notified the
Purchase Contract Agent but failed to make the required cash payment on the
fourth Business Day immediately preceding the Purchase Contract Settlement Date
pursuant to the terms of the Purchase Contract Agreement, and (b) the Separate
Senior Notes of the holders of Separate Senior Notes, if any, who have elected
to have their Separate Senior Notes be remarketed in such Remarketing pursuant
to the terms of the Purchase Contract Agreement.



     “Remarketing” means the remarketing of the Remarketed Senior Notes pursuant
to this Remarketing Agreement.



     “Remarketing Agent” means any of Banc of America, CSFB or UBS appointed as
the Remarketing Agent by the Company pursuant to Section 2(a) hereof.



     “Remarketing Date” means either the Initial Remarketing Date (as defined
herein) or the Final Remarketing Date (as defined herein), as context requires.



     “Remarketing Materials” means the Preliminary Prospectus, the Prospectus or
any other information furnished by the Company to the Remarketing
Agent for
distribution to investors in connection with the Remarketing.



     “Senior Notes” means the senior notes due February 16, 2008 of the Company.



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     “Transaction Documents” means this Agreement, the Purchase Contract
Agreement, the Pledge Agreement and the Indenture, in each case as amended or
supplemented from time to time.



     SECTION 2. Appointment And Obligations Of The Remarketing Agent.



     (a) On or before the 20/th/ Business Day prior to the Initial Remarketing
Date (the “Appointment Date”), the Company shall send written notice appointing
any of Banc of America, CSFB or UBS as the exclusive Remarketing Agent for the
purpose of (i) Remarketing the Remarketed Senior Notes on behalf of the holders
thereof, (ii) determining, in consultation with the Company, in the manner
provided for herein and in the Purchase Contract Agreement and the Indenture,
the Reset Rate for the Senior Notes, and (iii) performing such other duties as
are assigned to the Remarketing Agent in the Transaction Documents; provided
that if the Company fails to appoint a Remarketing Agent pursuant to this
Section 2(a) by the Appointment Date, the Company shall be deemed to have
appointed Banc of America as the Remarketing Agent. Each of Banc of America,
CSFB and UBS hereby agree that if the Company chooses to appoint it as the
Remarketing Agent, it shall, subject to the terms and conditions set forth
herein, accept such appointment by the Company as the exclusive Remarketing
Agent.



     (b) Unless a Special Event Redemption has occurred prior to such date, on
the third Business Day immediately preceding November 16, 2005 (the “Initial
Remarketing Date”), the Remarketing Agent shall use its reasonable efforts to
remarket (“Initial Remarketing”) the Remarketed Senior Notes, at a price (the
“Remarketing Price”), based on the Reset Rate, equal to approximately 100.25% of
the sum of the Treasury Portfolio Purchase Price and the Separate Senior Notes
Purchase Price.



     (c) In the case of a Failed Initial Remarketing and unless a Special Event
Redemption has occurred prior to such date, on the third Business Day
immediately preceding the Purchase Contract Settlement Date (the “Final
Remarketing Date”), the Remarketing Agent shall use its reasonable efforts to
remarket (the “Final Remarketing”) the Remarketed Senior Notes at a price (the
“Final Remarketing Price”), based on the Reset Rate, equal to approximately
100.25% of the aggregate principal amount of the Remarketed Senior Notes being
remarketed in such Final Remarketing. It is understood and agreed that the
Remarketing on any Remarketing Date will be considered successful and no further
attempts will be made if the resulting proceeds are at least 100.25% of the sum
of the Treasury Portfolio Purchase Price and the Separate Senior Notes Purchase
Price, in the case of the Initial Remarketing, or 100.25% of the aggregate
principal amount of the Remarketed Senior Notes in the case of the Final
Remarketing.



     (d) In connection with each Remarketing, the Remarketing Agent shall
determine, in consultation with the Company, the rate per annum, rounded to the
nearest one-thousandth (0.001) of one percent per annum, that the Senior Notes
should bear (the “Reset Rate”) in order for the Remarketed Senior Notes to have
an aggregate market value equal to the Remarketing Price or the Final
Remarketing Price, as the case may be, and that in the sole reasonable
discretion of the Remarketing Agent will enable it to remarket all of the
Remarketed Senior Notes at the Remarketing Price or Final Remarketing Price, as
the case may be, in such Remarketing, provided that such rate shall not exceed
the maximum interest rate permitted by law.



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     (e) In the event of a Failed Remarketing or if no Senior Notes are
included in Corporate Units, and none of the holders of the Separate Senior
Notes elect to have Senior Notes be remarketed in such Remarketing, the
applicable interest rate on the Senior Notes will not be reset and will continue
to be the Coupon Rate set forth in the Indenture, as supplemented from time to
time.



     (f) If, by 4:00 p.m. (New York City time) on the applicable Remarketing
Date, the Remarketing Agent is unable to remarket all of the Remarketed Senior
Notes at the Remarketing Price or the Final Remarketing Price, as the case may
be, pursuant to the terms and conditions hereof, a Failed Remarketing shall be
deemed to have occurred, and the Remarketing Agent shall so advise, by telephone
the Depositary, the Purchase Contract Agent and the Company. Whether or not
there has been a Failed Remarketing will be determined in the sole reasonable
discretion of the Remarketing Agent. Promptly following any Failed Remarketing,
the Remarketing Agent shall return Separate Senior Notes submitted for
remarketing, if any, to the Custodial Agent for distribution to the appropriate
Holders.



     (g) In the event of a Successful Remarketing, by approximately 4:30 p.m.
(New York City time) on the applicable Remarketing Date, the Remarketing Agent
shall advise, by telephone:




     (i) the Depositary, the Purchase Contract Agent and the Company of
the Reset Rate determined by the Remarketing Agent in such Remarketing and
the number of Remarketed Senior Notes sold in such Remarketing;




     (ii) each purchaser (or the Depositary Participant thereof) of
Remarketed Senior Notes of the Reset Rate and the number of Remarketed

Senior Notes such purchaser is to purchase; and




     (iii) each such purchaser to give instructions to its Depositary
Participant to pay the purchase price on the third business day immediately
following the date of such Successful Remarketing in same day funds against
delivery of the Remarketed Senior Notes purchased through the facilities of
the Depositary.


The Remarketing Agent shall also, if required by the Securities Act or the rules
and regulations promulgated thereunder, deliver to each purchaser a Prospectus
in connection with the Remarketing.




     (h) After deducting any fees specified in Section 4 below, the proceeds
from a Successful Remarketing (i) with respect to the Senior Notes that are
components of the Corporate Units, shall be paid to the Collateral Agent in
accordance with Sections 5.07 and 7.03 of the Pledge Agreement, as the case may
be, and Section 5.02 of the Purchase Contract Agreement and (ii) with respect to
the Separate Senior Notes, shall be paid to the Custodial Agent for payment to
the holders of such Separate Senior Notes in accordance with Section 5.02 of the
Purchase Contract Agreement and Sections 5.07 and 7.03 of the Pledge Agreement.



     (i) The right of each holder of Separate Senior Notes or Corporate Units
to have Senior Notes remarketed and sold on any Remarketing Date shall be
subject to the conditions



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that (i) the Remarketing Agent conducts an Initial Remarketing pursuant to the
terms of this Agreement, (ii) a Special Event Redemption has not occurred prior
to such Remarketing Date, (iii) the Remarketing Agent is able to find a
purchaser or purchasers for Remarketed Senior Notes at the Remarketing Price or
the Final Remarketing Price, as the case may be and (iv) such purchaser or
purchasers deliver the purchase price therefor to the Remarketing Agent as and
when required.




     (j) It is understood and agreed that the Remarketing Agent shall not have
any obligation whatsoever to purchase any Remarketed Senior Notes, whether in
the Remarketing or otherwise, and shall in no way be obligated to provide funds
to make payment upon tender of Senior Notes for Remarketing or to otherwise
expend or risk its own funds or incur or to be exposed to financial liability in
the performance of its duties under this Agreement, and without limitation of
the foregoing, the Remarketing Agent shall not be deemed an underwriter of the
Remarketed Senior Notes. The Company shall similarly not be obligated in any
case to provide funds to make payment upon tender of the Senior Notes for
Remarketing.



     SECTION 3. Representations And Warranties Of The Company. The Company
represents and warrants (i) on and as of the date any Remarketing Materials are
first distributed in connection with the Remarketing (the “Commencement Date”),
(ii) on and as of the applicable Remarketing Date and (iii) on and as of the
settlement date relating to such Remarketing Date, that:



     (a) Each of the representations and warranties of the Company as set forth
in Section 1 (except for paragraphs (a) and (i) of such section) of the
Underwriting Agreement dated as of December 11, 2002 relating to the issuance of
Equity Units by the Company (the “Underwriting Agreement”) among the Company and
the Underwriters identified in Schedule A thereto, is true and correct as if
made on each of the dates specified above; provided that for purposes of this
Section 3(a), (i) any reference in such sections of the Underwriting Agreement
to the “Underwriter” or “Underwriters” or the “Representative” or
“Representatives” shall be deemed to refer to the Remarketing Agent, (ii) the
“Designated Securities” shall be deemed to refer to the Remarketed Senior Notes,
(iii) the “Registration Statement”, the “Prospectus” or the “Preliminary
Prospectus” shall be deemed to refer to such terms as defined herein, (iv) the
“First Closing Date” and “Optional Closing Date” shall be each deemed to refer
to the settlement date for the applicable Remarketing Date, (v) “this
Agreement”, the “Underwriting Agreement”, “hereof”, “herein” and all references
of similar import, shall be deemed to mean and refer to this Remarketing
Agreement and (vi) “the date hereof”, “the date of this Agreement” and all
similar references shall be deemed to refer to the date of this Remarketing
Agreement.



     (b) The Registration Statement, if any, in the form heretofore delivered
or to be delivered to the Remarketing Agent, has been declared effective by the
Commission in such form; and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission.



     (c) The documents incorporated by reference in the Prospectus, if any,
when they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact



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required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the Prospectus or
any further amendment or supplement thereto, when such documents are filed with
the Commission, will conform in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder, and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information relating to the Remarketing Agent furnished in writing to the
Company by the Remarketing Agent or its counsel expressly for use in the
Prospectus.




     (d) The Registration Statement, if any, conforms (and the Prospectus, if
any, and any further amendments or supplements to the Registration Statement or
the Prospectus, when they become effective or are filed with the Commission, as
the case may be, will conform) in all material respects to the requirements of
the Securities Act and the rules and regulations promulgated thereunder, and the
Registration Statement and the Remarketing Materials (and any amendment or
supplement thereto) as of their respective effective or filing dates and as of
the Commencement Date, applicable Remarketing Date and settlement date relating
to such Remarketing Date do not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that no
representation and warranty is made as to any statement of eligibility on Form
T-1 filed or incorporated by reference as part of the Registration Statement,
the Prospectus or the Remarketing Materials, or as to information relating to
the Remarketing Agent contained in or omitted from the Registration Statement,
the Prospectus or the Remarketing Materials in reliance upon and in conformity
with written information furnished to the Company by the Remarketing Agent.



     (e) This Agreement has been duly authorized, executed and delivered by the
Company.



     SECTION 4. Fees.



     (a) In the event of a Successful Remarketing of the Remarketed Senior
Notes prior to the Final Remarketing Date, the Remarketing Agent may retain as a
remarketing fee (the “Remarketing Fee”) an amount equal to 25 basis points
(0.25%) of the sum of the Treasury Portfolio Purchase Price and the Separate
Senior Note Purchase Price.



     (b) In the event of a Successful Final Remarketing, the Remarketing Agent
may retain as the Remarketing Fee an amount equal to 25 basis points (0.25%), of
the principal amount of the Remarketed Senior Notes.



     SECTION 5. Covenants Of The Company. If and to the extent the Remarketed
Senior Notes are required (in the view of counsel, which need not be in the form
of a written opinion, for either the Remarketing Agent or the Company) to be
registered under the Securities Act as in effect at the time of the Remarketing,
the Company covenants and agrees as follows:



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     (a) The Company shall prepare the Registration Statement and the
Prospectus, in a form approved by the Remarketing Agent, shall file any such
Prospectus pursuant to the Securities Act within the period required by the
Securities Act and the rules and regulations thereunder and shall use its best
efforts to cause the Registration Statement to be declared effective by the
Commission prior to the second Business Day immediately preceding the applicable
Remarketing Date.



     (b) The Company shall file promptly with the Commission any amendment to
the Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the reasonable judgment of the Company or the Remarketing Agent, be
required by the Securities Act or requested by the Commission.



     (c) The Company shall advise the Remarketing Agent, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Remarketing Agent with copies thereof.



     (d) The Company shall file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of a
Prospectus is required in connection with the offering or sale of the Remarketed
Senior Notes.



     (e) The Company shall advise the Remarketing Agent, promptly after it
receives notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of the Prospectus, of the
suspension of the qualification of any of the Remarketed Senior Notes for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or for
additional information, and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Prospectus or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal.



     (f) The Company shall furnish promptly to the Remarketing Agent such
copies of the following documents as the Remarketing Agent shall reasonably
request: (A) conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case excluding
exhibits); (B) the Preliminary Prospectus and any amended or supplemented
Preliminary Prospectus, (C) the Prospectus and any amended or supplemented
Prospectus; and (D) any document incorporated by reference in the Prospectus
(excluding exhibits thereto); and, if at any time when delivery of a prospectus
is required in connection with the Remarketing, any event shall have occurred as
a result of which the Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered, not
misleading, or if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to comply with
the Securities Act or the Exchange Act, to notify the



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Remarketing Agent and, upon its request, to file such document and to prepare
and furnish without charge to the Remarketing Agent and to any dealer in
securities as many copies as the Remarketing Agent may from time to time
reasonably request of an amended or supplemented Prospectus that will correct
such statement or omission or effect such compliance.




     (g) Prior to filing with the Commission (A) any amendment to the
Registration Statement or supplement to the Prospectus or (B) any Prospectus
pursuant to Rule 424 under the Securities Act, the Company shall furnish a copy
thereof to the Remarketing Agent and counsel to the Remarketing Agent; and shall
not file any such amendment or supplement that shall be reasonably disapproved
by the Remarketing Agent promptly after reasonable notice;



     (h) As soon as practicable, but in any event not later than eighteen
months, after the effective date of the Registration Statement, the Company
shall make “generally available to its security holders” an “earnings statement”
of the Company and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Securities Act and the rules and regulations thereunder
(including, at the option of the Company, Rule 158 under the Securities Act).
The terms “generally available to its security holders” and “earnings statement”
shall have the meanings set forth in Rule 158 under the Securities Act; and



     (i) The Company shall take such action as the Remarketing Agent may
reasonably request in order to qualify the Remarketed Senior Notes for offer and
sale under the securities or “blue sky” laws of such jurisdictions as the
Remarketing Agent may reasonably request; provided that in no event shall the
Company be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction.



     (j) The Company shall furnish the Remarketing Agent with such information
and documents as the Remarketing Agent may reasonably request in connection with
the transactions contemplated hereby, and to make reasonably available to the
Remarketing Agent and any accountant, attorney or other advisor retained by the
Remarketing Agent such information that parties would customarily require in
connection with a due diligence investigation conducted in accordance with
applicable securities laws and to cause the Company’s officers, directors,
employees and accountants to participate in all such discussions and to supply
all such information reasonably requested by any such Person in connection with
such investigation.



     SECTION 6. Payment Of Expenses. The Company agrees to pay (a) all costs
incident to the preparation and printing of the Registration Statement, if any,
any Prospectus and any other Remarketing Materials and any amendments or
supplements thereto, (b) all costs of distributing the Registration Statement,
if any, any Prospectus and any other Remarketing Materials and any amendments or
supplements thereto, (c) any fees and expenses of qualifying the Remarketed
Senior Notes under the securities laws of the several jurisdictions as provided
in Section 5(i) and of preparing, printing and distributing a Blue Sky
Memorandum, if any (including any related fees and expenses of counsel to the
Remarketing Agent), (d) all other costs and expenses incident to the performance
of the obligations of the Company hereunder and the Remarketing Agent hereunder
and (e) the reasonable fees and expenses of counsel to the Remarketing Agent in
connection with their duties hereunder.



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     SECTION 7. Conditions To The Remarketing Agent’s Obligation. The
obligations of the Remarketing Agent hereunder shall be subject to the following
conditions:



     (a) The representations and warranties of the Company contained herein
shall be true and correct in all material respects on and as of the applicable
Remarketing Date and the settlement date for the applicable Remarketing Date,
and the Company, the Purchase Contract Agent and the Collateral Agent shall have
performed in all material respects all covenants and agreements contained herein
or in the Purchase Contract Agreement or Pledge Agreement to be performed on
their part at or prior to such date.



     (b) (i) Trading generally shall not have been suspended or materially
limited on the New York Stock Exchange, (ii) trading of any securities of the
Company shall not have been materially suspended or limited on the New York
Stock Exchange, (iii) a general moratorium on commercial banking activities in
New York shall not have been declared by either Federal or New York State
authorities, or (iv) there shall not have occurred a material adverse change in
the financial markets, any outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war or other calamity or crisis, if the effect of any such event specified in
this clause (b) in the judgment of the Remarketing Agent makes it impracticable
or inadvisable to proceed with the Remarketing or the delivery of the Remarketed
Senior Notes on the terms and in the manner contemplated in the Transaction
Documents.



     (c) The Prospectus, if any, shall have been timely filed with the
Commission; no stop order suspending the effectiveness of the Registration
Statement, if any, or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the Commission; and
any request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been complied
with.



     (d) The Company shall have furnished to the Remarketing Agent a
certificate, dated the applicable Remarketing Date, of the Chief Executive
Officer and the Treasurer satisfactory to the Remarketing Agent stating that:
(1) no order suspending the effectiveness of the Registration Statement, if any,
or prohibiting the sale of the Remarketed Senior Notes is in effect, and no
proceedings for such purpose are pending before or, to the knowledge of such
officers, threatened by the Commission; (2) the representations and warranties
of the Company in Section 3 are true and correct on and as of the applicable
Remarketing Date and the Company has performed in all material respects all
covenants and agreements contained herein to be performed on its part at or
prior to such Remarketing Date; and (3) the Registration Statement, as of its
effective date, and the Remarketing Materials, as of their respective dates, did
not contain any untrue statement of a material fact and did not omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading and the Prospectus did not contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.



     (e) On the applicable Remarketing Date, the Remarketing Agent shall have
received a letter addressed to the Remarketing Agent and dated such date, in
form and substance satisfactory to the Remarketing Agent, of
PricewaterhouseCoopers LLP, the independent



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accountants of the Company, containing statements and information of the type
ordinarily included in accountants’ “comfort letters” with respect to certain
financial information contained in the Remarketing Materials, if any.




     (f) The General Counsel for the Company shall have furnished to the
Remarketing Agent its opinion, addressed to the Remarketing Agent and dated the
Remarketing Date, in form and substance reasonably satisfactory to the
Remarketing Agent addressing such matters as are set forth in such counsel’s
opinion furnished pursuant to Section 5(d) of the Underwriting Agreement,
adapted as necessary to relate to the securities being remarketed hereunder and
to the Remarketing Materials, if any, or to any changed circumstances or events
occurring subsequent to the date of this Agreement, such adaptations being
reasonably acceptable to counsel to the Remarketing Agent.



     (g) Davis Polk & Wardwell, counsel for the Remarketing Agent, shall have
furnished to the Remarketing Agent its opinion, addressed to the Remarketing
Agent and dated the applicable Remarketing Date, in form and substance
satisfactory to the Remarketing Agent.



     (h) Subsequent to the execution and delivery of this Agreement and prior
to the applicable Remarketing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate an
improvement, in the rating accorded any of the Company’s securities by any
“nationally recognized statistical rating organization,” as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.



     (i) The Senior Notes shall not have been called for redemption following
the occurrence of a Special Event.


If any condition specified in this Section 7 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Remarketing
Agent by notice to the Company at any time on or prior to the applicable
Remarketing Date, which termination shall be without liability on the part of
any party to any other party, except that Section 6, Section 8 and Section 9
shall at all times be effective and shall survive such termination.




     SECTION 8. Indemnification.



     (a) The Company agrees to indemnify and hold harmless the Remarketing
Agent, its officers and employees, and each person, if any, who controls the
Remarketing Agent within the meaning of the Securities Act and the Exchange Act
against any loss, claim, damage, liability or expense, as incurred, to which the
Remarketing Agent or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such loss, claim, damage, liability or expense (or actions
in respect thereof as contemplated below) arises out of or is based (i) upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including any information
deemed to be a part thereof under the Securities Act, or the omission or alleged
omission therefrom of a material fact, in each case, required to be stated
therein or necessary to make the statements



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therein not misleading; or (ii) upon any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Prospectus or any other Remarketing Materials (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact, in
each case, necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; or (iii) in whole
or in part upon any inaccuracy in the representations and warranties of the
Company contained herein; or (iv) in whole or in part upon any failure of the
Company to perform its obligations hereunder or under law; or (v) any act or
failure to act or any alleged act or failure to act by the Remarketing Agent in
connection with, or relating in any manner to, the Remarketed Senior Notes or
the Remarketing contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon any matter covered by clause (i) or (ii) above, and to reimburse the
Remarketing Agent and each such controlling person for any and all expenses
(including the fees and disbursements of counsel chosen by the Remarketing
Agent) as such expenses are reasonably incurred by the Remarketing Agent or such
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not
apply to any loss, claim, damage, liability or expense to the extent, but only
to the extent, arising out of or based upon any 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 the Remarketing
Agent expressly for use in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any other Remarketing Materials (or any amendment
or supplement thereto); and provided, further, that with respect to any
Preliminary Prospectus, the foregoing indemnity agreement shall not inure to the
benefit of the Remarketing Agent if the person asserting any loss, claim,
damage, liability or expense purchased Remarketed Senior Notes, or any person
controlling the Remarketing Agent, if copies of the Prospectus were timely
delivered to the Remarketing Agent and a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of the Remarketing
Agent to such person, if required by law so to have been delivered, at or prior
to the written confirmation of the sale of the Remarketed Senior Notes to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or expense. The
indemnity agreement set forth in this Section 8(a) shall be in addition to any
liabilities that the Company may otherwise have.



     (b) The Remarketing Agent agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Securities Act or the Exchange Act, against any loss, claim, damage,
liability or expense, as incurred, to which the Company, or any such director,
officer or controlling person may become subject, under the Securities Act, the
Exchange Act, or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Remarketing Agent),
insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based upon any untrue or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any other Remarketing
Materials (or any amendment or supplement thereto), or arises out of or is based
upon the omission or alleged omission to state



11









 







therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any other Remarketing Materials (or any amendment
or supplement thereto), in reliance upon and in conformity with written
information furnished to the Company by the Remarketing Agent expressly for use
therein; and to reimburse the Company, or any such director, officer or
controlling person for any legal and other expense reasonably incurred by the
Company, or any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. The Company hereby acknowledges that the
only information that the Remarketing Agent has furnished to the Company
expressly for use in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any other Remarketing Materials (or any amendment or supplement
thereto) is the information set forth in a certificate to be provided by the
Remarketing Agent on or prior to the Remarketing Date. The indemnity agreement
set forth in this Section 8(b) shall be in addition to any liabilities that each
Underwriter may otherwise have.



     (c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof,
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this Section 8 or to
the extent it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it shall elect, jointly with all other indemnifying parties similarly notified,
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party’s election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with local
counsel), approved by the indemnifying party (the Remarketing Agent in the case
of Section 8(b)), representing the indemnified parties who are parties to such
action) or (ii) the



12









 







indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.



     (d) The indemnifying party under this Section 8 shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there is a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by Section 8(c) hereof, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement, compromise or consent to the entry
of judgment in any pending or threatened action, suit or proceeding in respect
of which any indemnified party is or could have been a party and indemnity was
or could have been sought hereunder by such indemnified party, unless such
settlement, compromise or consent (x) includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding and (y) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.



     SECTION 9. Contribution.



     If the indemnification provided for in Section 8 is for any reason held to
be unavailable to or otherwise insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount paid or payable by such indemnified party, as incurred, as a
result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Remarketing Agent, on
the other hand, from the Remarketing of the Remarketed Senior Notes pursuant to
this Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, on the one hand, and the Remarketing Agent, on the other
hand, in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Remarketing Agent, on the other hand, in connection with the Remarketing
of the Remarketed Senior Notes pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the
Remarketing of the Remarketed Senior Notes pursuant to this Agreement (before
deducting expenses) received by the Company, and the total Remarketing Fee
received by the Remarketing Agent, in each case as set forth on the front cover
page of the Prospectus, bear to the aggregate Remarketing Price of the
Remarketed Senior Notes as set forth on such cover. The



13









 







relative fault of the Company, on the one hand, and the Remarketing Agent, on
the other hand, shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact or any such inaccurate or alleged
inaccurate representation or warranty relates to information supplied by the
Company, on the one hand, or the Remarketing Agent, on the other hand, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.



     The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.



     The provisions set forth in Section 8(c) with respect to notice of
commencement of any action shall apply if a claim for contribution is to be made
under this Section 9; provided, however, that no additional notice shall be
required with respect to any action for which notice has been given under
Section 8(c) for purposes of indemnification.



     The Company and the Remarketing Agent agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 9.



     Notwithstanding the provisions of this Section 9, the Remarketing Agent
shall not be required to contribute any amount in excess of the amount by which
the Remarketing Fee exceeds the amount of any damages which the Remarketing
Agent 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 Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9, each officer and
employee of the Remarketing Agent and each person, if any, who controls the
Remarketing Agent within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as the Remarketing Agent, 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 the Securities Act and the Exchange Act shall have the same rights to
contribution as the Company.



     SECTION 10. Resignation And Removal Of The Remarketing Agent.



     Banc of America, CSFB or UBS (the “Remarketing Agent Candidates”) may
resign and be discharged from their duties and obligations hereunder, and the
Company may remove any of the Remarketing Agent Candidates, by giving 30 days’
prior written notice, in the case of a resignation, to the Company and the
Depositary and, in the case of a removal, to the removed Remarketing Agent
Candidate and the Depositary; provided, however, that if only one Remarketing
Agent Candidate remains:



     (a) such Remarketing Agent Candidate may not resign without reasonable
cause; and



14









 





     (b) no such resignation nor any such removal shall become effective until
the Company shall have appointed at least one nationally recognized
broker-dealer as successor Remarketing Agent and such successor Remarketing
Agent shall have entered into a remarketing agreement with the Company, in which
it shall have agreed to conduct the Remarketing in accordance with the
Transaction Documents in all material respects.


In any such case, the Company will use commercially reasonable efforts to
appoint a successor Remarketing Agent and enter into such a remarketing
agreement with such person as soon as reasonably practicable. The provisions of
Section 8 and Section 9 shall survive the resignation or removal of any
Remarketing Agent Candidate pursuant to this Agreement.




     SECTION 11. Dealing In Securities. The Remarketing Agent, when acting as a
Remarketing Agent or in its individual or any other capacity, may, to the extent
permitted by law, buy, sell, hold and deal in any of the Remarketed Senior
Notes, Corporate Units, Treasury Units or any of the securities of the Company
(together, the “Securities”). The Remarketing Agent may exercise any vote or
join in any action which any beneficial owner of such Securities may be entitled
to exercise or take pursuant to the Indenture with like effect as if it did not
act in any capacity hereunder. The Remarketing Agent, in its individual
capacity, either as principal or agent, may also engage in or have an interest
in any financial or other transaction with the Company as freely as if it did
not act in any capacity hereunder.



     SECTION 12. Remarketing Agent’s Performance; Duty Of Care. The duties and
obligations of the Remarketing Agent shall be determined solely by the express
provisions of this Agreement and the Transaction Documents. No implied covenants
or obligations of or against the Remarketing Agent shall be read into this
Agreement or any of the Transaction Documents. In the absence of bad faith on
the part of the Remarketing Agent, the Remarketing Agent may conclusively rely
upon any document furnished to it, as to the truth of the statements expressed
in any of such documents. The Remarketing Agent shall be protected in acting
upon any document or communication reasonably believed by it to have been
signed, presented or made by the proper party or parties except as otherwise set
forth herein. The Remarketing Agent, acting under this Agreement, shall incur no
liability to the Company or to any holder of Remarketed Senior Notes in its
individual capacity or as Remarketing Agent for any action or failure to act, on
its part in connection with a Remarketing or otherwise, except if such liability
is judicially determined to have resulted from its failure to comply with the
material terms of this Agreement or the gross negligence or willful misconduct
on its part. The provisions of this Section 12 shall survive the termination of
this Agreement and shall survive the resignation or removal of any Remarketing
Agent pursuant to this Agreement.



     SECTION 13. Termination. This Agreement shall automatically terminate (i)
as to the Remarketing Agent on the effective date of the resignation or removal
of the Remarketing Agent pursuant to Section 10 and (ii) on the earlier of (x)
any Special Event Redemption Date and (y) the Purchase Contract Settlement Date.
If this Agreement is terminated pursuant to any of the other provisions hereof,
except as otherwise provided herein, the Company shall not be under any
liability to the Remarketing Agent and the Remarketing Agent shall not be under
any liability to the Company, except that if this Agreement is terminated by the
Remarketing Agent because of any failure or refusal on the part of the Company
to comply with the terms or to fulfill any of the conditions of this Agreement,
the Company will reimburse the Remarketing Agent for



15









 







all of its out-of-pocket expenses (including the fees and disbursements of its
counsel) reasonably incurred by it. Section 8, Section 9 and Section 12 hereof
shall survive the termination of this Agreement or the resignation or removal of
the Remarketing Agent.



     SECTION 14. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:



     (a) if to the Remarketing Agent Candidates, shall be delivered or sent by
mail, telex or facsimile transmission to:


Banc of America Securities LLC

9 West 57/th/ Street

New York, NY 10019

Telecopier No.: 212-847-5124

Attention: Eric Hambleton



Credit Suisse First Boston Corporation

Eleven Madison Avenue

New York, NY 10010

Telecopier No.: 212-325-4296

Attention: Legal Department



UBS Warburg LLC

299 Park Avenue

New York, NY 10171

Telecopier No.: 212-821-3285

Attention: Legal Department




     (b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to Baxter International Inc., One Baxter Parkway,
Deerfield, Illinois 60015, Telecopier No.: 847-948-3827; Attention: General
Counsel; and



     (c) if to the Purchase Contract Agent, shall be delivered or sent by mail,
telex or facsimile transmission to Bank One Trust Company, N.A., 1 Bank One
Plaza, Suite IL1-0823, Chicago, Illinois 60670-0823; Telecopier No.:
312-336-8840; Attention: Corporate Trust Administration.


Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.




     SECTION 15. Persons Entitled To Benefit Of Agreement. This Agreement shall
inure to the benefit of and be binding upon each party hereto and its respective
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (x) the representations, warranties,
indemnities and agreements of the Company contained in this Agreement shall also
be deemed to be for the benefit of the Remarketing Agent and the person or
persons, if any, who control the Remarketing Agent within the meaning of Section
15 of the Securities Act and (y) the indemnity agreement of the Remarketing
Agent



16









 







contained in Section 8 of this Agreement shall be deemed to be for the benefit
of the Company’s directors and officers who sign the Registration Statement, if
any, and any person controlling the Company within the meaning of Section 15 of
the Securities Act. Nothing contained in this Agreement is intended or shall be
construed to give any person, other than the persons referred to herein, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.



     SECTION 16. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Remarketing Agent contained in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive any Remarketing and shall remain in full force and
effect, regardless of any investigation made by or on behalf of any of them or
any person controlling any of them.



     SECTION 17. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of New York, without regard to conflicts
of laws principles.



     SECTION 18. Judicial Proceedings.



     (a) Each party hereto expressly accepts and irrevocably submits to the
non-exclusive jurisdiction of the United States Federal or New York State court
sitting in the Borough of Manhattan, The City of New York, New York, over any
suit, action or proceeding arising out of or relating to this Agreement or the
Securities. To the fullest extent it may effectively do so under applicable law,
each party hereto irrevocably waives and agrees not to assert, by way of motion,
as a defense or otherwise, any claim that it is not subject to the jurisdiction
of any such court, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding brought in any such court
and any claim that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum.



     (b) Each party hereto agrees, to the fullest extent that it may
effectively do so under applicable law, that a judgment in any suit, action or
proceeding of the nature referred to in Section 18(a) brought in any such court
shall be conclusive and binding upon such party, subject to rights of appeal and
may be enforced in the courts of the United States of America or the State of
New York (or any other court the jurisdiction to which the Company is or may be
subject) by a suit upon such judgment.



     SECTION 19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.



     SECTION 20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.



     SECTION 21. Severability. If any provision of this Agreement shall be held
or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as
applied in any particular case in any or all jurisdictions because it conflicts
with any provisions of any constitution, statute, rule



17









 







or public policy or for any other reason, then, to the extent permitted by law,
such circumstances shall not have the effect of rendering the provision in
question invalid, inoperative or unenforceable in any other case, circumstance
or jurisdiction, or of rendering any other provision or provisions of this
Agreement invalid, inoperative or unenforceable to any extent whatsoever.



     SECTION 22. Amendments. This Agreement may be amended by an instrument in
writing signed by the parties hereto. The Company agrees that it will not enter
into, cause or permit any amendment or modification of the Transaction Documents
or any other instruments or agreements relating to the Senior Notes or the
Corporate Units that would in any way adversely affect the rights, duties or
obligations of any of Banc of America, CSFB or UBS, each as a potential
Remarketing Agent, without the prior written consent of Banc of America, CSFB
and UBS.



     SECTION 23. Successors And Assigns. The rights and obligations of the
Company hereunder may not be assigned or delegated to any other Person without
the prior written consent of Banc of America, CSFB and UBS. The rights and
obligations of the Remarketing Agent hereunder may not be assigned or delegated
to any other Person (other than an affiliate of the Remarketing Agent) without
the prior written consent of the Company.



     If the foregoing correctly sets forth the agreement by and between the Company,
the Remarketing Agent Candidates and the Purchase Contract Agent, please
indicate your acceptance in the space provided for that purpose below.



[SIGNATURES ON THE FOLLOWING PAGE]




18









 






	 	 	 
	 

	 	Very truly yours,
	 
	 	 
	 

	 	BAXTER INTERNATIONAL INC.
	 
	 	 
	 

	 	By:                                                             
	 

	 	      Name:
	 
	 	 
	 

	 	      Title:
	CONFIRMED AND ACCEPTED:
	 	 
	 
	 	 
	BANC OF AMERICA SECURITIES LLC
	 	 
	 
	 	 
	By:                                                             
	 	 
	      Name:
	 	 
	 
	 	 
	      Title:
	 	 
	 
	 	 
	CREDIT SUISSE FIRST BOSTON CORPORATION
	 	 
	 
	 	 
	By:                                                             
	 	 
	      Name:
	 	 
	 
	 	 
	      Title:
	 	 
	 
	 	 
	UBS WARBURG LLC
	 	 
	 
	 	 
	By:                                                             
	 	 
	      Name:
	 	 
	 
	 	 
	      Title:
	 	 
	 
	 	 
	 
	 	 
	Bank One Trust Company, N.A.,
	 	 
	 
	 	 
	not individually but solely as Purchase Contract Agent

and as attorney-in-fact for the Holders of the Purchase Contracts
	 	 
	 
	 	 
	By:                                                             
	 	 
	      Name:
	 	 
	 
	 	 
	      Title:
	 	 







 









 






SUPPLEMENTAL REMARKETING AGREEMENT




November 10, 2005




Banc of America Securities LLC

9 West 57th Street

New York, New York 10019




J.P. Morgan Securities Inc.

270 Park Avenue

New York, New York 10017




UBS Securities LLC

299 Park Avenue

New York, New York 10171




Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013




Credit Suisse First Boston LLC

Eleven Madison Avenue

New York, New York 10010




J.P. Morgan Trust Company, National Association

277 W. Monroe Street

Suite 2600

Chicago, Illinois 60606

Attention: Worldwide Securities Services




Ladies and Gentlemen:




     This Supplemental Remarketing Agreement is dated as of November 10, 2005 (the
“Supplemental Agreement”) by and among Baxter International Inc., a Delaware corporation
(the “Company”), Banc of America Securities LLC (“Banc of America”), J.P. Morgan
Securities Inc. (“J.P. Morgan”), UBS Securities LLC (“UBS”), Citigroup Global
Markets Inc. (“Citigroup”), Credit Suisse First Boston LLC (“CSFB”) and J.P. Morgan
Trust Company, National Association, a national banking association (successor in interest to Bank
One Trust Company, N.A.), not individually but solely as purchase contract agent (the “Purchase
Contract Agent”) and as attorney-in-fact of the holders of the Purchase Contracts (as defined
in the Purchase Contract Agreement referred to below). This Supplemental Agreement supplements the
Remarketing Agreement, dated as of December 17, 2002 (the “Remarketing Agreement”), among
the Company, Banc of America, CSFB, UBS and the Purchase Contract Agent, as



 









 





supplemented by a
letter agreement, dated October 13, 2005 (the “Letter Agreement”), appointing Banc of
America, J.P. Morgan, UBS, Citigroup and CSFB as Remarketing Agents (as defined below). Unless
modified or superseded by provisions of this Supplemental Agreement, the provisions of the
Remarketing Agreement shall apply to the Remarketing (as defined below). If there is any
inconsistency between the Remarketing Agreement and this Supplemental Agreement, the provisions in
this Supplemental Agreement shall govern.



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



SECTION 1.




Definitions.




     (a) Capitalized terms used and not defined in this Supplemental Agreement shall have the
meanings assigned to them in the Remarketing Agreement or, if not defined therein, in the Purchase
Contract Agreement, dated as of December 17, 2002, between the Company and the Purchase Contract
Agent (the “Purchase Contract Agreement”). If there is any inconsistency between a term
defined in this Supplemental Agreement and a term defined in the Remarketing Agreement, the
definition in this Supplemental Agreement shall govern.



     (b) As used in this Supplemental Agreement, the following terms shall have the following
meanings:



     “462(b) Registration Statement” means the registration statement on Form S-3 (File No.
333-101779) of the Company filed with the Securities and Exchange Commission (the
“Commission”) on December 11, 2002 pursuant to Rule 462(b) under the Securities Act of 1933
(the “Securities Act”) as amended by Post-Effective Amendment No. 1 thereto as declared
effective by the Commission on June 14, 2005.



     “Base Prospectus” means the prospectus, dated June 14, 2005, relating to the offering
of securities of the Company, which forms a part of and is included in the Registration Statement.



     “Base Registration Statement” means the registration statement on Form S-3 (File No.
333-101122) of the Company relating to the Senior Notes and other securities of the Company filed
with the Commission on November 12, 2002 under the Securities Act, allowing for delayed offerings
pursuant to Rule 415 under the Securities Act, and declared effective by the Commission at 9:16
a.m. on November 20, 2002, as amended by Post-Effective Amendment No. 1 thereto as declared
effective by the Commission on June 14, 2005.



     “Final Remarketing Prospectus” means the final remarketing prospectus supplement to be
dated on or about November 10, 2005, which relates to the Remarketing, in the form in which it is
first used by the Remarketing Agents to confirm sales of the Remarketed Senior Notes in the
Remarketing, together with the Base Prospectus, and shall include the documents filed by the
Company with the Commission under the Securities Exchange Act of 1934 (the “Exchange Act”)
and incorporated or deemed to be incorporated by reference in such Final Remarketing Prospectus.



2









 





     “Indenture” means the Indenture, dated as of April 26, 2002, between the Company and
J.P. Morgan Trust Company, National Association (successor in interest to Bank One Trust Company,
N.A.), as trustee (the “Trustee”), as supplemented by Supplemental Indenture No. 1, dated
as of December 17, 2002, between the Company and the Trustee.



     “Preliminary Remarketing Prospectus” means the preliminary remarketing prospectus
supplement, dated November 9, 2005, which describes the Remarketing and is used prior to the filing
of the Final Remarketing Prospectus, together with the Base Prospectus, and shall include the
documents filed by the Company with the Commission under the Exchange Act and incorporated or
deemed to be incorporated by reference in such Preliminary Remarketing Prospectus.



     “Registration Statement” means the Base Registration Statement together with the
462(b) Registration Statement and including the Base Prospectus and the documents filed by the
Company under the Exchange Act that are incorporated or deemed to be incorporated by reference
therein.



     “Remarketed Senior Notes” means the Pledged Senior Notes and the Separate Senior
Notes, if any, subject to the Remarketing as identified to the Remarketing Agents by the Purchase
Contract Agent and the Custodial Agent, respectively, after 11:00 a.m., New York City time, on the
Business Day immediately preceding the Remarketing Date pursuant to the terms of the Purchase
Contract Agreement.



     “Remarketing” means the remarketing of the Remarketed Senior Notes on the Remarketing
Date pursuant to the Remarketing Agreement, as supplemented by this Supplemental Agreement.



     “Remarketing Agents” means Banc of America, J.P. Morgan, UBS, Citigroup and
CSFB, as remarketing agents.




     “Remarketing Date” means November 10, 2005.



     “Remarketing Materials” means the Preliminary Remarketing Prospectus, the Final
Remarketing Prospectus or any other information furnished by the Company to the Remarketing Agents
for distribution to investors in connection with the Remarketing.



     “Senior Notes” means the senior notes due February 16, 2008 of the Company.



     “Successful Remarketing” means the Remarketing of the Pledged Senior Notes and
Separate Senior Notes at a price equal to or greater than the sum of 100.25% of the Treasury
Portfolio Purchase Price and the Separate Senior Notes Purchase Price.



     “Transaction Documents” means this Supplemental Agreement, the Remarketing Agreement,
the Purchase Contract Agreement, the Pledge Agreement, the Senior Notes and the Indenture, in each
case as amended or supplemented from time to time.



3









 





SECTION 2.




Appointment and Obligations of the Remarketing Agents.




     (a) The Company hereby appoints the Remarketing Agents as the exclusive remarketing agents,
and each of the Remarketing Agents, severally and not jointly, agrees to accept its appointment as
one of the exclusive Remarketing Agents, for the purposes of (i) Remarketing the Remarketed Senior
Notes on behalf of the holders thereof in the manner set forth in Section 2(b) herein, (ii)
determining, in consultation with the Company, in the manner provided for herein and in the
Purchase Contract Agreement and the Indenture, the Reset Rate (as defined below) for the Senior
Notes and (iii) performing such other duties as are assigned to the Remarketing Agents in the
Transaction Documents.



     (b) Subject to the terms and conditions and in reliance upon the representations and
warranties set forth or incorporated by reference herein, each of the Remarketing Agents agrees,
severally and not jointly, to use its reasonable efforts to remarket the Remarketed Senior Notes at
a price per note, based on the Reset Rate, such that the aggregate proceeds of the Remarketing
shall be equal to approximately 100.25% of the sum of the Treasury Portfolio Purchase Price and the
Separate Senior Notes Purchase Price (the “Remarketing Price”).



     (c) In connection with the Remarketing, the Remarketing Agents shall determine, in
consultation with the Company, the rate per annum, rounded to the nearest one-thousandth (0.001) of
one percent per annum, that the Senior Notes should bear (the “Reset Rate”) in order for
the Remarketed Senior Notes to have an aggregate market value equal to the Remarketing Price and
that in the sole reasonable discretion of the Remarketing Agents will enable all of the Remarketed
Senior Notes to be remarketed at the Remarketing Price.



     (d) If, by 4:00 p.m. (New York City time) on the Remarketing Date, the Remarketing Agents are
unable to remarket all of the Remarketed Senior Notes at the Remarketing Price pursuant to the
terms and conditions hereof, a Failed Remarketing shall be deemed to have occurred, and the
Remarketing Agents shall so advise, by telephone, the Depositary, the Purchase Contract Agent and
the Company. Whether or not there has been a Failed Remarketing will be determined in the sole
reasonable discretion of the Remarketing Agents.



     (e) In the event of a Successful Remarketing, by approximately 4:30 p.m. (New York City time)
on the Remarketing Date, the Remarketing Agents shall advise, by telephone:




     (i) the Depositary, the Purchase Contract Agent, the Trustee and the Company of the
Reset Rate determined by the Remarketing Agents in such Remarketing and the aggregate
principal amount of Remarketed Senior Notes sold in such Remarketing;




     (ii) each purchaser (or the Depositary Participant thereof) of Remarketed Senior Notes
of the Reset Rate and the number of Remarketed Senior Notes such purchaser is to purchase;
and



4









 






     (iii) each such purchaser to give instructions to its Depositary Participant to pay the
purchase price on the third Business Day immediately following the Remarketing Date in same
day funds against delivery of the Remarketed Senior Notes purchased through the facilities
of the Depositary.


The Remarketing Agents shall also, if required by the Securities Act or the rules and regulations
of the Commission promulgated thereunder, deliver to each purchaser a Final Remarketing Prospectus
in connection with the Remarketing.




     (f) Delivery of payment for the Remarketed Senior Notes by the purchasers thereof identified
by the Remarketing Agents and payment of the Remarketing Fee (as defined below) shall be made at
10:00 a.m., New York City time, at the offices of Sidley Austin Brown & Wood LLP, Chase Tower, 10
South Dearborn Street, Chicago, Illinois 60603 on November 16, 2005, which date and time may be
postponed by agreement between the Remarketing Agents and the Company (the date on which such
settlement occurs being referred to herein as the “Remarketing Closing Date”). Delivery of
the Remarketed Senior Notes and payment of the Remarketing Fee shall be made to the Remarketing
Agents against payment by the respective purchasers of the Remarketed Senior Notes of the
consideration therefor specified herein, which consideration shall be paid to the Collateral Agent
(in its role as such and, if applicable, as Custodial Agent) for the account of the persons
entitled thereto by certified or official bank check or checks drawn on or by a New York Clearing
House bank and payable in immediately available funds or in immediately available funds by wire
transfer to an account or accounts designated by the Collateral Agent.



     (g) It is understood and agreed that the Remarketing Agents shall not have any obligation
whatsoever to purchase any Remarketed Senior Notes, whether in the Remarketing or otherwise, and
shall in no way be obligated to provide funds to make payment upon tender of Senior Notes for
Remarketing or to otherwise expend or risk their own funds or incur or to be exposed to financial
liability in the performance of their duties under this Supplemental Agreement, and without
limitation of the foregoing, the Remarketing Agents shall not be deemed underwriters of the
Remarketed Senior Notes. The Company shall similarly not be obligated in any case to provide funds
to make payment upon tender of the Senior Notes for Remarketing.



     (h) The Company acknowledges and agrees that the Remarketing Agents are acting solely in the
capacity of an arm’s length contractual counterparty to the Company with respect to the Remarketing
contemplated hereby, the transactions contemplated by the Remarketing Agreement as supplemented by
this Supplemental Agreement or any matters leading up to such transactions, and not as a financial
advisor or a fiduciary to, or an agent of, the Company, its management, stockholders, creditors or
any other person. Additionally, the Remarketing Agents are not advising the Company, its
management, stockholders, creditors or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company shall consult with its own
advisors concerning such matters and shall be responsible for making their own independent
investigation and appraisal of the transactions contemplated hereby, and the Remarketing Agents
shall have no responsibility or liability to the Company with respect thereto. Any review by the
Remarketing Agents of the Company, the transactions contemplated hereby or other matters relating
to such transactions will be performed solely for the benefit of



5









 




the Remarketing Agents and shall
not be on behalf of the Company, its management, stockholders, creditors or any other person.




SECTION 3.




Representations and Warranties of the Company.




     The provisions of this Section 3 shall supersede and replace in their entirety those
provisions of Section 3 in the Remarketing Agreement with respect to the Remarketing. The Company
represents and warrants that:



     (a) The Registration Statement, in the form heretofore delivered to the Remarketing Agents,
has been declared effective by the Commission in such form; and no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding for that purpose has
been initiated or, to the Company’s knowledge, threatened by the Commission.



     (b) The documents incorporated, or deemed to be incorporated, by reference in the Final
Remarketing Prospectus or the Registration Statement, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission promulgated thereunder, and, when read
together with the other information in the Final Remarketing Prospectus, at the date of the Final
Remarketing Prospectus, will not include 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.



     (c) As of the effective date of Post-Effective Amendment No. 1 thereto, the Registration
Statement complied in all material respects with the requirements of the Securities Act and the
rules and regulations of the Commission promulgated thereunder, and did not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and as of the date of the Final
Remarketing Prospectus and as of the Remarketing Closing Date, the Final Remarketing Prospectus
will not include any untrue statement of a material fact or omit to state a material fact required
to be stated therein or 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 Company makes
no representation and warranty as to any statement of eligibility on Form T-1 filed or incorporated
by reference as part of the Registration Statement or the Final Remarketing Prospectus, or as to
information relating to the Remarketing Agents contained in or omitted from the Registration
Statement or the Final Remarketing Prospectus in reliance upon and in conformity with written
information furnished to the Company by the Remarketing Agents expressly for use therein.



     (d) Each of this Supplemental Agreement and the Remarketing Agreement has been duly
authorized, executed and delivered by the Company.



     (e) The Indenture has been duly authorized by the Company and qualified under the Trust
Indenture Act of 1939, as amended (the “Trust Indenture Act”) and (assuming due
authorization, execution and delivery of the Indenture by the Trustee) constitutes a valid and



6









 




binding agreement of the Company enforceable against the Company in accordance with its terms,
except to the extent that the enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws affecting creditors’ rights
generally and (ii) general principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law). The Indenture conforms in all material respects to the
description thereof contained in the Final Remarketing Prospectus.




     (f) The Senior Notes have been duly authorized by the Company, and (assuming due
authentication of the Senior Notes by the Trustee) constitute valid and binding obligations of the
Company, entitled to the benefits provided by the Indenture and enforceable against the Company in
accordance with their terms, except to the extent that the enforcement thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors’ rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or at law). The
Senior Notes conform in all material respects to the description thereof contained in the Final
Remarketing Prospectus.



     (g) Since the respective dates as of which information is given in the Registration Statement
and the Final Remarketing Prospectus, except as otherwise stated therein or contemplated thereby,
(i) there has been no 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 (a
“Material Adverse Effect”) and (ii) there has been no 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.



     (h) PricewaterhouseCoopers LLP, the accountants who certified the financial statements and
schedules filed with the Commission as a part of the Registration Statement and included in the
Final Remarketing Prospectus, is, to the Company’s best knowledge, an independent registered public
accounting firm with respect to the Company and its subsidiaries as required by the Securities Act
and the rules and regulations thereunder.



     (i) The financial statements included in the Registration Statement or Final Remarketing
Prospectus (including those incorporated by reference) present fairly, in all material respects,
the financial position of the Company and its consolidated subsidiaries as of the dates indicated
and the consolidated results of their operations for the periods specified. Such financial
statements have been prepared in conformity with generally accepted accounting principles in the
United States applied on a consistent basis during the periods involved, except as may be indicated
therein. The supporting schedules included in the Registration Statement or Final Remarketing
Prospectus (including those incorporated by reference) present fairly, in all material respects,
the information required to be stated therein.



     (j) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has the corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the



7









 




Final Remarketing
Prospectus and to enter into and perform its obligations under this Supplemental Agreement. The
Company is duly qualified as a foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, except where the failure to so qualify
would not, individually or in the aggregate, result in a Material Adverse Effect.




     (k) Each of Baxter Healthcare Corporation, a Delaware corporation, and Baxter World Trade
Corporation, a Delaware corporation (together, the “Significant Subsidiaries”), is
wholly-owned by the Company and, together with the Company, owned more than 80% of the consolidated
assets of the Company and its subsidiaries as of December 31, 2004 and contributed at least 80% of
the consolidated income from continuing operations of the Company and its subsidiaries for the year
ended December 31, 2004 (each such calculation with respect to Baxter World Trade Corporation
having been done on a consolidated basis with its subsidiaries), and each 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; each Significant Subsidiary is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify would not result in a Material Adverse Effect; all
of the issued and outstanding capital stock of each Significant Subsidiary has been duly authorized
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.



     (l) Neither the Company nor any of the Significant Subsidiaries is (i) in violation of its
respective charter or by-laws or (ii) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any bond, debenture, note or other
evidence of indebtedness or in any contract, indenture, mortgage, loan agreement or lease to which
it is a party or by which it or its properties is bound, except, with respect to clause (ii) above,
for such defaults that would not result in a Material Adverse Effect.



     (m) No consent, approval, authorization, order, decree, registration or filing or
qualification of or with any court or governmental agency or body is required in connection with
the execution and delivery of this Supplemental Agreement, the Remarketing Agreement or the
Indenture or the consummation by the Company of the transactions contemplated herein and therein,
except such as have been obtained or rendered, as the case may be.



     (n) The execution and delivery of this Supplemental Agreement, the Remarketing Agreement and
the Indenture, the incurrence of the obligations set forth herein and therein and the consummation
of the transactions contemplated herein and therein will not conflict with or constitute a breach
of, or default under (i) the respective charter or by-laws of the Company or any of the Significant
Subsidiaries, (ii) 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 the Significant
Subsidiaries is a party or by it is bound, or (iii) any statute, law, administrative regulation or
administrative or court decree, except, with respect to clauses (ii) and (iii) above, for such
conflicts, breaches or defaults that would not result in a Material Adverse Effect.



8









 





     (o) Except as set forth in the Final Remarketing Prospectus, including the documents
incorporated therein by reference, 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 the Significant Subsidiaries, which, either
singly or in the aggregate, could reasonably be expected to result in a Material Adverse Effect or,
either singly or in the aggregate, would reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated by this Supplemental Agreement.



     (p) The Company is not required to be registered under the Investment Company Act of 1940, as
amended (the “Investment Company Act”).



     (q) The Company is subject to Section 13 or 15(d) of the Exchange Act.



     Any certificate signed by an officer of the Company and delivered to the Remarketing Agents or
to counsel for the Remarketing Agents shall be deemed to be a representation and warranty by the
Company to each Remarketing Agent as to the matters set forth therein.



     The Company acknowledges that the Remarketing Agents and, for purposes of the opinions to be
delivered pursuant to Section 7 hereof, counsel to the Company and counsel to the
Remarketing Agents, will rely upon the accuracy and truthfulness of the foregoing representations
and hereby consents to such reliance.



SECTION 4.




Fees.




     In the event of a Successful Remarketing on the Remarketing Date, the Remarketing Agents may
retain as a remarketing fee (the “Remarketing Fee”) an aggregate amount equal to 25 basis
points (0.25%) of the sum of the Treasury Portfolio Purchase Price and the Separate Senior Notes
Purchase Price, payable by deduction from any amount received in connection with the Remarketing in
excess of the sum of the Treasury Portfolio Purchase Price and the Separate Senior Notes Purchase
Price, with each Remarketing Agent receiving the percentage of such Remarketing Fee set forth
opposite such Remarketing Agent’s name on Schedule I hereto.



SECTION 5.




Covenants of the Company.




     Anything herein to the contrary notwithstanding, the provisions of Section 5 of the
Remarketing Agreement are incorporated herein by reference mutatis mutandis and except that all
references therein to “this Agreement” and “Remarketing Agent” shall be deemed to mean and refer to
this “Supplemental Agreement” and “Remarketing Agents,” respectively, as defined herein and all
references therein to the “Registration Statement,” the “Preliminary Prospectus” and the
“Prospectus” shall be deemed to mean and refer to the Registration Statement, the Preliminary
Remarketing Prospectus and the Final Remarketing Prospectus, respectively, as defined herein.



9









 





SECTION 6.




Payment of Expenses.




     The provisions of this Section 6 shall supersede and replace in their entirety those
provisions of Section 6 in the Remarketing Agreement with respect to the Remarketing.



     The Company agrees to pay (a) all costs incident to the preparation and printing of the
Registration Statement, the Preliminary Remarketing Prospectus, the Final Remarketing Prospectus
and any other Remarketing Materials and any amendments or supplements thereto, (b) all costs of
distributing the Registration Statement, the Preliminary Remarketing Prospectus, the Final
Remarketing Prospectus and any other Remarketing Materials and any amendments or supplements
thereto, (c) any fees and expenses of qualifying the Remarketed Senior Notes under the securities
laws of the several jurisdictions as provided in Section 5(i) of the Remarketing Agreement and of
preparing, printing and distributing a Blue Sky Memorandum, if any (including any related fees and
expenses of counsel to the Remarketing Agents), (d) all other costs and expenses incident to the
performance of the obligations of the Company hereunder and the Remarketing Agents hereunder and
(e) fifty percent (50%) of the reasonable fees and expenses of counsel to the Remarketing Agents in
connection with their duties hereunder.



SECTION 7.




Conditions to the Remarketing Agent’s Obligation.




     The provisions of this Section 7 shall supersede and replace in their entirety those
provisions of Section 7 in the Remarketing Agreement with respect to the Remarketing.



     The obligations of the Remarketing Agents hereunder shall be subject to the following
conditions:



     (a) The representations and warranties of the Company contained herein shall be true and
correct on and as of the Remarketing Date and the Remarketing Closing Date.



     (b) The Company, the Purchase Contract Agent and the Collateral Agent shall have performed in
all material respects all covenants and agreements contained or incorporated by reference herein
and, to the extent not inconsistent with this Supplemental Agreement, in the Remarketing Agreement,
and in the Purchase Contract Agreement or Pledge Agreement to be performed on their part at or
prior to the Remarketing Closing Date.



     (c) (i) Trading generally shall not have been suspended or materially limited on the New York
Stock Exchange, (ii) trading of any securities of the Company shall not have been materially
suspended or limited on the New York Stock Exchange, (iii) a general moratorium on commercial
banking activities in New York shall not have been declared by either Federal or New York State
authorities, or (iv) there shall not have occurred a material adverse change in the financial
markets, any outbreak or escalation of hostilities involving the United States or the declaration
by the United States of a national emergency or war or other calamity or crisis, if the effect of
any such event specified in this clause (c) in the reasonable judgment of the Remarketing Agents
makes it impracticable or inadvisable to proceed with the Remarketing or



10









 




the delivery of the
Remarketed Senior Notes on the terms and in the manner contemplated in the Transaction Documents.




     (d) The Final Remarketing Prospectus shall have been timely filed with the Commission pursuant
to Rule 424(b) under the Securities Act; no stop order suspending the effectiveness of the
Registration Statement, or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or, to the knowledge of the Company, is threatened by the
Commission; and any request of the Commission for inclusion of additional information in the
Registration Statement or the Final Remarketing Prospectus or otherwise shall have been complied
with.



     (e) The Company shall have furnished to the Remarketing Agents a certificate, dated the
Remarketing Closing Date, of the Chief Financial Officer and the Treasurer of the Company
satisfactory to the Remarketing Agents stating that, to the best of their knowledge after due
investigation: (1) no order suspending the effectiveness of the Registration Statement or prohibiting the
sale of the Remarketed Senior Notes is in effect, and no proceedings for such purpose have been
instituted or are pending before or, to the knowledge of such officers, threatened by the
Commission; (2) the representations and warranties of the Company in Section 3 are true and
correct on and as of the Remarketing Closing Date and the Company has performed all covenants and
agreements contained herein to be performed on its part at or prior to the Remarketing Closing
Date; and (3) the Registration Statement, as of the effective date of Post-Effective Amendment No.
1 thereto, and the Remarketing Materials, as of their respective dates, did not contain any untrue
statement of a material fact and did not omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and the Final Remarketing
Prospectus did not contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.



     (f) On the Remarketing Date and on the Remarketing Closing Date, the Remarketing Agents shall
have received letters addressed to the Remarketing Agents and dated such date, in form and
substance satisfactory to the Remarketing Agents, of PricewaterhouseCoopers LLP, the independent
accountants of the Company, containing statements and information of the type ordinarily included
in accountants’ “comfort letters” with respect to certain financial information contained in the
Final Remarketing Prospectus and the Remarketing Materials.



     (g) Susan R. Lichtenstein, Corporate Vice President, General Counsel and Corporate Secretary
of the Company, shall have furnished to the Remarketing Agents her opinion, addressed to the
Remarketing Agents and dated the Remarketing Closing Date, in the form of Annex A-1 hereto
and otherwise in form and substance reasonably satisfactory to the Remarketing Agents.



     (h) Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Company, shall have
furnished to the Remarketing Agents its opinion or opinions, addressed to the Remarketing Agents
and dated the Remarketing Closing Date, in the forms of Annex A-2 and Annex A-3
hereto and otherwise in form and substance reasonably satisfactory to the Remarketing Agents.



11









 





     (i) Sidley Austin Brown & Wood LLP, counsel for the Remarketing Agents, shall have furnished
to the Remarketing Agents its opinion, addressed to the Remarketing Agents and dated the
Remarketing Closing Date, in form and substance satisfactory to the Remarketing Agents.



     (j) Subsequent to the execution and delivery of this Supplemental Agreement and prior to the
Remarketing Closing Date (i) there shall not have occurred any Material Adverse Effect, the effect
of which is such as to make it, in the reasonable judgment of the Remarketing Agents, impracticable
to remarket the Senior Notes in the manner and on the terms described in the Final Remarketing
Prospectus, (ii) there shall not have occurred any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any review for a possible change (other than a
notice of a review with positive implications of a possible upgrading, and no implication of a
possible downgrading), in the rating accorded any securities of the Company by any “nationally
recognized statistical rating organization” as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act, and (iii) there shall not have come to the attention of the Remarketing
Agents any facts that would reasonably cause the Remarketing Agents to believe that the
Registration Statement, at the time Post-Effective Amendment No. 1 thereto became effective, or the
Final Remarketing Prospectus, as of its date or on the Remarketing Closing Date 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 under which they were made, not misleading.


If any condition specified in this Section 7 is not satisfied when and as required to be
satisfied, this Supplemental Agreement may be terminated by the Remarketing Agents by notice in
writing or by telephone or facsimile confirmed in writing to the Company at any time on or prior to
the Remarketing Closing Date, which termination shall be without liability on the part of any party
to any other party, except that Section 6 and Section 8 of this Supplemental
Agreement and Section 11 of the Remarketing Agreement shall at all times be effective and
shall survive such termination.




SECTION 8.




Indemnification and Contribution.




     Anything herein to the contrary notwithstanding, the provisions of Section 8 and Section 9 of
the Remarketing Agreement are incorporated herein by reference mutatis mutandis and except that all
references therein to “this Agreement” and “Remarketing Agent” shall be deemed to mean and refer to
this “Supplemental Agreement” and “Remarketing Agents,” respectively, as defined herein and all
references therein to the “Registration Statement,” the “Preliminary Prospectus” and the
“Prospectus” shall be deemed to mean and refer to the Registration Statement, the Preliminary
Remarketing Prospectus and the Final Remarketing Prospectus, respectively, as defined herein.



12









 





SECTION 9.




Remarketing Agents’ Performance; Duty of Care.




     The provisions of this Section 9 shall supersede and replace in their entirety those
provisions of Section 12 in the Remarketing Agreement with respect to the Remarketing.



     The duties and obligations of the Remarketing Agents shall be determined solely by the express
provisions of this Supplemental Agreement and the Remarketing Agreement. No implied covenants or
obligations of or against any Remarketing Agent shall be read into this Supplemental Agreement or
the Remarketing Agreement. In the absence of bad faith on the part of any Remarketing Agent, such
Remarketing Agent may conclusively rely upon any document furnished to it, as to the truth of the
statements expressed in any of such documents. The Remarketing Agents shall be protected in acting
upon any document or communication reasonably believed by them to have been signed, presented or
made by the proper party or parties except as otherwise set forth herein. No Remarketing Agent,
acting under this Supplemental Agreement, shall incur any liability to the Company or to any holder
of Remarketed Senior Notes in its individual capacity or as Remarketing Agent for any action or
failure to act, on its part in connection with the Remarketing or otherwise, except if such
liability is judicially determined to have resulted from its failure to comply with the material
terms of this Supplemental Agreement or the Remarketing Agreement and the Indenture or gross
negligence or willful misconduct on its part. The provisions of this Section 9 shall
survive the termination of this Supplemental Agreement and shall survive the resignation or removal
of any Remarketing Agent pursuant to the Remarketing Agreement.



SECTION 10.




Notices.




     All statements, requests, notices and agreements hereunder shall be in writing, and:



     (a) if to the Remarketing Agents, shall be delivered or sent by mail, telex or facsimile
transmission to:


Banc of America Securities LLC

9 West 57th Street

New York, NY 10019

Telecopier No.: 704-264-2522

Attention: High Grade Transaction Management


J.P. Morgan Securities Inc.

270 Park Avenue

New York, NY 10017

Telecopier No.: 212-834-6081

Attention: Investment Grade Syndicate Desk



13









 







UBS Securities LLC

299 Park Avenue

New York, NY 10171

Telecopier No.: 212-821-3285

Attention: Legal Department


Citigroup Global Markets Inc.

388 Greenwich Street

New York, NY 10013

Attention:


Credit Suisse First Boston LLC

Eleven Madison Avenue

New York, NY 10010

Telecopier No.: 212-325-4296

Attention: Legal Department



     (b) if to the Company, shall be delivered or sent by mail, telex or facsimile transmission to
Baxter International Inc., One Baxter Parkway, Deerfield, Illinois 60015, Telecopier No.:
847-948-2450; Attention: General Counsel; and



     (c) if to the Purchase Contract Agent or the Trustee, shall be delivered or sent by mail,
telex or facsimile transmission to J.P. Morgan Trust Company, National Association, 227 W. Monroe
Street, Suite 2600, Chicago, Illinois 60606, Attention: Worldwide Securities Services; Telecopier
No.: 312-267-5202.


Any such statements, requests, notices or agreements shall take effect at the time of receipt
thereof.




SECTION 11.




Persons Entitled to Benefit of Agreement.




     This Supplemental Agreement shall inure to the benefit of and be binding upon each party
hereto and its respective successors. This Supplemental Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (x) the representations,
warranties, indemnities and agreements of the Company contained in this Supplemental Agreement
shall also be deemed to be for the benefit of the Remarketing Agents and the person or persons, if
any, who control the Remarketing Agents within the meaning of Section 15 of the Securities Act and
(y) the indemnity agreement of the Remarketing Agents contained in Section 8 of this
Supplemental Agreement shall be deemed to be for the benefit of the Company’s directors and
officers who sign the Registration Statement, if any, and any person controlling the Company within
the meaning of Section 15 of the Securities Act. Nothing contained in this Supplemental Agreement
is intended or shall be construed to give any person, other than the persons referred to herein,
any legal or equitable right, remedy or claim under or in respect of this Supplemental Agreement or
any provision contained herein.



14









 





SECTION 12.




Survival.




     The respective indemnities, representations, warranties and agreements of the Company and the
Remarketing Agents contained in this Supplemental Agreement or made by or on behalf of them,
respectively, pursuant to this Supplemental Agreement, shall survive any Remarketing and shall
remain in full force and effect, regardless of any investigation made by or on behalf of any of
them or any person controlling any of them.



SECTION 13.




Governing Law.




     This Supplemental Agreement shall be governed by, and construed in accordance with, the laws
of New York, without regard to conflicts of laws principles.



SECTION 14.




Judicial Proceedings.




     (a) Each party hereto expressly accepts and irrevocably submits to the non-exclusive
jurisdiction of the United States Federal or New York State court sitting in the Borough of
Manhattan, The City of New York, New York, over any suit, action or proceeding arising out of or
relating to this Supplemental Agreement or the Securities. To the fullest extent it may
effectively do so under applicable law, each party hereto irrevocably waives and agrees not to
assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the
jurisdiction of any such court, any objection that it may now or hereafter have to the laying of
the venue of any such suit, action or proceeding brought in any such court and any claim that any
such suit, action or proceeding brought in any such court has been brought in an inconvenient
forum.



     (b) Each party hereto agrees, to the fullest extent that it may effectively do so under
applicable law, that a judgment in any suit, action or proceeding of the nature referred to in
Section 14(a) brought in any such court shall be conclusive and binding upon such party,
subject to rights of appeal and may be enforced in the courts of the United States of America or
the State of New York (or any other court the jurisdiction to which the Company is or may be
subject) by a suit upon such judgment.



SECTION 15.




Counterparts.




     This Supplemental Agreement may be executed in one or more counterparts and, if executed in
more than one counterpart, the executed counterparts shall each be deemed to be an original but all
such counterparts shall together constitute one and the same instrument.



15









 





SECTION 16.




Headings.




     The headings herein are inserted for convenience of reference only and are not intended to be
part of, or to affect the meaning or interpretation of, this Supplemental Agreement.



SECTION 17.




Severability.




     If any provision of this Supplemental Agreement shall be held or deemed to be or shall, in
fact, be invalid, inoperative or unenforceable as applied in any particular case in any or all
jurisdictions because it conflicts with any provisions of any constitution, statute, rule or public
policy or for any other reason, then, to the extent permitted by law, such circumstances shall not
have the effect of rendering the provision in question invalid, inoperative or unenforceable in any
other case, circumstance or jurisdiction, or of rendering any other provision or provisions of this
Supplemental Agreement invalid, inoperative or unenforceable to any extent whatsoever.



SECTION 18.




Amendments.




     This Supplemental Agreement may be amended by an instrument in writing signed by the parties
hereto. The Company agrees that it will not enter into, cause or permit any amendment or
modification of the Transaction Documents or any other instruments or agreements relating to the
Senior Notes that would in any way adversely affect the rights, duties or obligations of any of the
Remarketing Agents, without the prior written consent of the Remarketing Agents.



SECTION 19.




Successors and Assigns.




     The rights and obligations of the Company hereunder may not be assigned or delegated to any
other Person without the prior written consent of the Remarketing Agents. The rights and
obligations of the Remarketing Agents hereunder may not be assigned or delegated to any other
Person (other than an affiliate of the Remarketing Agent) without the prior written consent of the
Company.


If the foregoing correctly sets forth the agreement by and between the Company, the Remarketing
Agents and the Purchase Contract Agent, please indicate your acceptance in the space provided for
that purpose below.




[SIGNATURES ON THE FOLLOWING PAGE]







16









 








	 	 	 	 	 
	 	Very truly yours,





BAXTER INTERNATIONAL INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 





	 	 	 	 	 
	CONFIRMED AND ACCEPTED:





BANC OF AMERICA SECURITIES LLC

 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 



	 	 	 	 	 
	J.P. MORGAN SECURITIES INC.

 
	By: 	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 



	 	 	 	 	 
	UBS SECURITIES LLC

 
	By: 	 	 
	 	Name: 	 	 
	 	Title:  	 	 
	 
	 	 	 
	 	 	 	 	 
	CITIGROUP GLOBAL MARKETS, INC.

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	CREDIT SUISSE FIRST BOSTON LLC

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 


J.P. Morgan Trust Company, National Association, not
individually but solely as Purchase Contract Agent and as
attorney-in-fact for the Holders of the Purchase Contracts




	 	 	 	 	 
	 	 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title: