Baxter International Inc S-4, filed Apr 7, 2021
Baxter International Inc (BAX)
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As filed with the Securities and Exchange Commission on April 7, 2021
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BAXTER INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
| Delaware | 3841 | 36-0781620 | ||
| (State or other jurisdiction of incorporation) | (Primary Standard Industrial Classification Code Number) | (IRS Employer Identification No.) |
One Baxter Parkway
Deerfield, Illinois 60015
(224) 948-2000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
James K. Saccaro
Executive Vice President and Chief Financial Officer
Baxter International Inc.
One Baxter Parkway
Deerfield, Illinois 60015
(224) 948-2000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
With a copy to:
Catherine M. Clarkin
Ari B. Blaut
Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
(212) 558-4000
Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.
If the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
| Emerging growth company | ☐ | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-1(d) (Cross Border Third-Party Tender Offer) ☐
CALCULATION OF REGISTRATION FEE
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| ||||||||
| Title of each class of securities to be registered |
Amount to be registered(1) |
Proposed maximum offering
price |
Proposed maximum aggregate offering price(2) |
Amount of registration fee(3) | ||||
| 3.950% Senior Notes due 2030 |
$500,000,000 | 100% | $500,000,000 | $54,550 | ||||
| 1.730% Senior Notes due 2031 |
$650,000,000 | 100% | $650,000,000 | $70,915 | ||||
| Total |
$1,150,000,000 | $125,465 | ||||||
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| (1) | Represents the aggregate principal amount of each series of notes to be offered in the exchange offers to which the registration statement relates. |
| (2) | Represents the maximum aggregate offering price of all notes to be offered in the exchange offers to which the registration statement relates. |
| (3) | Calculated in accordance with Rule 457(f) of the Securities Act of 1933. |
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. We may not complete the exchange offers and issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 7, 2021
PROSPECTUS
Baxter International Inc.
Offers to Exchange
Up to $500,000,000 aggregate principal amount of new 3.950% Senior Notes due 2030 registered under the
Securities Act of 1933, for any and all outstanding unregistered 3.950% Senior Notes due 2030; and
Up to $650,000,000 aggregate principal amount of new 1.730% Senior Notes due 2031 registered under the
Securities Act of 1933, for any and all outstanding unregistered 1.730% Senior Notes due 2031.
Baxter International Inc. (“Baxter” or “we”) is offering to exchange (i) new registered 3.950% Senior Notes due 2030 (the “2030 Exchange Notes”) for its outstanding unregistered 3.950% Senior Notes due 2030 (the “2030 Original Notes”) and (ii) new registered 1.730% Senior Notes due 2031 (the “2031 Exchange Notes” and, together with the 2030 Exchange Notes, the “Exchange Notes”) for its outstanding unregistered 1.730% Senior Notes due 2031 (the “2031 Original Notes” and, together with the 2030 Original Notes, the “Original Notes”). The Original Notes and the Exchange Notes are sometimes referred to in this prospectus together as the “notes”. The terms of each series of the Exchange Notes are substantially identical to the terms of the applicable series of Original Notes, except that the Exchange Notes are registered under the Securities Act of 1933, as amended (the “Securities Act”), and there are certain differences relating to transfer restrictions, registration rights and payment of additional interest in case of non-registration. We refer to these offers as the “Exchange Offers”.
The Exchange Offers will expire at 5:00 p.m., New York City time, on , 2021, unless extended or earlier terminated by us (such date, as the same may be extended or earlier terminated with respect to either or both series of Exchange Notes, the “Expiration Date”). Holders may withdraw their tendered Original Notes at any time at or prior to the Expiration Date of the Exchange Offers.
The Exchange Notes will be general senior unsecured and unsubordinated obligations and will rank equal in priority with all of Baxter’s existing and future unsecured and unsubordinated indebtedness and senior in right of payment to any future subordinated indebtedness Baxter may incur. See “Description of the Exchange Notes”.
Baxter agreed with Citigroup Global Markets, Inc., Goldman, Sachs & Co. LLC, J.P. Morgan Securities LLC, BofA Securities, Inc., Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Mizuho Securities USA LLC. and Morgan Stanley & Co. LLC, the initial purchasers of the 2030 Original Notes (the “2030 Initial Purchasers”), and BofA Securities, Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Barclays Capital Inc., U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC, the initial purchasers of the 2031 Original Notes (the “2031 Initial Purchasers” and, together with the 2030 Initial Purchasers, the “Initial Purchasers”), to make this offer and to register the issuance of the Exchange Notes after the initial sale of the Original Notes.
No public market currently exists for the Original Notes and we cannot assure you that any public market for the Exchange Notes will develop. The Exchange Notes will not be listed on any national securities exchange.
Each broker-dealer that receives Exchange Notes for its own account pursuant to the Exchange Offers must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Original Notes where such Original Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. See “Plan of Distribution” below.
Investing in the Exchange Notes involves risks. See “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which is incorporated by reference herein, and on page 9 of this prospectus, to read about factors you should consider before investing in the Exchange Notes.
Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
Prospectus dated , 2021.
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| Certain U.S. Federal Income Tax Considerations of the Exchange Offers |
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No person has been authorized to give any information or any representation concerning us or the Exchange Offers (other than as contained in this prospectus or the related letter of transmittal) and we take no responsibility for, nor can we provide any assurance as to the reliability of, any other information that others may give you. You should not assume that the information contained or incorporated by reference in this prospectus is accurate as of any date other than the date on the front cover of this prospectus or the date of the incorporated document, as applicable.
In making an investment decision, prospective investors must rely on their own examination of us, and the terms of the Exchange Offers, including the merits and risks involved. Prospective investors should not construe anything in this prospectus as legal, business or tax advice. Each prospective investor should consult its own advisors as needed to make its investment decision and to determine whether it is legally permitted to participate in the Exchange Offers and to invest in the Exchange Notes under applicable legal investment or similar laws or regulations.
There are no guaranteed delivery provisions provided for in conjunction with the Exchange Offers under the terms of this prospectus and the accompanying letter of transmittal. Tendering holders must tender their Original Notes in accordance with the procedures set forth under “The Exchange Offers—Procedures for Tendering Original Notes”.
This prospectus contains summaries believed to be accurate with respect to certain documents, but reference is made to the actual documents for complete information. All such summaries are qualified in their entirety by such reference. See “Incorporation by Reference”.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN RECOMMENDED BY ANY UNITED STATES FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
In this prospectus, unless we have indicated otherwise, or the context otherwise requires, references to “we”, “us” and “our” are references to Baxter International Inc. and its subsidiaries. Unless the context otherwise requires, references to “Baxter” in this prospectus are to Baxter International Inc. and not to any of its subsidiaries.
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This prospectus includes and the documents incorporated by reference herein include “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements are identified by their use of terms and phrases such as “believe”, “anticipate”, “could”, “estimate”, “intend”, “may”, “plan”, “expect”, and similar expressions. The statements are based on assumptions about many important factors, including assumptions concerning:
| • | demand for, market acceptance risks for and competitive pressures related to new and existing products (including challenges with our ability to accurately predict these pressures and the resulting impact on customer inventory levels and the impact of reduced hospital admission rates and elective surgery volumes), and the impact of those products on quality and patient safety concerns; |
| • | product development risks, including satisfactory clinical performance, the ability to manufacture at appropriate scale, and the general unpredictability associated with the product development cycle; |
| • | our ability to finance and develop new products or enhancements on commercially acceptable terms or at all; |
| • | our ability to identify business development and growth opportunities and to successfully execute on business development strategies; |
| • | product quality or patient safety issues, leading to product recalls, withdrawals, launch delays, warning letters, import bans, sanctions, seizures, litigation, or declining sales; |
| • | the impact of global economic conditions (including potential trade wars) and pandemics, epidemics or other public health crises, such as COVID-19, on us and our customers and suppliers, including foreign governments in countries in which we operate; |
| • | the continuity, availability and pricing of acceptable raw materials and component supply, and the related continuity of our manufacturing and distribution; |
| • | inability to create additional production capacity in a timely manner or the occurrence of other manufacturing, sterilization or supply difficulties (including as a result of natural disaster, public health crises and epidemics/pandemics, regulatory actions or otherwise); |
| • | breaches or failures of our information technology systems or products, including by cyber-attack, data leakage, unauthorized access or theft (as a result of increased remote working arrangements or otherwise); |
| • | future actions of (or failures to act or delays in acting by) the Food and Drug Administration, the European Medicines Agency or any other regulatory body or government authority (including the SEC, the Department of Justice or the Attorney General of any State) that could delay, limit or suspend product development, manufacturing or sale or result in seizures, recalls, injunctions, monetary sanctions or criminal or civil liabilities, including the continued delay in lifting the warning letter at our Ahmedabad facility or proceedings related to the misstatements in previously reported non-operating income related to foreign exchange gains and losses; |
| • | developments that would require the correction of additional misstatements in our previously issued financial statements; |
| • | failures with respect to our quality, compliance or ethics programs; |
| • | future actions of third parties, including third-party payers, the impact of healthcare reform and its implementation, suspension, repeal, replacement, amendment, modification and other similar actions undertaken by the United States or foreign governments, including with respect to pricing, reimbursement, taxation and rebate policies; legislation, regulation and other governmental pressures in the United States or globally, including the cost of compliance and potential penalties for purported |
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| noncompliance thereof, all of which may affect pricing, reimbursement, taxation and rebate policies of government agencies and private payers or other elements of our business, including new or amended laws, rules and regulations (such as the California Consumer Privacy Act of 2018, the European Union’s General Data Protection Regulation and proposed regulatory changes of the U.S. Department of Health and Human Services in kidney health policy and reimbursement, which may substantially change the U.S. end stage renal disease market and demand for our peritoneal dialysis products, necessitating significant multi-year capital expenditures, which are difficult to estimate in advance, for example); |
| • | the outcome of pending or future litigation or government investigations, including the opioid litigation and litigation related to the internal investigation of foreign exchange gains and losses; |
| • | the impact of competitive products and pricing, including generic competition, drug reimportation and disruptive technologies; |
| • | global regulatory, trade and tax policies; |
| • | the ability to protect or enforce our owned or in-licensed patent or other proprietary rights (including trademarks, copyrights, trade secrets and know-how) or patents of third parties preventing or restricting our manufacture, sale or use of affected products or technology; |
| • | the impact of any goodwill or other intangible asset impairments on our operating results; |
| • | any failure by Baxalta Incorporated or Shire plc to satisfy its obligations under the separation agreements, including the tax matters agreement, or that certain letter agreement entered into with Shire plc and Baxalta Incorporated; |
| • | fluctuations in foreign exchange and interest rates; |
| • | any changes in law concerning the taxation of income (whether with respect to current or future tax reform), including income earned outside the United States and potential taxes associated with the Base Erosion and Anti-Abuse Tax; |
| • | actions by tax authorities in connection with ongoing tax audits; |
| • | loss of key employees or inability to identify and recruit new employees; and |
| • | other factors identified elsewhere in this prospects or our Annual Report, including those factors described under “Risk Factors” in Item 1A of our Annual Report and on page 9 of this prospectus and in other filings with the SEC that are incorporated by reference herein. |
Actual results may differ materially from those projected in the forward-looking statements. We do not undertake to update our forward-looking statements.
In this prospectus, Baxter “incorporates by reference” certain of the information Baxter files with the SEC, which means that Baxter can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and information that Baxter files later with the SEC and incorporates herein will automatically update and supersede this information. Baxter incorporates by reference the documents listed below and any future filings Baxter will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after the filing of the registration statement to which this prospectus relates and prior to the effectiveness of such registration statement and all such future filings that Baxter makes with the SEC until the Expiration Date (other than, in each case, documents or information deemed to have been furnished and not filed in accordance with the SEC rules):
| 1. | Baxter’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 11, 2021 (the “Annual Report”); |
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| 2. | The portions of Baxter’s Definitive Proxy Statement on Schedule 14A for the 2021 Annual Meeting of Stockholders, filed with the SEC on March 22, 2021, which are incorporated by reference into Part III of our Annual Report on Form 10-K for the year ended December 31, 2020; and |
| 3. | Baxter’s Current Report on Form 8-K filed with the SEC on February 16, 2021. |
Baxter files annual, quarterly and current reports, proxy statements and other information with the SEC. Baxter’s SEC filings are available to the public, free of charge, through the SEC’s website at http://www.sec.gov. Information about Baxter, including its SEC filings, is also available through Baxter’s website at http://www.baxter.com. The information on Baxter’s website is not incorporated into this prospectus.
You may also request a copy of these filings, excluding exhibits unless such exhibits are specifically incorporated by reference, at no cost by writing or telephoning us at the following address:
Corporate Secretary
Baxter International Inc.
One Baxter Parkway
Deerfield, Illinois 60015
(224) 948-2000
To receive timely delivery of the documents prior to the Expiration Date, you should make your request no later than five business days before the date you must make your investment decision, or , 2021. In the event that Baxter extends the Exchange Offer, you should submit your request at least five business days prior to the Expiration Date, as extended.
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This summary highlights selected information contained or incorporated by reference in this prospectus. As a result, it is not complete and does not contain all of the information that may be important to you or that you should consider when making an investment decision with respect to the Exchange Offers. You should read the following summary in conjunction with the more detailed information contained in this prospectus and the documents that Baxter has incorporated by reference before making a decision to participate in the Exchange Offers. See “Incorporation by Reference”.
Baxter International Inc.
Baxter, through its subsidiaries, provides a broad portfolio of essential healthcare products, including acute and chronic dialysis therapies; sterile intravenous (IV) solutions; infusion systems and devices; parenteral nutrition therapies; inhaled anesthetics; generic injectable pharmaceuticals; and surgical hemostat and sealant products. These products are used by hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors’ offices and by patients at home under physician supervision. Our global footprint and the critical nature of our products and services play a key role in expanding access to healthcare in emerging and developed countries. As of December 31, 2020, we manufactured products in over 20 countries and sold them in over 100 countries.
Baxter International Inc. was incorporated under Delaware law in 1931. Our principal executive offices are located at One Baxter Parkway, Deerfield, Illinois 60015 and our telephone number is (224) 948-2000.
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The Exchange Offers
| Background |
On March 26, 2020, we issued the 2030 Original Notes in a transaction exempt from the registration requirements of the Securities Act, and, as of the date of this prospectus, an aggregate principal amount of $500,000,000 in 2030 Original Notes is outstanding. The 2030 Original Notes issued pursuant to Rule 144A are represented by CUSIP No. 071813 BW8, and the 2030 Original Notes issued pursuant to Regulation S are represented by CUSIP No. U07181 AZ0. |
| On November 2, 2020, we issued the 2031 Original Notes in a transaction exempt from the registration requirements of the Securities Act, and, as of the date of this prospectus, an aggregate principal amount of $650,000,000 in 2031 Original Notes is outstanding. The 2031 Original Notes issued pursuant to Rule 144A are represented by CUSIP No. 071813 BZ1, and the 2031 Original Notes issued pursuant to Regulation S are represented by CUSIP No. U07181 BA4. |
| The terms of the Exchange Notes and the Original Notes are substantially identical in all material respects, except that the Exchange Notes will be freely transferable by the holders of the Exchange Notes except as otherwise provided in this prospectus. |
| The Exchange Notes will bear different CUSIP numbers from the Original Notes. |
| The Exchange Offers |
We are offering to exchange (i) our 2030 Exchange Notes, which have been registered under the Securities Act, for a like principal amount of our outstanding unregistered 2030 Original Notes and (ii) our 2031 Exchange Notes, which have been registered under the Securities Act, for a like principal amount of our outstanding unregistered 2031 Original Notes. See “The Exchange Offers”. |
| Resale of Exchange Notes |
Based upon the position of the staff of the SEC as described in previous no-action letters and subject to the immediately following sentence, we believe that Exchange Notes issued pursuant to the Exchange Offers in exchange for Original Notes may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that you will acknowledge in writing at the time of the consummation of the Exchange Offers that: |
| • | you are not a broker-dealer tendering Original Notes that you acquired directly from us for your own account; |
| • | you are acquiring the Exchange Notes in the ordinary course of your business; |
| • | you have not participated in, do not intend to participate in, and have no arrangement or understanding with any person to participate in, a distribution of the Exchange Notes; and |
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| • | you are not our “affiliate” as defined under Rule 405 of the Securities Act. |
| However, any purchaser of Exchange Notes who is an affiliate of ours or who intends to participate in the Exchange Offers for the purpose of distributing the Exchange Notes (i) will not be able to rely on the interpretations of the SEC staff set forth in the above-mentioned no-action letters, (ii) will not be entitled to tender its Original Notes in the Exchange Offers and (iii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or transfer of the Exchange Notes unless such sale or transfer is made pursuant to an exemption from such requirements. |
| Any broker-dealer who holds Original Notes acquired for its own account as a result of market-making activities or other trading activities and who receives Exchange Notes in exchange for such Original Notes pursuant to the Exchange Offers may be a statutory underwriter and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes. See “Plan of Distribution”. |
| Purpose of the Exchange Offers |
The purpose of the Exchange Offers is to satisfy our obligations under a registration rights agreement, dated as of March 26, 2020 (the “March Registration Rights Agreement”), with respect to the 2030 Original Notes, and a registration rights agreement, dated November 2, 2020 (the “November Registration Rights Agreement” and, together with the March Registration Rights Agreement, the “Registration Rights Agreements”), with respect to the 2031 Original Notes. |
| Consequences If You Do Not Exchange Your Original Notes |
Original Notes that are not tendered in the Exchange Offers or are not accepted for exchange will continue to bear legends restricting their transfer. You will not be able to offer or sell such Original Notes unless: |
| • | you are able to rely on an exemption from the requirements of the Securities Act; or |
| • | the Original Notes are registered under the Securities Act. |
| To the extent that Original Notes are tendered and accepted in the Exchange Offers, the trading market for any remaining Original Notes may (and likely will) be adversely affected. See “Risk Factors—Risks Relating to Participation in the Exchange Offers—If you fail to exchange your Original Notes, they will continue to be restricted securities and may become less liquid”. |
| After the Exchange Offers are complete, you will not have any further rights under the applicable Registration Rights Agreement, including any right to require us to register any outstanding Original Notes that you do not exchange (except under limited circumstances) or to pay |
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| you the additional interest we agreed to pay to holders of Original Notes if we failed to timely commence and complete the Exchange Offers. |
| Accrued and Unpaid Interest |
The Exchange Notes will bear interest from the date of original issuance of the corresponding Original Notes or from the most recent date on which interest on the corresponding Original Notes has been paid, whichever is later. If your Original Notes are accepted for exchange, you will receive interest on the corresponding Exchange Notes and not on the Original Notes. Any Original Notes not tendered will remain outstanding and continue to accrue interest according to their terms. |
| Expiration Date |
The Expiration Date of the Exchange Offers will be 5:00 p.m., New York City time, on , 2021, unless extended or earlier terminated by us. The term “Expiration Date” means such date and time or, if we extend either Exchange Offer, the latest date and time to which we extend such Exchange Offer. |
| Settlement Date |
The settlement of the Exchange Offers will occur promptly after the Expiration Date. |
| Conditions to the Exchange Offers |
Each of the Exchange Offers is subject to customary closing conditions described in “The Exchange Offers—Conditions to the Exchange Offers”, including, among other things, the condition that no stop order has been issued for the registration statement of which this prospectus forms a part, or any proceedings for that purpose, and that there shall not have occurred or be reasonably likely to occur any material adverse change to our business, operations, properties, condition, assets, liabilities, prospects or financial affairs. Neither Exchange Offer is conditioned upon the other Exchange Offer, and we may terminate or extend either Exchange Offer without terminating or extending the other Exchange Offer. |
| Extension; Waivers and Amendments |
Subject to applicable law, we reserve the right to (1) extend either Exchange Offer; (2) waive any and all conditions to or amend either Exchange Offer in any respect (except as to the condition that the registration statement of which this prospectus forms a part not being subject to a stop order or any proceedings for that purpose, which condition we cannot waive); or (3) terminate either Exchange Offer. Neither Exchange Offer is conditioned upon the other Exchange Offer, and we may terminate or extend either Exchange Offer without terminating or extending the other Exchange Offer. Any extension, waiver, amendment or termination will be followed as promptly as practicable by a public announcement thereof, such announcement, in the case of an extension, to be issued no later than 9:00 a.m., New York City time, on the next business day after the last previously scheduled Expiration Date. See “The Exchange Offers—Expiration Date; Extension; Termination; Amendment”. |
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| Terms of Exchange Notes |
The terms of the Exchange Notes are described in this prospectus under “Description of Exchange Notes”. |
| Procedures for Tendering the Original Notes |
You may tender your Original Notes by transferring them through The Depository Trust Company’s (the “DTC”) Automated Tender Offer Program (“ATOP”) or following the other procedures described under “The Exchange Offers—Procedures for Tendering Original Notes”. |
| For further information, call the Exchange Agent at the telephone numbers set forth under “The Exchange Agent” or consult your broker, dealer, commercial bank, trust company or other nominee for assistance. |
| If you are a beneficial owner of Original Notes that are held by or registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian and you wish to tender your Original Notes in order to participate in either Exchange Offer, you should contact your intermediary entity promptly and instruct it to tender the Original Notes on your behalf. You should keep in mind that your intermediary may require you to take action with respect to the applicable Exchange Offer a number of days before the Expiration Date in order for such entity to tender Original Notes on your behalf at or prior to the Expiration Date in accordance with the terms of such Exchange Offer. See “The Exchange Offers—Procedures for Tendering Original Notes”. |
| If you are a beneficial owner of Original Notes through Euroclear or Clearstream, Luxembourg (each as defined herein) and wish to tender your Original Notes, you must instruct Euroclear or Clearstream, Luxembourg, as the case may be, to block the account in respect of the tendered Original Notes in accordance with the procedures established by Euroclear or Clearstream, Luxembourg. You are encouraged to contact Euroclear or Clearstream, Luxembourg directly to ascertain their procedures for tendering Original Notes. |
| Withdrawal Rights; Non-Acceptance |
You may withdraw your tender of Original Notes at any time prior to the Expiration Date. In the event that tendered Original Notes are not withdrawn and not accepted by us for exchange, such Original Notes will be promptly returned to such holders or credited to such holders’ DTC account in the same manner as tendered to us, unless a holder has indicated other delivery instructions in the related letter of transmittal or computer-generated message. See “The Exchange Offers—Withdrawal of Tenders” and “The Exchange Offers— Terms of the Exchange Offers”. |
| Certain U.S. Federal Income Tax Considerations |
The exchange of notes pursuant to the Exchange Offers generally should not be a taxable event for U.S. federal income tax purposes. See “Certain U.S. Federal Income Tax Considerations”. |
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| Accounting Treatment |
The Exchange Notes will be recorded at the same carrying value as the Original Notes as reflected in our accounting records on the date of the exchange. Accordingly, we will not recognize any gain or loss for accounting purposes upon the completion of the Exchange Offers. Payments made to other third parties will be expensed as incurred in accordance with generally accepted accounting principles. See “The Exchange Offers—Accounting Treatment”. |
| Use of Proceeds |
We will not receive any cash proceeds in connection with the Exchange Offers. Original Notes that are validly tendered and exchanged will be retired and canceled. We will pay all expenses incident to the Exchange Offers. |
| Exchange Agent |
The Bank of New York Mellon Trust Company, N.A. is the Exchange Agent for the Exchange Offers. See “The Exchange Agent” herein. |
| Further Information |
See “The Exchange Offers” for more information concerning the Exchange Offers. |
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The Exchange Notes
The following summary contains basic information about the Exchange Notes and is not intended to be complete. For a more complete understanding of the Exchange Notes, please refer to “Description of Exchange Notes”.
| Offeror |
Baxter International Inc., a Delaware corporation. |
| Exchange Notes |
The terms of each series of the Original Notes and the corresponding series of Exchange Notes are identical, except the Exchange Notes offered in the Exchange Offers: |
| • | will have been registered under the Securities Act; |
| • | will not have transfer restrictions and registration rights that relate to the Original Notes; and |
| • | will not have rights relating to the payment of additional interest to holders of Original Notes if we fail to timely commence and complete the Exchange Offers. |
| Maturity Date |
The 2030 Exchange Notes will mature on April 1, 2030. |
| The 2031 Exchange Notes will mature on April 1, 2031. |
| Interest |
Interest on the 2030 Exchange Notes will accrue at the rate of 3.950% per annum. |
| Interest on the 2031 Exchange Notes will accrue at the rate of 1.730% per annum. |
| Interest Payment Dates |
Interest on the Exchange Notes will be payable semi-annually on April 1 and October 1 of each year, beginning on October 1, 2021. Interest will accrue from , 2021. |
| Ranking |
The Exchange Notes are senior unsecured and unsubordinated obligations of Baxter and rank equal in priority with all of the existing and future unsecured and unsubordinated indebtedness of Baxter and senior in right of payment to any of its future subordinated indebtedness. See “Description of Exchange Notes—Ranking”. |
| Optional Redemption |
Baxter may, at its option, redeem the Exchange Notes of any series, at any time, in whole or in part, at the redemption prices described herein under the caption “Description of Exchange Notes—Optional Redemption of the Exchange Notes”. |
| Change of Control Triggering Event |
Upon the occurrence of a Change of Control Triggering Event, as defined under “Description of Exchange Notes—Offer to Purchase Upon Change of Control Triggering Event”, with respect to the Exchange Notes of any series, Baxter will be required to make an offer to repurchase the Exchange Notes of such series at a price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest to, but not including, the date of repurchase. |
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| Certain Covenants |
We will issue the Exchange Notes under the indenture that governs the Original Notes. The indenture contains certain covenants that, among other things, limit Baxter’s ability and the ability of certain of Baxter’s subsidiaries to create liens on its assets. These covenants are subject to a number of important limitations and exceptions. See “Description of Exchange Notes—Certain Covenants”. |
| Further Issuances |
Baxter reserves the right, from time to time, without the consent of the holders of any series of the Exchange Notes, to issue additional Exchange Notes of any such series on terms and conditions substantially identical to those of the Exchange Notes of such series, so that such additional Exchange Notes will increase the aggregate principal amount of, and will be consolidated and form a single series with, the Exchange Notes of such series. |
| Absence of Public Market |
There are currently no established trading markets for the Exchange Notes. As a result, a liquid market for the Exchange Notes may not develop. |
| Trustee, Registrar and Paying Agent |
The Bank of New York Mellon Trust Company, N.A. |
| Form and Settlement |
The Exchange Notes will be issued in the form of one or more fully registered Global Notes which will be deposited with, or on behalf of, DTC as the depositary, and registered in the name of Cede & Co., DTC’s nominee. For purposes of this prospectus, “Global Note” refers to the Global Note or Global Notes representing an entire series of Exchange Notes. Beneficial interests in the Global Notes will be represented through book-entry accounts of financial institutions acting on behalf of beneficial owners as direct and indirect participants in DTC. Investors may elect to hold interests in the Global Notes through either DTC (in the United States), Clearstream Banking, société anonyme (“Clearstream, Luxembourg”), or Euroclear Bank S.A./N.V., as operator of the Euroclear System (“Euroclear”) (outside of the United States), if they are participants in these systems, or indirectly through organizations which are participants in these systems. Cross-market transfers between persons holding directly or indirectly through DTC participants, on the one hand, and directly or indirectly through Clearstream, Luxembourg or Euroclear participants, on the other hand, will be effected in accordance with DTC rules on behalf of the relevant international clearing system by its U.S. depositary. |
| Listing |
We do not intend to apply for a listing of the Exchange Notes on any securities exchange or an automated dealer quotation system. |
| Governing Law |
The Exchange Notes will be governed by the laws of the State of New York. |
| Risk Factors |
See “Risk Factors” described herein for important information regarding Baxter and participation in the Exchange Offers. |
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Before making an investment decision, you should carefully consider the following risk factors as well as the risk factors discussed in Baxter’s Annual Report and in other filings with the SEC that are incorporated by reference herein. See “Incorporation by Reference”.
Risks Relating to Participation in the Exchange Offers
The Exchange Offers may be cancelled, delayed or extended.
The consummation of the Exchange Offers is subject to, and conditional upon, the satisfaction or waiver of the conditions discussed under “The Exchange Offers—Conditions to the Exchange Offers”. We may, at our option and in our sole discretion, waive any such conditions or extend the length of either Exchange Offer. Even if the Exchange Offers are completed, the Exchange Offers may not be completed on the schedule described in this prospectus. Accordingly, holders participating in the Exchange Offers may have to wait longer than expected to receive their Exchange Notes during which time those holders of the Original Notes will not be able to effect transfers of their Original Notes tendered for exchange.
If you fail to exchange your Original Notes, they will continue to be restricted securities and may become less liquid.
Original Notes that you do not tender or that we do not accept will, following the Exchange Offers, continue to be restricted securities, and you may not offer to sell them except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities law. We will issue Exchange Notes in exchange for the Original Notes pursuant to the Exchange Offers only following the satisfaction of the procedures and conditions set forth in “The Exchange Offers—Conditions to the Exchange Offers” and “The Exchange Offers—Procedures for Tendering Original Notes”. These procedures and conditions include timely receipt by the Exchange Agent of such Original Notes (or a confirmation of book-entry transfer) and of a properly completed and duly executed letter of transmittal (or an agent’s message from DTC).
Because we anticipate that most holders of Original Notes will elect to exchange their Original Notes, we expect that the liquidity of the market for any Original Notes remaining after the completion of the Exchange Offers will be substantially limited. Any Original Notes tendered and exchanged in the Exchange Offers will reduce the aggregate principal amount of the applicable series of Original Notes outstanding. Following the Exchange Offers, if you do not tender your Original Notes, you generally will not have any further registration rights, and your Original Notes will continue to be subject to certain transfer restrictions. Accordingly, the liquidity of the market for the Original Notes could be adversely affected.
If an active trading market does not develop for the Exchange Notes, you may be unable to sell the Exchange Notes or to sell them at a price you deem sufficient.
The Exchange Notes are a new issue of securities for which there is currently no public trading market. We do not intend to list the Exchange Notes on any national securities exchange. Accordingly, there can be no assurance that an active trading market will develop upon completion of the Exchange Offers or, if it develops, that such market will be sustained, or as to the liquidity of any market. If an active trading market does not develop or is not sustained, the market price and the liquidity of the Exchange Notes may be adversely affected. In addition, the liquidity of the trading market for the Exchange Notes, if it develops, and the market price quoted for the Exchange Notes, may be adversely affected by changes in the overall market for those securities and by changes in our financial performance or prospects or in the prospects for companies in our industry generally.
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Risks Relating to the Notes
The notes are Baxter’s obligations and not obligations of its subsidiaries and will be structurally subordinated to the claims of Baxter’s subsidiaries’ creditors.
The notes are exclusively Baxter’s obligations and not obligations of, and will not be guaranteed by, its subsidiaries. Baxter is a holding company and, accordingly, Baxter conducts substantially all of its operations through its subsidiaries. As a result, Baxter’s cash flow and its ability to service its debt, including the notes, depends upon the earnings and operating capital requirements of its subsidiaries. Baxter depends on the distribution of earnings, loans or other payments by its subsidiaries to it. Baxter’s subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the notes or to make any funds available to it for such payment, whether by dividends, distributions, loans or other payments. The ability of Baxter’s subsidiaries to make any payments to it will depend on its subsidiaries’ earnings, business and tax considerations and any legal restrictions, including the terms of such subsidiaries’ current and future indebtedness.
As a result of our structure, the notes will be structurally subordinated to all existing and future indebtedness, trade payables and other liabilities of Baxter’s subsidiaries. Baxter’s right to receive any assets of any of its subsidiaries upon their liquidation or reorganization, and therefore the right of holders of the notes to participate in those assets, will be subject to the prior claims of our subsidiaries’ creditors, including trade creditors. In addition, even if Baxter were a creditor of any of its subsidiaries, Baxter’s rights as a creditor would be subordinate to any security interest in the assets of its subsidiaries and any indebtedness of its subsidiaries senior to that held by Baxter.
The indenture does not restrict the amount of additional unsecured debt that we may incur or our ability to enter into various transactions that could increase the amount of our outstanding indebtedness, adversely affect our capital structure or credit ratings, or otherwise adversely affect holders of the notes.
The indenture does not place any limitation on the amount of unsecured debt that we may incur. In addition, we are not restricted under the indenture from paying dividends or issuing or repurchasing our securities.
The indenture generally does not prevent us or our subsidiaries from entering into a variety of acquisition, change of control, refinancing, recapitalization or other highly leveraged transactions. As a result, we could enter into any such transaction even though the transaction could increase the total amount of our outstanding indebtedness, adversely affect our capital structure or credit ratings, or otherwise adversely affect the holders of the notes.
We may not be able to generate sufficient cash to service all of our indebtedness, including the notes.
Our ability to make scheduled payments of principal and interest or to satisfy our obligations in respect of our indebtedness or to refinance our indebtedness will depend on our future operating performance. Prevailing economic conditions (including interest rates) and financial, business and other factors, many of which are beyond our control, may also affect our ability to meet these obligations. We may not be able to generate sufficient cash flows from operations, or obtain future borrowings in an amount sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or before maturity. We may not be able to refinance any of our indebtedness when needed on commercially reasonable terms or at all.
We may not be able to repurchase all of the notes upon a change of control triggering event, which would result in a default under the notes.
We will be required to offer to repurchase the notes upon the occurrence of a change of control triggering event as provided in the indenture. However, we may not have sufficient funds to repurchase the notes in cash at
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such time. In addition, our ability to repurchase the notes for cash may be limited by law or the terms of other agreements relating to our indebtedness outstanding at the time (including our existing and future credit facilities). The failure to make such repurchase would result in a default under the notes.
An increase in market interest rates could result in a decrease in the market value of the notes.
The condition of the financial markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future. In general, as market interest rates rise, debt securities bearing interest at fixed rates of interest decline in value. Consequently, if you purchase notes bearing interest at fixed rates of interest and market interest rates increase, the market values of those notes may decline. We cannot predict the future level of market interest rates.
Our credit ratings are subject to change and may not reflect all risks of an investment in the notes.
The credit ratings of the notes may not reflect the potential impact of all risks related to structure and other factors on any trading market for, or trading value of, the notes. However, actual or anticipated changes in our credit ratings will generally affect any trading market for, or trading value of, the notes. Agency credit ratings are not a recommendation to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization. The agencies may revise their ratings in response to changing macroeconomic conditions or in response to a change in our financial forecasts or liquidity position. The consummation or proposed consummation of various corporate transactions may also cause the agencies to change our credit ratings. These transactions may include, among other things, potential acquisitions of business development targets of various sizes and structures, our entry into a new credit facility or financing arrangement or the re-pricing or re-negotiation of any business development transaction. Additionally, each agency’s rating should be evaluated independently of any other agency’s rating.
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These Exchange Offers are intended to satisfy our obligations under the Registration Rights Agreements entered into in connection with the issuance of the Original Notes. We will not receive any cash proceeds from the issuance of the Exchange Notes in the Exchange Offers. The Original Notes surrendered and exchanged for the Exchange Notes will be retired and canceled.
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The Exchange Notes offered hereby will be issued, and the Original Notes were issued, under the indenture, dated March 26, 2020 (the “base indenture”), between Baxter and The Bank of New York Mellon Trust Company, N.A., as trustee (the “trustee”), as amended and supplemented by the first supplemental indenture, dated March 26, 2020 (the “first supplemental indenture”), between Baxter and the trustee, and by the second supplemental indenture, dated November 2, 2020 (the “second supplemental indenture”), and as further amended, supplemented or modified from time to time. The base indenture, the first supplemental indenture and the second supplemental indenture, as they may be further amended, supplemented or modified from time to time, are referred to herein collectively as the “Indenture”. The terms of the Indenture are those provided in the Indenture and those made a part of the indenture by the Trust Indenture Act of 1939, as amended (the “TIA”).
The following description is a summary of the material provisions of the Exchange Notes and the Indenture. It does not purport to be complete, and it is qualified in its entirety by reference to the Exchange Notes, the Indenture and the TIA. Baxter urges you to read the Exchange Notes and the Indenture because they, and not this description, define your rights as holders of the Exchange Notes. Copies of the base indenture and first supplemental indenture were filed with the SEC on March 27, 2020, and a copy of the second supplemental indenture was filed with the SEC on November 6, 2020, and you should refer to the Indenture for provisions that may be important to you.
Original Notes and Exchange Notes will represent the same debt
The Exchange Notes will be issued solely in exchange for an equal principal amount of Original Notes pursuant to the Exchange Offers. The Exchange Notes will evidence the same debt as the Original Notes and both series of Exchange Notes will be entitled to the benefits of the indenture and treated as a single class of debt securities. The terms of the Exchange Notes will be the same in all material respects as the Original Notes except that (i) the Exchange Notes will be registered under the Securities Act, and therefore, will not bear legends restricting the transfer thereof and (ii) the Exchange Notes will not be subject to the registration rights under the Registration Rights Agreements.
If the Exchange Offers are consummated, holders of the Original Notes who do not exchange their Original Notes for Exchange Notes will vote together with holders of Exchange Notes for all relevant purposes under the Indenture. Accordingly, all references herein to specified percentages in aggregate principal amount of the outstanding notes shall be deemed to mean, at any time after the Exchange Offers are consummated, such percentages in aggregate principal amount of the Original Notes and the Exchange Notes then outstanding.
General
Baxter issued the 2030 Original Notes in an initial aggregate principal amount of $500,000,000. The 2030 notes are scheduled to mature on April 1, 2030.
Baxter issued the 2031 Original Notes in an initial aggregate principal amount of $650,000,000. The 2031 notes are scheduled to mature on April 1, 2031.
Baxter may, from time to time, without the consent of the holders of any series of the Exchange Notes, issue additional Exchange Notes of any such series on terms and conditions substantially identical to those of the Exchange Notes of such series (except for the issue date and, in some cases, the initial interest payment date), so that such additional notes will increase the aggregate principal amount of, and will be consolidated and form a single series with, the Exchange Notes of such series and will otherwise have the same terms as the Exchange Notes of such series; provided that Baxter will not issue such additional notes as part of the same series as such outstanding Exchange Notes, unless the additional notes are fungible with the outstanding Exchange Notes of the particular series for U.S. federal income tax purposes.
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Each series of Exchange Notes will be issued in the form of one or more global securities registered in the name of the nominee of The Depository Trust Company (which Baxter may refer to along with its successors in such capacity as the depositary). The Exchange Notes will only be issued in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
With certain exceptions and pursuant to certain requirements set forth in the indenture, Baxter may discharge its obligations under the indenture with respect to the Exchange Notes as described in the sections entitled “—Satisfaction and Discharge” and “—Defeasance and Covenant Defeasance” set forth below.
The Exchange Notes will not be subject to a sinking fund provision.
Interest Rate
The 2030 Exchange Notes will bear interest at a rate of 3.950% per annum. The 2031 Exchange Notes will bear interest at a rate of 1.730% per annum. Interest on the Exchange Notes is payable semi-annually on April 1 and October 1 of each year, beginning on October 1, 2021. Baxter will make each interest payment to the holders of record of the Exchange Notes as of the close of business on the immediately preceding March 17 and September 16 (whether or not a business day). Interest on the Exchange Notes will be calculated on the basis of a 360-day year of twelve 30-day months.
If any interest payment date on the notes falls on a day that is not a business day, payment will be made on the next succeeding business day, and no interest will accrue for the period from and after the interest payment date to the next succeeding business day. As used in this prospectus, the term “business day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in The City of New York are authorized or obligated by or pursuant to law, regulation or executive order to close.
Ranking
The Exchange Notes are Baxter’s direct, unsecured and unsubordinated obligations and will rank equal in priority of payment with all of Baxter’s other existing and future unsecured and unsubordinated indebtedness, and senior in right of payment to any future subordinated indebtedness. At December 31, 2020, Baxter had approximately $6.2 billion of senior unsecured indebtedness outstanding.
A substantial portion of Baxter’s assets are owned through its subsidiaries, many of which have significant debt or other liabilities of their own which will be structurally senior to the Exchange Notes. None of Baxter’s subsidiaries will guarantee or have any obligations with respect to the Exchange Notes. The Exchange Notes will be structurally subordinated to all indebtedness and other liabilities, including trade payables, of Baxter’s subsidiaries. Therefore, Baxter’s rights and the rights of its creditors, including holders of the Exchange Notes, to participate in the assets of any subsidiary upon any such subsidiary’s liquidation may be subject to the prior claims of the subsidiary’s other creditors.
Although Baxter will be required to comply with the covenant described below under the caption “—Certain Covenants—Restrictions on the creation of secured debt” with respect to the Exchange Notes, Baxter has the ability to incur substantial amounts of debt and the indenture will not limit the ability of its subsidiaries to incur an unlimited amount of debt, including secured debt. The indenture does not limit the amount of liabilities that are not considered debt that may be incurred by us or our subsidiaries.
Optional Redemption
The 2030 Exchange Notes, at any time prior to January 1, 2030, and the 2031 Exchange Notes, at any time prior to January 1, 2031 (each such date, a “Par Call Date”), will be redeemable in whole at any time or in part, from time to time, at Baxter’s option, at a “make-whole” redemption price equal to the greater of (1) 100% of the
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principal amount of the relevant series of Exchange Notes to be redeemed plus accrued and unpaid interest, if any, to, but including to the date of redemption, and (2) the sum of the present values of the principal amount of the relevant series of Exchange Notes to be redeemed and the scheduled payments of interest thereon (exclusive of interest accrued to the date of redemption) from the redemption date to the applicable Par Call Date for such series, in each case discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, as defined below, plus 50 basis points, in the case of the 2030 Exchange Notes, and 15 basis points, in the case of the 2031 Exchange Notes, in each case plus accrued and unpaid interest, if any, but excluding, the date of redemption. Baxter will calculate the redemption price.
On or after the applicable Par Call Date, the Exchange Notes will be redeemable in whole at any time or in part, from time to time, at Baxter’s option, at a redemption price equal to 100% of the principal amount of the Exchange Notes of the applicable series to be redeemed, plus accrued and unpaid interest, if any, to, but excluding the date of redemption.
“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Exchange Notes to be redeemed calculated as if the maturity date of such series of Exchange Notes were the applicable Par Call Date (the “Remaining Life”) that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the Remaining Life of such notes.
“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if Baxter obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.
“Independent Investment Banker” means one of the Reference Treasury Dealers that Baxter shall appoint.
“Reference Treasury Dealers” means (1) (a) with respect to the 2030 Exchange Notes, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC and their respective successors, and (b) with respect to the 2031 Exchange Notes, BofA Securities, Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. government securities dealer (“Primary Treasury Dealer”), Baxter shall substitute another nationally recognized investment banking firm that is a Primary Treasury Dealer, and (2) with respect to each series of Exchange Notes, at our option, additional Primary Treasury Dealers selected by us.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by us, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to us by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day preceding such redemption date.
To exercise our option to redeem the Exchange Notes of any series, Baxter will give each holder of the Exchange Notes of such series to be redeemed a notice in writing at least 10 days but not more than 60 days before the redemption date.
With respect to the 2031 Exchange Notes, notice of any redemption may, in Baxter’s discretion, be given subject to the satisfaction of one or more conditions precedent, In that case, such notice shall describe each such condition, and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied or waived by Baxter by the relevant redemption date.
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If less than all of the Exchange Notes are to be redeemed, the selection of such Exchange Notes shall be made in accordance with the applicable depositary.
Unless a default occurs in payment of the redemption price, from and after the redemption date interest will cease to accrue on the notes or portions thereof called for redemption.
Offer to Purchase Upon Change of Control Triggering Event
If a Change of Control Triggering Event occurs with respect to the Exchange Notes of any series, other than with respect to Exchange Notes of such series for which Baxter has exercised its option to redeem as described above, Baxter will be required to make an offer (the “Change of Control Offer”) to each holder of the Exchange Notes of such series to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that holder’s Exchange Notes of such series on the terms set forth in such Exchange Notes. In the Change of Control Offer, Baxter will be required to offer payment in cash equal to 101% of the aggregate principal amount of Exchange Notes of the applicable series repurchased, plus accrued and unpaid interest, if any, on the Exchange Notes of such series repurchased to the date of repurchase (the “Change of Control Payment”). Within 30 days following any Change of Control Triggering Event or, at our option, prior to any Change of Control, but after public announcement of the transaction that constitutes or may constitute the Change of Control, a notice will be mailed (or with respect to Global Notes, to the extent permitted or required by applicable DTC procedures, sent electronically) to holders of the applicable Exchange Notes with a copy to the trustee describing the transaction that constitutes or may constitute the Change of Control Triggering Event and offering to repurchase such Exchange Notes on the date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed or sent (the “Change of Control Payment Date”). The notice will, if mailed or sent prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date.
On the Change of Control Payment Date, Baxter will, to the extent lawful:
| • | accept for payment all Exchange Notes or portions of Exchange Notes properly tendered pursuant to the Change of Control Offer; |
| • | deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of Exchange Notes properly tendered; and |
| • | deliver or cause to be delivered to the trustee such Exchange Notes properly accepted together with an officers’ certificate stating the aggregate principal amount of Exchange Notes or portions of Exchange Notes being repurchased. |
Baxter will not be required to comply with the obligations relating to repurchasing the Exchange Notes if a third party instead satisfies them. In addition, Baxter will not repurchase any Exchange Notes if there has occurred and is continuing on the Change of Control Payment Date an event of default under the indenture with respect to such Exchange Notes, other than a default in the payment of the Change of Control Payment upon a Change of Control Triggering Event.
Baxter will comply with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations applicable to the repurchase of the Exchange Notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any such securities laws or regulations conflict with the change of control offer provisions of the Exchange Notes, Baxter will comply with those securities laws and regulations and will not be deemed to have breached its obligations under the change of control offer provisions of the notes by virtue of any such conflict.
If a Change of Control Offer is made, there can be no assurance that Baxter will have available funds sufficient to make the Change of Control Payment for all of the notes that may be tendered for repurchase. See
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“Risk Factors—We may not be able to repurchase all of the notes upon a change of control triggering event, which would result in a default under the notes.”
For purposes of the change of control offer provisions of the Exchange Notes, the following terms will be applicable:
“Change of Control” means the occurrence of any of the following: (1) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than us or one of our subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and l3d-5 under the Exchange Act), directly or indirectly, of more than 50% of our Voting Stock or other Voting Stock into which our Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares, (2) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of our assets and the assets of our subsidiaries, taken as a whole, to one or more “persons” (as that term is defined in the indenture), other than us or one of our subsidiaries or (3) the adoption of a plan relating to our liquidation or dissolution. Notwithstanding the foregoing, a transaction will not be deemed to be a Change of Control if (1) Baxter becomes a direct or indirect wholly owned subsidiary of a holding company and (2)(A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of our Voting Stock immediately prior to that transaction or (B) immediately following that transaction no “person” (as that term is used in Section 13(d)(3) of the Exchange Act) (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company.
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Rating Event.
“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, and the equivalent investment grade credit rating from any replacement Rating Agency or Rating Agencies.
“Moody’s” means Moody’s Investors Service, Inc.
“Rating Agencies” means (1) each of Moody’s and S&P, and (2) if either Moody’s or S&P ceases to rate the Exchange Notes or fails to make a rating of the Exchange Notes publicly available for reasons outside of our control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act selected by us (as certified by a resolution of our board of directors) as a replacement agency for Moody’s or S&P, or both of them, as the case may be.
“Rating Event” means with respect to any series of the Exchange Notes, the rating on such Exchange Notes is lowered by each of the Rating Agencies and such Exchange Notes are rated below an Investment Grade Rating by each of the Rating Agencies on any day within the 60-day period (which 60-day period will be extended so long as the rating of such Exchange Notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies but no longer than 180 days) after the earlier of (1) the occurrence of a Change of Control and (2) public notice of our intention to effect a Change of Control; provided, however, that a Rating Event with respect to any series of the Exchange Notes otherwise arising by virtue of a particular reduction in rating will not be deemed to have occurred in respect of a particular Change of Control (and thus will not be deemed a Rating Event for purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in rating with respect to any series of the Exchange Notes to which this definition would otherwise apply do not announce or publicly confirm to us in writing at our request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control has occurred at the time of the Rating Event).
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“S&P” means S&P Global Ratings, a division of S&P Global.
“Voting Stock” means, with respect to any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act), as of any date, the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.
The definition of Change of Control includes a phrase relating to the direct or indirect sale, transfer, conveyance or other disposition, in one or a series of related transactions, of “all or substantially all” of our assets and the assets of our subsidiaries, taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all”, there is no precise established definition of such phrase under applicable law. Accordingly, the ability of a holder of the Exchange Notes to require us to repurchase that holder’s Exchange Notes as a result of the sale, transfer, conveyance or other disposition of less than all of our assets and the assets of our subsidiaries, taken as a whole, to one or more persons may be uncertain.
Baxter’s obligation to purchase the Exchange Notes following a Change of Control Triggering Event is subject to the provisions described in the section entitled “— Defeasance and Covenant Defeasance”.
Certain Covenants
Restrictions on the creation of secured debt. Baxter will not, and will not cause or permit any restricted subsidiary to, create, incur, assume or guarantee any indebtedness that is secured by a security interest in any principal facilities of Baxter or any restricted subsidiary or in shares of stock owned directly or indirectly by Baxter in any restricted subsidiary or in indebtedness for money borrowed by one of its restricted subsidiaries from Baxter or another of the restricted subsidiaries (“secured debt”) unless the Exchange Notes then outstanding and any other indebtedness of or guaranteed by Baxter or such restricted subsidiary then entitled to be so secured is secured equally and ratably with or prior to any and all other obligations and indebtedness thereby secured, with exceptions as listed in the indenture. These restrictions do not apply to indebtedness secured by:
| • | any security interest on any property which is a parcel of real property at a manufacturing plant, a warehouse or an office building and which is acquired, constructed, developed or improved by Baxter or a restricted subsidiary, which security interest secures or provides for the payment of all or any part of the acquisition cost of the property or the cost of the construction, development or improvement of the property and which security interest is created prior to, at the same time as, or within 120 days after (i) in the case of the acquisition of property, the completion of the acquisition of the property and (ii) in the case of construction, development or improvement of property, the later to occur of the completion of such construction, development or improvement or the commencement of operation, use or commercial production of the property; |
| • | any security interest on property existing at the time of the acquisition of such property by Baxter or a restricted subsidiary which security interest secures obligations assumed by Baxter or a restricted subsidiary; |
| • | any security interest arising from conditional sales agreements or title retention agreements with respect to property acquired by Baxter or any restricted subsidiary; |
| • | security interests existing on the property or on the outstanding shares or indebtedness of a corporation or firm at the time the corporation or firm becomes a restricted subsidiary or is merged or consolidated with Baxter or a restricted subsidiary or at the time the corporation or firm sells, leases or otherwise disposes of its property as an entirety or substantially as an entirety to Baxter or a restricted subsidiary; |
| • | security interests securing indebtedness of a restricted subsidiary to Baxter or to another restricted subsidiary; |
| • | mechanics’ and other statutory liens arising in the ordinary course of business in respect of obligations which are not due or which are being contested in good faith; |
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| • | security interests arising by reason of deposit with, or the giving of any form of security to, any governmental agency which is required by law as a condition to the transaction of any business; |
| • | security interests for taxes, assessments or governmental charges or levies not yet delinquent or security interests for taxes, assessments or governmental charges or levies already delinquent but which are being contested in good faith; |
| • | security interests arising in connection with legal proceedings, including judgment liens, so long as the proceedings are being contested in good faith and, in the case of judgment liens, the execution has been stayed; |
| • | landlords’ liens on fixtures located on premises leased by Baxter or a restricted subsidiary in the ordinary course of business; |
| • | security interests arising in connection with contracts and subcontracts with or made at the request of the United States, any state thereof, or any department, agency or instrumentality of the United States or any state thereof; |
| • | security interests that secure an obligation issued by the United States or any state, territory or possession of the United States or any of their political subdivisions or the District of Columbia, in connection with the financing of the cost of construction or acquisition of a principal facility or a part of a principal facility; |
| • | security interests by reason of deposits to qualify Baxter or a restricted subsidiary to conduct business, to maintain self-insurance, or to obtain the benefits of, or comply with, laws; |
| • | the extension of any security interest existing on the date of the indenture on a principal facility to additions, extensions or improvements to the principal facility and not as a result of borrowing money or the securing of indebtedness incurred after the date of the indenture; or |
| • | any extension, renewal or refunding, or successive extensions, renewals or refundings, in whole or in part of any secured debt secured by any security interest listed above, provided that the principal amount of the secured debt secured thereby does not exceed the principal amount outstanding immediately prior to the extension, renewal or refunding and that the security interest securing the secured debt is limited to the property which, immediately prior to the extension, renewal or refunding, secured the secured debt and additions to the property. |
For purposes of the indenture, “principal facilities” are any manufacturing plants, warehouses, office buildings and parcels of real property owned by Baxter or any restricted subsidiary, provided each such facility has a gross book value, without deduction for any depreciation reserves, in excess of 2% of Baxter’s consolidated net tangible assets other than any facility that is determined by Baxter’s board of directors to not be of material importance to the business conducted by Baxter and its subsidiaries taken as a whole. For purposes of the indenture, “consolidated net tangible assets” are the total amount of assets that would be included on Baxter’s consolidated balance sheet under U.S. generally accepted accounting principles after deducting all short-term liabilities and liability items, except for indebtedness payable more than one year from the date of incurrence and all goodwill, trade names, trademarks, patents, unamortized debt discount and unamortized expense incurred in the issuance of debt and other like intangibles, except for prepaid royalties.
Notwithstanding the limitations on secured debt described above, Baxter and any restricted subsidiary may create, incur, assume or guarantee secured debt, without equally and ratably securing the notes, provided that the sum of such secured debt and all other secured debt entered into after the date of the indenture, other than secured debt permitted as described in the bullet points above, does not exceed 15% of Baxter’s consolidated net tangible assets.
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For purposes of the indenture, a “restricted subsidiary” is any corporation in which Baxter owns voting securities entitling it to elect a majority of the directors and which is either designated as a restricted subsidiary in accordance with the indenture or:
| • | existed as such on the date of the indenture or is the successor to, or owns, any equity interest in, a corporation which so existed; |
| • | has its principal business and assets in the United States; |
| • | the business of which is other than the obtaining of financing in capital markets outside the United States or the financing of the acquisition or disposition of real or personal property or dealing in real property for residential or office building purposes; and |
| • | does not have assets substantially all of which consist of securities of one or more corporations which are not restricted subsidiaries. |
Restrictions on Mergers, Consolidations and Transfers of Assets. Baxter will not consolidate with or merge into or sell, transfer or lease all or substantially all of its properties and assets to another person unless:
| • | in the case of a merger, Baxter is the surviving corporation, or |
| • | the person into which Baxter is merged or which acquires all or substantially all of the properties and assets of Baxter expressly assumes all of the obligations of Baxter relating to the notes and the indenture. |
Upon a consolidation, merger or transfer, the successor corporation will be substituted for Baxter under the indenture. The successor corporation may then exercise all of the powers and rights of Baxter under the indenture, and Baxter will be released from all of its obligations and covenants under the Exchange Notes and the indenture. If Baxter leases all or substantially all of its assets, the lessee corporation will be the successor and may exercise all of the respective powers and rights under the indenture but Baxter will not be released from its obligations and covenants under the Exchange Notes and the indenture.
Events of Default
Each of the following will be an event of default under the indenture with respect to either series of Exchange Notes:
| • | our failure to pay interest on any of the Exchange Notes of such series when due, and continuance of the default for a period of 30 days; |
| • | our failure to pay principal or premium, if any, on such series of Exchange Notes when due, whether at maturity or otherwise; |
| • | default in the deposit of any sinking fund payment or payment under any analogous provision when due with respect to any of the Exchange Notes of such series; |
| • | our failure to perform, or our breach, of any covenant or warranty in the indenture in respect of such series of Exchange Notes, other than a covenant or warranty included in the indenture solely for the benefit of another series of notes, and continuance of that failure or breach, without that failure or breach having been cured or waived, for a period of 90 days after the trustee gives notice to us or, in the case of notice by the holders, the holders of not less than 25% in aggregate principal amount of the outstanding Exchange Notes of such series give notice to us and the trustee, specifying the default or breach; or |
| • | specified events involving our bankruptcy, insolvency or reorganization. |
An event of default under one series of notes does not necessarily constitute an event of default under any other series of notes. The indenture provides that, within 90 days after the occurrence of any default with respect
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to a series of notes, the trustee will mail to all holders of Exchange Notes of such series notice of the default, unless the default has been cured or waived. However, the indenture provides that the trustee may withhold notice of a default with respect to a series of Exchange Notes, except a default in payment of principal, premium, if any, or interest, if any, if the trustee considers it in the best interest of the holders to do so. In the case of a default in the performance, or breach, of any covenant or warranty in the indenture or in respect of a series of Exchange Notes, no notice with respect to such series will be given until at least 30 days after the occurrence of the default or breach. As used in this paragraph, the term “default” means any event which is, or after notice or lapse of time or both would become, an event of default with respect to a series of Exchange Notes.
If an event of default, other than an event of default relating to events of bankruptcy, insolvency or reorganization, with respect to a series of Exchange Notes occurs and is continuing, either the trustee or the holders of at least 25% in aggregate principal amount of the outstanding notes of that series may declare the principal of, and accrued and unpaid interest, if any, on, the Exchange Notes in that series to be due and payable immediately. If an event of default relating to events of bankruptcy, insolvency or reorganization with respect to a series of Exchange Notes occurs then the principal of, and accrued and unpaid interest, if any, on, all the Exchange Notes of that series will automatically become and be immediately due and payable without any declaration or other act on the part of the trustee or any holder of the Exchange Notes. However, upon specified conditions, the holders of a majority in aggregate principal amount of the outstanding Exchange Notes of a series may rescind and annul an acceleration of the Exchange Notes of that series and its consequences.
Any notice of event of default, notice of acceleration or instruction to the trustee to provide a notice of event of default, notice of acceleration or to take any other action (a “Noteholder Direction”) provided by any one or more holders of the Exchange Notes (other than, in the case of the 2031 Exchange Notes, a Regulated Bank) (each a “Directing Holder”) must be accompanied by a written representation from each such holder to Baxter and the trustee that such holder is not (or, in the case such holder is DTC or its nominee, that such holder is being instructed solely by beneficial owners that have represented to such holder that they are not) Net Short (a “Position Representation”), which representation, in the case of a Noteholder Direction relating to a notice of event of default shall be deemed repeated at all times until the resulting event of default is cured or otherwise ceases to exist or the notes are accelerated. In addition, each Directing Holder must, at the time of providing a Noteholder Direction, provide Baxter with such other information as Baxter may reasonably request from time to time in order to verify the accuracy of such Directing Holder’s Position Representation within five business days of request therefor (a “Verification Covenant”). In any case in which the holder is DTC or its nominee, any Position Representation or Verification Covenant required hereunder shall be provided by the beneficial owner of the notes in lieu of DTC or its nominee.
If, following the delivery of a Noteholder Direction, but prior to acceleration of the Exchange Notes, Baxter determines in good faith that there is a reasonable basis to believe a Directing Holder was, at any relevant time, in breach of its Position Representation and provides to the trustee (i) in the case of the 2031 Exchange Notes, an officer’s certificate stating that Baxter has initiated litigation in, or (ii) in the case of the 2030 Exchange Notes, evidence that Baxter has filed papers with, a court of competent jurisdiction seeking a determination that such Directing Holder was, at such time, in breach of its Position Representation and seeking to invalidate any event of default that resulted from the applicable Noteholder Direction, the cure period with respect to such event of default shall be automatically stayed pending a final and non-appealable determination of a court of competent jurisdiction on such matter. If, following the delivery of a Noteholder Direction, but prior to acceleration of the applicable Exchange Notes, Baxter provides to the trustee an officers’ certificate stating that a Directing Holder failed to satisfy its Verification Covenant, (i) in the case of the 2031 Exchange Notes, the cure period with respect to such default shall be automatically stayed and the cure period with respect to any event of default that resulted from the applicable Noteholder Direction shall be automatically reinstituted and remedy stayed, or (ii) in the case of the 2030 Exchange Notes, the cure period with respect to any event of default that resulted from the applicable Noteholder Direction shall be automatically stayed, in each case pending satisfaction of such Verification Covenant. Any breach of the Position Representation shall result in such holder’s participation in such Noteholder Direction being disregarded; and, if, without the participation of such holder, the percentage of
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notes held by the remaining holders that provided such Noteholder Direction would have been insufficient to validly provide such Noteholder Direction, such Noteholder Direction shall be void ab initio, with the effect that such event of default shall be deemed never to have occurred and, in the case of the 2031 Exchange Notes, acceleration shall be voided and the trustee shall be deemed not to have received such Noteholder Direction or any notice of such default or event of default.
Notwithstanding anything in the preceding two paragraphs to the contrary, with respect to the 2031 Exchange Notes, any Noteholder Direction delivered to the trustee during the pendency of an event of default as the result of bankruptcy or similar proceedings shall not require compliance with the foregoing paragraphs. In addition, for the avoidance of doubt, with respect to the 2031 Exchange Notes, the foregoing two paragraphs shall not apply to any holder that is a Regulated Bank.
For the avoidance of doubt, with respect to the 2031 Exchange Notes, the trustee shall be entitled to conclusively rely on any Noteholder Direction, Position Representation, Verification Covenant, officers’ certificate or other document delivered to it pursuant to the foregoing paragraphs, shall have no duty to inquire as to or investigate the accuracy of any Position Representation, enforce compliance with any Verification Covenant, verify any statements in any officers’ certificate delivered to it, or otherwise make calculations, investigations or determinations with respect to Regulated Banks, Derivative Instruments, Net Shorts, Long Derivative Instruments, Short Derivative Instruments or otherwise and shall have no liability for ceasing to take any action or staying any remedy. With respect to the 2031 Exchange Notes, the trustee shall have no liability to Baxter, any holder or any other person in acting in good faith on a Noteholder Direction or to determine whether any holder has delivered a Position Representation or that such Position Representation conforms with the indenture or any other agreement or whether or not any holder is a Regulated Bank.
Subject to the trustee being required to act with the requisite standard of care during the continuance of an event of default under the indenture with respect to any series of the Exchange Notes, the trustee is under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any of the holders of such Exchange Notes unless those holders have offered to the trustee security or indemnity satisfactory to the trustee against the costs, expenses and liabilities that may be incurred by taking such action.
Subject to this requirement, holders of a majority in aggregate principal amount of the outstanding Exchange Notes of a series have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee under the indenture with respect to the Exchange Notes of such series.
The indenture requires the annual filing with the trustee of a certificate signed by the principal executive officer, the principal financial officer or the principal accounting officer of Baxter that states whether Baxter is in default under the terms, provisions or conditions of the indenture.
Notwithstanding any other provision of the indenture, the holders of Exchange Notes will have the right, which is absolute and unconditional, to receive payment of the principal of, and premium, if any, and interest, if any, on such Exchange Notes on the respective due dates for those payments and to institute suit for the enforcement of those payments, and this right will not be impaired without the consent of the holder.
For purposes of the event of default provisions of the Exchange Notes, the following terms shall apply, as applicable:
“Approved Commercial Bank” means a commercial bank with a consolidated combined capital and surplus of at least $5 billion.
“Derivative Instrument” with respect to a person, means any contract, instrument or other right to receive payment or delivery of cash or other assets to which such person or any affiliate of such person that is acting in concert with such person in connection with such person’s investment in the Exchange Notes (other than a
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Screened Affiliate) is a party (whether or not requiring further performance by such person), the value and/or cash flows of which (or any material portion thereof) are materially affected by the value and/or performance of the Exchange Notes and/or the creditworthiness of Baxter (the “Performance References”).
“Long Derivative Instrument” means a Derivative Instrument (i) the value of which generally increases, and/or the payment or delivery obligations under which generally decrease, with positive changes to the Performance References and/or (ii) the value of which generally decreases, and/or the payment or delivery obligations under which generally increase, with negative changes to the Performance References.
“Net Short” means, with respect to a holder or beneficial owner, as of a date of determination, either (i) the value of its Short Derivative Instruments exceeds the sum of the (x) the value of its Exchange Notes plus (y) the value of its Long Derivative Instruments as of such date of determination or (ii) it is reasonably expected that such would have been the case were a Failure to Pay or Bankruptcy Credit Event (each as defined in the 2014 International Swaps and Derivatives Association, Inc. Credit Derivatives Definitions) to have occurred with respect to Baxter immediately prior to such date of determination.
“Regulated Bank” means an Approved Commercial Bank that is (i) a U.S. depository institution the deposits of which are insured by the Federal Deposit Insurance Corporation; (ii) a corporation organized under section 25A of the U.S. Federal Reserve Act of 1913; (iii) a branch, agency or commercial lending company of a foreign bank operating pursuant to approval by and under the supervision of the Board of Governors under 12 CFR part 211; (iv) a non-U.S. branch of a foreign bank managed and controlled by a U.S. branch referred to in clause (iii); or (v) any other U.S. or non-U.S. depository institution or any branch, agency or similar office thereof supervised by a bank regulatory authority in any jurisdiction.
“Screened Affiliate” means any affiliate of a holder (i) that makes investment decisions independently from such holder and any other affiliate of such holder that is not a Screened Affiliate, (ii) that has in place customary information screens between it and such holder and any other affiliate of such holder that is not a Screened Affiliate and such screens prohibit the sharing of information with respect to Baxter or its subsidiaries, (iii) whose investment policies are not directed by such holder or any other affiliate of such holder that is acting in concert with such holder in connection with its investment in the notes, and (iv) whose investment decisions are not influenced by the investment decisions of such holder or any other affiliate of such holder that is acting in concert with such holders in connection with its investment in the notes.
“Short Derivative Instrument” means a Derivative Instrument (i) the value of which generally decreases, and/or the payment or delivery obligations under which generally increase, with positive changes to the Performance References and/or (ii) the value of which generally increases, and/or the payment or delivery obligations under which generally decrease, with negative changes to the Performance References.
Modification and Waivers
The indenture permits Baxter and the trustee, with the consent of the holders of a majority in aggregate principal amount of the outstanding Exchange Notes of a series affected by a modification or amendment, to modify or amend any of the provisions of the indenture or of the Exchange Notes of the applicable series or the rights of the holders of such Exchange Notes under the indenture. However, no modification or amendment may, without the consent of the holder of each outstanding Exchange Notes affected by the modification or amendment, among other things:
| • | change the stated maturity of the principal of, or premium, if any, or any installment of interest, if any, with respect to the notes; |
| • | reduce the principal of or any premium on the notes or reduce the rate of interest on or the redemption or repurchase price of the notes; |
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| • | change any place where or the currency in which the principal of, any premium or interest on, any note is payable; |
| • | impair a holder’s right to institute suit to enforce any payment on or after the stated maturity of the notes or, in the case of redemption, on or after the redemption date; |
| • | reduce the percentage in principal amount of outstanding notes of the applicable series whose holders must consent to any modification or amendment or any waiver of compliance with specific provisions of the indenture or specified defaults under the indenture and their consequences; or |
| • | make certain modifications to the provisions for modification of the indenture and for certain waivers, except to increase the principal amount of outstanding notes of the applicable series necessary to consent to any such change. |
Notwithstanding the foregoing, the indenture also contains provisions permitting Baxter and the trustee, without the consent of the holders of the notes, to modify or amend the indenture, among other things:
| • | to convey, transfer, assign, mortgage or pledge to the trustee as security for the Exchange Notes any property or assets which Baxter may desire; |
| • | to evidence succession of another corporation to Baxter, or its successors, and the assumption by the successor corporation of the covenants, agreements and obligations of Baxter; |
| • | to add covenants and agreements of Baxter to those included in the indenture for the protection of holders of Exchange Notes and to make the occurrence of a default of any such covenants or agreements a default or an event of default permitting enforcement of the remedies set forth in the indenture; |
| • | to prohibit the authentication and delivery of additional series of Exchange Notes under the indenture; |
| • | to cure any ambiguity or correct or supplement any provision contained in the indenture or any supplemental indenture which may be defective or inconsistent with any other provisions contained therein; |
| • | to make such other provisions in regard to matters or questions arising under the indenture as are not inconsistent with the provisions of the indenture or any supplemental indenture and shall not adversely affect the interests of the holders of the Exchange Notes in any material respect; or |
| • | to evidence and provide for acceptance of appointment under the indenture by a successor trustee with respect to the Exchange Notes of one or more series or to add to or change any of the provisions of the indenture as shall be necessary to provide for or facilitate the administration of the trusts under the indenture by more than one trustee. |
The holders of a majority in aggregate principal amount of the outstanding Exchange Notes of a series may, with respect to the Exchange Notes of such series waive our compliance with some of the restrictive provisions of the indenture. The holders of a majority in aggregate principal amount of the outstanding Exchange Notes of a series may, on behalf of all holders of the Exchange Notes of such series, waive any past default under the indenture with respect to the Exchange Notes of such series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest, if any, on the Exchange Notes of such series or a default in respect of a covenant or provision which cannot be modified or amended without the consent of the holder of each outstanding Exchange Note of such series.
In order to determine whether the holders of the requisite principal amount of the outstanding Exchange Notes have taken an action under an indenture as of a specified date notes owned by us or any other obligor upon the Exchange Notes or any of our or their affiliates will be disregarded and deemed not to be outstanding.
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Satisfaction and Discharge
Upon the direction of Baxter, the indenture will cease to be of further effect with respect to any series of Exchange Notes specified, subject to the survival of specified provisions of the indenture, when:
| • | either: (i) all Exchange Notes of a series issued under the indenture, subject to exceptions, have been delivered to the trustee for cancellation; or (ii) all Exchange Notes of a series issued under the indenture have become due and payable or will become due and payable at their stated maturity within one year or are to be called for redemption within one year and Baxter has deposited with the trustee, in trust, funds in United States dollars, or direct or indirect obligations of the United States (“government obligations”) in an amount sufficient to pay the entire indebtedness on the Exchange Notes of such series including the principal, premium, if any, interest, if any, to the date of the deposit, if the Exchange Notes of such series have become due and payable, or to the maturity or redemption date of such Exchange Notes, as the case may be; |
| • | Baxter has paid all other sums payable under the indenture with respect to the outstanding Exchange Notes of any series issued under the indenture; and |
| • | the trustee has received each officer’s certificate and opinion of counsel called for by the indenture. |
Defeasance and Covenant Defeasance
Baxter may elect with respect to any series of Exchange Notes issued under the indenture either:
| • | to defease and be discharged from all of its obligations with respect to the outstanding Exchange Notes of any series (“defeasance”), except for, among other things, |
| • | the obligation to register the transfer or exchange of such series of Exchange Notes, |
| • | the obligation to replace temporary or mutilated, destroyed, lost or stolen such series of Exchange Notes, |
| • | the obligation to maintain an office or agency in respect of such series of Exchange Notes, and |
| • | the obligation to hold monies for payment in trust; or |
| • | to be released from its obligations with respect to any series of Exchange Notes under specified covenants in the indenture including those described under the heading “Certain Covenants — Restrictions on the creation of secured debt”, and any omission to comply with those obligations will not constitute a default or an event of default with respect to such series of Exchange Notes (“covenant defeasance”), |
in either case upon the irrevocable deposit by Baxter with the trustee, or other qualifying trustee, in trust for that purpose, of an amount in United States dollars and/or government obligations which, through the payment of principal and interest in accordance with their terms, will provide money in an amount sufficient to pay the principal, premium, if any, and interest, if any, on the due dates for those payments.
The defeasance or covenant defeasance described above will only be effective if, among other things:
| • | it will not result in a breach or violation of, or constitute a default under, the indenture or any other material agreement or instrument to which Baxter is a party or is bound; |
| • | in the case of defeasance, Baxter will have delivered to the trustee an opinion of independent counsel confirming that |
| • | Baxter has received from or there has been published by the Internal Revenue Service a ruling, or |
| • | since the date of the indenture there has been a change in applicable federal income tax law, |
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in either case to the effect that, and based on this ruling or change in law, the opinion of counsel will confirm that the holders of the applicable series of Exchange Notes then outstanding will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the defeasance had not occurred;
| • | in the case of covenant defeasance, Baxter will have delivered to the trustee an opinion of independent counsel to the effect that the holders of the applicable series of Exchange Notes then outstanding will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the covenant defeasance had not occurred; |
| • | if the cash and/or government obligations deposited are sufficient in the opinion of a certified public accounting firm of national reputation to pay the principal of, and premium, if any, and interest, if any, with respect to the applicable series of Exchange Notes provided the notes are redeemed on a particular redemption date, Baxter will have given the trustee irrevocable instructions to redeem such series of Exchange Notes on that date; and |
| • | no event of default or event which with notice or lapse of time or both would become an event of default with respect to the applicable series of Exchange Notes will have occurred and be continuing on the date of the deposit into trust, and, solely in the case of defeasance, no event of default or event which with notice or lapse of time or both would become an event of default arising from specified events of bankruptcy, insolvency or reorganization with respect to Baxter will have occurred and be continuing during the period through and including the 91st day after the date of the deposit into trust. |
In the event covenant defeasance is effected with respect to a series of Exchange Notes and those Exchange Notes are declared due and payable because of the occurrence of any event of default other than an event of default with respect to the covenants as to which covenant defeasance has been effected, which would no longer be applicable to that series of Exchange Notes after covenant defeasance, the amount of monies and/or government obligations deposited with the trustee to effect covenant defeasance may not be sufficient to pay amounts due on such Exchange Notes at the time of any acceleration resulting from that event of default. However, Baxter would remain liable to make payment of those amounts due at the time of acceleration.
Book-Entry and Settlement
Each series of Exchange Notes will be issued in the form of one or more fully registered global notes, deposited with, or on behalf of, The Depository Trust Company, New York, New York (“DTC”) and registered in the name of DTC or its nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. Global notes are not exchangeable for definitive note certificates except in the specific circumstances described below. For purposes of this prospectus, “Global Note” refers to the Global Note or Global Notes representing an entire series of Exchange Notes. So long as DTC, or its nominee, is the registered owner of a Global Note, DTC or the nominee, as the case may be, will be considered the sole owner or holder of the notes under the indenture.
All interests in the Global Notes will be subject to the operations and procedures of DTC, Euroclear Bank SA/NV (“Euroclear”) and Clearstream Banking, S.A. (“Clearstream, Luxembourg”).
Except as provided below, you will not be entitled to have Exchange Notes registered in your name, will not receive or be entitled to receive physical delivery of Exchange Notes in definitive form, and will not be considered the owner or holder thereof under the indenture.
Except as set forth below, a Global Note may be transferred, in whole or in part, only to another nominee of DTC or to a successor of DTC or its nominee.
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The Depository Trust Company. DTC has advised us that it is:
| • | a limited-purpose trust company organized under New York Banking Law; |
| • | a “banking organization” within the meaning of the New York Banking Law; |
| • | a member of the Federal Reserve System; |
| • | a “clearing corporation” within the meaning of the New York Uniform Commercial Code; and |
| • | a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. |
DTC holds securities that its participants (“Direct Participants”) deposit with DTC and facilitates the post-trade settlement of transactions among Direct Participants in such securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation (“DTTC”). DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others, such as securities brokers and dealers, banks and trust companies that clear transactions through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”, including Clearstream, Luxembourg or Euroclear). The rules applicable to DTC and its participants are on file with the SEC. More information about DTC can be found at www.dtcc.com.
Purchases of Exchange Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Exchange Notes on DTC’s records. The ownership interest of each actual purchaser of each Exchange Notes will be recorded on the Direct and Indirect Participants’ records. These beneficial owners will not receive written confirmation from DTC of their purchase, but beneficial owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the beneficial owner entered into the transaction. Transfers of ownership interests in the Exchange Notes are to be accomplished by entries made on the books of Direct and Indirect participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in the Exchange Notes, except in the event that use of the book-entry system for the notes is discontinued.
To facilitate subsequent transfers, all Exchange Notes deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Exchange Notes with DTC and their registration in the name of Cede & Co. or such other DTC nominee, will not change the beneficial ownership of the Exchange Notes. DTC has no knowledge of the actual beneficial owners of the Exchange Notes; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Exchange Notes are credited, which may or may not be the beneficial owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Redemption notices with respect to any series will be sent to DTC. If less than all of the notes of a series are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each direct participant in such series to be redeemed.
In any case where a vote may be required with respect to the Exchange Notes of any series, neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to such notes unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an
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omnibus proxy to Baxter as soon as possible after the record date. The omnibus proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the notes of the series are credited on the record date (identified in the listing attached to the omnibus proxy).
Principal and interest payments, if any, on the Exchange Notes will be made to Cede & Co, as nominee of DTC, or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts, upon DTC’s receipt of funds and corresponding detail information from Baxter or the trustee, on the applicable payment date in accordance with their respective holdings shown on DTC’s records. Payments by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name”, and will be the responsibility of such participant and not of DTC, Baxter or the trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of us or the trustee. Disbursement of payments from Cede & Co. to Direct Participants is DTC’s responsibility. Disbursements of payments to beneficial owners are the responsibility of Direct and Indirect Participants.
In any case where Baxter has made a tender offer for the purchase of any notes, a beneficial owner must give notice through a participant to a tender agent to elect to have its notes purchased or tendered. The beneficial owner must deliver notes by causing the direct participants to transfer the participant’s interest in the notes, on DTC’s records, to a tender agent. The requirement for physical delivery of Exchange Notes in connection with an optional tender or a mandatory purchase is satisfied when the ownership rights in the Exchange Notes are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Exchange Notes to the tender agent’s DTC account.
Baxter obtained the information in this section concerning DTC and DTC’s book-entry system from sources that Baxter believes to be reliable, but Baxter takes no responsibility for the accuracy of this information.
If at any time DTC or any successor depository for the Exchange Notes of any series notifies us that it is unwilling or unable to continue as the depository for the Exchange Notes of such series, or if at any time DTC or such successor depository shall no longer be a clearing agency registered under the Exchange Act and any other applicable statute or regulation, Baxter will be obligated to use commercially reasonable efforts to appoint another depository for the notes of such series. If another depository is not appointed within 90 days, definitive note certificates will be issued in exchange for the Global Note representing the Exchange Notes of that series.
Baxter may at any time in our sole discretion determine that the Exchange Notes of any series shall no longer be represented by the Global Note, in which case definitive note certificates will be issued in exchange for the Global Note representing the Exchange Notes of that series.
Clearstream, Luxembourg and Euroclear. Clearstream, Luxembourg and Euroclear hold interests on behalf of their participating organizations through customers’ securities accounts in Clearstream, Luxembourg’s and Euroclear’s names on the books of their respective depositaries, which hold those interests in customers’ securities accounts in the depositaries’ names on the books of DTC. At the present time, Citibank, N.A. acts as U.S. depositary for Clearstream, Luxembourg and JPMorgan Chase Bank, N.A. acts as U.S. depositary for Euroclear (the “U.S. Depositaries”).
Clearstream, Luxembourg holds securities for its participating organizations (“Clearstream Participants”) and facilitates the clearance and settlement of securities transactions between Clearstream Participants through electronic book-entry changes in accounts of Clearstream Participants, thereby eliminating the need for physical movement of certificates. Clearstream, Luxembourg provides to Clearstream Participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream, Luxembourg interfaces with domestic markets in several countries.
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Clearstream, Luxembourg is registered as a bank in Luxembourg, and as such is subject to regulation by the Commission de Surveillance du Secteur Financier and the Banque Centrale du Luxembourg, which supervise and oversee the activities of Luxembourg banks. Clearstream, Luxembourg participants are worldwide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations, and may include the underwriters or their affiliates. Indirect access to Clearstream, Luxembourg is available to other institutions that clear through or maintain a custodial relationship with a Clearstream, Luxembourg participant. Clearstream, Luxembourg has established an electronic bridge with Euroclear as the operator of the Euroclear system (the “Euroclear Operator”) in Brussels to facilitate settlement of trades between Clearstream, Luxembourg and the Euroclear Operator.
Distributions with respect to the Exchange Notes held beneficially through Clearstream, Luxembourg will be credited to cash accounts of Clearstream Participants in accordance with its rules and procedures, to the extent received by the U.S. Depositary for Clearstream, Luxembourg.
Euroclear holds securities and book-entry interests in securities for participating organizations (“Euroclear Participants”) and facilitates the clearance and settlement of securities transactions between Euroclear Participants and between Euroclear Participants and participants of certain other securities intermediaries through electronic book-entry changes in accounts of such participants or other securities intermediaries. Euroclear provides Euroclear Participants, among other things, with safekeeping, administration, clearance and settlement, securities lending and borrowing, and related services. Euroclear Participants are investment banks, securities brokers and dealers, banks, central banks, supranationals, custodians, investment managers, corporations, trust companies and certain other organizations, and may include the underwriters or their affiliates. Non-participants in Euroclear may hold and transfer beneficial interests in a global note through accounts with a participant in the Euroclear system or any other securities intermediary that holds a book-entry interest in a global note through one or more securities intermediaries standing between such other securities intermediary and Euroclear.
Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear system and applicable Belgian law (collectively, the “Terms and Conditions”). The Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Operator acts under the Terms and Conditions only on behalf of Euroclear Participants and has no record of or relationship with persons holding through Euroclear Participants.
Distributions with respect to Exchange Notes held beneficially through Euroclear will be credited to the cash accounts of Euroclear Participants in accordance with the Terms and Conditions to the extent received by the U.S. Depositary for Euroclear.
Transfers between Euroclear Participants and Clearstream, Luxembourg Participants will be effected in the ordinary way in accordance with their respective rules and operating procedures. Subject to compliance with the transfer restrictions applicable to the Global Notes described herein, cross-market transfers between Direct Participants in DTC, on the one hand, and Euroclear Participants or Clearstream Participants, on the other hand, will be effected through DTC in accordance with DTC’s rules on behalf of Euroclear or Clearstream, Luxembourg, as the case may be, by its U.S. Depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, Luxembourg, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (European time) of such system. Euroclear or Clearstream, Luxembourg, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its U.S. Depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the global note in DTC, and making or receiving payment in accordance with normal procedures for same-day fund settlement applicable to DTC. Euroclear Participants and Clearstream Participants may not deliver instructions directly to their respective U.S. Depositaries.
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Due to time zone differences, the securities accounts of a Euroclear or Clearstream Participant purchasing an interest in a global note from a Direct Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear Participant or Clearstream Participant, during the securities settlement processing day (which must be a business day for Euroclear or Clearstream, Luxembourg) immediately following the settlement date of DTC. Cash received in Euroclear or Clearstream, Luxembourg as a result of sales of interests in a global note by or through a Euroclear or Clearstream Participant to a Direct Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream, Luxembourg cash account only as of the business day for Euroclear or Clearstream, Luxembourg following DTC’s settlement date.
The information in this section concerning Euroclear and Clearstream, Luxembourg and their book-entry systems has been obtained from sources that Baxter believes to be reliable, but Baxter takes no responsibility for the accuracy of that information.
Although Euroclear and Clearstream, Luxembourg have agreed to the foregoing procedures to facilitate transfers of interests in global notes among Euroclear Participants and Clearstream, Luxembourg Participants, they are under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. Neither Baxter nor the underwriters take any responsibility for the performance by Euroclear or Clearstream, Luxembourg or their respective participants of their respective obligations under the rules and procedures governing their operations.
Governing Law
The indenture and the Exchange Notes will be governed by and construed in accordance with the laws of the State of New York, as applied to contracts made and performed within the State of New York, without regard to principles of conflicts of law.
The Trustee, Registrar and Paying Agent
The Bank of New York Mellon Trust Company, N.A. will be the trustee, registrar and paying agent with respect to the Exchange Notes. Neither the trustee nor any paying agent shall be responsible for monitoring our rating status, making any request upon any Rating Agency, or determining whether any Rating Event or Change of Control Triggering Event has occurred.
Additional Information
Anyone who receives this prospectus may obtain a copy of the indenture when available without charge by writing to Baxter at One Baxter Parkway, Deerfield, Illinois 60015, Attention: Corporate Secretary.
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Purpose of the Exchange Offers
The 2030 Original Notes were purchased by the 2030 Initial Purchasers on March 26, 2020 and the 2031 Original Notes were purchased by the 2031 Initial Purchasers on November 2, 2020, in each case for resale to qualified institutional buyers in compliance with Rule 144A under the Securities Act and outside of the United Stated to non-U.S. persons in compliance with Regulation S under the Securities Act. In connection with the sale of the 2030 Original Notes, Baxter and Citigroup Global Markets Inc., Goldman, Sachs & Co. LLC and J.P. Morgan Securities LLC, as representatives to the 2030 Initial Purchasers, entered into the March Registration Rights Agreement. In connection with the sale of the 2031 Original Notes, Baxter and BofA Securities, Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC, as representatives to the 2031 Initial Purchasers, entered into the November Registration Rights Agreement.
Baxter is making the Exchange Offers in reliance on the position of the SEC as set forth in Exxon Capital Holdings Corporation and similar no-action letters. However, Baxter has not sought our own no-action letter. Based upon these interpretations by the SEC, Baxter believes that a holder of Exchange Notes who is not our “affiliate” within the meaning of Rule 405 of the Securities Act and who exchanges Original Notes for Exchange Notes in the Exchange Offers generally may offer the Exchange Notes for resale, sell the Exchange Notes and otherwise transfer the Exchange Notes without further registration under the Securities Act and without delivery of a prospectus that satisfies the requirements of Section 10 of the Securities Act. This does not apply, however, to a holder who is our “affiliate” within the meaning of Rule 405 of the Securities Act. Baxter also believes that a holder may offer, sell or transfer the Exchange Notes only if the holder acknowledges that the holder is acquiring the Exchange Notes in the ordinary course of its business and is not participating, does not intend to participate and has no arrangement or understanding with any person to participate in a distribution of the Exchange Notes.
Any holder of the Original Notes using the Exchange Offers to participate in a distribution of Exchange Notes cannot rely on the no-action letters referred to above. Any broker-dealer who holds Original Notes acquired for its own account as a result of market-making activities or other trading activities and who receives Exchange Notes in exchange for such Original Notes pursuant to the Exchange Offers may be a statutory underwriter and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes. See “Plan of Distribution”. You may not participate in the Exchange Offers if you are a broker-dealer tendering Original Notes that you acquired directly from us for your own account.
Except as set forth in this prospectus, this prospectus may not be used for an offer to resell, resale or other transfer of Exchange Notes.
The Exchange Offers are not being made to, nor will Baxter accept tenders for exchange from, holders of Original Notes in any jurisdiction in which the Exchange Offers or the acceptance of them would not be in compliance with the securities or blue sky laws of such jurisdiction.
Each broker-dealer that receives Exchange Notes for its own account in exchange for Original Notes, where such Original Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Original Notes where such Original Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. Baxter has agreed that, for a period of 90 days after the Expiration Date (as defined herein), Baxter will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution” below.
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Terms of the Exchange Offers
Based on the terms and subject to the conditions set forth in this prospectus and accompanying Letter of Transmittal, Baxter will accept any and all Original Notes validly tendered prior to 5:00 p.m., New York City time, on the Expiration Date for the Exchange Offers. Baxter will issue $1,000 principal amount of Exchange Notes in exchange for each $1,000 principal amount of outstanding Original Notes validly tendered pursuant to the Exchange Offers on or before the Expiration Date and not validly withdrawn. Holders may tender some or all of the Original Notes pursuant to the Exchange Offers. The Exchange Offers are not conditioned upon any minimum aggregate principal amount of Original Notes to be tendered.
Promptly after the Expiration Date (unless extended as described in this prospectus), Baxter will issue an aggregate principal amount of up to $500,000,000 of 2030 Exchange Notes for a like principal amount of outstanding 2030 Original Notes tendered and accepted and up to $650,000,000 of 2031 Exchange Notes for a like principal amount of outstanding 2031 Original notes tendered and accepted in connection with the Exchange Offers. The Exchange Notes issued in connection with the Exchange Offers will be delivered promptly after the Expiration Date.
The form and terms of the Exchange Notes will be substantially identical to the terms of the Original Notes, except that:
| • | the Exchange Notes will have different CUSIP numbers from the Original Notes; |
| • | the Exchange Notes will have been registered under the Securities Act and, therefore, the Exchange Notes will not bear legends restricting the transfer of the Exchange Notes; and |
| • | holders of the Exchange Notes will not be entitled to any rights under the Registration Rights Agreements, which rights will terminate upon the consummation of the Exchange Offers, or to the additional interest provisions of the Registration Rights Agreements. |
The Exchange Notes will evidence the same debt as the Original Notes and will be issued under the same indenture and be entitled to the same benefits under that indenture as the Original Notes being exchanged. As a result, the Original Notes and the Exchange Notes will be treated as a single series under the indenture.
No interest will be paid in connection with the Exchange Offers. The Exchange Notes will accrue interest from and including the last interest payment date on which interest has been paid on the Original Notes or, if no interest has been paid on the Original Notes, from the date of original issue of the Original Notes. Accordingly, the holders of Original Notes that are accepted for exchange will not receive accrued but unpaid interest on Original Notes at the time of tender. Rather, that interest will be payable on the Exchange Notes delivered in exchange for the Original Notes on the first interest payment date after the Expiration Date.
In connection with the issuance of the Original Notes, Baxter arranged for the Original Notes purchased by qualified institutional buyers and those sold in reliance on Regulation S under the Securities Act to be issued and transferable in book-entry form through the facilities of DTC, acting as depositary. Exchange Notes will be issued in the form of one or more Global Notes registered in the name of DTC or its nominee and each beneficial owner’s interest in it will be transferable in book-entry form through DTC. See “Description of Exchange Notes—Book-Entry and Settlement”.
Original Notes that are not tendered for exchange or are tendered but not accepted in connection with the Exchange Offers will remain outstanding and be entitled to the benefits of the Indenture that governs the notes, but certain registration and other rights under the Registration Rights Agreements will terminate and holders of the Original Notes will generally not be entitled to any registration rights under the Registration Rights Agreements. See “—Consequences of Failure to Properly Tender Original Notes in the Exchange Offers”.
Baxter shall be considered to have accepted validly tendered Original Notes if and when Baxter has given oral (to be followed by prompt written notice) or written notice to the Exchange Agent. The Exchange Agent will act as agent for the tendering holders for the purposes of receiving the Exchange Notes from us.
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If any tendered Original Notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events described in this prospectus or otherwise, Baxter will return the Original Notes, without expense, to the tendering holder promptly after the Expiration Date for the Exchange Offers.
Holders who tender Original Notes will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes on exchange of Original Notes in connection with the Exchange Offers. Baxter will pay all charges and expenses, other than certain applicable taxes described below, in connection with the Exchange Offers. See “—Fees and Expenses”.
Expiration Date; Extension; Termination; Amendment
The Exchange Offers will remain open for at least 20 full business days. The Expiration Date for the Exchange Offers is 5:00 p.m., New York City time, on , 2021 unless extended by us in our sole discretion, in which case the term “Expiration Date” shall mean the latest date and time to which the Exchange Offers are extended with respect to either or both series of Exchange Notes.
Subject to applicable law, Baxter reserves the right, in our sole discretion:
| • | to delay accepting any Original Notes, to extend either Exchange Offer or to terminate either Exchange Offer if, in our reasonable judgment, any of the conditions described below shall not have been satisfied, by giving oral (to be followed by prompt written notice) or written notice of the delay, extension or termination to the Exchange Agent; or |
| • | to amend the terms of either Exchange Offer in any manner. |
If Baxter amends either Exchange Offer in a manner that Baxter considers material, Baxter will disclose such amendment by means of a prospectus supplement, and Baxter will extend such Exchange Offer for a period of five to ten business days. Neither Exchange Offer is conditioned upon the other Exchange Offer, and Baxter may terminate either Exchange Offer without terminating the other Exchange Offer.
If Baxter determines to extend, amend or terminate either Exchange Offer, Baxter will publicly announce this determination by making a timely release through an appropriate news agency.
If Baxter delays accepting any Original Notes or terminates either Exchange Offer, Baxter promptly will pay the consideration offered, or return any Original Notes deposited, pursuant to the Exchange Offers as required by Rule 14e-1(c).
Conditions to the Exchange Offers
Notwithstanding any other provisions of the Exchange Offers, or any extension of the Exchange Offers, Baxter will not be required to accept for exchange, or to exchange any Exchange Notes for, any Original Notes and Baxter may terminate either Exchange Offer or, at its option, modify, extend or otherwise amend either Exchange Offer, if any of the following conditions are not satisfied at or prior to the Expiration Date. Additionally, neither Exchange Offer is conditioned upon the other Exchange Offer, and Baxter may terminate or extend either Exchange Offer without terminating or extending the other Exchange Offer:
(1) In our reasonable judgment, no action or event has occurred or been threatened (including a default under an agreement, indenture or other instrument or obligation to which Baxter or one of its affiliates is a party or by which Baxter or one of its affiliates is bound), no action is pending, no action has been taken, and no statute, rule, regulation, judgment, order, stay, decree or injunction has been promulgated, enacted, entered, enforced or deemed applicable to the Exchange Offers or the exchange of Original Notes for Exchange Notes
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under the Exchange Offers by or before any court or governmental regulatory or administrative agency, authority, or tribunal, which either:
| • | challenges the making of the Exchange Offers or the exchange of Original Notes for Exchange Notes under the Exchange Offers or might, directly or indirectly, prohibit, prevent, restrict or delay consummation of, or might otherwise adversely affect in any material manner, the Exchange Offers or the exchange of Original Notes for Exchange Notes under the Exchange Offers; or |
| • | in our reasonable judgment, could materially affect the business, condition (financial or otherwise), income, operations, properties, assets, liabilities or prospects of Baxter and its subsidiaries, taken as a whole, or materially impair the contemplated benefits to Baxter of the Exchange Offers or the exchange of Original Notes for Exchange Notes under the Exchange Offers; |
(2) None of the following has occurred:
| • | the SEC has issued a stop order which would suspend the effectiveness of the registration statement of which this prospectus forms a part or the qualification of the applicable indenture governing the Exchange Notes under the TIA; |
| • | any general suspension of, or limitation on, trading in securities on any United States national securities exchanges or in the over-the-counter market (whether or not mandatory); |
| • | a declaration of a banking moratorium or any suspension of payments in respect of banks by federal or state authorities in the United States (whether or not mandatory); |
| • | any material adverse change in the United States’ securities or financial markets generally; or |
| • | in the case of any of the foregoing existing at the time of the commencement of the Exchange Offers, a material acceleration or worsening thereof; and |
(3) The trustee under the Indenture has not objected in any respect to, or taken any action that could in our reasonable judgment adversely affect the consummation of, either of the Exchange Offers, nor has the trustee taken any action that challenges the validity or effectiveness of the procedures used by us in making the Exchange Offers.
Baxter expressly reserves the right to amend or terminate either Exchange Offer and to reject for exchange any Original Notes not previously accepted for such exchange, upon the occurrence of any of the conditions of the Exchange Offers specified above. Baxter will give oral or written notice (with any oral notice to be promptly confirmed in writing) of any amendment, non-acceptance, termination or waiver to the Exchange Agent as promptly as practicable, followed by a timely press release.
These conditions are for our sole benefit and, except as set forth below, may be waived by us, in whole or in part in our sole discretion. Any determination made by us concerning these events, developments or circumstances shall be conclusive and binding. Baxter may, at its option and in our sole discretion, waive any such conditions except for the condition that the registration statement of which this prospectus forms a part is not subject to a stop order or any proceedings for that purpose.
All conditions to the Exchange Offers must be satisfied or, where permitted, waived, at or by the Expiration Date. In addition, Baxter may in its absolute discretion, subject to applicable law, terminate either Exchange Offer for any other reason.
If any of the foregoing conditions are not satisfied, Baxter may, at any time at or prior to the Expiration Date:
(1) terminate either Exchange Offer and promptly return all tendered Original Notes with respect to that Exchange Offer to the respective tendering holders;
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(2) modify, extend or otherwise amend either Exchange Offer and retain all tendered Original Notes with respect to that Exchange Offer until the Expiration Date, as extended, subject, however, to the withdrawal rights of holders; or
(3) waive the unsatisfied conditions, except for the condition that the registration statement of which this prospectus forms a part is not subject to a stop order or any proceedings for that purpose, with respect to either Exchange Offer and accept all Original Notes tendered and not previously validly withdrawn.
Effect of Tender
Any tender by a holder, and our subsequent acceptance of that tender, of Original Notes will constitute a binding agreement between that holder and us upon the terms and subject to the conditions of the Exchange Offers described in this prospectus and in the letter of transmittal. The participation in the Exchange Offers by a tendering holder of Original Notes will constitute the agreement by that holder to deliver good and marketable title to the tendered Original Notes, free and clear of any and all liens, restrictions, charges, pledges, security interests, encumbrances or rights of any kind of third parties.
Absence of Dissenters’ Rights of Appraisal
Holders of the Original Notes do not have any dissenters’ rights of appraisal in connection with the Exchange Offers.
Procedures for Tendering Original Notes
If you hold Original Notes and wish to have those notes exchanged for Exchange Notes, you must validly tender (or cause the valid tender of) your Original Notes using the procedures described in this prospectus and in the accompanying letter of transmittal.
The procedures by which you may tender or cause to be tendered Original Notes will depend upon the manner in which you hold the Original Notes, as described below.
If you are a beneficial owner which holds Original Notes through Euroclear or Clearstream, Luxembourg and wish to tender your Original Notes, you must instruct Euroclear or Clearstream, Luxembourg, as the case may be, to block the account in respect of the tendered Original Notes in accordance with the procedures established by Euroclear or Clearstream, Luxembourg. You are encouraged to contact Euroclear and Clearstream, Luxembourg directly to ascertain their procedure for tendering Original Notes.
Original Notes Held with DTC by a DTC Participant
Pursuant to authority granted by DTC, if you are a DTC participant that has Original Notes credited to your DTC account and thereby held of record by DTC’s nominee, you may directly tender your Original Notes as if you were the record holder. Accordingly, references herein to record holders include DTC participants with Original Notes credited to their accounts. Within two business days after the date of this prospectus, the Exchange Agent will establish accounts with respect to the Original Notes at DTC for purposes of the Exchange Offers.
Tenders of Original Notes will be accepted only integral multiples of $1,000. No alternative, conditional or contingent tenders will be accepted.
Any DTC participant may tender Original Notes by effecting a book-entry transfer of the Original Notes to be tendered in the Exchange Offers into the account of the Exchange Agent at DTC and either (1) electronically transmitting its acceptance of the Exchange Offers through DTC’s ATOP procedures for transfer or (2) completing and signing the letter of transmittal according to the instructions contained therein and delivering it, together with
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any signature guarantees and other required documents, to the Exchange Agent at its address on the back cover page of this prospectus, in either case before the Expiration Date of the Exchange Offers.
If ATOP procedures are followed, DTC will verify each acceptance transmitted to it, execute a book-entry delivery to the Exchange Agent’s account at DTC and send an agent’s message to the Exchange Agent. An “agent’s message” is a message, transmitted by DTC to and received by the Exchange Agent and forming part of a book-entry confirmation, which states that DTC has received an express acknowledgement from a DTC participant tendering Original Notes that the participant has received and agrees to be bound by the terms of the letter of transmittal and that Baxter may enforce the agreement against the participant. DTC participants following this procedure should allow sufficient time for completion of the ATOP procedures prior to the Expiration Date of the Exchange Offers. A letter of transmittal need not accompany tenders effected through ATOP; however, you will be bound by its terms just as if you had signed it.
The letter of transmittal (or facsimile thereof), with any required signature guarantees, or (in the case of book-entry transfer) an agent’s message in lieu of the letter of transmittal, and any other required documents, must be transmitted to and received by the Exchange Agent prior to the Expiration Date of the Exchange Offers at one of its addresses set forth on the back cover page of this prospectus. Delivery of these documents to Baxter or DTC does not constitute delivery to the Exchange Agent.
Original Notes Held Through a Nominee by a Beneficial Owner
Currently, all of the Original Notes are held in book-entry form and can only be tendered by following the procedures described under “—Procedures for Tendering Original Notes—Original Notes Held with DTC by a DTC Participant”. However, any beneficial owner whose Original Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct it to tender on the owner’s behalf if such owner wishes to participate in the Exchange Offers. You should keep in mind that your intermediary may require you to take action with respect to the Exchange Offers a number of days before the Expiration Date in order for such entity to tender Original Notes on your behalf at or prior to the Expiration Date in accordance with the terms of the Exchange Offers.
Beneficial owners should be aware that their broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadlines for participation in the Exchange Offers. Accordingly, beneficial owners wishing to participate in the Exchange Offers should contact their broker, dealer, commercial bank, trust company or other nominee as soon as possible in order to determine the times by which such owner must take action in order to participate in the Exchange Offers.
Letter of Transmittal
Subject to and effective upon the acceptance for exchange and issuance of Exchange Notes, in exchange for Original Notes tendered by a letter of transmittal in accordance with the terms and subject to the conditions set forth in this prospectus, by executing and delivering a letter of transmittal (or agreeing to the terms of a letter of transmittal pursuant to an agent’s message) a tendering holder of Original Notes:
| • | irrevocably sells, assigns and transfers to or upon the order of Baxter all right, title and interest in and to, and all claims in respect of or arising or having arisen as a result of the holder’s status as a holder of, the Original Notes tendered thereby; |
| • | represents and warrants that the Original Notes tendered were owned as of the date of tender, free and clear of all liens, charges, claims, encumbrances, interests and restrictions of any kind; and |
| • | irrevocably constitutes and appoints the Exchange Agent the true and lawful agent and attorney-in-fact of the holder with respect to any tendered Original Notes (with full knowledge that the Exchange |
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| Agent also acts as the agent of Baxter and an affiliate of the Exchange Agent acts as trustee under the Indenture), with full powers of substitution and revocation (such power of attorney being deemed to be an irrevocable power coupled with an interest) to cause the Original Notes tendered to be assigned, transferred and exchanged in the Exchange Offers. |
Proper Execution and Delivery of Letter of Transmittal
If you wish to participate in the Exchange Offers, delivery of your Original Notes, signature guarantees and other required documents are your responsibility. Delivery is not complete until the required items are actually received by the Exchange Agent. If you mail these items, Baxter recommends that you (1) use registered mail properly insured with return receipt requested and (2) mail the required items in sufficient time to ensure timely delivery.
Except as otherwise provided below, all signatures on the letter of transmittal or a notice of withdrawal must be guaranteed by a recognized participant in the Securities Transfer Agents Medallion Program, the NYSE Medallion Signature Program or the Stock Exchange Medallion Program. Signatures on the letter of transmittal need not be guaranteed if:
| • | the letter of transmittal is signed by a DTC participant whose name appears on a security position listing of DTC as the owner of the Original Notes and the portion entitled “Special Issuance Instructions” on the letter of transmittal has not been completed; or |
| • | the Original Notes are tendered for the account of an eligible institution. See Instruction 4 in the letter of transmittal. |
No alternative, conditional, irregular or contingent tenders will be accepted. By executing the letter of transmittal, or facsimile thereof, the tendering holders of Original Notes waive any right to receive any notice of the acceptance for exchange of their Original Notes. Tendering holders should indicate in the applicable box in the letter of transmittal the name, address and DTC participant number to which unexchanged Original Notes should be delivered by book-entry transfer, if different from the name and address of the person signing the letter of transmittal. If those instructions are not given, Original Notes not tendered or exchanged will be returned by book-entry transfer to the tendering holder.
Miscellaneous
All questions as to the validity, form, eligibility, including time of receipt, and acceptance and withdrawal of tendered Original Notes will be determined by us in our absolute discretion, which determination will be final and binding. Baxter reserves the absolute right to reject any and all tendered Original Notes determined by us not to be in proper form or not to be tendered properly or any tendered Original Notes our acceptance of which would, in the opinion of our counsel, be unlawful. Baxter also reserves the right to waive, in its absolute discretion, any defects, irregularities or conditions of tender as to particular Original Notes, whether or not waived in the case of other Original Notes. Baxter’s interpretation of the terms and conditions of the Exchange Offers, including the terms and instructions in the letter of transmittal, will be final and binding on all parties.
Unless waived, any defects or irregularities in connection with tenders of Original Notes must be cured within the time Baxter determines. Although Baxter intends to notify holders of defects or irregularities with respect to tenders of Original Notes, none of we, the Exchange Agent or any other person will be under any duty to give that notification or shall incur any liability for failure to give that notification. Tenders of Original Notes will not be deemed to have been made until any defects or irregularities therein have been cured or waived.
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In addition, Baxter reserves the right, as set forth above under the caption “—Conditions to the Exchange Offers”, to terminate either Exchange Offer. By tendering, each holder represents and acknowledges to us, among other things, that:
| • | it has full power and authority to tender, sell, assign and transfer the Original Notes it is tendering and that Baxter will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by us; |
| • | the Exchange Notes acquired in connection with the Exchange Offers are being obtained in the ordinary course of business of the person receiving the Exchange Notes; |
| • | at the time of commencement of the Exchange Offers it had no arrangement with any person to participate in a distribution of such Exchange Notes; |
| • | it is not an “affiliate” (as defined in Rule 405 under the Securities Act) of our company; and |
| • | if the holder is a broker-dealer, it is not engaged in, and does not intend to engage in, a distribution of the Exchange Notes, and that it will receive Exchange Notes for its own account in exchange for Original Notes that were acquired by such broker-dealer as a result of market-making activities or other trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. See “Plan of Distribution”. |
There are no guaranteed delivery procedures for the Exchange Offers. Holders must tender their Original Notes via the ATOP system in accordance with the procedures of the letter of transmittal by the Expiration Date.
Withdrawal of Tenders
Tenders of Original Notes in the Exchange Offers may be validly withdrawn at any time prior to the Expiration Date.
Beneficial owners desiring to withdraw a tender of Original Notes previously tendered through the ATOP procedures should contact the DTC participant through which they hold their Original Notes. In order to withdraw Original Notes previously tendered, a DTC participant may, prior to the Expiration Date of the Exchange Offers, withdraw its instruction previously transmitted through ATOP by (1) withdrawing its acceptance through ATOP, or (2) delivering to the Exchange Agent by mail, hand delivery or facsimile transmission, notice of withdrawal of such instruction. The withdrawal notice must:
| • | specify the name of the tendering holder of Original Notes; |
| • | bear a description, including the series, of the Original Notes to be withdrawn; |
| • | specify the aggregate principal amount represented by those Original Notes; |
| • | specify the name and number of the account at DTC to be credited with the withdrawn Original Notes; and |
| • | be signed by the holder of those Original Notes in the same manner as the original signature on the letter of transmittal, including any required signature guarantees, or be accompanied by evidence satisfactory to us that the person withdrawing the tender has succeeded to the beneficial ownership of those Original Notes. |
The signature on any notice of withdrawal must be guaranteed by an eligible guarantor institution, unless the Original Notes have been tendered for the account of an eligible guarantor institution.
Withdrawal of tenders of Original Notes may not be rescinded, and any Original Notes validly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Exchange Offers. Validly withdrawn Original Notes may, however, be re-tendered by again following one of the procedures described in “—Procedures for Tendering Original Notes” at or prior to the Expiration Date.
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Exchange Agent
The Bank of New York Mellon Trust Company, N.A. has been appointed as Exchange Agent in connection with the Exchange Offers. Questions and requests for assistance, as well as requests for additional copies of this prospectus or of the letter of transmittal, should be directed to the Exchange Agent at:
The Bank of New York Mellon Trust Company, N.A., as Exchange Agent
c/o BNY Mellon Corporate Trust Operations—Reorganization Unit
111 Sanders Creek Parkway
East Syracuse, NY 13057
Attn: Tiffany Castor
Tel: (315) 414-3034
Fax: (732) 667-9408
Email: CT_Reorg_Unit_Inquiries@bnymellon.com
Fees and Expenses
Baxter will not make any payment to brokers, dealers or others soliciting acceptances of the Exchange Offers. Baxter will pay certain other expenses to be incurred in connection with the Exchange Offers, including the fees and expenses of the Exchange Agent and certain accounting and legal fees.
Holders who tender their Original Notes for exchange generally will not be obligated to pay transfer taxes. If, however,
| • | Exchange Notes are to be delivered to, or issued in the name of, any person other than the registered holder of the Original Notes tendered, |
| • | tendered Original Notes are registered in the name of any person other than the person signing the letter of transmittal, or |
| • | a transfer tax is imposed for any reason other than the exchange of Original Notes in connection with the Exchange Offers, |
then the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption from them is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to the tendering holder.
Accounting Treatment
The Exchange Notes will be recorded at the same carrying value as the Original Notes as reflected in our accounting records on the date of the exchange. Accordingly, Baxter will not recognize any gain or loss for accounting purposes upon the completion of the Exchange Offers. Payments made to other third parties will be expensed as incurred in accordance with generally accepted accounting principles.
Consequences of Failure to Properly Tender Original Notes in the Exchange Offers
Issuance of the Exchange Notes in exchange for the Original Notes under the Exchange Offers will be made only after timely receipt by the Exchange Agent of a properly completed and duly executed letter of transmittal (or an agent’s message from DTC through ATOP) and the certificate(s) representing such Original Notes (or confirmation of book-entry transfer), and all other required documents. Therefore, holders of the Original Notes desiring to tender such Original Notes in exchange for Exchange Notes should allow sufficient time to ensure timely delivery. Baxter is under no duty to give notification of defects or irregularities of tenders of Original
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Notes for exchange. Original Notes that are not tendered or that are tendered but not accepted by us will, following completion of the Exchange Offers, continue to be subject to the existing restrictions upon transfer thereof under the Securities Act, and, upon completion of the Exchange Offers, certain registration rights under the Registration Rights Agreements will terminate.
In the event the Exchange Offers are completed, Baxter generally will not be required to register the remaining Original Notes. Remaining Original Notes will continue to be subject to the following restrictions on transfer:
| • | the remaining Original Notes may be resold only if registered pursuant to the Securities Act, if any exemption from registration is available, or if neither such registration nor such exemption is required by law; and |
| • | the remaining Original Notes will bear a legend restricting transfer in the absence of registration or an exemption. |
Baxter does not currently anticipate that it will register the remaining Original Notes under the Securities Act. To the extent that Original Notes are tendered and accepted in connection with the Exchange Offers, any trading market for remaining Original Notes could be adversely affected. See “Risk Factors—Risks Relating to Participation in the Exchange Offers—If you fail to exchange your Original Notes, they will continue to be restricted securities and may become less liquid”.
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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE EXCHANGE OFFERS
An exchange of Original Notes for Exchange Notes pursuant to the Exchange Offers should not be treated as a disposition of the Original Notes for U.S. federal income tax purposes. Accordingly, for U.S. federal income tax purposes, (a) a holder of Original Notes should not recognize gain or loss in respect of such exchange, (b) a holder’s tax basis in the Exchange Notes should equal its tax basis in the Original Notes, (c) a holder’s holding period in the Exchange Notes should include its holding period in the Original Notes, and (d) a holder should be subject to tax in respect of the Exchange Notes in the same manner as with respect to the Original Notes.
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If you want to participate in the Exchange Offers, you must represent, among other things, that you:
| • | are not a broker-dealer tendering Original Notes that you acquired directly from us for your own account; |
| • | are acquiring the Exchange Notes in the ordinary course of your business; |
| • | have not participated in, do not intend to participate in, and have no arrangement or understanding with any person to participate in, a distribution of the Exchange Notes; and |
| • | are not an “affiliate” as defined under Rule 405 of the Securities Act. |
If you fail to satisfy any of these conditions, you cannot rely on the position of the SEC set forth in the no-action letters referred to above under “Summary—The Exchange Offers—Resale of Exchange Notes” and you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a resale of the Exchange Notes.
Each broker-dealer that receives Exchange Notes for its own account pursuant to the Exchange Offers must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Original Notes where such Original Notes were acquired as a result of market-making activities or other trading activities. Baxter has agreed that, for a period of 90 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.
Baxter will not receive any proceeds from any sale of Exchange Notes by broker-dealers. Exchange Notes received by broker-dealers for their own account pursuant to the Exchange Offers may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Notes. Any broker-dealer that resells Exchange Notes that were received by it for its own account pursuant to the Exchange Offers and any broker or dealer that participates in a distribution of such Exchange Notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of Exchange Notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date, Baxter will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the Exchange Offers other than commissions or concessions of any brokers or dealers, and will indemnify the holders of the Exchange Notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.
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The Bank of New York Mellon Trust Company, N.A has been appointed as the Exchange Agent for the Exchange Offers. Letters of transmittal and all correspondence in connection with the Exchange Offers should be sent or delivered by each holder of Original Notes, or a beneficial owner’s commercial bank, broker, dealer, trust company or other nominee, to the Exchange Agent at the address and telephone number set forth on the back cover of this prospectus.
Questions concerning tender procedures and requests for additional copies of this prospectus or the letter of transmittal should be directed to the Exchange Agent at the address and telephone numbers listed below. Holders of Original Notes may also contact their commercial bank, broker, dealer, trust company or other nominee for assistance concerning the Exchange Offers.
We will pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses.
The contact information for the Exchange Agent is:
The Bank of New York Mellon Trust Company, N.A., as Exchange Agent
c/o BNY Mellon Corporate Trust Operations—Reorganization Unit
111 Sanders Creek Parkway
East Syracuse, NY 13057
Attn: Tiffany Castor
Tel: (315) 414-3034
Fax: (732) 667-9408
Email: CT_Reorg_Unit_Inquiries@bnymellon.com
Questions and requests for assistance related to the Exchange Offers or for additional copies of this prospectus and the letter of transmittal may be directed to the Exchange Agent at the telephone number and address listed above.
DELIVERY OF A LETTER OF TRANSMITTAL OR TRANSMISSION OF INSTRUCTIONS TO AN ADDRESS OR FACSIMILE NUMBER OTHER THAN THAT OF THE EXCHANGE AGENT AS SET FORTH ON THE BACK COVER OF THIS PROSPECTUS DOES NOT CONSTITUTE VALID DELIVERY.
The validity of the Exchange Notes will be passed upon for us by Sullivan & Cromwell LLP, New York, New York.
The financial statements and management’s assessment of the effectiveness of internal control over financial reporting (which is included in Management’s Assessment of Internal Control Over Financial Reporting) incorporated in this prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2020 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
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Baxter International Inc.
OFFERS TO EXCHANGE
PROSPECTUS
The Exchange Agent for the Exchange Offers is:
The Bank of New York Mellon Trust Company, N.A.
Requests for additional copies of this prospectus and the letter of transmittal may be directed to the Exchange Agent at the address or telephone number set forth above. Beneficial owners may also contact their custodian for assistance concerning the Exchange Offers.
Until , 2021, all dealers that effect transactions in the Exchange Notes, whether or not participating in the Exchange Offers, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
| Item 20. | Indemnification of Directors and Officers |
Section 145 of the General Corporation Law of the State of Delaware, as amended, provides that under certain circumstances a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in right of the corporation), by reason of the fact that such person is or was a director, officer, employee or agent of the corporation or is or was serving at its request in such capacity in another corporation or business association, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The statute provides that indemnification pursuant to its provisions is not exclusive of other rights of indemnification to which a person may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. Article NINTH of Baxter’s Certificate of Incorporation provides that Baxter shall indemnify directors and officers of Baxter and its subsidiaries against certain liabilities that may arise as a result of such service to the fullest extent permitted by the General Corporation Law of the State of Delaware.
Baxter is also empowered by Section 102(b)(7) of the General Corporation Law of the State of Delaware to include a provision in its certificate of incorporation to limit under certain circumstances a director’s liability to Baxter or its stockholders for monetary damages for breaches of fiduciary duty as a director. Article EIGHTH of Baxter’s Certificate of Incorporation states that to the fullest extent permitted by the General Corporation Law of Delaware as the same exists or may hereafter be amended, directors of Baxter shall not be liable to Baxter or its stockholders for monetary damages for breach of fiduciary duty as a director. Under currently applicable Delaware law, directors will remain liable for damages for (i) a breach of their duty of loyalty to Baxter and its stockholders; (ii) acts or omissions not in good faith; (iii) their intentional misconduct or knowing violation of law; (iv) unlawful dividend payments, stock repurchases or redemptions; and (v) any transaction from which the director derived an improper personal benefit.
Baxter maintains insurance policies under which the directors and officers of Baxter are insured, within the limits and subject to the limitations of the policies, against certain expenses in connection with the defense of actions, suits or proceedings, and certain liabilities which might be imposed as a result of such actions, suits or proceedings, to which they are parties by reason of being or having been such directors or officers which could include liabilities under the Securities Act or the Exchange Act.
Baxter has entered into indemnification agreements with its officers and directors. These agreements provide for full indemnification, including indemnification for judgments or settlements against an officer or director in favor of Baxter, with certain exceptions. This indemnity could apply to liabilities under the Securities Act in certain circumstances.
| Item 21. | Exhibits and Financial Statement Schedules |
The following exhibits are filed as part of this registration statement or incorporated herein by reference.
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| * | Previously filed. |
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| Item 22. | Undertakings |
| (a) The | undersigned registrant hereby undertakes: |
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) Any portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
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(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
| (b) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (c) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. |
| (d) | The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
| (e) | The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Deerfield, State of Illinois, on the 7th day of April, 2021.
| BAXTER INTERNATIONAL INC. | ||
| By: | /s/ José E. Almeida | |
| José E. Almeida Chairman, President and Chief Executive Officer | ||
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Each person whose signature appears below constitutes and appoints James K. Saccaro, Baxter’s Executive Vice President and Chief Financial Officer, Sean Martin, Baxter’s Senior Vice President and General Counsel, and Ellen Bradford, Baxter’s Senior Vice President, Associate General Counsel and Corporate Secretary, and each of them, and any successor or successors to such offices held by each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in his or her name, place and stead, in any and all capacities, to sign any or all further amendments (including post-effective amendments) to this registration statement (and any additional registration statement related hereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments, including post-effective amendments, thereto)), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ José A. Almeida José A. Almeida |
Chairman, President and Chief Executive Officer (Principal Executive Officer) |
April 7, 2021 | ||
| /s/ James K. Saccaro James K. Saccaro |
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
April 7, 2021 | ||
| /s/ Brian C. Stevens Brian C. Stevens |
Senior Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer) |
April 7, 2021 | ||
| /s/ Thomas F. Chen Thomas F. Chen |
Director | April 7, 2021 | ||
| /s/ John D. Forsyth John D. Forsyth |
Director | April 7, 2021 | ||
|
James R. Gavin III, M.D., Ph.D. |
Director | |||
| /s/ Peter S. Hellman Peter S. Hellman |
Director | April 7, 2021 | ||
| /s/ Michael F. Mahoney Michael F. Mahoney |
Director | April 7, 2021 | ||
| /s/ Patricia B. Morrison Patricia B. Morrison |
Director | April 7, 2021 | ||
| /s/ Stephen N. Oesterle, M.D. Stephen N. Oesterle, M.D. |
Director | April 7, 2021 | ||
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| Signature | Title | Date | ||
| /s/ Cathy R. Smith Cathy R. Smith |
Director |
April 7, 2021 | ||
| /s/ Thomas T. Stalkamp Thomas T. Stalkamp |
Director | April 7, 2021 | ||
| /s/ Albert P.L. Stroucken Albert P.L. Stroucken |
Director | April 7, 2021 | ||
| /s/ Amy A. Wendell Amy A. Wendell |
Director | April 7, 2021 | ||
| /s/ David S. Wilkes, M.D. David S. Wilkes, M.D. |
Director | April 7, 2021 | ||
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Exhibit 4.3
[FORM OF FACE OF NOTE]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR TO A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
1
CUSIP No.: 071813 BY4
ISIN: US071813BY49
BAXTER INTERNATIONAL INC.
3.950% Senior Notes due 2030
| No. | $ |
Baxter International Inc., a Delaware corporation (the “Company”), for value received, hereby promises to pay to or registered assigns, at the office or agency of the Company in the City of New York, the principal sum of set forth on Schedule I attached hereto (as the same may be revised from time to time) on April 1, 2030, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest, semiannually on April 1 and October 1 of each year, commencing on October 1, 2020, on said principal sum at said office or agency, in like coin or currency, at the rate per annum specified in the title of this Note, from the April 1 and October 1, as the case may be, next preceding the date of this Note to which interest has been paid, unless the date hereof is a date to which interest has been paid, in which case from the date of this Note, or unless no interest has been paid on these Notes, in which case from March 26, 2020 until payment of said principal sum has been made or duly provided for; provided, that payment of interest may be made at the option of the Company by check mailed to the address of the person entitled thereto as such address shall appear on the Security Register or by wire transfer to an account maintained by the payee with a bank located in the United States.
Notwithstanding the foregoing, if the date hereof is after the 17th day of March or the 16th day of September, as the case may be, and before the following April 1 or October 1, as the case may be, this Note shall bear interest from such April 1 and October 1; provided, that, if the Company shall default in the payment of interest due on such April 1 and October 1, then this Note shall bear interest from the next preceding April 1 or October 1, to which interest has been paid or, if no interest has been paid on these Notes, from March 26, 2020. The interest so payable on any April 1 or October 1, will, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Note is registered at the close of business on the March 17 or September 16 (whether or not a Business Day (as defined herein)), as the case may be, preceding such April 1 or October 1. Interest on this Note will be calculated on the basis of a 360-day year of twelve 30-day months.
Reference is made to the further provisions of this Note set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Trustee under the Indenture referred to on the reverse hereof.
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IN WITNESS WHEREOF, Baxter International Inc. has caused this instrument to be duly executed on the date set forth below.
Dated:
| BAXTER INTERNATIONAL INC. | ||
| By: |
||
| Name: |
||
| Title: |
||
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[FORM OF CERTIFICATION OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein issued under the within-mentioned Indenture.
| THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee | ||
| By: | ||
| Authorized Signatory | ||
Dated:
4
REVERSE OF NOTE
BAXTER INTERNATIONAL INC.
3.950% Senior Notes due 2030
This Note is one of a duly authorized issue of Securities of the Company of the series hereinafter specified, all issued or to be issued under and pursuant to an Indenture, dated as of March 26, 2020, as supplemented by the First Supplemental Indenture, dated as of March 26, 2020 (both together herein called the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (herein called the “Trustee” which term includes any successor Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities. This Note is one of a series of Securities of the Company designated as the 3.950% Senior Notes due 2030 (the “Notes”), initially limited in aggregate principal amount of $500,000,000, subject to the issuance of additional Notes as provided in the Indenture. Terms used but not defined herein shall have the respective meanings set forth in the Indenture.
If any interest payment date, maturity date or redemption date of this Note falls on a day that is not a Business Day, payment will be made on the next succeeding Business Day, and no interest will accrue for the period from and after the interest payment date, maturity date or redemption date, as the case may be, to the next succeeding Business Day. As used in this Note, the term “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in the City of New York are authorized or obligated by or pursuant to law, regulation or executive order to close.
The Indenture contains provisions for the defeasance at any time of the entire indebtedness of the Notes or certain covenants set forth in the Indenture applicable to the Notes upon compliance by the Company of certain conditions set forth therein, which provisions apply to this Note.
This Note is redeemable in whole at any time or in part, from time to time, at the option of the Company, prior to the date that is three months prior to its maturity date (the “Par Call Date”), at a make whole redemption price equal to the greater of:
(i) 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest thereon to the date of redemption, and
(ii) the sum of the present values of the principal amount of the Notes to be redeemed and the scheduled payments of interest thereon (exclusive of interest accrued to the date of redemption) from the redemption date to the Par Call Date, discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points, plus accrued and unpaid interest thereon to the date of redemption.
“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.
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“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed calculated as if the maturity date of the Notes were the Par Call Date (the “Remaining Life”) that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the Remaining Life of the Notes.
“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.
“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company.
“Reference Treasury Dealers” means (1) Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer (“Primary Treasury Dealer”), the Company shall substitute another nationally recognized investment banking firm that is a Primary Treasury Dealer, and (2) at the option of the Company, additional Primary Treasury Dealers selected by the Company.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. New York City time on the third Business Day preceding such redemption date.
On or after the date that is one month prior to its maturity date, this Note is redeemable in whole at any time or in part, from time to time, at the option of the Company, at a redemption price equal to 100% of its principal amount, plus accrued and unpaid interest thereon to the date of redemption.
Any redemption made at the option of the Company (an “Optional Redemption”) shall be made upon not less than 10 nor more than 60 days prior notice before the redemption date to the Holders. If the Notes are only partially redeemed by the Company pursuant to an Optional Redemption, the Notes to be redeemed shall be selected by such method as the Trustee shall deem fair and appropriate and in accordance with the Indenture, provided, however, that in the case of Notes in global form such selection shall be made in accordance with the procedures of the applicable Depositary. In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. Unless the Company defaults in payment of the redemption price, on and after the redemption date interest will cease to accrue on the Notes or portions thereof called for redemption.
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If a Change of Control Triggering Event (as defined below) occurs, unless the Company has exercised its option to redeem the Notes (as described above), the Company shall be required to make an offer (the “Change of Control Offer”) to each holder of the Notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that holder’s Notes on the terms set forth below. In the Change of Control Offer, the Company shall be required to offer payment in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased to the date of repurchase (the “Change of Control Payment”). Within 30 days following any Change of Control Triggering Event or, at the option of the Company, prior to any Change of Control, but after public announcement of the transaction that constitutes or may constitute the Change of Control, a notice shall be mailed (or, with respect to Notes in global form, to the extent permitted or required by applicable Depositary procedures, sent electronically) to holders of the Notes with a copy to the Trustee describing the transaction that constitutes or may constitute the Change of Control Triggering Event and offering to repurchase the Notes on the date specified in the notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed or sent (the “Change of Control Payment Date”). The notice shall, if mailed or sent prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date.
On the Change of Control Payment Date, the Company shall, to the extent lawful:
| (1) | accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer; |
| (2) | deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and |
| (3) | deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being repurchased. |
The Company shall not be required to make a Change of Control Offer upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and the third party repurchases all Notes properly tendered and not withdrawn under its offer. In addition, the Company shall not repurchase any Notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default, other than a default in the payment of the Change of Control Payment upon a Change of Control Triggering Event.
The Company shall comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Offer provisions of the Notes, the Company shall comply with those securities laws and regulations and shall not be deemed to have breached its obligations under the Change of Control Offer provisions of the Notes by virtue of any such conflict.
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For purposes of the Change of Control Offer provisions of the Notes, the following definitions shall apply:
“Change of Control” means the occurrence of any of the following: (1) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than the Company or one of its subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Company’s Voting Stock or other Voting Stock into which the Company’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares; (2) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Company’s assets and the assets of its subsidiaries, taken as a whole, to one or more “persons” (as that term is defined in the Indenture), other than the Company or one of its subsidiaries or (3) the adoption of a plan relating to the Company’s liquidation or dissolution. Notwithstanding the foregoing, a transaction shall not be deemed to be a Change of Control if (1) the Company becomes a direct or indirect wholly-owned subsidiary of a holding company and (2)(A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction or (B) immediately following that transaction no “person” (as that term is used in Section 13(d)(3) of the Exchange Act) (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company.
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Rating Event.
“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, and the equivalent investment grade credit rating from any replacement Rating Agency or Rating Agencies.
“Moody’s” means Moody’s Investors Service, Inc.
“Rating Agencies” means (1) each of Moody’s and S&P, and (2) if either Moody’s or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act selected by the Company (as certified by a resolution of the Company’s Board of Directors) as a replacement agency for Moody’s or S&P, or both of them, as the case may be.
“Rating Event” means the rating on the Notes is lowered by each of the Rating Agencies and the Notes are rated below an Investment Grade Rating by each of the Rating Agencies on any day within the 60-day period (which 60-day period will be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by any of the
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Rating Agencies but no longer than 180 days) after the earlier of (1) the occurrence of a Change of Control and (2) public notice of the Company’s intention to effect a Change of Control; provided, however, that a Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Rating Event for purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm to the Company in writing at the Company’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control has occurred at the time of the Rating Event).
“S&P” means S&P Global Ratings, a division of S&P Global.
“Voting Stock” means, with respect to any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act), as of any date, the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.
The Company’s obligation to make a Change of Control Offer as set forth herein shall be subject to the covenant defeasance provisions of Section 13.02(c) of the Indenture.
If an Event of Default, with respect to the Notes shall have occurred and be continuing, the principal of this Note may be declared due and payable in the manner and with the effect set forth in the Indenture.
Payment of Additional Interest shall be the sole and exclusive remedy for a Holder of the Notes in the event of a Registration Default (as defined in the Registration Rights Agreement) referred to in Section 6(a) of the Registration Rights Agreement and failure to pay such Additional Interest when due and payable will constitute an Event of Default if such failure to pay continues for a period of 30 days (subject to the terms of Article VI of the Indenture). No other default under the Registration Rights Agreement shall constitute a default or Event of Default under the Notes or the Indenture.
The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time Outstanding of each series to be affected to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the Holders of the Notes subject to the limitations set forth in the Indenture. It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of such series may on behalf of the Holders of all the Securities of such series waive any such past default or Event of Default and its consequences. The preceding sentence shall not, however, apply to a default in the payment of the principal of or premium, if any, or interest on the Notes. Any such consent or waiver by the Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes.
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No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligations of the Company, which are absolute and unconditional, to pay the principal of, and any premium and interest on, this Note in the manner and at the respective times herein provided.
The Notes are issuable in registered form without coupons in denominations of $2,000 and any multiple of $1,000 in excess thereof. In the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations at the office or agency of the Trustee in the City of New York.
There is no sinking fund for the retirement of the Notes.
Upon due presentment for registration of transfer of this Note at the office or agency of the Trustee in the City of New York, a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange therefor, subject to the limitations provided in the Indenture, without charge except for any tax or other governmental charge imposed in connection therewith.
Prior to due presentment for registration of transfer, the Company, the Trustee and any agent of the Company, or the Trustee may treat the registered Holder hereof as the owner of this Note (whether or not this Note shall be overdue), for the purpose of receiving payment of the principal hereof and premium, if any, and subject to the provisions on the face hereof, interest hereon, and for all other purposes, and neither the Company, nor the Trustee nor any agent of the Company, or the Trustee shall be affected by any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement contained in the Indenture or any indenture supplemental thereto or in any Note, or because of any indebtedness evidenced thereby, shall be had against any incorporator or against any past, present or future stockholder, employee, officer or director, as such, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability and any and all such claims being expressly waived and released as a condition of, and as a consideration for, the execution of the supplement to the Indenture and issue hereof of the Notes.
This Note is the senior unsecured and unsubordinated obligation of the Company and will rank on parity with all other unsecured and unsubordinated indebtedness of the Company, including any other Securities issued under the Indenture.
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[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.:
Please print or typewrite name and address including zip code of assignee of the within Note
and all rights thereunder, hereby irrevocably constituting and appointing to transfer said Note on the books of the Company with full power of substitution in the premises.
| By: |
||
| Date: |
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Schedule I
BAXTER INTERNATIONAL INC.
3.950% Senior Notes due 2030
No.
| Date |
Principal Amount |
Notation Explaining Principal Amount Recorded |
Authorized Signature of Trustee or Custodian | |||
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Exhibit 4.6
[FORM OF FACE OF NOTE]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR TO A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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CUSIP No.: 071813 CB3
ISIN: US071813CB37
BAXTER INTERNATIONAL INC.
1.730 % Senior Notes due 2031
| No. | $ |
Baxter International Inc., a Delaware corporation (the “Company”), for value received, hereby promises to pay to or registered assigns, at the office or agency of the Company in the City of New York, the principal sum set forth on Schedule I attached hereto (as the same may be revised from time to time) on April 1, 2031, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest, semiannually on April 1 and October 1 of each year, commencing on April 1, 2021, on said principal sum at said office or agency, in like coin or currency, at the rate per annum specified in the title of this Note, from the April 1 and October 1, as the case may be, next preceding the date of this Note to which interest has been paid on the Notes, unless the date hereof is a date to which interest has been paid on the Notes, in which case from the date of this Note, or unless no interest has been paid on the Notes, in which case from November 2, 2020 until payment of said principal sum has been made or duly provided for; provided, that payment of interest may be made at the option of the Company by check mailed to the address of the person entitled thereto as such address shall appear on the Security Register or by wire transfer to an account maintained by the payee with a bank located in the United States.
Notwithstanding the foregoing, if the date hereof is after the 15th day of March or the 15th day of September, as the case may be, and before the following April 1 or October 1, as the case may be, this Note shall bear interest from such April 1 and October 1; provided, that, if the Company shall default in the payment of interest due on such April 1 and October 1, then this Note shall bear interest from the next preceding April 1 or October 1, to which interest has been paid on the Notes or, if no interest has been paid on the Notes, from November 2, 2020. The interest so payable on any April 1 or October 1, will, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Note is registered at the close of business on the March 15 or September 15 (whether or not a Business Day (as defined herein)), as the case may be, preceding such April 1 or October 1. Interest on this Note will be calculated on the basis of a 360-day year of twelve 30-day months.
Reference is made to the further provisions of this Note set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Trustee under the Indenture referred to on the reverse hereof.
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IN WITNESS WHEREOF, Baxter International Inc. has caused this instrument to be duly executed on the date set forth below.
Dated:
| BAXTER INTERNATIONAL INC. | ||
| By: |
||
| Name: |
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| Title: |
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[FORM OF CERTIFICATION OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein issued under the within-mentioned Indenture.
| THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee | ||
| By: | ||
| Authorized Signatory | ||
Dated:
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REVERSE OF NOTE
BAXTER INTERNATIONAL INC.
1.730% Senior Notes due 2031
This Note is one of a duly authorized issue of Securities of the Company of the series hereinafter specified, all issued or to be issued under and pursuant to an Indenture, dated as of March 26, 2020, as supplemented by the Second Supplemental Indenture, dated as of November 2, 2020 (both together herein called the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (herein called the “Trustee” which term includes any successor Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities. This Note is one of a series of Securities of the Company designated as the 1.730% Senior Notes due 2031 (the “Notes”), initially limited in aggregate principal amount of $650,000,000, subject to the issuance of additional Notes as provided in the Indenture. Terms used but not defined herein shall have the respective meanings set forth in the Indenture.
If any interest payment date, maturity date or redemption date of this Note falls on a day that is not a Business Day, payment will be made on the next succeeding Business Day, and no interest will accrue for the period from and after the interest payment date, maturity date or redemption date, as the case may be, to the next succeeding Business Day. As used in this Note, the term “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in the City of New York are authorized or obligated by or pursuant to law, regulation or executive order to close.
The Indenture contains provisions for the defeasance at any time of the entire indebtedness of the Notes or certain covenants set forth in the Indenture applicable to the Notes upon compliance by the Company of certain conditions set forth therein, which provisions apply to this Note.
This Note is redeemable in whole at any time or in part, from time to time, at the option of the Company, prior to January 1, 2031 (the “Par Call Date”), at a make whole redemption price equal to the greater of:
(i) 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest thereon to the date of redemption, and
(ii) the sum of the present values of the principal amount of the Notes to be redeemed and the scheduled payments of interest thereon (exclusive of interest accrued to the date of redemption) from the redemption date to the Par Call Date, discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points, plus accrued and unpaid interest thereon to the date of redemption.
“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.
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“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed calculated as if the maturity date of the Notes were the Par Call Date (the “Remaining Life”) that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the Remaining Life of the Notes.
“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.
“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company.
“Reference Treasury Dealers” means (1) BofA Securities, Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer (“Primary Treasury Dealer”), the Company shall substitute another nationally recognized investment banking firm that is a Primary Treasury Dealer, and (2) at the option of the Company, additional Primary Treasury Dealers selected by the Company.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. New York City time on the third Business Day preceding such redemption date.
On or after the Par Call Date, this Note is redeemable in whole at any time or in part, from time to time, at the option of the Company, at a redemption price equal to 100% of its principal amount, plus accrued and unpaid interest thereon to the date of redemption.
Any redemption made at the option of the Company (an “Optional Redemption”) shall be made upon not less than 10 nor more than 60 days’ prior notice before the redemption date to the Holders. Any such notice of redemption may, in the Company’s discretion, be given subject to the satisfaction of one or more conditions precedent. In that case, such notice of redemption shall describe each such condition, and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied or waived by the Company by the relevant redemption date. If the Notes are only partially redeemed by the Company pursuant to an Optional Redemption, the Notes to be redeemed shall be selected by such method as the Trustee shall deem fair and appropriate and in accordance with the Indenture, provided, however, that in the case of Notes in global form such selection shall be made in accordance with the procedures of the applicable Depositary. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. Unless the Company defaults in payment of the redemption price, on and after the redemption date interest will cease to accrue on the Notes or portions thereof called for redemption.
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If a Change of Control Triggering Event (as defined below) occurs, unless the Company has exercised its option to redeem the Notes (as described above), the Company shall be required to make an offer (the “Change of Control Offer”) to each holder of the Notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that holder’s Notes on the terms set forth below. In the Change of Control Offer, the Company shall be required to offer payment in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased to the date of repurchase (the “Change of Control Payment”). Within 30 days following any Change of Control Triggering Event or, at the option of the Company, prior to any Change of Control, but after public announcement of the transaction that constitutes or may constitute the Change of Control, a notice shall be mailed (or, with respect to Notes in global form, to the extent permitted or required by applicable Depositary procedures, sent electronically) to holders of the Notes with a copy to the Trustee describing the transaction that constitutes or may constitute the Change of Control Triggering Event and offering to repurchase the Notes on the date specified in the notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed or sent (the “Change of Control Payment Date”). The notice shall, if mailed or sent prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date.
On the Change of Control Payment Date, the Company shall, to the extent lawful:
| (1) | accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer; |
| (2) | deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and |
| (3) | deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being repurchased. |
The Company shall not be required to make a Change of Control Offer upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and the third party repurchases all Notes properly tendered and not withdrawn under its offer. In addition, the Company shall not repurchase any Notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default, other than a default in the payment of the Change of Control Payment upon a Change of Control Triggering Event.
The Company shall comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Offer provisions of the Notes, the Company shall comply with those securities laws and
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regulations and shall not be deemed to have breached its obligations under the Change of Control Offer provisions of the Notes by virtue of any such conflict.
For purposes of the Change of Control Offer provisions of the Notes, the following definitions shall apply:
“Change of Control” means the occurrence of any of the following: (1) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than the Company or one of its subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Company’s Voting Stock or other Voting Stock into which the Company’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares; (2) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Company’s assets and the assets of its subsidiaries, taken as a whole, to one or more “persons” (as that term is defined in the Indenture), other than the Company or one of its subsidiaries or (3) the adoption of a plan relating to the Company’s liquidation or dissolution. Notwithstanding the foregoing, a transaction shall not be deemed to be a Change of Control if (1) the Company becomes a direct or indirect wholly-owned subsidiary of a holding company and (2)(A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction or (B) immediately following that transaction no “person” (as that term is used in Section 13(d)(3) of the Exchange Act) (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company.
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Rating Event.
“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, and the equivalent investment grade credit rating from any replacement Rating Agency or Rating Agencies.
“Moody’s” means Moody’s Investors Service, Inc.
“Rating Agencies” means (1) each of Moody’s and S&P, and (2) if either Moody’s or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act selected by the Company (as certified by a resolution of the Company’s Board of Directors) as a replacement agency for Moody’s or S&P, or both of them, as the case may be.
8
“Rating Event” means the rating on the Notes is lowered by each of the Rating Agencies and the Notes are rated below an Investment Grade Rating by each of the Rating Agencies on any day within the 60-day period (which 60-day period will be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by any of the
Rating Agencies but no longer than 180 days) after the earlier of (1) the occurrence of a Change of Control and (2) public notice of the Company’s intention to effect a Change of Control; provided, however, that a Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Rating Event for purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm to the Company in writing at the Company’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control has occurred at the time of the Rating Event).
“S&P” means S&P Global Ratings, a division of S&P Global.
“Voting Stock” means, with respect to any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act), as of any date, the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.
The Company’s obligation to make a Change of Control Offer as set forth herein shall be subject to the covenant defeasance provisions of Section 13.02(c) of the Indenture.
If an Event of Default, with respect to the Notes shall have occurred and be continuing, the principal of this Note may be declared due and payable in the manner and with the effect set forth in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities at the time Outstanding of each series to be affected to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the Holders of the Securities of such series subject to the limitations set forth in the Indenture. It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of such series may on behalf of the Holders of all the Securities of such series waive any such past default or Event of Default and its consequences. The preceding sentence shall not, however, apply to a default in the payment of the principal of or premium, if any, or interest on the Notes. Any such consent or waiver by the Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes.
9
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligations of the Company, which are absolute and unconditional, to pay the principal of, and any premium and interest on, this Note in the manner and at the respective times herein provided.
The Notes are issuable in registered form without coupons in denominations of $2,000 and any multiple of $1,000 in excess thereof. In the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations at the office or agency of the Trustee in the City of New York.
There is no sinking fund for the retirement of the Notes.
Upon due presentment for registration of transfer of this Note at the office or agency of the Trustee in the City of New York, a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange therefor, subject to the limitations provided in the Indenture, without charge except for any tax or other governmental charge imposed in connection therewith.
Prior to due presentment for registration of transfer, the Company, the Trustee and any agent of the Company, or the Trustee may treat the registered Holder hereof as the owner of this Note (whether or not this Note shall be overdue), for the purpose of receiving payment of the principal hereof and premium, if any, and subject to the provisions on the face hereof, interest hereon, and for all other purposes, and neither the Company, nor the Trustee nor any agent of the Company, or the Trustee shall be affected by any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement contained in the Indenture or any indenture supplemental thereto or in any Note, or because of any indebtedness evidenced thereby, shall be had against any incorporator or against any past, present or future stockholder, employee, officer or director, as such, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability and any and all such claims being expressly waived and released as a condition of, and as a consideration for, the execution of the supplement to the Indenture and issue hereof of the Notes.
This Note is the senior unsecured and unsubordinated obligation of the Company and will rank on parity with all other unsecured and unsubordinated indebtedness of the Company, including any other Securities issued under the Indenture.
10
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
Please print or typewrite name and address including zip code of assignee
the within Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Note on the books of
the Company with full power of substitution in the premises.
| By: |
||
| Date: |
||
11
Schedule I
BAXTER INTERNATIONAL INC.
1.730% Senior Notes due 2031
No.
The initial principal amount of this Note is $[ ]
| Date |
Principal Amount |
Notation Explaining Principal Amount Recorded |
Authorized Signature of Trustee or Custodian | |||
12
Exhibit 5.1
[Sullivan & Cromwell LLP Letterhead]
April 7, 2021
Baxter International Inc.,
One Baxter Parkway,
Deerfield, Illinois 60015.
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933 (the “Act”) of (i) $500,000,000 principal amount of 3.950% Senior Notes due 2030 (the “2030 Notes”) and (ii) $650,000,000 principal amount of 1.730% Senior Notes due 2031 (the “2031 Notes” and, together with the 2030 Notes, the “Notes”) of Baxter International Inc., a Delaware corporation (the “Company”), to be issued in exchange for the Company’s outstanding 3.950% Senior Notes due 2030 and 1.730% Senior Notes due 2031, respectively, issued pursuant to the Indenture, dated as of March 26, 2020, as amended and supplemented by the first supplemental indenture, dated March 26, 2020, and by the second supplemental indenture, dated November 2, 2020 (collectively, the “Indenture”), among the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, (the “Trustee”), we, as your counsel, have examined such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination, it is our opinion that, when the Registration Statement has become effective under the Act and the Notes have been duly executed and authenticated in accordance with the Indenture and issued and exchanged as contemplated in the Registration Statement, the Notes will constitute valid and legally binding obligations of the Company, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.
In rendering the foregoing opinion, we are not passing upon, and assume no responsibility for, any disclosure in any registration statement or any related prospectus or other offering material relating to the offer and sale of the Notes.
The foregoing opinion is limited to the Federal laws of the United States, the laws of the State of New York and the General Corporation Law of the State of Delaware, and we are expressing no opinion as to the effect of the laws of any other jurisdiction.
| Baxter International Inc. | - 2 - |
We have relied as to certain factual matters on information obtained from public officials, officers of the Company and other sources believed by us to be responsible, and we have assumed that the Indenture has been duly authorized, executed and delivered by the Trustee thereunder, an assumption which we have not independently verified.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to us under the heading “Validity of Notes” in the Prospectus. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act.
| Very truly yours, |
| /s/ SULLIVAN & CROMWELL LLP |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of Baxter International, Inc. of our report dated February 11, 2021 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in Baxter International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
April 7, 2021
Exhibit 25.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
| ☐ | CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.
(Exact name of trustee as specified in its charter)
| 95-3571558 | ||
| (Jurisdiction of incorporation if not a U.S. national bank) |
(I.R.S. employer identification no.) | |
| 400 South Hope Street Suite 500 Los Angeles, California |
90071 | |
| (Address of principal executive offices) | (Zip code) | |
BAXTER INTERNATIONAL INC.
(Exact name of obligor as specified in its charter)
| Delaware | 36-0781620 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) | |
| One Baxter Parkway Deerfield, Illinois |
60015 | |
| (Address of principal executive offices) | (Zip code) | |
3.950% Senior Notes due 2030
and 1.730% Senior Notes due 2031
(Title of the indenture securities)
| 1. | General information. Furnish the following information as to the trustee: |
| (a) | Name and address of each examining or supervising authority to which it is subject. |
| Name |
Address | |
| Comptroller of the Currency United States Department of the Treasury |
Washington, DC 20219 | |
| Federal Reserve Bank | San Francisco, CA 94105 | |
| Federal Deposit Insurance Corporation | Washington, DC 20429 | |
| (b) | Whether it is authorized to exercise corporate trust powers. |
Yes.
| 2. | Affiliations with Obligor. |
If the obligor is an affiliate of the trustee, describe each such affiliation.
None.
| 16. | List of Exhibits. |
Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the “Act”).
| 1. | A copy of the articles of association of The Bank of New York Mellon Trust Company, N.A., formerly known as The Bank of New York Trust Company, N.A. (Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121948 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-152875). |
| 2. | A copy of certificate of authority of the trustee to commence business. (Exhibit 2 to Form T-1 filed with Registration Statement No.333-121948). |
| 3. | A copy of the authorization of the trustee to exercise corporate trust powers (Exhibit 3 to Form T-1 filed with Registration Statement No.333-152875). |
- 2 -
| 4. | A copy of the existing by-laws of the trustee (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-229762). |
| 6. | The consent of the trustee required by Section 321(b) of the Act (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-152875). |
| 7. | A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. |
- 3 -
SIGNATURE
Pursuant to the requirements of the Act, the trustee, The Bank of New York Mellon Trust Company, N.A., a banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Houston, and State of Texas, on the 31st day of March, 2021.
| THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. | ||
| By: | /s/ Julie Hoffman-Ramos | |
| Name: Julie Hoffman-Ramos | ||
| Title: Vice President | ||
- 4 -
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
of 400 South Hope Street, Suite 500, Los Angeles, CA 90071
At the close of business December 31, 2020, published in accordance with Federal regulatory authority instructions.
| Dollar amounts in thousands |
||||
| ASSETS |
||||
| Cash and balances due from depository institutions: |
||||
| Noninterest-bearing balances and currency and coin |
1,685 | |||
| Interest-bearing balances |
335,190 | |||
| Securities: |
||||
| Held-to-maturity securities |
0 | |||
| Available-for-sale debt securities |
77,127 | |||
| Equity securities with readily determinable fair values not held for trading |
0 | |||
| Federal funds sold and securities |
||||
| purchased under agreements to resell: |
||||
| Federal funds sold in domestic offices |
0 | |||
| Securities purchased under agreements to resell |
0 | |||
| Loans and lease financing receivables: |
||||
| Loans and leases held for sale |
0 | |||
| Loans and leases, held for investment |
0 | |||
| LESS: Allowance for loan and lease losses |
0 | |||
| Loans and leases held for investment, net of allowance |
0 | |||
| Trading assets |
0 | |||
| Premises and fixed assets (including capitalized leases) |
22,577 | |||
| Other real estate owned |
0 | |||
| Investments in unconsolidated subsidiaries and associated companies |
0 | |||
| Direct and indirect investments in real estate ventures |
0 | |||
| Intangible assets |
856,313 | |||
| Other assets |
104,906 | |||
|
|
|
|||
| Total assets |
$ | 1,397,798 | ||
|
|
|
|||
1
| LIABILITIES |
||||
| Deposits: |
||||
| In domestic offices |
1,612 | |||
| Noninterest-bearing |
1,612 | |||
| Interest-bearing |
0 | |||
| Not applicable |
||||
| Federal funds purchased and securities sold under agreements to repurchase: |
||||
| Federal funds purchased in domestic offices |
0 | |||
| Securities sold under agreements to repurchase |
0 | |||
| Trading liabilities |
0 | |||
| Other borrowed money: |
||||
| (includes mortgage indebtedness and obligations under capitalized leases) |
0 | |||
| Not applicable |
||||
| Not applicable |
||||
| Subordinated notes and debentures |
0 | |||
| Other liabilities |
270,910 | |||
| Total liabilities |
272,522 | |||
| Not applicable |
||||
| EQUITY CAPITAL |
||||
| Perpetual preferred stock and related surplus |
0 | |||
| Common stock |
1,000 | |||
| Surplus (exclude all surplus related to preferred stock) |
324,364 | |||
| Not available |
||||
| Retained earnings |
798,671 | |||
| Accumulated other comprehensive income |
1,241 | |||
| Other equity capital components |
0 | |||
| Not available |
||||
| Total bank equity capital |
1,125,276 | |||
| Noncontrolling (minority) interests in consolidated subsidiaries |
0 | |||
| Total equity capital |
1,125,276 | |||
|
|
|
|||
| Total liabilities and equity capital |
1,397,798 | |||
|
|
|
|||
I, Matthew J. McNulty, CFO of the above-named bank do hereby declare that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief.
| Matthew J. McNulty |
) | CFO |
We, the undersigned directors (trustees), attest to the correctness of the Report of Condition (including the supporting schedules) for this report date and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct.
|
Antonio I. Portuondo, President |
) | |||||
|
Michael P. Scott, Managing Director |
) | Directors (Trustees) | ||||
|
Kevin P. Caffrey, Managing Director |
) |
2
Exhibit 99.1
LETTER OF TRANSMITTAL
Relating to
Baxter
Offers to Exchange
Up to $500,000,000 Principal Amount Outstanding of
Unregistered 3.950% Senior Notes due 2030
(CUSIP Nos.: 071813 BW8, U07181 AZ0; ISIN: US071813BW82, USU07181AZ08)
for
a Like Principal Amount of
3.950% Senior Notes due 2030
which have been registered under the Securities Act of 1933
(CUSIP No.: 071813 BY4; ISIN: US071813BY49)
Up to $650,000,000 Principal Amount Outstanding of
Unregistered 1.730% Senior Notes due 2031
(CUSIP Nos.: 071813 BZ1, U07181 BA4; ISIN: US071813BZ14, USU07181BA48)
for
a Like Principal Amount of
1.730% Senior Notes due 2031
which have been registered under the Securities Act of 1933
(CUSIP No.: 071813 CB3; ISIN: US071813CB37)
Pursuant to the Prospectus Dated , 2021
THE EXCHANGE OFFERS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2021, UNLESS EITHER EXCHANGE OFFER IS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED WITH RESPECT TO EITHER OR BOTH OF THE EXCHANGE OFFERS, IN EACH CASE, THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN AT OR PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
The Exchange Agent For The Exchange Offers Is:
The Bank of New York Mellon Trust Company, N.A.
| By Hand, By Mail or Overnight Delivery: | By Email or Facsimile Transmission (for Eligible Institutions Only): | |
| The Bank of New York Mellon Trust Company, N.A., as Exchange Agent |
Email: CT_REORG_UNIT_INQUIRIES@bnymellon.com | |
| c/o BNY Mellon Corporate Trust Operations- Reorganization Unit | Facsimile: (732) 667-9408 | |
| 111 Sanders Creek Parkway | ||
| East Syracuse, New York 13057 Attn: Tiffany Castor |
To Confirm by Telephone or for Information Call: (315) 414-3034 | |
Delivery of this Letter of Transmittal to an address, or transmission via facsimile, other than as set forth above will not constitute a valid delivery. The instructions contained herein should be read carefully before this Letter of Transmittal is completed.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE EXCHANGE NOTES FOR THEIR ORIGINAL NOTES PURSUANT TO EITHER OR BOTH OF THE EXCHANGE OFFERS, AS THE CASE MAY BE, MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR ORIGINAL NOTES TO THE EXCHANGE AGENT AT OR PRIOR TO THE APPLICABLE EXPIRATION DATE.
By execution hereof, the undersigned acknowledges receipt of the Prospectus (the “Prospectus”), dated , 2021, of Baxter International Inc., a Delaware corporation (“Baxter” or the “Company”), which, together with this Letter of Transmittal and the instructions hereto (the “Letter of Transmittal”), constitute the Company’s offers (the “Exchange Offers”) to exchange (i) an aggregate principal amount of up to $500,000,000 of its 3.950% Senior Notes due 2030 (CUSIP No.: 071813 BY4; ISIN: US071813BY49) (the “2030 Exchange Notes”) that have been registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a Registration Statement of which the Prospectus constitutes a part, for an equal principal amount of its outstanding unregistered 3.950% Senior Notes due 2030 (CUSIP Nos.: 071813 BW8, U07181 AZ0; ISIN: US071813BW82, USU07181AZ08) (the “2030 Original Notes”), and (ii) an aggregate principal amount of up to $650,000,000 of its 1.730% Senior Notes due 2031 (CUSIP No.: 071813 CB3; ISIN: US071813CB37) (the “2031 Exchange Notes” and, together with the 2030 Exchange Notes, the “Exchange Notes”) that have been registered under the Securities Act, pursuant to a Registration Statement of which the Prospectus constitutes a part, for an equal principal amount of its outstanding unregistered 1.730% Senior Notes due 2031 (CUSIP Nos.: 071813 BZ1, U07181 BA4; ISIN: US071813BZ14, USU07181BA48) (the “2031 Original Notes” and, together with the 2030 Original Notes, the “Original Notes”), upon the terms and subject to the conditions set forth in the Prospectus. Capitalized terms used but not defined herein shall have the same meaning given to them in the Prospectus.
The Company has agreed that, for a period of 90 days after each Expiration Date, it will make the Prospectus available to any broker-dealer for use in connection with resales.
Each holder of Original Notes wishing to participate in either or both of the Exchange Offers, as the case may be, except holders of Original Notes executing their tenders through the Automated Tender Offers Program (“ATOP”) procedures of The Depository Trust Company (“DTC”), should complete, sign and submit this Letter of Transmittal to the Exchange Agent, The Bank of New York Mellon Trust Company, N.A., at or prior to the applicable Expiration Date.
This Letter of Transmittal may be used to participate in the Exchange Offers if Original Notes are to be tendered by effecting a book-entry transfer into the Exchange Agent’s account at DTC and instructions are not being transmitted through ATOP, for which the Exchange Offers are eligible. Unless you intend to tender your Original Notes through ATOP, you should complete, execute and deliver this Letter of Transmittal to indicate the action you desire to take with respect to the Exchange Offers.
Holders of Original Notes tendering by book-entry transfer to the Exchange Agent’s account at DTC may execute tenders through ATOP, for which each Exchange Offer is eligible. Financial institutions that are DTC participants may execute tenders through ATOP by transmitting acceptance of the Exchange Offers to DTC at or prior to the applicable Expiration Date. DTC will verify acceptance of the Exchange Offers, execute a book-entry transfer of the tendered Original Notes into the account of the Exchange Agent at DTC and send to the Exchange Agent a “book-entry confirmation”, which shall include an agent’s message. An “agent’s message” is a message, transmitted by DTC to, and received by, the Exchange Agent and forming part of a book-entry confirmation, which states that DTC has received an express acknowledgement from a DTC participant tendering Original Notes that the participant has received and agrees to be bound by the terms of this Letter of Transmittal as an undersigned hereof and that the Company may enforce such agreement against the participant. Delivery of the agent’s message by DTC will satisfy the terms of the Exchange Offers as to execution and delivery of a Letter of Transmittal by the DTC participant identified in the agent’s message. Accordingly, holders who tender their Original Notes through DTC’s ATOP procedures shall be bound by, but need not complete, this Letter of Transmittal.
If you are a beneficial owner that holds Original Notes through Euroclear or Clearstream, Luxembourg and wish to tender your Original Notes, you must instruct Euroclear or Clearstream, Luxembourg, as the case may be, to
block the account in respect of the tendered Original Notes in accordance with the procedures established by Euroclear or Clearstream, Luxembourg. You are encouraged to contact Euroclear or Clearstream, Luxembourg directly to ascertain their procedures for tendering Original Notes.
Tendering holders of Original Notes must tender Original Notes in minimum denominations of $2,000 and integral multiples of $1,000 thereafter. Exchange Notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 thereafter.
Any holder that is a bank, broker, or other custodial entity holding Original Notes on behalf of more than one beneficial owner may submit to the Exchange Agent a list of the aggregate principal amount of Original Notes owned by each such beneficial owner, and the Exchange Agent, in determining the aggregate principal amount of Exchange Notes to be issued to such holder, will treat each such beneficial owner as a separate holder.
Holders that anticipate tendering other than through DTC are urged to contact promptly a bank, broker or other intermediary (that has the capability to hold securities custodially through DTC) to arrange for receipt of Exchange Notes to be delivered pursuant to the applicable Exchange Offer(s) and to obtain the information necessary to provide the required DTC participant with account information in this Letter of Transmittal.
Baxter reserves the right, in its sole discretion, to amend, at any time, the terms and conditions of either Exchange Offer, except for the condition that the registration statement of which the Prospectus forms a part is not subject to a stop order or any proceedings for that purpose. Neither Exchange Offer is conditioned upon the other Exchange Offer, and we may terminate or extend one Exchange Offer without terminating or extending the other Exchange Offer. Baxter will give you notice of any applicable amendments, if required by applicable law. With respect to each Exchange Offer, the term “Expiration Date” shall mean the latest time and date to which such Exchange Offer is extended.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to one or both of the Exchange Offers.
The instructions included with this Letter of Transmittal must be followed. Questions and requests for assistance or for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Exchange Agent.
HOLDERS WHO WISH TO ACCEPT AN EXCHANGE OFFER AND TENDER THEIR ORIGINAL NOTES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED, WITH SIGNATURE GUARANTEE IF REQUIRED, AND COMPLETE THE FORM W-9 (OR IRS FORM W-8, AS APPLICABLE), AS SET FORTH BELOW.
TENDER OF ORIGINAL NOTES
To effect a valid tender of Original Notes through the completion, execution and delivery of this Letter of Transmittal, the undersigned must complete the tables below entitled “Method of Delivery” and “Description of Original Notes” and sign this Letter of Transmittal where indicated.
Exchange Notes will be delivered in book-entry form through DTC and only to the DTC account of the undersigned or the undersigned’s custodian, as specified in the table below entitled “Method of Delivery”.
We have not provided guaranteed delivery procedures in conjunction with either Exchange Offer or under any of the Prospectus or other materials provided therewith.
Failure to provide the information necessary to effect delivery of Exchange Notes will render such holder’s tender defective, and Baxter will have the right, which it may waive, to reject such tender without notice.
METHOD OF DELIVERY
| ☐ | CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC.
| |||
| PROVIDE BELOW THE NAME OF THE DTC PARTICIPANT AND PARTICIPANT’S ACCOUNT NUMBER IN WHICH THE TENDERED ORIGINAL NOTES ARE HELD AND/OR THE CORRESPONDING EXCHANGE NOTES ARE TO BE DELIVERED. | ||||
| Name of Tendering Institution: | ||||
| DTC Book-Entry Account No.: | ||||
| Transaction Code No.: | ||||
| ☐ | CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE ORIGINAL NOTES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A “PARTICIPATING BROKER-DEALER”) AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. | |||
| Name: | ||||
| Address: | ||||
List below the Original Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the numbers and principal amount at maturity of Original Notes should be listed on a separate signed schedule affixed hereto.
| DESCRIPTION OF ORIGINAL NOTES | ||||||||
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DTC Participant Name(s), Number(s) and Address(es) of Holder(s) (Please fill in, if blank) |
Title of Security |
CUSIP Number |
Total Principal Amount Held |
Aggregate Principal Amount Tendered (if less than all) * | ||||
| TOTAL PRINCIPAL AMOUNT OF ORIGINAL NOTES TENDERED | ||||||||
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* Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of their Original Notes. The principal amount of Original Notes tendered hereby must be in minimum denominations of $2,000 and integral multiples of $1,000 thereafter. See Instruction 3. | ||||||||
Note: Signatures must be provided below.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the applicable Exchange Offer(s), the undersigned hereby tenders to the Company the aggregate principal amount of the Original Notes indicated above. Subject to, and effective upon, the acceptance for exchange of the Original Notes tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company, all right, title and interest in and to such Original Notes as are being tendered hereby upon the terms and subject to the conditions set forth in the Prospectus dated , 2021 (as the same may be amended or supplemented from time to time, the “Prospectus”), receipt of which is acknowledged, and in this Letter of Transmittal. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent its agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as the agent of the Company and an affiliate of the Exchange Agent acts as Trustee under the Indenture for the Original Notes and the Exchange Notes) with respect to the tendered Original Notes with full power of substitution to (1) transfer ownership of such Original Notes on the account books maintained by DTC with all accompanying evidences of transfer and authenticity to, or upon the order of, the Company and (2) present such Original Notes for transfer on the books of the Company and receive all benefits and otherwise exercise all rights of beneficial ownership of such Original Notes, all in accordance with the terms of the applicable Exchange Offer(s). The power of attorney granted in this paragraph shall be deemed irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Original Notes tendered hereby and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by the Company. The undersigned hereby further represents that it is not an “affiliate”, as defined in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”), of the Company, that any Exchange Notes to be received by it will be acquired in the ordinary course of business and that at the time of commencement of the applicable Exchange Offer(s) it had no arrangement with any person to participate in a distribution of the Exchange Notes.
In addition, if the undersigned is a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of the Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Original Notes, it represents that the Original Notes to be exchanged for Exchange Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.
The Company has agreed that, subject to the provisions of the Registration Rights Agreements, dated as of March 26, 2020, and November 2, 2020, as applicable, the Prospectus, as it may be amended or supplemented from time to time, may be used by a participating broker-dealer (as defined below) in connection with resales of Exchange Notes received in exchange for Original Notes, where such Original Notes were acquired by such participating broker-dealer for its own account as a result of market-making activities or other trading activities, for a period ending 90 days after the applicable Expiration Date or, if earlier, when all such Exchange Notes have been disposed of by such participating broker-dealer. In that regard, each broker-dealer who acquired Original Notes for its own account as a result of market-making or other trading activities (a “participating broker-dealer”), by tendering such Original Notes and executing this Letter of Transmittal, agrees that, upon receipt of notice from the Company of the occurrence of any event or the discovery of any fact which makes any statement contained or incorporated by reference in the Prospectus untrue in any material respect or which causes the Prospectus to omit to state a material fact necessary in order to make the statements contained or incorporated by reference therein, in light of the circumstances under which they were made, not misleading, or of the occurrence of certain other events specified in the applicable Registration Rights Agreement, such participating broker-dealer will suspend the sale of Exchange Notes pursuant to the Prospectus until the Company has amended
or supplemented the Prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented Prospectus to the participating broker-dealer or the Company has given notice that the sale of the Exchange Notes may be resumed, as the case may be. If the Company gives such notice to suspend the sale of the Exchange Notes, it shall extend the 90-day period referred to above during which participating broker-dealers are entitled to use the Prospectus in connection with the resale of Exchange Notes by the number of days during the period from and including the date of the giving of such notice to and including the date when participating broker-dealers shall have received copies of the supplemented or amended Prospectus necessary to permit resales of the Exchange Notes or to and including the date on which the Company has given notice that the sale of Exchange Notes may be resumed, as the case may be.
The undersigned also acknowledges that the Exchange Offers are being made by the Company based upon the Company’s understanding of an interpretation by the staff of the Securities and Exchange Commission (the “Commission”) as set forth in no-action letters issued to third parties, that the Exchange Notes issued in exchange for the Original Notes pursuant to the applicable Exchange Offer(s) may be offered for resale, resold and otherwise transferred by holders thereof, without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that: (1) such holders are not affiliates of the Company within the meaning of Rule 405 under the Securities Act; (2) such Exchange Notes are acquired in the ordinary course of such holders’ business; (3) such holders are not engaged in, and do not intend to engage in, a distribution of such Exchange Notes and have no arrangement or understanding with any person to participate in the distribution of such Exchange Notes; and (4) such holders are not broker-dealers tendering Original Notes that have been acquired from the Company for their own account. However, the staff of the Commission has not considered the Exchange Offers in the context of a no-action letter, and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offers as in other circumstances. If a holder of Original Notes is an affiliate of the Company, acquires the Exchange Notes other than in the ordinary course of such holder’s business or is engaged in or intends to engage in a distribution of the Exchange Notes or has any arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the applicable Exchange Offer(s), such holder could not rely on the applicable interpretations of the staff of the Commission and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction.
The undersigned will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Original Notes tendered hereby. All authority conferred or agreed to be conferred in this Letter of Transmittal and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in “The Exchange Offers — Withdrawal of Tenders” section of the Prospectus.
For purposes of the Exchange Offers, the Company shall be deemed to have accepted validly tendered Original Notes when and if the Company has given oral or written notice thereof to the Exchange Agent.
Unless otherwise indicated under “Special Issuance Instructions”, the undersigned hereby requests that the Exchange Agent credit the DTC account specified in the table entitled “Description of Original Notes”, for any book-entry transfers of Original Notes not accepted for exchange. If the “Special Issuance Instructions” are completed, the undersigned hereby requests that the Exchange Agent credit the DTC account indicated therein for any book-entry transfers of Original Notes not accepted for exchange, in the name of the person or account indicated under “Special Issuance Instructions”. The undersigned recognizes that the Company has no obligation pursuant to the “Special Issuance Instructions” to transfer any Original Notes from the name of the registered holder(s) thereof if the Company does not accept for exchange any of the Original Notes so tendered.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED “DESCRIPTION OF ORIGINAL NOTES” ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE DEEMED TO HAVE TENDERED THE ORIGINAL NOTES AS SET FORTH IN SUCH BOX ABOVE.
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 2, 4 AND 5)
To be completed ONLY if Original Notes tendered by book-entry transfer that are not accepted for exchange are to be returned by credit to an account maintained at DTC other than the account indicated above.
| ☐ Credit any unexchanged Original Notes delivered by book-entry transfer to DTC account number set forth below: |
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| DTC Account |
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| Name: |
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| Address: |
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Tax Identification or Social Security No: |
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IMPORTANT: This Letter of Transmittal or a facsimile hereof or an agent’s message in lieu thereof (together with a book-entry confirmation and all other required documents) must be received by the Exchange Agent at or prior to 5:00 p.m. New York City time, on the applicable Expiration Date.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
IN ORDER TO VALIDLY TENDER ORIGINAL NOTES FOR EXCHANGE, HOLDERS OF ORIGINAL NOTES MUST COMPLETE, EXECUTE, AND DELIVER THE LETTER OF TRANSMITTAL OR A PROPERLY TRANSMITTED AGENT’S MESSAGE.
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PLEASE SIGN HERE
(To be Completed By All Tendering Holders of Original Notes, Other Than Holders Effecting Delivery Through ATOP)
By completing, executing and delivering this Letter of Transmittal, the undersigned hereby tenders to Baxter the principal amount of the Original Notes listed in the table entitled “Description of Original Notes”.
This Letter of Transmittal must be signed by the holder(s) of Original Notes exactly as such participant’s name appears on a security position listing as the owner of Original Notes, or by person(s) authorized to become registered Holder(s) by endorsements and documents transmitted with this Letter of Transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below under “Capacity” and submit evidence satisfactory to the Company of such person’s authority to so act. See Instruction 4 herein.
IF THE SIGNATURE APPEARING BELOW IS NOT OF THE REGISTERED HOLDER(S) OF THE ORIGINAL NOTES, THEN THE REGISTERED HOLDER(S) MUST SIGN A VALID PROXY, WHICH SIGNATURE MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION. THE PROXY MUST ACCOMPANY THIS LETTER OF TRANSMITTAL.
X Date:
X Date:
Signature(s) of Holder(s) or Authorized Signatory
Name(s): Address |
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(Please Print) (Including Zip Code)
Capacity (full title) Area Code and Telephone No.
SIGNATURE GUARANTEE
(Certain Signatures Must Be Guaranteed by an Eligible Institution – See Instruction 4 herein) |
| (Name of Eligible Institution Guaranteeing Signatures) |
| (Address (including zip code) and Telephone Number (including area code) of Firm) |
| (Authorized Signature) |
| (Printed Name) |
| (Title) |
| Dated |
INSTRUCTIONS
Forming Part of the Terms and Conditions
of the Exchange Offers
| 1. | Delivery of this Letter of Transmittal. |
This Letter of Transmittal is to be completed by holders if tenders of Original Notes are to be made by book-entry transfer to the Exchange Agent’s account at DTC and instructions are not being transmitted through ATOP.
Confirmation of a book-entry transfer into the Exchange Agent’s account at DTC of all Original Notes delivered electronically, as well as a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) or properly transmitted agent’s message, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein before the Expiration Date of the applicable Exchange Offer.
Any financial institution that is a participant in DTC may electronically transmit its acceptance of the applicable Exchange Offer by causing DTC to transfer Original Notes to the Exchange Agent in accordance with DTC’s ATOP procedures for such transfer at or prior to the Expiration Date of such Exchange Offer. The Exchange Agent will make available its general participant account at DTC for the Original Notes for purposes of the Exchange Offers.
Delivery of a Letter of Transmittal to DTC will not constitute valid delivery to the Exchange Agent. No Letter of Transmittal should be sent to Baxter or DTC.
The method of delivery of this Letter of Transmittal and all other required documents, including delivery through DTC and any acceptance or agent’s message delivered through ATOP, is at the option and risk of the tendering holder. Delivery is not complete until the required items are actually received by the Exchange Agent. If you mail these items, we recommend that you (1) use registered mail properly insured with return receipt requested and (2) mail the required items in sufficient time to ensure timely delivery.
Any beneficial owner whose Original Notes are held by or in the name of a custodial entity such as a broker, dealer, commercial bank, trust company or other nominee should be aware that such custodial entity may have deadlines earlier than the applicable Expiration Date for such custodial entity to be advised of the action that the beneficial owner may wish for the custodial entity to take with respect to the beneficial owner’s Original Notes. Accordingly, such beneficial owners are urged to contact any custodial entities through which such Original Notes are held as soon as possible in order to learn of the applicable deadlines of such entities.
Neither Baxter nor the Exchange Agent is under any obligation to notify any tendering holder of Baxter’s acceptance of tendered Original Notes at or prior to the expiration of the applicable Exchange Offer.
| 2. | Delivery of Exchange Notes. |
Exchange Notes will be delivered only in book-entry form through DTC and only to the DTC account of the tendering holder or the tendering holder’s custodian. Accordingly, the appropriate DTC participant name and number (along with any other required account information) to permit such delivery must be provided in the table entitled “Description of Original Notes”. Failure to do so will render a tender of Original Notes defective and Baxter will have the right, which it may waive, to reject such tender. Holders who anticipate tendering by a method other than through DTC are urged to promptly contact a bank, broker or other intermediary (that has the facility to hold securities custodially through DTC) to arrange for receipt of any Exchange Notes delivered pursuant to the Exchange Offers and to obtain the information necessary to complete the table.
| 3. | Amount of Tenders. |
Tenders of Original Notes will be accepted only in minimum denominations of $2,000 and integral multiples of $1,000 thereafter. No alternative, conditional or contingent tenders will be accepted. Holders who tender less than all of their Original Notes must continue to hold Original Notes in the minimum authorized denomination of $2,000 principal amount.
| 4. | Signatures on this Letter of Transmittal; Instruments of Transfer; Guarantee of Signatures. |
For purposes of this Letter of Transmittal, the term “registered holder” means an owner of record as well as any DTC participant that has Original Notes credited to its DTC account. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a recognized participant in the Securities Transfer Agents Medallion Program, the NYSE Medallion Signature Program or the Stock Exchange Medallion Program (each, a “Medallion Signature Guarantor”). Signatures on this Letter of Transmittal need not be guaranteed if:
| • | this Letter of Transmittal is signed by a participant in DTC whose name appears on a security position listing of DTC as the owner of the Original Notes and the holder(s) has/have not completed the box entitled “Special Issuance Instructions” on this Letter of Transmittal; or |
| • | the Original Notes are tendered for the account of an eligible institution. |
An eligible institution is one of the following firms or other entities identified in Rule 17Ad–15 under the Securities Exchange Act of 1934, as amended (as the terms are defined in such Rule):
| • | a bank; |
| • | a broker, dealer, municipal securities dealer, municipal securities broker, government securities dealer or government securities broker; |
| • | a credit union; |
| • | a national securities exchange, registered securities association or clearing agency; or |
| • | a savings institution that is a participant in a Securities Transfer Association recognized program. |
If Original Notes are registered in the name of a person other than the signer of this Letter of Transmittal or if Original Notes not accepted for exchange are to be returned to a person other than the registered holder, then the signatures on this Letter of Transmittal accompanying the tendered Original Notes must be guaranteed by a Medallion Signature Guarantor as described above.
If any of the Original Notes tendered are held by two or more registered holders, all of the registered holders must sign this Letter of Transmittal.
If a number of Original Notes registered in different names are tendered, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of such Original Notes.
If this Letter of Transmittal is signed by the registered holder or holders of the Original Notes (which term, for the purposes described herein, shall include a participant in DTC whose name appears on a security listing as the owner of the Original Notes) listed and tendered hereby, no endorsements of the tendered Original Notes or separate written instruments of transfer or exchange are required. In any other case, if tendering Original Notes, the registered holder (or acting holder) must either validly endorse the Original Notes or transmit validly completed bond powers with this Letter of Transmittal (in either case executed exactly as the name(s) of the registered holder(s) appear(s) on the Original Notes, and, with respect to a participant in DTC whose name appears on a security position listing as the owner of Original Notes, exactly as the name of such participant appears on such security position listing), with the signature on the Original Notes or bond power guaranteed by a Medallion Signature Guarantor (except where the Original Notes are tendered for the account of an eligible institution).
If Original Notes are to be tendered by any person other than the person in whose name the Original Notes are registered, the Original Notes must be endorsed or accompanied by an appropriate written instrument(s) of transfer executed exactly as the name(s) of the holder(s) appear on the Original Notes, with the signature(s) on the Original Notes or instrument(s) of transfer guaranteed by a Medallion Signature Guarantor, and this Letter of Transmittal must be executed and delivered either by the holder(s), or by the tendering person pursuant to a valid proxy signed by the holder(s), which signature must, in either case, be guaranteed by a Medallion Signature Guarantor.
Baxter will not accept any alternative, conditional, irregular or contingent tenders. By executing this Letter of Transmittal (or a facsimile thereof) or directing DTC to transmit an agent’s message, you waive any right to receive any notice of the acceptance of your Original Notes for exchange.
If this Letter of Transmittal or instruments of transfer are signed by trustees, executors, administrators, guardians or attorneys–in–fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and, unless waived by Baxter, evidence satisfactory to Baxter of their authority so to act must be submitted with this Letter of Transmittal.
Beneficial owners whose tendered Original Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if such beneficial owners desire to tender such Original Notes.
| 5. | Special Issuance Instructions. |
Holders tendering Original Notes by book-entry transfer may request that Original Notes not exchanged be credited to such account maintained at DTC as such note holder may designate hereon. Tendering Holders of Original Notes should indicate in the box entitled “Special Issuance Instructions”, the DTC participant name and number, if different from the name or address or the DTC participant name and number, as the case may be, of the person signing this Letter of Transmittal. In the case of issuance in a different name, the employer identification or social security number of the person named also must be indicated. If no such instructions are given, such Original Notes not exchanged will be returned to the name and address or the account maintained at DTC, as the case may be, of the person signing this Letter of Transmittal.
| 6. | Transfer Taxes. |
Holders who tender their Original Notes for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, Exchange Notes are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the Original Notes tendered hereby, or if tendered Original Notes are registered in the name of any person other than the person signing this Letter, or if a transfer tax is imposed for any reason other than the exchange of Original Notes in connection with the Exchange Offers, the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Original Notes specified in this Letter of Transmittal.
| 7. | Tax Identification Number and Backup Withholding. |
An exchange of Original Notes for Exchange Notes generally will not be treated as a taxable exchange or other taxable event for U.S. federal income tax purposes. In particular, no backup withholding or information reporting is required in connection with such an exchange. However, U.S. federal income tax law generally requires that payments of principal and interest on a note to a holder be subject to backup withholding unless such holder provides the payor with such holder’s correct Taxpayer Identification Number (“TIN”) on the Form W-9 below or otherwise establishes a basis for exemption. If such holder is an individual, the TIN is his or her social security number. If the payor is not provided with the current TIN or an adequate basis for an exemption, such tendering holder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, such holder may be subject to backup withholding in an amount that is currently 24% of all reportable payments of principal and interest.
Certain holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. See the enclosed Form W-9 for additional instructions.
To prevent backup withholding on reportable payments of principal and interest, each tendering holder of Original Notes should provide its correct TIN by completing the Form W-9 enclosed below, certifying (A) that the TIN provided is correct (or that such holder is awaiting a TIN), (B) that (i) the holder is exempt from backup withholding, (ii) the holder has not been notified by the Internal Revenue Service that such holder is subject to a backup withholding as a result of a failure to report all interest or dividends or (iii) the Internal Revenue Service has notified the holder that such holder is no longer subject to backup withholding and (C) that the holder is a U.S. person (including a U.S. resident alien). If the Original Notes are in more than one name or are not in the name of the actual owner, such holder should consult the General Instructions on Form W-9 for information on which TIN to report. If such holder does not have a TIN, such holder should consult the General Instructions on Form W-9 for instructions on applying for a TIN, and write “applied for” in lieu of its TIN. Note: writing “applied for” on the form means that such holder has already applied for a TIN or that such holder intends to apply for one in the near future. If a holder writes “applied for” on Form W-9, backup withholding at a rate currently of 24% will nevertheless apply to all reportable payments made by such holder. If such a holder furnishes its TIN to the Company within 60 calendar days, however, any amounts so withheld shall be refunded to such holder.
If the tendering holder of Original Notes is a nonresident alien or foreign entity not subject to backup withholding, such holder should give the Company a completed Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding), W-8BEN-E or other appropriate Form W-8. These forms may be obtained from the Exchange Agent or from the Internal Revenue Service’s website, www.irs.gov. If backup withholding applies, the payor will withhold the appropriate percentage (currently 24%) from payments to the payee. Backup withholding is not an additional Federal income tax. Rather, the Federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in overpayment of taxes, a refund may be obtained from the Internal Revenue Service.
| 8. | Waiver of Conditions. |
Baxter reserves the absolute right to amend or waive any of the conditions either Exchange Offer enumerated in the Prospectus at any time and from time to time prior to the applicable Expiration Date, except for the condition that the registration statement of which the Prospectus forms a part is not subject to a stop order or any proceedings for that purpose.
| 9. | Validity of Tenders; No Conditional Tenders. |
All questions as to the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tender of Original Notes in connection with either Exchange Offer will be determined by Baxter, in its sole discretion, and Baxter’s determination will be final and binding. Baxter reserves the absolute right to reject any or all tenders not in proper form or the acceptance for exchange of which may, in the opinion of its counsel, be unlawful. Baxter also reserves the absolute right to waive any defect or irregularity in the tender of any Original Notes in either Exchange Offer, and its interpretation of the terms and conditions of the Exchange Offers (including the instructions in this Letter of Transmittal) will be final and binding on all parties. None of Baxter, the Exchange Agent, the Trustee under Baxter’s Indenture, or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification.
Tenders of Original Notes involving any irregularities will not be deemed to have been made until such irregularities have been cured or waived. Original Notes received by the Exchange Agent in connection with either Exchange Offer that are not validly tendered and as to which the irregularities have not been cured or waived will be returned by the Exchange Agent to the DTC participant who delivered such Original Notes by crediting an account maintained at DTC designated by such DTC participant, in either case promptly after the Expiration Date of the applicable Exchange Offer or the withdrawal or termination of the applicable Exchange Offer.
No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders of Original Notes, by execution of this Letter of Transmittal or, in lieu thereof, a Book-Entry Acknowledgement, shall waive any right to receive notice of the acceptance of their Original Notes for exchange.
| 10. | Withdrawal. |
Tenders may be withdrawn only pursuant to the procedures and subject to the terms set forth in the Prospectus under the caption “The Exchange Offers — Withdrawal of Tenders”.
| 11. | Requests for Assistance or Additional Copies. |
Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent, at the address and telephone number indicated herein.
| Form W-9 (Rev. October 2018) Department of the Treasury Internal Revenue Service |
Request for Taxpayer Identification Number and Certification
u Go to www.irs.gov/FormW9 for instructions and the latest information. |
Give Form to the requester. Do not send to the IRS.
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| Print or type See Specific Instructions on page 3.
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1 Name (as shown on your income tax return). Name is required on this line; do not leave this line blank.
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| 2 Business name/disregarded entity name, if different from above
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| 3 Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the following seven boxes.
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4 Exemptions (codes apply only to
Exempt payee code (if any)
Exemption from FATCA reporting
(Applies to accounts maintained | |||||||||||||||||||||||||
| ☐ | Individual/sole proprietor or single-member LLC |
☐ | C Corporation | ☐ | S Corporation | ☐ | Partnership | ☐ Trust/estate | ||||||||||||||||||
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☐ Limitedliability company. Enter the tax classification (C=C corporation, S=S corporation, P=Partnership) u
Note: Check the
appropriate box in the line above for the tax classification of the single-member owner. Do not check LLC if
☐ Other(see instructions) u
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5 Address (number, street, and apt. or suite no.) See instructions.
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Requester’s name and address (optional) |
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6 City, state, and ZIP code
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7 List account number(s) here (optional)
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| Part I | Taxpayer Identification Number (TIN) |
| Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the instructions for Part I, later. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN, later.
Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and Number To Give the Requester for guidelines on whose number to enter.
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| Part II | Certification |
Under penalties of perjury, I certify that:
| 1. | The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and |
| 2. | I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and |
| 3. | I am a U.S. citizen or other U.S. person (defined below); and |
| 4. | The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. |
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions for Part II, later.
| Sign Here |
Signature of U.S. person u |
Date u |
| Cat. No. 10231X | Form W-9 (Rev. 10-2018) |
| Form W-9 (Rev. 10-2018) |
Page 2 |
| Form W-9 (Rev. 10-2018) |
Page 3 |
| Form W-9 (Rev. 10-2018) |
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Privacy Act Notice
Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting the above information. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities, states, the District of Columbia, and U.S. commonwealths and possessions for use in administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer. Certain penalties may also apply for providing false or fraudulent information.