Document:

Fourth Amendment to Loan and Security Agreement

 Exhibit 10.134 
 FOURTH AMENDMENT 
 TO LOAN AND SECURITY AGREEMENT 

This Fourth Amendment to Loan and Security Agreement (this “Amendment”) is entered into as of January 23, 2012, by and among OXFORD
FINANCE LLC (“Oxford”), in its capacity as collateral agent on behalf of the Lenders (the “Collateral Agent”); the Lenders including Oxford in its capacity as a Lender (each a “Lender” and
collectively, the “Lenders”); and LIGAND PHARMACEUTICALS INCORPORATED, a Delaware corporation, whose address is 11085 N. Torrey Pines Road, Suite 300, La Jolla, CA 92037, and the additional Persons signing this Amendment as
Borrowers (individually, a “Borrower”, and collectively, the “Borrowers”). 

RECITALS 

A. Collateral Agent, Lenders and Borrowers have entered into that certain Loan and Security Agreement dated as of January 24, 2011 (as
amended by that certain First Amendment to Loan and Security Agreement dated April 29, 2011, that certain Joinder and Second Amendment to Loan and Security Agreement dated as of October 28, 2011 and that certain Third Amendment to Loan and
Security Agreement dated as of November 23, 2011; as the same may from time to time be further amended, modified, supplemented or restated, collectively, the “Loan Agreement”). 

B. Lenders extended credit to Borrowers for the purposes permitted in the Loan Agreement. 

C. Borrowers have requested that Collateral Agent and Lenders amend the Loan Agreement to make certain revisions to the Loan Agreement as more
fully set forth herein. 
 D. Collateral Agent and Lenders have agreed to amend certain provisions of the Loan Agreement, but only to the
extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below. 
 AGREEMENT 
 NOW, THEREFORE, in
consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows: 

1. Definitions. Except as set forth herein, capitalized terms used but not defined in this Amendment shall have the meanings given to them in the
Loan Agreement. 
 2. Amendments to Loan Agreement. 

2.1 Section 2.2(a) (Term Loan; Availability). Section 2.2(a) of the Loan Agreement hereby is amended and
restated in its entirety to read as follows: 
 “(a) Availability. On or about January 24, 2011, Lenders made a
term loan (the “Term A Loan”) to Borrowers in an aggregate amount of Twenty Million Dollars ($20,000,000). Subject to the terms and conditions of this Agreement, Lenders agree, severally and not jointly, to make another term loan to
Borrowers, on the Fourth Amendment Effective Date, in an aggregate amount up to Seven Million Five Hundred Thousand Dollars ($7,500,000) (the “Term B Loan”) according to each Lender’s Term Loan Commitment as set forth on Schedule
1.1 hereto. Subject to the terms and 

  
 1 

 
conditions of this Agreement, Lenders agree, severally and not jointly, to (if and when so requested by Borrowers during the Term C Draw Period) make another term loan to Borrowers, during the
Term C Draw Period, in an aggregate amount up to Two Million Five Hundred Thousand Dollars ($2,500,000) (the “Term C Loan” and, collectively with the Term A Loan and the Term B Loan, the “Term Loan”) according to each
Lender’s Term Loan Commitment as set forth on Schedule 1.1 hereto. After repayment, the Term Loan may not be re-borrowed.” 
 2.2 Section 2.2(b) (Term Loan; Repayment). Section 2.2(b) of the Loan Agreement hereby is amended and restated in its entirety to read as follows: 

“(b) Repayment. Borrowers shall make monthly payments of interest only on the outstanding principal
balance of the Term Loan, commencing on the first
(1st) Payment Date following the Funding Date of the
Term Loan, and continuing on the Payment Date of each successive month thereafter through and including the Payment Date immediately preceding the Amortization Date. The Amortization Date is March 1, 2013. Commencing on the Amortization Date,
and continuing on the Payment Date of each month thereafter, Borrowers shall make consecutive equal monthly payments of principal and interest, in arrears, to each Lender, as calculated by Collateral Agent (as set forth in the Amortization Table;
which calculations shall be deemed correct absent manifest error) based upon: (1) the amount of such Lender’s Term Loan, (2) the effective rate of interest, as determined in Section 2.3(a), and (3) a repayment schedule equal
to eighteen (18) months from the Amortization Date. All unpaid principal and accrued and unpaid interest with respect to the Term Loan is due and payable in full on the Maturity Date. The Term Loan may only be prepaid in accordance with
Sections 2.2(c) and 2.2(d).” 
 2.3 Section 12.1 (Successors and Assigns). The following
sentence hereby is added to the end of Section 12.1, to read as follows: 
 “Notwithstanding anything
to the contrary contained herein, so long as no Event of Default has occurred and is continuing, no Lender Transfer (other than a Lender Transfer (i) in respect of any warrants or (ii) in connection with (x) assignments by a Lender
due to a forced divestiture at the request of any regulatory agency; or (y) a Lender’s own financing or securitization transactions and upon the occurrence of a default, Event of Default or similar occurrence with respect to such financing
or securitization transaction) shall be permitted to any Person if such person is an Affiliate or Subsidiary of a Borrower, a direct competitor of a Borrower or a vulture hedge fund, each as determined by Collateral Agent, without Borrowers’
consent.” 
 2.4 Section 14.1 (Definitions). The following terms and their respective
definitions hereby are added to or amended in Section 14.1 of the Loan Agreement as follows: 
 “Amortization
Table” means the amortization table(s) attached to the Secured Promissory Note(s). 
 “Basic Rate”
means (x) with respect to the Term A Loan, the per annum rate of interest (based on a year of 360 days) equal to the greater of (a) 8.63% per annum and (b) the sum of (i) 8.34% plus (ii) the 3-month LIBOR rate reported
in The Wall Street Journal three (3) Business Days prior to the Funding Date of the Term A Loan; and (y) with respect to the Term B Loan and the Term C Loan, the per annum rate of interest (based on a year of 360 days) equal to the
greater of (a) 8.81% per annum and (b) the sum of (i) 8.34% plus (ii) the 3-month LIBOR rate reported in The Wall Street Journal three (3) Business Days prior to the Funding Date of the Term B Loan or the Term C
Loan, as applicable. 

  
 2 

 “Fourth Amendment Effective Date” means January 23, 2012. 

“Term A Loan” has the meaning assigned in Section 2.2(a). 

“Term B Loan” has the meaning assigned in Section 2.2(a). 

“Term C Draw Period” means the period from the Fourth Amendment Effective Date through the earlier of an
Event of Default and April 30, 2012. 
 “Term C Loan” has the meaning assigned in Section 2.2(a).

 2.5 Schedule 1.1 attached to the Loan Agreement hereby is deleted and replaced in its entirety
with Schedule 1.1 attached hereto. 
 3. Representations and Warranties. To induce Collateral Agent and Lenders to
enter into this Amendment, each Borrower hereby represents and warrants to Collateral Agent and Lenders as follows: 
 3.1 Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the
date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing; 

3.2 Borrower has the power and due authority to execute and deliver this Amendment and to perform its obligations
under the Loan Agreement, as amended by this Amendment; 
 3.3 The organizational documents of Borrower
delivered to Collateral Agent on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect; 

3.4 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations
under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order,
judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower; 

3.5 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations
under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or
subdivision thereof, binding on Borrower, except as already has been obtained or made; and 
 3.6 This
Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights. 

  
 3 

 4. Integration. This Amendment and the Loan Documents represent the entire agreement
about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between or among the parties about the subject matter of the Loan Documents merge into this
Amendment and the Loan Documents. 
 5. Prior Agreement. The Loan Documents are hereby ratified and reaffirmed and shall
remain in full force and effect. This Amendment is not a novation and the terms and conditions of this Amendment shall be in addition to and supplemental to all terms and conditions set forth in the Loan Documents. In the event of any conflict or
inconsistency between this Amendment and the terms of such documents, the terms of this Amendment shall be controlling, but such document shall not otherwise be affected or the rights therein impaired. The amendment set forth in Section 2
above, is effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term of condition of any Loan Document, or
(b) otherwise prejudice any right or remedy which Lenders or Collateral Agent may now have or may have in the future under or in connection with any Loan Document. 
 6. Counterparts. This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

 7. Effectiveness. This Amendment shall be deemed effective upon (i) the due execution and delivery to
Collateral Agent of (a) this Amendment by each party hereto; (b) a Loan Payment/Advance Request Form, substantially in the form of Annex I attached hereto; (ii) the due execution and delivery to Oxford of Secured Promissory
Notes dated as of the Fourth Amendment Date substantially in the form of Annex II attached hereto, in form and substance satisfactory to Oxford; (iii) receipt by Collateral Agent of (v) the original share certificate(s) owned by
Ligand Pharmaceuticals Incorporated in CyDex Pharmaceuticals, Inc., and duly executed (in blank) Stock Powers with respect thereto; (w) a facility fee in the amount of Seventy Five Thousand Dollars ($75,000), receipt of which hereby is
acknowledged; (x) Perfection Certificates duly executed by each of Ligand Pharmaceuticals Incorporated and CyDex Pharmaceuticals, Inc.; (y) duly executed landlord waivers and bailee agreements, in form and content reasonably acceptable to
Collateral Agent, with respect to each of Borrowers’ leased locations and each third-party location where any Borrower maintains Collateral; and (z) duly executed Control Agreements with respect to each Collateral Account maintained by any
Borrower; and (iv) Borrowers’ payment of all Lenders’ Expenses incurred through the date of this Amendment, which may be debited (or ACH’d) from any of a Borrower’s bank accounts. 

8. Governing Law. This Amendment and the rights and obligations of the parties hereto shall be governed by and construed in
accordance with the laws of the State of California without regard for conflicts of laws principles. 

[Balance of Page Intentionally Left Blank] 

  
 4 

 IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of the date first written above. 
  

			
	BORROWERS
	
	 LIGAND PHARMACEUTICALS INCORPORATED

		
	 By
	 	/s/ John P. Sharp
	Name: John P. Sharp
	 Title: Vice President, Finance and Chief Financial Officer

  

			
	SERAGEN, INC.
		
	By	 	/s/ John P. Sharp
	Name: John P. Sharp
	Title: Vice President and Chief Financial Officer

  

			
	METABASIS THERAPEUTICS, INC.
		
	By	 	/s/ John P. Sharp
	Name: John P. Sharp
	Title: Vice President and Chief Financial Officer

  

			
	PHARMACOPEIA, LLC
	
	By: Ligand Pharmaceuticals Incorporated,
	Its Sole and Managing Member

  

			
	By	 	/s/ John P. Sharp
	Name: John P. Sharp
	Title: Vice President, Finance and Chief Financial Officer

  

			
	NEUROGEN CORPORATION
		
	By	 	/s/ John P. Sharp
	Name: John P. Sharp
	Title: Vice President and Chief Financial Officer

  

			
	ALLERGAN LIGAND RETINOID THERAPEUTICS, INC.
		
	By	 	/s/ John P. Sharp
	Name: John P. Sharp
	Title: Chief Financial Officer

 [Signature Page to Fourth Amendment to Loan and Security Agreement]

 [Signatures Continued Next Page] 

  

			
	LIGAND JVR, INC.
		
	By	 	/s/ John P. Sharp
	Name: John P. Sharp
	Title: Chief Financial Officer

  

			
	CYDEX PHARMACEUTICALS, INC.
		
	By	 	/s/ John P. Sharp
	Name: John P. Sharp
	Title: Vice President and Chief Financial Officer

  

			
	COLLATERAL AGENT AND LENDER:
	
	OXFORD FINANCE LLC
		
	By	 	/s/ Mark A. Davis
	Name:	 	Mark A. Davis
	Title:	 	Vice President-Finance, Secretary & Treasurer

 [Signature page to Fourth Amendment to Loan and Security Agreement]

 SCHEDULE 1.1 

LENDERS AND COMMITMENTS 
 Term A Loan 
  

									
	 Lender
	  	Term Loan Commitment	 	  	Commitment Percentage	 
	 Oxford Finance LLC
	  	$	20,000,000.00	  	  	 	100.00	% 
	 TOTAL
	  	$	20,000,000.00	  	  	 	100.00	% 

 Term B Loan 

 

									
	 Lender
	  	Term Loan Commitment	 	  	Commitment Percentage	 
	 Oxford Finance LLC
	  	$	7,500,000.00	  	  	 	100.00	% 
	 TOTAL
	  	$	7,500,000.00	  	  	 	100.00	% 

 Term C Loan 

 

									
	 Lender
	  	Term Loan Commitment	 	  	Commitment Percentage	 
	 Oxford Finance LLC
	  	$	2,500,000.00	  	  	 	100.00	% 
	 TOTAL
	  	$	2,500,000.00	  	  	 	100.00	% 

 Aggregate 
  

									
	 Lender
	  	Term Loan Commitment	 	  	Commitment Percentage	 
	 Oxford Finance LLC
	  	$	30,000,000.00	  	  	 	100.00	% 
	 TOTAL
	  	$	30,000,000.00	  	  	 	100.00	% 

 ANNEX I 
 Loan Payment/Advance Request Form 

 DISBURSEMENT LETTER 

January 23, 2012 
 The
undersigned, being the duly elected and acting Vice President, Finance and Chief Financial Officer of LIGAND PHARMACEUTICALS INCORPORATED (“Borrower”), certifies on behalf of all Borrowers to OXFORD FINANCE LLC
(“Oxford” and “Lender”), as collateral agent (the “Collateral Agent”) in connection with that certain Loan and Security Agreement dated January 24, 2011 by and between Borrowers and Oxford, as
a Lender and Collateral Agent (as amended from time to time, including by that certain Fourth Amendment to Loan and Security Agreement (the “Fourth Amendment”) dated as of even date herewith, the “Loan Agreement”; with
other capitalized terms used below having the meanings ascribed thereto in the Loan Agreement) that: 
 1. The representations and
warranties made by each Borrower in Section 5 of the Loan Agreement and in the other Loan Documents are true and correct in all material respects as of the date hereof. 
 2. No event or condition has occurred that would constitute an Event of Default under the Loan Agreement or any other Loan Document. 
 3. Borrowers are in compliance with the covenants and requirements contained in Sections 4, 6 and 7 of the Loan Agreement. 
 4. All conditions referred to in Section 3 of the Loan Agreement to the making of the Term B Loan to be made on or about the date hereof have been satisfied or waived by Collateral Agent.

 5. All conditions referred to in Section 7 of the Fourth Amendment to the making of the Term B Loan to be made on or about the
date hereof have been satisfied or waived by Collateral Agent. 
 6. No Material Adverse Change has occurred. 

7. The undersigned is a Responsible Officer. 
 8. The proceeds of the Term B Loan shall be disbursed as follows: 
  

					
	 Disbursement from Oxford:
	  			
	 Loan Amount
	  	$	7,500,000	  
	 Plus:
	  			
	 —Deposit Received
	  	$	75,000	  
	 Less:
	  			
	 —Lender’s Legal Fee
	  	 	($35,000	)* 
	 —Facility Fee
	  	 	($75,000	) 
	 Net Proceeds due from Oxford:
	  	 	($7,465,000	) 

  

	*	Legal fees and costs are through the Fourth Amendment Effective Date. Post-closing legal fees and costs, payable after the Fourth Amendment Effective Date, to be
invoiced and paid post-closing. 

 [Balance of Page Intentionally Left Blank]

 9. The aggregate net proceeds of the Term B Loan shall be transferred to
Borrower’s account as follows: 
  

					
		 	 Account Name:
	  	Ligand Pharmaceuticals
		 	 Bank Name:
	  	Comerica Bank
		 	 Bank Address:
	  	 333 W. Santa Clara St.,
 San
Jose, CA 95113

		 	 Account Number:
	  	1891502369
		 	 ABA Number:
	  	121137522

 [Balance of Page Intentionally Left Blank] 

 Dated as of the date first set forth above. 
 BORROWER: 
  

			
	LIGAND PHARMACEUTICALS INCORPORATED
		
	By	 	 
	Name: John P. Sharp
	Title: Vice President, Finance and Chief Financial Officer
	
	
	AS COLLATERAL AGENT AND AS A LENDER:
	
	OXFORD FINANCE LLC
		
	By	 	 
	Name:	 	 
	Title	 	 

 [Signature Page to Loan Payment/Advance Request Form; Disbursement Letter]

 ANNEX II 
 FORM OF SECURED PROMISSORY NOTE 

 SECURED PROMISSORY NOTE 

 

			
	$4,000,000	  	January 23, 2012

 FOR VALUE RECEIVED, LIGAND PHARMACEUTICALS INCORPORATED, a Delaware corporation, and each of the other Persons signing
below as a Borrower (individually, a “Borrower” and, collectively, the “Borrowers”) jointly and severally PROMISE TO PAY to the order of OXFORD FINANCE LLC (“Lender”) the principal amount of
FOUR MILLION DOLLARS ($4,000,000) or such lesser amount as shall equal the outstanding principal balance of the Term B Loan made to Borrowers by Lender, plus interest on the aggregate unpaid principal amount of Term B Loan, at the rates and in
accordance with the terms of the Loan and Security Agreement dated as of January 24, 2011 by and among Borrowers, Oxford Finance LLC, as Collateral Agent and as a Lender, and Lenders from time to time party thereto (as amended, restated,
supplemented or otherwise modified from time to time, the “Loan Agreement”). If not sooner paid, the entire principal amount and all accrued and unpaid interest hereunder shall be due and payable on the Maturity Date as set forth in
the Loan Agreement. Any capitalized term not otherwise defined herein shall have the meaning attributed to such term in the Loan Agreement. 

Borrowers agree to pay any initial partial monthly interest payment from the date the Term B Loan is made to Borrowers under this Secured Promissory Note
(this “Note”) to the first Payment Date (“Interim Interest”) on the first Payment Date. 
 Principal, interest
and all other amounts due with respect to the Term B Loan, are payable in lawful money of the United States of America to Lender as set forth in the Loan Agreement and this Note. The principal amount of this Note and the interest rate applicable
thereto, and all payments made with respect thereto, shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note. 
 The Loan Agreement, among other things, (a) provides for the making of a secured Term Loan by Lender to Borrowers, and (b) contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events. 
 This Note may not be prepaid except as set forth in Section 2.2 (c) and Section 2.2(d) of
the Loan Agreement. 
 This Note and the obligation of Borrowers to repay the unpaid principal amount of the Term B Loan, interest on the Term B
Loan and all other amounts due Lender under the Loan Agreement is secured under the Loan Agreement. 
 Presentment for payment, demand, notice
of protest and all other demands and notices of any kind in connection with the execution, delivery, performance and enforcement of this Note are hereby waived. 
 Borrowers shall pay all reasonable fees and expenses, including, without limitation, reasonable attorneys’ fees and costs, incurred by Lender in the enforcement or attempt to enforce any of a
Borrower’s obligations hereunder not performed when due. 
 This Note shall be governed by, and construed and interpreted in accordance
with, the internal laws of the State of California. 
 The ownership of an interest in this Note shall be registered on a record of ownership
maintained by Lender or its agent. Notwithstanding anything else in this Note to the contrary, the right to the principal of, and stated interest on, this Note may be transferred only if the transfer is registered on such record of ownership and the
transferee is identified as the owner of an interest in the obligation. Borrowers shall be entitled to treat the registered holder of this Note (as recorded on such record of ownership) as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in this Note on the part of any other person or entity. Unless and until Lender notifies Borrowers in writing that such a registered transfer has occurred and that it is so recorded on
the record of ownership, Borrowers shall be entitled to act as if there has been no such transfer and no such recordation on the record of ownership. 

 IN WITNESS WHEREOF, Borrowers have caused this Note to be duly executed by one of its officers thereunto
duly authorized on the date hereof. 
  

									
	LIGAND PHARMACEUTICALS
INCORPORATED	 		 	CYDEX PHARMACEUTICALS, INC.
					
	By	 	 	 		 	By	 	 
	Name:	 	John P. Sharp	 		 	Name:	 	John P. Sharp
	Title:	 	Vice President, Finance and Chief Financial Officer	 		 	Title:	 	Vice President and Chief Financial Officer
				
	SERAGEN, INC.	 		 		 	
					
	By	 	 	 		 		 	
	Name:	 	John P. Sharp	 		 		 	
	Title:	 	Vice President and Chief Financial Officer	 		 		 	
				
	METABASIS THERAPEUTICS, INC.	 		 		 	
					
	By	 	 	 		 		 	
	Name:	 	John P. Sharp	 		 		 	
	Title:	 	Vice President and Chief Financial Officer	 		 		 	
				
	PHARMACOPEIA, LLC	 		 		 	
				
	 By: Ligand Pharmaceuticals Incorporated,
 Its Sole and Managing Member
	 		 		 	
					
	By	 	 	 		 		 	
	Name:	 	John P. Sharp	 		 		 	
	Title:	 	Vice President, Finance and Chief Financial Officer	 		 		 	
				
	NEUROGEN CORPORATION	 		 		 	
					
	By	 	 	 		 		 	
	Name:	 	John P. Sharp	 		 		 	
	Title:	 	Vice President and Chief Financial Officer	 		 		 	
				
	ALLERGAN LIGAND RETINOID
THERAPEUTICS, INC.	 		 		 	
					
	By	 	 	 		 		 	
	Name:	 	John P. Sharp	 		 		 	
	Title:	 	Chief Financial Officer	 		 		 	
				
	LIGAND JVR, INC.	 		 		 	
					
	By	 	 	 		 		 	
	Name:	 	John P. Sharp	 		 		 	
	Title:	 	Chief Financial Officer	 		 		 	

 Signature Page to Secured Promissory Note 

Term B Loan – Note 1 

 LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL 

 

									
	 Date
	  	Principal
Amount	  	Interest Rate	  	Scheduled
Payment
Amount	  	Notation By

 Amortization Table 

(Term B Loan; Note 1) 
 Attached. 

 SECURED PROMISSORY NOTE 

 

			
	$3,500,000	  	January 23, 2012

 FOR VALUE RECEIVED, LIGAND PHARMACEUTICALS INCORPORATED, a Delaware corporation, and each of the other Persons signing
below as a Borrower (individually, a “Borrower” and, collectively, the “Borrowers”) jointly and severally PROMISE TO PAY to the order of OXFORD FINANCE LLC (“Lender”) the principal amount of
THREE MILLION FIVE HUNDRED THOUSAND DOLLARS ($3,500,000) or such lesser amount as shall equal the outstanding principal balance of the Term B Loan made to Borrowers by Lender, plus interest on the aggregate unpaid principal amount of Term B Loan, at
the rates and in accordance with the terms of the Loan and Security Agreement dated as of January 24, 2011 by and among Borrowers, Oxford Finance LLC, as Collateral Agent and as a Lender, and Lenders from time to time party thereto (as amended,
restated, supplemented or otherwise modified from time to time, the “Loan Agreement”). If not sooner paid, the entire principal amount and all accrued and unpaid interest hereunder shall be due and payable on the Maturity Date as
set forth in the Loan Agreement. Any capitalized term not otherwise defined herein shall have the meaning attributed to such term in the Loan Agreement. 
 Borrowers agree to pay any initial partial monthly interest payment from the date the Term B Loan is made to Borrowers under this Secured Promissory Note (this “Note”) to the first
Payment Date (“Interim Interest”) on the first Payment Date. 
 Principal, interest and all other amounts due with respect to
the Term B Loan, are payable in lawful money of the United States of America to Lender as set forth in the Loan Agreement and this Note. The principal amount of this Note and the interest rate applicable thereto, and all payments made with respect
thereto, shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note. 
 The
Loan Agreement, among other things, (a) provides for the making of a secured Term Loan by Lender to Borrowers, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events. 

This Note may not be prepaid except as set forth in Section 2.2 (c) and Section 2.2(d) of the Loan Agreement. 

This Note and the obligation of Borrowers to repay the unpaid principal amount of the Term B Loan, interest on the Term B Loan and all other amounts due
Lender under the Loan Agreement is secured under the Loan Agreement. 
 Presentment for payment, demand, notice of protest and all other demands
and notices of any kind in connection with the execution, delivery, performance and enforcement of this Note are hereby waived. 
 Borrowers
shall pay all reasonable fees and expenses, including, without limitation, reasonable attorneys’ fees and costs, incurred by Lender in the enforcement or attempt to enforce any of a Borrower’s obligations hereunder not performed when due.

 This Note shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of California. 

The ownership of an interest in this Note shall be registered on a record of ownership maintained by Lender or its agent. Notwithstanding anything else
in this Note to the contrary, the right to the principal of, and stated interest on, this Note may be transferred only if the transfer is registered on such record of ownership and the transferee is identified as the owner of an interest in the
obligation. Borrowers shall be entitled to treat the registered holder of this Note (as recorded on such record of ownership) as the owner 

 
in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in this Note on the part of any other person or entity. Unless and until Lender
notifies Borrowers in writing that such a registered transfer has occurred and that it is so recorded on the record of ownership, Borrowers shall be entitled to act as if there has been no such transfer and no such recordation on the record of
ownership. 

 IN WITNESS WHEREOF, Borrowers have caused this Note to be duly executed by one of its officers thereunto
duly authorized on the date hereof. 
  

									
	LIGAND PHARMACEUTICALS
INCORPORATED	 		 	CYDEX PHARMACEUTICALS, INC.
					
	By	 	 	 		 	By	 	 
	Name:	 	John P. Sharp	 		 	Name:	 	John P. Sharp
	Title:	 	Vice President, Finance and Chief Financial Officer	 		 	Title:	 	Vice President and Chief Financial Officer
				
	SERAGEN, INC.	 		 		 	
					
	By	 	 	 		 		 	
	Name:	 	John P. Sharp	 		 		 	
	Title:	 	Vice President and Chief Financial Officer	 		 		 	
				
	METABASIS THERAPEUTICS, INC.	 		 		 	
					
	By	 	 	 		 		 	
	Name:	 	John P. Sharp	 		 		 	
	Title:	 	Vice President and Chief Financial Officer	 		 		 	
				
	PHARMACOPEIA, LLC	 		 		 	
				
	 By: Ligand Pharmaceuticals Incorporated,
 Its Sole and Managing Member
	 		 		 	
					
	By	 	 	 		 		 	
	Name:	 	John P. Sharp	 		 		 	
	Title:	 	Vice President, Finance and Chief Financial Officer	 		 		 	
				
	NEUROGEN CORPORATION	 		 		 	
					
	By	 	 	 		 		 	
	Name:	 	John P. Sharp	 		 		 	
	Title:	 	Vice President and Chief Financial Officer	 		 		 	
				
	ALLERGAN LIGAND RETINOID
THERAPEUTICS, INC.	 		 		 	
					
	By	 	 	 		 		 	
	Name:	 	John P. Sharp	 		 		 	
	Title:	 	Chief Financial Officer	 		 		 	
				
	LIGAND JVR, INC.	 		 		 	
					
	By	 	 	 		 		 	
	Name:	 	John P. Sharp	 		 		 	
	Title:	 	Chief Financial Officer	 		 		 	

 Signature Page to Secured Promissory Note 

Term B Loan – Note 2 

 LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL 

 

									
	 Date
	  	Principal
Amount	  	Interest Rate	  	Scheduled
Payment
Amount	  	Notation By

 Amortization Table 

(Term B Loan; Note 2) 
 Attached. 

  
 2EX-10.9

 EXHIBIT 10.9 
 BAXTER INTERNATIONAL INC. 
 DIRECTORS’ DEFERRED COMPENSATION PLAN

 (Amended and Restated Effective January 1, 2009) 

 TABLE OF CONTENTS 

 

							
	 ARTICLE I PURPOSE AND EFFECTIVE DATE
	  	 	3	  
	 1.1
	  	Purpose	  	 	3	  
	 1.2
	  	Effective Date	  	 	3	  
		
	 ARTICLE II DEFINITIONS
	  	 	4	  
	 2.1
	  	Account	  	 	4	  
	 2.2
	  	Administrator	  	 	4	  
	 2.3
	  	Baxter	  	 	4	  
	 2.4
	  	Beneficiary	  	 	4	  
	 2.5
	  	Board	  	 	4	  
	 2.6
	  	Compensation	  	 	4	  
	 2.7
	  	Compensation Committee	  	 	4	  
	 2.8
	  	Deferral	  	 	4	  
	 2.9
	  	Deferral Election Form	  	 	4	  
	 2.10
	  	Distribution Election Form	  	 	4	  
	 2.11
	  	Outside Director	  	 	5	  
	 2.12
	  	Participant	  	 	5	  
	 2.13
	  	Plan Year	  	 	5	  
	 2.14
	  	Termination	  	 	5	  
	 2.15
	  	Unforeseeable Emergency	  	 	5	  
		
	ARTICLE III ELIGIBILITY FOR COMPENSATION DEFERRALS	  	 	6	  
	 3.1
	  	Compensation Deferral Elections	  	 	6	  
	 3.2
	  	Timing of and Changes in Deferral Election	  	 	6	  
	 3.3
	  	Deferral of Restricted Stock Units	  	 	6	  
		
	ARTICLE IV CREDITING OF ACCOUNTS	  	 	8	  
	 4.1
	  	Crediting of Accounts	  	 	8	  
	 4.2
	  	Earnings	  	 	8	  
	 4.3
	  	Account Statements	  	 	8	  
	 4.4
	  	Vesting	  	 	8	  
		
	ARTICLE V DISTRIBUTION OF BENEFITS	  	 	9	  
	 5.1
	  	Distribution of Benefits	  	 	9	  
	 5.2
	  	Distribution	  	 	9	  
	 5.3
	  	Effect of Payment	  	 	11	  
	 5.4
	  	Taxation of Plan Benefits	  	 	11	  
	 5.5
	  	Withholding and Payroll Taxes	  	 	11	  
	 5.6
	  	Distribution Due to Unforeseeable Emergency	  	 	11	  
		
	ARTICLE VI BENEFICIARY DESIGNATION	  	 	12	  
	 6.1
	  	Beneficiary Designation	  	 	12	  
	 6.2
	  	Amendments to Beneficiary Designation	  	 	12	  
	 6.3
	  	No Beneficiary Designation	  	 	12	  

							
	ARTICLE VII ADMINISTRATION	  	 	13	  
	 7.1
	  	Administration	  	 	13	  
	 7.2
	  	Administrator Powers	  	 	13	  
	 7.3
	  	Finality of Decisions	  	 	13	  
	 7.4
	  	Claims Procedure	  	 	13	  
	 7.5
	  	Indemnity	  	 	14	  
		
	ARTICLE VIII AMENDMENT AND TERMINATION OF PLAN	  	 	15	  
	 8.1
	  	Amendment	  	 	15	  
	 8.2
	  	Right to Terminate	  	 	15	  
	 8.3
	  	Payment at Termination	  	 	15	  
		
	ARTICLE IX MISCELLANEOUS	  	 	16	  
	 9.1
	  	Unfunded Plan	  	 	16	  
	 9.2
	  	Unsecured General Creditor	  	 	16	  
	 9.3
	  	Nonassignability	  	 	16	  
	 9.4
	  	Protective Provisions	  	 	16	  
	 9.5
	  	Governing Law	  	 	16	  
	 9.6
	  	Severability	  	 	16	  
	 9.7
	  	Notice	  	 	17	  
	 9.8
	  	Successors	  	 	17	  
	 9.9
	  	Action by Baxter	  	 	17	  
	 9.10
	  	Participant Litigation	  	 	17	  

  
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 BAXTER INTERNATIONAL INC. 

DIRECTORS’ DEFERRED COMPENSATION PLAN 
 (Amended and Restated Effective January 1, 2009) 
 ARTICLE I

 PURPOSE AND EFFECTIVE DATE 
 1.1 Purpose. The Baxter International Inc. Directors’ Deferred Compensation Plan (the “Plan”) has been adopted by Baxter International Inc. (“Baxter”). The Plan is intended
to help Baxter retain the services of qualified individuals to serve as outside members of its Board of Directors by offering them the opportunity to defer payment of their retainers and directors’ fees through an unfunded deferred compensation
arrangement. 
 1.2 Effective Date. The original effective date of this Plan was July 1, 2003. The Plan was amended
and restated in its entirety effective January 1, 2005, and two amendments have been adopted to the Plan as so amended and restated. The Plan is being again amended and restated in its entirety in order to incorporate the prior amendments, to
comply with the final regulations issued by the Internal Revenue Service to implement the requirements of §409A of the Internal Revenue Code (“Code”), and for certain other purposes. This amendment and restatement of the Plan is
generally effective as of January 1, 2009; provided that the amendments to the Plan (including without limitation Section 2.10(b) and 5.2(A)) permitting a Participant to make certain distribution elections, or changes to distribution
elections previously made, prior to January 1, 2009, in accordance with the transitional rules set forth in IRS Notice 2007-86, shall be effective on the date approved by the Compensation Committee; and provided further than any provision of
the amendment and restatement that reflects the manner in which the Plan has been administered in compliance with §409A since January 1, 2005, shall, to the extent required by §409A, be effective as of January 1, 2005.

  
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 ARTICLE II 
 DEFINITIONS 
 2.1 Account. The bookkeeping account established to
record a Participant’s interest in the Plan as provided in Article IV. 
 2.2 Administrator. The person or
entity appointed to administer the Plan as provided in Article VII. 
 2.3 Baxter. Baxter International Inc., a
Delaware corporation, and any other company that succeeds to the obligations of Baxter under this Plan pursuant to Section 9.8. 
 2.4 Beneficiary. A Participant’s Beneficiary, as defined in Article VI, is the Beneficiary designated to receive the Participant’s Account, if any, from the Plan, upon the death of
the Participant. 
 2.5 Board. The Board of Directors of Baxter. 

2.6 Compensation. All compensation (other than Stock Options) payable by Baxter to a Participant for his/her services as a member
of the Board, including without limitation any annual retainer, fees for attending meetings of the Board or any committee thereof, fees for acting as chairperson of any Board or committee meeting, and any other fees as may become payable to a
Non-Employee Director, including the additional retainer payable to the Lead Director. 
 2.7 Compensation Committee. The
Compensation Committee of the Board. 
 2.8 Deferral. The Deferral is the amount of the Participant’s Compensation
that the Participant elected to defer and contribute to the Plan, which, but for such election, would have otherwise been paid to him/her. 
 2.9 Deferral Election Form. The form that a Participant must complete and return to the Administrator, in accordance with the rules and procedures as may be established by the Administrator, in
order to elect to defer a portion of his or her Compensation into the Plan. 
 2.10 Distribution Election Form. The form
that a Participant must complete and return to the Administrator, in accordance with the rules and procedures as may be established by the Administrator. This form is to be used by Participants for two purposes: 

 

	 	(a)	To elect the manner in which the Participant’s Account will be distributed upon Termination. Only one election form shall be filed with respect to distribution of
a Participant’s Account following Termination. 

  

	 	(b)	Prior to January 1, 2009, a Participant may also file a Distribution Election Form to request a scheduled in-service distribution of all or a portion of his or her
Account, in accordance with Section 5.2(B). Effective January 1, 2009, scheduled in-service distributions are no longer permitted unless elected at the same time the Participant commences participation in the Plan.

  
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 To be effective, a Distribution Election Form must be filed at the same time as the Participant’s first
Deferral Election Form (in which case it may be combined with the Deferral Election Form), or at such other time as may be permitted by Section 5.2. 
 2.11 Outside Director. Any member of the Board who is not an employee of Baxter or its subsidiaries and who receives Compensation for his services as a member of the Board. 

2.12 Participant. A Participant is any Outside Director or former Outside Director who has an Account balance in the Plan.

 2.13 Plan Year. The Plan Year is the calendar year. The first Plan Year was the six-month period commencing
July 1, 2003, and ending December 31, 2003. 
 2.14 Termination. For purposes of the Plan, Termination means a
Participant ceasing to be a member of the Board for any reason, including resignation, removal, or failure to be re-elected. A Participant who ceases to be an Outside Director, but is still a member of the Board, shall not have incurred a
Termination. Notwithstanding the foregoing, for purposes of determining when a Participant’s Account becomes payable, Termination shall not be considered to have occurred until the Participant incurs a separation from service as defined in
Treasury Regulations issued pursuant to §409A of the Code. A Participant shall not be considered to have incurred a separation from service until the Participant has ceased to provide any services as a director or independent contractor for
Baxter, its subsidiaries, and any other entity that would be treated as a member of a controlled group that includes Baxter under §414(b) or (c) of the Code (as modified by substituting 50% ownership for 80% for all purposes thereof),
without any expectation of the Participant being retained to provide future services as a director or independent contractor; provided, however, that a Participant shall not be considered to have failed to incur a separation from service if the
Participant is, or becomes, an employee of any such entity. 
 2.15 Unforeseeable Emergency. A severe financial hardship
to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary, or the Participant’s dependent (as defined in §152 of the Code, without regard to
§§152(b)(1), (b)(2), and (d)(1)(B)); loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance); or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of the Participant. Whether a Participant is faced with an unforeseeable emergency permitting a distribution under this Plan is to be determined based on the relevant facts
and circumstances of each case and in accordance with the requirements of §409A of the Code. 

  
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 ARTICLE III 
 ELIGIBILITY FOR COMPENSATION DEFERRALS 
 3.1 Compensation Deferral
Elections. Any Outside Director may elect to defer a portion of his or her Compensation as set forth on his or her Deferral Election Form, in accordance with applicable rules and procedures established by the Administrator. An Outside Director
Participant may elect to defer up to a total of 100% of his or her Compensation, or any lesser amount; provided that the Administrator may establish reasonable procedures requiring Deferral Elections to be stated in whole dollar amounts or whole
percentages. 
 3.2 Timing of and Changes in Deferral Election. An Outside Director may make a Deferral Election for each
Plan Year either 
  

	 	(a)	during the annual enrollment period established by the Administrator prior to the beginning of the Plan Year, in which event such Deferral Election shall apply to all
Compensation payable to such Outside Director during the Plan Year; or 

  

	 	(b)	not later than 30 days after the Outside Director is first elected to the Board, in which event such Deferral Election shall apply to all Compensation earned after the
election is made in the remainder of the Plan Year (including a pro rata share of any annual retainer or similar amount, determined by multiplying the amount of such Compensation by a fraction, the numerator of which is the number of days remaining
in the Plan Year after the election and denominator is the number of days remaining in the Plan Year after the Outside Director is elected to the Board); provided, that prior to his election to the Board the Outside Director did not participate in
any elective deferred compensation arrangement with respect to Baxter, its subsidiaries, and any other entity that would be treated as a member of a controlled group that includes Baxter under §414(b) or (c) of the Code, other than
(i) the Baxter International Inc. and Subsidiaries Deferred Compensation Plan, or any similar plan applicable only to employees, or (ii) a deferred compensation plan under which the Outside Director either accrued no additional benefit
(other than investment earnings) during the 24 month period prior to his election, or received a complete distribution of his entire account balance and ceased to be eligible to participate prior to his election. 

A Participant who has a Deferral Election in effect may not change such election during the Plan Year, and may only revoke such election in accordance
with procedures established by the Administrator consistent with Treasury Regulations issued pursuant to §409A of the Code, subject to Section 5.6. 
 3.3 Deferral of Restricted Stock Units. Effective January 1, 2007, each Participant may elect to defer the receipt of all (but not fewer than all) of the shares of Stock the Participant is
entitled to receive upon the vesting of any annual grant of Restricted Stock Units to the 

  
 - 6-

 
Participant for service on the Board. Such deferral election must be made, in accordance with procedures established by the Administrator, during either of the enrollment periods described in
Section 3.2 for the Plan Year in which the Restricted Stock Units are granted; provided that if the Outside Director makes such election during the 30 day period described in Section 3.2(b), and after the date of grant of the RSUs, the
number of shares deferred shall be equal to the total number of RSUs multiplied by a fraction, the numerator of which is the number of days between the date on which the election is made and the date of the next annual meeting following the date of
grant and the denominator of which is the number of days between the date of grant and the date of the next annual meeting, rounded to the next lower number of whole shares. If a Participant elects to defer an annual grant of Restricted Stock Units,
the Stock underlying such grant shall be distributed on the third anniversary of the date of such grant (and may not be deferred to any other date), provided that if the Director incurs a Termination before such date, the Stock, to the extent
vested, shall be distributed as soon as practical after the Termination. A Participant’s deferred Restricted Stock Units shall be accounted for separately as part of the Participant’s Account, and shall not be subject to Section 4.1,
4.2, 5.2 or 5.6, but shall otherwise be subject to the provisions of this Plan. 

  
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 ARTICLE IV 
 CREDITING OF ACCOUNTS 
 4.1 Crediting of Accounts. All amounts
deferred by a Participant under the Plan shall be credited to his/her Account in the Plan. Each Participant’s Account shall be credited or charged with its share of investment earnings or losses determined in accordance with Section 4.2,
and shall be charged with all distributions made to the Participant or his/her Beneficiary. Accounts shall be maintained for bookkeeping purposes only, and shall not require the segregation of funds or establishment of a separate fund. 

4.2 Earnings. Each Participant’s Account shall be adjusted upward or downward, on a weekly (or as otherwise determined by the
Administrator) basis to reflect the investment return that would have been realized had such amounts been invested in one or more investments selected by the Participant from among the assumed investment alternatives designated by the Administrator
for use under the Plan. Until otherwise determined by the Administrator in its sole discretion, the investment alternatives shall be the same as those available under the Baxter International Inc. and Subsidiaries Deferred Compensation Plan, and
Accounts for which no election is made shall be invested in the Stable Income Fund. Prior to the first day of each calendar quarter (or at such other intervals as may be determined by the Administrator), Participants may change the assumed
investment alternatives in which their Account will be deemed invested for such quarter. Participant elections of assumed investment alternatives shall be made at the time and in the form determined by the Administrator, and shall be subject to such
other restrictions and limitations as the Administrator shall determine. 
 4.3 Account Statements. Account Statements
will be generated effective as of the last day of each calendar quarter and mailed to each Participant as soon as administratively feasible. Account Statements will reflect all Account activity during the reporting quarter, including Account
contributions, distributions and earnings credits. Notwithstanding the foregoing, the failure to provide an Account Statement shall not constitute a breach of this Plan or entitle any Participant to any amount that he would not otherwise be entitled
to under the Plan. 
 4.4 Vesting. Subject to Sections 9.1 and 9.2, a Participant is always 100% vested in his or
her Account in the Plan at all times. 

  
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 ARTICLE V 
 DISTRIBUTION OF BENEFITS 
 5.1 Distribution of Benefits. Subject to
Section 5.2, distribution of a Participant’s Account, if any, will be made in accordance with the Participant’s Distribution Election Form. Anything else in this Plan to the contrary notwithstanding, effective October 22, 2004,
(i) in no event shall the distribution of any Account be accelerated to a time earlier than which it would otherwise have been paid, whether by amendment of the Plan, exercise of the Compensation Committee’s discretion, or otherwise,
except as permitted by Treasury Regulations issued pursuant to §409A of the Code, and (ii) in the event that the Compensation Committee, in its sole discretion, determines that any time or form of distribution provided for in the Plan, or
the existence of a right to elect a different time or form of distribution, would cause the Plan to fail to meet the requirements of §409A of the Code, or otherwise cause Participants to be subject to any adverse federal income tax
consequences, the Compensation Committee shall amend the Plan to modify or remove the form of distribution or election right. The distribution restrictions under §409A of the Code shall apply to Participant’s entire account balances under
the Plan, whether deferred before or after January 1, 2005. Notwithstanding the foregoing, if at any time any portion of a Participant’s account balance is includible in the Participant’s income pursuant to §409A of the Code, the
portion so included shall be distributed to the Participant as soon as administratively feasible. 
 5.2 Distribution.

 A. Distribution Election Form – Termination. A Participant’s Account will be paid after the
Participant’s Termination, in accordance with the form of payment designated in such Participant’s Distribution Election Form. Only one Distribution Election Form may be submitted with respect to distribution of a Participant’s
Account following Termination, and such election shall apply to the Participant’s entire Account balance at his or her Termination. A Participant shall file a Distribution Election Form with his or her first Deferral Election Form, and may
change the form of payment designated on his or her Distribution Election Form from time to time by filing a new Distribution Election Form in accordance with procedures established by the Administrator; provided that, in the case of a change made
after December 31, 2008 (and after the last day permitted for filing the initial Deferral Election Form), (i) distribution of the Account following the change shall commence not earlier than five years after the distribution would
otherwise have begun, and (ii) if the Participant incurs a Termination within 12 months after changing the form of payment designated, the change shall be disregarded and his/her Account shall be distributed in accordance with the form of
payment designated prior to the change. 

  
 - 9-

 B. In-Service Distribution. Prior to January 1, 2009, a Participant may also
elect to receive a distribution of all or a portion of his or her Account at a specified future date, by filing a Distribution Election Form with the Administrator, either electing to have his or her entire Account balance on such date distributed,
or specifying the dollar amount of the distribution. A Participant who has elected to receive an in-service distribution may subsequently elect to postpone the date of such distribution (but may not change the amount to be distributed) by filing a
new Distribution Election Form, provided that the new Distribution Election From must be filed not later than twelve months prior to the original specified distribution date, and the new distribution date must be at least five years after the
original distribution date. If the balance in the Participant’s Account on the specified distribution date is less than the dollar amount requested, the entire balance of the Account shall be distributed. If the Participant has a Termination
prior to the specific date requested on such Distribution Election Form, such form shall be ignored and the Participant’s distribution election with respect to Termination shall be followed. 

C. Forms of Distribution. The forms of distribution are: 

 

	 	(a)	a lump sum payment, or 

  

	 	(b)	for distributions upon Termination only, annual installments of at least 2 years, but not to exceed 15 years. 

Annual installments will commence in the first ninety days of the Plan Year following the Plan Year in which the Participant incurs a Termination.
Subsequent installments will be paid annually in the first ninety days of subsequent Plan Years, and each installment shall be equal to the remaining balance in the Participant’s Account immediately prior to such payment divided by the number
of installments remaining to be paid. 
 Lump sum payments pursuant to a Distribution Election Form relating to payments following Termination
will be made in the first ninety days of the Plan Year following the Plan Year in which the Participant incurs a Termination. All distributions of a Participant’s Account prior to Termination will be paid in a lump sum as soon as
administratively feasible after the date elected by the Participant in the Distribution Election Form. 
 If a Participant does not elect a form
of distribution by the time the Deferral Election Form or the Distribution Election Form is required to be completed, the Participant’s election will default to a lump sum payment in the first ninety days of the Plan Year following the Plan
Year in which the Participant incurs a Termination. 
 Notwithstanding the above, a Participant whose Account totals less than $50,000 as of the
last day of the Plan Year in which he or she incurs a Termination will receive lump sum payment of his or her Account in the first ninety days of the Plan Year following the Plan Year in which the Participant incurs a Termination. 

D. Distributions Upon Death. Upon the death of a Participant prior to the complete distribution of the Participant’s account,
the Participant’s remaining account balance shall be paid to his or her Beneficiary in a lump sum as soon as practical, but not later than ninety days after the Participant’s death, regardless of whether the Participant had elected payment
in installments or whether installment payments had begun prior to the Participant’s death. 

  
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 5.3 Effect of Payment. Payment to the person, trust or other entity reasonably and in
good faith determined by the Administrator to be the Participant’s Beneficiary will completely discharge any obligations Baxter or any other Employer may have under the Plan. If a Plan benefit is payable to a minor or a person declared to be
incompetent or to a person the Administrator in good faith believes to be incompetent or incapable of handling the disposition of property, the Administrator may direct payment of such Plan benefit to the guardian, legal representative or person
having the care and custody of such minor and such decision by the Administrator is binding on all parties. The Administrator may initiate whatever action it deems appropriate to ensure that benefits are properly paid to an appropriate guardian.

 The Administrator may require proof of incompetence, minority, incapacity or guardianship, as it may deem appropriate prior to distribution
of the Plan benefit. Such distribution will completely discharge the Administrator and the Employer from all liability with respect to such benefit. 
 5.4 Taxation of Plan Benefits. It is intended that each Participant will be taxed on amounts credited to him or her under the Plan at the time such amounts are received, and the provisions of the
Plan will be interpreted consistent with that intention. 
 5.5 Withholding and Payroll Taxes. Baxter will withhold from
payments made hereunder any taxes required to be withheld for the payment of taxes to the Federal, or any state or local government. 
 5.6 Distribution Due to Unforeseeable Emergency. Upon written request of a Participant and the showing of Unforeseeable Emergency, the Administrator may authorize distribution of all or a portion
of the Participant’s Accounts, and or the acceleration of any installment payments being made from the Plan, but only to the extent reasonably necessary to relieve the Unforeseeable Emergency, including federal, state, local, or foreign income
taxes or penalties reasonably imposed upon the distribution. In any event, payment may not be made to the extent such Unforeseeable Emergency is or may be satisfied through reimbursement by insurance or otherwise, including, but not limited to,
liquidation of the Participant’s assets (but not including hardship deferrals or loans from the Participant’s account in any qualified retirement plan, as defined in Treasury Regulations §1.409A-1(a)(2)), to the extent that such
liquidation would not in and of itself cause severe financial hardship. If the Participant demonstrates the existence of an Unforeseeable Emergency, the Administrator shall first cancel the Participant’s Deferrals for the Plan Year (other than
Deferrals of Restricted Stock Units pursuant to Section 3.3), and the amount of the distribution required to relieve the Unforeseeable Emergency shall take into account the additional income available to the Participant as the result of
cancellation of such Deferrals. The Administrator may also impose such other conditions upon a distribution as it determines in its discretion to be appropriate and not inconsistent with §409A of the Code. 

  
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 ARTICLE VI 
 BENEFICIARY DESIGNATION 
 6.1 Beneficiary Designation. Each
Participant has the right to designate one or more persons, trusts or, with the Administrator’s approval, other entity as the Participant’s Beneficiary, primary as well as secondary, to whom benefits under this Plan will be paid in the
event of the Participant’s death prior to complete distribution to the Participant of the benefits due under the Plan. Each Beneficiary designation will be in a written form prescribed by the Administrator and will be effective only when filed
with the Administrator during the Participant’s lifetime. 
 6.2 Amendments to Beneficiary Designation. Any
Beneficiary designation may be changed by a Participant without the consent of any Beneficiary by the filing of a new Beneficiary designation with the Administrator. Filing a Beneficiary designation as to any benefits available under the Plan
revokes all prior Beneficiary designations effective as of the date such Beneficiary designation is received by the Administrator. If a Participant’s Account is community property, any Beneficiary designation will be valid or effective only as
permitted under applicable law. 
 6.3 No Beneficiary Designation. In the absence of an effective Beneficiary
designation, or if all Beneficiaries predecease the Participant, the Participant’s estate will be the Beneficiary. If a Beneficiary dies after the Participant and before payment of benefits under this Plan has been completed, and no secondary
Beneficiary has been designated to receive such Beneficiary’s share, the remaining benefits will be payable to the Beneficiary’s estate. 

  
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 ARTICLE VII 
 ADMINISTRATION 
 7.1 Administration. The Plan is administered by the
Compensation Committee, which shall be the Administrator for all purposes of the Plan. Notwithstanding the foregoing, all authority to administer the Plan on an ongoing basis, including the authority to adopt and implement all rules and procedures
for the administration of the Plan, shall be exercised by such persons as may be designated by the Corporate Vice President-Human Resources of Baxter, subject to the authority of the Compensation Committee, and all references to the Administrator
herein shall, as appropriate, be construed to refer to such person or persons. 
 7.2 Administrator Powers. The
Administrator has such powers as may be necessary to discharge its duties hereunder, including, but not by way of limitation, the power, right and duty to construe, interpret and enforce the Plan provisions and to determine all questions arising
under the Plan including, but not by way of limitation, questions of Plan participation, eligibility for Plan benefits and the rights of Outside Directors, Participants, Beneficiaries and other persons to benefits under the Plan and to determine the
amount, manner and time of payment of any benefits hereunder, and to adopt procedures, rules, regulations and forms to be utilized in the efficient administration of the Plan which may alter any procedural provision of the Plan without the necessity
of an amendment. The Administrator is empowered to employ agents (who may also be employees of Baxter) and to delegate to them any of the administrative duties imposed upon the Administrator or Baxter 

7.3 Finality of Decisions. Any ruling, regulation, procedure or decision of the Administrator will be conclusive and binding upon
all persons affected by it. There will be no appeal from any ruling by the Administrator, which is within its authority, except as provided in Section 7.4 below. 
 7.4 Claims Procedure. Any claim for benefits by a Participant, his or her Beneficiary or Beneficiaries, or any other person claiming the right to receive any benefit from the Plan by reason of his
or her relationship to a Participant or Beneficiary (the “applicant”) shall be in writing and filed in accordance with procedures specified by the Administrator not more than one year after the claimant knows or with the exercise of
reasonable diligence should have known of the basis for the claim. If the claim is denied, the Administrator will furnish the applicant within a reasonable period of time with a written notice that specifies the reason for the denial, and explains
the claim review procedures of this Section 7.4. If, within 60 days after receipt of such notice, the applicant so requests in writing, the Administrator will review its earlier decision. The Administrator’s decision on review will be
in writing, will include specific reasons for the decision, and will be given to the claimant with a reasonable period of time after the request for review is received. By participating in the Plan, each Participant agrees, on behalf of himself or
herself and all persons claiming through him or her, not to commence any action or proceeding for payment of any amount claimed to be due under the Plan without first complying with the foregoing procedures. 

  
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 7.5 Indemnity. To the extent permitted by applicable law and to the extent that they
are not indemnified or saved harmless under any liability insurance contracts, any present or former employees, officers, or directors of Baxter, or its subsidiaries or affiliates, if any, will be indemnified and saved harmless by Baxter from and
against any and all liabilities or allegations of liability to which they may be subjected by reason of any act done or omitted to be done in good faith in the administration of the Plan, including all expenses reasonably incurred in their defense
in the event that Baxter fails to provide such defense after having been requested in writing to do so. 

  
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 ARTICLE VIII 
 AMENDMENT AND TERMINATION OF PLAN 
 8.1 Amendment. The Compensation
Committee may amend the Plan at any time, except that no amendment will decrease the Accounts of Participants and Beneficiaries at the time of the amendment. Notwithstanding the foregoing, the Administrator may adopt any amendment to the Plan that
is technical, ministerial or procedural in nature, and any rule or procedure properly adopted by the Administrator that is technical, ministerial or procedural in nature shall be deemed an amendment to the Plan to the extent of any inconsistency
between such rule or procedure and the provisions hereof. 
 8.2 Right to Terminate. The Compensation Committee may at
any time terminate the Plan. 
 8.3 Payment at Termination. If the Plan is terminated, the Accounts of Participants shall
continue to be held until distributed in accordance with Article V, unless in connection with such termination the Compensation Committee amends the Plan to provide for distribution of all Accounts in lump sum payments, provided that such
distributions are permitted by Treasury Regulations issued pursuant to §409A of the Code. 

  
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 ARTICLE IX 
 MISCELLANEOUS 
 9.1 Unfunded Plan. This Plan is intended to be an
unfunded deferred compensation plan. All credited amounts are unfunded, general obligations of Baxter. This Plan is not intended to create an investment contract. Participants are members of the Board of Baxter, who, by virtue of their position, are
uniquely informed as to Baxter’s operations and have the ability to affect materially Baxter’s profitability and operations. 
 9.2 Unsecured General Creditor. In the event of Baxter’s insolvency, Participants and their Beneficiaries, heirs, successors and assigns will have no legal or equitable rights, interest or
claims in any property or assets of Baxter or any of its subsidiaries, nor will they be beneficiaries of, or have any rights, claims or interests in any life insurance policies, annuity contracts or the proceeds therefrom owned or which may be
acquired by such Baxter (the “Policies”) greater than those of any other unsecured general creditors. In that event, any and all of Baxter’s assets and Policies will be, and remain, the general, unpledged, unrestricted assets of
Baxter. Baxter’s obligation under the Plan will be merely that of an unfunded and unsecured promise of Baxter to pay money in the future. 
 9.3 Nonassignability. Neither a Participant nor any other person will have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or
convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be nonassignable and nontransferable. No part of the amounts payable will, prior to actual
payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any
other person’s bankruptcy or insolvency. Nothing contained herein will preclude Baxter from offsetting any amount owed to it by a Participant against payments to such Participant or his or her Beneficiary. 

9.4 Protective Provisions. A Participant will cooperate with Baxter by furnishing any and all information requested by Baxter, in
order to facilitate the payment of benefits hereunder. 
 9.5 Governing Law. The provisions of this Plan will be
construed and interpreted according to the laws of the State of Illinois. 
 9.6 Severability. In the event any provision
of the Plan is held invalid or illegal for any reason, any illegality or invalidity will not affect the remaining parts of the Plan, but the Plan will be construed and enforced as if the illegal or invalid provision had never been inserted, and
Baxter will have the privilege and opportunity to correct and remedy such questions of illegality or invalidity by amendment as provided in the Plan, including, but not by way of limitation, the opportunity to construe and enforce the Plan as if
such illegal and invalid provision had never been inserted herein. 

  
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 9.7 Notice. Any notice or filing required or permitted to be given to Baxter or the
Administrator under the Plan will be sufficient if in writing and hand delivered, or sent by registered or certified mail to Baxter’s Chief Financial Officer and, if mailed, will be addressed to the principal executive offices of Baxter. Notice
to a Participant or Beneficiary may be hand delivered or mailed to the Participant or Beneficiary at his or her most recent address as listed in the employment records of Baxter. Notices will be deemed given as of the date of delivery or mailing or,
if delivery is made by certified or registered mail, as of the date shown on the receipt for registration or certification. Any person entitled to notice hereunder may waive such notice. 

9.8 Successors. The provisions of this Plan will bind and inure to the benefit of Baxter, the Participants and Beneficiaries, and
their respective successors, heirs and assigns. The term successors as used herein will include any corporate or other business entity, which, whether by merger, consolidation, purchase or otherwise acquires all or substantially all of the business
and assets of Baxter, and successors of any such corporation or other business entity. 
 9.9 Action by Baxter. Except as
otherwise provided herein, any action required of or permitted by Baxter under the Plan will be by resolution of the Compensation Committee or any person or persons authorized by resolution of the Compensation Committee. Any action required of or
permitted by Baxter in its role as Administrator may be taken by the Corporate Vice President-Human Resources of Baxter or persons acting under his or her authority. 
 9.10 Participant Litigation. In any action or proceeding regarding the Plan, Outside Directors, Participants, Beneficiaries or any other persons having or claiming to have an interest in this Plan
will not be necessary parties and will not be entitled to any notice or process. Any final judgment which is not appealed or appealable and may be entered in any such action or proceeding will be binding and conclusive on the parties hereto and all
persons having or claiming to have any interest in this Plan. To the extent permitted by law, if a legal action is begun against Baxter, the Administrator, or any member of the Compensation Committee by or on behalf of any person and such action
results adversely to such person or if a legal action arises because of conflicting claims to a Participant’s or other person’s benefits, the costs to such person of defending the action will be charged to the amounts, if any, which were
involved in the action or were payable to the Participant or other person concerned. To the extent permitted by applicable law, acceptance of participation in this Plan will constitute a release of Baxter, the Administrator and each member of the
Compensation Committee, and their respective agents from any and all liability and obligation not involving willful misconduct or gross neglect. 
 *    *    * 

  
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 Amendment No. 1 to 

Baxter International Inc. 
 Directors’ Deferred Compensation Plan 
 Effective as of
January 1, 2012, the Baxter International Inc. Directors’ Deferred Compensation Plan, as amended and restated effective as of January 1, 2009 (the “Plan”) is amended as follows: 

 

	 	1.	Section 3.3 is amended to read in its entirety as follows: 

 3.3 Deferral of Restricted Stock Units. Each Participant may elect to defer the receipt of all (but not fewer than all) of the shares of Stock the Participant is entitled to receive upon the
vesting of any annual grant of Restricted Stock Units to the Participant for service on the Board. Such deferral election must be made, in accordance with procedures established by the Administrator, during either of the enrollment periods described
in Section 3.2 for the Plan Year in which the Restricted Stock Units are granted; provided that if the Outside Director makes such election during the 30 day period described in Section 3.2(b), and after the date of grant of the RSUs, the
number of shares deferred shall be equal to the total number of RSUs multiplied by a fraction, the numerator of which is the number of days between the date on which the election is made and the date of the next annual meeting following the date of
grant and the denominator of which is the number of days between the date of grant and the date of the next annual meeting, rounded to the next lower number of whole shares. If a Participant elects to defer an annual grant of Restricted Stock Units,
the Stock underlying such grant shall be settled by delivery of all of the deferred shares within the first ninety days of the Plan Year following the Plan Year in which the Participant incurs a Termination (regardless of whether the Participant has
elected payment of his Account in installments). A Participant’s deferred Restricted Stock Units shall be accounted for separately as part of the Participant’s Account, and shall not be subject to Section 4.1, 4.2 or 5.6, but shall
otherwise be subject to the provisions of this Plan. 

  
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