Exhibit 10.9


 


 


 


JPMorgan Chase Bank, National Association


London Branch

25 Bank Street

Canary Wharf

London E14 5JP

England


 


	DATE:	August 7, 2019
	 	 
	TO:	
        Ironwood Pharmaceuticals, Inc.

        301 Binney Street

        Cambridge, MA 02142

        Attn: Chief Legal Officer

         

	FROM:	JPMorgan Chase Bank, National Association
	 	 
	SUBJECT:	Partial Terminations of Relevant Transactions Listed on Attached Schedule A and Related Amendments


 


The purpose of this communication (this “Confirmation”)
is to set forth the terms and conditions of the partial termination (the “Transaction”) of the rights and obligations
under and in respect of the following transactions (each such transaction, a “Relevant Transaction” and collectively
the “Relevant Transactions” and the terminated portion of each such Relevant Transaction, the “Terminated
Portion”) and to modify the Relevant Transactions as described herein: Base call option transaction confirmation, dated
as of June 10, 2015, by and between JPMorgan Chase Bank, National Association, London Branch and Ironwood Pharmaceuticals, Inc.
(“Counterparty”), (the “Call Options”); and the base warrant transaction confirmation, dated
as of June 10, 2015, by and between Dealer and Counterparty (the “Warrants”). The Terminated Portion of each
of the above Relevant Transactions shall be as set forth on Schedule A in the column labeled “Number of Options or Warrants,
As Applicable, of such Relevant Transaction Subject to Termination”. The Terminated Portion of each Relevant Transaction
shall be terminated as of the date that is one Settlement Cycle following the last day of the Unwind Period (the “Termination
Effective Date”).


 


1.                  
The definitions and provisions of the 2002 ISDA Equity Derivatives Definitions, as published by the International
Swaps and Derivatives Association, Inc. (“ISDA”) are incorporated into this Confirmation. Any capitalized term
not otherwise defined herein shall have the meaning set forth for such term in the confirmation for the relevant Call Options or
Warrants, as applicable.


 


2.                  
In consideration for the termination of the Terminated Portion of each Relevant Transaction, a “Termination
Payment” with respect to the Terminated Portion of each Relevant Transaction shall be made in the amount set forth in Section
5, such Termination Payments to be made as further specified in Section 4 below. Each of Dealer and Counterparty hereby agrees
that, upon receipt of the Termination Payments (as aggregated into a Net Termination Payment as provided in Section 3 below), with
respect to the Terminated Portion of each Relevant Transaction: (i) such Terminated Portion of the Relevant Transaction and all
of the respective rights and obligations of Dealer and Counterparty thereunder are cancelled and terminated as of the Termination
Effective Date; (ii) Dealer releases and discharges Counterparty from and agrees not to make any claim against Counterparty with
respect to any obligations of Counterparty arising out of, and to be performed in connection with, any Terminated Portion of a
Relevant Transaction after the Termination Effective Date, including, but not limited to, any rights or obligations said to survive
the termination of a Relevant Transaction in such Relevant Transaction’s confirmation in respect of the Terminated Portion
of such Relevant Transaction and; (iii) Counterparty releases and discharges Dealer from and agrees not to make any claim against
Dealer with respect to any obligations of Dealer arising out of, and to be performed in connection with, any Terminated Portion
of a Relevant Transaction after the Termination Effective Date, including, but not limited to, any rights or obligations said to
survive the termination of a Relevant Transaction in such Relevant Transaction’s confirmation in respect of the Terminated
Portion of such Relevant Transaction. Each of the parties hereby represents and acknowledges to the other that, upon receipt of
the Termination Payments (as aggregated into a Net Termination Payment as provided in Section 3 below), no further amounts are
owed by Dealer or Counterparty to any other party with respect to the Terminated Portion of each Relevant Transaction.


 


JPMorgan Chase Bank, National Association


Organised under the laws of the United States
as a National Banking Association.


Main Office 1111 Polaris Parkway, Columbus,
Ohio 43240


Registered as a branch in England &
Wales branch No. BR000746


Registered Branch Office 25 Bank Street,
Canary Wharf, London E14 5JP


Authorised by the Office of the Comptroller
of the Currency in the jurisdiction of the USA.


Authorised by the Prudential Regulation
Authority. Subject to regulation by the Financial Conduct


Authority and to limited regulation by the
Prudential Regulation Authority. Details about the


extent of our regulation by the Prudential
Regulation Authority are available from us on request.


  



     


     


    




 


3.                 
The parties hereby agree to net the Termination Payments with respect to the Terminated Portion of each of the Relevant
Transactions such that a single payment shall be made with respect to the Terminated Portion of each of the Relevant Transactions
(such net payment, the “Net Termination Payment”), such Net Termination Payment satisfying each party’s
obligations to make payments to the other. On the Termination Effective Date, Dealer shall deliver to Counterparty the Net Termination
Payment in accordance with the Ironwood Payment Instructions below.


 


4.                 
Ironwood Payment Instructions:


 


5.                 The
Termination Payment with respect to the Terminated Portion of each Relevant Transaction shall be equal to the amount determined
by referencing the VWAP Price for the Relevant Transaction as set forth in the table below.


  


	VWAP Price
 
 	 	 	Termination Payment in respect of the

 Terminated Portion of the Call Options	 	 	Termination Payment in respect of the

 Terminated Portion of the Warrants	 
	$	 	 	$	 	 	$	 
	9.00	 	 	$	11,201,801.31	 	 	$	10,016,425.51	 
	9.10	 	 	$	11,438,876.47	 	 	$	10,194,231.88	 
	9.20	 	 	$	11,735,220.42	 	 	$	10,431,307.04	 
	9.30	 	 	$	12,031,564.37	 	 	$	10,727,650.99	 
	9.40	 	 	$	12,327,908.32	 	 	$	10,964,726.15	 
	9.50	 	 	$	12,624,252.27	 	 	$	11,201,801.31	 
	9.60	 	 	$	12,920,596.22	 	 	$	11,498,145.26	 
	9.70	 	 	$	13,276,208.96	 	 	$	11,794,489.21	 
	9.80	 	 	$	13,572,552.91	 	 	$	12,031,564.37	 
	9.90	 	 	$	13,868,896.86	 	 	$	12,327,908.32	 
	10.00	 	 	$	14,165,240.81	 	 	$	12,564,983.48	 
	10.10	 	 	$	14,520,853.55	 	 	$	12,861,327.43	 
	10.20	 	 	$	14,817,197.50	 	 	$	13,098,402.59	 
	10.30	 	 	$	15,113,541.45	 	 	$	13,394,746.54	 
	10.40	 	 	$	15,469,154.19	 	 	$	13,691,090.49	 
	10.50	 	 	$	15,765,498.14	 	 	$	13,928,165.65	 
	10.60	 	 	$	16,121,110.88	 	 	$	14,283,778.39	 
	10.70	 	 	$	16,417,454.83	 	 	$	14,520,853.55	 
	10.80	 	 	$	16,773,067.57	 	 	$	14,817,197.50	 
	10.90	 	 	$	17,128,680.31	 	 	$	15,113,541.45	 
	11.00	 	 	$	17,425,024.26	 	 	$	15,409,885.40	 



  



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If the VWAP Price is between two VWAP Prices in the table above,
the amount of the Termination Payment with respect to the Terminated Portion of the Relevant Transaction shall be determined by
a straight-line interpolation between the amount of the Termination Payment set forth for the higher and lower VWAP Prices. If
the VWAP Price exceeds the highest or is below the lowest VWAP Price in the table above, the amount of the Termination Payment
with respect to the Terminated Portion of the Relevant Transaction shall be extrapolated from the table in a commercially reasonable
manner.


 


The parties acknowledge and agree that the Termination Payments
set forth in the table above shall remain subject to adjustment pursuant to the terms of the applicable Relevant Transaction during
the term of this Confirmation and that any such adjustment will be made in good faith and in a commercially reasonable manner by
the Calculation Agent subject to the applicable requirements set forth opposite the caption “Calculation Agent” in
the applicable Relevant Transaction.


 


“VWAP Price” shall mean the arithmetic average
of the per-Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page IRWD
<equity> AQR in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time of the
Exchange on each Scheduled Trading Day that is not a Disrupted Day during the Unwind Period (or if such volume-weighted average
price is unavailable at such time, the market value of one Share on such Valid Day, as determined by the Calculation Agent using,
if practicable, a volume-weighted average method).


 


“Unwind
Period” shall mean the four Scheduled Trading Days beginning on and including the earlier of (1) the Scheduled Trading
Day following the date that J.P. Morgan Securities LLC (the “Initial Purchaser”) exercises its option to purchase
additional Notes (as defined herein) pursuant to Section 2 of the Purchase Agreement between Counterparty and the Initial Purchaser,
as notified by Counterparty to Dealer on such day in a written notice containing a repetition of the representation and warranty
contained in Section 8(f) herein, and (2) August 26, 2019; provided, however, that (a) if any such Scheduled Trading Day
is a Disrupted Day, the Unwind Period shall be extended by one Scheduled Trading Day for each such Disrupted Day (which provision
shall be applied successively until four Scheduled Trading Days that are not Disrupted Days occur, in which case the Termination
Effective Date shall be postponed by one Scheduled Trading Day for each such Disrupted Day) and (b) Dealer may (x) postpone the
Unwind Period or (y) add, in whole or in part, Scheduled Trading Days to the Unwind Period, in either case, if Dealer reasonably
and in good faith, (i) determines that such action is reasonably necessary or appropriate to preserve Dealer’s commercially
reasonable hedging or hedge unwind activity hereunder in light of existing liquidity conditions or (ii) determines, based on the
advice of counsel, that such action is reasonably necessary or appropriate to enable Dealer to effect transactions with respect
to Shares in connection with its commercially reasonable hedging, hedge unwind or settlement activity hereunder in a manner that
would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory
requirements, or with related policies and procedures applicable to Dealer.


 


6.                
The parties agree that from and after the Termination Effective Date, each of the Relevant Transactions shall be
amended and restated in its entirety but with the adjustments shown in the column labeled “Revisions to the Terms of the
Relevant Transaction” in Schedule A beside each Relevant Transaction. The parties further agree that each of the following
side letters to the Relevant Transactions shall continue in full force and effect:


 


		·	The letter agreement by and between Dealer and Counterparty dated as of June 10, 2015, specifying certain additional terms
and conditions of the Warrants issued by Counterparty to Dealer;



  


		·	The letter agreement by and between Dealer and Counterparty dated as of June 10, 2015, specifying certain additional terms
and conditions of the Call Options issued by Dealer to Counterparty; and



 






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7.                
10b5-1 Plan. Counterparty represents, warrants and covenants to Dealer that:


 


		a.	it is entering into this Confirmation and the Transaction in good faith and
not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange
Act (“Rule 10b5-1”) or any other antifraud or anti-manipulation provisions of
the federal or applicable state securities laws and that it has not entered into or altered and will not enter into or alter any
corresponding or hedging transaction or position with respect to the Shares. Counterparty acknowledges that it is the intent of
the parties that transactions in the Shares effected by Dealer in connection with this Transaction during the Unwind Period comply
with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 and this Transaction shall be interpreted to comply
with the requirements of Rule 10b5-1(c).



 


		b.	it will not seek to control or influence Dealer’s decision to make any “purchases
or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) in connection with this Transaction, including, without limitation,
Dealer’s decision to enter into any hedging transactions. Counterparty represents
and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Confirmation
under Rule 10b5-1.



 


		c.	it acknowledges and agrees that any amendment, modification, waiver or termination
of this Transaction must be effected in accordance with the requirements for the amendment or termination of a “plan”
as defined in Rule 10b5-1(c). Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination
shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment,
modification, waiver or termination shall be made at any time at which Counterparty or any officer, director, manager or similar
person of Counterparty is aware of any material non-public information regarding Issuer or the Shares.



 


8.                
Counterparty represents and warrants to Dealer on the date hereof and, with respect to all representations below
other than the representation in subsection 8(f), on the Termination Effective Date that:


 


		a.	Counterparty has all necessary corporate power and authority to execute, deliver and perform
its obligations in respect of this Confirmation; such execution, delivery and performance have been duly authorized by all necessary
corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty
and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights
to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.



 


		b.	Neither the execution and delivery of this Confirmation nor the incurrence or performance of
obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or
any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or any agreement or instrument to which Counterparty or any of its subsidiaries is a
party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject,
or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.



 






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		c.	No consent, approval, authorization, or order of, or filing with, any governmental agency or
body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except
such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended, or state securities
laws.



 


		d.	Counterparty is not and, after consummation of the transactions contemplated hereby, will not
be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as
amended.



 


		e.	Counterparty is an “eligible contract participant” (as such term is defined in Section
1a(18) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(18)(C)
of the Commodity Exchange Act).



 


		f.	Counterparty and each of its affiliates are not, on the date hereof, in possession of any material
non-public information with respect to the Issuer or the Shares.



 


		g.	No state or local (including any non-U.S. jurisdiction’s) law, rule, regulation or regulatory
order applicable to the Shares would give rise to any reporting, consent, registration or other requirement (including without
limitation a requirement to obtain prior approval from any person or entity), except for the reporting requirements of the Exchange
Act and rules promulgated thereunder as a result of Dealer or its affiliates owning or holding (however defined) Shares.



 


		h.	Counterparty (A) is capable of evaluating investment risks independently, both in general and
with regard to all transactions and investment strategies involving a security or securities; (B) will exercise independent judgment
in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer
in writing; and (C) has total assets of at least $50 million.



 


		i.	Counterparty is not entering into this Confirmation to create actual or apparent trading activity
in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate
the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange
Act.



 


9.                
Dealer hereby repeats the representations made to Counterparty in Section 3 of the 2002 ISDA Master Agreement on
the date hereof and on the Termination Effective Date.


 


10.              
Governing Law. This Confirmation and any dispute arising hereunder shall be governed by and construed in accordance
with the laws of the State of New York (without reference to choice of law doctrine).


 


11.              
If on or prior to August 12, 2019 (or such later date as agreed upon by the parties) (such date, the “Termination
Transaction Contingency Date”), the issuance by Counterparty of its Convertible Senior Notes due 2024 and its Convertible
Senior Notes due 2026 has not been completed for any reason, subject to the proviso below, this Transaction shall automatically
be cancelled without the payment of any settlement amount, breakage costs or other amounts representing the future value of this
Transaction and all of the respective rights and obligations of Dealer and Counterparty under this Confirmation shall be cancelled
and terminated; provided that, if Dealer determines that as a result of any hedge unwind activity by Dealer in good faith
in connection with the transactions contemplated hereby the cancellation of the Transaction would result in Dealer not maintaining
Hedge Positions in the amount it deems appropriate with respect to any Relevant Transaction, this Transaction shall remain in effect
but the Terminated Portions for each Relevant Transaction shall be determined by Dealer in good faith to correspond to such hedge
unwind activity and the relevant Termination Payments shall be adjusted pro rata and the Calculation Agent shall make corresponding
adjustments to the respective amounts set forth in Schedule A. For the avoidance of doubt, upon such cancellation and termination
of this Confirmation, except as set forth in the immediately preceding proviso, the respective rights and obligations of Dealer
and Counterparty under each Relevant Transaction, any indenture or otherwise shall not be cancelled or terminated. Following such
cancellation and termination of this Confirmation, except in the case set forth in the proviso above, each party shall be released
and discharged by the other party from, and agrees not to make any claim against the other party with respect to, any obligations
or liabilities of either party arising out of and to be performed in connection with this Transaction either prior to or after
the Termination Transaction Contingency Date.


 






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12.              
Except as expressly set forth herein, all of the terms and conditions of the Call Options and the Warrants shall
remain in full force and effect and are hereby confirmed in all respects.


 


13.              
U.S. Stay Regulations. The parties agree that (i) to the extent that prior to the date hereof both parties have adhered
to the 2018 ISDA U.S. Resolution Stay Protocol (the “Protocol”), the terms of the Protocol are incorporated
into and form a part of this Confirmation, and for such purposes this Confirmation shall be deemed a Protocol Covered Agreement
and each party shall be deemed to have the same status as “Regulated Entity” and/or “Adhering Party” as
applicable to it under the Protocol; (ii) to the extent that prior to the date hereof the parties have executed a separate agreement
the effect of which is to amend the qualified financial contracts between them to conform with the requirements of the QFC Stay
Rules (the “Bilateral Agreement”), the terms of the Bilateral Agreement are incorporated into and form a part
of this Confirmation and each party shall be deemed to have the status of “Covered Entity” or “Counterparty Entity”
(or other similar term) as applicable to it under the Bilateral Agreement; or (iii) if clause (i) and clause (ii) do not apply,
the terms of Section 1 and Section 2 and the related defined terms (together, the “Bilateral Terms”) of the
form of bilateral template entitled “Full-Length Omnibus (for use between U.S. G-SIBs and Corporate Groups)” published
by ISDA on November 2, 2018 (currently available on the 2018 ISDA U.S. Resolution Stay Protocol page at www.isda.org and, a copy
of which is available upon request), the effect of which is to amend the qualified financial contracts between the parties thereto
to conform with the requirements of the QFC Stay Rules, are hereby incorporated into and form a part of this Confirmation, and
for such purposes this Confirmation shall be deemed a “Covered Agreement,” Dealer shall be deemed a “Covered
Entity” and Counterparty shall be deemed a “Counterparty Entity.” In the event that, after the date of this Confirmation,
both parties hereto become adhering parties to the Protocol, the terms of the Protocol will replace the terms of this paragraph.
In the event of any inconsistencies between this Confirmation and the terms of the Protocol, the Bilateral Agreement or the Bilateral
Terms (each, the “QFC Stay Terms”), as applicable, the QFC Stay Terms will govern. Terms used in this paragraph
without definition shall have the meanings assigned to them under the QFC Stay Rules. For purposes of this paragraph, references
to “this Confirmation” include any related credit enhancements entered into between the parties or provided by one
to the other. In addition, the parties agree that the terms of this paragraph shall be incorporated into any related covered affiliate
credit enhancements, with all references to Dealer replaced by references to the covered affiliate support provider.


 


“QFC Stay Rules” means
the regulations codified at 12 C.F.R. 252.2, 252.81–8, 12 C.F.R. 382.1-7 and 12 C.F.R. 47.1-8, which, subject to limited
exceptions, require an express recognition of the stay-and-transfer powers of the FDIC under the Federal Deposit Insurance Act
and the Orderly Liquidation Authority under Title II of the Dodd Frank Wall Street Reform and Consumer Protection Act and the override
of default rights related directly or indirectly to the entry of an affiliate into certain insolvency proceedings and any restrictions
on the transfer of any covered affiliate credit enhancements.


 


14.              
Role of Agent. Each party agrees and acknowledges that (i) J.P. Morgan Securities LLC, an affiliate of Dealer (“JPMS”),
has acted solely as agent for Dealer (and not as agent for Counterparty) and not as principal with respect to the Transaction and
(ii) JPMS has no obligation or liability, by way of guaranty, endorsement or otherwise, in any manner in respect of the Transaction
(including, if applicable, in respect of the settlement thereof). Each party agrees it will look solely to the other party (or
any guarantor in respect thereof) for performance of such other party’s obligations under the Transaction. For the avoidance
of doubt, any performance by Dealer of its obligations hereunder solely to JPMS shall not relieve Dealer of such obligations. Any
performance by Counterparty of its obligations (including notice obligations) through or by means of JPMS’ agency for Dealer
shall constitute good performance of Counterparty’s obligations hereunder to Dealer.


  






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left blank]


 






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This Confirmation may be executed in several counterparts, each
of which shall be deemed an original but all of which together shall constitute one and the same instrument. Facsimile or portable
document format (.pdf) copies of this Confirmation shall have the same force and effect as an original.


 


Please confirm that the foregoing correctly sets forth the terms
of the agreement between Dealer and Counterparty with respect to the Transaction, by manually signing this Confirmation as evidence
of agreement to such terms and returning an executed copy to us.


 





	Very Truly Yours,	 
	 	 	 
	J.P. Morgan Securities LLC, as agent for JPMorgan Chase Bank, National Association 	 
	 	 	 
	By:	/s/ Kevin Cheng	 
	Name: 	Kevin Cheng	 
	Title: 	Vice President	 







 


JPMorgan Chase Bank, National Association


Organised under the laws of the United States
as a National Banking Association.


Main Office 1111 Polaris Parkway, Columbus,
Ohio 43240


Registered as a branch in England &
Wales branch No. BR000746


Registered Branch Office 25 Bank Street,
Canary Wharf, London E14 5JP


Authorised by the Office of the Comptroller
of the Currency in the jurisdiction of the USA.


Authorised by the Prudential Regulation
Authority. Subject to regulation by the Financial Conduct


Authority and to limited regulation by the
Prudential Regulation Authority. Details about the


extent of our regulation by the Prudential Regulation Authority
are available from us on request.


  



     


     


    







 


Counterparty hereby agrees to, accepts and confirms the terms
of the foregoing as of the Termination Effective Date.


 





	IRONWOOD PHARMACEUTICALS, INC.


 


	 
	By:	/s/ Gina Consylman	 
	Name: 	Gina Consylman	 
	Title: 	SVP and CFO, Finance	 







 


[Signature Page to Unwind Agreement]


 






     


     


    

  


Schedule A


 


	Relevant
Transaction 
	 	Number
of Options or 

Warrants, As Applicable, of 

such Relevant Transaction

 Subject to Termination 
	 	Revisions
to the Terms of the 

Relevant Transaction 

	Base call option transaction confirmation, dated as of June 10, 2015, by and between Dealer and Counterparty	 	215,000 Options	 	Number of Options shall be revised to equal 85,000
	Base warrant transaction confirmation, dated as of June 10, 2015, by and between Dealer and Counterparty	 	5,926,879  Warrants	 	Number of Warrants shall be revised to equal 2,343,185



 






    A-1