Exhibit 10.4


 


EXECUTION VERSION


 


Credit Suisse Capital LLC


c/o Credit Suisse Securities (USA) LLC


11 Madison Avenue


New York, NY 10010


 


August 7, 2019


 





	To:	Ironwood Pharmaceuticals, Inc.
	 	301 Binney Street
	 	Cambridge, Massachusetts, 02142
	 	Attention:           Chief Legal Officer





 


	Re:	Base Call Option Transaction



 





The purpose of this letter agreement (this
“Confirmation”) is to confirm the terms and conditions of the call option transaction entered into between Credit
Suisse Capital LLC (“Dealer”), represented by Credit Suisse Securities (USA) LLC (“Agent”)
and Ironwood Pharmaceuticals, Inc. (“Counterparty”) as of the Trade Date specified below (the “Transaction”).
This letter agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below. This
Confirmation shall replace any previous agreements with respect to the Transaction and serve as the final documentation for the
Transaction.


 


The definitions and provisions contained
in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International
Swaps and Derivatives Association, Inc. (“ISDA”) are incorporated into this Confirmation. In the event of any
inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms used
herein are based on terms that are defined in the Offering Memorandum dated August 7, 2019 (the “Offering Memorandum”)
relating to the 1.50% Convertible Senior Notes due 2026 (as originally issued by Counterparty, the “Convertible Notes”
and each USD 1,000 principal amount of Convertible Notes, a “Convertible Note”) issued by Counterparty in an
aggregate initial principal amount of USD 175,000,000 (as increased by up to an aggregate principal amount of USD 25,000,00 if
and to the extent that the Initial Purchaser (as defined herein) exercises its option to purchase additional Convertible Notes
pursuant to the Purchase Agreement (as defined herein)) pursuant to an Indenture to be dated August 12, 2019 between Counterparty
and U.S. Bank National Association, as trustee (the “Indenture”). In the event of any inconsistency between
the terms defined in the Offering Memorandum, the Indenture and this Confirmation, this Confirmation shall govern. The parties
acknowledge that this Confirmation is entered into on the date hereof with the understanding that (i) definitions set forth in
the Indenture which are also defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred
to herein will conform to the descriptions thereof in the Offering Memorandum. If any such definitions in the Indenture or any
such sections of the Indenture differ from the descriptions thereof in the Offering Memorandum, the descriptions thereof in the
Offering Memorandum will govern for purposes of this Confirmation. The parties further acknowledge that the Indenture section numbers
used herein are based on the draft of the Indenture last reviewed by Dealer as of the date of this Confirmation, and if any such
section numbers are changed in the Indenture as executed, the parties will amend this Confirmation in good faith to preserve the
intent of the parties. Subject to the foregoing, references to the Indenture herein are references to the Indenture as in effect
on the date of its execution, and if the Indenture is amended or supplemented following such date (other than any amendment or
supplement (x) pursuant to Section 10.01(h) of the Indenture that, as determined by the Calculation Agent, conforms the Indenture
to the description of Convertible Notes in the Offering Memorandum or (y) pursuant to Section 4.07(a) of the Indenture, subject,
in the case of this clause (y), to the second paragraph under “Method of Adjustment” in Section 3), any such amendment
or supplement will be disregarded for purposes of this Confirmation (other than as provided in Section 9(h)(ii) below) unless the
parties agree otherwise in writing.


 


Each party is hereby advised, and each such
party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and
has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates
on the terms and conditions set forth below.


 






     


     


    

 


1.            This
Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction
to which this Confirmation relates. This Confirmation shall supplement, form a part of, and be subject to an agreement in the
form of the 2002 ISDA Master Agreement (the “Agreement”) as if Dealer and Counterparty had executed an
agreement in such form (but without any Schedule except for (i) the election of US Dollars (“USD”) as the
Termination Currency, (ii) the election of the laws of the State of New York as the governing law (without reference to
choice of law doctrine), (iii) the election that following the payment of the Premium, the condition precedent in Section
2(a)(iii)(1) of the Agreement with respect to an Event of Default or Potential Event of Default (other than an Event of
Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) shall not apply to a payment or delivery owing by Dealer
to Counterparty, and (iv) the election that the “Cross Default” provisions of Section 5(a)(vi) of the Agreement
shall apply to Dealer with a “Threshold Amount” of 3% of Dealer’s ultimate parent’s
shareholders’ equity on the Trade Date (provided that (a) the phrase “, or becoming capable at such time of being
declared,” shall be deleted from clause (1) of such Section 5(a)(vi) of the Agreement, (b) “Specified
Indebtedness” shall have the meaning specified in Section 14 of the Agreement, except that such term shall not include
obligations in respect of deposits received in the ordinary course of Dealer’s banking business and (c) the following
sentence shall be added to the end of Section 5(a)(vi) of the Agreement: “Notwithstanding the foregoing, a default
under subsection (2) hereof shall not constitute an Event of Default if (x) the default was caused solely by error or
omission of an administrative or operational nature; (y) funds were available to enable the relevant party to make the
payment when due; and (z) the payment is made within two Local Business Days of such party’s receipt of written
notice of its failure to pay.”). In the event of any inconsistency between provisions of the Agreement and this
Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The
parties hereby agree that no transaction other than the Transaction to which this Confirmation relates shall be governed by
the Agreement. The parties acknowledge that the Transaction to which this Confirmation relates is not governed by, and shall
not be treated as a transaction under, any other ISDA Master Agreement entered into between the parties from time to time. In
the event of any inconsistency between this Confirmation and the Agreement, this Confirmation shall govern.


 


2.            The Transaction
constitutes a Share Option Transaction for purposes of the Equity Definitions. The terms of the particular Transaction to which
this Confirmation relates are as follows:


 





	General Terms.	 
	 	 
	Trade Date:	August 7, 2019
	 	 
	Effective Date:	The second Exchange Business Day immediately prior to the Premium Payment Date
	 	 
	Option Style:	“Modified American”, as described under “Procedures for Exercise” below
	 	 
	Option Type:	Call
	 	 
	Buyer:	Counterparty
	 	 
	Seller:	Dealer
	 	 
	Shares:	The Class A common stock of Counterparty, par value USD 0.001 per Share (Exchange symbol “IRWD”).
	 	 
	Number of Options:	175,000. For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by Counterparty. In no event will the Number of Options be less than zero.
	 	 
	Applicable Percentage:	75%
	 	 
	Option Entitlement:	A number equal to the product of the Applicable Percentage and 74.6687.
	 	 
	Strike Price:	USD 13.3925
	 	 
	Cap Price:	USD 17.0450



 






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	Premium:	USD 8,190,000.00
	 	 
	Premium Payment Date:	August 12, 2019
	 	 
	Exchange:	The NASDAQ Global Select Market
	 	 
	Related Exchange(s):	All Exchanges
	 	 
	Excluded Provisions:	Section 4.05(h) and Section 4.04 of the Indenture.
	 	 
	Procedures for Exercise.	 
	 	 
	Conversion Date:	With respect to any conversion of a Convertible Note (other than any conversion of Convertible Notes with a Conversion Date occurring prior to the Final Conversion Period Start Date (any such conversion, an “Early Conversion”), to which the provisions of Section 9(h)(iv) of this Confirmation shall apply), the date on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements for conversion thereof as set forth in Section 4.02(b) of the Indenture; provided that if Counterparty has not delivered to Dealer a related Notice of Exercise, then in no event shall a Conversion Date be deemed to occur hereunder (and no Option shall be exercised or deemed to be exercised hereunder) with respect to any surrender of a Convertible Note for conversion in respect of which Counterparty has elected to designate a financial institution for exchange in lieu of conversion of such Convertible Note pursuant to Section 4.11 of the Indenture.
	 	 
	Final Conversion Period Start Date:	The 45th Scheduled Valid Day immediately preceding June 15, 2026
	 	 
	Expiration Time:	The Valuation Time
	 	 
	Expiration Date:	June 15, 2026, subject to earlier exercise.
	 	 
	Multiple Exercise:	Applicable, as described under “Automatic Exercise” below.
	 	 
	Automatic Exercise:	Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion Date on or after the Final Conversion Period Start Date in respect of which a Notice of Conversion that is effective as to Counterparty has been delivered by the relevant converting Holder, a number of Options equal to the number of Convertible Notes in denominations of USD 1,000 as to which such Conversion Date has occurred shall be deemed to be automatically exercised; provided that such Options shall be exercised or deemed exercised only if Counterparty has provided a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below.
	 	 
	 	Notwithstanding the foregoing, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of Options.



 






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	Notice of Exercise:	Notwithstanding anything to the contrary in the Equity Definitions or under “Automatic Exercise” above, in order to exercise any Options relating to Convertible Notes with a Conversion Date occurring on or after the Final Conversion Period Start Date, Counterparty must notify Dealer in writing, including by email, before 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the Expiration Date specifying the number of such Options (including, if applicable, whether all or any portion of such exercise relates to the conversion of the Convertible Notes in connection with which holders thereof are entitled to receive additional shares and/or cash pursuant to the adjustment of the Conversion Rate set forth in Section 4.04 of the Indenture) provided that, notwithstanding the foregoing, such notice (and the related exercise of Options hereunder) shall be effective if given after the applicable notice deadline specified above but prior to 5:00 p.m., New York City time, on the third Exchange Business Day following such notice deadline, in which event the Calculation Agent shall have the right to adjust Dealer’s delivery obligation hereunder and the Settlement Date in a commercially reasonable manner, with respect to the exercise of such Options, as appropriate to reflect the additional commercially reasonable costs and losses (limited to losses as a result of hedging mismatches and market losses, assuming that Dealer maintains commercially reasonable hedge positions) and expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position), with such adjustments made assuming that Dealer maintains commercially reasonable hedge positions, solely resulting from Dealer not having received such notice prior to such notice deadline (it being understood that the adjusted delivery obligation described in the preceding proviso can never be less than zero and can never require any payment by Counterparty); provided further that if the Relevant Settlement Method for such Options is (x) Net Share Settlement and the Specified Cash Amount is not USD 1,000, (y) Cash Settlement or (z) Combination Settlement, Dealer shall have received a separate notice (the “Notice of Final Settlement Method”) (which, for the avoidance of doubt, may be by email) in respect of all such Convertible Notes before 5:00 p.m. (New York City time) on the Final Conversion Period Start Date specifying (1) the Relevant Settlement Method for such Options, and (2) if the settlement method for the related Convertible Notes is not Settlement in Shares or Settlement in Cash (each as defined below), the fixed amount of cash per Convertible Note that Counterparty has elected to deliver to Holders (as such term is defined in the Indenture) of the related Convertible Notes (the “Specified Cash Amount”) and if Counterparty fails to timely provide such Notice of Final Settlement Method, it shall be deemed to have provided a Notice of Final Settlement Method indicating that the Relevant Settlement Method is Net Share Settlement and that the settlement method for the related Relevant Convertible Notes is a combination of cash and shares with a Specified Cash Amount of USD 1,000. Counterparty acknowledges its responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of the Exchange Act (as defined below) and the rules and regulations thereunder, in respect of any election of a settlement method with respect to the Convertible Notes that is not Net Share Settlement with a Specified Cash Amount of USD 1,000.



 






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	Valuation Time:	At the close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in good faith and in its commercially reasonable discretion.
	 	 
	Market Disruption Event:	Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following:
	 	 
	 	“‘Market Disruption Event’ means, in respect of a Share, (i) a failure by the primary United States national or regional securities exchange or market on which the Shares are listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m. (New York City time) on any Scheduled Valid Day for the Shares for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Shares or in any options contracts or futures contracts relating to the Shares.”
	 	 
	Settlement Terms.	 
	 	 
	Settlement Method:	For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below for such Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement Method, but only if Counterparty shall have notified Dealer of the Relevant Settlement Method in the Notice of Final Settlement Method for such Option.
	 	 
	Relevant Settlement Method:	In respect of any Option:
	 	 
	 	(i) if Counterparty has elected to settle its conversion obligations in respect of the related Convertible Note (A) entirely in Shares pursuant to Section 4.02(a)(ii)(A) of the Indenture (together with cash in lieu of fractional Shares) (such settlement method, “Settlement in Shares”), (B) in a combination of cash and Shares pursuant to Section 4.02(a)(ii)(C) of the Indenture with a Specified Cash Amount less than USD 1,000 (such settlement method, “Low Cash Combination Settlement”) or (C) in a combination of cash and Shares pursuant to Section 4.02(a)(ii)(C) of the Indenture with a Specified Cash Amount equal to USD 1,000, then, in each case, the Relevant Settlement Method for such Option shall be Net Share Settlement;



 






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	 	(ii) if Counterparty has elected to settle its conversion obligations in respect of the related Convertible Note in a combination of cash and Shares pursuant to Section 4.02(a)(ii)(C) of the Indenture with a Specified Cash Amount greater than USD 1,000, then the Relevant Settlement Method for such Option shall be Combination Settlement; and
	 	 
	 	(iii) if Counterparty has elected to settle its conversion obligations in respect of the related Convertible Note entirely in cash pursuant to Section 4.02(a)(ii)(B) of the Indenture (such settlement method, “Settlement in Cash”), then the Relevant Settlement Method for such Option shall be Cash Settlement.
	 	 
	Net Share Settlement:	If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option, a number of Shares (the “Net Share Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i) (a) the Daily Option Value for such Valid Day, divided by (b) the Relevant Price on such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period; provided that in no event shall the Net Share Settlement Amount for any Option exceed a number of Shares equal to the Applicable Limit for such Option divided by the Applicable Limit Price on the Settlement Date for such Option.
	 	 
	 	Dealer will pay cash in lieu of delivering any fractional Shares to be delivered with respect to any Net Share Settlement Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period.
	 	 
	Combination Settlement:	If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay or deliver, as the case may be, to Counterparty, on the relevant Settlement Date for each such Option:
	 	 
	 	(i) cash (the “Combination Settlement Cash Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (A) an amount (the “Daily Combination Settlement Cash Amount”) equal to the lesser of (1) the product of (x) the Applicable Percentage and (y) the Specified Cash Amount minus USD 1,000 and (2) the Daily Option Value, divided by (B) the number of Valid Days in the Settlement Averaging Period; provided that if the calculation in clause (A) above results in zero or a negative number for any Valid Day, the Daily Combination Settlement Cash Amount for such Valid Day shall be deemed to be zero; and



 






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	 	(ii) Shares (the “Combination Settlement Share Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of a number of Shares for such Valid Day (the “Daily Combination Settlement Share Amount”) equal to (A) (1) the Daily Option Value on such Valid Day minus the Daily Combination Settlement Cash Amount for such Valid Day, divided by (2) the Relevant Price on such Valid Day, divided by (B) the number of Valid Days in the Settlement Averaging Period; provided that if the calculation in sub-clause (A)(1) above results in zero or a negative number for any Valid Day, the Daily Combination Settlement Share Amount for such Valid Day shall be deemed to be zero;
	 	 
	 	provided that in no event shall the sum of (x) the Combination Settlement Cash Amount for any Option and (y) the Combination Settlement Share Amount for such Option multiplied by the Applicable Limit Price on the Settlement Date for such Option, exceed the Applicable Limit for such Option.
	 	 
	 	Dealer will pay cash in lieu of delivering any fractional Shares to be delivered with respect to any Combination Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period.
	 	 
	Cash Settlement:	If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an amount of cash (the “Cash Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period.
	 	 
	Daily Option Value:	For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii) (A) the lesser of the Relevant Price on such Valid Day and the Cap Price, less (B) the Strike Price on such Valid Day; provided that if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less than zero.
	 	 
	Applicable Limit:	For any Option, an amount of cash equal to the Applicable Percentage multiplied by the excess of (i) the aggregate
    of (A) the amount of cash, if any, paid to the Holder of the related Convertible Note upon conversion of such Convertible
    Note as determined pursuant to Section 4.02(a)(ii) of the Indenture and (B) the number of Shares, if any, delivered to the
    Holder of the related Convertible Note upon conversion of such Convertible Note as determined pursuant to Section 4.02(a)(ii)
    of the Indenture multiplied by the Applicable Limit Price on the Settlement Date for such Option, over (ii) USD 1,000.



 






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	Applicable Limit Price:	On any day, the opening price as displayed under the heading “Op” on Bloomberg page IRWD <equity> (or any successor thereto).
	 	 
	Valid Day:	A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other United States national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a United States national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Valid Day” means a Business Day.
	 	 
	Scheduled Valid Day:	A day that is scheduled to be a Valid Day on the principal United States national or regional securities exchange or market on which the Shares are listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Scheduled Valid Day” means a Business Day.
	 	 
	Business Day:	Any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.
	 	 
	Relevant Price:	On any Valid Day, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page IRWD <equity> AQR (or any successor thereto) (“Bloomberg VWAP”) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time of the Exchange on such Valid Day (or if Bloomberg VWAP 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). The Relevant Price will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
	 	 
	Settlement Averaging Period:	For any Option and regardless of the Settlement Method applicable to such Option, the 40 consecutive Valid Days commencing on, and including, the 41st Scheduled Valid Day immediately prior to the Expiration Date.
	 	 
	Settlement Date:	For any Option, the second Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option.
	 	 
	Settlement Currency:	USD
	 	 
	Other Applicable Provisions:	The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-settled” shall be read as references to “Share Settled”. “Share Settled” in relation to any Option means that Net Share Settlement or Combination Settlement is applicable to that Option.



 






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	Representation and Agreement:	Notwithstanding anything to the contrary in the Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty may be, upon delivery, subject to restrictions and limitations arising from Counterparty’s status as issuer of the Shares under applicable securities laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated form in lieu of delivery through the Clearance System and (iii) any Shares delivered to Counterparty may be “restricted securities” (as defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)).
	 	 
	3.            Additional Terms applicable to the Transaction.	 
	 	 
	Adjustments applicable to the Transaction:	 
	 	 
	Potential Adjustment Events:	Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event” means an occurrence of any event or condition, as set forth in any Dilution Adjustment Provision, that would result in an adjustment under the Indenture to the “Conversion Rate” or the composition of a “unit of Reference Property” or to any “Last Reported Sale Price”, “Daily VWAP”, “Daily Conversion Value” or “Daily Settlement Amount” (each as defined in the Indenture). For the avoidance of doubt, Dealer shall not have any delivery or payment obligation hereunder in respect of any “Distributed Property” delivered by Counterparty pursuant to the fourth sentence of Section 4.05(c) of the Indenture or any payment obligation in respect of any cash paid by Counterparty pursuant to the fourth sentence of Section 4.05(d) of the Indenture (in each case, whether upon conversion or otherwise) (collectively, the “Conversion Rate Adjustment Fallback Provisions”), and no adjustment shall be made to the terms of the Transaction, on account of (x) any event or condition described in the Conversion Rate Adjustment Fallback Provisions or (y) any other transaction in which holders of the Convertible Notes are entitled to participate, in each case, in lieu of an adjustment under the Indenture of the type referred to in the immediately preceding sentence (including, without limitation, pursuant to the Conversion Rate Adjustment Fallback Provisions).
	 	 
	Method of Adjustment:	Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent shall make an adjustment corresponding to the adjustment to be made pursuant to the Indenture to any one or more of the Strike Price, the Number of Options, the Option Entitlement, the Relevant Price and/or other applicable price with respect to the Shares and the composition of the “Shares” hereunder.



 






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	 	Notwithstanding the foregoing and “Consequences of Merger Events / Tender Offers” below:
	 	 
	 	(i) if the Calculation Agent in good faith disagrees with any adjustment to the Convertible Notes that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation, pursuant to Section 4.06 of the Indenture, Section 4.07(a) of the Indenture or any supplemental indenture entered into thereunder or in connection with any proportional adjustment or the determination of the fair value of any securities, property, rights or other assets), then in each such case, the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, the Number of Options, the Option Entitlement, the Relevant Price and/or other applicable price with respect to the Shares and the composition of the “Shares” hereunder in a commercially reasonable manner, after using good faith efforts to consult with Counterparty to the extent permitted by applicable law; provided, that, notwithstanding the foregoing, if any Potential Adjustment Event occurs during the Settlement Averaging Period but no adjustment was made to any Convertible Note under the Indenture because the relevant Holder (as such term is defined in the Indenture) was deemed to be a record owner of the underlying Shares on the related Conversion Date, then the Calculation Agent shall make an adjustment, as determined by it in a commercially reasonable manner, after using good faith efforts to consult with Counterparty to the extent permitted by applicable law, to the terms hereof in order to account for such Potential Adjustment Event;
	 	 
	 	(ii) in connection with any Potential Adjustment Event as a result of an event or condition set forth in Section 4.05(b) of the Indenture or Section 4.05(c) of the Indenture where, in either case, the period for determining “Y” (as such term is used in Section 4.05(b) of the Indenture) or “SP0” (as such term is used in Section 4.05(c) of the Indenture), as the case may be, begins before Counterparty has publicly announced the event or condition giving rise to such Potential Adjustment Event, then the Calculation Agent shall have the right to adjust any variable relevant to the exercise, settlement or payment for the Transaction as appropriate to reflect reasonable costs and losses (to account solely for hedging mismatches and market losses, assuming that Dealer maintains commercially reasonable hedge positions) and expenses that would be incurred by Dealer (documented subject to the requirements of the second paragraph under “Calculation Agent” below, as applicable) assuming that Dealer maintains commercially reasonable hedge positions, as a result of such event or condition not having been publicly announced prior to the beginning of such period, as determined by it in a commercially reasonable manner, after using good faith efforts to consult with Counterparty to the extent permitted by applicable law; and



 






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	 	(iii) if any Potential Adjustment Event is declared and (a) the event or condition giving rise to such Potential Adjustment Event is subsequently amended, modified, cancelled or abandoned, (b) the “Conversion Rate” (as defined in the Indenture) is otherwise not adjusted at the time or in the manner contemplated by the relevant Dilution Adjustment Provision based on such declaration or (c) the “Conversion Rate” (as defined in the Indenture) is adjusted as a result of such Potential Adjustment Event and subsequently re-adjusted (each of clauses (a), (b) and (c), a “Potential Adjustment Event Change”) then, in each case, the Calculation Agent shall have the right to adjust, in a commercially reasonable manner, after using good faith efforts to consult with Counterparty to the extent permitted by applicable law, any variable relevant to the exercise, settlement or payment for the Transaction as appropriate to reflect the reasonable costs and losses (to account solely for hedging mismatches and market losses, assuming that Dealer maintains commercially reasonable hedge positions) and expenses that would be incurred by Dealer (documented subject to the requirements of the second paragraph under “Calculation Agent” below, as applicable) assuming that Dealer maintains commercially reasonable hedge positions, as a result of such Potential Adjustment Event Change.
	 	 
	 	For the avoidance of doubt, whenever the Calculation Agent or the Hedging Party is called upon to make an adjustment pursuant to the terms of this Transaction to take into account the effect of an event, the Calculation Agent or the Hedging Party, as applicable, shall make such adjustment by reference to the effect of such event on the Hedging Party, assuming that the Hedging Party maintains a commercially reasonable hedge position.
	 	 
	Dilution Adjustment Provisions:	Sections 4.05(a), (b), (c), (d) and (e) and Section 4.06 of the Indenture.
	 	 
	Extraordinary Events applicable to the Transaction:	 
	 	 
	Merger Events:	Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in the definition of “Merger Event” in Section 4.07(a) of the Indenture.
	 	 
	Tender Offers:	Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 4.05(e) of the Indenture.



 






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	Consequences of Merger Events / Tender Offers:	Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer that is required under the terms of the Indenture to result in an adjustment to the terms of the Convertible Notes, the Calculation Agent shall make an adjustment corresponding to the adjustment to be made pursuant to the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options, Option Entitlement, the definitions of “Exchange”, “Relevant Price”, “Settlement Averaging Period”, “Valid Day”, “Scheduled Valid Day”, “Market Disruption Event”, and/or the number of Share thresholds in Section 9(b)(i) and 9(b)(ii) of this Confirmation, subject to the second paragraph under “Method of Adjustment”; provided, however, that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision; provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction following such Merger Event or Tender Offer will not be a corporation organized under the laws of the United States, any State thereof or the District of Columbia, then, in either case, Cancellation and Payment (Calculation Agent Determination) may apply at Dealer’s sole election; provided further that, for the avoidance of doubt, adjustments shall be made pursuant to the provisions set forth above regardless of whether any Merger Event or Tender Offer gives rise to an Early Conversion.
	 	 
	Consequences of Announcement Events:	Modified Calculation Agent Adjustment as set forth in Section 12.3(d) of the Equity Definitions; provided that, in respect of an Announcement Event, (x) references to “Tender Offer” shall be replaced by references to “Announcement Event” and references to “Tender Offer Date” shall be replaced by references to “date of such Announcement Event”, (y) the phrase “exercise, settlement, payment or any other terms of the Transaction (including, without limitation, the spread)” shall be replaced with the phrase “Cap Price (provided that in no event shall the Cap Price be less than the Strike Price)” and the words “whether within a commercially reasonable (as determined by the Calculation Agent) period of time prior to or after the Announcement Event” shall be inserted prior to the word “which” in the seventh line, and (z) for the avoidance of doubt, the Calculation Agent shall, in good faith and in a commercially reasonable manner, determine whether the relevant Announcement Event has had a material economic effect (as determined by Calculation Agent) on the Transaction and if so, shall adjust the Cap Price accordingly, and may make the related adjustments on one or more occasions on or after the date of the Announcement Event up to, and including, the Expiration Date, any Early Termination Date and/or any other date of cancellation, it being understood that any adjustment in respect of an Announcement Event shall take into account any earlier adjustment relating to the same Announcement Event and shall not be duplicative with any other adjustment or cancellation valuation made pursuant to this Confirmation, the Equity Definitions or the Agreement; provided that in no event shall the Cap Price be less than the Strike Price. An Announcement Event shall be an “Extraordinary Event” for purposes of the Equity Definitions, to which Article 12 of the Equity Definitions is applicable.



 






    12


     


    

 


	Announcement Event:	(i) The public announcement by (A) Counterparty, any subsidiary of Counterparty, or any Valid Third-Party Entity of any transaction or event that the Calculation Agent determines is reasonably likely to be completed and that, if completed, would constitute a Merger Event or Tender Offer (it being understood and agreed that in determining whether such transaction or event is reasonably likely to be completed, the Calculation Agent may take into consideration the effect of the relevant announcement on the Shares and/or options relating to the Shares and, if any such effect is material, may deem such transaction or event to be reasonably likely to be completed), (B) Counterparty or any subsidiary thereof of any potential acquisition or disposal by Counterparty and/or its subsidiaries where the aggregate consideration exceeds 35% of the market capitalization of Counterparty as of the date of such announcement (a “Transformative Transaction”) or (C) Counterparty, any subsidiary of Counterparty or any Valid Third-Party Entity of the intention to enter into a Merger Event or Tender Offer or a Transformative Transaction, which, in the case of an announcement other than by Counterparty, the Calculation Agent determines is reasonably likely to occur (it being understood and agreed that in determining whether such transaction or event is reasonably likely to occur, the Calculation Agent may take into consideration the effect of the relevant announcement on the Shares and/or options relating to the Shares and, if any such effect is material, may deem such transaction or event to be reasonably likely to occur), (ii) the public announcement by Counterparty of an intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, a Merger Event or Tender Offer or a Transformative Transaction or (iii) any subsequent public announcement by any entity of a change to a transaction or intention that is the subject of an announcement of the type described in clause (i) or (ii) of this sentence (including, without limitation, a new announcement, whether or not by the same party, relating to such a transaction or intention or the announcement of a withdrawal from, or the abandonment or discontinuation of, such a transaction or intention), as determined by the Calculation Agent. For the avoidance of doubt, the occurrence of an Announcement Event with respect to any transaction or intention shall not preclude the occurrence of a later Announcement Event with respect to such transaction or intention. For purposes of this definition of “Announcement Event,” (1) “Merger Event” shall mean such term as defined under Section 12.1(b) of the Equity Definitions (but, for the avoidance of doubt, the remainder of the definition of “Merger Event” in Section 12.1(b) of the Equity Definitions following the definition of “Reverse Merger” therein shall be disregarded) and (2) “Tender Offer” shall mean such term as defined under Section 12.1(d) of the Equity Definitions; provided that Section 12.1(d) of the Equity Definitions is hereby amended by replacing “10%” with “20%” in the third line thereof.



 






    13


     


    

 


	Valid Third-Party Entity:	In respect of any transaction, any third party that the Calculation Agent determines has a bona fide intent to enter into or consummate such transaction (it being understood and agreed that in determining whether such third party has such a bona fide intent, the Calculation Agent shall take into consideration the effect of the relevant announcement by such third party on the Shares and/or options relating to the Shares and, if such effect is material, may deem such third party to have a bona fide intent).
	 	 
	Nationalization, Insolvency or Delisting:	Cancellation and Payment (Calculation Agent Determination); provided that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange.
	 	 
	Additional Disruption Events:	 
	 	 
	Change in Law:	Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation,” (ii) replacing the word “Shares” with the phrase “Hedge Positions” in clause (X) thereof and (iii) inserting the parenthetical “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption, effectiveness or promulgation of new regulations authorized or mandated by existing statute)” at the end of clause (A) thereof.
	 	 
	Failure to Deliver:	Applicable
	 	 
	Hedging Disruption:	Applicable; provided that:
	 	 
	 	(i) Section 12.9(a)(v) of the Equity Definitions is hereby amended by (a) inserting the following words at the end of clause (A) thereof: “in the manner contemplated by the Hedging Party on the Trade Date” and (b) inserting the following language at the end of such Section:



 






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	 	“, provided that any such inability that occurs solely due to the deterioration of the creditworthiness of the Hedging Party shall not be deemed a Hedging Disruption. For the avoidance of doubt, the term “equity price risk” shall be deemed to include, but shall not be limited to, stock price and volatility risk. And, for the further avoidance of doubt, any such transactions or assets referred to in phrases (A) or (B) above must be available on commercially reasonable pricing terms.”; and
	 	 
	 	(ii) Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the third line thereof, after the words “to terminate the Transaction”, the words “or a portion of the Transaction affected by such Hedging Disruption”.
	 	 
	Increased Cost of Hedging:	Applicable
	 	 
	Hedging Party:	For all applicable Additional Disruption Events, Dealer; provided, however, that all calculations, adjustments, specifications, choices and determinations by Dealer acting in its capacity as the Hedging Party shall be made in good faith and in a commercially reasonable manner and assuming that Dealer maintains a commercially reasonable hedge position (it being understood that Hedging Party will be subject to the requirements of the second paragraph under “Calculation Agent” below).
	 	 
	Determining Party:	For all applicable Extraordinary Events, Dealer; provided, however, that all calculations, adjustments, specifications, choices and determinations by Dealer acting in its capacity as the Determining Party shall be made in good faith and in a commercially reasonable manner and assuming that Dealer maintains a commercially reasonable hedge position (it being understood that Determining Party will be subject to the requirements of the second paragraph under “Calculation Agent” below).
	 	 
	Non-Reliance:	Applicable
	 	 
	Agreements and Acknowledgments Regarding Hedging Activities:	Applicable
	 	 
	Additional Acknowledgments:	Applicable



 






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	4.            Calculation Agent.	Dealer; provided, however, that all calculations, adjustments, specifications, choices and determinations by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. The parties agree that they will work reasonably to resolve any disputes as set forth in the immediately following paragraph.
	 	 
	 	In the case of any calculation, adjustment or determination by the Hedging Party, the Determining Party or the Calculation Agent, following any written request from Counterparty, the Hedging Party, the Determining Party or the Calculation Agent, as the case may be, shall promptly provide to Counterparty a written explanation describing in reasonable detail the basis for such calculation, adjustment or determination (including any quotation, market data or information from internal or external sources used in making such calculation, adjustment or determination, but without disclosing any proprietary models or other information that may be proprietary or confidential). If Counterparty promptly disputes such calculation, adjustment or determination in writing and provides reasonable detail as to the basis for such dispute, the Calculation Agent shall, to the extent permitted by applicable law, discuss the dispute with Counterparty in good faith, it being understood that notwithstanding such discussion, the Calculation Agent’s calculation, adjustment or determination shall apply to the Transaction and be binding on the parties provided that such calculation, adjustment or determination was made in good faith and in a commercially reasonable manner.



 


	5.            Account Details.
	 
	(a)  Account for payments to Counterparty: 
	 	 
	Account for delivery of Shares to Counterparty:
	 
	To be provided by Counterparty
	 
	(b)   Account for payments to Dealer:
	 
	To be provided by Dealer
	 	 
	Account for delivery of Shares to Dealer:
	 	 
	To be provided by Dealer
	 
	6.            Offices.	 
	 
	(a)   The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party.
	 
	(b)   The Office of Dealer for the Transaction is: New York







 






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7.             Notices.


 


(a)       Address
for notices or communications to Counterparty:


 





Ironwood Pharmaceuticals, Inc.


301 Binney Street


Cambridge, Massachusetts, 02142


Attention:General Counsel


 


With a copy to:


 


Ropes & Gray LLP


Attention: Isabel Dische, Esq. and Thomas Holden, Esq.


Telephone No: (212) 596-9000


Facsimile No: (212) 596-9090


Email: isabel.dische@ropesgray.com & thomas.holden@ropesgray.com


 


(b)       Address
for notices or communications to Dealer:


 


Credit Suisse Capital LLC


c/o Credit Suisse Securities (USA) LLC


Eleven Madison Avenue


New York, NY 10010


Attention:Tucker Martin


Telephone:(212) 325-9182


Facsimile:(212) 743-3661


Email:tucker.martin@credit-suisse.com


 


With a copy to:


 


Credit Suisse Securities (USA) LLC


1 Madison Avenue, 9th Floor


New York, New York 10010


Attn: Senior Legal Officer


Telephone: (212) 538-2616


Facsimile: (212) 325-8036


Email: stephen.gray@credit-suisse.com


 


For payments and deliveries:


 


Facsimile No.: (212) 325 8175


Telephone No.: (212) 325 8678 / (212) 325 3213


 


For all other communications:


 


Telephone: (212) 538-6040


Facsimile: (917) 326-8603


 






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8.            Representations
and Warranties of Counterparty.


 


Each of the representations and warranties of Counterparty
set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of August 7, 2019, between
Counterparty and J.P. Morgan Securities LLC, as Initial Purchaser (the “Initial Purchaser”), are true and correct
and are hereby deemed to be repeated to Dealer as if set forth herein, except to the extent that such representations and warranties,
if not true or correct, would not have a material adverse effect on the power or ability of Counterparty to execute and deliver
this Confirmation or to perform its obligations hereunder. Counterparty hereby further represents and warrants to Dealer on the
date hereof and on and as of the Premium Payment Date that:


 





		(a)	Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of
the Transaction; 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.



 


		(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 (the “Securities Act”) 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)	Each of it and its affiliates is not, on the date hereof, in possession of any material non-public information with respect
to Counterparty 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) 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.



 






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9.             Other Provisions.


 


(a)       [Reserved].


 


		(b)	Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, promptly
give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase,
the number of outstanding Shares as determined on such day is (i) less than 152,992,485 (in the case of the first such notice)
or (ii) thereafter more than 3,282,663 less than the number of Shares included in the immediately preceding Repurchase Notice.
Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors,
agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including
losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”,
including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection
therewith with respect to the Transaction), claims, damages, judgments, liabilities and reasonable expenses (including reasonable
attorney’s fees), joint or several, which an Indemnified Person may become subject to, as a result of Counterparty’s
failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse,
within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection
with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing.
If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted
against the Indemnified Person as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice in accordance
with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person
and any others Counterparty may designate in such proceeding and shall pay the commercially reasonable fees and expenses of such
counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding contemplated by this
paragraph that is effected without its written consent, but if settled with such consent or if there be a final judgment for the
plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement
or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person (such consent not to be unreasonably
withheld, conditioned or delayed), effect any settlement of any pending or threatened proceeding contemplated by this paragraph
that is in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder
by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability
on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification
provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then Counterparty hereunder, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities.
The remedies provided for in this paragraph (b) are not exclusive and shall not limit any rights or remedies which may otherwise
be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph
shall remain operative and in full force and effect regardless of the termination of the Transaction.






 


		(c)	Regulation M. Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation
M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of Counterparty,
other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M.
Counterparty shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution.



 


		(d)	No Manipulation. Counterparty is not entering into the Transaction 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.



 






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(e)       Transfer
or Assignment.


 


		(i)	Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less
than all, of the Options hereunder (such Options, the “Transfer Options”); provided that such transfer
or assignment shall be subject to reasonable conditions that Dealer may impose, including but not limited, to the following conditions:



 





		(A)	With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant
to Section 9(b) or any obligations under Section 9(o) or 9(t) of this Confirmation;



 


		(B)	Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in the
Internal Revenue Code of 1986, as amended (the “Code”));



 


		(C)	Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including,
but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable
judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation
and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested
and reasonably satisfactory to Dealer;



 


		(D)	Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount
under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in
the absence of such transfer and assignment;



 


		(E)	An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment;



 


		(F)	Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations
and to provide such tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described
in clauses (D) and (E) will not occur upon or after such transfer and assignment; and



 


		(G)	Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer
in connection with such transfer or assignment.



 


		(ii)	Dealer may, without Counterparty’s consent, transfer or assign all or any part of its rights or obligations under the
Transaction (A) to any affiliate of Dealer (1) that has a rating for its long term, unsecured and unsubordinated indebtedness that
is equal to or better than Dealer’s credit rating at the time of such transfer or assignment, or (2) whose obligations hereunder
will be guaranteed, pursuant to the terms of a customary guarantee in a form used by Dealer generally for similar transactions,
by Dealer or Dealer’s ultimate parent entity, or (B) to any other third party with a rating for its long term, unsecured
and unsubordinated indebtedness equal to or better than the lesser of (1) the credit rating of Dealer at the time of the transfer
and (2) A- by Standard and Poor’s Rating Group, Inc. or its successor (“S&P”), or A3 by Moody’s
Investor Service, Inc. (“Moody’s”) or, if either S&P or Moody’s ceases to rate such debt, at
least an equivalent rating or better by a substitute rating agency mutually agreed by Counterparty and Dealer. If at any time at
which (A) the Section 16 Percentage exceeds 7.5%, (B) the Option Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds
the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership
Position”), Dealer is unable after using its good faith and commercially reasonable efforts to effect a transfer or assignment
of Options to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to
Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination
Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial
termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect
to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated
in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the number of Options underlying
the Terminated Portion, (2) Counterparty were the sole Affected Party with respect to such partial termination and (3) the Terminated
Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(m) shall apply to any
amount that is payable by Dealer to Counterparty pursuant to this sentence as if Counterparty was not the Affected Party). The
“Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the
number of Shares that Dealer and any of its affiliates or any other person subject to aggregation with Dealer for purposes of the
“beneficial ownership” test under Section 13 of the Exchange Act, or any “group” (within the meaning of
Section 13 of the Exchange Act) of which Dealer is or may be deemed to be a part beneficially owns (within the meaning of Section
13 of the Exchange Act), without duplication, on such day (or, to the extent that for any reason the equivalent calculation under
Section 16 of the Exchange Act and the rules and regulations thereunder results in a higher number, such higher number) and (B)
the denominator of which is the number of Shares outstanding. The “Option Equity Percentage” as of any day is the fraction,
expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Options and the Option Entitlement
and (2) the aggregate number of Shares underlying any other call option transaction sold by Dealer to Counterparty, and (B) the
denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares
that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer
Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Counterparty that
are, in each case, applicable to ownership of Shares (“Applicable Restrictions”), owns, beneficially owns, constructively
owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership under any Applicable Restriction,
as determined by Dealer in good faith and in its reasonable discretion. The “Applicable Share Limit” means a number
of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations or other requirements
(including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer
Person, under any Applicable Restriction, as determined by Dealer in good faith and in its reasonable discretion, minus (B)
1% of the number of Shares outstanding.



 






    20


     


    

 


		(iii)	Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive
or deliver any Shares or other securities, or make or receive any payment in cash, to or from Counterparty, Dealer may designate
any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or to make or receive such payment
in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such
obligations. Dealer shall be discharged of its obligations to Counterparty to the extent of any such Dealer affiliate’s performance
to Counterparty.



 


		(f)	Staggered Settlement. If upon advice of counsel with respect to applicable legal and regulatory requirements,
including any requirements relating to Dealer’s hedging activities hereunder, Dealer reasonably determines that it would
not be practicable or advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer
on any Settlement Date for the Transaction, Dealer may, by notice to Counterparty on or prior to any Settlement Date (a “Nominal
Settlement Date”), elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”)
as follows:



 


		(i)	in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which shall be on or prior
to such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date;



 





		(ii)	the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates will
equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date; and



 


		(iii)	if the Net Share Settlement terms or the Combination Settlement terms set forth above were to apply on the Nominal Settlement
Date, then the Net Share Settlement terms or the Combination Settlement terms, as the case may be, will apply on each Staggered
Settlement Date, except that the number of Shares otherwise deliverable on such Nominal Settlement Date will be allocated among
such Staggered Settlement Dates as specified by Dealer in the notice referred to in clause (i) above.



 


		(g)	Role of Agent. As a broker-dealer registered with the U.S. Securities and Exchange Commission (“SEC”),
Credit Suisse Securities (USA) LLC in its capacity as Agent will be responsible for (i) effecting the Transaction, (ii) issuing
all required confirmations and statements to Dealer and Counterparty, (iii) maintaining books and records relating to the Transaction
as required by Rules 17a-3 and 17a-4 under the Exchange Act and (iv) unless otherwise requested by Counterparty, receiving, delivering,
and safeguarding Counterparty’s funds and any securities in connection with each Transaction, in compliance with Rule 15c3-3
under the Exchange Act.



 


Credit Suisse Securities (USA) LLC is acting in connection
with the Transaction solely in its capacity as Agent for Dealer and Counterparty pursuant to instructions from Dealer and Counterparty.
Credit Suisse Securities (USA) LLC shall have no responsibility or personal liability to Dealer or Counterparty arising from any
failure by Dealer or Counterparty to pay or perform any obligations hereunder, or to monitor or enforce compliance by Dealer or
Counterparty with any obligation hereunder, including without limitation, any obligations to maintain collateral. Each of Dealer
and Counterparty agrees to proceed solely against the other to collect or recover any securities or monies owing to it in connection
with or as a result of the Transaction. Credit Suisse Securities (USA) LLC shall otherwise have no liability in respect of the
Transaction, except for its gross negligence or willful misconduct in performing its duties as Agent.


 


Any and all notices, demands, or communications of any
kind relating to this Transaction between Dealer and Counterparty shall be transmitted exclusively through Agent at the following
address:


 






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Credit Suisse Capital LLC


c/o Credit Suisse Securities (USA) LLC


Eleven Madison Avenue


New York, NY 10010


Attention:Tucker Martin


Telephone:(212) 325-9182


Facsimile:(212) 743-3661


Email:tucker.martin@credit-suisse.com


 


With a copy to:


 


Credit Suisse Securities (USA) LLC


1 Madison Avenue, 9th Floor


New York, New York 10010


Attn: Senior Legal Officer


Telephone: (212) 538-2616


Facsimile: (212) 325-8036


Email: stephen.gray@credit-suisse.com


 


For payments and deliveries:


 


Facsimile No.: (212) 325 8175


Telephone No.: (212) 325 8678 / (212) 325 3213


 





For all other communications:


 


Telephone: (212) 538-6040


Facsimile: (917) 326-8603


 


The date and time of the Transaction evidenced hereby
will be furnished by the Agent to Dealer and Counterparty upon written request.


 


The Agent will furnish to Counterparty upon written
request a statement as to the source and amount of any remuneration received or to be received by the Agent in connection with
the Transaction evidenced hereby.


 


Dealer is not a member of the SIPC (Securities Investor
Protection Corporation).


 


Dealer represents that it is an “OTC derivatives
dealer” as such term is defined in the Exchange Act and is an affiliate of a broker-dealer that is registered with and fully-regulated
by the SEC, Credit Suisse Securities (USA) LLC.


 






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(h)       Additional
Termination Events.


 


(i) Notwithstanding anything to the contrary in this
Confirmation if an event of default occurs under the terms of the Convertible Notes as set forth in Section 7.01 of the Indenture,
then such event of default shall constitute an Additional Termination Event applicable to the Transaction and, with respect to
such Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the Transaction shall be
the sole Affected Transaction and (C) Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section
6(b) of the Agreement.


 


(ii) Notwithstanding anything to the contrary in this
Confirmation, the occurrence of an Amendment Event shall constitute an Additional Termination Event applicable to the Transaction
and, with respect to such Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the
Transaction shall be the sole Affected Transaction and (C) Dealer shall be the party entitled to designate an Early Termination
Date pursuant to Section 6(b) of the Agreement. “Amendment Event” means that Counterparty amends, modifies,
supplements, waives or obtains a waiver in respect of any term of the Indenture or the Convertible Notes governing the principal
amount, coupon, maturity, repurchase obligation of Counterparty, any term relating to conversion of the Convertible Notes (including
changes to the conversion rate, conversion rate adjustment provisions, conversion settlement dates or conversion conditions), or
any term that would require consent of the holders of not less than 100% of the principal amount of the Convertible Notes to amend
(other than, in each case, any amendment or supplement (v) pursuant to Section 10.01(c) of the Indenture, (w) pursuant to Section
10.01(h) of the Indenture that, as determined by the Calculation Agent, conforms the Indenture to the description of Convertible
Notes in the Offering Memorandum, (x) pursuant to Section 4.07 of the Indenture, (y) pursuant to Section 10.01(i) of the Indenture,
or (z) pursuant to Section 10.01(a) of the Indenture that, as determined by Calculation Agent, cures any ambiguity, defect or inconsistency
in the Indenture or in the Convertible Notes in a manner that does not adversely affect any Holder in any material respect), in
each case, without the consent of Dealer.


 


(iii) In addition, notwithstanding anything to the contrary
in this Confirmation:


 


(A) Promptly following any Repayment Event (as defined
below) (but, in any event, within 5 Scheduled Valid Days following settlement thereof), Counterparty may notify Dealer of such
Repayment Event and the aggregate principal amount of Convertible Notes subject to such Repayment Event (the “Repayment
Convertible Notes”) (any such notice, a “Repayment Notice”); provided that any such Repayment
Notice shall contain a repetition by Counterparty of the representation and warranty set forth in Section 8(f) hereunder as of
the date of such Repayment Notice. The receipt by Dealer from Counterparty of any Repayment Notice shall constitute an Additional
Termination Event as provided in this Section 9(h).


 


(B) Upon receipt of any such Repayment Notice, Dealer
shall designate an Exchange Business Day following receipt of such Repayment Notice (which Exchange Business Day shall be on or
as promptly as reasonably practicable after the related settlement date for the relevant Repayment Event) as an Early Termination
Date with respect to a portion (the “Repayment Terminated Portion”) of the Transaction consisting of a number
of Options (the “Repayment Options”) equal to the lesser of (A) the number of Repayment Convertible Notes in
denominations of USD1,000 that are subject to the relevant Repayment Event and (B) the Number of Options as of the date Dealer
designates such Early Termination Date (prior to giving effect to a reduction thereto on such date pursuant to the immediately
following sentence). As of any such Early Termination Date, the Number of Options shall be reduced by the applicable number of
Repayment Options.


 


(C) Any payment
or delivery in respect of such termination of the Repayment Terminated Portion of the Transaction shall be made pursuant to Section
6 of the Agreement as if an Early Termination Date had been designated in respect of a Transaction having terms identical to the
Transaction and a Number of Options equal to the number of Repayment Options. Counterparty shall be the sole Affected Party with
respect to such Additional Termination Event and the Repayment Terminated Portion of the Transaction shall be the sole Affected
Transaction. “Repayment Event” means that (i) any Convertible Notes are repurchased by Counterparty or any of
its subsidiaries, (ii) any Convertible Notes are delivered to Counterparty in exchange for delivery of any property or assets of
Counterparty or any of its subsidiaries (howsoever described), (iii) any principal of any of the Convertible Notes is repaid prior
to the final maturity date of the Convertible Notes (other than upon an event of default under the Convertible Notes described
in the first paragraph of this Section 9(h)), or (iv) any Convertible Notes are exchanged by or for the benefit of the Holders
(as defined in the Indenture) thereof for any other securities of Counterparty or any of its Affiliates (as defined in the Indenture)
(or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction; provided that
(x) no conversion of Convertible Notes pursuant to the terms of the Indenture shall constitute a Repayment Event and (y) no surrender
of a Convertible Note for repurchase in respect of which Counterparty has elected to designate a financial institution for exchange
in lieu of repurchase pursuant to Section 4.11 of the Indenture shall constitute a Repayment Event. Counterparty acknowledges its
responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of the Exchange Act and the rules
and regulations thereunder, in respect of any action taken by Counterparty or any of its Affiliates (as defined in the Indenture)
in respect of a Repayment Event, including, without limitation, the delivery of a Repayment Notice.


 






    23


     


    

 


(D) Counterparty
acknowledges and agrees that if an Additional Termination Event has occurred under this Section 9(h)(iii) that any related Convertible
Notes subject to a Repayment Event will be deemed to be cancelled and disregarded an no longer outstanding for all purposes hereunder.


 


(iv) Notwithstanding anything to the contrary in this
Confirmation, upon any Early Conversion in respect of which a Notice of Conversion that is effective as to Counterparty has been
delivered by the relevant converting Holder:


 


(A) Counterparty
shall, as promptly as practicable (but in any event within five Scheduled Trading Days of the “Conversion Date” (as
defined in the Indenture) for such Early Conversion), provide written notice (an “Early Conversion Notice”)
to Dealer specifying the number of Convertible Notes surrendered for conversion on such Conversion Date (such Convertible Notes,
the “Affected Convertible Notes”), and the giving of such Early Conversion Notice shall constitute an Additional
Termination Event as provided in this clause (iv);


 


(B) upon receipt
of any such Early Conversion Notice, Dealer shall designate an Exchange Business Day as an Early Termination Date (which Exchange
Business Day shall be no earlier than one Scheduled Trading Day following the Conversion Date for such Early Conversion) with respect
to the portion of the Transaction corresponding to a number of Options (the “Affected Number of Options”) equal
to the lesser of (x) the number of Affected Convertible Notes and (y) the Number of Options as of the Conversion Date for such
Early Conversion;


 


(C) any payment
hereunder with respect to such termination shall be calculated pursuant to Section 6 of the Agreement as if (x) an Early Termination
Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to
the Affected Number of Options, (y) Counterparty were the sole Affected Party with respect to such Additional Termination Event
and (z) the terminated portion of the Transaction were the sole Affected Transaction; provided that the amount payable with
respect to such termination shall not be greater than (1) the Applicable Percentage, multiplied by (2) the Affected Number
of Options, multiplied by (3) (x) the sum of (i) the amount of cash paid (if any) to the Holder (as such term is defined
in the Indenture) of an Affected Convertible Note upon conversion thereof and (ii) the number of Shares delivered (if any) to the
Holder (as such term is defined in the Indenture) of an Affected Convertible Note upon conversion of such Affected Convertible
Note, multiplied by the Applicable Limit Price on the settlement date for the cash to be paid and/or the Shares to be delivered
to the Holders (as defined in the Indenture) of such Affected Convertible Note, minus (y) USD 1,000;


 


(D) for the
avoidance of doubt, in determining the amount payable in respect of such Affected Transaction pursuant to Section 6 of the Agreement,
the Calculation Agent shall assume that (x) the relevant Early Conversion and any conversions, adjustments, agreements, payments,
deliveries or acquisitions by or on behalf of Counterparty leading thereto had not occurred, (y) no adjustments to the Conversion
Rate have occurred pursuant to any Excluded Provision and (z) the corresponding Convertible Notes remain outstanding; and


 


(E) the Transaction
shall remain in full force and effect, except that, as of the Conversion Date for such Early Conversion, the Number of Options
shall be reduced by the Affected Number of Options.


 






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(i)        Amendments
to the Equity Definitions.


 


		(i)	Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the word “or”
after the word “official” and inserting a comma therefor, and (2) deleting the semi-colon at the end of subsection
(B) thereof and inserting the following words therefor “or (C) at Dealer’s option, the occurrence of any of the events
specified in Section 5(a)(vii)(1) through (9) of the ISDA Master Agreement with respect to that Issuer.”



 


 





		(ii)	Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either party may elect” with “Dealer
may elect” and (2) replacing “notice to the other party” with “notice to Counterparty” in the first
sentence of such section.



 


		(iii)	Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “that may have a diluting or concentrative
effect on the theoretical value of the relevant Shares” and replacing them with the words “that is the result of a
corporate event involving the Issuer or its securities that has a material economic effect on the Shares and/or options on the
Shares; provided that such event is not based on (a) an observable market, other than the market for the Issuer’s
own stock or (b) an observable index, other than an index calculated and measured solely by reference to Issuer’s own operations”.



 


		(iv)	Section 12.9(b)(vi) of the Equity Definitions is hereby amended by (1) adding the word “or” immediately before
subsection “(B)”, (2) deleting the comma at the end of subsection (A), (3) deleting subsection (C) in its entirety,
(4) deleting the word “or” immediately preceding subsection (C) and (5) replacing the words “either party”
in the last sentence of such Section with “Dealer”.



 


		(j)	Setoff. Obligations under the Transaction shall not be set off by either party against any other obligations
of the parties, whether arising under the Agreement, this Confirmation, under any other agreement between the parties hereto, by
operation of law or otherwise. For the avoidance of doubt, in the event of bankruptcy or liquidation of either Counterparty or
Dealer neither party shall have the right to set off any obligation that it may have to the other party under the Transaction against
any obligation such other party may have to it, whether arising under the Agreement, this Confirmation or any other agreement between
the parties hereto, by operation of law or otherwise.



 


		(k)	Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If in respect
of the Transaction, an amount is payable by Dealer to Counterparty (i) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions
or (ii) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), then Dealer
shall satisfy the Payment Obligation by the Share Termination Alternative (as defined below), unless (a) Counterparty gives irrevocable
telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 12:00 p.m. (New York City time)
on the Merger Date, Tender Offer Date, Announcement Date (in the case of a Nationalization, Insolvency or Delisting), Early Termination
Date or date of cancellation, as applicable, of its election that the Share Termination Alternative shall not apply, (b) Counterparty
remakes the representation set forth in Section 8(f) as of the date of such election and (c) Dealer agrees, in good faith and in
its reasonable discretion, to such election, in which case the provisions of Section 12.7 or Section 12.9 of the Equity Definitions,
or the provisions of Section 6(d)(ii) of the Agreement, as the case may be, shall apply.



 






    25


     


    

 


Share Termination Alternative:                       If
applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable
period of time after, the date when the relevant Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of
the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable, in satisfaction of such Payment Obligation
in the manner reasonably requested by Counterparty free of payment.


 


Share Termination Delivery
Property:             A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation
divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing
any fractional portion of a security therein with an amount of cash equal to the value of such fractional security


 


based on the values used to calculate the Share
Termination Unit Price.


 


Share Termination Unit Price:                         The
value of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by
commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation.
For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent
may consider, if commercially reasonable, the purchase price paid in connection with the purchase of Share Termination Delivery
Property.


 


Share Termination Delivery
Unit:                    One Share or, if the Shares have changed into cash or any other property or the right to receive cash or any other property
as the result of a Nationalization, Insolvency or Merger Event (any such cash or other property, the “Exchange Property”),
a unit consisting of the type and amount of such Exchange Property received by a holder of one Share (without consideration of
any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Nationalization, Insolvency
or Merger Event, as determined by the Calculation Agent.


 


Failure to Deliver:                                            Applicable


 


Other applicable provisions:                            If
Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions
and the provisions set forth opposite the caption “Representation and Agreement” in Section 2 will be applicable, except
that all references in such provisions to “Physically-settled” shall be read as references to “Share Termination
Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”.
“Share Termination Settled” in relation to the Transaction means that the Share Termination Alternative is applicable
to the Transaction.


 






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		(l)	Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may
have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that
no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not,
in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other
party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications
provided herein.



 


		(m)	Registration. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer based on the
advice of counsel, the Shares (“Hedge Shares”) acquired by Dealer for the purpose of hedging its obligations
pursuant to the Transaction cannot be sold in the public market by Dealer without registration under the Securities Act, Counterparty
shall, at its election, either (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to
Dealer an effective registration statement under the Securities Act and
enter into an agreement, in form and substance satisfactory to Dealer, substantially in the form of an underwriting agreement for
a registered secondary offering of similar size; provided, however, that if Dealer, in its sole reasonable discretion, is
not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation
for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of
Counterparty, (ii) in order to allow Dealer to sell the Hedge Shares in a private placement, enter into a private placement agreement
substantially similar to private placement purchase agreements customary for private placements of equity securities of similar
size, in form and substance satisfactory to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms
of the Transaction that are necessary, in its commercially reasonable judgment, to compensate Dealer for any discount from the
public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares
from Dealer at the Relevant Price on such Exchange Business Days, and in the amounts, requested by Dealer.



 





		(n)	Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty
and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses)
that are provided to Counterparty relating to such tax treatment and tax structure.



 


		(o)	Right to Extend. Dealer may postpone or add, in whole or in part, any Valid Day or Valid Days during the Settlement
Averaging Period or any other date of valuation, payment or delivery by Dealer, with respect to some or all of the Options hereunder,
if Dealer reasonably and in good faith determines, based on the advice of counsel in the case of the immediately following clause
(ii), that such action is reasonably necessary or appropriate (i) to preserve Dealer’s commercially reasonable hedging or
hedge unwind activity hereunder in light of existing liquidity conditions or (ii) to enable Dealer to effect transactions with
respect to Shares in connection with a 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
organization requirements, or with related policies and procedures applicable to Dealer; provided that no such Valid Day
or other date of valuation, payment or delivery may be postponed or added more than 80 Valid Days after the original Valid Day
or date of valuation, payment or delivery, as the case may be.



 


		(p)	Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey
to Dealer rights against Counterparty with respect to the Transaction that are senior to the claims of common stockholders of Counterparty
in any United States bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed
to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with
respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s
rights in respect of any transactions other than the Transaction.



 


		(q)	Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities
contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the
“Bankruptcy Code”), and the parties hereto to be entitled to the protections afforded by, among other Sections,
Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code, (ii) a party’s right to liquidate the
Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to
the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and
delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment”
and a “transfer” as defined in the Bankruptcy Code.



 






    27


     


    

 


		(r)	Notice of Certain Other Events. Counterparty covenants and agrees that:



 


		(i)	promptly following the public announcement of the results of any election by the holders of Shares with respect to the consideration
due upon consummation of any Merger Event, Counterparty shall give Dealer written notice of (x)
the weighted average of the types and amounts of consideration that holders of Shares have elected to receive upon consummation
of such Merger Event or (y) if no holders of Shares affirmatively make such election, the types and amounts of consideration actually
received by holders of the Shares (the date of such notification, the “Consideration Notification Date”); provided
that in no event shall the Consideration Notification Date be later than the date on which such Merger Event is consummated;
and



 


		(ii)	(A) Counterparty shall give Dealer commercially reasonable advance (but in no event less than one Exchange Business Day) written
notice of the section or sections of the Indenture and, if applicable, the formula therein, pursuant to which any adjustment will
be made to the Convertible Notes in connection with any Potential Adjustment Event, Merger Event or Tender Offer and (B) promptly
following any such adjustment, Counterparty shall give Dealer written notice of the details of such adjustment.



 


		(s)	Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency
and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any
regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either
party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement,
as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event
under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising
from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the
Agreement)).



 


		(t)	Agreements and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges and agrees that: (A)
at any time on and prior to the Expiration Date, Dealer and its affiliates may buy or sell Shares or other securities or buy or
sell options or futures contracts or enter into swaps or other derivative securities in order to adjust its hedge position with
respect to the Transaction; (B) Dealer and its affiliates also may be active in the market for Shares other than in connection
with hedging activities in relation to the Transaction; (C) Dealer shall make its own determination as to whether, when or in what
manner any hedging or market activities in securities of Issuer shall be conducted and shall do so in a manner that it deems appropriate
to hedge its price and market risk with respect to the Relevant Prices; and (D) any market activities of Dealer and its affiliates
with respect to Shares may affect the market price and volatility of Shares, as well as the Relevant Prices, each in a manner that
may be adverse to Counterparty.



 


		(u)	Early Unwind. In the event the sale of the “Underwritten Securities” (as defined in the Purchase
Agreement) is not consummated with the Initial Purchaser for any reason by 5:00 p.m. (New York City time) on the Premium Payment
Date, or such later date as agreed upon by the parties (the Premium Payment Date or such later date, the “Early Unwind
Date”), the Transaction shall automatically terminate (the “Early Unwind”) on the Early Unwind Date
and (i) the Transaction and all of the respective rights and obligations of Dealer and Counterparty under the Transaction shall
be cancelled and terminated and (ii) 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 the other party arising out of and to be performed
as Hedging Positions in respect of this Transaction either prior to or after the Early Unwind Date. Each of Dealer and Counterparty
represents and acknowledges to the other that, upon an Early Unwind, all obligations with respect to the Transaction shall be deemed
fully and finally discharged.



 


		(v)	Payment by Counterparty. In the event that, following payment of the Premium, (i) an Early Termination Date
                                                               occurs or is designated with respect to the Transaction as a result of a Termination Event or an Event of Default (other than
                                                               an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Counterparty owes to
                                                               Dealer an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer, pursuant to Section
                                                               12.7 or Section 12.9 of the Equity Definitions, an amount calculated under
Section 12.8 of the Equity Definitions, such amount shall be deemed to be zero.



 






    28


     


    

 


		(w)	Designation of Dealer. Notwithstanding any other provision in this Confirmation to the contrary requiring or
allowing Dealer to purchase, sell, receive or deliver any Shares or other securities to or from Issuer, Dealer may designate any
of its affiliates to purchase, sell, receive or deliver such Shares or other securities and otherwise to perform Dealer’s
obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its
obligations to Counterparty to the extent of any such performance.



 


(x)       Tax
Documentation and Representations.


 


		(i)	Tax documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service (“IRS”)
Form W-9 on or before the date of execution of this Confirmation and will promptly tender an updated IRS Form W-9 if the previously
tendered IRS Form W-9 becomes incorrect as a result of a change in facts. Dealer shall provide Counterparty a valid IRS Form W-9
or applicable IRS Form W-8 on or before the date of execution of this Confirmation and will promptly tender an updated IRS Form
W-9 or applicable IRS Form W-8 if the previously tendered IRS Form W-9 or applicable IRS Form W-8 becomes incorrect as a result
of a change in facts.



 


		(ii)	Tax Representations. For the purpose of Section 3(f) of the Agreement, Counterparty is a corporation for U.S. federal
income tax purposes and is organized under the laws of the State of Delaware. Counterparty is a “U.S. person” (as that
term is used in section 1.1441-4(a)(3)(ii) of United States Treasury Regulations) for U.S. federal income tax purposes and an exempt
recipient under Treasury Regulation Section 1.6049-4(c)(1)(ii).



 


(y)       Certain
Withholding Taxes.


 


		(i)	Withholding Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act.
“Indemnifiable Tax” as defined in Section 14 of the Agreement shall not include any tax imposed or collected pursuant
to Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof, any agreement
entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant
to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (a “FATCA
Withholding Tax”). For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which
is required by applicable law for the purposes of Section 2(d) of the Agreement.



 


		(ii)	Incorporation of ISDA 2015 Section 871(m) Protocol Provisions. To the extent that either party to the Agreement with
respect to this Transaction is not an adhering party to the ISDA 2015 Section 871(m) Protocol published by the International Swaps
and Derivatives Association, Inc. on November 2, 2015 and available at www.isda.org, as may be amended, supplemented, replaced
or superseded from time to time (the “871(m) Protocol”), the parties agree that the provisions and amendments
contained in the Attachment to the 871(m) Protocol are incorporated into and apply to the Agreement with respect to this Transaction
as if set forth in full herein. The parties further agree that, solely for purposes of applying such provisions and amendments
to the Agreement with respect to this Transaction, references to “each Covered Master Agreement” in the 871(m) Protocol
will be deemed to be references to the Agreement with respect to this Transaction, and references to the “Implementation
Date” in the 871(m) Protocol will be deemed to be references to the Trade Date of this Transaction.



 


		(z)	Other Adjustments Pursuant to the Equity Definitions. Notwithstanding anything to the contrary in this Confirmation,
solely for the purpose of adjusting the Cap Price, the terms “Potential Adjustment Event,” “Merger Event,”
and “Tender Offer” shall each have the meanings assigned to such term in the Equity Definitions (as amended by Section 9(i)(iii)),
and upon the occurrence of a Merger Date, the occurrence of a Tender Offer Date, or declaration by Counterparty of the terms of
any Potential Adjustment Event, the Calculation Agent shall determine in good faith and in a commercially reasonable manner whether
such occurrence or declaration, as applicable, has had a material economic effect on the Transaction and, if so, shall, in its
good faith and commercially reasonable discretion, adjust the Cap Price to preserve the fair value of the Options; provided
that in no event shall the Cap Price be less than the Strike Price; provided further that any adjustment to the Cap
Price made pursuant to this Section 9(z) shall be made without duplication of any other adjustment hereunder.



 









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		(aa)	U.S. Resolution Stay Protocol. To the extent that the QFC Stay Rules are applicable hereto, then 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.


 






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Please confirm that the foregoing correctly
sets forth the terms of our agreement by executing this Confirmation and returning it to Dealer


 





	 	Very truly yours,
	 	 	 
	 	CREDIT SUISSE CAPITAL LLC
	 	 	 
	 	By:	/s/ Steven J. Reis
	 	Name:  	Steven J. Reis
	 	Title:	Authorized Signatory
	 	 	 
	 	By:	/s/ Shui Wong
	 	Name:	Shui Wong
	 	Title:	Authorized Signatory
	 	 	 
	 	CREDIT SUISSE SECURITIES (USA) LLC, as Agent
	 	 	 
	 	By:	/s/ Steven J. Reis
	 	Name:	Steven J. Reis
	 	Title:	Director







 


[Signature Page to Base Capped Call Confirmation]




 



     
 


     


    







 


Accepted and confirmed


as of the Trade Date:


 


Ironwood Pharmaceuticals, Inc.


 





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







 


[Signature Page to Base Capped Call Confirmation]