<PAGE>

                                                                   EXHIBIT 10.24

Portions of this exhibit were omitted and filed separately with the Secretary of
the Commission pursuant to an application for confidential treatment filed with
the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.
Such portions are marked by a series of asterisks.


              PRODUCT DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

This Product Development and Commercialization Agreement (the "Agreement") dated
as of the 19th day of November, 1999 (the "Effective Date") is made and entered
into by and between ViroPharma Incorporated, a Delaware corporation having its
principal place of business at 405 Eagleview Boulevard, Exton, PA 19341
("ViroPharma"), and Battelle Memorial Institute, an Ohio non-profit corporation,
having a principal place of business at 505 King Avenue, Columbus, OH 43201,
through its Battelle Pulmonary Therapeutics Division ("BPTD"). ViroPharma and
BPTD may be referred to herein as a "Party" or, collectively, as "Parties."


                                  BACKGROUND

In consideration of the covenants and promises contained in this Agreement, and
intending to be legally bound, the Parties agree as follows:

1.   DEFINITIONS.

As used herein, the following capitalized terms shall have the following
meanings when used in this Agreement, and all terms defined in the singular
shall have the same meanings when used in the plural (and vice versa, as
appropriate), unless otherwise specified:

     1.1  "Affiliate" means a corporation, partnership, entity, person, firm,
          company, or joint venture, whether de jure or de facto, that controls,
          is controlled by or is under the common control with the referenced
          Party. For the purposes of this definition the word "control"
          (including, with correlative meaning, the terms "controlled by" or "is
          under the common control with") means (a) ownership directly or
          indirectly of at least fifty percent (50%) of the voting stock of the
          applicable entity, or such lesser percentage that is the maximum
          allowed to be owned by a foreign corporation in a particular
          jurisdiction, or (b) the actual ability to control the management and
          operations of the applicable entity.

     1.2  "Approval Application" means any application to a Regulatory
          Authority, required to be approved by such Regulatory Authority before
          marketing the Drug Inhalation System in a particular country, and may
          include, without limitation a New Drug Application, Abbreviated New
          Drug Application, 510(k) Premarketing Notification, and/or a Premarket
          Application, and analogous foreign regulatory filings.

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     1.3  "BPTD Invention" means any Invention that covers the EHD Device, the
          Drug Container, or the Drug Vehicle, or any method of making or using
          the EHD Device, the Drug Container, or the Drug Vehicle in the Field,
          which Invention is made during the Term of this Agreement.

     1.4  "BPTD Patent" means any Patent owned or Controlled by BPTD or a BPTD
          Affiliate during the term of the Agreement that generically or
          specifically claims or covers the manufacture, use, sale, or offer for
          sale, import or export of the EHD Device, the Drug Container, or the
          Drug Vehicle. Attached hereto as Exhibit A is a list of BPTD Patents
          existing as of the Effective Date, which Exhibit A shall be updated by
          BPTD on at least a semiannual basis during the term of the Agreement,
          provided, however, that unintentional omission of Patents from such
          Exhibit A shall not constitute a breach of the Agreement, nor shall it
          limit the scope of the defined term "BPTD Patent."

     1.5  "BPTD Technology" means all BPTD Patents and BPTD Inventions, and all
          Information reasonably necessary for ViroPharma to practice the rights
          granted and fulfill the responsibilities imposed in this Agreement,
          and all copyrights relating to the Drug Inhalation System, that BPTD
          or a BPTD Affiliate owns or Controls during the term of the Agreement.

     1.6  "Commercialization Plan" means the plan developed by ViroPharma for
          the distribution, marketing and sale of the Drug Inhalation System.

     1.7  "cGMPs" means the then current standards for manufacture of
          pharmaceuticals and pharmaceutical delivery devices, as set forth in
          the United States Federal Food, Drug, and Cosmetic Act and applicable
          regulations promulgated thereunder, as amended from time to time, and
          such standards of good manufacturing practice as are required by the
          European Union and other organizations and governmental agencies in
          countries in which the Drug Inhalation System is intended to be sold.

     1.8  (a)  "Confidential Information" means all secret, confidential or
          proprietary information or data, whether provided in written, oral,
          graphic, video, computer or other form, provided by one Party (the
          "Discloser") to the other Party ("Disclosee") pursuant to this
          Agreement or the Confidential Disclosure Agreement between the Parties
          dated January 20, 1999, or generated pursuant to this Agreement,
          including but not limited to information relating to the Discloser's
          existing or proposed research, development efforts, business or
          products, the terms of this Agreement and any other materials that
          have not been made available by the Discloser to the general public.

          (b)  Notwithstanding the foregoing Section 1.8(a), Confidential
          Information shall not include any information or materials that: (i)
          at the time of disclosure by the Discloser to the Disclosee are in, or
          after such disclosure become part of, the


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<PAGE>

           public domain, through no improper act on the part of the Disclosee
           or any of its officers, employees, or agents; (ii) was in the
           Disclosee's possession at the time that such information was first
           disclosed by the Discloser, as shown by written evidence, and was not
           acquired, directly or indirectly, from the Discloser; (iii) the
           Disclosee receives from a third party, provided that such information
           was not obtained by such third party, directly or indirectly, from
           the Discloser; (iv) are required to be disclosed pursuant to valid
           law, regulation or court order; or (v) was independently developed by
           Disclosee employees having no access to the Confidential Information.

     1.9   "Control" means, with respect to a material, Information or
           intellectual property right, possession by a Party of the ability to
           grant access to or a license or sublicense as provided for herein
           under such material, Information or right without violating the terms
           of any agreement or other arrangements with any Third Party existing
           at the time such Party would be first required hereunder to grant the
           other Party such access or license or sublicense.

     1.10  "Development Activities" means all activities performed pursuant to
           the Development Plan and this Agreement.

     1.11  "Development Plan" means the detailed written work plan prepared in
           accordance with Section 3.2.1, as such plan may be amended from time
           to time.

     1.12  "Device Specifications" means the analytical and design
           specifications for the EHD Device and the Drug Container, prepared
           and modified in accordance with Section 3.2.3(a), and incorporated
           into this Agreement by reference.

     1.13  "Diligent Efforts" means efforts that are no less than the applicable
           efforts that a Party applies to the development, manufacture or
           commercialization of its own compounds or products with similar
           regulatory requirements and market potential.

     1.14  "Drug" means a Small Molecule for use in the Field, and shall
           include, without limitation VP 14637.

     1.15  "Drug Container" means the container developed or identified for
           ViroPharma for the Formulated Drug, all connectors, adapters and
           other equipment necessary to permit the attachment of the container
           to and incorporation of the container into the EHD Device, all
           connectors, adapters and other equipment necessary to permit the
           container to be attached to a device to fill the container with
           Formulated Drug, and all labels, labeling and packaging for such
           container.

     1.16  "Drug Inhalation System" means the EHD Device and Packaged Drug
           combined and assembled together for use in the Field by a patient
           or subject.

     1.17  "Drug Master File" or "DMF" means Information and materials, or the
           applicable part thereof, submitted to a Regulatory Authority,
           providing

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<PAGE>

           information on the manufacturing facilities and manufacturing
           processes for making a Drug Inhalation System or component thereof,
           including, without limitation, activities relating to manufacturing,
           processing, formulating, packaging and storage to be conducted by or
           under the direction of BPTD or its Affiliates, which Information may
           be used to support Regulatory Approval of the Drug Inhalation System
           in a country. For purposes of this Agreement, the Drug Master File
           shall include, without limitation, chemistry, manufacturing and
           control information, as defined in the FDA regulations at 21 CFR
           Section 314.50(d).

     1.18  "Drug Vehicle" means the combination of all excipients, active, and
           inactive ingredients developed for ViroPharma other than the Drug,
           with which the Drug is mixed to permit the Pulmonary Delivery of the
           Drug via the EHD Device.

     1.19  "EHD Device" means the hand-held, single-user, disposable device
           developed by BPTD for ViroPharma for the electrohydrodynamic delivery
           of Drugs by inhalation, including, without limitation, any removable
           mouthpiece or mask for use by patients, and any other equipment or
           accessories necessary for a patient to use the device in accordance
           with its approved labeling and supplied together with the device, all
           of which meet the Specifications.

     1.20  "FDA" means the United States Food and Drug Administration, or the
           successor thereto.

     1.21  "Field" means the treatment and/or prevention of the effect on humans
           of respiratory syncytial viruses ("RSV") by Pulmonary Delivery of one
           or more Small Molecules not in a formulation or in a combination with
           one or more ********** or **********, but not the treatment and/or
           prevention of the effect on humans of RSV by Pulmonary Delivery of
           one or more ********** or ********** alone or in a formulation or in
           a combination with one or more Small Molecules.

     1.22  "First Commercial Sale" means, on a country by country basis, the
           first sale of the Drug Inhalation System to a Third Party after
           Regulatory Approval.

     1.23  "Formulated Drug" means the combined, formulated Drug and Drug
           Vehicle.

     1.24  "Full Royalty Rate Period" for the Drug Inhalation System in any
           given country means the period during which ViroPharma's distribution
           and/or sale of the Drug Inhalation System in the applicable country,
           in the absence of the rights and licenses granted by this Agreement,
           would have infringed a BPTD Patent.

     1.25  "Information" means information and data of any type whatsoever, in
           any tangible or intangible form, including without limitation
           inventions, practices, methods, techniques, specifications,
           formulations, formulae, knowledge, know-how, skill, experience, trade
           secrets, test data including pharmacological,

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<PAGE>

           biological, chemical, biochemical, toxicological and clinical test
           data, analytical and quality control data, stability data, studies
           and procedures, and patent and other legal information or
           descriptions.

     1.26  "Invention" means any invention, modification, discovery,
           improvement, technology, trade secret, chemical or biological
           material, assay, method, process, technique, documentation,
           scientific and technical data, drawing or other information, whether
           patentable or not, relating to a Drug, Drug Vehicle, Formulated Drug,
           Drug Container, or EHD Device, or any method of making or using such
           Drug, Drug Vehicle, Formulated Drug, Drug Container, or EHD Device in
           the Field.

     1.27  "Major Markets" means Austria, Belgium, Canada, Denmark, Finland,
           France, Germany, Indonesia, Ireland, Italy, Japan, Mexico,
           Netherlands, Portugal, Spain, Sweden, the United Kingdom, the United
           States.

     1.28  "Net Sales" means the total amount invoiced or otherwise charged by
           ViroPharma or its Affiliates to customers or Third Party licensees on
           account of the sale of the Drug Inhalation System, less the following
           deductions: (a) deductions, credits, allowances, and discounts
           actually granted for spoiled, damaged, out-dated and returned units
           of the Drug Inhalation System (including withdrawals and recalls);
           (b) rebates (including Medicaid, managed care rebates and other
           similar types of rebates, e.g. chargebacks); (c) freight and
           insurance costs for transporting the Drug Inhalation System which are
           included in the billed amount; (d) sales, use, excise, value-added
           and other direct taxes on the sale of the Drug Inhalation System; (e)
           customs duties, surcharges and other governmental charges incurred in
           connection with the exportation or importation of the Drug Inhalation
           System; (f) trade, cash, and quantity discounts off the invoiced
           price and similar promotional discounts or rebates (such as
           management fees required by hospital buying groups or granted to
           managed care organizations) off the invoiced price, and (g) amounts
           reflecting retroactive price adjustments on sale of products, to the
           extent not previously deducted from net sales, but only to the extent
           such adjustment is not made more than one year after the sale; all of
           the foregoing to the extent consistent with the normal practice in
           the industry, and provided that any and all of the foregoing are
           calculated in accordance with United States generally accepted
           accounting principles consistently applied. Included in Net Sales
           shall be any disposition of a Drug Inhalation System or component
           thereof for value, and if for other than cash, such disposition to be
           converted to a cash amount equal to the amount such system or
           components are sold to others.

     1.29  "Packaged Drug" means Formulated Drug packaged in a finished Drug
           Container.

     1.30  "Patent" means (a) all patent applications heretofore or hereafter
           filed or having legal force in any country; (b) all patents that have
           issued or in the future issue

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<PAGE>

           therefrom, including without limitation utility, model and design
           patents and certificates of invention; and (c) all divisionals,
           continuations, continuations-in-part, reissues, renewals, extensions
           (including supplemental protection certificates), additions,
           registrations or confirmations to or of any such patent applications
           and patents.

     1.31  "Pulmonary Delivery" means

           a.  the administration of any substance by:

               i.   inhalation through the mouth, or

               ii.  simultaneous inhalation through the mouth and nose, or

               iii. where inhalation through the mouth is not possible or
                    reasonably practicable due to the patient's condition,
                    inhalation through the nose,

               in each case to the lungs and/or to the trachea (including
               necessary incidental non-therapeutic and non-functional [i.e.,
               not for diagnosis, prevention or treatment of disease] delivery
               to the mouth, nose and throat as a result of such inhalation) for
               the purpose of diagnosis, prevention or treatment of disease;

           b.  the administration of any substance to the lungs, trachea, mouth,
               throat or nasal passages by inhalation through the mouth and/or
               nose for the treatment, prevention, or diagnosis of all cancers
               of the respiratory tract; and

           c.  where it can be shown by clinical trials that treatment or
               prevention of a particular disease by delivery of a substance to
               the lungs and/or the trachea in accord with Section 1.31(a) above
               is significantly improved by simultaneous delivery of the same
               substance to the mouth and/or throat then "Pulmonary Delivery"
               will be extended to include delivery under Section 1.31(a) above
               together with simultaneous delivery of the same substance to the
               mouth and/or throat for the prevention or treatment of that
               disease.

     For the avoidance of doubt, "Pulmonary Delivery" shall not include:
                                                            ---

           d.  any delivery or deposition to the nasal passage or nasal cavities
               other than as expressly permitted in Sections 1.31(a-b) above;
               and

           e.  except as provided in Section 1.31(b) above, delivery to the
               mouth and/or throat when not done simultaneously with delivery to
               the lungs and/or trachea in accordance with Section 1.31(c)
               above.

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<PAGE>

     1.32  "Pulmonary Surfactant" means

           a.   More than ********** total, per dose, of one or more of the
                following **********; **********, and/or

           b.   Any amount of ********** or ********** or any derivative thereof
                (a fragment or modified form of ********** or ********** or such
                fragment) or any molecule specifically developed and
                intentionally used to replace ********** or ********** in whole,
                or in part, and/or

           c.    Any amount of ********** or any derivative thereof (a fragment
                or modified form of ********** or such fragment) plus (i)
                ********** conforming to a) above and/or (ii) any molecule
                conforming to b) above.

     1.33  "Recovery Cost" means the actual costs inclusive of all direct and
           reasonable indirect costs of products or services incurred after the
           Effective Date, with no mark-up for profits, and in the case of
           products or services provided by a Third Party, the actual amount
           charged by such Third Party, but in no event shall Recovery Costs
           include Third Party Payments. Notwithstanding anything in this
           Agreement to the contrary, all services and/or property provided by
           any Battelle Memorial Institute operating unit, division, or
           affiliate other than BPTD shall be sold or billed to ViroPharma or
           any other party under this Agreement at ordinary and customary prices
           and/or rates, including profits (but not for BPTD).

     1.34  "Reduced Royalty Rate Period" for the Drug Inhalation System in a
           country means the period beginning on the expiration of the Full
           Royalty Rate Period for the Drug Inhalation System in that country,
           or if there is no Full Royalty Rate Period in that country, then
           beginning on the First Commercial Sale of the Drug Inhalation System
           in that country, and ending on the ********** anniversary of the
           Effective Date.

     1.35  "Regulatory Approval"

     1.36  "Regulatory Authority" { shall mean any national (e.g., the United
           States Food and Drug Administration), supra-national (e.g., the
           European Commission, the Council of the European Union, or the
           European Agency for the Evaluation of Medicinal Products), regional,
           state or local regulatory agency, department, bureau, commission,
           council or other governmental entity in each country of the

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<PAGE>

           world involved in the granting of Regulatory Approval for the Drug
           Inhalation System.

     1.37  "Retained Rights" means the right of the Third Party identified in
           Exhibit B to this Agreement to have granted to it upon request a
           paid-up, non-exclusive license to make, keep, use and sell subject
           matter disclosed and claimed in those of the BPTD Patents designated
           with an asterisk in Exhibit A to this Agreement.

     1.38  "Small Molecule" means any chemical entity or compound, but not small
           peptides or proteins.

     1.39  "Specifications" means the System Specifications and the Device
           Specifications.

     1.40  "System Specifications" means the analytical, design and performance
           specifications for the Drug Inhalation System, prepared and modified
           in accordance with Section 3.2.2, and incorporated into this
           Agreement by reference.

     1.41  "Third Party" means any entity or individual other than BPTD,
           ViroPharma, or Affiliates of either.

     1.42  "Third Party Payment" means any payment made by BPTD or a BPTD
           Affiliate:

           a.  to any Third Party as a result of BPTD's obtaining or licensing,
               before or after the Effective Date, such Third Party's Patents or
               technology; or

           b.  to any Third Party as a result of any defense or settlement of
               any Third Party claim or action alleging that the manufacture,
               use, sale, offer for sale, importation or exportation of the EHD
               Device, the Drug Vehicle or the Drug Container infringes a Third
               Party Patent in any country of the world.

     1.43  "ViroPhaema Invention" means any Invention that is not a BPTD
           Invention, including, without limitation, any Invention that covers
           the Drug, or the Formulated Drug, or any method of making or using
           the Drug or Formulated Drug in the Field, which Invention is made
           during the Term of this Agreement.

     1.44  "ViroPharma Patent" means any Patent owned or Controlled by
           ViroPharma or a ViroPharma Affiliate during the term of the Agreement
           that claims an Invention in the Field or that generically or
           specifically claims or covers the manufacture, use, sale, or offer
           for sale, import or export of the Drug or Formulated Drug.

     1.45  "ViroPharma Technology" means all ViroPharma Patents and ViroPharma
           Inventions, and all copyright, trademarks, and Information that
           ViroPharma or an Affiliate owns or Controls during the term of the
           Agreement.

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<PAGE>

2.   LICENSES

     2.1  License to ViroPharma.

          2.1.1  General. Except as limited by the Retained Rights, BPTD grants
                 to ViroPharma and its Affiliates the worldwide, royalty-
                 bearing, exclusive, except as to BPTD and its Affiliates,
                 sublicensable right and license to use the BPTD Technology to
                 the extent necessary to perform the activities under this
                 Agreement in the Field, including, without limitation, making,
                 using, selling, offering for sale, importing, or exporting the
                 Drug Inhalation System or any part of the Drug Inhalation
                 System, or licensing a Third Party to do any of the foregoing.

          2.1.2  Post Expiration of Payment Obligation. After the expiration of
                 the obligation to make payments under Sections 9.1-9.6 of this
                 Agreement, the licenses under this Section 2.1 shall be fully-
                 paid, perpetual, irrevocable and royalty-free.

     2.2  License to BPTD. ViroPharma grants to BPTD and its Affiliates the
          royalty-free, non-sublicensable, non-exclusive, right and license to
          use the ViroPharma Technology only to the extent necessary to perform
          the activities under this Agreement in the Field, but for no other
          purposes.

     2.3  Exclusive Relationship.

          2.3.1  General. Except as specifically permitted by the terms of this
                 Agreement and for the purposes of this Agreement, during the
                 term of this Agreement, without the prior written consent of
                 ViroPharma, neither BPTD nor any of its Affiliates shall
                 directly or indirectly use or license a Third Party to use the
                 BPTD Technology in the Field.

          2.3.2  Drug Vehicle Use. Except as specifically permitted by the terms
                 of this Agreement and for the purposes of this Agreement,
                 neither BPTD nor any of its Affiliates shall directly or
                 indirectly use the Drug Vehicle in the Field, or any BPTD
                 Technology covering the Drug Vehicle in the Field:

                 a.  During the term of this Agreement; and

                 b.  For five years after the term of this Agreement, unless
                     this Agreement is terminated pursuant to Section 14.2 or
                     14.3.

          2.3.3  Drug Vehicle License. Neither BPTD nor any of its Affiliates
                 shall directly or indirectly license a Third Party to use the
                 Drug Vehicle in the Field, or any BPTD Technology covering the
                 Drug Vehicle in the Field:

                 a.  During the term of this Agreement; and

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<PAGE>

                 b.  For five years after the term of this Agreement, unless
                     this Agreement is terminated pursuant to Section 14.2 or
                     14.3.

          2.3.4  ********** or ********** Used with Small Molecules. Without the
                 prior written consent of ViroPharma, BPTD and its Affiliates
                 shall not directly or indirectly use or license a Third Party
                 to use the BPTD Technology for the Pulmonary Delivery of one or
                 more Small Molecules in a formulation or in a combination with
                 one or more ********** or ********** for the treatment and/or
                 prevention of the effect on humans of RSV where any Small
                 Molecule in such formulation or combination is active as a
                 single agent for the treatment and/or prevention of the effect
                 on humans of RSV.

     2.4  Right of Reference. BPTD and its Affiliates grant ViroPharma, its
          Affiliates and designees a "Right of Reference," as that term is
          defined in 21 C.F.R. (S) 314.3(b), to any data developed under this
          Agreement or under the Master Services Agreement between the Parties
          dated April 12, 1999, and BPTD and/or its Affiliates shall provide a
          signed statement to this effect, if requested by ViroPharma, in
          accordance with 21 C.F.R. (S) 314.50(g)(3).


3.   PRODUCT DEVELOPMENT.

     3.1  General.

          3.1.1  Compliance with Laws. The Parties shall perform all activities
                 under this Agreement, including, without limitation,
                 Development Activities, in compliance with all federal, state
                 and local laws, regulations and ordinances, and with any
                 applicable professional standards. Neither Party shall take
                 legal action against the other Party for damages for a non-
                 material breach of this Section 3.1.1.

          3.1.2  Diligence.  The Parties will use Diligent Efforts in performing
                 Development Activities.

          3.1.3  Terms for Performing Development Activities. All Development
                 Activities performed by BPTD shall be performed pursuant to
                 Section 4 of this Agreement. ViroPharma shall not be liable to
                 BPTD for the costs of any Development Activities not performed
                 pursuant to Section 4.

     3.2  Development Planning and Development Activities.

          3.2.1  Preparation of Development Plan. Within ninety days after the
                 Effective Date, ViroPharma and BPTD will prepare a mutually
                 agreeable

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<PAGE>

                    Development Plan, which shall be attached to this Agreement
                    as Exhibit C that shall identify in reasonable detail the
                    activities necessary to:

                    a.   Design and develop an EHD Device appropriate to deliver
                         the Formulated Drug, in accordance with Device
                         Specifications;

                    b.   Design and develop a Drug Vehicle that is compatible
                         with the EHD Device and the Drug;

                    c.   Design and develop a Drug Container or identify a
                         commercially available Drug Container that can contain
                         adequate quantities of the Formulated Drug, and that
                         can be readily incorporated into the EHD Device, in
                         accordance with Device Specifications for the Drug
                         Container; and

                    d.   Develop preclinical and clinical data and complete
                         Approval Applications necessary to obtain Regulatory
                         Approval for the Drug Inhalation System in countries
                         throughout the world.

                    At least semiannually, after reviewing the results of the
                    development efforts to that time, ViroPharma and BPTD shall
                    mutually agree on any amendments to the Development Plan to
                    reflect revised development and/or regulatory activities or
                    goals. In the event of any failure to agree on the portions
                    of the Development Plan described in Sections 3.2.1(a)
                    through(c), BPTD shall have final decision making authority.
                    In the event of any failure to agree on the portions of the
                    Development Plan described in Section 3.2.1(d), ViroPharma
                    shall have final decision making authority.

          3.2.2     Drug Inhalation System Specifications. The summary System
                    Specifications for the Drug Inhalation System setting forth
                    the planned design, performance and features of the Drug
                    Inhalation System are to be developed after the Effective
                    Date and attached to this Agreement as Exhibit D (the
                    "System Specifications"). The System Specifications may be
                    altered by ViroPharma, only after BPTD has had a reasonable
                    opportunity to review and comment on any proposed changes.

          3.2.3     EHD Device and Drug Container.

                    a.   EHD Device and Drug Container Specifications.
                         ViroPharma and BPTD shall collaborate to prepare
                         summary Device Specifications for the EHD Device and
                         Drug Container setting forth the planned design,
                         features and performance of the EHD Device and the Drug
                         Container consistent with the System Specifications. If
                         the System Specifications and the Device Specifications
                         conflict in any material regard, the System

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                         Specifications shall govern. At any time during the
                         term of the Agreement, BPTD may suggest changes to the
                         design of the EHD Device or the Drug Container. No such
                         changes shall be implemented except upon the written
                         approval of ViroPharma.

                    b.   Development Activities. The Parties shall perform
                         Development Activities on the EHD Device and the Drug
                         Container in compliance with the Development Plan and
                         the Specifications. BPTD shall perform Development
                         Activities pursuant to Article 4, as requested by
                         ViroPharma. ViroPharma shall not employ Third Parties
                         to perform Development Activities on the EHD Device and
                         the Drug Container.

          3.2.4     Drug Vehicle Development. The Parties shall perform
                    Development Activities on the Drug Vehicle in compliance
                    with the Development Plan and the Specifications. At
                    ViroPharma's reasonable request, BPTD shall perform
                    Development Activities pursuant to Article 4.

          3.2.5     Costs. Except as expressly set out in this Agreement,
                    ViroPharma shall pay for all Development Activities under
                    this Agreement.

          3.2.6     Master Services Agreement. As reasonably requested by
                    ViroPharma, BPTD shall perform the activities described in
                    the document entitled "ViroPharma Project: Preformulation
                    and EHD Aerosol Feasibility Study of VP 14637" attached to
                    the Master Services Agreement between the Parties dated
                    April 12, 1999, in accordance with the terms of such Master
                    Services Agreement. If the performance of activities under
                    the Master Services Agreement conflicts with, or is made
                    impractical by, this Agreement, such activities shall be
                    performed pursuant to this Agreement. If any provisions of
                    the Master Services Agreement are in conflict with the
                    provisions of this Agreement, this Agreement shall control.

     3.3  Clinical Testing of Inhalation System. ViroPharma or its designees
          shall be responsible for designing, performing and funding clinical
          studies necessary to obtain Regulatory Approval for the Drug
          Inhalation System.

     3.4  Development Product Supply. ViroPharma or its designees shall supply,
          at its own cost, adequate amounts of Drug, Formulated Drug and placebo
          for the performance of Development Activities under this Section 3.
          BPTD shall supply, at ViroPharma's expense (to be charged to
          ViroPharma at BPTD's Recovery Cost), adequate numbers of Drug
          Inhalation System units for the performance of Development Activities
          under this Article 3, consistent with Article 5.

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     3.5  Approval Applications.

          3.5.1     Generally. ViroPharma, by itself, or through its Affiliates
                    or sublicensees will use Diligent Efforts to prepare,
                    assemble and submit in its own name and at its own expense
                    all Approval Applications and DMFs for the Drug Inhalation
                    System in countries of the world consistent with the
                    Commercialization Plan. ViroPharma will own any such
                    Approval Applications, DMFs and Regulatory Approvals.

          3.5.2     Assistance by BPTD. BPTD and its Affiliates shall provide to
                    ViroPharma for inclusion in Approval Applications or DMFs
                    any necessary information or materials regarding the EHD
                    Device and/or the Drug Container and shall employ Diligent
                    Efforts to provide any reasonably necessary assistance to
                    ViroPharma in obtaining Regulatory Approval or in submitting
                    DMFs at ViroPharma's cost. Upon ViroPharma's reasonable
                    request, BPTD and/or BPTD's Affiliates shall attend and
                    participate in meetings regarding the Drug Inhalation
                    System, including meetings with Regulatory Authorities.

          3.5.3     Filings by BPTD. If the laws or regulations of any country
                    require that BPTD, or a BPTD Affiliate rather than
                    ViroPharma, file any part of any Approval Application, DMF
                    or part thereof, BPTD, or such BPTD Affiliate, shall file
                    the Approval Application, DMF or part thereof at
                    ViroPharma's expense and shall, consistent with the laws and
                    regulations of the country, transfer such Approval
                    Application, DMF, Regulatory Approval, or part thereof, to
                    ViroPharma, or hold and maintain the same on ViroPharma's
                    behalf.

4.   PERFORMANCE OF DEVELOPMENT ACTIVITIES BY BPTD.

     4.1  Work Orders. BPTD shall perform Development Activities as agreed to by
          the Parties, consistent with the Development Plan from time to time.
          The specific details of each assignment in respect of the Development
          Activities will be separately negotiated and contracted for in
          writing, and shall be set forth in a work order in substantially the
          form attached hereto as Exhibit E each to be sequentially numbered and
          to be subject to all of the terms and conditions set forth in this
          Agreement, and incorporated into this Agreement by reference (each, a
          "Work Order").

     4.2  Protocols. Unless otherwise indicated on the applicable Work Order,
          BPTD shall prepare protocols describing the Development Activities for
          ViroPharma's review and approval prior to initiating such Development
          Activities. BPTD shall make such changes to such protocol that are
          reasonably requested by ViroPharma and agreed to by BPTD, such
          agreement not to be withheld or delayed unreasonably

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          (as so modified, the "Protocol"). BPTD shall perform the Development
          Activities in accordance with the applicable Protocol.

     4.3  Deliverables. BPTD shall deliver to ViroPharma the deliverables
          described or referred to on the applicable Work Order (each, a
          "Deliverable"). The Development Activities described in a particular
          Work Order shall be deemed to have been completed upon BPTD's
          completing such Development Activities in accordance with the Work
          Order terms and with the terms of this Agreement.

     4.4  Inspection; Project Materials. Upon reasonable advance notice to BPTD,
          and at reasonable times during normal business hours, ViroPharma shall
          be permitted to send certain of its employees or designees to BPTD's
          facilities to consult with BPTD's employees and consultants engaged in
          the activities contemplated by a Work Order, to observe BPTD in the
          performance of its duties hereunder, and to inspect and take copies of
          any of the results of the Development Activities. BPTD shall make
          BPTD's employees and consultants and such results available to
          ViroPharma for such purposes. During such visits, ViroPharma shall
          comply with BPTD policy regarding security, as such policy shall be in
          force from time to time.

     4.5  Reports. BPTD shall maintain accurate and complete records of all
          Development Activities it performs and all results of any trials,
          studies and other investigations conducted by or on behalf of
          ViroPharma hereunder. Unless otherwise indicated on the applicable
          Work Order, BPTD shall prepare and deliver to ViroPharma a final
          written Report for each Work Order, in such detail as agreed to by the
          Parties. BPTD shall provide ViroPharma with summary data describing
          the interim results of the Development Activities, and copies of all
          materials generated in connection with the activities contemplated by
          this Agreement, upon ViroPharma's request and at ViroPharma's cost,
          provided that ViroPharma is not then in default of its obligations
          under this Agreement.

     4.6  Fees. Except as expressly agreed to in advance by ViroPharma: (a) in
          no event shall the price to ViroPharma for any Deliverable exceed the
          "Maximum Fee" listed opposite such Deliverable on such Work Order; (b)
          in no event shall the aggregate amount due for any Work Order exceed
          the "Total Fee" set forth on such Work Order; and (c) in no event
          shall Development Activities be billed at more than BPTD's Recovery
          Cost. The Maximum Fee and Total Fee are to be negotiated for the work
          orders on a case-by-case basis. Unless otherwise agreed to by
          ViroPharma in a Work Order, BPTD shall be solely responsible for
          expenses incurred by it in the performance of the Development
          Activities.

     4.7  Invoices. BPTD shall generate invoices in accordance with the mutually
          agreed upon payment schedule described in the applicable Work Order
          (the "Payment Schedule"). All invoices that are not disputed by
          ViroPharma in good faith shall be payable within thirty days after
          ViroPharma's receipt. ViroPharma will pay interest of 1% per month on
          balances due for late payment.

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<PAGE>

5.   CLINICAL SUPPLY MANUFACTURING.

     5.1  General. BPTD agrees to itself, or through its Affiliates, (a) supply
          ViroPharma's clinical testing requirements of the EHD Device, (b)
          install Packaged Drug supplied by ViroPharma to BPTD into such EHD
          Devices, and (c) ship labeled and packaged investigational Drug
          Inhalation Systems to clinical trial sites or a clinical trial
          distributor identified by ViroPharma. If the Drug Container is not
          readily commercially available, BPTD agrees to itself, or through its
          Affiliates, (x) supply ViroPharma's clinical testing requirements of
          the Drug Container, and (y) ship such Drug Container to ViroPharma or
          a designee. BPTD shall perform or cause to be performed all such
          activities in accordance with the Specifications and the terms of this
          Agreement and in compliance with all applicable federal, state, and
          local laws, regulations and ordinances, including, without limitation,
          cGMPs. Neither BPTD nor its Affiliates shall alter the manufacturing
          processes of clinical supplies under this Section 5.1 without the
          prior written approval of ViroPharma, not to be unreasonably withheld
          or delayed.

     5.2  Manufacturing Facilities, Equipment and Licenses. In manufacturing
          clinical supplies pursuant to Section 5.1, BPTD and BPTD's Affiliates
          shall:

          5.2.1     acquire all equipment and licenses, including, without
                    limitation, all necessary plant equipment and facilities
                    licenses, necessary to manufacture investigational EHD
                    Devices and Drug Containers under this Section 5;

          5.2.2     use Diligent Efforts to keep such equipment properly
                    maintained and to reduce risks of breakdown of critical
                    machinery;

          5.2.3     obtain and maintain all necessary federal, state and local
                    manufacturing licenses and approvals for the manufacturing
                    facilities;

          5.2.4     maintain all records that are necessary and appropriate to
                    demonstrate compliance with cGMPs; and

          5.2.5     BPTD shall ensure that the manufacturing of investigational
                    EHD Devices, Drug Containers, or assembly of Drug Inhalation
                    Systems under Section 5 complies with all applicable
                    federal, state and local environmental, health and safety
                    laws and regulations in effect at the time and place of such
                    manufacture, and all waste, including but not limited to all
                    hazardous waste, generated in such manufacturing shall be
                    disposed of in accordance with all applicable federal, state
                    and local laws and regulations.

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     5.3  Orders.

          5.3.1     Placement of an Order. ********** prior to the start of each
                    clinical trial, ViroPharma will advise BPTD of the estimated
                    number of Drug Inhalation System units necessary to complete
                    such clinical trial, the estimated schedule on which the
                    units will be needed and an order specifying the number of
                    units needed for the first ********** of the clinical trial.
                    ViroPharma will place orders for ********** of inventory for
                    the Drug Inhalation System at a time, ********** in advance
                    of the required delivery date.

          5.3.2     Confirmation of an Order. Within two business days after
                    receiving a an order under Section 5.3.1, BPTD shall provide
                    written confirmation of its ability to fill such order as
                    well as the address to which ViroPharma should ship Packaged
                    Drug to be used in filling the order. If BPTD believes that
                    it may be unable to fulfill such order, it shall notify
                    ViroPharma by telephone and in writing immediately, but in
                    no case later than two business days after receiving such
                    order.

          5.3.3     Conflicting Terms in Order Forms or Invoices. If any
                    purchase order, invoice or acknowledgment form used by
                    either ViroPharma or BPTD contains any provision additional
                    or contrary to the provisions of this Agreement, such
                    additional or contrary provision shall have no force or
                    effect and the terms of this Agreement shall control.

     5.4  Shipment of Packaged Drug.

          5.4.1.    Shipping by ViroPharma. Within two business days after
                    ViroPharma receives written confirmation of BPTD's ability
                    to fulfill an order pursuant to Section 5.3.2, ViroPharma
                    shall ship a number of units of Packaged Drug equal to 102%,
                    rounded up to the nearest whole number, of the number of
                    units of Drug Inhalation System requested in the order FOB
                    the address supplied by BPTD in such written confirmation.

          5.4.2.    Receipt and Possession by BPTD. ViroPharma shall retain
                    title and BPTD shall be solely responsible for the risk of
                    loss of Packaged Drug in the inventory or possession of BPTD
                    or a BPTD Affiliate which loss is due to the negligence or
                    intentional misconduct of BPTD or the BPTD Affiliate.
                    ViroPharma shall be responsible for all losses of Packaged
                    Drug not described in the preceding sentence. BPTD shall
                    notify ViroPharma promptly upon the loss of any Packaged
                    Drug. ViroPharma shall invoice BPTD for the cost of any lost
                    Packaged Drug, for which BPTD is liable under this Section
                    5.4.2., which amount BPTD shall pay within thirty days of
                    its receipt of such invoice.

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     5.5  Completion and Packaging. BPTD will combine the Packaged Drug and the
          EHD Device, package and label the Drug Inhalation System for use in
          the clinical research program in accordance with the Specifications.

     5.6  Inspection of Final Products.

          5.6.1     Inspection. BPTD shall inspect finished Drug Inhalation
                    System units pursuant to the applicable Specifications, all
                    federal, state, and local laws and regulations, and in
                    accordance with reasonable industry standards. ViroPharma
                    shall have the right, at its own cost, to witness or
                    participate in any and all inspections of finished Drug
                    Inhalation System units at the site where such inspection
                    takes place.

          5.6.2     Documentation. Within three business days after completing
                    the inspection of finished Drug Inhalation System units,
                    BPTD shall forward to ViroPharma:

                    a.   a production report identifying any problems
                         encountered in the fulfillment of the applicable
                         Binding Order, the results of the QC analysis, and the
                         results of any inspection, along with any supporting
                         data, and

                    b.   a Certificate of Analysis and Conformance ("COA")
                         specifying that all Drug Inhalation System units
                         subject to such COA conform with the Specifications.

                    The COAs will use lot numbers as directed by ViroPharma.
                    ViroPharma shall be under no obligation to accept any
                    shipment of BPTD products without an accompanying COA.

     5.7  Shipment of Final Products. BPTD, or its Affiliates shall ship the
          units of Drug Inhalation Systems in fulfillment of an order FOB the
          address specified in such order for delivery by the Delivery Date.

     5.8  Invoices. BPTD will invoice ViroPharma for the Recovery Cost of
          investigational EHD Devices and Drug Containers upon delivery of the
          Drug Inhalation Systems to the carrier identified by ViroPharma. Such
          invoices shall reasonably itemize BPTD's Recovery Costs for labor,
          materials, supplies, and payments to Third Parties or Affiliates, by
          production lot number for the Drug Inhalation System, and shall
          contain such other information as may be reasonably requested by
          ViroPharma.

     5.9  Payments. ViroPharma shall pay any invoice under Section 5.8 within
          thirty days of receiving such invoice.

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<PAGE>

6.   MANUFACTURING OF COMMERCIAL SUPPLY.

     6.1  General. ViroPharma or its designees shall be solely responsible for
          contracting for and paying the costs of any commercial supply of the
          Drug Inhalation System. ViroPharma may, but is not required to,
          contract with BPTD to provide any part of such commercial supply.

     6.2  Volume Discounts for EHD Device Component Supply. BPTD shall disclose
          to ViroPharma the identity of the supplier for each component of the
          EHD Device or the Drug Container purchased from a Third Party for
          which BPTD is eligible to receive a volume discount, and will exert
          reasonable commercial efforts to cause any such supplier to provide
          similar discounts to ViroPharma.

     6.3  Consulting and Technology Transfer. If ViroPharma contracts with a
          Third Party to manufacture commercial supplies of the EHD Device, Drug
          Container, and/or Drug Vehicle (the "Third Party Manufacturer"), then
          BPTD shall, at its Recovery Cost for such services:

          6.3.1     assist ViroPharma in transferring to the Third Party
                    Manufacturer all BPTD Technology existing at the time of
                    transfer which is necessary in the manufacture of the EHD
                    Device, Drug Container, and/or Drug Vehicle to
                    Specifications and in compliance with all applicable
                    federal, state, and local laws and regulations, except that
                    the first such transfer shall be at BPTD's expense;

          6.3.2     assist ViroPharma and the Third Party Manufacturer in
                    troubleshooting any problems that may arise in manufacturing
                    the EHD Device, Drug Container, and/or Drug Vehicle;

          6.3.3     consult with ViroPharma and its Third Party Manufacturer on
                    all aspects of manufacturing of the EHD Device, Drug
                    Container, and/or Drug Vehicle, and any improvements that
                    can be made to the manufacturing process; and

          6.3.4     perform any other consulting, advisory, technology transfer,
                    problem-solving or other activities reasonably necessary to
                    assist ViroPharma and its Third Party Manufacturer to
                    successfully manufacture the EHD Device, Drug Container,
                    and/or Drug Vehicle.

7.   COMMERCIALIZATION AND MARKETING.

     7.1  Commercialization Plan. Ninety days before it submits the first
          Approval Application for the Drug Inhalation System to any Regulatory
          Authority, ViroPharma shall provide to BPTD a copy of its
          Commercialization Plan. The Commercialization Plan shall set out the
          countries in which ViroPharma intends

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          to seek Regulatory Approval for and launch the Drug Inhalation System
          in the next five years. ViroPharma shall update the Commercialization
          Plan at least annually and shall provide BPTD with a copy of all
          updated Commercialization Plans.

     7.2  Diligence. Within ********** of receiving the first Regulatory
          Approval for the Drug Inhalation System, ViroPharma shall obtain
          Regulatory Approval of the Drug Inhalation System in ********** of the
          Major Market countries.

          7.2.1     If ViroPharma's failure to obtain such Regulatory Approvals
                    is not due to reasonably unforeseeable adverse regulatory
                    actions, or refusal or delay of Regulatory Approval because
                    of a Regulatory Authority's concerns with the EHD Device,
                    the Drug Container, or the Drug Vehicle, the license grant
                    to ViroPharma under this Agreement becomes non-exclusive for
                    all countries in which ViroPharma has not already obtained
                    Regulatory Approval or in which approval is not pending.

          7.2.2     If ViroPharma's failure to obtain such Regulatory Approvals
                    is due to reasonably unforeseeable adverse regulatory
                    actions, then the period for obtaining such Regulatory
                    Approvals shall be extended by a reasonable period of time,
                    mutually agreed to by the Parties.

          7.2.3     If ViroPharma's failure to obtain such Regulatory Approvals
                    is due to refusal or delay of Regulatory Approval because of
                    a Regulatory Authority's concerns with the EHD Device, the
                    Drug Container, or the Drug Vehicle, then the period for
                    obtaining such Regulatory Approvals shall be extended for as
                    long as necessary to resolve such Regulatory Authority's
                    concerns with the EHD Device, the Drug Container, or the
                    Drug Vehicle.

     7.3  Further Diligence. ViroPharma shall exercise Diligent Efforts to
          obtain Regulatory Approval in countries consistent with the
          Commercialization Plan.

          7.3.1     Countries Declined by ViroPharma. If ViroPharma has not
                    received Regulatory Approval for the Drug Inhalation System
                    in a country, and ViroPharma has confirmed to BPTD in
                    writing that it does not intend to seek Regulatory Approval
                    for the Drug Inhalation System in such country, and if no
                    gray market or price effects exist as set forth in Section
                    7.3.3, then upon ninety days prior written notice, BPTD may
                    grant a non-exclusive license to a Third Party to use the
                    BPTD Technology, in the Field, in such country.

          7.3.2     Countries Requested by BPTD. If ********** after the first
                    Regulatory Approval, ViroPharma has not submitted an
                    Approval Application for the Drug Inhalation System in a
                    country, and if BPTD has received a request from a Third
                    Party to License the BPTD Technology in the Field in such

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                    country, then BPTD may request from ViroPharma, in writing,
                    the right to make such license.

                    a.   If within ninety days of such request, ViroPharma does
                         not respond in writing stating that ViroPharma will
                         submit an Approval Application for the Drug Inhalation
                         System in such country or that gray market or price
                         effects exist as set forth in Section 7.3.3, then BPTD
                         may license a Third Party to use the BPTD Technology,
                         in the Field, in such country.

                    b.   If ViroPharma responds in writing stating that it will
                         submit an Approval Application for the Drug Inhalation
                         System in such country, then ViroPharma shall have a
                         reasonable period of time, mutually agreed to by the
                         Parties, but in no event less than **********, to
                         obtain Regulatory Approval in such country, and
                         ViroPharma will use Diligent Efforts to obtain such
                         Regulatory Approval. The Parties shall agree to extend
                         the time for obtaining Regulatory Approval in the event
                         of reasonably unforeseeable adverse regulatory actions,
                         or in the event of a refusal or delay of Regulatory
                         Approval because of a Regulatory Authority's concerns
                         with the EHD Device, the Drug Container, or the Drug
                         Vehicle. If ViroPharma fails to obtain Regulatory
                         Approval in such country in the period agreed to by the
                         Parties, then upon ninety days prior written notice,
                         BPTD may grant a non-exclusive license to a Third Party
                         to use the BPTD Technology, in the Field, in such
                         country, unless the failure is due to the Regulatory
                         Authority's concerns with the EHD Device, the Drug
                         Container, or the Drug Vehicle.

          7.3.3     Gray Market and Price Effects. Gray market or price effects
                    shall be deemed to exist if it is reasonably expected that
                    the licensing of the BPTD Technology in the Field to a Third
                    Party in a country would either:

                    a.   Reduce ********** of the Drug Inhalation System
                         ********** by ********** or more; or

                    b.   Reduce ********** of the Drug Inhalation System by
                         ********** or more.

                    In the event of a failure of the Parties to agree on the
                    existence of gray market or price effects under this
                    Section 7.3.3, the Parties shall resolve the matter in
                    accordance with Section 15.15.

     7.4  Marketing Diligence. During the term of this Agreement, ViroPharma
          shall use Diligent Efforts to promote the use and sale of the Drug
          Inhalation System in each country in which the Drug Inhalation System
          has received Regulatory Approval,

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          and ViroPharma shall assure that an adequate sales force is maintained
          for the appropriate promotion of the Drug Inhalation System.

     7.5  Regulatory Reporting. ViroPharma or its designee shall be responsible
          for filing all reports required to be filed in order to maintain any
          Regulatory Approvals granted for the Drug Inhalation System in the
          world, including, without limitation, adverse drug experience reports.
          BPTD and its Affiliates shall cooperate with ViroPharma in preparing
          and filing all such reports and, upon ViroPharma's request, provide
          ViroPharma with any information in BPTD's or its Affiliates'
          possession or Control that ViroPharma reasonably deems to be relevant
          to any such reports. If BPTD or a BPTD Affiliate has or receives any
          information regarding any adverse drug experience that may be related
          to the use of the Drug Inhalation System, BPTD shall provide
          ViroPharma with all such information in writing within forty-eight
          hours of BPTD's receiving such information.

     7.6  Recalls.

          7.6.1     Notification. BPTD shall immediately inform ViroPharma
                    orally of all information in BPTD's possession relating to:

                    a.   any incident relating to a Drug Inhalation System unit
                         and/or any lot of the Drug Inhalation System that is
                         the subject of recall, market withdrawal or correction,
                         or

                    b.   any Drug Inhalation System Units that may require,
                         whether based on design defect, manufacturing defect,
                         or otherwise, a recall, field alert, product withdrawal
                         or field correction arising from any defect in such
                         units.

          7.6.2     Costs of Recall. The costs of any recall shall be borne
                    consistent with the indemnification in Sections 13.1-2.

     7.7  Failure Analysis. BPTD shall, at ViroPharma's expense, assist
          ViroPharma or its designees in performing all failure analysis for
          recalled, rejected, and out-of-System Specification Drug Inhalation
          System units that is required by federal, state, or local laws or
          regulations, or that is reasonably requested by ViroPharma. BPTD shall
          assist in making all reasonable changes to the Specifications to
          reduce failure rates in Drug Inhalation System units.

     7.8  Technical Assistance. At ViroPharma's reasonable request and expense,
          BPTD shall provide ViroPharma with reasonable technical assistance and
          advice for responding to consumer queries regarding the Drug
          Inhalation System.

     7.9  Patent Marking. ViroPharma shall assure that, consistent with the laws
          of the country in which it is distributed, each Drug Inhalation System
          unit subject in such country to a BPTD Patent shall be marked in a
          conspicuous location with a

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<PAGE>

          patent notice adequate to meet the patent notification requirements of
          that country.

8.   GENERAL REGULATORY MATTERS.

     8.1  Inspections. If BPTD or a BPTD Affiliate is inspected by a Regulatory
          Authority regarding activities under this Agreement, BPTD or the
          Affiliate shall promptly notify ViroPharma. BPTD or the inspected
          party shall provide ViroPharma with a written report of any such
          inspection, noting with specificity any record or document reviewed by
          the regulatory inspector. When a copy of a document or record is
          supplied to the inspector on request, that fact will be noted in the
          report. BPTD or the BPTD Affiliate shall keep copies of each of these
          records or documents in a separate inspection file and, on
          ViroPharma's request, will provide ViroPharma with copies of any or
          all of these Study Records or documents.

     8.2  Regulatory Correspondence. BPTD shall provide ViroPharma with a copy
          of all correspondence between BPTD or any Affiliate and a Regulatory
          Authority pertaining to the manufacturing of investigational EHD
          Devices, Drug Containers, or assembly of Drug Inhalation Systems under
          Section 5, including, without limitation, any Form 483s, or similar
          notices or observations. BPTD shall provide ViroPharma with a copy of
          any proposed response or correspondence to a Regulatory Authority that
          relates directly or indirectly to the manufacturing of investigational
          EHD Devices, Drug Containers, or assembly of Drug Inhalation Systems
          under Section 5 for ViroPharma's approval at least five business days
          before the submission of such response or correspondence.

     8.3  Audits. At reasonable times and at reasonable intervals, ViroPharma or
          a designee may inspect and audit BPTD's, or a BPTD Affiliate's
          manufacturing of investigational EHD Devices, Drug Containers, or
          assembly of Drug Inhalation Systems under Section 5. BPTD, or the BPTD
          Affiliate shall make all documents and records available for review
          and copying. BPTD or the BPTD Affiliate shall adopt reasonable
          suggestions of ViroPharma or a designee to correct any deficiencies
          identified in any site visit or audit.


9.   LICENSE FEES AND ROYALTIES.

     9.1  Milestone License Fees. In partial consideration for the licenses
          granted to ViroPharma under this Agreement, ViroPharma shall pay BPTD
          the following amounts in U.S. Dollars within the specified time period
          after the occurrence of the specified events:

          **********

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     9.2  Royalty Payments on ViroPharma Sales During Full Royalty Rate Period.
          During the Full Royalty Rate Period, in partial consideration for the
          licenses granted to ViroPharma under this Agreement, ViroPharma shall
          pay BPTD the following amounts:

          9.2.1     Marginal Rates. For each calendar year, or portion thereof,
                    in the Full Royalty Rate Period during which ViroPharma or
                    any of its Affiliates sells the Drug Inhalation System,
                    ViroPharma shall pay BPTD a royalty on the combined Net
                    Sales made by ViroPharma and its Affiliate of such Drug
                    Inhalation System units **********:

**********

          9.2.2     Minimum Payments. In no event shall the payment under
                    Section 9.2.1 for the second or any subsequent full calendar
                    year during which ViroPharma or an Affiliate sells the Drug
                    Inhalation System be less than **********.

     9.3  Royalty Payments on ViroPharma Sales During Reduced Royalty Period.
          During the Reduced Royalty Rate Period, in partial consideration for
          the know-how and trade secret licenses granted to ViroPharma under
          this Agreement, ViroPharma shall pay BPTD, for each calendar year, or
          portion thereof during which ViroPharma sells the Drug Inhalation
          System, a royalty equal to ********** of the Net Sales made by
          ViroPharma and its Affiliates of the Drug Inhalation System units.

     9.4  Royalty Payments on Sublicensed Sales Outside the U.S.

          9.4.1     In partial consideration for the licenses granted to
                    ViroPharma under this Agreement, for each calendar year, or
                    portion thereof during which a Third Party sublicensee of
                    ViroPharma or its Affiliates sells the Drug Inhalation
                    System outside the U.S. during the Full Royalty Rate Period,
                    ViroPharma shall pay BPTD an amount equal to **********, and
                    during the Reduced Royalty Rate Period, ViroPharma shall pay
                    BPTD an amount equal to ********** of ********** during each
                    calendar year or portion thereof for such Third Party
                    sublicensee's sales of, and/or right to sell Drug Inhalation
                    System units outside the U.S., including **********, but
                    excluding **********.

          9.4.2     In partial consideration for the licenses granted to
                    ViroPharma under this Agreement, for each calendar year, or
                    portion thereof during which ViroPharma or its Affiliates
                    sells the Drug Inhalation System to a sublicensee for
                    intended sale outside the U.S. during the Full Royalty Rate
                    Period, ViroPharma shall pay BPTD an amount equal to
                    ********** of

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                    Net Sales to such sublicensee, and ********** of Net
                    Sales to such sublicensee during the Reduced Royalty Rate
                    Period.

     9.5  Royalty Payments on Sublicensed Sales in the U.S. For purposes of
          Sections 9.2-9.3, any sale in the U.S. of the Drug Inhalation System
          by a Third Party sublicensee of ViroPharma shall be deemed a sale by
          ViroPharma.

     9.6  Reduction in Royalty Payments for Infringing Competition. If
          infringing Competition, as defined below in this Section 9.6, exists
          during a given calendar quarter during the Full Royalty Rate Period
          for the Drug Inhalation System in a country, the royalty rates used to
          calculate the royalties payable to BPTD for sales of the Drug
          Inhalation System in such country during such calendar quarter will be
          reduced to **********, retroactive to the first date that infringement
          is determined to exist by agreement of the Parties, or pursuant to
          Section 15.15. Infringing Competition shall be deemed to exist if,
          during the applicable calendar quarter, each of the following is true:

          9.6.1     one or more Third Parties is selling a pharmaceutical
                    product for electohydrodynamic inhalation delivery for use
                    in the Field that infringes a BPTD patent. If the parties
                    disagree as to whether or not such an infringement exists,
                    the matter shall be resolved in accordance with the terms of
                    Section 15.15;

          9.6.2     BPTD has not filed suit against such Third Parties for
                    infringement of a BPTD Patent, and BPTD has not obtained a
                    discontinuance of such infringement by such Third Parties;
                    and

          9.6.3     the sales of such competing products (measured on a unit
                    basis) accounts for ********** or more of the combined
                    market for the Drug Inhalation System and such competing
                    products in such country.

     9.7  Sales Reports. Within forty-five days of the end of each calendar
          quarter after the first commercial sale of the Drug Inhalation System
          in any country, ViroPharma will provide BPTD with a report listing the
          Net Sales of Drug Inhalation System units by country, to the extent
          available; identifying whether such sales were made by ViroPharma
          and/or an Affiliate, or by a Third Party sublicensee of ViroPharma
          and/or an Affiliate and calculating the royalty due on such Net Sales
          pursuant to this Section 9.

     9.8  Payments.

          9.8.1     Timing. The payment obligations under Sections 9.2-9.6 shall
                    accrue upon the sale of the Drug Inhalation System to a
                    Third Party purchaser, other than a Third Party Sublicensee
                    of ViroPharma and/or an Affiliate, by ViroPharma, its
                    Affiliates or sublicensees. Such a sale shall be deemed to
                    occur on the date of the invoice for such sale. Payment
                    obligations under

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                    Sections 9.2-9.6 that accrue during a calendar quarter shall
                    be payable within forty-five days after the end of such
                    calendar quarter.

          9.8.2     Currency. All amounts due under this Agreement shall be
                    payable in the United States in U.S. Dollars. Net Sales in a
                    particular country outside the United States shall be
                    converted from the currency of the sale into U.S. Dollars at
                    the average daily rates of exchange for the four week period
                    immediately preceding the last week in such calendar quarter
                    as reported in the Wall Street Journal or some other source
                    agreeable to both Parties.

     9.9  Records; Audits.

          9.9.1     Record Keeping. ViroPharma shall keep, and shall require its
                    Affiliates and sublicensees to keep complete and accurate
                    records of all Net Sales, and ViroPharma shall obtain and
                    keep copies of such records sent by its Affiliates and
                    sublicensees. BPTD shall keep, and shall require its
                    Affiliates to keep complete and accurate records of all
                    costs of the manufacturing of investigational EHD Devices,
                    Drug Containers or assembly of Drug Inhalation Systems under
                    Section 5, and BPTD shall obtain and keep copies of such
                    records sent by its Affiliates.

          9.9.2     Audits. Upon thirty days prior written notice from a Party
                    (the "Auditing Party"), the other Party (the "Audited
                    Party") shall permit an independent certified public
                    accounting firm of nationally recognized standing selected
                    by the Auditing Party and reasonably acceptable to the
                    Audited Party, to examine, at the Auditing Party's sole
                    expense, the relevant books and records of the Audited Party
                    and its Affiliates as may be reasonably necessary to verify
                    the accuracy of the calculation of sales and royalties under
                    Sections 9.2-9.6, and Recovery Costs of the manufacture of
                    investigational EHD Devices, Drug Containers or assembly of
                    Drug Inhalation Systems under Section 5. An examination by a
                    Party under this Section 9.9.2 shall occur not more than
                    once in any calendar year and shall be limited to the
                    pertinent books and records for any calendar year ending not
                    more than thirty-six months before the date of the request.
                    The accounting firm shall be provided access to such books
                    and records at the Audited Party's facility(ies) where such
                    books and records are normally kept and such examination
                    shall be conducted during the Audited Party's normal
                    business hours. The Audited Party may require the accounting
                    firm to sign a standard non-disclosure agreement before
                    providing the accounting firm access to the Audited Party's
                    facilities or records. Upon completion of the audit, the
                    accounting firm shall provide both Parties with a written
                    report disclosing whether the reports submitted by the
                    Audited Party are correct or incorrect, whether the
                    royalties under Sections 9.2-9.6, and Recovery Costs of the
                    manufacture of investigational EHD Devices, Drug Containers,
                    or assembly of Drug Inhalation Systems under Section 5, are
                    correct or incorrect, and, in each case, the specific
                    details

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<PAGE>

                    concerning any discrepancies. No other information shall be
                    provided to the Auditing Party.

          9.9.3     Underpayments/Overpayments. If the results of the audit
                    under Section 9.9.2 show that additional royalties were due
                    to BPTD, ViroPharma shall pay BPTD the additional royalties
                    together with interest at 1% per month (or the maximum
                    amount allowed by law, if less) from the day such amounts
                    were first due until paid, within thirty days of the date
                    ViroPharma receives the written audit report. If such
                    underpayment exceeds five percent of the royalties that were
                    to be distributed to BPTD, ViroPharma also shall reimburse
                    BPTD for the out-of-pocket expenses incurred in conducting
                    the audit. If the results of the audit under Section 9.9.2
                    show that ViroPharma overpaid BPTD for the Recovery Costs of
                    manufacturing under Section 5, BPTD will refund such
                    overpayments, together with interest at 1% per month (or the
                    maximum amount allowed by law, if less) from the day such
                    amounts were first paid by ViroPharma until reimbursed by
                    BPTD, within thirty days of the date BPTD receives the
                    written audit report. If such overpayment exceeds five
                    percent of the Recovery Costs that were to be paid to BPTD,
                    BPTD also shall reimburse ViroPharma for the out-of-pocket
                    expenses incurred in conducting the audit.

          9.9.4     Confidentiality. All financial information of a Party which
                    is subject to review under this Section 9.9 shall be deemed
                    to be Confidential Information subject to the provisions of
                    Article 11, and such Confidential Information shall not be
                    disclosed to any Third Party or used for any purpose other
                    than verifying payments to be made by one Party to the other
                    hereunder, provided, however, that such Confidential
                    Information may be disclosed to Third Parties only to the
                    extent necessary to enforce a Party's rights under this
                    Agreement.


10.  INTELLECTUAL PROPERTY.

     10.1 Pre-existing Technology. ViroPharma shall remain the sole and
          exclusive owner of the ViroPharma Patents and all Information,
          copyrights, and trademarks owned or Controlled by ViroPharma at the
          Effective Date, subject to the rights granted hereunder. BPTD shall
          remain the sole and exclusive owner of the BPTD Patents and all
          Information, copyrights, and trademarks owned or Controlled by BPTD at
          the Effective Date, subject to the rights granted hereunder.

     10.2 Inventions. ViroPharma shall own all ViroPharma Inventions and BPTD
          shall own all BPTD Inventions, whether such Inventions are made solely
          by either Party or jointly by the Parties. BPTD hereby irrevocably
          assigns and transfers to ViroPharma, and to the extent that an
          executory assignment is not enforceable, BPTD hereby agrees to assign
          and transfer to ViroPharma, in writing, from time

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<PAGE>

          to time, upon request, any and all right, title and interest that BPTD
          may have or may later acquire in the ViroPharma Inventions under
          copyright, patent, trade secret and trademark law, in perpetuity or
          for the longest period otherwise permitted by law, without the
          necessity of further consideration. ViroPharma hereby irrevocably
          assigns and transfers to BPTD, and to the extent that an executory
          assignment is not enforceable, ViroPharma hereby agrees to assign and
          transfer to BPTD, in writing, from time to time, upon request, any and
          all right, title and interest that ViroPharma may have or may later
          acquire in the BPTD Inventions under copyright, patent, trade secret
          and trademark law, in perpetuity or for the longest period otherwise
          permitted by law, without the necessity of further consideration.

     10.3 Prosecution and Maintenance of Patents; Abandonment.

          10.3.1    Primary Responsibility. ViroPharma shall have the sole right
                    and responsibility to file, prosecute and maintain the
                    ViroPharma Patents, and to file Patents on ViroPharma
                    Inventions, and shall bear all expenses associated
                    therewith. BPTD shall have the sole right and responsibility
                    to file, prosecute and maintain the BPTD Patents, and to
                    file Patents on BPTD Inventions, and shall bear all expenses
                    associated therewith. Each Party will keep the other Party
                    reasonably apprised of the filing, prosecution and
                    maintenance status of the Party's respective Patents
                    referred to in this Section 10.3.1.

          10.3.2    Abandonment. BPTD shall use Diligent Efforts to initially
                    file those BPTD Patents owned by BPTD (or foreign
                    equivalents thereof) in the countries identified in Exhibit
                    F to the extent such filing is permitted under the
                    applicable patent laws. BPTD shall use Diligent Efforts to
                    prosecute and maintain those BPTD Patents owned by BPTD (or
                    foreign equivalents thereof) in the countries listed in
                    Exhibit F in which it has chosen to prosecute and maintain
                    such Patents to the extent such prosecution is permitted
                    under the applicable patent laws. If BPTD decides to refrain
                    from filing, or to abandon prosecution or maintenance of a
                    particular BPTD Patent whose claims relate generically or
                    specifically to the Drug Inhalation System in any country,
                    ViroPharma may request that ViroPharma have the right to
                    continue such prosecution and/or maintenance, which request
                    BPTD will reasonably consider, provided that BPTD need not
                    in any event grant any such request if BPTD has a strategic
                    reason, with respect to its prosecution strategy for its
                    Patents, for abandoning such Patent (which reason may not
                    include simply cost savings). If BPTD grants ViroPharma's
                    request, ViroPharma may continue the prosecution and
                    maintenance of such BPTD Patent, at ViroPharma's expense,
                    provided that ViroPharma keeps BPTD reasonably informed of
                    the progress of any such prosecution.

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     10.4 Third Party Patent Licenses.

          10.4.1    Procedures. If either Party reasonably believes that the
                    manufacture, use, sale, offering for sale, import, or export
                    of the Drug Inhalation System may infringe a Patent owned by
                    a Third Party, then such Party will provide the other Party
                    all Information in its possession relating to such belief.
                    Promptly thereafter, the Parties shall meet to discuss in
                    good faith the appropriate steps to take to address such
                    possible infringement, which may include, without
                    limitation:

                    a.   negotiating and entering into a license agreement with
                         such Third Party that grants the Parties the right to
                         continue making, importing, using, selling and/or
                         offering for sale the Drug Inhalation System,

                    b.   modifying the Drug Inhalation System so that the
                         Parties believe it no longer infringes, or

                    c.   proceeding without any change based on a reasonable
                         analysis that the Drug Inhalation System does not
                         infringe and/or such Patent is not valid or
                         enforceable.

          10.4.2    Costs of License. If the Parties decide to obtain a license
                    pursuant to Section 10.4.1(a), then ViroPharma shall be
                    solely responsible for the payment of all consideration for
                    such license if the Drug is the basis for the infringement,
                    BPTD shall be solely responsible for the payment of all
                    consideration for such license if the EHD Device, the Drug
                    Vehicle, or the Drug Container is the basis for the
                    infringement, and the Parties shall share equally the
                    responsibility for payment of all consideration for such
                    license if the Formulated Drug is the basis for the
                    infringement. If the EHD Device, the Drug Vehicle, the
                    Formulated Drug, or the Drug Container is the basis for the
                    infringement, and if the Parties do not agree that
                    proceeding under Section 10.4.1(c) is prudent and BPTD is
                    unwilling or unable to make the modifications described in
                    Section 10.4.1(b), and BPTD elects not to enter into a
                    license agreement with such third party pursuant to Section
                    10.4.1(a), then ViroPharma may enter into such agreement,
                    and all amounts paid by ViroPharma thereunder, or half of
                    such amounts if the basis for infringement is the Formulated
                    Drug, shall be creditable against amounts payable to BPTD
                    under this Agreement.

          10.4.3    Cost of Royalties. If the Parties agree to obtain a license
                    pursuant to Section 10.4.1(a) for the manufacture, import,
                    use, sale or offering for sale of the Drug Inhalation
                    System, or if the Parties are required to pay royalties or
                    other consideration to a Third Party to settle or otherwise
                    resolve a Patent infringement suit alleging Patent
                    infringement by the Drug Inhalation System:

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                    a.   all royalties based on the manufacture, import, use,
                         sale, or offer for sale of the EHD Device, the Drug
                         Vehicle, or the Drug Container shall be paid by BPTD;

                    b.   all royalties based on the manufacture, import, use,
                         sale, or offer for sale of the Drug shall be paid by
                         ViroPharma;

                    c.   each Party shall pay half of all royalties based on the
                         manufacture, import, use, sale, or offer for sale of
                         the Formulated Drug.

          10.5      Defense of Third Party Patent Claims.

                    10.5.1    Third Party Claims Regarding BPTD Products.
                              ViroPharma shall promptly notify BPTD in writing
                              of any action against ViroPharma based on alleged
                              infringement of a Third Party's Patent by the EHD
                              Device, the Drug Vehicle, or the Drug Container.
                              BPTD shall defend any claim or action by a Third
                              Party against ViroPharma and/or BPTD based on a
                              claim that the EHD Device, the Drug Vehicle, or
                              the Drug Container infringes a Patent that is
                              owned or controlled by such Third Party.
                              ViroPharma shall give BPTD control of the defense
                              thereof (and any negotiations for settlement or
                              compromise thereof) and will cooperate fully in
                              the defense thereof. BPTD shall not settle or
                              compromise any such claim or action without
                              ViroPharma's prior written consent, if such
                              settlement or compromise would impose on
                              ViroPharma any obligation to pay or incur any
                              costs or expenses. If BPTD does not undertake the
                              defense of an action against ViroPharma hereunder
                              within fifteen days of notice to BPTD of such
                              claim, then ViroPharma shall have the full right
                              to defend itself, using counsel of its own
                              choosing, against such claim, including any
                              negotiations for settlement or compromise thereof,
                              and BPTD shall reimburse ViroPharma for all
                              reasonable costs and expenses of such defense.

                    10.5.2    Third Party Claims Regarding ViroPharma Products.
                              BPTD shall promptly notify ViroPharma in writing
                              of any action against BPTD based on alleged
                              infringement of a Third Party's Patent by the Drug
                              or Formulated Drug. ViroPharma shall defend any
                              claim or action by a Third Party against
                              ViroPharma and/or BPTD based on a claim that the
                              Drug or Formulated Drug infringes a Patent that is
                              owned or controlled by such Third Party. BPTD
                              shall give ViroPharma control of the defense
                              thereof (and any negotiations for settlement or
                              compromise thereof) and will cooperate fully in
                              the defense thereof. ViroPharma shall not settle
                              or compromise any such claim or action without
                              BPTD's prior written consent, if such settlement
                              or compromise would impose on BPTD any obligation
                              to pay or incur any costs or expenses. If
                              ViroPharma does not undertake the defense of an
                              action against BPTD hereunder within fifteen

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                              days of notice to ViroPharma of such claim, then
                              BPTD shall have the full right to defend itself,
                              using counsel of its own choosing, against such
                              claim, including any negotiations for settlement
                              or compromise thereof, and ViroPharma shall
                              reimburse BPTD for all reasonable costs and
                              expenses of such defense.

     10.6      Enforcement of Patent Rights. If any BPTD Patent or ViroPharma
               Patent is infringed by a Third Party in any country, the Party to
               this Agreement first having knowledge of such infringement shall
               promptly notify the other in writing. The notice shall set forth
               the facts of that infringement in reasonable detail. BPTD shall
               have the primary right, but not the obligation, to institute,
               prosecute, and control any action or proceeding with respect to
               such infringement of a BPTD Patent by counsel of its own choice
               and at its expense, and ViroPharma shall have the primary right,
               but not the obligation, to institute, prosecute, and control any
               action or proceeding with respect to such infringement of a
               ViroPharma Patent by counsel of its own choice and at its
               expense.

     10.7      Patent Certifications. Each Party shall immediately give written
               notice to the other of any certification of which it becomes
               aware filed pursuant to 21 U.S.C. (S) 355(b)(2)(A), or (S)
               355(j)(2)(A)(vii) (or any amendment or successor statute thereto)
               claiming that any Patent covering the Drug Inhalation System is
               invalid or that infringement will not arise from the manufacture,
               use or sale of the Drug Inhalation System by a Third Party.

     10.8      Trademarks and Tradenames Generally. ViroPharma will select and
               own the trademarks or tradenames to be used by ViroPharma for the
               Drug Inhalation System. Neither Party nor its Affiliates shall
               adopt, use, or register any acronym, trademark, tradename,
               service mark or other marketing name that is the same as or
               confusingly similar to any acronym, trademark, tradename, service
               mark or other marketing name used by the other Party or its
               Affiliates except to the extent such adoption, use or
               registration was in process prior to the Effective Date.

11.  EXCHANGE OF INFORMATION, CONFIDENTIALITY AND PUBLICATION.

     11.1      Exchange Of Information. Promptly after the Effective Date, BPTD
               shall disclose and supply to ViroPharma all Information relating
               to the EHD Device, the Drug Vehicle, the Formulated Drug and the
               Drug Container, to the extent known to and legally disclosable by
               BPTD, that is necessary to enable ViroPharma to fully carry out
               all of its rights and obligations under this Agreement.
               Thereafter, during the term of the Agreement, BPTD shall promptly
               disclose and supply to ViroPharma any further Information meeting
               the foregoing requirements that may have become known to BPTD
               during such time. For clarification, the foregoing obligation
               shall not require BPTD to disclose proprietary Information except
               as reasonably required to implement the licenses granted to
               ViroPharma.

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     11.2 Confidentiality. Except as otherwise provided in this Article 11,
          during the term of this Agreement and for a period of five years
          thereafter, each Party shall maintain in confidence and shall use only
          for purposes of this Agreement all Confidential Information disclosed
          by the other Party under the Agreement, except as may be otherwise
          provided herein. Notwithstanding the foregoing, a Party may disclose
          the other Party's Confidential Information to those of its Affiliates,
          Permitted Sublicensees (as defined in Section 11.3), directors,
          officers, employees, agents, consultants and clinical investigators
          that have a need to know such Information in order to achieve the
          purposes of this Agreement, provided that such Party obtains prior
          agreement from such disclosees to hold in confidence and not make use
          of such Confidential Information for any purpose other than those
          permitted by this Agreement. Each Party will promptly notify the other
          upon discovery of any unauthorized use or disclosure of the
          Confidential Information. Any breech of this obligation of
          Confidentiality by an Affiliate, Permitted Sublicensee, director,
          officer, employee, agent, consultant or clinical investigator of a
          Party shall be deemed a breech by that Party.

     11.3 Authorized Disclosure.  Each Party may disclose Confidential
          Information of the other Party to Third Parties solely to the extent
          such disclosure is reasonably necessary in filing or prosecuting
          patent applications, prosecuting or defending litigation, applying for
          and obtaining Regulatory Approvals or complying with applicable laws,
          governmental regulations or court orders, provided that such Party
          will give reasonable advance notice to the other Party of such
          disclosure requirement and shall give the other Party sufficient
          opportunity to object to such disclosure or to secure confidential
          treatment of such Confidential Information required to be disclosed to
          the extent that such is available.  Either Party may disclose (subject
          to the confidentiality restrictions contained herein) Confidential
          Information to Third Parties to the extent necessary to perform its
          obligations or exercise its rights under this Agreement, provided such
          Third Parties execute confidentiality agreements containing terms no
          less strict than those contained herein (a "Permitted Sublicensee").
          Further, nothing in this Article 11 shall be construed as preventing
          or in any way inhibiting either Party from complying with statutory
          and regulatory requirements governing the development, manufacture,
          use and sale or other distribution of the Drug Inhalation System in
          any manner consistent with the terms of this Agreement, provided that
          any such compliance that requires disclosing to regulatory authorities
          confidential or other information received from the other Party may be
          made only if such Party provides reasonable advance notice of such
          disclosure to the other Party and makes reasonable efforts to obtain
          confidential treatment of such confidential information if requested
          by the other Party to the extent that such is available.

     11.4 Publication. BPTD shall not submit for written or oral publication any
          manuscript, abstract or the like which includes data or other
          information relating directly or indirectly to the Drug Inhalation
          System or any part of it without first obtaining the prior written
          consent of ViroPharma, which consent shall not be

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          unreasonably withheld. ViroPharma shall not submit for written or oral
          publication any manuscript, abstract or the like which includes data
          or other information relating directly or indirectly to the EHD
          Device, Vehicle or Drug Container without first obtaining the prior
          written consent of BPTD, which consent shall not be unreasonably
          withheld. The Parties agree to review and comment within thirty
          working days on any such draft publication. Each Party shall use its
          Diligent Efforts to bind the clinical investigators and other agents
          it utilizes for the Development of the Drug Inhalation System to a
          provision similar to this Section, provided that it is understood that
          a Party's inability to bind a clinical investigator to such a similar
          provision shall not prohibit such party from utilizing such clinical
          investigator. The contribution of each Party shall be noted in all
          publications or presentations by acknowledgment or coauthorship,
          whichever is appropriate.

     11.5 Confidentiality Issues In Bankruptcy.  In the event that a court
          or other legal or administrative tribunal, directly or through an
          appointed master, trustee or receiver, assumes partial or complete
          control over the assets of a Party to this Agreement based on the
          insolvency or bankruptcy of such Party, the bankrupt or insolvent
          Party shall promptly notify the court or other tribunal:  (a) that
          Confidential Information received from the other Party under this
          Agreement remains the property of the other Party and (b) of the
          confidentiality obligations under this Agreement with respect to such
          information.  In addition, the bankrupt or insolvent Party shall, to
          the extent permitted by law, take all steps necessary or desirable to
          maintain the confidentiality of the other Party's Confidential
          Information and to seek to ensure that the court, other tribunal or
          appointee maintains such information in confidence in accordance with
          the terms of this Agreement.


12.  REPRESENTATIONS & WARRANTIES.

     12.1 Representations and Warranties of the Parties.  Each of ViroPharma and
          BPTD represents and warrants to the other that:

          12.1.1   It is duly organized and validly existing and in good
                   standing under the laws of its organization or formation, and
                   has full corporate power and authority to enter into this
                   Agreement and to carry out the provisions hereof.

          12.1.2   It is duly authorized to execute and deliver this Agreement
                   and to perform its obligations hereunder.

          12.1.3   This Agreement is a legal and valid obligation binding upon
                   it and enforceable in accordance with its terms, except to
                   the extent limited by applicable bankruptcy and creditor's
                   rights laws. The execution, delivery and performance of this
                   Agreement by it does not conflict with any

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                   agreement, instrument or understanding, oral or written, to
                   which it is a party or by which it may be bound, nor violate
                   any material law or regulation of any court, governmental
                   body or administrative or other agency having jurisdiction
                   over it.

          12.1.4   It has obtained all necessary consents, approvals and
                   authorizations of all governmental authorities and other
                   entities and persons required to be obtained by it in
                   connection with entry into this Agreement.

          12.1.5   No agreement between it and a Third Party in existence as of
                   the Effective Date would prevent it from performing its
                   obligations under this Agreement or granting to the other
                   Party the rights granted hereunder, and it shall not enter
                   into any such Third Party agreement that would prevent it
                   from performing its obligations under this Agreement or
                   granting to the other Party the rights granted hereunder.

     12.2 Additional Representation and Warranties of BPTD. BPTD represents and
          warrants to ViroPharma that:

          12.2.1   To the best of BPTD's knowledge, as of the Effective Date,
                   the manufacture, use or sale of the EHD Device, the Drug
                   Vehicle, or the Drug Container will not violate the
                   intellectual property rights of any Third Party, and BPTD has
                   no present knowledge from which it reasonably can be inferred
                   that any BPTD Patent is invalid.

          12.2.2   BPTD has no present knowledge of the existence of any pre-
                   clinical or clinical data or information concerning the EHD
                   Device, the Drug Vehicle, or the Drug Container that BPTD has
                   not provided to ViroPharma that suggests that there may exist
                   quality, toxicity, safety and/or efficacy concerns that may
                   materially impair the utility and/or safety of the EHD
                   Device, the Drug Vehicle, or the Drug Container in the Field;

          12.2.3   BPTD shall use Diligent Efforts in performing all Development
                   Activities;

          12.2.4   at the time of delivery of any unit of the investigational
                   Drug Inhalation System, any part of such unit that BPTD or a
                   BPTD Affiliate manufactured shall conform in all material
                   respects to the Specifications, and federal, state and local
                   laws and regulations, and shall be free from material defects
                   in materials and workmanship;

          12.2.5   the term "condition" as used in Section 1.31(a)(iii),
                   includes but is not limited to infancy and elderly;

          12.2.6   BPTD has the full right, power, and authority to grant
                   ViroPharma all the right, title, and interest in the license
                   described in Section 2.1.1 for each

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                   BPTD Patent included in Exhibit A as such Exhibit A exists on
                   the Effective Date; and

          12.2.7   only those BPTD Patents designated with an asterisk in
                   Exhibit A as such Exhibit A exists on the Effective Date are
                   subject to the Retained Rights.

     12.3 DISCLAIMER. EXCEPT FOR THE EXPRESS WARRANTIES AND REPRESENTATIONS
          CONTAINED IN THIS AGREEMENT, NEITHER VIROPHARMA NOR BPTD MAKES, AND
          EACH HEREBY EXPRESSLY DISCLAIMS, ANY WARRANTIES OR REPRESENTATIONS,
          EITHER EXPRESS OR IMPLIED, WHETHER IN FACT OR IN LAW, INCLUDING
          WITHOUT LIMITATION IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
          FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.

     12.4 Certain Additional Covenants.

          12.4.1   BPTD shall pay all royalties or other sums that BPTD may owe
                   to any Third Party by virtue of its activities under this
                   Agreement, and shall perform and observe all of the other
                   material obligations under all present and future agreements
                   between BPTD and any Third Party that are in any way related
                   to BPTD's ability to grant the rights BPTD has granted to
                   ViroPharma under this Agreement or to BPTD's ability to
                   perform its obligations to ViroPharma under this Agreement.
                   If BPTD receives notice from any such Third Party that BPTD
                   has committed a breach of its obligations under any such
                   agreement, or if BPTD anticipates such breach, which breach
                   may give rise to a right by such Third Party to terminate or
                   materially diminish BPTD's rights to Patents and/or
                   Information in the Field licensed to BPTD, which Patents
                   and/or Information are sublicensed to ViroPharma hereunder,
                   or otherwise to diminish materially BPTD's ability to perform
                   its obligations to ViroPharma under this Agreement, BPTD
                   shall immediately notify ViroPharma of such situation, and
                   BPTD shall promptly cure such breach. However, if BPTD is
                   unable to cure such breach, BPTD shall, to the extent
                   possible, permit ViroPharma to cure such breach on BPTD's
                   behalf.

          12.4.2   BPTD agrees that, without the prior written approval of
                   ViroPharma, BPTD and its Affiliates shall not knowingly
                   conduct any development work, either themselves or in
                   conjunction with any other licensees or partners, on the EHD
                   Device, the Drug Vehicle, the Formulated Drug, the Drug, or
                   the Drug Container for use in the Field; provided that the
                   foregoing shall not be interpreted to prevent BPTD or its
                   Affiliates or other licensees from developing other BPTD
                   pulmonary drug delivery products for use outside the Field.

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<PAGE>

          12.5     Representation by Legal Counsel. Each Party hereto represents
                   that it has been represented by legal counsel in connection
                   with this Agreement and acknowledges that it has participated
                   in the drafting hereof. In interpreting and applying the
                   terms and provisions of this Agreement, the Parties agree
                   that no presumption shall exist or be implied against the
                   Party that drafted such terms and provisions.


     13.  INDEMNIFICATION.

          13.1     Indemnification by BPTD. BPTD shall indemnify, defend and
                   hold ViroPharma, its directors, employees, agents and
                   representatives (including but not limited to ViroPharma's
                   Affiliates and sublicensees) harmless from and against all
                   claims, causes of action, settlement costs (including but not
                   limited to reasonable attorney's fees and expenses) losses or
                   liabilities of any kind which (a) arise from or are
                   attributable to any negligent act or omission or willful
                   misconduct on the part of BPTD, its directors, employees,
                   agents or representatives relating to any of its obligations
                   under this Agreement, including, but not limited to any
                   breach of a representation or warranty; or (b) arise from or
                   are attributable to a defect in the EHD Device, the Drug
                   Container or the Drug Vehicle or in the manufacture of the
                   EHD Device, the Drug Container or the Drug Vehicle where such
                   manufacture is under the control of BPTD, and which in either
                   case are not otherwise attributable to any negligent act or
                   omission or willful misconduct on the part of ViroPharma, its
                   directors, employees, agents or representatives (including,
                   but not limited to ViroPharma's Affiliates).

          13.2     Indemnification by ViroPharma. ViroPharma shall indemnify,
                   defend and hold BPTD, its directors, employees, agents and
                   representations harmless from and against all claims, causes
                   of actions, settlement costs (including but not limited to
                   reasonable attorney's fees and expenses) losses or
                   liabilities of any kind which: (a) arise from or are
                   attributable to any negligent act or omission or willful
                   misconduct on the part of ViroPharma, its directors,
                   employees, agents or representatives relating to any of its
                   obligations under this Agreement; or (b) arise from or are
                   attributable to the labeling, distribution, use, sale,
                   marketing and promotion of the Drug Inhalation System or
                   manufacturing of the Drug Inhalation System or its components
                   where such manufacturing is under the control of ViroPharma,
                   and which in either case are not otherwise attributable to
                   any negligent act or omission or willful misconduct on the
                   part of BPTD, its directors, employees, agents or
                   representatives (including, but not limited to BPTD's
                   Affiliates).

          13.3     Indemnity Procedure. If a Party seeks indemnification under
                   Section 13.1 or 13.2, it shall inform the other Party (the
                   "Indemnifying Party") of a claim as soon as reasonably
                   practicable after it receives notice of the claim, shall
                   permit the Indemnifying Party to assume direction and control
                   of the defense of the claim (including the right to settle
                   the claim solely for monetary consideration), and, at

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<PAGE>

                   the Indemnifying Party's expense, shall cooperate as
                   reasonably requested in the defense of the claim. The
                   Indemnified Party shall have the right to retain its own
                   counsel, subject to the approval of any such outside counsel
                   by the Indemnifying Party, with the fees and expenses to be
                   paid by the Indemnifying Party if representation of such
                   Party by the counsel retained by Indemnifying Party would be
                   inappropriate due to actual or potential differing interests
                   between such indemnitee and any other party represented by
                   such counsel in such proceedings. The Indemnifying Party may
                   not settle such action or claim, or otherwise consent to an
                   adverse judgment in such action or claim, without the express
                   written consent of the Indemnified Party if such settlement
                   or adverse judgment diminishes the rights or interests of the
                   Indemnified Party.

          13.4     LIMITATION OF LIABILITY. IN NO EVENT, NOT WITHSTANDING ANY
                   PROVISION OF THIS AGREEMENT TO THE CONTRARY, SHALL EITHER
                   PARTY, ITS DIRECTORS, TRUSTEES, OFFICERS, EMPLOYEES, AGENTS
                   OR AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT,
                   INCIDENTAL, OR CONSEQUENTIAL DAMAGES, WHETHER BASED UPON A
                   CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT
                   LIABILITY OR OTHER TORT, OR OTHERWISE, ARISING OUT OF THIS
                   AGREEMENT.

          13.5     Insurance. Each Party hereby agrees to maintain, during the
                   term of this Agreement, insurance with reputable and sound
                   independent insurers at commercially reasonable levels of
                   coverage in relation to the type, scope and size of business
                   it conducts and to all its obligations herein contained and
                   shall give the other Party an opportunity from time to time
                   to review the insurance policies so that the other Party may
                   satisfy itself that such insurance policies are valid, that
                   the premiums are being paid regularly and that the policies
                   are kept in full force and effect. Each Party shall, upon the
                   other Party's reasonable request from time to time, produce
                   evidence that all insurance premiums have been paid and kept
                   up to date and are kept in accordance with any local
                   insurance laws or regulations from time to time in force.
                   Each Party will, at the request of the other Party, name the
                   other Party and its Affiliates as additional insureds as
                   applicable on all liability insurance policies, including,
                   but not limited to, product liability, products and
                   clinicians, malicious product tampering and general liability
                   policies and will obtain for the other Party an endorsement
                   that such insurance shall not be cancelled without thirty
                   days prior written notice to the other Party. A Party's
                   liability to the other is in no way limited to the extent of
                   the Party's insurance coverage. In the event of duplicate
                   coverage, the insurance policy of the Party whose fault
                   causes the need for reimbursement under an insurance policy
                   shall be primary and the other Party's secondary.

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<PAGE>

     14.  TERM OF AGREEMENT AND TERMINATION.

          14.1     Term. Unless earlier terminated as provided herein, this
                   Agreement shall expire on the expiration of the last to
                   expire Reduced Royalty Rate Period for the Drug Inhalation
                   System.

          14.2     Termination for Material Breach. A non defaulting Party shall
                   have the right to terminate this Agreement after written
                   notice to the other that the other is in material breach of
                   this Agreement (the "Defaulting Party"), unless the
                   Defaulting Party cures the breach before the expiration of
                   ninety days - thirty days in the case of a delayed payment -
                   after such written notice.

          14.3     Termination by ViroPharma. ViroPharma may terminate this
                   Agreement at any time effective upon thirty (30) days written
                   notice to BPTD and payment of any amounts due as of the date
                   of notice of termination, including direct costs to terminate
                   commitments and work in process authorized through open Work
                   Orders that cannot be avoided through reasonable commercial
                   efforts.

          14.4     Termination for Bankruptcy. Either Party may terminate this
                   Agreement if, at any time, the other Party shall file in any
                   court or agency pursuant to any statute or regulation of any
                   state or country, a petition in bankruptcy or insolvency or
                   for reorganization or for an arrangement or for the
                   appointment of a receiver or trustee of the Party or of its
                   assets, or if the other Party proposes a written agreement of
                   composition or extension of its debts, or if the other Party
                   shall be served with an involuntary petition against it,
                   filed in any insolvency proceeding, and such petition shall
                   not be dismissed within sixty days after the filing thereof,
                   or if the other Party shall propose or be a party to any
                   dissolution or liquidation, or if the other Party shall make
                   an assignment for the benefit of creditors.

          14.5     Consequences of Termination. Upon the expiration or any
                   termination of this Agreement, (i) all licenses under this
                   Agreement shall be terminated, except as expressly provided
                   under this Agreement, including, without limitation, Sections
                   14.8 and 2.1; and (ii) each Party shall destroy and shall not
                   retain any copies of any Confidential Information provided by
                   the other Party hereunder, except for one copy to be retained
                   by legal counsel solely for archival purposes.
                   Notwithstanding anything in this Agreement to the contrary,
                   in the event of the termination or expiration of this
                   Agreement, ViroPharma shall have a continuing right to sell
                   under this Agreement for a period of ********** days
                   following termination, such amount of EHD Devices or Drug
                   Containers remaining in its inventory.

          14.6     Accrued Rights, Surviving Obligations. Termination or
                   expiration of this Agreement shall not affect any rights to
                   payment or other rights that accrued before the date of
                   termination or expiration. The terms of the following
                   Articles and Sections shall survive any termination of this
                   Agreement: 2.1.2, 2.3.2-2.3.3, 2.4, 3.5.3, 7.5-7.6, 9.9,
                   10.1, 10.2, 10.5, 10.7, 11, 12, 13, 14.5, 14.6, 14.8.

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<PAGE>

          14.7     Financial Status; Rights in Event of Financing Difficulties.
                   BPTD and ViroPharma agree to keep each other informed as to
                   its financial condition during the term of this Agreement. If
                   at any time the financial resources of BPTD or ViroPharma are
                   not reasonably sufficient to enable it to continue to meet
                   its obligations hereunder for at least the next six months,
                   the parties will meet to review and consider steps that might
                   be taken to ensure that the other party will be able to
                   perform its obligations under this Agreement.

          14.8     Rights In Event of Bankruptcy.

          14.8.1   Notwithstanding the bankruptcy of BPTD, or the impairment of
                   performance by BPTD of its obligations under this Agreement
                   as a result of bankruptcy or insolvency of BPTD, ViroPharma
                   shall be entitled to retain the license rights and licenses
                   granted herein, subject to ViroPharma's performance of all
                   its obligations under the Agreement and to BPTD's rights to
                   terminate this Agreement for reasons other than bankruptcy or
                   insolvency as expressly provided in this Agreement.

          14.8.2   All rights and licenses granted under or pursuant to this
                   Agreement are, for all purposes of Section 365(n) of Title 11
                   of the United States Code ("Title 11"), licenses of rights to
                   "intellectual property" as defined in Title 11. Each Party
                   agrees that the other Party, as licensee of such rights under
                   this Agreement shall retain and may fully exercise all of its
                   rights and elections under Title 11. Each Party shall during
                   the Term of this Agreement create and maintain current copies
                   or, if not amenable to copying, detailed descriptions or
                   other appropriate embodiments, to the extent feasible, of all
                   such intellectual property. If a case is commenced by or
                   against a Party under Title 11 (the "Affected Party"), the
                   Affected Party (in any capacity, including debtor-in-
                   possession) and its successors and assigns (including,
                   without limitation, a Title 11 Trustee) shall:

                   a.   as the other Party may elect in a written request,
                        immediately upon such request:

                        i.   perform all of the obligations provided in this
                             Agreement to be performed by the Affected Party
                             including, where applicable and without limitation,
                             providing to the other Party portions of such
                             intellectual property (including embodiments
                             thereof) held by the Affected Party and such
                             successors and assigns or otherwise available to
                             them; or

                        ii.  provide to the other Party all such intellectual
                             property (including all embodiments thereof) held
                             by the Affected Party and such successors and
                             assigns or otherwise available to them; and

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November 19, 1999             ViroPharma-BPTD Agreement                  Page 38
<PAGE>

                   b.   not interfere with the rights of the other Party under
                        this Agreement, or any agreement supplemental hereto, to
                        such intellectual property (including such embodiments),
                        including any right to obtain such intellectual property
                        (or such embodiments) from another entity.

          14.8.3   If a Title 11 case is commenced by or against the Affected
                   Party, and this Agreement is rejected as provided in Title
                   11, and the other Party elects to retain its rights hereunder
                   as provided in Title 11, then the Affected Party (in any
                   capacity, including debtor-in-possession) and its successors
                   and assigns (including, without limitation, a Title 11
                   Trustee) shall provide to the other Party all such
                   intellectual property (including all embodiments thereof)
                   held by the Affected Party and such successors and assigns,
                   or otherwise available to them, immediately upon the other
                   Party's written request. Whenever the Affected Party or any
                   of its successors or assigns provides to the other Party any
                   of the intellectual property licensed hereunder (or any
                   embodiment thereof) pursuant to this Section 13.8, the other
                   Party shall have the right to perform the obligations of the
                   Affected Party hereunder with respect to such intellectual
                   property, but neither such provision nor such performance by
                   the other Party shall release the Affected Party from any
                   such obligation or liability for failing to perform it.

          14.8.4   All rights, powers and remedies of the other Party provided
                   herein are in addition to and not in substitution for any and
                   all other rights, powers and remedies now or hereafter
                   existing at law or in equity (including, without limitation,
                   Title 11) in the event of the commencement of a Title 11 case
                   by or against the Affected Party. The other Party, in
                   addition to the rights, power and remedies expressly provided
                   herein, shall be entitled to exercise all other such rights
                   and powers and resort to all other such remedies as may now
                   or hereafter exist at law or in equity (including, without
                   limitation, Title 11) in such event. The Parties agree that
                   they intend the foregoing rights to extend to the maximum
                   extent permitted by law, including, without limitation, for
                   purposes of Title 11:

                   a.   the right of access to any intellectual property
                        (including all embodiments thereof) of the Affected
                        Party, or any third party with whom the Affected Party
                        contracts to perform an obligation of the Affected Party
                        under this Agreement, and, in the case of the Third
                        Party, which is necessary for the development,
                        registration, manufacture and marketing of Drug
                        Inhalation Systems; and

                   b.   the right to contract directly with any Third Party
                        described in 14.8.4(a) to complete the contracted work.


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<PAGE>

     15.  MISCELLANEOUS.

          15.1   Press Releases; Disclosure of Agreement. No public announcement
                 or other disclosure to Third Parties concerning the terms of
                 this Agreement shall be made, either directly or indirectly, by
                 either Party to this Agreement, except as may be legally
                 required or as may be required by the terms of that certain
                 license agreement between Battelle Memorial Institute and
                 Electrosols, Ltd. dated March 29, 1999, and as may be required
                 for recording purposes, without first obtaining the written
                 approval of the other Party and agreement upon the nature and
                 text of such announcement or disclosure. The Party desiring to
                 make any such public announcement or other disclosure shall
                 inform the other Party of the proposed announcement or
                 disclosure in reasonably sufficient time prior to public
                 release, and shall provide the other Party with a written copy
                 thereof, in order to allow such other Party to comment upon
                 such announcement or disclosure. Each Party agrees that it
                 shall cooperate fully with the other with respect to all
                 disclosures regarding this Agreement to the Securities Exchange
                 Commission and any other governmental or regulatory agencies,
                 including requests for confidential treatment of proprietary
                 information of either Party included in any such disclosure.

          15.2   Recordation. Subject to compliance with all confidentiality
                 obligations of ViroPharma under this Agreement, ViroPharma
                 shall have the right, at any time, to record or register this
                 Agreement in appropriate governmental or regulatory offices
                 anywhere in the world, and BPTD shall provide reasonable
                 assistance to ViroPharma in effecting such recording or
                 registration, provided that ViroPharma shall take appropriate
                 measures available to protect the confidentiality of the terms
                 of the Agreement.

          15.3   Entire Agreement; Amendment. This Agreement, and the existing
                 Confidentiality Agreements between the Parties related to the
                 subject matter of this Agreement, sets forth the terms of the
                 collaboration agreement between the Parties hereto and, except
                 as otherwise set forth herein, supersedes and terminates all
                 prior representations, agreements and understandings between
                 the Parties regarding the subject matter hereof. Any
                 modification of this Agreement shall be effective only when in
                 writing and signed by the Parties, and specifically stating
                 that it is an amendment to this Agreement.

          15.4   Assignment. This Agreement and the licenses and rights herein
                 granted shall be binding upon and inure to the benefit of the
                 successors in interest of the respective Parties. Neither Party
                 may assign or transfer this Agreement or any rights or
                 obligations hereunder without the prior written consent of the
                 other Party, which consent shall not be unreasonably withheld,
                 except that a Party may make such an assignment without the
                 other Party's consent to Affiliates or to a successor to all or
                 substantially all of the related business assets of such Party
                 relating to this Agreement, whether by way of a merger, sale of
                 stock, sale of assets or other similar transaction.


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<PAGE>

     15.5  Notices. Any notice required or permitted to be given under this
           Agreement shall be in writing, shall specifically refer to this
           Agreement and shall be effective on receipt, as evidenced in writing,
           when given by registered airmail or overnight courier and addressed,
           unless otherwise specified in writing, to the addresses of the
           Parties described below:


          For BPTD:        Battelle Pulmonary Therapeutics Division
                           Attention:  Dennis Cearlock
                           505 King Avenue
                           Columbus, Ohio 43201-2693
                           FAX (614) 424-3622

          With a copy to:  Robert L. Zieg (same address)
                           FAX (614) 424-3864


          For ViroPharma:  ViroPharma Incorporated
                           405 Eagleview Boulevard
                           Exton, PA 19341
                           FAX:  (610) 458-7380
                           Attention: Jeffrey Hincks, Ph.D.

          With a copy to:  ViroPharma Incorporated
                           405 Eagleview Boulevard
                           Exton, PA 19341
                           FAX:  (610) 458-7380
                           Attention:  General Counsel

     15.6  Severability. If any Article or part thereof of this Agreement is
           declared invalid by any court of competent jurisdiction, or any
           government or other agency having jurisdiction over either BPTD or
           ViroPharma deems any Article or part thereof to be contrary to any
           anti-trust or competition laws then such declaration shall not affect
           the remainder of the Article or other Articles. To the extent
           possible the Parties shall revise such invalidated Article or part
           thereof in a manner that will render such provision valid without
           impairing the Parties' original intent. In the event a Party's rights
           are materially affected as a result of a change in this Agreement
           under this Paragraph, the Parties will renegotiate the terms and
           conditions of this Agreement to resolve any inequities.

     15.7  Force Majeure. Except as otherwise provided herein, no Party shall be
           in breach of this Agreement, or liable to the other Party, for any
           delay or failure of performance to the extent such delay or failure
           is caused by circumstances beyond its reasonable control and that by
           the exercise of Diligent Efforts it is unable to

________________________________________________________________________________
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<PAGE>

           prevent, provided that the party claiming excuse uses its Diligent
           Efforts to overcome the same.


     15.8  Expenses. Except as otherwise provided in the Agreement, all expenses
           incurred by ViroPharma in connection with its obligations under this
           Agreement will be borne solely by ViroPharma and all expenses
           incurred by BPTD in connection with its obligations under this
           Agreement will be borne solely by BPTD. Each Party will be
           responsible for appointing its own employees, agents and
           representatives, who will be compensated by such Party. Each Party
           will be responsible for paying any finder's or broker's fee owed to a
           Third Party that such Party incurs based directly or indirectly on
           negotiating and entering this Agreement, and shall indemnify the
           other Party against any obligation to pay such fee.

     15.9  Non-Waiver. The failure of a Party in any one or more instances to
           insist upon strict performance of any of the terms and conditions of
           this Agreement shall not be construed as a waiver or relinquishment,
           to any extent, of the right to assert or rely upon any such terms or
           conditions on any future occasion.

     15.10 Disclaimer of Agency; Relationship of the Parties. This Agreement
           shall not render either Party the legal representative or agent of
           the other, nor shall either Party have the right or authority to
           assume, create, or incur any Third Party liability or obligation of
           any kind, express or implied, against or in the name of or on behalf
           of another except as expressly set forth in this Agreement. The
           relationship between BPTD and ViroPharma under this Agreement is that
           of independent contractors. BPTD and ViroPharma are not joint
           venturers, partners, principal and agent, master and servant,
           employer or employee, and have no relationship other than as
           independent contracting Parties. Neither Party shall have any
           responsibility for the hiring, firing, compensation or employee
           benefits of the other Party's employees.

     15.11 Further Actions. Each Party agrees to execute, acknowledge and
           deliver such further instruments, and to do all such other acts, as
           may be necessary or appropriate in order to carry out the purposes
           and intent of the Agreement.

     15.12 Governing Law. This Agreement will be governed by and interpreted in
           accordance with the laws of the Commonwealth of Pennsylvania, without
           regard to the choice of law doctrines of Pennsylvania or any other
           jurisdiction.

     15.13 Counterparts. This Agreement may be executed in one or more
           counterparts, each of which shall be an original and all of which
           shall constitute together the same document.

     15.14 Debarment. Each Party certifies that none of its directors, officers,
           employees, consultants or agents, nor any of its Affiliates'
           directors, officers, employees, consultants or agents have been
           debarred, nor have they been engaged in any acts

________________________________________________________________________________
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<PAGE>

           that could serve as the basis for debarment under the Generic Drug
           Enforcement Act.

     15.15 Dispute Resolution. In the event the parties cannot resolve any
           controversy or claim arising out of or relating to this Agreement or
           the breach thereof, such controversy or claim shall be settled by a
           sole neutral through a binding, non-reviewable and non-appealable
           alternative dispute resolution process in accordance with the then
           existing Non-Administered Arbitration Rules of the CPR Institute for
           Dispute Resolution, 366 Madison Avenue, New York, New York 10017-
           3122. The neutral's award may be entered in any court having final
           jurisdiction.

IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of
the date first above written.


BATTELLE MEMORIAL INSTITUTE-                     VIROPHARMA INCORPORATED
COLUMBUS OPERATIONS


By: /s/ Dennis B. Cearlock                       By: /s/ Claude H. Nash

Name: Dennis B. Cearlock                         Name: Claude H. Nash

Its: Senior Vice President                       Its: President, CEO & Chairman

________________________________________________________________________________
November 19, 1999        ViroPharma-BPTD Agreement                       Page 43
<PAGE>

                                   EXHIBIT A

                           BPTD Patents/Applications

                                  **********

________________________________________________________________________________
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<PAGE>

                                   EXHIBIT B

The Third Party referred to in Section 1.37 of this Agreement is ********** and
its successors in interest.

________________________________________________________________________________
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<PAGE>

                                   EXHIBIT C

                               Development Plan

________________________________________________________________________________
November 19, 1999        ViroPharma-BPTD Agreement                       Page 46
<PAGE>

                                   EXHIBIT D

                             System Specifications

________________________________________________________________________________
November 19, 1999        ViroPharma-BPTD Agreement                       Page 47
<PAGE>

                                   EXHIBIT E

                              Form of Work Order
                                  WORK ORDER


     This Work Order is entered into this ____ day of ______________, 1999
between BPTD and ViroPharma and is subject to all of the terms and conditions
set forth in that certain Product Development and Commercialization Agreement
dated November 19, 1999, between the BPTD and ViroPharma (the "PDC Agreement").
In the event of any conflict between the terms of this Work Order and the PDC
Agreement, the terms of this Work Order shall control.


     1.      Description of Services.
             -----------------------



     2.      Deliverables; Fees; Delivery Dates.
             ----------------------------------


                                               Maximum Fee
     Description of Deliverables              for Deliverable    Delivery Date
     ---------------------------              ---------------    -------------




     TOTAL MAXIMUM FEE



     3.      Payment Schedule.
             ----------------

________________________________________________________________________________
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<PAGE>

     The PDC Agreement shall remain in full force and effect, subject only to
the express terms of this Work Order, and the parties hereto hereby ratify and
confirm the provisions of the PDC Agreement, as may be so modified by this Work
Order. The parties have executed this Work Order as of the latest of the dates
set forth below.


VIROPHARMA INCORPORATED                      BATTELLE MEMORIAL INSTITUTE

By:_______________________________           By:________________________________

Name, Title:______________________           Name, Title:_______________________

Date:_____________________________           Date:______________________________

________________________________________________________________________________
November 19, 1999        ViroPharma-BPTD Agreement                       Page 49
<PAGE>

                                   EXHIBIT F

                 Countries in Which BPTD Shall File, Prosecute
             and Maintain BPTD Patents Pursuant to Section 10.3.2
             ----------------------------------------------------


                                  **********

________________________________________________________________________________
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