Document:

Second Amended and Restated Severance Agreement

 Exhibit 10.31 
  
 SECOND AMENDED AND RESTATED SEVERANCE AGREEMENT 
  
 THIS AMENDED AND RESTATED AGREEMENT dated as of September 1, 2003 is made by and between ViroPharma Incorporated (the
“Company”), and Claude Nash (the “Employee”). 
  
 WHEREAS, the Company and the Employee entered into that certain Severance Agreement dated August 21, 2000, as amended and restated as of September 1, 2002 and the parties desire to further amend and restate such agreement in its entirety as
set forth herein; and 
  
 WHEREAS, the Board of Directors of the
Company (the “Board”) recognizes that, as is the case with many publicly held corporations, the possibility of a Change of Control (as defined in the last Section hereof) exists and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the departure or distraction of key personnel to the detriment of the Company and its stockholders; and 
  
 WHEREAS, the Board also recognizes that by continuing service with the Company as an employee and as a member of the Board, Employee has foregone other
significant opportunities and should be protected against the possibility of his involuntary termination of employment without cause or a constructive termination of his employment; and 
  
 WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention
and dedication of the Company’s key personnel, including the Employee, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change of Control or other termination of
employment; 
  
 NOW, THEREFORE, in consideration of the premises
and the mutual covenants herein contained, this Company and the Employee hereby agree as follows: 
  
 1. Defined Terms. Unless sooner defined below, the definition of capitalized terms used in this Agreement is provided in the last Section hereof. 
  
 2. Payments. 
  
 2.1 From the date hereof until August 31, 2004, the Employee shall perform such duties as the President of the Company may determine from time to time,
and in respect thereof the Employee shall receive (a) such health, life, disability and accident insurance benefits substantially similar to those which are received by other employees of the Company, and (b) a salary in the amount of $1,000 per
month, provided however that such employment shall be an “at-will” relationship terminable at any time by either the Company or the Employee for any reason whatsoever, with or without Cause, and upon termination of such employment
relationship, the obligations of the Company under this Section 2.1 shall automatically terminate. Unless otherwise expressly agreed to by the Compensation Committee of the Board of Directors of the Company, the Employee shall not be entitled to
participate in any of the Company’s stock option or incentive bonus arrangements in his capacity as an employee. The Company shall maintain an office for the Employee during the period that Employee continues to serve on the Board of Directors
of the Company. 

 2.2 (a) Provided that Employee has signed the Release attached hereto as Exhibit A (the
“Release”), the Company shall pay the Employee the payments described in this Section 2.2 (the “Severance Payments”) upon the termination of the Employee’s employment, unless such termination is (i) by the Company for Cause,
or (ii) by reason of death or Disability. Notwithstanding the foregoing, the Company’s obligation to pay Employee the Severance Payments or to provide any other benefit to Employee hereunder shall immediately cease (A) upon Employee’s
breach of any of the provisions set forth in Section 3 below, or (B) if Employee revokes or attempts to revoke the Release. 
  
 (b) For the two-year period starting on the Date of Termination, the Company shall arrange to provide the Employee with life, disability and accident
insurance benefits substantially similar to those which the Employee is receiving immediately prior to the Notice of Termination (without giving effect to any reduction in such benefits if such reduction constitutes Good Reason). For the entire
period beginning on the Date of Termination and ending on the earlier of the Employee’s death or the Employee’s 65th birthday, Company shall arrange to provide the Employee with health insurance benefits substantially similar to those
which the Employee is receiving immediately prior to the Notice of Termination (without giving effect to any reduction in such benefits if such reduction constitutes Good Reason). Benefits otherwise receivable by the Employee pursuant to this
Section 2.2(b) shall be reduced to the extent comparable benefits are actually received by or made available to the Employee without cost during the above-referenced period. In addition, any such benefits actually received by the Employee shall be
reported to the Company by the Employee. Notwithstanding the foregoing, to the extent that the coverage described in this Section 2.2(b) cannot be provided under the Company’s benefit plans without jeopardizing the tax status of such plans, for
underwriting reasons or because of the tax impact on the Employee, then the Company shall pay the Employee an amount such that the Employee can purchase such benefits separately at no greater after tax cost to the Employee than the Employee would
have had if the benefits were provided to the Employee as an employee of the Company. 
  
 2.3. (a) Whether or not the Employee becomes entitled to the Severance Payments, if any of the Total Payments (as defined in subsection (b) below) will be subject to an excise tax under Section 4999 of the Code (the
“Excise Tax”), the Company shall pay to the Employee an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Employee, after deduction of any Excise Tax on the Total Payments and any federal, state
and local income tax and Excise Tax upon the payment provided for by this Section 2.3, shall be equal to the excess of the Total Payments over the payment provided for by this Section 2.3. 
  
 (b) For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) any payments or benefits received or to be received by the Employee in connection with a Change of Control or the 
  

 2 

 Employee’s termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with the Company (the “Total Payments”), shall be treated as “parachute payments” (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel selected by the Company’s
independent auditors and reasonably acceptable to the Employee, such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, and all “excess parachute
payments” (within the meaning of section 280G(b)(1) of the Code) shall be treated as subject to the Excise Tax unless, in the opinion of such tax counsel, such excess parachute payments (in whole or in part) represent reasonable compensation
for services actually rendered (within the meaning of section 280G(b)(4)(B) of the Code), or are otherwise not subject to the Excise Tax, and (ii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the
Company’s independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, FICA taxes at the highest rate applicable with respect to wages in excess of the Social Security taxable wage base in effect for the year of
payment, and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Employee’s residence on the Date of Termination (or such other time as is hereinafter described), net of the maximum reduction
in federal income taxes which could be obtained from deduction of such state and local taxes. 
  
 (c) In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Employee’s employment (or such other time as is
hereinafter described), the Employee shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up
Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Employee to the extent that such repayment results in a reduction in Excise Tax or a federal, state or local income
tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination
of the Employee’s employment (or such other time as is hereinafter described) (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess (plus any interest, penalties or addition payable by the Employee with respect to such excess) at the time that the amount of such excess is finally determined. The Employee and the Company shall each
reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the Total Payments. If an Employee who remains in the employ of the
Company becomes entitled to the payment provided for by this paragraph, such payment shall be made no later than the later of (i) the fifth day following the date on which the Employee notifies the Company that he is subject to the Excise Tax and
(ii) twenty days prior to the date on which the Excise Tax is initially due. 
  

 3 

 (d) The payments provided for in this Section 2.3 shall be made as soon as practicable prior to the date
that Employee is obligated to pay the Excise tax; provided, however, that, if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to the Employee on such day an estimate, as determined in
good faith by the Company of the minimum amount of such payments to which the Employee is clearly entitled and shall pay the remainder of such payments (together with interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon as the
amount thereof can be determined. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to the Employee, payable on the fifth (5th)
business day after demand by the Company (together with interest at the rate provided in section 1274(b)(2)(B) of the Code). At the time that payments are made under this section, the Company shall provide the Employee with a written statement
setting forth the manner in which such payments were calculated and the basis for such calculations including. 
  
 3. The Employee’s Covenants.  
  
 3.1 Except as is necessary in the performance of Employee’s duties as an employee and as a member of the Board of Directors of the Company, Employee shall not, without the prior written consent of the Company in
its sole discretion, for any reason or for any purpose, during or after Employee’s employment by the Company, either directly or indirectly, divulge to any third-party or use for his own direct or indirect benefit, any Company Information (as
defined below) revealed to or obtained by Employee at any time during the course of his employment with the Company. “Company Information” generally means all of the Company’s confidential, proprietary, business and technical
information, trade secrets or other information or materials that have not been made available to the general public by the Company. Nothing contained herein shall restrict Employee from divulging or using for his own benefit or for any other
purpose any Company Information that is readily available to the general public so long as such information did not become available to the general public as a direct or indirect result of Employee’s breach of this Agreement. 
  
 3.2. For the two year period starting on the Date of Termination, regardless
of the reason for the termination, Employee shall not, directly or indirectly, and whether for Employee’s own direct or indirect benefit or for the direct or indirect benefit of any third party: 
  
 (a) perform any services that may be used in connection with developing,
manufacturing or marketing a chemical entity or product that competes with the Company’s business of the discovery, development, manufacture, marketing and sale of pharmaceuticals for the treatment of any disease that is or was the focus of any
of the Company’s research, development or commercialization programs that are described in or are incorporated by reference into the Company’s most recent Form 10-K or most recent Form S-1 or S-3 filed with the Securities and Exchange
Commission prior to the Date of Termination, or that are otherwise publicly announced by the Company after the filing of the foregoing Form 10-K, Form S-1 or 
  

 4 

 Form S-3 and prior to the Date of Termination (the “Business”), provided that nothing in this Subsection shall
prevent Employee, with the prior approval of a majority of the members of the Board of Directors of the Company, from serving on the Board of Directors of another entity that may otherwise be deemed to be in competition with the Business; or

  
 (b) solicit, call on, or otherwise deal in any way with any
licensor, customer, vendor or contractor with whom the Company shall have dealt at any time during the period of Employee’s employment by the Company, for a purpose which is competitive with the Business; or 
  
 (c) employ, engage or retain, or arrange to have any other person or entity
employ, engage or retain any person who is an employee, contractor, consultant or agent of the Company or shall have been employed, engaged or retained by the Company as an employee, contractor, consultant or agent at any time during the one (1)
year period preceding the Date of Termination; additionally, Employee shall not, directly or indirectly, influence or attempt to influence any such person to terminate or modify his or her employment arrangement or engagement with the Company.

  
 The Employee acknowledges that the Company would be
irreparably injured by a violation of this Section 3, and agrees that the Company, in addition to other remedies available to it for such breach or threatened breach, shall be entitled to a preliminary injunction, temporary restraining order or
other equitable relief restraining the Employee from any actual or threatened breach of this Section 3 without any bond or other security being required. Employee’s obligation under this Section 3 shall survive any termination of the
Company’s obligation to make payments to Employee hereunder. 
  
 4.
Termination Procedures. 
  
 4.1. During the term of this
Agreement, any termination of the Employee’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 6 hereof. For purposes of
this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee’s employment under the provision so indicated. 
  
 4.2. “Date of Termination,” with respect to any termination of the Employee’s employment shall mean: 
  
 (a) if the Employee’s employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Employee
shall not have returned to the full-time performance of the Employee’s duties during such thirty (30) day period); and 
  

 5 

 (b) if the Employee’s employment is terminated for any other reason, the date specified in the
Notice of Termination, which, in the case of: (i) a termination by the Company, shall not be less than thirty (30) days after the date Notice of Termination is given (except in the case of a termination for Cause) and, (ii) a termination by the
Employee, shall not be less than fifteen (15) days nor more than sixty (60) days after the date such Notice of Termination is given. 
  
 5. Successors; Binding Agreement. 
  
 5.1. In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Employee to
compensation from the Company in the same amount and on the same terms as the Employee would be entitled to hereunder if the Employee were to terminate the Employee’s employment for Good Reason after a Change of Control, except that, for
purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. 
  
 5.2. This Agreement shall inure to the benefit of and be enforceable by the Employee’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Employee shall die while any amount would still be payable to the Employee hereunder (other than amounts which, by their terms, terminate upon the death of the Employee) if the Employee
had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Employee’s estate. 
  
 6. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or mailed by United states registered mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt: 
  

 6 

			
	 To the Company:
	  	 To the Employee:

		
	 ViroPharma Incorporated
	  	 Claude H. Nash

	 405 Eagleview Boulevard
	  	 2400 Beaver Hill Rd., PO Box 179,

	 Exton, PA 19341
	  	 Birchrunville, PA 19421-0179

	 Attention:  General Counsel
	  	 

  
 7. Miscellaneous. No provision
of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Employee and such officer as may be specifically designated by the Board. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The
validity, interpretation, construction this Agreement shall be governed by the laws of the Commonwealth of Pennsylvania. All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such
sections. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which the Employee has agreed 
  
 8. Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 
  
 9. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute
one and the same instruments. 
  
 10. Settlement of Disputes; Arbitration.
All claims by the Employee for benefits under this Agreement shall be directed to and determined by the Board and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Employee in writing
and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Employee for a review of the decision denying a claim and shall further allow
the Employee to appeal to the Board a decision of the Board within sixty (60) days after notification by the Board that the Employee’s claim has been denied. Any further dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration in Philadelphia, Pennsylvania in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

  

 7 

 11. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below:

  
 11.1 “Cause” means Employee’s conviction of
any felony, Employee’s commission of any act of fraud or embezzlement, or Employee’s unauthorized use or disclosure of confidential information or trade secrets of the Company or its subsidiaries. 
  
 11.2 “Change of Control” shall mean “Change of Control”
as defined in the ViroPharma Incorporated Stock Option Plan. 
  
 11.3 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. References to specific sections of the code shall include any successors thereto. 
  
 11.4 “Disability” shall be deemed the reason for the termination by
the Company of the Employee’s employment if, as a result of the Employee’s incapacity due to physical or mental illness, the Employee shall have been absent from the full-time performance of the Employee’s duties with the Company for
a period of six (6) consecutive months, the Company shall have given the Employee a Notice of Termination for Disability and, within thirty (30) days after such Notice of Termination is given, the Employee shall not have returned to the full-time
performance of the Employee’s duties. 
  
 11.5 “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended from time to time. 
  
 11.6 “Good Reason” for termination by the Employee of the Employee’s employment shall mean the occurrence (without the Employee’s express written consent) of any one of the following acts by the
Company, or failures by the Company to act, unless, in the case of any act or failure to act described in subsections (a), (d), or (e) below, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof: 
  
 (a) the assignment by
the Company to the Employee of any duties inconsistent with the Employee’s status as an employee of the Company or a substantial adverse alteration in the nature or status of the Employee’s responsibilities; 
  
 (b) a reduction by the Company in the Employee’s annual base salary as
in effect on the date hereof or as the same may be increased from time to time except for across-the-board salary reductions similarly affecting all Employees of the Company and all Employees of any Person in control of the Company; 
  
 (c) the relocation by the Company of its principal executive offices to a
location more than 30 miles from the Company’s principal offices on the date of this Agreement or the Company’s requiring the Employee to be based anywhere other than the Company’s principal executive offices except for required
travel on the Company’s business to an extent substantially consistent with the Employee’s present business travel obligations; 
  

 8 

 (d) the failure by the Company to pay to the Employee any portion of the Employee’s current
compensation except pursuant to an across-the-board compensation deferral similarly affecting all Employees of the Company and all Employees of any Person in control of the Company, or to pay to the Employee any portion of an installment of deferred
compensation under any deferred compensation program of the Company, within thirty (30) days of the date such compensation is due; 
  
 (e) the failure by the Company to continue to provide the Employee with benefits substantially similar to those enjoyed by the Employee under any of the
Company’s pension, life insurance medical, health and accident, or disability plans in which the Employee was participating immediately preceding such failure, the taking of any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive the Employee of any material fringe benefit enjoyed by the Employee immediately preceding such failure, or the failure by the Company to provide the Employee with the number of paid vacation days to
which the Employee is entitled on the basis of years of service with the Company in accordance, with the Company’s normal vacation policy in effect immediately preceding such failure. 
  
 11.7 “Person” shall have the meaning given in section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; provided, however, that a Person shall not include (a) the Company or any of its subsidiaries, (b) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries, (c) an underwriter temporarily holding securities pursuant to an offering of such securities, or (d) a corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company. 
  

 9 

 IN WITNESS WHEREOF, this Agreement has been executed, as of the date first above written, on behalf of
this Company by its duly authorized officer and by the Employee. 
  

					
	 ATTEST:
	 	 VIROPHARMA INCORPORATED

			
	     /s/ Thomas F. Doyle

	 	 By:
	 	     /s/ Michel de Rosen

	 Secretary
	 	 	 	     Michel de Rosen

	 	 	 	 	     Chief Executive Officer and President

		
	 	 	 EMPLOYEE

			
	 	 	 By:
	 	     /s/ Claude H. Nash

	 	 	 	 	       Claude H. Nash

  

 10 

 EXHIBIT A 
  

RELEASE 
  
 In consideration for the above consideration and the promises contained in that certain Second Amended and Restated Severance Agreement dated as of
September 1, 2002 between you and ViroPharma Incorporated (the “Company”), the sufficiency of which are hereby acknowledged, you hereby agree of your own free will, to voluntarily waive, release and forever discharge the Company and its
subsidiaries, affiliates, predecessors, officers, employees and directors of and from any and all actions, causes of actions, suits, grievances, claims, debts, charges, complaints, contracts (whether oral or written, express or implied from any
source), claims for recall or reinstatement and promises, whatsoever, in law or equity, which you or your heirs, executors, administrators, successors and assigns, may have, or may have knowledge of, or may be charged with knowledge of, as of the
date of this Agreement, for, upon, or by reason of any matter, cause or thing whatsoever, including, but not limited to, any and all matters arising out of your employment by the Company and the cessation of said employment, and including but not
limited to, any violation of: 
  

	 	(a)	 	Title VII of the Civil Rights Act of 1964, as amended; 

  

	 	(b)	 	Sections 1981 through 1988 of Title 42 of the United States Code; 

  

	 	(c)	 	The Employee Retirement Income Security Act of 1974, as amended; 

  

	 	(d)	 	The Vocational Rehabilitation Act of 1973, as amended; 

  

	 	(e)	 	The Age Discrimination in Employment Act of 1967, as amended; 

  

	 	(f)	 	The Older Workers Benefit Protection Act of 1990, as amended; 

  

	 	(g)	 	The Americans with Disabilities Act of 1990, as amended; 

  

	 	(h)	 	The Pennsylvania Human Relations Act, 43 P.S. sections 951, et. seq.; 

  

	 	(i)	 	Any other federal, state or local labor, whistleblower, wage and hour or human rights law; and 

  

	 	(j)	 	Any other alleged violation of any local, state or federal law, regulation or ordinance and/or public policy, contract, tort or common law having any bearing whatsoever on the terms
and conditions and/or cessation of your employment with the Company which you ever had, now has or may have as of the date of execution of this Agreement. 

  

 11 

 IN WITNESS WHEREOF, this Release has been executed, as of the date written below by the undersigned in favor of
ViroPharma Incorporated. 
  

	
	 EMPLOYEE:

	
	

	 Claude H. Nash

	
	 ACCEPTED:

	
	 VIROPHARMA INCORPORATED

  

			
	 By:
	 	

		
	 Name:
	 	

		
	 Title:
	 	

  

 12Exchange Agreement

 Exhibit 10.32 
  
 EXCHANGE AGREEMENT 
  
 THIS EXCHANGE AGREEMENT (this “Agreement”), dated as of October 2, 2003 (the “Effective Date”), is made by and between
Everspring Master Fund Ltd. (“Everspring”) and ViroPharma Incorporated (the “Company”). 
  
 Whereas, Everspring owns certain of the Company’s 6% Convertible Subordinated Notes due March 1, 2007 (the “Notes”); and 

 
 Whereas, the Company wishes to offer shares of the Company’s common
stock to Everspring in exchange for the Notes, and Everspring wishes to accept such offer, pursuant to the exemption from registration provided by Section 3(a)(9) (“Section 3(a)(9)”) under the Securities Act of 1933, as amended (the
“Securities Act”); 
  
 In consideration of the
mutual promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 
  
 1. Exchange; Exchange Date. On the terms and subject to the conditions set forth in this Agreement, on the Exchange
Date (as defined below), the Company will deliver to Everspring shares (the “Shares”) of the Company’s common stock, par value $.002 per share (the “Common Stock”), in exchange for Notes currently held by
Everspring (the “Exchangeable Notes”) with an aggregate face amount equal to one million dollars ($1,000,000) (subject to adjustment as provided herein, the “Aggregate Face Amount”). The exchange of Shares for
Exchangeable Notes pursuant to this Agreement is referred to herein as the “Exchange” and the date on which the Exchange occurs is referred to herein as the “Exchange Date”. 
  
 2. Pricing Period; Pricing Notice. The Exchange Date shall occur on
the second (2nd) Business Day immediately following the last Trading Day of the Pricing Period. “Pricing
Period” means the period of five (5) consecutive Trading Days beginning on (and including) the Trading Day immediately following the Effective Date; provided, however, that Everspring shall have the right, during the Pricing
Period, to notify the Company in writing that it wishes to accelerate the Pricing Period (a “Pricing Notice”) and, upon delivery of a Pricing Notice to the Company, the term “Pricing Period” shall mean the period of
five (5) consecutive Trading Days ending on (and including) the date on which such notice is delivered. 

 3. Exchange Ratio. (a) The number of Shares that the Company will deliver to Everspring in
exchange for the Exchangeable Notes shall be calculated using the following formula: 
  

							
	 	  	X	  	=	  	 (Y) x (A/ B)

	 	  	 	  	 	  	         C

				
	 where:            
	  	X	  	=	  	 the number of Shares to be issued to Everspring;

	 	  	Y	  	=	  	 the Aggregate Face Amount;

	 	  	A	  	=	  	 $550;

	 	  	B	  	=	  	 $1,000; and

	 	  	C	  	=	  	 the Exchange Price (as defined below).

  
 In the event that any
fractional Share would be issuable pursuant to the foregoing formula, the number of Shares issuable will be rounded up to the next highest whole number. 
  
 (b) “Exchange Price” means 90% of the average of the VWAPs for each of the five (5) consecutive Trading Days occurring during the Pricing
Period; provided, however, that in no event shall the Exchange Price be lower than $2.40 (such amount subject to adjustment in the event of a stock split, stock dividend or similar event). “VWAP” means the dollar
volume-weighted average price for the Common Stock on the Nasdaq National Market (the “Principal Market”) during the period beginning at 9:30 a.m. (eastern time) and ending at 4:00 p.m. (eastern time) as reported by Bloomberg
Financial Markets (“Bloomberg”) through its “Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30 a.m. (eastern time) and ending at 4:00 p.m. (eastern time) as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for
such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.);
provided, however, that the calculation of VWAP for a particular Trading Day shall exclude any block trade of ten thousand (10,000) shares or greater that is executed on such day. “Trading Day” means any day during
which the Principal Market is open for business and on which trading in the Common Stock on the Principal Market has not been suspended or otherwise curtailed or limited. “Business Day” means any day other than a Saturday, Sunday or
other day on which commercial banks or the New York Stock Exchange are authorized or required by law to close in New York, New York. 
  
 (c) In the case of a dispute as to the number of Shares issuable pursuant to the Exchange, or any component of such calculation, the Company shall issue
to Everspring on the Exchange Date the number of Shares that are not disputed and at the same time shall submit the disputed calculations to a nationally-recognized independent accounting firm selected mutually by the Company and Everspring within
two (2) Business Days following the receipt by either party of written notice of any such dispute, provided that if the Company 
  

 -2- 

 and Everspring are unable to agree on such accounting firm within two (2) Business Days following receipt of such notice,
the Company shall promptly cause its independent accountants to select such accounting firm. The Company and Everspring shall each use commercially reasonable efforts to cause such accountant to calculate the number of Shares issuable as provided
herein and to notify the Company and Everspring of the results in writing no later than two (2) Business Days following the day on which such accountant received the disputed calculations (the “Dispute Procedure”). Such
accountant’s calculation shall be deemed conclusive absent manifest error. The fees of such accountant shall be borne by the party whose calculations were most at variance with those of such accountant. 
  
 4. Conditions to Exchange. (a) The obligation of the Company to
deliver the Shares to Everspring pursuant to the Exchange is subject to the satisfaction, as of the Exchange Date, of each of the following conditions, provided that such conditions are for the Company’s sole benefit and may be waived by the
Company in its sole discretion: 
  
 (i) the
representations and warranties of Everspring in this Agreement shall be true and correct as of the date when made and as of the Exchange Date as though made at that time (except for representations and warranties that speak as of a specific date);

  
 (ii) Everspring shall have performed,
satisfied and complied with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Everspring at or prior to the Exchange Date; and 
  
 (iii) Everspring shall have tendered the Exchangeable Notes
to the Company in the form required by this Agreement. 
  
 (b) The
obligation of Everspring hereunder to deliver the Exchangeable Notes to the Company pursuant to the Exchange is subject to the satisfaction, as of the Exchange Date, of each of the following conditions, provided that such conditions are for
Everspring’s sole benefit and may be waived by Everspring in its sole discretion: 
  
 (i) the Common Stock shall be authorized for quotation on the Principal Market, trading in the Common Stock shall not have been suspended
by the Principal Market, and the Company shall not have received notice of any pending or threatened proceeding or other action to delist or suspend trading in the Common Stock; 
  
 (ii) the representations and warranties of the Company in this Agreement shall be true and correct as of the
date when made and as of the Exchange Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Company shall have performed, satisfied and complied with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied with by the Company on or prior to the Exchange Date; 
  

 -3- 

 (iii) Everspring shall have received the opinion of the Company’s counsel dated as
of the Exchange Date, in form, scope and substance reasonably satisfactory to Everspring and in substantially the form of Exhibit A attached hereto; 
  
 (iv) the Company shall have delivered to Everspring the Shares in the form required by this Agreement; 
  
 (v) the Company’s Board of Directors shall have adopted
resolutions approving this Agreement and the transactions contemplated hereby (the “Resolutions”), and the Resolutions shall be in full force and effect and shall not have been amended or revised in any respect from the forms
attached to the certificate delivered pursuant to clause (vii) below; 
  
 (vi) the Company shall have delivered to Everspring a certificate evidencing the incorporation and good standing of the Company issued by the state of its incorporation as of a recent date; and 
  
 (vii) the Company shall have delivered to Everspring a
certificate, executed by the Company’s Secretary or Assistant Secretary, dated the Exchange Date, and attached to which shall be a certified copy of its Certificate of Incorporation, a copy of it Bylaws as currently in effect, and the
Resolutions, such certificate to state that the Resolutions and the Company’s Certificate of Incorporation and Bylaws are each in full force and effect on the Exchange Date, and have not been amended or revised in any respect from the forms
attached thereto. 
  
 5. Representations and Warranties of
Everspring. Everspring hereby represents and warrants to the Company as of the Effective Date and as of the Exchange Date (except for representations and warranties that speak as of a specific date), as follows: 
  
 (i) Authorization; Enforceability. Everspring
has the requisite power and authority to enter into and perform this Agreement. The execution and delivery of this Agreement by Everspring and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary
corporate action. This Agreement constitutes a valid and binding obligation of Everspring enforceable against Everspring in accordance with its terms. 
  
 (ii) Investment Intent. Everspring is entering into this Agreement for its own account for investment purposes and not with a view
to the distribution of the Shares, and has no present arrangement to sell the Shares to or through any person or entity; provided, however, that by making such representations, Everspring does not agree to hold the Shares for any minimum or other
specific term and reserves the right to dispose of the Shares, and to enter into other transactions with respect to the Shares, at any time in accordance with federal and state securities laws applicable to such disposition or transaction.

  

 -4- 

 (iii) Ownership of Notes. Everspring owns the Exchangeable Notes beneficially and
of record, free and clear of any liens, claims or encumbrances incurred by or through Everspring, and has not paid to any person, directly or indirectly, any commission or other remuneration for soliciting the Exchange. 
  
 (iv) Ownership of Company Common Stock. As of the date
hereof, Everspring owns and, as of the Exchange Date and after giving effect to the transactions contemplated by this Agreement, including the receipt of the Shares, will own, beneficially and of record, less than five percent (5%) of the number of
shares of Common Stock then outstanding. 
  
 6. Representations
and Warranties of the Company. The Company hereby represents and warrants to Everspring as of the Effective Date and as of the Exchange Date (except for representations and warranties that speak as of a specific date), and agrees with
Everspring, as follows: 
  
 (i) Due
Incorporation. The Company is duly incorporated and in good standing under the laws of the State of Delaware, and has all requisite corporate authority to own its properties and to carry on its business as now being conducted. 
  
 (ii) Authorization; Enforceabilty. The Company
has the power and authority to enter into and perform its obligations under this Agreement, including without limitation, the power and authority to issue and deliver the Shares pursuant to the Exchange. The execution and delivery of this Agreement
by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company, and no consent or authorization of any person or entity is required that has not been
obtained prior to the Effective Date. This Agreement constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (a) as rights to indemnification and contribution may be limited by
federal or state securities laws and policies underlying such laws and (b) as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies. 
  
 (iii) No Conflict. The terms of this Agreement, and the consummation of the transactions contemplated hereby, do not violate,
contravene, conflict with or constitute a default or create a lien, charge or encumbrance under any organizational documents of the Company, any agreements to which the Company is a party or to which its assets are bound, or any order or decree of
any court or regulatory body. 
  
 (iv)
Reservation of Shares; Valid Issuance; Preemptive Rights. The Company has duly and validly authorized and reserved for issuance to Everspring pursuant to the Exchange at least 229,167 shares of its Common Stock. When issued and delivered
pursuant to the Exchange, and upon receipt by the Company of the Exchangeable Notes, the Shares will be duly and validly issued, fully paid, and non-assessable, 
  

 -5- 

 free and clear of any liens, claims or encumbrances. Neither the Exchange nor the performance by the
Company of its obligations under this Agreement will trigger any preemptive, “poison-pill”, anti-takeover, anti-dilution, reset or other rights that would require the issuance of securities of the Company to any person. 
  
 (v) Common Stock; Reporting Requirements. The Common
Stock is registered pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company’s Annual Report on Form 10-K for the year ended December 31, 2002, and all documents filed by the Company
pursuant to the reporting requirements of the Exchange Act since the date on which such Form 10-K was filed with the Securities and Exchange Commission, complied in all material respects with such requirements and the rules and regulations
promulgated thereunder. 
  
 (vi) Listing.
As of the Effective Date, the Common Stock (including the Shares) is listed and eligible for trading on the Nasdaq National Market; and the Company is in compliance in all material respects with all continued listing requirements of such market. As
of the Effective Date, the Company has not received any notice or inquiry from such market regarding any failure to comply with such listing requirements or the termination of the listing of the Common Stock. 
  
 (vii) Non-Public Information. The Company has not
disclosed any material non-public information to Everspring. 
  
 (viii) No Broker. The Company has not paid to any person, directly or indirectly, any commission or other remuneration for soliciting the Exchange. 
  
 (ix) No Reliance. In entering into this Agreement, the Company (i) is not relying on any advice or
representation of Everspring (other than the representations of Everspring contained herein), (ii) has not received from Everspring any assurance or guarantee as to the merits (whether legal, regulatory, tax, financial or otherwise) of the Exchange
or entering into this Agreement, (iii) has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent that it has deemed necessary, and (iv) has entered into this Agreement based on its own
independent judgment and on the advice of its advisors as it has deemed necessary, and not on any view (whether written or oral) expressed by Everspring. Everspring is not now nor has it ever been a financial advisor to, or other fiduciary with
respect to, the Company. 
  
 (x) Bankruptcy
Protection. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”) or any similar state bankruptcy law nor
does the Company have any knowledge or reason to believe that its creditors intend to initiate an involuntary proceeding under the Bankruptcy Code or any such state law. 
  
 (xi) Solvency. To the Company’s knowledge, as of the Effective Date and, based upon fair and
reasonable estimates made by the Company, after giving effect to 
  

 -6- 

 the Exchange, (a) the fair value of the Company’s assets exceeds the current market value of its
liabilities, contingent or otherwise, as determined in accordance with generally accepted accounting principles, and (b) the Company reasonably anticipates that it is able to pay its debts as they mature. 
  
 7. Agreements. The parties agree as follows: 
  
 (i) Issuance of Shares. The issuance of the Shares
pursuant to the Exchange shall be made in compliance with the provisions and requirements of Section 3(a)(9) and any applicable state securities law. 
  
 (ii) Delivery of Notes. On the Exchange Date, Everspring shall deliver the Exchangeable Notes to the Company by instructing its
custodian to deliver such Notes to such account or accounts as the Company may specify in writing on or before the Business Day immediately preceding the Exchange Date, and shall execute such documents and take such further action as may be
reasonably necessary in order to transfer to the Company all right, title and interest to the Exchangeable Notes. 
  
 (iii) Delivery of Shares; Legends. On the Exchange Date, the Company shall deliver certificates representing the Shares to
Everspring or, if Everspring so requests on or before the Business Day immediately preceding the Exchange Date, and provided the Company’s transfer agent is then participating in The Depository Trust Company (“DTC”) Fast
Automated Securities Transfer Program, by crediting the Shares to Everspring’s or its designee’s account with DTC through its Deposit Withdrawal Agent Commission system. Certificates evidencing the Shares issued on the Exchange Date shall
be free of all restrictive or other legends. The Shares shall be freely tradable upon the issuance thereof pursuant to the Exchange, and the Company shall, on or before the Exchange Date, notify its transfer agent that the Shares constitute freely
tradable securities, and provide Everspring with written evidence of such notification. 
  
 (iv) Listing of Common Stock. The Company shall use commercially reasonable efforts to maintain the listing of the Common Stock
(including the Shares) on the Principal Market while Everspring continues to hold any Shares. If the Company applies to have the Common Stock traded on any other stock exchange or market, it will include the Shares in such application. 

 
 (v) Termination and Cash Payment upon Certain
Events. In the event that, for any reason within its control, the Company fails to deliver the number of Shares to which Everspring is entitled hereunder, in freely tradable form in the manner provided herein, on or before the close of business
on the third (3rd) Business Day immediately following the Exchange Date, Everspring may, at its option, terminate
the Exchange by delivering written notice thereof to the Company, in which event the Company will deliver to Everspring, on the first Business Day following the Company’s receipt of such notice, immediately available funds in an amount equal to
the Aggregate Face Amount multiplied by 550/1,000, against delivery of the Exchangeable Notes by Everspring to the Company. 
  

 -7- 

 (vi) Payment Set Aside. To the extent that the delivery of the Shares to
Everspring pursuant to the Exchange, or any other payment made pursuant to this Agreement for or with respect to the Exchangeable Notes, is declared to be fraudulent or preferential, set aside, recovered from, or otherwise restored to the Company or
to a trustee, receiver or any other person or entity under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then, to the extent of any such restoration, the obligation or
part thereof represented by the Exchangeable Notes to which such delivery or payment relates shall be revived and continued in full force and effect as if such delivery had not been made or such enforcement or setoff had not occurred and, in such
event, Everspring shall promptly return to the Company the Shares and any such payment. 
  
 8. Miscellaneous. 
  
 (i) Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force
and effect without said provision; provided that in such case the parties shall negotiate in good faith to replace such provision. 
  
 (ii) Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Neither party may assign its rights or obligations under this Agreement, except that the Company may assign this Agreement, and its
rights and obligations hereunder, to the surviving company in the event of a merger or consolidation involving the Company, and to the acquiring entity in the event of a sale of all or substantially all of the Company’s assets or other similar
transaction. 
  
 (iii) Governing Law;
Jurisdiction. This Agreement shall be governed by and construed under the laws of the State of Delaware applicable to contracts made and to be performed entirely within the State of Delaware. Each party hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts sitting in Wilmington, Delaware, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. In any claim or action commenced in connection with a dispute hereunder, the prevailing party shall be entitled to reimbursement of all reasonable legal fees and expenses. 
  

 -8- 

 (iv) Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. A party may deliver executed copies of this Agreement to the other party by facsimile transmission. 
  
 (v) Headings. The headings used in this Agreement are
used for convenience only and are not to be considered in construing or interpreting this Agreement. 
  
 (vi) Other Definitional Provisions. All definitions contained in this Agreement are applicable equally to the singular and plural
forms of the terms defined. The words “hereof”, “herein” and “hereunder” and words of similar import referring to this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. 
  
 (vii)
Notices. Any notice, demand or request required or permitted to be given by either party pursuant to the terms of this Agreement shall be in writing and shall be deemed delivered (i) when delivered personally or by verifiable facsimile
transmission, unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to an overnight courier
and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid), addressed as follows: 
  
 to Everspring: 
  
 767 Third Avenue, 38th Floor 
 New York, NY 10017 
 Attn: Brian Yeh/Ted Kalem 
 Fax:  (212) 504-8264 
  
 with copy to: 
  
 Duval & Stachenfeld LLP 
 300 East 42nd Street 
 New York, NY 10017 
 Attn:  Robert L. Mazzeo 
 Fax:  (212) 883-8883 
  
 to the Company: 
  
 405 Eagleview Boulevard 
 Exton, PA 19341 
 Attn: Vincent Milano, Chief Financial Officer 
 Fax:  (610) 458-7380 
  

 -9- 

 with copy to: 
  

Thomas F. Doyle, Esq. 
 Vice President and General Counsel 
 ViroPharma Incorporated 
 405 Eagleview Boulevard 
 Exton, PA 19341 
 Fax:  (610) 458-2017 
  
 A party may from time to time change its address for notices by giving at
least 10 days’ written notice of such changed address to the other party hereto. 
  
 (viii) Entire Agreement; Amendments; No Agreement as to Future Exchanges. This Agreement constitutes the entire agreement between
the parties with regard to the subject matter hereof, superseding all prior agreements or understandings, whether written or oral, between or among the parties. Except as expressly provided herein, neither this Agreement nor any term hereof may be
amended except pursuant to a written instrument executed by Everspring and the Company, and no provision hereof may be waived other than by a written instrument signed by the party against whom enforcement of any such waiver is sought. The parties
acknowledge that no agreement or understanding currently exists between them with regard to any exchanges of securities other than the Exchange. 
  
 (ix) No Strict Construction. The language used in this Agreement is and will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied against any party. 
  
 (x) Expenses. The Company and Everspring each shall pay all costs and expenses that it incurs in connection with the negotiation,
execution, delivery and performance of this Agreement, provided, however, that the Company shall reimburse Everspring for all out-of-pocket expenses (including without limitation legal fees and expenses) incurred by it in connection
the negotiation, preparation, execution, delivery and performance of this Agreement in an amount not to exceed fifteen thousand dollars ($15,000). 
  
 (xi) Confidentiality. Each party (the “Receiving Party”) agrees (i) to keep all Confidential Information (as
defined below) that it receives from the other party (the “Transmitting Party”) strictly confidential, (ii) not to disclose any such Confidential Information to any third party other than employees and agents of the Receiving Party
who have a need to know such Confidential Information for the purpose of effecting the Exchange and who have been made aware of the confidentiality obligations imposed hereby, and (iii) not to use any such Confidential Information except in
connection with the Exchange. “Confidential Information” means all non-public information that Disclosing Party designates as being confidential or that under the circumstances surrounding the disclosure thereof would reasonably be
considered to constitute Confidential Information of the Disclosing 
  

 -10- 

 Party, but shall not include any information that (i) is or subsequently becomes publicly available
without a breach by Receiving Party, or any of its employees, agents or affiliates, of any obligation owed Disclosing Party or (ii) became known to Receiving Party prior to Disclosing Party’s disclosure of such information to Receiving Party as
shown by Receiving Party’s written records. Notwithstanding the foregoing, Receiving Party may disclose Confidential Information to the extent required to be disclosed by law, rule, regulation, administrative or legal process. 
  
 [Signature Page to Follow] 
  

 -11- 

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

			
	 VIROPHARMA INCORPORATED

		
	 By:
	 	/s/    VINCENT J. MILANO
	 	 	

	 	 	       Name: Vincent J. Milano

	 	 	       Title: Chief Financial Officer and Treasurer

	
	 EVERSPRING MASTER FUND LTD.

		
	 By:
	 	/s/    THEODORE E. KALEM
	 	 	

	 	 	       Name: Theodore E. Kalem

	 	 	       Title: Managing Member

	 	 	       Its:

  

 -12-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}]]