Document:

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                                                                   EXHIBIT 10.27

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.

                                 $150,000,000

                            VIROPHARMA INCORPORATED

                6% Convertible Subordinated Debentures Due 2007

                              PURCHASE AGREEMENT

                               February 24, 2000
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                                                               February 24, 2000

Morgan Stanley & Co. Incorporated
U.S. Bancorp Piper Jaffray Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036

Dear Sirs and Mesdames:

     VIROPHARMA INCORPORATED, a Delaware corporation (the "Company"), proposes
to issue and sell to the several purchasers named in Schedule I hereto (the
"Initial Purchasers") $150,000,000 principal amount of its 6% Convertible
Subordinated Notes due 2007 (the "Firm Securities") to be issued pursuant to the
provisions of an Indenture (the "Indenture") between the Company and Summit
Bank, as Trustee (the "Trustee"). The Company also proposes to issue and sell to
the Initial Purchasers not more than an additional $30,000,000 principal amount
of its 6% Convertible Subordinated Notes due 2007 (the "Additional Securities")
if and to the extent that you shall have determined to exercise, on behalf of
the Initial Purchasers, the right to purchase such 6% Convertible Subordinated
Notes due 2007 granted to the Initial Purchasers in Section 2 hereof. The Firm
Securities and the Additional Securities are hereinafter collectively referred
to as the "Securities". The Securities will be convertible into shares of Common
Stock, $.002 par value, of the Company (the "Underlying Securities").

     The Securities and the Underlying Securities will be offered without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
only to qualified institutional buyers in compliance with the exemption from
registration provided by Rule 144A under the Securities Act and to a limited
number of institutional accredited investors (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) that deliver a letter in the form annexed
to the Final Memorandum (as defined below).

     The Initial Purchasers and their direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement dated the date
hereof between the Company and the Initial Purchasers (the "Registration Rights
Agreement").

     In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum (the "Preliminary Memorandum") and a
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final offering memorandum (the "Final Memorandum" and, with the Preliminary
Memorandum, each a "Memorandum") including a description of the terms of the
Securities and the Underlying Securities, the terms of the offering and a
description of the Company. Unless otherwise indicated, any reference herein to
a Memorandum shall include all documents incorporated therein by reference. The
terms "supplement", "amendment" and "amend" as used herein with respect to a
Memorandum shall include all documents deemed to be incorporated by reference in
the Preliminary Memorandum or Final Memorandum that are filed subsequent to the
date of such Memorandum and before the date you have sold all of the Securities
in accordance with this Agreement with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act").

     1.   Representations and Warranties. The Company represents and warrants to
and agrees with, the Initial Purchasers that:

               (a)  (i) Each document, if any, filed or to be filed pursuant to
          the Exchange Act and incorporated by reference in either Memorandum
          complied, or will comply when so filed, in all material respects with
          the Exchange Act and the applicable rules and regulations of the
          Commission thereunder and (ii) the Preliminary Memorandum does not
          contain and the Final Memorandum, in the form used by the Initial
          Purchasers to confirm sales and on the Closing Date (as defined in
          below) and the Option Closing Date (as defined below), will not
          contain any untrue statement of a material fact or omit to state a
          material fact necessary to make the statements therein, in the light
          of the circumstances under which they were made, not misleading,
          except that the representations and warranties set forth in this
          paragraph do not apply to statements or omissions in either Memorandum
          based upon information relating to any Initial Purchaser furnished to
          the Company in writing by such Initial Purchaser through you expressly
          for use therein.

               (b)  The Company has been duly incorporated, is validly existing
          as a corporation in good standing under the laws of the State of
          Delaware, has the corporate power and authority to own its property
          and to conduct its business as described in each Memorandum and is
          duly qualified to transact business and is in good standing in each
          jurisdiction in which the conduct of its business or its ownership or
          leasing of property requires such qualification, except to the extent
          that the failure to be so qualified or be in good standing would not
          have a material adverse effect on the Company.

               (c)  The Company does not own or control, directly or
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          indirectly, any interest in any other corporation, association, or
          other business entity.

               (d)  This Agreement has been duly authorized, executed and
          delivered by the Company.

               (e)  The authorized capital stock of the Company conforms as to
          legal matters to the description thereof contained in the Final
          Memorandum.

               (f)  The shares of the Company's capital stock outstanding on the
          date hereof have been duly authorized and are validly issued, fully
          paid and non-assessable.

               (g)  The Securities have been duly authorized and, when executed
          and authenticated in accordance with the provisions of the Indenture
          and delivered to and paid for by the Initial Purchasers in accordance
          with the terms of this Agreement, will be valid and binding
          obligations of the Company, enforceable in accordance with their
          terms, subject to applicable bankruptcy, insolvency or similar laws
          affecting creditors' rights generally and general principles of
          equity, and will be entitled to the benefits of the Indenture and the
          Registration Rights Agreement.

               (h)  The Underlying Securities reserved for issuance upon
          conversion of the Securities have been duly authorized and reserved
          and, when issued upon conversion of the Securities in accordance with
          the terms of the Securities, will be validly issued, fully paid and
          non-assessable, and the issuance of the Securities is not, and the
          issuance of the Underlying Securities will not be, subject to any
          preemptive or similar rights.

               (i)  Each of the Indenture and the Registration Rights Agreement
          has been duly authorized, and when executed and delivered by the
          Company, will be a valid and binding agreement of the Company,
          enforceable in accordance with its terms, subject to applicable
          bankruptcy, insolvency or similar laws affecting creditors' rights
          generally and general principles of equity, and except as rights to
          indemnification and contribution under the Registration Rights
          Agreement may be limited under applicable law.

               (j)  The execution and delivery by the Company of, and the
          performance by the Company of its obligations under, this Agreement,
          the Indenture, the Registration Rights Agreement and the Securities
          will not contravene any provision of applicable law or the certificate
          of incorporation or by-laws of the Company or
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          any agreement or other instrument binding upon the Company that is
          material to the Company, or any judgment, order or decree of any
          governmental body, agency or court having jurisdiction over the
          Company, and no consent, approval, authorization or order of, or
          qualification with, any governmental body or agency is required for
          the performance by the Company of its obligations under this
          Agreement, the Indenture, the Registration Rights Agreement or the
          Securities, except such as may be required by the securities or Blue
          Sky laws of the various states in connection with the offer and sale
          of the Securities and by Federal and state securities laws with
          respect to the Company's obligations under the Registration Rights
          Agreement.

               (k)  There has not occurred any material adverse change, or any
          development involving a prospective material adverse change, in the
          condition, financial or otherwise, or in the earnings, business or
          operations of the Company from that set forth in the Final Memorandum
          (exclusive of any amendments or supplements thereto subsequent to the
          date of this Agreement).

               (l)  There are no legal or governmental proceedings pending or
          threatened to which the Company is a party or to which any of the
          properties of the Company is subject other than proceedings that would
          not have a material adverse effect on the Company or on the power or
          ability of the Company to perform its obligations under this
          Agreement, the Indenture, the Registration Rights Agreement or the
          Securities or to consummate the transactions contemplated by the Final
          Memorandum.

               (m)  The Company is not, and after giving effect to the offering
          and sale of the Securities and the application of the proceeds thereof
          as described in each Memorandum, will not be an "investment company"
          as such term is defined in the Investment Company Act of 1940, as
          amended.

               (n)  The Company (i) is in compliance with any and all applicable
          foreign, federal, state and local laws and regulations relating to the
          protection of human health and safety, the environment or hazardous or
          toxic substances or wastes, pollutants or contaminants (including,
          without limitation, all laws and regulations relating to biohazardous
          substances materials or radioactive materials) ("Environmental Laws"),
          (ii) has received all permits, licenses or other approvals required of
          it under applicable Environmental Laws to conduct its business and
          (iii) is in compliance with all terms and conditions of any such
          permit, license or approval, except where such noncompliance with
          Environmental Laws, failure to receive required permits, licenses
<PAGE>

          or other approvals or failure to comply with the terms and conditions
          of such permits, licenses or approvals would not, singly or in the
          aggregate, have a material adverse effect on the Company.

               (o)  There are no costs or liabilities associated with
          Environmental Laws (including, without limitation, any capital or
          operating expenditures required for clean-up, closure of properties or
          compliance with Environmental Laws or any permit, license or approval,
          any related constraints on operating activities and any potential
          liabilities to third parties) which would be reasonably expected,
          singly or in the aggregate, to have a material adverse effect on the
          Company.

               (p)  Neither the Company nor any affiliate (as defined in Rule
          501(b) of Regulation D under the Securities Act, an "Affiliate") of
          the Company has directly, or through any agent, (i) sold, offered for
          sale, solicited offers to buy or otherwise negotiated in respect of,
          any security (as defined in the Securities Act) which is or will be
          integrated with the sale of the Securities in a manner that would
          require the registration under the Securities Act of the Securities or
          (ii) engaged in any form of general solicitation or general
          advertising in connection with the offering of the Securities (as
          those terms are used in Regulation D under the Securities Act) or
          solicited offers to buy or offered to sell any of the Securities in
          any manner involving a public offering within the meaning of Section
          4(2) of the Securities Act.

               (q)  It is not necessary in connection with the offer, sale and
          delivery of the Securities to the Initial Purchasers in the manner
          contemplated by this Agreement to register the Securities under the
          Securities Act or to qualify the Indenture under the Trust Indenture
          Act of 1939, as amended.

               (r)  The Securities satisfy the requirements set forth in Rule
          144A(d)(3) under the Securities Act.

               (s)  Subsequent to the respective dates as of which information
          is given in each Memorandum, (i) the Company has not incurred any
          material liability or obligation, direct or contingent, nor entered
          into any material transaction not in the ordinary course of business;
          (ii) the Company has not purchased any of its outstanding capital
          stock, nor declared, paid or otherwise made any dividend or
          distribution of any kind on its capital stock other than ordinary and
          customary dividends; and (iii) there has not been any material change
          in the capital stock, short-term debt or long-term debt of the
          Company, except in each case as described in such Memorandum.
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               (t)  The Company has good and marketable title in fee simple to
          all real property and good and marketable title to all personal
          property owned by it which is material to the business of the Company,
          in each case free and clear of all liens, encumbrances and defects
          except such as are described in each Memorandum or such as do not
          materially affect the value of such property and do not interfere with
          the use made and proposed to be made of such property by the Company;
          and any real or personal property and buildings held under lease by
          the Company are held by it under valid, subsisting and enforceable
          leases with such exceptions as are not material and do not interfere
          with the use made and proposed to be made of such property and
          buildings by the Company, in each case except as described in each
          Memorandum.

               (u)  The Company owns or possesses adequate licenses or other
          rights to use the patents and patent applications set forth on Exhibit
                                                                         -------
          A hereto (the "Company Patents"), copyrights, trademarks, service
          -
          marks, trade names, technology and know-how (including trade secrets
          and other unpatented and/or unpatentable proprietary rights) necessary
          (in any material respect) to conduct its business in the manner
          described in each Memorandum (collectively, the "Company Intellectual
          Property"); the Company is not obligated to pay a royalty, grant a
          license, or provide other consideration to any third party in
          connection with the Company Intellectual Property other than as
          disclosed in such Memorandum, and, except as disclosed in the Final
          Memorandum, the Company has not received any notice of infringement or
          conflict with (and the Company does not know of any infringement of
          conflict with) asserted rights of others with respect to the Company
          Intellectual Property, in each case which would reasonably be expected
          to result in any material adverse effect on the condition, financial
          or otherwise, or in the earnings, business or operations of the
          Company; and, except as disclosed in each Memorandum, the discoveries,
          inventions, products or processes of the Company referred to in such
          Memorandum do not, to the best knowledge of the Company, infringe or
          conflict with any right or patent of any third party, or any
          discovery, invention, product or process which is the subject of a
          patent application filed by any third party, known to the Company,
          which could reasonably be expected to have a material adverse effect
          on the condition, financial or otherwise, or in the earnings, business
          or operations of the Company. Except as described in each Memorandum,
          no third party, including any academic or governmental organization,
          possesses rights to the Company Intellectual Property which, if
          exercised, could enable such party to develop products competitive to
          those of the Company or could reasonably be expected to have a
<PAGE>

          material adverse effect on the ability of the Company to conduct its
          business in the manner described in such Memorandum

               (v)  The Company has duly and properly filed or caused to be
          filed with the United States Patent and Trademark Office (the "PTO")
          and applicable foreign and international patent authorities all patent
          applications listed on Exhibit A (the "Company Patent Applications");
                                 ---------
          in connection with the filing of the Company Patent Applications, the
          Company conducted reasonable investigations of the published
          literature and patent references relating to the inventions claimed in
          such applications; to the Company's knowledge, it has complied with
          the PTO's duty of candor and disclosure for the Company Patent
          Applications and has made no misrepresentation in the Company Patent
          Applications; the Company is unaware of any facts material to a
          determination of patentability regarding the Company Patent
          Applications not called to the attention of the PTO; the Company is
          unaware of any facts not called to the attention of the PTO which
          would preclude the grant of a patent for the Company Patent
          Applications; and the Company has no knowledge of any facts which
          would preclude it from having clear title to the Company Patent
          Applications.

               (w)  No material labor dispute with the employees of the Company
          exists, except as described in or contemplated by each Memorandum, or,
          to the knowledge of the Company, is imminent; and the Company is not
          aware of any existing, threatened or imminent labor disturbance by the
          employees of any of its principal suppliers, manufacturers or
          contractors that could result in any material adverse effect on the
          Company.

               (x)  The Company is insured by insurers of recognized financial
          responsibility against such losses and risks and in such amounts as
          are prudent and customary in the business in which it is engaged; the
          Company has not been refused any insurance coverage sought or applied
          for; and the Company has no reason to believe that it will not be able
          to renew its existing insurance coverage as and when such coverage
          expires or to obtain similar coverage from similar insurers as may be
          necessary to continue its business at a cost that could not have a
          material adverse effect on the Company.

               (y)  The Company possesses all certificates, authorizations and
          permits issued by the appropriate federal, state or foreign regulatory
          authorities necessary to conduct its business as presently conducted,
          including without limitation, all such
<PAGE>

          certificates, authorizations and permits required by the United States
          Food and Drug Administration (the "FDA"), the Nuclear Regulatory
          Commission (the "NRC") or any other federal, state or foreign agencies
          or bodies engaged in the regulation of pharmaceuticals or biohazardous
          substances, except where the failure to possess such certificates,
          authorizations and permits would not, singly or in the aggregate, have
          a material adverse effect on the Company; and the Company has not
          received any notice of proceedings relating to the revocation or
          modification of any such certificate, authorization or permit which,
          singly or in the aggregate, if the subject of an unfavorable decision,
          ruling or finding, could result in a material adverse effect on the
          Company. The Company is in compliance in all material respects with
          all applicable federal, state, local and foreign laws, regulations,
          orders and decrees governing its business as currently conducted,
          including without limitation, all regulations prescribed by the FDA,
          the NRC or any other federal, state or foreign agencies or bodies
          engaged in the regulation of pharmaceuticals, biohazardous substances
          or radioactive materials, except where noncompliance would not, singly
          or in the aggregate, have a material adverse effect on the Company.

               (z)  The Company maintains a system of internal accounting
          controls sufficient to provide reasonable assurance that (i)
          transactions are executed in accordance with management's general or
          specific authorizations; (ii) transactions are recorded as necessary
          to permit preparation of financial statements in conformity with
          generally accepted accounting principles and to maintain asset
          accountability; (iii) access to assets is permitted only in accordance
          with management's general or specific authorization; and (iv) the
          recorded accountability for assets is compared with the existing
          assets at reasonable intervals and appropriate action is taken with
          respect to any differences.

               (aa) KPMG LLP are, and during the periods covering their report
          included or incorporated by reference in each Memorandum were,
          independent accountants with respect to the Company as required by the
          Securities Act. The financial statements of the Company (together with
          the related notes thereto) included in or incorporated by reference in
          each Memorandum present fairly the financial position and results of
          operations of the Company at the respective dates and for the
          respective periods to which they apply, subject to normal year-end
          adjustments. Such financial statements (together with the related
          notes thereto) have been prepared in accordance with generally
          accepted accounting principles consistently applied throughout the
          periods involved except as otherwise stated therein.
<PAGE>

               (bb) Except as described in each Memorandum, there are no
          contracts, agreements or understandings between the Company and any
          person granting such person the right to require the Company to file a
          registration statement under the Securities Act with respect to any
          securities of the Company or to require the Company to include such
          securities with the Securities and Underlying Securities to be
          registered pursuant to the Registration Rights Agreement. All persons
          who possess such rights have effectively waived them with respect to
          the registration of the Underlying Shares pursuant to the Registration
          Rights Agreement.

               (cc) Each material contract, agreement and license to which the
          Company is bound is legal, valid, binding, enforceable, and in full
          force and effect against the Company, and to the knowledge of the
          Company, each other party thereto. Neither the Company nor, to the
          Company's knowledge, any other party is in breach or default with
          respect to any such contract, agreement and license, and, to the
          Company's knowledge, no event has occurred which with notice or lapse
          of time would constitute a breach or default, or permit termination,
          modification, or acceleration, under any such contract, agreement or
          license. No party has repudiated any provision of any such contract,
          agreement or license.

               (dd) The Company has reviewed its operations to evaluate the
          extent to which the business or operations of the Company has been or
          will be affected by the Year 2000 Problem (that is, any significant
          risk that computer hardware or software applications used by the
          Company did not or will not, in the case of dates or time periods
          occurring after December 31, 1999, function at least as effectively as
          in the case of dates or time periods occurring prior to January 1,
          2000); as a result of such review, (i) the Company has no reason to
          believe, and does not believe, that (A) there are any issues related
          to the Company's preparedness to address the Year 2000 Problem that
          are of a character required to be described or referred to in each
          Memorandum which have not been accurately described in such Memorandum
          and (B) the Year 2000 Problem had or will have a material adverse
          effect on the Company, or result in any material loss or interference
          with the business or operations of the Company; and (ii) the Company
          reasonably believes, after due inquiry, that the suppliers, vendors,
          customers or other material third parties used or served by the
          Company have addressed or will address the Year 2000 Problem in a
          timely manner, except to the extent that a failure to address the Year
          2000 Problem by any supplier, vendor, customer or material third party
          would not have a material adverse effect on the Company.
<PAGE>

     2.   Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Initial Purchasers, and each Initial Purchaser, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Company the respective principal amount of Firm Securities set forth in
Schedule I hereto opposite its name at a purchase price of 97% of the principal
amount thereof (the "Purchase Price") plus accrued interest, if any, to the
Closing Date.

     On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Initial Purchasers the Additional Securities, and the Initial Purchasers
shall have a one-time right to purchase, severally and not jointly, up to
$30,000,000 principal amount of Additional Securities at the Purchase Price plus
accrued interest, if any, to the date of payment and delivery. If Morgan Stanley
& Co. Incorporated ("Morgan Stanley"), on behalf of the Initial Purchasers,
elects to exercise such option, Morgan Stanley shall so notify the Company in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the principal amount of Additional Securities to be purchased by
the Initial Purchasers and the date on which such Additional Securities are to
be purchased. Such date may be the same as the Closing Date but not earlier than
the Closing Date nor later than ten business days after the date of such notice.
Additional Securities may be purchased as provided in Section 4 hereof solely
for the purpose of covering over-allotments made in connection with the offering
of the Firm Securities. If any Additional Securities are to be purchased, each
Initial Purchaser agrees, severally and not jointly, to purchase the principal
amount of Additional Securities (subject to such adjustments to eliminate
fractional Securities as you may determine) that bears the same proportion to
the total principal amount of Additional Securities to be purchased as the
principal amount of Firm Securities set forth in Schedule I opposite the name of
such Initial Purchaser bears to the total principal amount of Firm Securities.

     The Company hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Initial Purchasers, it will not, during the period
ending 90 days after the date of the Final Memorandum, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (A) the sale of the
Securities under this Agreement, (B) the issuance of the Underlying Securities
upon conversion of the Securities, (C) the issuance by the Company of shares of
Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on
<PAGE>

the date of and described in the Final Memorandum, (D) the issuance of
additional options under the Company's existing stock option plans, provided
that such stock options are not exercisable during such 90 day period, or (E)
the issuance by the Company of Common Stock pursuant to the Stock Purchase
Agreement between the Company and American Home Products Corporation, dated as
of December 9, 1999. The Initial Purchasers acknowledge that discussions by the
Company during such 90 day period regarding the issuance of shares of the
Company's Common Stock following such 90 day period to a marketing, development
or manufacturing collaborator will not violate the terms of this paragraph.

     3.   Terms of Offering. You have advised the Company that the Initial
Purchasers will make an offering of the Securities purchased by the Initial
Purchasers hereunder on the terms to be set forth in the Final Memorandum, as
soon as practicable after this Agreement is entered into as in your judgment is
advisable.

     4.   Payment and Delivery. Payment for the Firm Securities shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Firm Securities for the respective accounts of the
several Initial Purchasers at 10:00 a.m., New York City time, on March 1, 1999
at a closing to be held at the offices of Ropes & Gray, One International Place,
Boston, Massachusetts or at such other time and place on the same or such other
date, not later than March 10, 2000, as shall be designated in writing by you.
The time and date of such payment are hereinafter referred to as the "Closing
Date."

     Payment for any Additional Securities shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Securities for the respective accounts of the several Initial
Purchasers at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 2 at a closing to be held at the offices of Ropes &
Gray, One International Place, Boston, Massachusetts or at such other time on
the same or on such other date, in any event not later than April 14, 2000, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Option Closing Date."

     Notes representing the Firm Securities and Additional Securities shall be
in certificated form or global form, as specified by you, and registered in such
names and in such denominations as you shall request in writing not later than
one full business day prior to the Closing Date or the Option Closing Date, as
the case may be. The notes evidencing the Firm Securities and Additional
Securities shall be delivered to you on the Closing Date or the Option Closing
Date, as the case may be, for the respective accounts of the several Initial
Purchasers, with any transfer taxes payable in connection with the transfer of
the Securities to the Initial Purchasers duly paid, against payment of the
Purchase Price therefor plus accrued interest, if any, to the date of payment
and delivery.
<PAGE>

     5.   Conditions to the Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase and pay for the Securities on
the Closing Date and the Option Closing Date, as the case may be, are subject to
the following conditions:

               (a)  Subsequent to the execution and delivery of this Agreement
          and prior to the Closing Date and the Option Closing Date, as the case
          may be, there shall not have occurred any downgrading, nor shall any
          notice have been given of any intended or potential downgrading or of
          any review for a possible change that does not indicate the direction
          of the possible change, in the rating accorded the Company or any of
          the Company's securities or in the rating outlook for the Company by
          any "nationally recognized statistical rating organization," as such
          term is defined for purposes of Rule 436(g)(2) under the Securities
          Act.

               (b)  Subsequent to the execution and delivery of this Agreement
          and prior to the Closing Date and the Option Closing Date, as the case
          may be, there shall not have occurred any change, or any development
          involving a prospective change, in the condition, financial or
          otherwise, or in the earnings, business or operations of the Company
          from that set forth in the Final Memorandum (exclusive of any
          amendments or supplements thereto subsequent to the date of this
          Agreement) that, in your judgment, is material and adverse and that
          makes it, in your judgment, impracticable to market the Securities on
          the terms and in the manner contemplated in the Final Memorandum.

               (c)  The Initial Purchasers shall have received on the Closing
          Date and the Option Closing Date, as the case may be, a certificate,
          dated such date and signed by an executive officer of the Company, to
          the effect set forth in Section 5(a) and to the effect that the
          representations and warranties of the Company contained in this
          Agreement are true and correct as of such date and that the Company
          has complied with all of the agreements and satisfied all of the
          conditions on its part to be performed or satisfied hereunder on or
          before such date.

        The officer signing and delivering such certificate may rely upon the
     best of his or her knowledge as to proceedings threatened.

               (d)  The Initial Purchasers shall have received on the Closing
          Date and the Option Closing Date, as the case may be, an opinion of
          Pepper, Hamilton LLP, outside counsel for the Company, dated such
          date, to the effect set forth in Exhibit B hereto.
                                           ---------

               (e)  The Initial Purchasers shall have received on the
<PAGE>

          Closing Date and the Option Closing Date, as the case may be, an
          opinion dated such date of Dann, Dorfman, Herrell and Skillman, P.C.,
          special patent counsel to the Company, to the effect set forth in
          Exhibit C.

               (f)  The Initial Purchasers shall have received on the Closing
          Date and the Option Closing Date, as the case may be, an opinion dated
          such date of Roberto Cuca, Esq., internal regulatory counsel to the
          Company, to the effect set forth in Exhibit D hereto.
                                              ---------

               (g)  The Initial Purchasers shall have received on the Closing
          Date and the Option Closing Date, as the case may be, an opinion of
          Ropes & Gray, counsel for the Initial Purchasers, dated such date, in
          a form satisfactory to the Initial Purchasers.

               The opinions of Pepper, Hamilton LLP Dann, Dorfman, Herrell and
          Skillman, P.C., and Roberto Cuca, Esq. described, respectively, in
          Sections 5(d), 5(e) and 5(f) above shall be rendered to the Initial
          Purchasers at the request of the Company and shall so state therein.

               (h)  The Initial Purchasers shall have received, on each of the
          date hereof, the Closing Date and the Option Closing Date, a letter
          dated such date, in form and substance satisfactory to the Initial
          Purchasers, from KPMG LLP, independent public accountants, containing
          statements and information of the type ordinarily included in
          accountants' "comfort letters" to underwriters with respect to the
          financial statements and certain financial information contained in or
          incorporated by reference into the Final Memorandum; provided that the
          letter delivered on the Closing Date shall use a "cut-off date" not
          earlier than the date hereof.

               (i)  The "lock-up" agreements, each substantially in the form of
          Exhibit E hereto, between you and certain shareholders, officers and
          ---------
          directors of the Company relating to sales and certain other
          dispositions of shares of Common Stock or certain other securities,
          delivered to you on or before the date hereof, shall be in full force
          and effect on the Closing Date and the Option Closing Date, as the
          case may be.

               (j)  The Company shall have executed and delivered the Indenture
          and the Registration Rights Agreement and the Trustee shall have
          executed and delivered the Indenture.

The several obligations of the Initial Purchasers to purchase Additional
Securities hereunder are subject to the delivery to you on the Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization, execution and authentication of
the Additional
<PAGE>

Securities and other matters related to the execution and authentication of the
Additional Securities.

     6.   Covenants of the Company. In further consideration of the agreements
of the Initial Purchasers contained in this Agreement, the Company covenants
with each Initial Purchaser as follows:

               (a)  To furnish to you in New York City, without charge, prior to
          10:00 a.m. New York City time on the business day next succeeding the
          date of this Agreement and during the period mentioned in Section
          6(c), as many copies of the Final Memorandum, any documents
          incorporated by reference therein and any supplements and amendments
          thereto as you may reasonably request.

               (b)  Before amending or supplementing either Memorandum, to
          furnish to you a copy of each such proposed amendment or supplement
          and not to use any such proposed amendment or supplement to which you
          reasonably object.

               (c)  If, during such period after the date hereof and prior to
          the date on which all of the Securities shall have been sold by the
          Initial Purchasers in accordance with this Agreement, any event shall
          occur or condition exist as a result of which it is necessary to amend
          or supplement the Final Memorandum in order to make the statements
          therein, in the light of the circumstances when the Final Memorandum
          is delivered to a purchaser, not misleading, or if, in the opinion of
          counsel for the Initial Purchasers, it is necessary to amend or
          supplement the Final Memorandum to comply with applicable law,
          forthwith to prepare and furnish, at its own expense, to the Initial
          Purchasers, either amendments or supplements to the Final Memorandum
          so that the statements in the Final Memorandum as so amended or
          supplemented will not, in the light of the circumstances when the
          Final Memorandum is delivered to a purchaser, be misleading or so that
          the Final Memorandum, as amended or supplemented, will comply with
          applicable law.

               (d)  To endeavor to qualify the Securities for offer and sale
          under the securities or Blue Sky laws of such jurisdictions as you
          shall reasonably request.

               (e)  Whether or not the transactions contemplated in this
          Agreement are consummated or this Agreement is terminated, to pay or
          cause to be paid all expenses incident to the performance of its
          obligations under this Agreement, including: (i) the fees,
          disbursements and expenses of the Company's counsel and the Company's
          accountants in connection with the issuance and sale of
<PAGE>

          the Securities and all other fees or expenses in connection with the
          preparation of each Memorandum and all amendments and supplements
          thereto, including all printing costs associated therewith, and the
          delivering of copies thereof to the Initial Purchasers, in the
          quantities hereinabove specified, (ii) all costs and expenses related
          to the transfer and delivery of the Securities to the Initial
          Purchasers, including any transfer or other taxes payable thereon,
          (iii) the cost of printing or producing any Blue Sky or legal
          investment memorandum in connection with the offer and sale of the
          Securities under state securities laws and all expenses in connection
          with the qualification of the Securities for offer and sale under
          state securities laws as provided in Section 6(d) hereof, including
          filing fees and the reasonable fees and disbursements of one counsel
          for the Initial Purchasers in connection with such qualification and
          in connection with the Blue Sky or legal investment memorandum, (iv)
          any fees charged by rating agencies for the rating of the Securities,
          (v) the fees and expenses, if any, incurred in connection with the
          admission of the Securities for trading in PORTAL or any appropriate
          market system, (vi) the costs and charges of the Trustee and any
          transfer agent, registrar or depositary, (vii) the cost of the
          preparation, issuance and delivery of the Securities, (viii) the costs
          and expenses of the Company relating to investor presentations on any
          "road show" undertaken in connection with the marketing of the
          offering of the Securities, including, without limitation, expenses
          associated with the production of road show slides and graphics, fees
          and expenses of any consultants engaged in connection with the road
          show presentations with the prior approval of the Company and lodging
          expenses of the representatives and officers of the Company and any
          such consultants, and the cost of any aircraft chartered in connection
          with the road show, and (ix) all other costs and expenses incident to
          the performance of the obligations of the Company hereunder for which
          provision is not otherwise made in this Section. It is understood,
          however, that except as provided in this Section, Section 8, and the
          last paragraph of Section 10, the Initial Purchasers will pay all of
          their costs and expenses, including fees and disbursements of their
          counsel, transfer taxes payable on resale of any of the Securities by
          them and any advertising expenses connected with any offers they may
          make.

               (f)  Neither the Company nor any Affiliate will sell, offer for
          sale or solicit offers to buy or otherwise negotiate in respect of any
          security (as defined in the Securities Act) which would be integrated
          with the sale of the Securities in a manner which would require the
          registration under the Securities Act of the Securities.
<PAGE>

               (g)  Neither the Company nor any Affiliate will solicit any offer
          to buy or offer or sell the Securities or the Underlying Securities by
          means of any form of general solicitation or general advertising (as
          those terms are used in Regulation D under the Securities Act) or in
          any manner involving a public offering within the meaning of Section
          4(2) of the Securities Act.

               (h)  While any of the Securities or the Underlying Securities
          remain "restricted securities" within the meaning of the Securities
          Act, to make available, upon request, to any seller of such Securities
          the information specified in Rule 144A(d)(4) under the Securities Act,
          unless the Company is then subject to Section 13 or 15(d) of the
          Exchange Act.

               (i)  To use its best efforts to permit the Securities to be
          designated PORTAL securities in accordance with the rules and
          regulations adopted by the National Association of Securities Dealers,
          Inc. relating to trading in the PORTAL Market.

               (j)  During the period of two years after the Closing Date or the
          Option Closing Date, if later, the Company will not, and will not
          permit any of its affiliates (as defined in Rule 144 under the
          Securities Act) to resell any of the Securities or the Underlying
          Securities which constitute "restricted securities" under Rule 144
          that have been reacquired by any of them.

               (k)  To comply with all of the terms and conditions of the
          Registration Agreement, and all agreements set forth in the
          representation letters of the Company to DTC relating to the approval
          of the Securities by DTC for "book entry" transfer.

               (l)  Prior to any registration of the Securities pursuant to the
          Registration Rights Agreement, or at such earlier time as may be so
          required, to qualify the Indenture under the 1939 Act and to enter
          into any necessary supplemental indentures in connection therewith.

     7.   Offering of Securities. Each Initial Purchaser, severally and not
jointly, represents and warrants that such Initial Purchaser is a qualified
institutional buyer as defined in Rule 144A under the Securities Act (a "QIB").
Each Initial Purchaser, severally and not jointly, agrees with the Company that
(i) it will not solicit offers for, or offer or sell, such Securities by any
form of general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act and (ii) it
will solicit offers for such Securities only from, and will offer such
Securities only to, persons that it reasonably believes to be (A) QIBs or (B)
within the United States, other institutional accredited investors (as defined
in Rule 501(a)(1), (2), (3) or (7)
<PAGE>

under the Securities Act ("institutional accredited investors"), that, in each
case, in purchasing such Securities are deemed to have represented and agreed as
provided in the Final Memorandum under the caption "Transfer Restrictions";
provided that in the case of an institutional accredited investor, each such
institutional accredited investor shall, prior to its purchase of the
Securities, deliver to such Initial Purchaser a letter containing the
representations and agreements set forth in Annex A to the Final Memorandum.

     8.   Indemnity and Contribution.

               (a)  The Company agrees to indemnify and hold harmless each
          Initial Purchaser and each person, if any, who controls any Initial
          Purchaser within the meaning of either Section 15 of the Securities
          Act or Section 20 of the Exchange Act from and against any and all
          losses, claims, damages and liabilities (including, without
          limitation, any legal or other expenses reasonably incurred in
          connection with defending or investigating any such action or claim)
          caused by any untrue statement or alleged untrue statement of a
          material fact contained in either Memorandum (as amended or
          supplemented if the Company shall have furnished any amendments or
          supplements thereto), or caused by any omission or alleged omission to
          state therein a material fact necessary to make the statements therein
          in the light of the circumstances under which they were made not
          misleading, except insofar as such losses, claims, damages or
          liabilities are caused by any such untrue statement or omission or
          alleged untrue statement or omission based upon information relating
          to any Initial Purchaser furnished to the Company in writing by such
          Initial Purchaser through you expressly for use therein; provided,
                                                                   --------
          however, that the foregoing indemnity agreement with respect to the
          -------
          Preliminary Memorandum shall not inure to the benefit of any Initial
          Purchaser from whom the person asserting any such losses, claims,
          damages or liabilities purchased Securities, or any person controlling
          such Initial Purchaser, if a copy of the Final Memorandum (as then
          amended or supplemented if the Company shall have furnished any
          amendments or supplements thereto) was not sent or given by or on
          behalf of such Initial Purchaser to such person at or prior to
          delivery of written confirmation of the sale of the Securities to such
          person, and if the Final Memorandum (as so amended or supplemented)
          would have cured the defect giving rise to such losses, claims,
          damages or liabilities, unless such failure is the result of
          noncompliance by the Company with Section 6(a) hereof.

               (b)  Each Initial Purchaser agrees, severally and not jointly, to
          indemnify and hold harmless the Company, its directors, its officers
          and each person, if any, who controls the Company
<PAGE>

          within the meaning of either Section 15 of the Securities Act or
          Section 20 of the Exchange Act to the same extent as the foregoing
          indemnity from the Company to such Initial Purchaser, but only with
          reference to information relating to such Initial Purchaser furnished
          to the Company in writing by such Initial Purchaser through you
          expressly for use in either Memorandum or any amendments or
          supplements thereto.

               (c)  In case any proceeding (including any governmental
          investigation) shall be instituted involving any person in respect of
          which indemnity may be sought pursuant to Section 8(a) or 8(b), such
          person (the "indemnified party") shall promptly notify the person
          against whom such indemnity may be sought (the "indemnifying party")
          in writing and the indemnifying party, upon request of the indemnified
          party, shall retain counsel reasonably satisfactory to the indemnified
          party to represent the indemnified party and any others the
          indemnifying party may designate in such proceeding and shall pay the
          fees and disbursements of such counsel related to such proceeding. In
          any such proceeding, any indemnified party shall have the right to
          retain its own counsel, but the fees and expenses of such counsel
          shall be at the expense of such indemnified party unless (i) the
          indemnifying party and the indemnified party shall have mutually
          agreed to the retention of such counsel or (ii) the named parties to
          any such proceeding (including any impleaded parties) include both the
          indemnifying party and the indemnified party and representation of
          both parties by the same counsel would be inappropriate due to actual
          or potential differing interests between them. It is understood that
          the indemnifying party shall not, in respect of the legal expenses of
          any indemnified party in connection with any proceeding or related
          proceedings in the same jurisdiction, be liable for the fees and
          expenses of more than one separate firm (in addition to any local
          counsel) for all such indemnified parties and that all such fees and
          expenses shall be reimbursed as they are incurred. Such firm shall be
          designated in writing by Morgan Stanley, in the case of parties
          indemnified pursuant to Section 8(a), and by the Company, in the case
          of parties indemnified pursuant to Section 8(b). The indemnifying
          party shall not be liable for any settlement of any proceeding
          effected without its written consent, but if settled with such consent
          or if there be a final judgment for the plaintiff, the indemnifying
          party agrees to indemnify the indemnified party from and against any
          loss or liability by reason of such settlement or judgment. No
          indemnifying party shall, without the prior written consent of the
          indemnified party, effect any settlement of any pending or threatened
          proceeding in respect of which any indemnified party is or could have
          been a party and indemnity could have been sought
<PAGE>

          hereunder by such indemnified party, unless such settlement includes
          an unconditional release of such indemnified party from all liability
          on claims that are the subject matter of such proceeding.

               (d)  To the extent the indemnification provided for in Section
          8(a) or 8(b) is applicable by its terms but unavailable to an
          indemnified party or insufficient in respect of any losses, claims,
          damages or liabilities referred to therein, then each indemnifying
          party under such paragraph, in lieu of indemnifying such indemnified
          party thereunder, shall contribute to the amount paid or payable by
          such indemnified party as a result of such losses, claims, damages or
          liabilities (i) in such proportion as is appropriate to reflect the
          relative benefits received by the Company on the one hand and the
          Initial Purchasers on the other hand from the offering of the
          Securities or (ii) if the allocation provided by clause (i) of this
          sentence is not permitted by applicable law, in such proportion as is
          appropriate to reflect not only the relative benefits referred to in
          clause (i) of this sentence but also the relative fault of the Company
          on the one hand and of the Initial Purchasers on the other hand in
          connection with the statements or omissions that resulted in such
          losses, claims, damages or liabilities, as well as any other relevant
          equitable considerations. The relative benefits received by the
          Company on the one hand and the Initial Purchasers on the other hand
          in connection with the offering of the Securities shall be deemed to
          be in the same respective proportions as the net proceeds from the
          offering of the Securities (before deducting expenses) received by the
          Company and the total discounts and commissions received by the
          Initial Purchasers, bear to the aggregate offering price of the
          Securities. The relative fault of the Company on the one hand and of
          the Initial Purchasers on the other hand shall be determined by
          reference to, among other things, whether the untrue or alleged untrue
          statement of a material fact or the omission or alleged omission to
          state a material fact relates to information supplied by the Company
          or by the Initial Purchasers and the parties' relative intent,
          knowledge, access to information and opportunity to correct or prevent
          such statement or omission. The Initial Purchasers' respective
          obligations to contribute pursuant to this Section 8 are several in
          proportion to the respective principal amount of Securities they have
          purchased hereunder, and not joint.

               (e)  The Company and the Initial Purchasers agree that it would
          not be just or equitable if contribution pursuant to this Section 8
          were determined by pro rata allocation (even if the Initial Purchasers
          were treated as one entity for such purpose) or by any other method of
          allocation that does not take account of the
<PAGE>

          equitable considerations referred to in Section 8(d). The amount paid
          or payable by an indemnified party as a result of the losses, claims,
          damages and liabilities referred to in Section 8(d) shall be deemed to
          include, subject to the limitations set forth above, any legal or
          other expenses reasonably incurred by such indemnified party in
          connection with investigating or defending any such action or claim.
          Notwithstanding the provisions of this Section 8, no Initial Purchaser
          shall be required to contribute any amount in excess of the amount by
          which the total price at which the Securities resold by it in the
          initial placement of such Securities were offered to investors exceeds
          the amount of any damages that such Initial Purchaser has otherwise
          been required to pay by reason of such untrue or alleged untrue
          statement or omission or alleged omission. No person guilty of
          fraudulent misrepresentation (within the meaning of Section 11(f) of
          the Securities Act) shall be entitled to contribution from any person
          who was not guilty of such fraudulent misrepresentation. The remedies
          provided for in this Section 8 are not exclusive and shall not limit
          any rights or remedies which may otherwise be available to any
          indemnified party at law or in equity.

               (f)  The indemnity and contribution provisions contained in this
          Section 8 and the representations, warranties and other statements of
          the Company contained in this Agreement shall remain operative and in
          full force and effect regardless of (i) any termination of this
          Agreement, (ii) any investigation made by or on behalf of any Initial
          Purchaser or any person controlling any Initial Purchaser or by or on
          behalf of the Company, its officers or directors or any person
          controlling the Company and (iii) acceptance of and payment for any of
          the Securities.

     9.   Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (i) through (iv) above, such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Securities on the terms and in the manner contemplated in the Final
Memorandum.
<PAGE>

     10.  Effectiveness; Defaulting Initial Purchasers. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.

     If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Initial Purchasers shall fail or refuse to purchase
Securities that it has or they have agreed to purchase hereunder on such date,
and the aggregate principal amount of Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of Securities to be
purchased on such date, the other Initial Purchasers shall be obligated
severally in the proportions that the principal amount of Firm Securities set
forth opposite their respective names in Schedule I bears to the aggregate
principal amount of Firm Securities set forth opposite the names of all such
non-defaulting Initial Purchasers, or in such other proportions as you may
specify, to purchase the Securities which such defaulting Initial Purchaser or
Initial Purchasers agreed but failed or refused to purchase on such date;
provided that in no event shall the principal amount of Securities that any
Initial Purchaser has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 10 by an amount in excess of one-ninth of such
principal amount of Securities without the written consent of such Initial
Purchaser. If, on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase Firm Securities which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of Securities
with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of Firm Securities to be purchased on such date, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Initial Purchaser
or of the Company. In any such case either you or the Company shall have the
right to postpone the Closing Date, but in no event for longer than seven days,
in order that the required changes, if any, in the Final Memorandum or in any
other documents or arrangements may be effected. If, on the Option Closing Date,
any Initial Purchaser or Initial Purchasers shall fail or refuse to purchase
Additional Securities and the aggregate principal amount of Additional
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Additional Securities to be purchased, the
non-defaulting Initial Purchasers shall have the option to (a) terminate their
obligation hereunder to purchase Additional Securities or (b) purchase not less
than the principal amount of Additional Securities that such non-defaulting
Initial Purchasers would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Initial Purchaser from liability in respect of any default of such Initial
Purchaser under this Agreement.

     If this Agreement shall be terminated by the Initial Purchasers, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Initial Purchasers or such Initial
Purchasers as have
<PAGE>

so terminated this Agreement with respect to themselves, severally, for all out-
of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Initial Purchasers in connection with this Agreement
or the offering contemplated hereunder.

     11.  Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

     12.  Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

     13.  Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
<PAGE>

                         Very truly yours,

                         VIROPHARMA INCORPORATED

                            By: /s/ Claude H. Nash
                                ------------------
                            Name: Claude H. Nash
                            Title: Chief Executive Officer

Accepted as of the date hereof

Morgan Stanley & Co. Incorporated
U.S. Bancorp Piper Jaffray Inc.

Acting severally on behalf of themselves and
   the several Initial Purchasers named in
   Schedule I hereto.

   By:  Morgan Stanley & Co. Incorporated

   By: /s/ Albert L. Lord
       ------------------
   Name: Albert L. Lord
   Title: Vice President

<PAGE>

                                   SCHEDULE I

                                                      Principal Amount of Firm
Initial Purchaser                                     Securities to be Purchased
-----------------                                     --------------------------

Morgan Stanley & Co. Incorporated                       $120,000,000
U.S. Bancorp Piper Jaffray Inc.                           30,000,000

Total:                                                  $150,000,000
                                                        ============
<PAGE>

                                                                               2

                                   EXHIBIT A
                                   ---------

                               "Company Patents"
                               -----------------

<TABLE>
<CAPTION>
         Number                  Title                                                          Date
---------------                  -----                                             -----------------
<S>                              <C>                                               <C>
U.S. Pat. No. 5,633,388          Compounds, Compositions and Methods for           Granted 5/27/97
                                 Treatment of Hepatitis C.

U.S. Pat. No. 5,684,024          Compounds Compositions and Methods for            Granted 11/4/97
                                 Treating Influenza.

U.S. Pat. No. 5,830,894          Methods for Preventing and Treating               Granted 11/3/98
                                 Pestivirus Infection and Associated Diseases.

U.S. Pat. No. 5,830,905          Compounds Compositions and Methods for            Granted 11/3/98
                                 Treatment of Hepatitis C.

U.S. Pat. No. 5,821,243          Compounds, Compositions and Methods for           Granted 10/13/98
                                 Treating Influenza.

U.S. Pat. No. 5,935,957          Compounds, Compositions and Methods for           Granted 8/10/99
                                 Treating Influenza.

                                 "Company Patent Applications"
                                 -----------------------------
U.S. Pat. Appl. No.              Compounds Compositions and Methods for            Filed 5/26/98
 09/084,538                      Treatment of Hepatitis C.

U.S. Pat. Appl. No.              Compounds, Compositions and Methods for           Filed 5/24/99
 60/135,585                      Treating or Preventing viral Infections and
                                 Associated Diseases.

U.S. Pat. Appl. No.              Compounds, Compositions and Methods for           Filed 5/24/99
 60/135,586                      Treating or Preventing viral Infections and
                                 Associated Diseases.

U.S. Pat. Appl. No.              Methods for Identifying Inhibitors of RNA         Filed 7/11/96
 08/678,771                      Viruses a.k.a. Methods for Identifying
                                 Inhibitors of Helicase Activity from
                                 Hepatitis C Virus.

**************                   **************                                    ******

                                 "Foreign/International Patent Applications"
                                 -------------------------------------------

PCT/US97/01614                   Methods for Identifying Inhibitors of RNA         Filed 1/17/97
(EPO Appl. No.                   Viruses.
97904912.9; Canada
Appl. No. 2,244,372;
Japan Appl. No. 527126/
1997)

PCT/US99/01985;                  Compounds, Compositions and Methods for           Filed 1/29/99
also India Appl.                 Preventing Pneumovirus Infection.
No. 959/Del
</TABLE>
<PAGE>

                                                                               3

<TABLE>
<S>                      <C>                                                       <C>
PCT/US98/03452           Methods for Preventing and Treating                       Filed 2/23/98
(Australia Appl.         Pestivirus Infection and Associated Diseases.
No.88365/98;
Brazil Appl. No.
PI 9804769.8;
Canada Appl. No.
2,251,646; EPO
Appl. No. 98910034.2;
Japan Appl. No.536935/
1998; S.Korea Appl. No.
98-708402; New Zealand
Appl. No. 332364);

Argentina Appl.          Methods of Preventing and Treating Post                   Filed 7/8/98
No. P 98 01              Virus Infection and Asscociated Diseases
03315, 7/8/98

PCT/US99/07404           Improved Hepatitis C Polymerase Encoding                  Filed 4/1/99
                         Nucleic Acids and Methods of Use Thereof
                         a.k.a Hepatitis C Virus NS5B Compositions and
                         Methods of Use Thereof.

PCT/US97/12799           Compounds Compositions and Methods for                    Filed 7/21/97
(Canada Appl. No.        Treating Influenza
2,260,799; EPO
Appl. No.
97938013.6; Japan
Serial No. 507182/
1998; S.Korea Appl.
No. 10-1999-7000449)
PCT/US99/18785           Compounds, Compositions and Methods for                   Filed 8/19/99
                         Treating or Preventing Viral Infections and
                         Associated Diseases.

Argentina, Chile,        Compounds, Compositions and Methods for Treating          Filed before
Pakistan,                or Preventing Viral Infections and Associated             2/21/00 (or
Philippines,             Diseases.                                                 earlier)
Taiwan and
Venezuela (No.
Appl. number yet)
(based on text of
RT105918785)

PCT/US99/20402           Methods for Treating or Preventing Viral                  Filed 9/3/99
                         Infections and Associated Diseases.
PCT/US99/22195           Methods for Treating or Preventing Viral                  Filed 9/24/99
                         Infections and Associated Diseases.

<CAPTION>

           "Patents and patent applications licensed to the Company"
            -------------------------------------------------------
<S>                      <C>                                                       <C>
U.S. Pat. No. 5,453,433  Thiadiazoles and Antipicornaviral                         Granted 9/26/95
                         Compositions.

U.S. Pat. No. 5,464,848  1,2,4-Oxadiazolyl-phenoxyalkylisoxazoles and              Granted 11/7/95
                         Their Use as Antiviral Agents.

Canadian Pat. Appl.      1,2,4-Oxadiazolyl-phenoxyalkylisoxazoles and              Filed 4/14/93
No. 2094012              Their Use as Antiviral Agents.

PCT/US/95/05790          Thiadiazoles and Their Use as                             Filed 5/10/95
(Canada Appl. No.        Antipicornaviral Agents.
2190130)

</TABLE>
<PAGE>

                                                                               4

<TABLE>
<S>                            <C>                                                 <C>
PCT/US/95/05790                Thiadiazoles and Their Use as                       Filed 5/10/95

(Canada Appl. No.              Antipicornaviral Agents.
2190130)
</TABLE>
<PAGE>

                                                                               5

                                   EXHIBIT B

                        OPINION OF PEPPER, HAMILTON LLP

     The opinion of Pepper, Hamilton LLP, to be delivered pursuant to Section
5(c) of the Purchase Agreement shall be to the effect that:

     A.  The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Final Memorandum and is duly qualified to transact business and
is in good standing in the Commonwealth of Pennsylvania.

     B.  The Purchase Agreement has been duly authorized, executed and delivered
by the Company.

     C.  The authorized capital stock of the Company conforms in all material
respects as to legal matters to the description thereof contained in the Final
Memorandum.

     D.  The shares of common stock outstanding on the Closing Date and the
Option Closing Date, as the case may be, have been duly authorized and are
validly issued, fully paid and non-assessable.

     E.  The Securities have been duly authorized by the Company and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance with the
terms of the Purchase Agreement, will be valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
general principles of equity, and will be entitled to the benefits of the
Indenture and the Registration Rights Agreement pursuant to which such
Securities are to be issued.

     F.  The Underlying Securities reserved for issuance upon conversion of the
Securities have been duly authorized and reserved and, when issued upon
conversion of the Securities in accordance with the terms of the Securities,
will be validly issued, fully paid and non-assessable and the issuance of the
Underlying Securities will not be subject to any preemptive or similar rights.
<PAGE>

                                                                               6

     G.   Each of the Indenture and the Registration Rights Agreement has been
duly authorized, executed and delivered by, and is a valid and binding agreement
of, the Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
general principles of equity and except as rights to indemnification and
contribution under the Registration Rights Agreement may be limited under
applicable law.

     H.   The execution and delivery by the Company of, and the performance by
the Company of its obligations under the Purchase Agreement, the Indenture, the
Registration Rights Agreement and the Securities will not contravene any
provision of applicable law or the certificate of incorporation or by-laws of
the Company or, to the best of such counsel's knowledge, any agreement or other
instrument binding upon the Company that is an exhibit to any of the documents
incorporated by reference into the Final Memorandum or, to the best of such
counsel's knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under the Purchase Agreement, the Indenture, the Registration
Rights Agreement or the Securities, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Securities and by Federal and state securities laws with respect
to the Company's obligations under the Registration Rights Agreement.

     I.   After due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened which the Company is a party or
to which any of the properties of the Company is subject other than proceedings
which such counsel believes are not likely to have a material adverse effect on
the Company or on the power or ability of the Company to perform its obligations
under the Purchase Agreement, the Indenture, the Registration Rights Agreement
or the Securities or to consummate the transactions contemplated by the Final
Memorandum.

     J.   The Company is not, and after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as described in
the Final Memorandum, will not be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.

     K.   The statements in the Final Memorandum under the captions "Business--
Strategic Relationships," "Description of Notes," "Description of Capital
Stock," "Private Placement" and "Transfer Restrictions" insofar as such
<PAGE>

                                                                               7

statements constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly summarize the matters referred to therein.

     L.   The statements in the Final Memorandum under the caption "Certain
Federal Income Tax Considerations," insofar as such statements constitute a
summary of the United States federal tax laws referred to therein, are accurate
and fairly summarize in all material respects the United States federal tax laws
referred to therein.

     M.   To the best of such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to include any securities with the
Securities and Underlying Securities to be registered pursuant to the
Registration Rights Agreement, which have been effectively waived with respect
thereto.

     N.   Each document incorporated by reference in the Final Memorandum
(except for financial statements and schedules and other financial and
statistical data included therein as to which such counsel need not express any
opinion), complied as to form when filed with the Commission in all material
respects with the Exchange Act and the rules and regulations of the Commission
thereunder.

     O.   Such counsel has no reason to believe that (except for financial
statements and schedules and other financial and statistical data as to which
such counsel need not express any belief) the Final Memorandum when used by the
Initial Purchasers to confirm sales contained, or as of the date such opinion is
delivered contains, any untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.

     P.   Based upon the representations, warranties and agreements of the
Company in Sections 1(p), 1(r), 6(f), 6(g) and 6(j) of the Purchase Agreement
and of the Initial Purchasers in Section 7 of the Purchase Agreement, it is not
necessary in connection with the offer, sale and delivery of the Securities to
the Initial Purchasers under the Purchase Agreement or in connection with the
initial resale of such Securities by the Initial Purchasers in accordance with
Section 7 of the Purchase Agreement to register the Securities under the
Securities Act of 1933 or to qualify the Indenture under the Trust Indenture Act
of 1939, it being understood that no opinion is expressed as to any subsequent
resale of any Security or Underlying Security.

<PAGE>

                                                                               8

                                   EXHIBIT C

              OPINION OF DANN, DORFMAN, HERRELL AND SKILLMAN, P.C.

     The opinion of Dann, Dorfman, Herrell and Skillman, P.C., to be delivered
pursuant to Section 5(d) of the Purchase Agreement shall be to the effect that:

     A.  Such counsel represents the Company in certain matters relating to
intellectual property, including patents, and is familiar with the technology
used by the Company in its business and the manner of its use and has read the
portions of the Final Memorandum entitled "Risk Factors - We depend on patents
and propriety rights, which may offer only limited protection against potential
infringement.  If we are unable to protect our patents and proprietary rights,
our business, financial condition and results of operations will be harmed" and
"Business - Patents and Proprietary Technology" (collectively, the "Intellectual
Property Portion").

     B.  The Intellectual Property Portion contains accurate descriptions of the
Company Patents and patents licensed to the Company and the statements in the
Intellectual Property Portion therein insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to therein,
fairly present the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to therein.

     C.  Such counsel has reviewed the Company Patent Applications filed in the
United States and outside the United States and in the opinion of such counsel
the Company Patent Applications have been properly prepared and filed on behalf
of the Company, and are being diligently pursued by the Company; the inventions
described in the Company Patent Applications are assigned or licensed to the
Company; to such counsel's knowledge, no other entity or individual has any
right or claim of ownership in any of said inventions, Company Patent
Applications, or any patent to be issued therefrom, and in such counsel's
opinion each of the Company Patent Applications discloses patentable subject
matter; to such counsel's knowledge, there are no legal or governmental
proceedings pending (other than the Company Patent Applications) relating to the
Company, the claimed inventions of the Company Patents, or the Company
Intellectual Property, and to such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or others.

     D.  Such counsel has no knowledge of any facts which would preclude the
Company from having valid license rights or clear title to the Company Patents,
and based on representations by the Company that no interests have been conveyed
to third parties which have not been recorded in the PTO, the Company
<PAGE>

                                                                               9

has clear record title to the Company Patents free and clear of any liens or
encumbrances that have been recorded with the PTO.

     E.  To the best of such counsel's knowledge, the Company has complied with
the PTO duty of candor and disclosure for each of the Company Patents, and such
counsel has no knowledge that the Company lacks or will be unable to obtain
patent rights to inventions claimed in the Company Patents and the Company
Patent Applications necessary for the conduct of its business as now proposed to
be conducted by the Company as described in the Final Memorandum.

     F.  Such counsel has no knowledge of any facts material to a determination
of patentability regarding the Company Patent Applications not called to the
attention of the PTO, and is unaware of any facts not called to the attention of
the PTO which would preclude the grant of a patent for the Company Patent
Applications.

     G.  Such counsel if not aware of any basis for a finding of
unenforceability or invalidity of any Company Patents, and (except as disclosed
in the Final Memorandum) to the best of such counsel's knowledge, the Company
has not received any notice of infringement of or conflict with rights or claims
of others with respect to the Company Intellectual Property;

     H.  Based on a review of the third party patent rights made known to
counsel and discussion with Company scientific personnel, such counsel has no
knowledge of any patent rights of others which are or would be infringed by
specific products or processes referred to in the Final Memorandum, which
infringement, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in any material adverse effect on the
condition, financial or otherwise, or in the earnings, business or operations of
the Company; and

     I.  Such counsel has no reason to believe that the Intellectual Property
Portion of the Final Memorandum, in the form used by the Initial Purchasers to
confirm sales contained, or as of the Closing Date or the Option Closing Date,
as the case may be, contains any untrue statement of a material fact or omitted,
or as of the Closing Date or the Option Closing Date, as the case may be, omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
With respect to paragraph I above, counsel may state that its belief is based
upon its participation in the preparation of the Final Memorandum (and any
<PAGE>

                                                                              10

amendments or supplements thereto) and review and discussion of the contents
thereof (including the review of, but not participation in the preparation of,
the documents incorporated by reference therein), but are without independent
check or verification except as specified.
<PAGE>

                                                                              11

                                   EXHIBIT D

                         OPINION OF ROBERTO CUCA, ESQ.

     The Opinion of Roberto Cuca, Esq., to be delivered pursuant to Section 5(e)
of the Purchase Agreement shall be to the effect that:

     A.  I represent the Company in certain matters relating to the United
States Federal Food Drug, and Cosmetic Act (the "FFDC Act") and related
government regulatory matters, and I am familiar with the drugs under
development and clinical testing by the Company. I have made such investigations
of fact and law as I have deemed necessary in connection with the opinion set
forth below.

     B.  Based upon and subject to the foregoing, and subject to the additional
qualifications set forth below, I am of the opinion that the portions of the
Final Memorandum entitled "Risk Factors" and "Business-Government Regulation",
insofar as they describe the FFDC Act, related government regulatory matters and
FDA regulations and requirements and the application thereof to the Company's
business and operations (collectively, the "Regulatory Portion"), are accurate
and complete in all material respects and fairly present such matters.

     C.  In addition to rendering the foregoing opinion, I confirm that I have
participated in conferences with other officers and representatives of the
Company, representatives of the independent accountants for the Company, counsel
for the Initial Purchasers and representatives of the Initial Purchasers in
which the contents of the Final Memorandum and related matters were discussed
and that, while I did not participate in similar conferences in respect of the
documents filed by the Company under the Exchange Act and incorporated by
reference in the Final Memorandum, and except for the matters referred to above,
am not passing upon and do not assume responsibility for the factual accuracy,
completeness or fairness of the statements contained in the Final Memorandum, no
facts have come to my attention that would cause me to have reason to believe
that the Regulatory Portion of the Final Memorandum, in the form used by the
Initial Purchasers to confirm sales contained, or as of the Closing Date or the
Option Closing Date, as the case may be, contains any untrue statement of a
material fact or omitted, or as of the Closing Date or the Option Closing Date,
as the case may be, omits to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
<PAGE>

                                                                              12

With respect to paragraph C above, counsel may state that its belief is based
upon its participation in the preparation of the Final Memorandum (and any
amendments or supplements thereto) and review and discussion of the contents
thereof (including the review of, but not participation in the preparation of,
the documents incorporated by reference therein), but are without independent
check or verification except as specified.
<PAGE>

                                                                               1

                                   EXHIBIT E

     [FORM OF LOCK-UP LETTER]

                                                  _____________, 2000

Morgan Stanley & Co. Incorporated
U.S. Bancorp Piper Jaffray Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York  10036

Dear Sirs and Mesdames:

     The undersigned understands that Morgan Stanley & Co. Incorporated ("Morgan
Stanley") proposes to enter into a Purchase Agreement (the "Purchase Agreement")
with ViroPharma Incorporated, a Delaware corporation (the "Company"), providing
for the offering (the "Offering") by the several Initial Purchasers, including
Morgan Stanley (the "Initial Purchasers"), of approximately $100,000,000
principal amount of the Company's [__%] Convertible Subordinated Debentures Due
2007 (the "Securities").  The Securities will be convertible into shares of
Common Stock, $.002 par value of the Company (the "Common Stock").

     To induce the Initial Purchasers that may participate in the Offering to
continue their efforts in connection with the Offering, the undersigned hereby
agrees that, without the prior written consent of Morgan Stanley on behalf of
the Initial Purchasers, it will not, during the period commencing on the date
hereof and ending 90 days after the date of the final offering memorandum
relating to the Offering (the "Final Memorandum"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise.  The foregoing sentence shall not apply to transactions
relating to shares of Common Stock or
<PAGE>

                                                                               2

other securities acquired in open market transactions after the completion of
the Offering. In addition, the undersigned agrees that, without the prior
written consent of Morgan Stanley on behalf of the Initial Purchasers, it will
not, during the period commencing on the date hereof and ending 90 days after
the date of the Final Memorandum, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.

     Notwithstanding the foregoing (i) gifts and transfers by will or intestacy
or (ii) transfers to (A) the undersigned's members, partners, affiliates or
immediate family or (B) a trust, the beneficiaries of which are the undersigned
and/or members of the undersigned's immediate family, shall not be prohibited by
this agreement; provided, that (x) the donee or transferee agrees in writing to
be bound by the foregoing in the same manner as it applies to the undersigned
and (y) if the donor or transferor is a reporting person subject to Section
16(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), any gifts or
transfers made in accordance with this paragraph shall not require such person
to, and such person shall not voluntarily, file a report of such transaction on
Form 4 under the Exchange Act. "Immediate family" shall mean spouse, lineal
descendants, father, mother, brother or sister of the transferor and father,
mother, brother or sister of the transferor's spouse.

     Whether or not the Offering actually occurs depends on a number of factors,
including market conditions.  Any Offering will only be made pursuant to a
Purchase Agreement, the terms of which are subject to negotiation between the
Company and the Initial Purchasers.

     This agreement shall automatically terminate in the event that the Purchase
Agreement is not entered into by March 31, 2000.

                                     Very truly yours,

                                     _________________________
                                     (Name)

                                     _________________________
                                     (Address)<PAGE>

                                                                   Exhibit 10.28

                         REGISTRATION RIGHTS AGREEMENT

                                 by and among

                            VIROPHARMA INCORPORATED

                                  as Issuer,

                                      and

                       MORGAN STANLEY & CO. INCORPORATED

                                      and

                        U.S. BANCORP PIPER JAFFRAY INC.

                             as Initial Purchasers

                           Dated as of March 1, 2000
<PAGE>

     THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of March 1,
2000, by and among ViroPharma Incorporated, a Delaware corporation (the
"Company"), and Morgan Stanley & Co. Incorporated and U.S. Bancorp Piper Jaffray
Inc. (together, the "Initial Purchasers") pursuant to the Purchase Agreement,
dated February 24, 2000 (the "Purchase Agreement") among the Company and the
Initial Purchasers. In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution of this Agreement is a condition to
the closing under the Purchase Agreement.

     The Company agrees with the Initial Purchasers, (i) for their benefit as
Initial Purchasers and (ii) for the benefit of the beneficial owners (including
the Initial Purchasers) from time to time of the Notes (as defined herein) and
the beneficial owners from time to time of the Underlying Common Stock (as
defined herein) issued upon conversion of the Notes (each of the foregoing a
"Holder" and together the "Holders"), as follows:

     Section 1.  Definitions.  Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:

     "Affiliate" means with respect to any specified person, an "affiliate," as
defined in Rule 144, of such person.

     "Amendment Effectiveness Deadline Date" has the meaning set forth in
Section 2(d) hereof.

     "Applicable Conversion Price"  as of any date of determination means the
Conversion Price in effect as of such date of determination or, if no Notes are
then outstanding, the Conversion Price that would be in effect were Notes then
outstanding.

     "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.

     "Common Stock" means the shares of common stock, par value $.002 per share,
of the Company and any other shares of common stock as may constitute "Common
Stock" for purposes of the Indenture, including the Underlying Common Stock.

     "Conversion Price" has the meaning assigned such term in the Indenture.

     "Damages Accrual Period" has the meaning set forth in Section 2(e) hereof.

     "Damages Payment Date" means each interest payment date under the Indenture
in the case of Notes, and each March 1 and September 1 in the case of the
Underlying Common Stock.

     "Deferral Notice" has the meaning set forth in Section 3(i) hereof.

                                      -1-
<PAGE>

     "Deferral Period" has the meaning set forth in Section 3(i) hereof.

     "Effectiveness Deadline Date" has the meaning set forth in Section 2(a)
hereof.

     "Effectiveness Period" means the period commencing on the date hereof and
ending on the date that all Registrable Securities have ceased to be Registrable
Securities.

     "Event" has the meaning set forth in Section 2(e) hereof.

     "Event Date" has the meaning set forth in Section 2(e) hereof.

     "Event Termination Date" has the meaning set forth in Section 2(e) hereof.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.

     "Filing Deadline Date" has the meaning set forth in Section 2(a) hereof.

     "Holder" has the meaning set forth in the second paragraph of this
Agreement.

     "Indenture" means the Indenture, dated as of March 1, 2000, between the
Company and Summit Bank, as trustee, pursuant to which the Notes are being
issued.

     "Initial Purchasers" means Morgan Stanley & Co. Incorporated and U.S.
Bancorp Piper Jaffray Inc.

     "Initial Shelf Registration Statement" has the meaning set forth in Section
2(a) hereof.

     "Issue Date" means March 1, 2000.

     "Liquidated Damages Amount" has the meaning set forth in Section 2(e)
hereof.

     "Losses" has the meaning set forth in Section 6 hereof.

     "Material Event" has the meaning set forth in Section 3(i) hereof.

     "Notes" means the 6% Convertible Subordinated Notes due 2007 of the Company
to be purchased pursuant to the Purchase Agreement.

     "Notice and Questionnaire" means a written notice delivered to the Company
containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex B to the Offering
Memorandum of the Company issued February 24, 2000 relating to the Notes.

     "Notice Holder" means, on any date, any Holder that has delivered a Notice
and Questionnaire to the Company on or prior to such date.

                                      -2-
<PAGE>

     "Purchase Agreement" has the meaning set forth in the preamble hereof.

     "Prospectus" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.

     "Record Holder" means (i) with respect to any Damages Payment Date relating
to any Notes as to which any such Liquidated Damages Amount has accrued, the
holder of record of such Note on the record date with respect to the interest
payment date under the Indenture on which such Damages Payment Date shall occur
and (ii) with respect to any Damages Payment Date relating to the Underlying
Common Stock as to which any such Liquidated Damages Amount has accrued, the
registered holder of such Underlying Common Stock on the preceding February 15
in the case of a March 1 Damages Payment Date and on the preceding August 15 in
the case of a September 1 Damages Payment Date.

     "Registrable Securities" means the Notes until such Notes have been
converted into or exchanged for the Underlying Common Stock and, at all times
subsequent to any such conversion or exchange the Underlying Common Stock and
any securities into or for which such Underlying Common Stock has been converted
or exchanged, and any security issued with respect thereto upon any stock
dividend, split or similar event until, in the case of any such security, (A)
the earliest of (i) its effective registration under the Securities Act and
resale in accordance with the Registration Statement covering it, (ii)
expiration of the holding period that would be applicable thereto under Rule
144(k) were it not held by an Affiliate of the Company or (iii) its sale to the
public pursuant to Rule 144 (or any similar provision then in force, but not
Rule 144A) under the Securities Act, and (B) as a result of the event or
circumstance described in any of the foregoing clauses (i) through (iii), the
legend with respect to transfer restrictions required under the Indenture are
removed or removable in accordance with the terms of the Indenture or such
legend, as the case may be.

     "Registration Expenses" has the meaning set forth in Section 5 hereof.

     "Registration Statement" means any registration statement of the Company
that covers any of the Registrable Securities pursuant to the provisions of this
Agreement including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

     "Restricted Securities" means "Restricted Securities" as defined in Rule
144.

     "Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

                                      -3-
<PAGE>

     "Rule 144A" means Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

     "SEC" means the Securities and Exchange Commission.

     "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.

     "Shelf Registration Statement" has the meaning set forth in Section 2(a)
hereof.

     "Special Counsel" means Ropes & Gray or such other single successor counsel
as shall be specified by the Holders of a majority of the Registrable
Securities, but which may, with the written consent of the Initial Purchasers
(which shall not be unreasonably withheld), be another nationally recognized law
firm experienced in securities law matters designated by the Company, the
reasonable fees and expenses of which will be paid by the Company pursuant to
Section 5 hereof.

     "Subsequent Shelf Registration Statement" has the meaning set forth in
Section 2(b) hereof.

     "TIA" means the Trust Indenture Act of 1939, as amended.

     "Trustee" means Summit Bank, the Trustee under the Indenture.

     "Underlying Common Stock" means the Common Stock into which the Notes are
convertible or issued upon any such conversion.

     Section 2.  Shelf Registration.  (a) The Company shall use its best efforts
to prepare and file or cause to be prepared and filed with the SEC, as soon as
practicable but in any event by the date (the "Filing Deadline Date") ninety
(90) days after the Issue Date, a Registration Statement for an offering to be
made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act
(a "Shelf Registration Statement") registering the resale from time to time by
Holders thereof of all of the Registrable Securities (the "Initial Shelf
Registration Statement"). The Initial Shelf Registration Statement shall be on
Form S-3 or another appropriate form permitting registration of such Registrable
Securities for resale by such Holders in accordance with the methods of
distribution elected by the Holders and set forth in the Initial Shelf
Registration Statement. The Company shall use its reasonable efforts to cause
the Initial Shelf Registration Statement to be declared effective under the
Securities Act as promptly as is practicable but in any event by the date (the
"Effectiveness Deadline Date") that is one hundred eighty (180) days after the
Issue Date, and to keep the Initial Shelf Registration Statement (or any
Subsequent Shelf Registration Statement) continuously effective under the
Securities Act until the expiration of the Effectiveness Period. At the time the
Initial Shelf Registration Statement is declared effective, each Holder that
became a Notice Holder on or prior to the date ten (10) Business Days prior to
such time of effectiveness shall be named as a selling securityholder in the
Initial Shelf Registration Statement and the related Prospectus in such a manner
as to permit

                                      -4-
<PAGE>

such Holder to deliver such Prospectus to purchasers of Registrable Securities
in accordance with applicable law. None of the Company's security holders (other
than the Holders of Registrable Securities) shall have the right to include any
of the Company's securities in the Shelf Registration Statement. The Holders
acknowledge that the filing of a separate registration statement for an offering
to be made on a continuous basis pursuant to Rule 415 of the Securities Act
registering the resale of shares of Common Stock held by, or issuable upon
conversion of outstanding securities held by, PSV, LP (the "PSV Shelf
Registration Statement") will not be deemed to be a breach of this Agreement.

       (b)  If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company shall use its
reasonable efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within thirty (30) days of such
cessation of effectiveness in a manner reasonably expected to obtain the
withdrawal of the order suspending the effectiveness thereof, or file either an
amendment to the Shelf Registration Statement or an additional Shelf
Registration Statement covering all of the securities that as of the date of
such filing are Registrable Securities (a "Subsequent Shelf Registration
Statement"). If a Subsequent Shelf Registration Statement is filed, the Company
shall use its reasonable efforts to cause the Subsequent Shelf Registration
Statement to become effective as promptly as is practicable after such filing
and to keep such Registration Statement (or subsequent Shelf Registration
Statement) continuously effective until the end of the Effectiveness Period.

       (c)  The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement,
if required by the Securities Act or as reasonably requested by the Initial
Purchasers or by the Trustee on behalf of the Holders of the Registrable
Securities covered by such Shelf Registration Statement.

       (d)  Each Holder of Registrable Securities agrees that if such Holder
wishes to sell Registrable Securities pursuant to a Shelf Registration Statement
and related Prospectus, it will do so only in accordance with this Section 2(d)
and Section 3(i). Each Holder of Registrable Securities wishing to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus agrees to deliver a Notice and Questionnaire to the Company at least
three (3) Business Days prior to any intended distribution of Registrable
Securities under the Shelf Registration Statement. From and after the date the
Initial Shelf Registration Statement is declared effective, the Company shall,
as promptly as practicable after the date a Notice and Questionnaire is
delivered, and in any event upon the later of (x) five (5) Business Days after
such date or (y) five (5) Business Days after the expiration of any Deferral
Period in effect when the Notice and Questionnaire is delivered, or put into
effect within five (5) Business Days of such delivery date, (i) if required by
applicable law, file with the SEC a post-effective amendment to the Shelf
Registration Statement or prepare and, if required by applicable law, file a
supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by

                                      -5-
<PAGE>

reference or file any other required document so that the Holder delivering such
Notice and Questionnaire is named as a selling securityholder in the Shelf
Registration Statement and the related Prospectus in such a manner as to permit
such Holder to deliver such Prospectus to purchasers of the Registrable
Securities in accordance with applicable law and, if the Company shall file a
post-effective amendment to the Shelf Registration Statement, use its reasonable
efforts to cause such post-effective amendment to be declared effective under
the Securities Act as promptly as is practicable, but in any event by the date
(the "Amendment Effectiveness Deadline Date") that is forty-five (45) days after
the date such post-effective amendment is required by this clause to be filed;
(ii) provide such Holder copies of any documents filed pursuant to Section
2(d)(i); and (iii) notify such Holder as promptly as practicable after the
effectiveness under the Securities Act of any post-effective amendment filed
pursuant to Section 2(d)(i); provided, that if such Notice and Questionnaire is
delivered during a Deferral Period, the Company shall so inform the Holder
delivering such Notice and Questionnaire and shall take the actions set forth in
clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in
accordance with Section 3(i). Notwithstanding anything contained herein to the
contrary, (i) the Company shall be under no obligation to name any Holder that
is not a Notice Holder as a selling securityholder in any Registration Statement
or related Prospectus and (ii) the Amendment Effectiveness Deadline Date shall
be extended by up to ten (10) Business Days from the expiration of a Deferral
Period (and the Company shall incur no obligation to pay Liquidated Damages
during such extension) if such Deferral Period shall be in effect on the
Amendment Effectiveness Deadline Date.

       (e)  The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if (i) the Initial Shelf Registration Statement
has not been filed on or prior to the Filing Deadline Date, (ii) the Initial
Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date, (iii) the Company
has failed to perform its obligations set forth in Section 2(d) within the time
period required therein, (iv) the aggregate duration of Deferral Periods in any
period exceeds the number of days permitted in respect of such period pursuant
to Section 3(i) hereof or (v) the number of Deferral Periods in any period
exceeds the number permitted in respect of such period pursuant to Section 3(i)
hereof (each of the events of a type described in any of the foregoing clauses
(i) through (v) are individually referred to herein as an "Event," and the
Filing Deadline Date in the case of clause (i), the Effectiveness Deadline Date
in the case of clause (ii), the date by which the Company is required to perform
its obligations set forth in Section 2(d) in the case of clause (iii) (including
the filing of any post-effective amendment prior to the Amendment Effectiveness
Deadline Date), the date on which the aggregate duration of Deferral Periods in
any period exceeds the number of days permitted by Section 3(i) hereof in the
case of clause (iv), and the date of the commencement of a Deferral Period that
causes the limit on the number of Deferral Periods in any period under Section
3(i) hereof to be exceeded in the case of clause (v), being referred to herein
as an "Event Date"). Events shall be deemed to continue until the "Event
Termination Date," which shall be the following dates with respect to the
respective types of Events: the date the Initial Shelf Registration Statement is
filed in the case of an Event of the type described in

                                      -6-
<PAGE>

clause (i); the date the Initial Shelf Registration Statement is declared
effective under the Securities Act in the case of an Event of the type described
in clause (ii); the date the Company performs its obligations set forth in
Section 2(d) in the case of an Event of the type described in clause (iii)
(including, without limitation, the date the relevant post-effective amendment
to the Shelf Registration Statement is declared effective under the Securities
Act); termination of the Deferral Period that caused the limit on the aggregate
duration of Deferral Periods in a period set forth in Section 3(i) to be
exceeded in the case of the commencement of an Event of the type described in
clause (iv) and termination of the Deferral Period the commencement of which
caused the number of Deferral Periods in a period permitted by Section 3(i) to
be exceeded in the case of an Event of the type described in clause (v).

     Accordingly, commencing on (and including) any Event Date and ending on
(but excluding) the next date on which there are no Events that have occurred
and are continuing (a "Damages Accrual Period"), the Company agrees to pay, as
liquidated damages and not as a penalty, an amount (the "Liquidated Damages
Amount"), payable on the Damages Payment Dates to Record Holders of Notes that
are Registrable Securities and of shares of Underlying Common Stock issued upon
conversion of Notes that are Registrable Securities, as the case may be,
accruing, for each portion of such Damages Accrual Period beginning on and
including a Damages Payment Date (or, in respect of the first time that the
Liquidated Damages Amount is to be paid to Holders on a Damages Payment Date as
a result of the occurrence of any particular Event, from the Event Date) and
ending on but excluding the first to occur of (A) the date of the end of the
Damages Accrual Period or (B) the next Damages Payment Date, at a rate per annum
equal to one-half of one percent (0.5 %) of the aggregate principal amount of
such Notes or, in the case of Notes that have been converted into or exchanged
for Underlying Common Stock, the Applicable Conversion Price of such shares of
Underlying Common Stock, as the case may be, in each case determined as of the
Business Day immediately preceding the next Damages Payment Date; provided, that
in the case of a Damages Accrual Period that is in effect solely as a result of
an Event of the type described in clause (iii) of the immediately preceding
paragraph, such Liquidated Damages Amount shall be paid only to the Holders that
have delivered Notice and Questionnaires that caused the Company to incur the
obligations set forth in Section 2(d) the non-performance of which is the basis
of such Event, provided further, that any Liquidated Damages Amount accrued with
respect to any Note or portion thereof called for redemption on a redemption
date or converted into Underlying Common Stock on a conversion date prior to the
Damages Payment Date, shall, in any such event, be paid instead to the Holder
who submitted such Note or portion thereof for redemption or conversion on the
applicable redemption date or conversion date, as the case may be, on such date
(or promptly following the conversion date, in the case of conversion).
Notwithstanding the foregoing, no Liquidated Damages Amounts shall accrue as to
any Registrable Security from and after the earlier of (x) the date such
security is no longer a Registrable Security and (y) expiration of the
Effectiveness Period. The rate of accrual of the Liquidated Damages Amount with
respect to any period shall not exceed the rate provided for in this paragraph
notwithstanding the occurrence of multiple concurrent Events. The Liquidated
Damages Amount shall be computed on the basis of a 360-day year comprised of
twelve (12) 30-day months. Following the cure of all Events requiring the
payment by the

                                      -7-
<PAGE>

Company of Liquidated Damages Amounts to the Holders of Registrable Securities
pursuant to this Section, the Damages Accrual Period shall end and the accrual
of Liquidated Damages Amounts will cease (without in any way limiting the effect
of any subsequent Event requiring the payment of Liquidated Damages Amount by
the Company).

     The Trustee shall be entitled, on behalf of Holders of Notes or Underlying
Common Stock, to seek any available remedy for the enforcement of this
Agreement, including for the payment of any Liquidated Damages Amount.
Notwithstanding the foregoing, the parties agree that the sole damages payable
for a violation (i) of the terms of this Agreement and (ii) Section 6(k) of the
Purchase Agreement (insofar as it relates to the Company's Obligations under
this Agreement), in each case with respect to which liquidated damages are
expressly provided, shall be such liquidated damages. Nothing shall preclude a
Notice Holder or Holder of Registrable Securities from pursuing or obtaining
specific performance or other equitable relief with respect to this Agreement.

     All of the Company's obligations set forth in this Section 2(e) that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).

     The parties hereto agree that the liquidated damages provided for in this
Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.

     Section 3.  Registration Procedures.  In connection with the registration
obligations of the Company under Section 2 hereof, the Company shall:

     (a)  Prepare and file with the SEC a Registration Statement or Registration
Statements on any appropriate form under the Securities Act available for the
sale of the Registrable Securities by the Holders thereof in accordance with the
intended method or methods of distribution thereof, and use its reasonable
efforts to cause each such Registration Statement to become effective and remain
effective as provided herein; provided, that before filing any Registration
Statement or Prospectus or any amendments or supplements thereto with the SEC,
the Company shall furnish to the Initial Purchasers and the Special Counsel
copies of all such documents proposed to be filed and use its reasonable efforts
to reflect in each such document when so filed with the SEC such comments as the
Special Counsel reasonably shall propose to the Company within three (3)
Business Days after the date on which the Company delivered such copies to the
Initial Purchasers and the Special Counsel.

     (b)  Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective until the expiration of the
Effectiveness Period; cause the related

                                      -8-
<PAGE>

Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provisions then in
force) under the Securities Act; and use its reasonable efforts to comply with
the provisions of the Securities Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement during the
Effectiveness Period in accordance with the intended methods of disposition by
the sellers thereof set forth in such Registration Statement as so amended or
such Prospectus as so supplemented.

     (c)  As promptly as practicable give notice to the Notice Holders, the
Initial Purchasers and the Special Counsel (i) when any Prospectus, Prospectus
supplement, Registration Statement or post-effective amendment to a Registration
Statement has been filed with the SEC and, with respect to a Registration
Statement or any post-effective amendment, when the same has been declared
effective, (ii) of any request, following the effectiveness of the Initial Shelf
Registration Statement under the Securities Act, by the SEC or any other federal
or state governmental authority for amendments or supplements to any
Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of any Registration
Statement or the initiation or threatening of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) of the occurrence of (but
not the nature of or details concerning) a Material Event and (vi) of the
determination by the Company that a post-effective amendment to a Registration
Statement will be filed with the SEC, which notice may, at the discretion of the
Company (or as required pursuant to Section 3 (i)), state that it constitutes a
Deferral Notice, in which event the provisions of Section 3(i) shall apply.

     (d)  Use reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale, in either case at the earliest possible moment, and provide
prompt notice to each Notice Holder and the Initial Purchasers of the withdrawal
of any such order.

     (e)  If reasonably requested by the Initial Purchasers or any Notice
Holder, as promptly as practicable incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Initial Purchasers, the Special Counsel or such Notice Holder shall, on the
basis of a written opinion of nationally-recognized counsel experienced in such
matters, reasonably determine to be required to be included therein by
applicable law and make any required filings of such Prospectus supplement or
such post-effective amendment.

     (f)  As promptly as practicable furnish to each Notice Holder, the Special
Counsel and the Initial Purchasers, without charge, at least one (1) conformed
copy of the Registration

                                      -9-
<PAGE>

Statement and any amendment thereto, including financial statements but
excluding schedules, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits (unless requested in writing to the
Company by such Notice Holder, Special Counsel, counsel or Initial Purchasers).

     (g)  During the Effectiveness Period, deliver to each Notice Holder, in
connection with any sale of Registrable Securities pursuant to a Registration
Statement, without charge, as many copies of the Prospectus or Prospectuses
relating to such Registrable Securities (including each preliminary prospectus)
and any amendment or supplement thereto as such Notice Holder may reasonably
request; and the Company hereby consents (except during such periods that a
Deferral Notice is outstanding and has not been revoked) to the use of such
Prospectus or each amendment or supplement thereto by each Notice Holder, in
connection with any offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto in the manner set forth
therein.

     (h)  Prior to any public offering of the Registrable Securities pursuant to
the Shelf Registration Statement, register or qualify or cooperate with the
Notice Holders in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Notice Holder reasonably requests
in writing (which request may be included in the Notice and Questionnaire);
prior to any public offering of the Registrable Securities pursuant to the Shelf
Registration Statement, keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period in connection
with such Notice Holder's offer and sale of Registrable Securities pursuant to
such registration or qualification (or exemption therefrom) and do any and all
other acts or things reasonably necessary or advisable to enable the disposition
in such jurisdictions of such Registrable Securities in the manner set forth in
the relevant Registration Statement and the related Prospectus; provided, that
nothing contained in this Section 3(h) shall require the Company to (i) qualify
as a foreign corporation or as a dealer in securities in any jurisdiction where
it would not otherwise be required to qualify but for this Agreement or (ii)
take any action that would subject it to general service of process in suits or
to taxation in any such jurisdiction where it is not then so subject.

     (i)  Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any fact (a "Material Event") as a result of which any Registration Statement
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any Prospectus shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the occurrence or existence
of any pending corporate development that, in the reasonable discretion of the
Company, makes it appropriate to suspend the availability of the Shelf
Registration Statement and the related

                                      -10-
<PAGE>

Prospectus, (i) in the case of clause (B) above, subject to the next sentence,
as promptly as practicable prepare and file, if necessary pursuant to applicable
law, a post-effective amendment to such Registration Statement or a supplement
to the related Prospectus or any document incorporated therein by reference or
file any other required document that would be incorporated by reference into
such Registration Statement and Prospectus so that such Registration Statement
does not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and such Prospectus does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
and, in the case of a post-effective amendment to a Registration Statement,
subject to the next sentence, use its reasonable efforts to cause it to be
declared effective as promptly as is practicable, and (ii) give notice to the
Notice Holders and the Special Counsel that the availability of the Shelf
Registration Statement is suspended (a "Deferral Notice") and, upon receipt of
any Deferral Notice, each Notice Holder agrees not to sell any Registrable
Securities pursuant to the Registration Statement until such Notice Holder's
receipt of copies of the supplemented or amended Prospectus provided for in
clause (i) above, or until it is advised in writing by the Company that the
Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus. The Company will use all reasonable efforts to ensure that
the use of the Prospectus may be resumed (x) in the case of clause (A) above, as
promptly as is practicable, (y) in the case of clause (B) above, as soon as, in
the sole judgment of the Company, public disclosure of such Material Event would
not be prejudicial to or contrary to the interests of the Company or, if
necessary to avoid unreasonable burden or expense, as soon as practicable
thereafter and (z) in the case of clause (C) above, as soon as, in the
discretion of the Company, such suspension is no longer appropriate. The Company
shall be entitled to exercise its right under this Section 3(i) to suspend the
availability of the Shelf Registration Statement or any Prospectus, without
incurring or accruing any obligation to pay liquidated damages pursuant to
Section 2(e), no more than six (6) times in any twelve (12) month period, and
any such period during which the availability of the Registration Statement and
any Prospectus is suspended (the "Deferral Period") shall, without incurring any
obligation to pay liquidated damages pursuant to Section 2(e), not exceed 30
days; provided, that in the case of a Material Event relating to an acquisition
or a probable acquisition or financing, recapitalization, business combination,
sale of the Company or other similar transaction, the Company may, without
incurring any obligation to pay liquidated damages pursuant to Section 2(e),
deliver to Notice Holders a second notice to the effect set forth above, which
shall have the effect of extending the Deferral Period by up to an additional 30
days, or such shorter period of time as is specified in such second notice,
provided, that the aggregate duration of any Deferral Periods shall not, without
incurring any obligation to pay liquidated damages pursuant to Section 2(e),
exceed 30 days in any three month period (or 60 days in any three month period
in the event of a Material Event pursuant to which the Company has delivered a
second notice as required above) or 90 days in any twelve (12) month period.

     (j)  If requested in writing in connection with a disposition of
Registrable Securities pursuant to a Registration Statement, make reasonably
available for inspection during normal

                                      -11-
<PAGE>

business hours and cause the appropriate officers, directors and employees of
the Company and its subsidiaries to make reasonably available for inspection
during normal business hours, in each case upon at least three (3) business
days' prior written notice, by a representative for the Notice Holders of such
Registrable Securities and any managing underwriter, broker-dealers, attorneys
and accountants retained by such Notice Holders, all relevant information
reasonably requested by such representative for the Notice Holders or any such
managing underwriter, broker-dealers, attorneys or accountants in connection
with such disposition, in each case as is customary for similar "due diligence"
examinations afforded to selling shareholders in secondary offerings or in the
case of any party which the special counsel deems to be potentially entitled to
a "due diligence" defense under the securities laws, afforded to underwriters in
a registered public offering; provided, however, that such persons shall first
agree in writing with the Company that any information that is reasonably and in
good faith designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons and
shall be used solely for the purposes of exercising rights under this Agreement,
unless (i) disclosure of such information is required by court or administrative
order or is necessary to respond to inquiries of regulatory authorities, (ii)
disclosure of such information is required by law (including any disclosure
requirements pursuant to federal securities laws in connection with the filing
of any Registration Statement or the use of any Prospectus referred to in this
Agreement), (iii) such information becomes generally available to the public
other than as a result of a disclosure or failure to safeguard by any such
person or (iv) such information becomes available to any such person from a
source other than the Company and such source is not bound by any direct or
indirect obligation to the Company not disclose such information, and provided,
that the foregoing inspection and information gathering shall, to the greatest
extent possible, be coordinated on behalf of all the Notice Holders and the
other parties entitled thereto by the counsel referred to in Section 5 and
provided further, that the Company shall not be required to disclose any
information subject to the attorney-client or attorney work product privilege if
and to the extent such disclosure would constitute a waiver of such privilege.

     (k)  Use all reasonable efforts to comply with all applicable rules and
regulations of the SEC and make generally available to its securityholders
earning statements (which need not be audited) satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the end of any
3-month period (or 90 days after the end of any 12-month period if such period
is a fiscal year) commencing on the first day of the first fiscal quarter of the
Company commencing after the effective date of a Registration Statement, which
statements shall cover said periods.

     (l)  Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold or to be sold pursuant to a Registration Statement, which certificates
shall not bear any restrictive legends, and cause such Registrable Securities to
be in such denominations as are permitted by the Indenture and registered in
such names as such Notice Holder may request in writing at least two (2)
Business Days prior to any sale of such Registrable Securities.

                                      -12-
<PAGE>

       (m)  Provide a CUSIP number for all Registrable Securities covered by
each Registration Statement not later than the effective date of such
Registration Statement and provide the Trustee and the transfer agent for the
Common Stock with printed certificates for the Registrable Securities that are
in a form eligible for deposit with The Depository Trust Company.

       (n)  Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.

       (o)  Upon (i) the filing of the Initial Registration Statement and (ii)
the effectiveness of the Initial Registration Statement, announce the same, in
each case by release to Reuters Economic Services and Bloomberg Business News.

     Section 4.  Holder's Obligations.  Each Holder agrees, by acquisition of
the Registrable Securities, that no Holder of Registrable Securities shall be
entitled to sell any of such Registrable Securities pursuant to a Registration
Statement or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with a Notice and Questionnaire as required pursuant to
Section 2(d) hereof (including the information required to be included in such
Notice and Questionnaire) and the information set forth in the next sentence.
Each Notice Holder agrees promptly to furnish to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Notice Holder not misleading and any other information
regarding such Notice Holder and the distribution of such Registrable Securities
as the Company may from time to time reasonably request. Any sale of any
Registrable Securities by any Holder shall constitute a representation and
warranty by such Holder that the information relating to such Holder and its
plan of distribution is as set forth in the Prospectus delivered by such Holder
in connection with such disposition, that such Prospectus does not as of the
time of such sale contain any untrue statement of a material fact relating to or
provided by such Holder or its plan of distribution and that such Prospectus
does not as of the time of such sale omit to state any material fact relating to
or provided by such Holder or its plan of distribution necessary to make the
statements in such Prospectus, in the light of the circumstances under which
they were made, not misleading.

     Section 5.  Registration Expenses.  The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not any of the
Registration Statements are declared effective. Such fees and expenses shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of the Special Counsel in
connection with Blue Sky qualifications of the Registrable Securities under the
laws of such jurisdictions as the Notice Holders of a majority of the
Registrable Securities being sold pursuant to a Registration Statement may
designate), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities in a form eligible for deposit
with The Depository Trust Company), (iii) duplication expenses relating to
copies of any Registration Statement or Prospectus delivered

                                      -13-
<PAGE>

to any Holders hereunder, (iv) reasonable fees and disbursements of counsel for
the Company and the Special Counsel in connection with the Shelf Registration
Statement (provided that the Company shall not be liable for the fees and
expenses of more than one separate firm for all parties participating in any
transaction hereunder), (v) reasonable fees and disbursements of the Trustee and
its counsel and of the registrar and transfer agent for the Common Stock and
(vi) Securities Act liability insurance obtained by the Company in its sole
discretion. In addition, the Company shall pay the internal expenses of the
Company (including, without limitation, all salaries and expenses of officers
and employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing by the
Company of the Registrable Securities on any securities exchange on which
similar securities of the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company. Notwithstanding
the provisions of this Section 5, each seller of Registrable Securities shall
pay selling expenses, which shall include, without limitation, all underwriting
discounts, selling commissions, transfer taxes and other similar expenses and
all registration expenses, to the extent required by applicable law.

     Section 6.  Indemnification.

       (a)  Indemnification by the Company. The Company shall indemnify and hold
harmless each Notice Holder and each person, if any, who controls any Notice
Holder (within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act) from and against any losses, liabilities, claims,
damages and expenses (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) (collectively, "Losses"), caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were made not
misleading, provided, however, that the Company shall not be liable in any such
case to the extent that any such Losses are caused by an untrue statement or
alleged untrue statement contained in or omission or alleged omission from any
of such documents in reliance upon and conformity with any of the information
relating to the Holders furnished to the Company in writing by a Holder
expressly for use therein; provided further, that the indemnification contained
in this paragraph shall not inure to the benefit of any Holder of Registrable
Securities (or to the benefit of any person controlling such Holder) on account
of any such Losses caused by an untrue statement or alleged untrue statement or
omission or alleged omission made in any preliminary prospectus provided in each
case the Company has performed its obligations under Section 3(a) hereof if
either (A) (i) such Holder failed to send or deliver a copy of the Prospectus
with or prior to the delivery of written confirmation of the sale by such Holder
to the person asserting the claim from which such Losses arise and (ii) the
Prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, or (B) (x) such untrue statement
or alleged untrue statement, omission or alleged omission is corrected in an
amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such Holder thereafter

                                      -14-
<PAGE>

fails to deliver such Prospectus as so amended or supplemented, with or prior to
the delivery of written confirmation of the sale of a Registrable Security to
the person asserting the claim from which such Losses arise.

       (b)  Indemnification by Holders of Registrable Securities. Each Holder
agrees severally and not jointly to indemnify and hold harmless the Company and
its respective directors and officers, and each person, if any, who controls the
Company (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) or any other Holder, from and against all Losses
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading, to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
information furnished to the Company by such Holder expressly for use in such
Registration Statement or Prospectus or amendment or supplement thereto. In no
event shall the liability of any selling Holder of Registrable Securities
hereunder be greater in amount than the dollar amount of the proceeds received
by such Holder upon the sale of the Registrable Securities pursuant to the
Registration Statement giving rise to such indemnification obligation.

       (c)  Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 6(a) or
6(b), such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the reasonable fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
indemnified parties, and that all such fees and expenses shall be reimbursed as
they are incurred. Such separate firm shall be designated in writing by, in the
case of parties indemnified pursuant to Section 6(a), the Holders of a majority
(with Holders of Notes deemed to be the Holders, for purposes of determining
such majority, of the number of shares of Underlying Common Stock into which
such Notes are or would be convertible or exchangeable as of the date

                                      -15-
<PAGE>

on which such designation is made) of the Registrable Securities covered by the
Registration Statement held by Holders that are indemnified parties pursuant to
Section 6(a) and, in the case of parties indemnified pursuant to Section 6(b),
the Company. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

       (d)  Contribution.  To the extent that the indemnification provided for
in Section 6(a) or 6(b) is applicable by its terms but unavailable to an
indemnified party or insufficient in respect of any Losses, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
Losses, as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the total net proceeds
from the initial placement pursuant to the Purchase Agreement (before deducting
expenses) of the Registrable Securities to which such Losses relate. Benefits
received by any Holder shall be deemed to be equal to the value of receiving
Registrable Securities that are registered under the Securities Act. The
relative fault of the Holders on the one hand and the Company on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Holders or by
the Company, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this paragraph are several in
proportion to the respective number of Registrable Securities they have sold
pursuant to a Registration Statement, and not joint.

     The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
                                                              --- ----
allocation or by any other method or allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding this

                                      -16-
<PAGE>

Section 6(d), an indemnifying party that is a selling Holder of Registrable
Securities shall not be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities sold by such
indemnifying party and distributed to the public were offered to the public
exceeds the amount of any damages that such indemnifying party has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

       (e)  The indemnity, contribution and expense reimbursement obligations of
the parties hereunder shall be in addition to any liability any indemnified
party may otherwise have hereunder, under the Purchase Agreement or otherwise.

       (f)  The indemnity and contribution provisions contained in this Section
6 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any person controlling any Holder, or the Company, or the
Company's officers or directors or any person controlling the Company and (iii)
the sale of any Registrable Securities by any Holder.

     Section 7.  Information Requirements.  (a) The Company covenants that, if
at any time before the end of the Effectiveness Period the Company is not
subject to the reporting requirements of the Exchange Act, it will cooperate
with any Holder of Registrable Securities and take such further reasonable
action as any Holder of Registrable Securities may reasonably request in writing
(including, without limitation, making such reasonable representations as any
such Holder may reasonably request), all to the extent required from time to
time to enable such Holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 and Rule 144A under the Securities Act and customarily taken in
connection with sales pursuant to such exemptions. Upon the written request of
any Holder of Registrable Securities, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing requirements,
unless such a statement has been included in the Company's most recent report
filed pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding
the foregoing, nothing in this Section 7 shall be deemed to require the Company
to register any of its securities (other than the Common Stock) under any
section of the Exchange Act.

       (b)  The Company shall file the reports required to be filed by it under
the Exchange Act and shall comply with all other requirements set forth in the
instructions to Form S-3 in order to allow the Company to be eligible to file
registration statements on Form S-3.

     Section 8.  Miscellaneous.

       (a)  No Conflicting Agreements.  The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement, enter
into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders of Registrable Securities in this Agreement,
except such conflict as has been validly waived. The Company represents and

                                      -17-
<PAGE>

warrants that the rights granted to the Holders of Registrable Securities
hereunder do not in any way conflict with the rights granted to the holders of
the Company's securities under any other agreements, other than such rights as
have been waived. The Holders acknowledge that the filing of the PSV Shelf
Registration Statement will not be deemed a breach of this Agreement.

       (b)  Amendments and Waivers.  The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Notes deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Common Stock into which such Notes are or would be convertible or exchangeable
as of the date on which such consent is requested). Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders of Registrable
Securities whose securities are being sold pursuant to a Registration Statement
and that does not directly or indirectly affect the rights of other Holders of
Registrable Securities may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders pursuant to such Registration
Statement; provided, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence. Each Holder of Registrable Securities
outstanding at the time of any such amendment, modification, supplement, waiver
or consent or thereafter shall be bound by any such amendment, modification,
supplement, waiver or consent effected pursuant to this Section 8(b), whether or
not any notice, writing or marking indicating such amendment, modification,
supplement, waiver or consent appears on the Registrable Securities or is
delivered to such Holder.

       (c)  Notices.  All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:

             (w)  if to a Holder of Registrable Securities, at the most current
                  address given by such Holder to the Company in a Notice and
                  Questionnaire or any amendment thereto;

             (x)  if to the Company, to:

                  ViroPharma Incorporated
                  405 Eagleview Boulevard
                  Exton, PA  19341
                  Attention:  General Counsel

                                      -18-
<PAGE>

               Telecopy No.:  (610) 458-7380

               and

               Pepper, Hamilton LLP
               1235 Westlakes Drive, Suite 400
               Berwyn, PA  19312
               Attention: Jeffrey P.- Libson, Esq.
               Telecopy No.: (610) 640-7835

          (y)  if to the Initial Purchasers, to:

               Morgan Stanley & Co. Incorporated
               1585 Broadway
               New York, New York
               Attention:  Equity Capital Markets
               Telecopy No.: (212) 761-0538

               and

               Ropes & Gray
               One International Place
               Boston, MA  02110
               Attention:  Patrick O'Brien, Esq.
               Telecopy No.  (617) 951-7050

or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.

  (d)  Approval of Holders.  Whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Purchasers
or subsequent Holders of Registrable Securities if such subsequent Holders are
deemed to be such affiliates solely by reason of their holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.

  (e)  Successors and Assigns.  Any person who purchases any Registrable
Securities from the Initial Purchasers shall be deemed, for purposes of this
Agreement, to be an assignee of the Initial Purchasers. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities.

                                      -19-
<PAGE>

       (f)  Counterparts.  This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.

       (g)  Headings.  The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

       (h)  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.

       (i)  Severability. If any term provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, and the parties hereto shall use their best efforts to find
and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction, it
being intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.

       (j)  Entire Agreement.  This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable Securities. Except as
provided in the Purchase Agreement, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
undertakings among the parties with respect to such registration rights. No
party hereto shall have any rights, duties or obligations other than those
specifically set forth in this Agreement. In no event will such methods of
distribution take the form of an underwritten offering of the Registrable
Securities without the prior agreement of the Company.

       (k)  Termination.  This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.

                                      -20-
<PAGE>

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

                                       VIROPHARMA INCORPORATED

                                       By: /s/ Vincent J. Milano
                                           ---------------------
                                           Name: Vincent J. Milano
                                           Title: Vice President, Chief
                                                  Financial Officer

Confirmed and accepted as of
the date first above written:

MORGAN STANLEY & CO. INCORPORATED
U.S. BANCORP PIPER JAFFRAY INC.

By: /s/ Albert L. Lord
    ------------------
    Name: Albert L. Lord
    Title: Vice President

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