Document:

<PAGE>

                                                                   EXHIBIT 10.24

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

              PRODUCT DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

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

                                  BACKGROUND

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

1.   DEFINITIONS.

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

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

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

-------------------------------------------------------------------------------
November 19, 1999          ViroPharms-BPTD Agreement                    Page 1
<PAGE>

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

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

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

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

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

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

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

--------------------------------------------------------------------------------
  November 19, 1999          ViroPharms-BPTD Agreement                    Page 2
<PAGE>

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

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

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

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

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

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

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

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

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

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

--------------------------------------------------------------------------------
  November 19, 1999          ViroPharms-BPTD Agreement                    Page 3
<PAGE>

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

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

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

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

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

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

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

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

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

--------------------------------------------------------------------------------
  November 19, 1999          ViroPharms-BPTD Agreement                    Page 4
<PAGE>

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

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

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

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

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

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

--------------------------------------------------------------------------------
  November 19, 1999          ViroPharms-BPTD Agreement                    Page 5
<PAGE>

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

     1.31  "Pulmonary Delivery" means

           a.  the administration of any substance by:

               i.   inhalation through the mouth, or

               ii.  simultaneous inhalation through the mouth and nose, or

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

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

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

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

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

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

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

--------------------------------------------------------------------------------
  November 19, 1999          ViroPharms-BPTD Agreement                    Page 6
<PAGE>

     1.32  "Pulmonary Surfactant" means

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

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

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

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

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

     1.35  "Regulatory Approval"

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

--------------------------------------------------------------------------------
  November 19, 1999          ViroPharms-BPTD Agreement                    Page 7
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

--------------------------------------------------------------------------------
  November 19, 1999          ViroPharms-BPTD Agreement                    Page 8
<PAGE>

2.   LICENSES

     2.1  License to ViroPharma.

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

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

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

     2.3  Exclusive Relationship.

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

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

                 a.  During the term of this Agreement; and

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

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

                 a.  During the term of this Agreement; and

--------------------------------------------------------------------------------
  November 19, 1999          ViroPharms-BPTD Agreement                    Page 9
<PAGE>

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

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

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

3.   PRODUCT DEVELOPMENT.

     3.1  General.

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

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

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

     3.2  Development Planning and Development Activities.

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

--------------------------------------------------------------------------------
  November 19, 1999          ViroPharms-BPTD Agreement                   Page 10
<PAGE>

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

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

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

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

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

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

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

          3.2.3     EHD Device and Drug Container.

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

--------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                  Page 11
<PAGE>

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

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

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

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

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

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

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

--------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                 Page 12
<PAGE>

     3.5  Approval Applications.

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

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

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

4.   PERFORMANCE OF DEVELOPMENT ACTIVITIES BY BPTD.

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

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

-------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                 Page 13
<PAGE>

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

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

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

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

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

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

-------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                 Page 14
<PAGE>

5.   CLINICAL SUPPLY MANUFACTURING.

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

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

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

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

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

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

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

-------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                 Page 15
<PAGE>

     5.3  Orders.

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

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

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

     5.4  Shipment of Packaged Drug.

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

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

-------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                 Page 16
<PAGE>

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

     5.6  Inspection of Final Products.

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

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

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

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

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

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

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

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

-------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                 Page 17
<PAGE>

6.   MANUFACTURING OF COMMERCIAL SUPPLY.

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

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

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

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

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

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

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

7.   COMMERCIALIZATION AND MARKETING.

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

-------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                 Page 18
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

-------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                 Page 20
<PAGE>

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

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

     7.6  Recalls.

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

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

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

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

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

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

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

________________________________________________________________________________
November 19, 1999             ViroPharma-BPTD Agreement                 Page 21
<PAGE>

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

8.   GENERAL REGULATORY MATTERS.

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

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

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

9.   LICENSE FEES AND ROYALTIES.

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

          **********

_______________________________________________________________________________
November 19, 1999             ViroPharma-BPTD Agreement                 Page 22
<PAGE>

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

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

**********

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

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

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

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

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

_______________________________________________________________________________
November 19, 1999             ViroPharma-BPTD Agreement                 Page 23
<PAGE>

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

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

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

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

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

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

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

     9.8  Payments.

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

________________________________________________________________________________
November 19, 1999              ViroPharma-BPTD Agreement                 Page 24
<PAGE>

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

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

     9.9  Records; Audits.

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

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

________________________________________________________________________________
November 19, 1999              ViroPharma-BPTD Agreement                 Page 25
<PAGE>

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

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

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

10.  INTELLECTUAL PROPERTY.

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

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

________________________________________________________________________________
November 19, 1999              ViroPharma-BPTD Agreement                 Page 26
<PAGE>

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

     10.3 Prosecution and Maintenance of Patents; Abandonment.

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

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

________________________________________________________________________________
November 19, 1999              ViroPharma-BPTD Agreement                 Page 27
<PAGE>

     10.4 Third Party Patent Licenses.

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

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

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

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

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

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

________________________________________________________________________________
November 19, 1999              ViroPharma-BPTD Agreement                 Page 28
<PAGE>

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

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

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

          10.5      Defense of Third Party Patent Claims.

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

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

________________________________________________________________________________
November 19, 1999              ViroPharma-BPTD Agreement                 Page 29
<PAGE>

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

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

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

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

11.  EXCHANGE OF INFORMATION, CONFIDENTIALITY AND PUBLICATION.

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

________________________________________________________________________________
November 19, 1999              ViroPharma-BPTD Agreement                 Page 30
<PAGE>

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

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

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

--------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                  Page 31
<PAGE>

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

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

12.  REPRESENTATIONS & WARRANTIES.

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

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

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

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

--------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                  Page 32
<PAGE>

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

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

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

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

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

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

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

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

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

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

--------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                  Page 33
<PAGE>

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

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

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

     12.4 Certain Additional Covenants.

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

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

--------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                  Page 34
<PAGE>

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

     13.  INDEMNIFICATION.

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

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

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

--------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                  Page 35
<PAGE>

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

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

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

--------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                  Page 36
<PAGE>

     14.  TERM OF AGREEMENT AND TERMINATION.

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

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

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

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

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

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

--------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                  Page 37
<PAGE>

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

          14.8     Rights In Event of Bankruptcy.

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

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

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

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

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

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

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

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

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

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

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

--------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                  Page 39
<PAGE>

     15.  MISCELLANEOUS.

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

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

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

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

--------------------------------------------------------------------------------
November 19, 1999             ViroPharma-BPTD Agreement                  Page 40
<PAGE>

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

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

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

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

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

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

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

________________________________________________________________________________
November 19, 1999        ViroPharma-BPTD Agreement                       Page 41
<PAGE>

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

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

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

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

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

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

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

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

________________________________________________________________________________
November 19, 1999        ViroPharma-BPTD Agreement                       Page 42
<PAGE>

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

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

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

BATTELLE MEMORIAL INSTITUTE-                     VIROPHARMA INCORPORATED
COLUMBUS OPERATIONS

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

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

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

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

                                   EXHIBIT A

                           BPTD Patents/Applications

                                  **********

________________________________________________________________________________
November 19, 1999        ViroPharma-BPTD Agreement                       Page 44
<PAGE>

                                   EXHIBIT B

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

________________________________________________________________________________
November 19, 1999        ViroPharma-BPTD Agreement                       Page 45
<PAGE>

                                   EXHIBIT C

                               Development Plan

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

                                   EXHIBIT D

                             System Specifications

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

                                   EXHIBIT E

                              Form of Work Order
                                  WORK ORDER

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

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

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

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

     TOTAL MAXIMUM FEE

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

________________________________________________________________________________
November 19, 1999        ViroPharma-BPTD Agreement                       Page 48
<PAGE>

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

VIROPHARMA INCORPORATED                      BATTELLE MEMORIAL INSTITUTE

By:_______________________________           By:________________________________

Name, Title:______________________           Name, Title:_______________________

Date:_____________________________           Date:______________________________

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

                                   EXHIBIT F

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

                                  **********

________________________________________________________________________________
November 19, 1999        ViroPharma-BPTD Agreement                       Page 50<PAGE>

                                                                   EXHIBIT 10.25

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.

                      COLLABORATION AND LICENSE AGREEMENT

                                by and between

                      AMERICAN HOME PRODUCTS CORPORATION,
                              acting through its
                      WYETH-AYERST LABORATORIES DIVISION

                                      and

                            VIROPHARMA INCORPORATED

                               December 9, 1999
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                             Page
<S>                                                                                                                          <C>
1.    DEFINITIONS.........................................................................................................      1

   1.1   "Acquiring Entity"...............................................................................................      1
   1.2   "Active Collaboration Target"....................................................................................      1
   1.3   "Active Compound"................................................................................................      2
   1.4   "Affiliate(s)"...................................................................................................      2
   1.5   "AHPC Chemical Library"..........................................................................................      5
   1.6   "AHPC Know-How"..................................................................................................      5
   1.7   "AHPC Patent Rights".............................................................................................      5
   1.8   "AHPC Technology"................................................................................................      5
   1.9   "AHPC Territory".................................................................................................      5
   1.10  "Annual Commercialization Plan and Budget".......................................................................      5
   1.11  "Annual Development Plan and Budget".............................................................................      5
   1.12  "Assay and Screening Technology".................................................................................      6
   1.13  "Assigned Sales Force Effort"....................................................................................      6
   1.14  "Baseline Allocation of Net Profits".............................................................................      6
   1.15  "Biomolecule"....................................................................................................      6
   1.16  "Calendar Quarter"...............................................................................................      6
   1.17  "Change of Control"..............................................................................................      6
   1.18  "Class A Product"................................................................................................      6
   1.19  "Class B Product"................................................................................................      6
   1.20  "Collaboration Inventions".......................................................................................      6
   1.21  "Collaboration Know-How".........................................................................................      7
   1.22  "Collaboration Patent Rights"....................................................................................      7
   1.23  "Collaboration Target"...........................................................................................      7
   1.24  "Collaboration Technology".......................................................................................      7
   1.25  "Commercialization"..............................................................................................      7
   1.26  "Commercially Reasonable Efforts"................................................................................      7
   1.27  "Compound".......................................................................................................      7
   1.28  "Confidential Information".......................................................................................      7
   1.29  "Control" or "Controlled"........................................................................................      7
   1.30  "Copromotion Territory"..........................................................................................      8
   1.31  "Copromotion Territory Commercialization Plan"...................................................................      8
   1.32  "Copyright"......................................................................................................      8
   1.33  "Cost of Goods Manufactured for Sale"............................................................................      8
   1.34  "Derivative".....................................................................................................      8
   1.35  "Detail".........................................................................................................      8
   1.36  "Development"....................................................................................................      8
   1.37  "Development Candidate"..........................................................................................      9
   1.38  "Development Expenses"...........................................................................................      9
   1.39  "Development Phase"..............................................................................................      9
   1.40  "Effective Date".................................................................................................      9
   1.41  "Executive Steering Committee" or "ESC"..........................................................................      9
   1.42  "Extra Effort"...................................................................................................      9
   1.43  "Extra Effort Expense"...........................................................................................      9
   1.44  "FDA"............................................................................................................      9
   1.45  "FD&C Act".......................................................................................................      9
   1.46  "Field"..........................................................................................................      9
   1.47  "First Commercial Sale"..........................................................................................      9
   1.48  "FTE"............................................................................................................      9
</TABLE>

________________________________________________________________________________
December 9, 1999                Collaboration Agreement                   Page i
<PAGE>

<TABLE>
   <S>                                                                                                                  <C>
   1.49  "Full Royalty Rate Period"...................................................................................  10
   1.50  "Fully-Absorbed Standard Cost"...............................................................................  10
   1.51  "Global Development Plan"....................................................................................  10
   1.52  "Good Clinical Practice" or "GCP"............................................................................  10
   1.53  "Good Laboratory Practice" or "GLP"..........................................................................  10
   1.54  "HCV"........................................................................................................  11
   1.55  "Hit"........................................................................................................  11
   1.56  "Incremental Sales Force Effort".............................................................................  11
   1.57  "Incremental Sales Force Effort Expense".....................................................................  11
   1.58  "IND"........................................................................................................  11
   1.59  "Initial Term of the Screening Phase"........................................................................  11
   1.60  "Invention"..................................................................................................  11
   1.61  "Joint Steering Committee" or "JSC"..........................................................................  11
   1.62  "Know-How"...................................................................................................  11
   1.63  "Lapse Quarter"..............................................................................................  12
   1.64  "Lapse Year".................................................................................................  12
   1.65  "Lead Compound"..............................................................................................  12
   1.66  "Major European Country".....................................................................................  12
   1.67  "Marketing Account"..........................................................................................  12
   1.68  "Marketing Steering Committee" or "MSC"......................................................................  12
   1.69  "NDA"........................................................................................................  12
   1.70  "Net Profits"................................................................................................  12
   1.71  "Net Sales"..................................................................................................  12
   1.72  "Non-Collaboration Invention"................................................................................  13
   1.73  "Patent Rights"..............................................................................................  13
   1.74  "Penalty Year"...............................................................................................  14
   1.75  "Phase I Clinical Study".....................................................................................  14
   1.76  "Phase II Clinical Study"....................................................................................  14
   1.77  "Phase III Clinical Study"...................................................................................  14
   1.78  "Post Approval Research and Regulatory Expenses".............................................................  14
   1.79  "Pre-Development Expenses"...................................................................................  14
   1.80  "Pre-Marketing Expenses".....................................................................................  14
   1.81  "Pre-Marketing Expense Shortfall"............................................................................  15
   1.82  "Prior Invention"............................................................................................  15
   1.83  "Product"....................................................................................................  15
   1.84  "Promotion"..................................................................................................  15
   1.85  "R&D Account"................................................................................................  15
   1.86  "R&D Reimbursement Account"..................................................................................  15
   1.87  "R&D Shortfall"..............................................................................................  15
   1.88  "Reduced Royalty Rate Period"................................................................................  15
   1.89  "Regulatory Approval"........................................................................................  15
   1.90  "Regulatory Authority".......................................................................................  16
   1.91  "Research"...................................................................................................  16
   1.92  "Research Phase".............................................................................................  16
   1.93  "Research Program"...........................................................................................  16
   1.94  "Sales and Marketing Expenses"...............................................................................  16
   1.95  "Sample".....................................................................................................  17
   1.96  "Sample Receipt Forms".......................................................................................  17
   1.97  "Screening"..................................................................................................  17
   1.98  "Screening Phase"............................................................................................  17
   1.99  "Small Molecule".............................................................................................  17
   1.100 "Surviving Entity"...........................................................................................  17
   1.101 "Tail Compound"..............................................................................................  17
   1.102 "Target".....................................................................................................  17
   1.103 "Target Market"..............................................................................................  17
   1.104 "Target Physician"...........................................................................................  17
</TABLE>

________________________________________________________________________________
December 9, 1999                Collaboration Agreement                  Page ii
<PAGE>

<TABLE>
<S>                                                                                                                          <C>
   1.105 "Term of the Screening Phase"....................................................................................   17
   1.106 "Third Part(y/ies)"..............................................................................................   17
   1.107 "Third Party License Fee"........................................................................................   18
   1.108 "Trademark"......................................................................................................   18
   1.109 "Valid Claim"....................................................................................................   18
   1.110 "ViroPharma Chemical Library"....................................................................................   18
   1.111 "ViroPharma Know-How"............................................................................................   18
   1.112 "ViroPharma Patent Rights".......................................................................................   18
   1.113 "ViroPharma Technology"..........................................................................................   18

2.    LICENSES............................................................................................................   19

   2.1   Licenses to AHPC.................................................................................................   19
   2.2   Licenses to ViroPharma...........................................................................................   19
   2.3   Sublicensing to Third Party Contractors..........................................................................   20
   2.4   Dropped Compounds................................................................................................   20
   2.5   Direct Licenses to AHPC Affiliates...............................................................................   20
   2.6   Exclusive Working Relationship...................................................................................   21
   2.7   Right of Reference...............................................................................................   22

3.    MANAGEMENT OF COLLABORATION.........................................................................................   22

   3.1   Joint Steering Committee.........................................................................................   22
      3.1.1    Formation; Membership......................................................................................   22
      3.1.2    Chairperson; Secretary.....................................................................................   22
      3.1.3    Meetings...................................................................................................   23
      3.1.4    Decision Making............................................................................................   23
      3.1.5    Responsibilities of the JSC................................................................................   23
   3.2   Marketing Steering Committee.....................................................................................   24
      3.2.1    Formation; Membership......................................................................................   24
      3.2.2    Chairperson; Secretary.....................................................................................   24
      3.2.3    Meetings...................................................................................................   25
      3.2.4    Decision Making............................................................................................   25
      3.2.5    Responsibilities of the MSC................................................................................   25
   3.3   Executive Steering Committee.....................................................................................   26
      3.3.1    Formation; Membership......................................................................................   26
      3.3.2    Chairperson; Secretary.....................................................................................   26
      3.3.3    Meetings...................................................................................................   26
      3.3.4    Decision Making............................................................................................   27
      3.3.5    Dispute Resolution.........................................................................................   27
   3.4   Authority........................................................................................................   27
   3.5   Project Coordinators.............................................................................................   27

4.    RESEARCH AND DEVELOPMENT............................................................................................   27

   4.1   The Research Program.............................................................................................   27
      4.1.1    General....................................................................................................   27
   4.2   Research & Development Plans.....................................................................................   28
      4.2.1    Global Research and Development Plan.......................................................................   28
      4.2.2    Annual Development Plans...................................................................................   28
   4.3   Term of Research Program.........................................................................................   29
      4.3.1    Screening Phase............................................................................................   29
      4.3.2    Research Phase.............................................................................................   29
      4.3.3    Screening Phase Tail.......................................................................................   30
      4.3.4    Development Phase..........................................................................................   30
   4.4   Selection of Additional Targets, Biomolecules, Hits, Lead Compounds, Development Candidates and Products.........   31
      4.4.1    Selection of Additional Targets............................................................................   31
      4.4.2    Selection of Biomolecules as Compounds.....................................................................   31
</TABLE>

________________________________________________________________________________
December 9, 1999                Collaboration Agreement                 Page iii
<PAGE>

<TABLE>
<S>                                                                                                                     <C>
      4.4.3    Selection of Hits......................................................................................  31
      4.4.4    Selection of Lead Compounds............................................................................  31
      4.4.5    Selection of Development Candidates....................................................................  31
      4.4.6    Selection of Products..................................................................................  31
   4.5   Conduct of the Research Program..............................................................................  32
   4.6   Funding of the Research Program..............................................................................  32
      4.6.1    Pre-Development Expenses...............................................................................  32
      4.6.2    Development Expenses...................................................................................  33
      4.6.3    Payment of Expenses; R&D Accounts......................................................................  33
      4.6.4    Expense Limitations....................................................................................  33
      4.6.5    Reconciliation of Expenses.............................................................................  34
      4.6.6    Records and Audits.....................................................................................  35
   4.7   Reporting and Disclosure.....................................................................................  36
      4.7.1    Reports................................................................................................  36
      4.7.2    Quarterly Meeting......................................................................................  36
      4.7.3    Disclosure.............................................................................................  36

5.    MANUFACTURING OF PRODUCTS; REGULATORY MATTERS...................................................................  36

   5.1   Manufacturing................................................................................................  36
   5.2   Labeling.....................................................................................................  37
   5.3   Regulatory Approvals.........................................................................................  37
   5.4   Regulatory Reporting.........................................................................................  37

6.    COMMERCIALIZATION OF PRODUCTS...................................................................................  38

   6.1   Commercialization in the Copromotion Territory...............................................................  38
      6.1.1    Principles of Copromotion..............................................................................  38
      6.1.2    Commercialization Plan.................................................................................  38
      6.1.3    Allocation of Target Markets; Sales Effort.............................................................  39
      6.1.4    Incremental Sales Force Effort.........................................................................  39
      6.1.5    Extra Effort...........................................................................................  40
      6.1.6    Performance Metrics....................................................................................  40
      6.1.7    Sales and Distribution; Recalls........................................................................  40
      6.1.8    Commercialization Expenses.............................................................................  41
         (a)   Pre-Marketing Expenses.................................................................................  41
         (b)   Sales and Marketing Expenses...........................................................................  41
         (c)   Post-Approval Research and Regulatory Expenses.........................................................  42
         (d)   Payment of Expenses; Marketing Accounts................................................................  42
         (e)   Expense Limitations....................................................................................  42
         (f)   Reconciliation of Pre-Marketing Expenses...............................................................  42
         (g)   Reimbursement of Sales and Marketing Expenses and Post Approval Research and Regulatory Expenses.......  43
      6.1.9    Marketing and Promotional Materials....................................................................  43
      6.1.10   Promotional Claims.....................................................................................  44
      6.1.11   Samples................................................................................................  44
      6.1.12   Communications.........................................................................................  44
      6.1.13   Training...............................................................................................  45
      6.1.14   Compliance.............................................................................................  45
      6.1.15   Generic Product........................................................................................  45
   6.2   Commercialization in the AHPC Territory......................................................................  46

7.    CONSIDERATION; PROFIT SHARING...................................................................................  46

   7.1   Research Program Expense Reimbursements......................................................................  46
   7.2   Additional Development Expense Payments......................................................................  46
   7.3   Purchase of Equity...........................................................................................  47
   7.4   Royalties....................................................................................................  47
      7.4.1    Royalty Rates..........................................................................................  47
      7.4.2    Royalty Adjustments....................................................................................  49
         (a)   Unpatented Products....................................................................................  49
         (b)   Competition............................................................................................  49
</TABLE>

________________________________________________________________________________
December 9, 1999                Collaboration Agreement                  Page iv
<PAGE>

<TABLE>
<S>                                                                                                                          <C>
      7.4.3    Term of Royalty............................................................................................   50
   7.5   Profit Sharing...................................................................................................   50
      7.5.1    Baseline Allocation of Profits; Penalties..................................................................   50
      7.5.2    Temporary Adjustments to Distribution of Profits...........................................................   50
      7.5.3    Permanent Adjustment to Baseline Allocation of Profits.....................................................   51
      7.5.2    Term of Profit Split Payments..............................................................................   51
   7.6   Reports and Payments.............................................................................................   51
      7.6.1    Cumulative Royalties.......................................................................................   51
      7.6.2    Royalty Statements and Payments............................................................................   51
      7.6.3    Net Profit Statements and Payments.........................................................................   51
         (a)   Estimated Statements.......................................................................................   51
         (b)   Actual Statements..........................................................................................   52
      7.6.4    Taxes and Withholding......................................................................................   52
      7.6.5    Currency...................................................................................................   53
   7.7   Maintenance of Records; Audits...................................................................................   53
      7.7.1    Record Keeping for the Copromotion Territory...............................................................   53
      7.7.2    Record Keeping for the AHPC Territory......................................................................   53
      7.7.3    Audits.....................................................................................................   54
      7.7.4    Underpayments/Overpayments.................................................................................   54
      7.7.5    Confidentiality............................................................................................   55
   7.8   Interest.........................................................................................................   55

8.    INTELLECTUAL PROPERTY...............................................................................................   55

   8.1   Inventions.......................................................................................................   55
   8.2   Patent Rights....................................................................................................   55
      8.2.1    Prosecution and Maintenance of Patent Rights...............................................................   55
         (a)   ViroPharma's Prior Inventions and Non-Collaboration Inventions.............................................   56
         (b)   AHPC's Prior Inventions and Non-Collaboration Inventions...................................................   56
         (c)   Collaboration Inventions...................................................................................   57
      8.2.2    Enforcement of Patent Rights...............................................................................   58
         (a)   Notice and Discontinuance of Infringement - General........................................................   58
         (b)   AHPC Patent Rights and ViroPharma Patent Rights............................................................   58
         (c)   Collaboration Patent Rights................................................................................   59
         (d)   Continuance of Infringement of ViroPharma Patent Rights....................................................   60
         (e)   Continuance of Infringement of the AHPC Patent Rights......................................................   60
      8.2.3    Infringement and Third Party Licenses......................................................................   61
         (a)   Infringement of Third Party Patents - Course of Action.....................................................   61
         (b)   AHPC Option to Negotiate...................................................................................   61
         (c)   Third Party Infringement Suit..............................................................................   61
         (d)   Other Third Party Licenses.................................................................................   62
         (e)   Third Party License Fees...................................................................................   62
      8.2.4    Patent Certifications......................................................................................   63
      8.2.5    Patent Term Restoration....................................................................................   63
      8.3   Trademarks....................................................................................................   63

9.    CONFIDENTIALITY.....................................................................................................   64

   9.1   Confidentiality..................................................................................................   64
   9.2   Authorized Disclosure and Use....................................................................................   64
      9.2.1    Disclosure.................................................................................................   64
      9.2.2    Use........................................................................................................   65
   9.3   SEC Filings......................................................................................................   65
   9.4   Publications.....................................................................................................   65
   9.5   Public Announcements.............................................................................................   66
      9.5.1    Coordination...............................................................................................   66
      9.5.2    Announcements..............................................................................................   66

10.   REPRESENTATIONS AND WARRANTIES......................................................................................   66

   10.1  Representations and Warranties of Each Party.....................................................................   66
   10.2  Additional Representations and Warranties of ViroPharma..........................................................   67
</TABLE>

________________________________________________________________________________
December 9, 1999                Collaboration Agreement                   Page v
<PAGE>

<TABLE>
<S>                                                                                                                     <C>
   10.3  Additional Representations and Warranties of AHPC............................................................  69
   10.4  Representation by Legal Counsel..............................................................................  70
   10.5  No Inconsistent Agreements...................................................................................  70
   10.6  Disclaimer...................................................................................................  70

11.   GOVERNMENT APPROVALS; TERM AND TERMINATION......................................................................  70

   11.1  Government Approvals.........................................................................................  70
      11.1.1   ViroPharma's and AHPC's Obligations....................................................................  70
      11.1.2   Cooperation............................................................................................  71
   11.2  Term.........................................................................................................  71
   11.3  Expiration...................................................................................................  71
   11.4  Termination for Cause........................................................................................  71
      11.4.1    Termination for Cause.................................................................................  71
      11.4.2   Effect of Termination for Cause on License.............................................................  72
   11.5  Termination for Convenience..................................................................................  72
      11.5.1   Right to Terminate.....................................................................................  72
      11.5.2   Effect of Termination for Convenience..................................................................  72
   11.6  Termination of ViroPharma's Right to Promote Products........................................................  73
      11.6.1   Failure to Provide Assigned Sales Force Effort.........................................................  73
      11.6.2   Payment and Term of Royalty............................................................................  74
      11.6.3   Effect on Other Rights and Obligations.................................................................  75
   11.7  Blocking Patents.............................................................................................  75
   11.8  Survival of Certain Obligations..............................................................................  75
   11.9  Provision for Insolvency.....................................................................................  76
      11.9.1Termination...............................................................................................  76
      11.9.2   Effect on Licenses.....................................................................................  76
      11.9.3   Rights to Intellectual Property........................................................................  77
      11.9.4   Additional Rights......................................................................................  77

12.   INDEMNIFICATION AND INSURANCE...................................................................................  78

   12.1  Indemnification by AHPC......................................................................................  78
   12.2  Indemnification by ViroPharma................................................................................  79
   12.3  Procedure....................................................................................................  79
   12.4  Insurance....................................................................................................  80

13.   MISCELLANEOUS...................................................................................................  80

   13.1  Assignment...................................................................................................  80
   13.2  Further Actions..............................................................................................  80
   13.3  Force Majeure................................................................................................  80
   13.4  Correspondence and Notices...................................................................................  81
      13.4.1   Ordinary Notices.......................................................................................  81
      13.4.2   Extraordinary Notices..................................................................................  81
   13.5  Amendment....................................................................................................  82
   13.6  Waiver.......................................................................................................  82
   13.7  Severability.................................................................................................  82
   13.8  Descriptive Headings.........................................................................................  82
   13.9  Governing Law................................................................................................  83
   13.10 Entire Agreement of the Parties..............................................................................  83
   13.11 Independent Contractors......................................................................................  83
   13.12 Debarment....................................................................................................  83
   13.13 Counterparts.................................................................................................  83
</TABLE>

________________________________________________________________________________
December 9, 1999                Collaboration Agreement                  Page vi
<PAGE>

                               LIST OF EXHIBITS

Exhibit 1.7                AHPC Patent Rights
Exhibit 1.18               Class A Product Chemical Series
Exhibit 1.23               Collaboration Targets
Exhibit 1.50               Elements of Fully-Absorbed Standard Costs
Exhibit 1.112              ViroPharma Patent Rights
Exhibit 5.4                Adverse Event Reporting Procedures
Exhibit 7.3                Stock Purchase Agreement
Exhibit 7.4.1              Sample Calculation of Royalty Distributions
Exhibit 7.5.3              Sample Calculation of Net Profit Distributions
Exhibit 10.2(a)            Third Party Rights, Title or Interest in ViroPharma
                           Intellectual Property
Exhibit 10.2(b)            Third Party Claims on ViroPharma Patent Rights and
                           Know-How
Exhibit10.2(c)             ViroPharma Intellectual Property Subject to
                           Government Funding Agreements
Exhibit 10.3(a)            Third Party Claims on AHPC Patent Rights and Know-
                           How

________________________________________________________________________________
December 9, 1999                Collaboration Agreement                 Page vii
<PAGE>

                      COLLABORATION AND LICENSE AGREEMENT

     THIS COLLABORTION AND LICENSE AGREEMENT (the "Agreement") is entered into
on this 9th day of December, 1999 by and between American Home Products
Corporation, acting through its Wyeth-Ayerst Laboratories Division ("AHPC"), a
Delaware Corporation, having a place of business at 5 Giralda Farms, Madison,
New Jersey 07940 and ViroPharma Incorporated ("ViroPharma"), a Delaware
corporation having a place of business at 405 Eagleview Boulevard, Exton,
Pennsylvania 19341. AHPC and ViroPharma may each be referred to herein
individually as a "Party" and collectively as the "Parties".

     WHEREAS, AHPC is engaged in the research, development and commercialization
of human pharmaceutical products;

     WHEREAS, ViroPharma is the owner of certain patent rights and know-how
relating to the hepatitis C virus and compounds and methods for treating humans
infected with the hepatitis C virus;

     WHEREAS, AHPC and ViroPharma have agreed to collaborate, on the terms and
conditions set forth herein, on the development and commercialization of
compounds for the treatment of humans infected with the hepatitis C virus.

     NOW THEREFORE, in consideration of the mutual promises and covenants set
forth below and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties hereby agree as
follows:

1.   DEFINITIONS.

     1.1  "Acquiring Entity" shall mean a Third Party that comes into control
          (as such term is defined in Section 1.4 hereof) of a Party or any of a
          Party's Affiliates through a Change in Control of such Party or such
          Affiliate occurring after the Effective Date hereof, and all other
          Third Parties controlling, controlled by or under common control with
          such Third Party, which Third Parties are not otherwise an Affiliate
          of such Party hereunder.

     1.2  "Active Collaboration Target" shall mean a Collaboration Target (a)
          that is not discontinued from use in accordance with Section 4.4.1 or
          (b) against which an Active Compound has been determined to have
          activity during the Screening Phase or Screening Phase Tail, whether
          or not such Collaboration Target has been discontinued from use in
          accordance with Section 4.4.1. Notwithstanding the foregoing, if, at
          any time after the end of the Screening Phase Tail, (a) a
          Collaboration Target has been discontinued from use in accordance with
          Section 4.4.1, (b) the use of such Collaboration Target has not been
          reinstated in accordance with Section 4.4.1, and (c) all Compounds
          which, during the Screening Phase or the Screening Phase Tail, were
          determined to have activity against such Collaboration Target and all
          Derivatives of such Compounds are no
<PAGE>

          longer Active Compounds, then such Collaboration Target shall
          thereafter not be an Active Collaboration Target for purposes of this
          Agreement.

     1.3  "Active Compound" shall mean a Compound that is being Researched,
          Developed or Commercialized by either of the Parties pursuant to this
          Agreement. For the sake of clarity, when the JSC or the MSC, as
          applicable, determines to discontinue the Research, Development or
          Commercialization of a Compound, such Compound shall no longer be an
          Active Compound for purposes of this Agreement.

     1.4  "Affiliate(s)" shall mean, with respect to each Party hereto, any
          corporation, company, partnership, joint venture, firm and/or other
          entity that controls, is controlled by or is under common control with
          such Party. For purposes of Section 1.1 and this Section 1.4,
          "control" shall mean (x) in the case of corporate entities, direct or
          indirect ownership of at least fifty percent (50%) of the stock or
          shares having the right to vote for the election of directors (other
          than such ownership by an employee benefit plan (or related trust)
          sponsored or maintained by a Party), and (y) in the case of non-
          corporate entities, direct or indirect ownership of at least fifty
          percent (50%) of the equity interest with the power to direct the
          management and policies of such non-corporate entities.
          Notwithstanding the foregoing, for purposes of this Agreement, the
          term "Affiliate" shall not include

               (a)  subsidiaries or any other entities in which a Party owns a
                    majority of the ordinary voting power necessary to elect a
                    majority of the board of directors or other governing board
                    but is restricted from electing such majority by contract or
                    otherwise until such time as such restrictions are no longer
                    in effect, or

               (b)  an Acquiring Entity that comes into control of ViroPharma or
                    a parent company Affiliate of ViroPharma after the Effective
                    Date hereof, provided that ViroPharma, on or before the date
                    such Change of Control becomes effective, delivers to AHPC
                    written notice stating that such Acquiring Entity shall not
                    be considered to be an Affiliate of ViroPharma and shall be
                    considered to be a Third Party for all purposes of this
                    Agreement and, provided further, that, by written agreement
                    (a copy of which shall be provided to AHPC along with the
                    notice described above in this Section 1.4(b)) between
                    ViroPharma and such Acquiring Entity, such written agreement
                    to be entered into either before or promptly after such
                    Change of Control becomes effective and to designate AHPC as
                    a third party beneficiary, such Acquiring Entity shall have
                    (i) no right, title or interest in or to any Product
                    hereunder, including, without limitation, the right to
                    participate in the Copromotion of any Product in the
                    Copromotion Territory (other than any such right, title or
                    interest that may be merely incidental to the
<PAGE>

                    Acquiring Entity's having an equity interest in ViroPharma,
                    e.g., an ownership interest in or right to receive a share
                    of ViroPharma's profits), (ii) no right to participate in
                    any of the activities to be conducted by or on behalf of
                    ViroPharma or ViroPharma's Affiliates hereunder or to
                    exercise any of ViroPharma's rights hereunder (other than
                    any such right that may exist as a result of a director or
                    employee of the Acquiring Entity serving as an officer or
                    director of ViroPharma, provided, however, that each such
                    director or employee shall not utilize any information
                    gained through participating in such activities for the
                    benefit of the Acquiring Entity in any way that the
                    Acquiring Entity is prohibited from using such information
                    pursuant to this Section 1.4), and (iii) no access to or
                    right to use, itself or on behalf of any Third Party or to
                    permit any Third Party to use, in either case for the
                    discovery, development and/or commercialization of
                    pharmaceutical products in the Field, any

                         (A)  of the ViroPharma Technology,

                         (B)  Compound included within the ViroPharma Chemical
                              Library,

                         (C)  of the AHPC Technology,

                         (D)  Compound included with the AHPC Chemical Library,
                              or

                         (E)  Confidential Information of either Party relating
                              to the Field, the Research Program or either
                              Party's activities under this Agreement,

                    (except to the extent that any of the foregoing constitute
                    Permitted Materials (as such term is defined below in this
                    Section 1.4), it being understood, however, that in the
                    event that either (xx) the written agreement between
                    ViroPharma and such Acquiring Entity described above expires
                    or is later terminated, (yy) ViroPharma provides AHPC with
                    written notice that it desires such Acquiring Entity to be
                    considered an Affiliate hereunder or (zz) such Acquiring
                    Entity otherwise gains access to or the right to use, itself
                    or on behalf of any Third Party, any materials or
                    information included within items A through E, inclusive,
                    described in clause (iii) above for the discovery,
                    development and/or commercialization of pharmaceutical
                    products in the Field, except to the extent that such
                    material or information constitutes Permitted Materials,
                    such Acquiring Entity thereafter shall be considered to be
                    an Affiliate of ViroPharma for all purposes of this
<PAGE>

                    Agreement, including, without limitation, the provisions set
                    forth in Section 2.6 hereof. For purposes of this Section
                    1.4, "Permitted Materials" shall mean any of items A through
                    E, inclusive, described above in this Section 1.4, which

                         (I)   the Acquiring Entity can demonstrate, through
                               written records created prior to the effective
                               date of the Change of Control of ViroPharma, was
                               in the Acquiring Entity's prior possession, other
                               than through receipt, directly or indirectly from
                               ViroPharma,

                         (II)  the Acquiring Entity can demonstrate, through
                               written records, was acquired by the Acquiring
                               Entity from a Third Party who had the right to
                               disclose or transfer the same to the Acquiring
                               Entity;

                         (III) the Acquiring Entity can demonstrate, through
                               written records, was independently developed by
                               employees of the Acquiring Entity who had no
                               knowledge of or access to any of items A through
                               E, inclusive, described above in this Section
                               1.4;

                         (IV)  becomes part of the public domain after the date
                               this Agreement was signed by the Parties other
                               than through any breach of this Agreement by
                               ViroPharma; or

                         (V)   is made available to such Acquiring Entity by
                               AHPC or any of AHPC's Affiliates;

                    provided, however, that none of the foregoing exclusions
                    shall result in the Acquiring Entity having any right to:

                         1.    practice any of the ViroPharma Patent Rights for
                               the discovery, development and/or
                               commercialization of pharmaceutical products in
                               the Field,

                         2.    practice any of the AHPC Patent Rights except
                               through a license granted by AHPC directly to
                               such Acquiring Entity,

                         3.    practice any of the Collaboration Patent Rights
                               for the discovery, development and/or
<PAGE>

                               commercialization of pharmaceutical products in
                               the Field,

                         4.    utilize Compounds included within the ViroPharma
                               Chemical Library for the discovery, development
                               and/or commercialization of pharmaceutical
                               product in the Field, or

                         5.    utilize Compounds included within the AHPC
                               Chemical Library, which Compounds are obtained
                               directly or indirectly from ViroPharma, except
                               through a license granted by AHPC directly to
                               such Acquiring Entity.

     1.5  "AHPC Chemical Library" shall mean those Compounds that AHPC, as of
          the Effective Date owns or Controls, or that come into AHPC's Control
          during the of the Research Program, provided, however, that for
          purposes of this Agreement, the AHPC Chemical Library shall not
          include those Compounds in the agricultural chemical library of AHPC's
          subsidiary, American Cyanamid Company.

     1.6  "AHPC Know-How" shall mean Know-How, excluding the Collaboration Know-
          How, that AHPC owns or Controls as of the Effective Date or that comes
          into the Control of AHPC during the term of this Agreement.

     1.7  "AHPC Patent Rights" shall mean Patent Rights that AHPC owns or
          Controls as of the Effective Date or that come into the Control of
          AHPC during the term of this Agreement, which Patent Rights claim any
          AHPC Prior Invention and/or AHPC Non-Collaboration Invention. Those
          AHPC Patent Rights known to be existing as of the Effective Date are
          listed on Exhibit 1.7 attached hereto.

     1.8  "AHPC Technology" shall mean the AHPC Patent Rights, AHPC's interest
          in the Collaboration Patent Rights, the AHPC Know-How, AHPC's interest
          in the Collaboration Know-How and the AHPC Assay and Screening
          Technology.

     1.9  "AHPC Territory" shall mean the world other than the countries
          included within the Copromotion Territory.

     1.10 "Annual Commercialization Plan and Budget" shall have the meaning set
          forth in Section 6.1.2.

     1.11 "Annual Development Plan and Budget" shall have the meaning set forth
          in Section 4.2.2.
<PAGE>

     1.12 "Assay and Screening Technology" shall mean the Know-How, methods and
          technology owned or Controlled by either Party which may be used for
          the screening of Compounds for activity against one or more
          Collaboration Targets.

     1.13 "Assigned Sales Force Effort" shall mean ******* in a **********
          during any Calendar Quarter or calendar year, as applicable, as
          assigned by the MSC under the then applicable Annual Commercialization
          Plan and Budget and in accordance with Section 6.1.3.

     1.14 "Baseline Allocation of Net Profits" shall have the meaning set forth
          in Section 7.5.1.

     1.15 "Biomolecule" shall mean a polypeptide, protein, vaccine or antibody,
          any of which is either of natural origin, expressed by recombinant
          methodology or chemically synthesized or which may be a chemical
          structure derived therefrom, an analog, derivative, congener or the
          like.

     1.16 "Calendar Quarter" shall mean the respective periods of three
          consecutive calendar months ending on March 31, June 30, September 30
          or December 31, for so long as this Agreement is in effect.

     1.17 "Change of Control" shall mean any of the following: (a) the sale or
          disposition of all or substantially all of the assets of a Party to a
          Third Party, (b) the acquisition by a Third Party, other than an
          employee benefit plan (or related trust) sponsored or maintained by a
          Party or any of its Affiliates, of more than 50% of such Party's
          outstanding shares of voting capital stock, or (c) the merger or
          consolidation of a Party with or into another corporation, other than
          a merger or consolidation of a Party in which holders of shares of
          such Party's voting capital stock immediately prior to the merger or
          consolidation will have at least 50% of the ownership of voting
          capital stock of the surviving corporation immediately after the
          merger or consolidation.

     1.18 "Class A Product" shall mean any Product that: ********************.

     1.19 "Class B Product" shall mean ********************.

     1.20 "Collaboration Inventions" shall mean all Inventions owned or
          Controlled by either Party which Inventions are made by either Party's
          employees, agents or subcontractors in the performance of such Party's
          obligations under the Research Program or in performing any research
          and development of a Product, pursuant to this Agreement, after such
          Product has received Regulatory Approval, including, without
          limitation, Phase IV clinical studies and clinical studies in support
          of additional indications within the Field or labeling changes for
          such Product during the term of this Agreement, regardless of whether
          such Inventions are made solely by such Party's employees, agents or
          subcontractors or jointly with the employees, agents or subcontractors
          of the other Party.
<PAGE>

     1.21 "Collaboration Know-How" shall mean that Know-How that is created or
          developed by or on behalf of either Party, either alone or jointly
          with the other Party, in performing its obligations under the Research
          Program or in performing any Post-Approval Research.

     1.22 "Collaboration Patent Rights" shall mean those Patent Rights that
          include claims directed to Collaboration Inventions.

     1.23 "Collaboration Target" shall mean any Target that is (a) listed in
          Exhibit 1.23 attached hereto, (b) selected by the JSC in accordance
          with Section 4.4.1 or (c) used by either Party in its performance of
          the Research Program for Screening Compounds for potential activity as
          a prophylactic or therapeutic agent in the Field.

     1.24 "Collaboration Technology" shall mean the Collaboration Patent Rights
          and the Collaboration Know-How.

     1.25 "Commercialization" shall mean any and all activities of making,
          having made, using, importing, marketing, promoting, distributing,
          offering for sale and selling a Product in the Field and shall include
          Promotion. When used as a verb, "Commercialize" shall mean to engage
          in Commercialization.

     1.26 "Commercially Reasonable Efforts" shall mean efforts and resources
          normally used by a Party for a product or compound owned by it or to
          which it has rights, which is of similar market potential at a similar
          stage in its development or product life, taking into account issues
          of safety and efficacy, product profile, the competitiveness of the
          marketplace, the proprietary position of the compound or product, the
          regulatory structure involved, the profitability of the applicable
          products, and other relevant factors.

     1.27 "Compound" shall mean a chemical compound or substance together with
          all complexes, mixtures and other combinations, prodrugs, metabolites,
          enantiomers, salt forms, racemates, and isomers thereof. For the sake
          of clarity, the term "Compounds" may include both Small Molecules and
          Biomolecules, provided, however, that, with respect to Biomolecules,
          only those Biomolecules selected for collaborative Research pursuant
          to Section 4.4.2, shall be considered to be Compounds hereunder.

     1.28 "Confidential Information" shall mean with respect to each Party, non-
          public proprietary data or information which belong in whole or in
          part to such Party or its Affiliates and/or information designated as
          Confidential Information of such Party hereunder.

     1.29 "Control" or "Controlled" shall mean with respect to any (a) item of
          information, including, without limitation, Know-How, or (b)
          intellectual property right, the possession (whether by ownership or
          license, other than pursuant to this
<PAGE>

          Agreement) by a Party of the ability to grant to the other Party
          access and/or a license as provided herein under such item or right
          without violating the terms of any agreement or other arrangements
          with any Third Party existing before or after the Effective Date.

     1.30 "Copromotion Territory" shall mean:  (a) the fifty (50) states of the
          United States and the District of Columbia, and (b) Canada.

     1.31 "Copromotion Territory Commercialization Plan" shall have the meaning
          set forth in Section 6.1.2.

     1.32 "Copyright" shall mean any copyright owned or Controlled by AHPC which
          copyright pertains to the promotional materials and literature
          utilized by the Parties in connection with the Promotion of Products
          in the Copromotion Territory pursuant to Section 6.1.

     1.33 "Cost of Goods Manufactured for Sale" shall mean AHPC's actual cost to
          acquire Product from a Third Party, or its Fully-Absorbed Standard
          Cost to produce the Product, plus (or minus, as the case may be):  (a)
          AHPC's costs for Product inventory adjustments and losses, (b) any
          manufacturing cost variances allocable to such Product, (c)
          amortization of new standard costs for such Product, (d) prior period
          adjustments allocable to such Product, and (e) actual distribution
          costs (other than those deducted as part of the calculation of Net
          Sales pursuant to Section 1.71(a)(v)), warehousing costs and billing,
          receiving, collection and other miscellaneous costs incurred by AHPC
          as they relate to distribution of the Products.

     1.34 "Derivative" of a given Compound shall mean a chemical compound
          derived by addition to or manipulation of a fundamental structure of
          such Compound.

     1.35 "Detail" shall mean a face-to-face meeting between one or more Target
          Physicians and one or more professional sales representative, made in
          compliance with the Target Market allocation of the MSC under Section
          6.1.3, during which a complete Product presentation, as defined from
          time to time by the MSC, is communicated, which Product presentation
          is either the first or second product-related information communicated
          by such professional sales representative during such meeting. When
          used as a verb, "Detail" shall mean to perform a Detail.

     1.36 "Development" shall mean, on a country by country basis, all
          activities performed by or on behalf of either Party pursuant to the
          Global Research and Development Plan on a Compound in the Field from
          the effective date of an IND for such Compound until Regulatory
          Approval of such Compound is obtained in such country for the
          indication under study. When used as a verb, "Develop" shall mean to
          engage in Development.
<PAGE>

     1.37 "Development Candidate" shall mean a Lead Compound or any Derivative
          thereof or any other Compound for use in the Field, that the JSC, in
          accordance with Section 4.4.5, selects or otherwise designates for
          further development to IND filing.

     1.38 "Development Expenses" shall mean, on a Compound by Compound and
          Product by Product basis, the expenses (other than Third Party License
          Fees) of the Parties incurred in performing the Development Phase of
          the Research Program and obtaining Regulatory Approval for such
          Compound or Product pursuant to the Global Research and Development
          Plan.

     1.39 "Development Phase" shall have the meaning set forth in Section 4.3.4.

     1.40 "Effective Date" shall mean the date of this Agreement first set forth
          above.

     1.41 "Executive Steering Committee" or "ESC" shall have the meaning set
          forth in Section 3.3.1.

     1.42 "Extra Effort" shall have the meaning set forth in Section 6.1.5. For
          the sake of clarity, Extra Effort shall not include any Incremental
          Sales Force Effort.

     1.43 "Extra Effort Expense" shall mean the cost to be charged to a Party's
          Marketing Account in accordance with Section 6.1.5 due to such Party's
          provision of Extra Effort.

     1.44 "FDA" shall mean the United States Food and Drug Administration or any
          successor agency thereto.

     1.45 "FD&C Act" shall mean the United States Federal Food, Drug, and
          Cosmetic Act, as amended, and the regulations promulgated thereunder.

     1.46 "Field" shall mean the therapeutic and/or prophylactic treatment of
          the effects of HCV on humans.

     1.47 "First Commercial Sale" shall mean, with respect to any Product and
          any country of the world, the first sale of such Product under this
          Agreement, for use in the Field, to a Third Party in such country,
          after such Product has been granted Regulatory Approval for use in the
          Field by the competent Regulatory Authorities in such country.

     1.48 "FTE" shall mean a full time equivalent scientific person year
          consisting of a minimum of a total of one thousand eight hundred
          eighty hours (1,880) per year of scientific work on or directly
          related to the Research Program. Work on or directly related to the
          Research Program can include, but is not limited to, experimental
          preclinical and clinical laboratory and research work, recording and
          writing up results, reviewing literature and references, holding
          scientific
<PAGE>

          discussions, managing and leading scientific staff, carrying out
          management duties related to the Research Program, and, only to the
          extent specifically pre-approved in writing by both ViroPharma and
          AHPC, writing up results for publications or presentation and
          attending or presenting appropriate seminars and symposia.

     1.49 "Full Royalty Rate Period" for a Product sold in any given country
          means the period during which either or both of the following is true:

          (a)  AHPC's distribution and/or sale of the applicable Product in the
               applicable country, in the absence of the rights and licenses
               granted by this Agreement, would have infringed one or more Valid
               Claims under Patent Rights, including Collaboration Patent
               Rights, then owned in whole or part by ViroPharma;

          (b)  AHPC's manufacture of the Product, in the absence of the rights
               and licenses granted by this Agreement, would have infringed one
               or more Valid Claims under Patent Rights, including Collaboration
               Patent Rights, then owned in whole or part by ViroPharma,

          provided that, except as may be precluded or limited by applicable
          law, the Full Royalty Rate Period for such Product in such country
          shall not expire before the tenth (10/th/) anniversary of the First
          Commercial Sale of such Product in such country.

     1.50 "Fully-Absorbed Standard Cost" shall mean the cost for those items
          specified in Exhibit 1.50 attached hereto, which costs are calculated
          in accordance with generally accepted accounting principles and have
          been incurred by AHPC or its Affiliates in manufacturing (i) materials
          to be used by the Parties in conducting clinical trials of Compounds
          or Products hereunder or (ii) Products for sale or distribution in the
          Copromotion Territory hereunder.

     1.51 "Global Research and Development Plan" shall have the meaning set
          forth in Section 4.2.1.

     1.52 "Good Clinical Practice" or "GCP" shall mean the then current
          standards for clinical trials for pharmaceuticals, as set forth in the
          United States Federal Food, Drug and Cosmetics Act and applicable
          regulations promulgated thereunder, as amended from time to time, and
          such standards of good clinical practice as are required by the
          European Union and other organizations and governmental agencies in
          countries in which the Products are intended to be sold, to the extent
          such standards are not inconsistent with United States GCP.

     1.53 "Good Laboratory Practice" or "GLP" shall mean the then current
          standards for laboratory activities for pharmaceuticals, as set forth
          in the United States Federal Food, Drug and Cosmetics Act and
          applicable regulations promulgated
<PAGE>

            thereunder, as amended from time to time, and such standards of good
            laboratory practice as are required by the European Union and other
            organizations and governmental agencies in countries in which the
            Products are intended to be sold, to the extent such standards are
            not inconsistent with United States GLP.

     1.54   "HCV" shall mean the hepatitis C virus.

     1.55   "Hit" shall mean a Compound identified by early screening, in assays
            conducted pursuant to protocols approved by the JSC, during the
            Screening Phase or the Screening Phase Tail that the JSC confirms,
            in accordance with Section 4.4.3 hereof, has activity against the
            applicable Collaboration Target that meets or exceeds an active
            threshold established by the JSC for that Collaboration Target.

     1.56   "Incremental Sales Force Effort" shall have the meaning set forth in
            Section 6.1.4. For the sake of clarity, "Incremental Sales Force
            Effort" shall not include any Extra Effort.

     1.57   "Incremental Sales Force Effort Expense" shall mean the cost to be
            charged to a Party's Marketing Account in accordance with Section
            6.1.4 hereof due to such Party's provision of an Incremental Sales
            Force Effort.

     1.58   "IND" shall mean an Investigational New Drug Application, as defined
            in the FD&C Act, that is required to be filed with the FDA before
            beginning clinical testing of a Product in human subjects, or an
            equivalent foreign filing.

     1.59   "Initial Term of the Screening Phase" shall have the meaning set
            forth in Section 4.3.1.

     1.60   "Invention" shall mean any invention in the Field that encompasses
            or relates to any Assay and Screening Technology, any Collaboration
            Target, any Compound that is Screened, Researched, or Developed
            under the Research Program, any Derivatives of any such Compounds,
            any Product and any method of making any such Compound, Derivative,
            or Product and any method of using any such Compound, Derivative or
            Product.

     1.61   "Joint Steering Committee" or "JSC" shall have the meaning set forth
            in Section 3.1.

     1.62   "Know-How" shall mean, as each of the following relates to the
            Field, all know-how, processes, materials, information, data and
            analyses including any copyright relating thereto Controlled by
            either Party or its Affiliates as of the Effective Date or coming
            into the Control of either Party or its Affiliates during the term
            of this Agreement relating to any Assay and Screening Technology,
            any Collaboration Target, any Compound that is at any time screened
            or developed under the Research Program, any Derivatives of any such
            Compounds, any Product and any

<PAGE>

           method of making any such Compound, Derivative, or Product and any
           method of using any such Compound, Derivative or Product.

     1.63  "Lapse Quarter" for a Party shall mean, on a Product by Product and
           country by country basis in the Copromotion Territory, any Calendar
           Quarter in which: (a) the Party has delivered less than *************
           of its then current Assigned Sales Force Effort, and (b) such
           percentage portion of its then current Assigned Sales Force Effort is
           at ************** lower than the portion of the other Party's
           Assigned Sales Force Effort actually performed by such other Party.

     1.64  "Lapse Year" for a Party shall mean, on a Product by Product and
           country by country basis in the Copromotion Territory, any calendar
           year in which such Party has three (3) or more Lapse Quarters.

     1.65  "Lead Compound" shall mean a Compound with: (a) sufficient potency
           and selectivity, based on activity against a Collaboration Target and
           activity in secondary selectivity assays, which activity levels and
           selectivity indices have been established by the JSC, (b) chemical
           tractability, (c) a preliminary indication of chemical structure-
           activity relationships and (d) a clear basis for initiating chemical
           optimization.

     1.66  "Major European Country" shall mean any of France, Germany, Italy, or
           the United Kingdom.

     1.67  "Marketing Account" shall have the meaning set forth in Section
           6.1.8(d).

     1.68  "Marketing Steering Committee" or "MSC" shall have the meaning set
           forth in Section 3.2.

     1.69  "NDA" shall mean a New Drug Application, as defined in the FD&C Act,
           that is required to be approved by the FDA before marketing a
           Product, or an equivalent foreign filing.

     1.70  "Net Profits" shall mean, with respect to the sales of any Product in
           a country of the Copromotion Territory, the Net Sales of such Product
           in such country, less the following expenses (deducted in the
           sequence listed) allocable to such Product in such country: (a) the
           Cost of Goods Manufactured for Sale, and (b) the Parties' combined
           Sales and Marketing Expenses, a Party's Incremental Sales Force
           Expenses, if any, a Party's Extra Effort Expense, if any, and the
           Parties' combined Post-Approval Research and Regulatory Expenses.

     1.71  "Net Sales" shall mean the gross amounts charged for sales of
           Products by AHPC, its Affiliates, or sublicensees, as appropriate, to
           non-Affiliate Third Parties on which payments are due under this
           Agreement, less the sum of (a) and (b) where (a) is a provision,
           determined under Generally Accepted Accounting Principles in the
           United States, for (i) reasonable trade, cash and quantity

<PAGE>

           discounts or rebates (other than price discounts granted at the time
           of sale), reasonable service allowances and reasonable broker's or
           agent's commissions, if any, actually allowed or paid, (ii) credits
           or allowances actually given or made for rejection or return of,
           previously sold Products or for retroactive price reductions
           (including Medicaid, managed care and similar types of rebates),
           (iii) taxes, duties or other governmental charges levied on or
           measured by the billing amount (excluding income and franchise
           taxes), as adjusted for rebates and refunds, and (iv) reasonable
           credits or allowances actually given or made for wastage replacement,
           and (v) charges actually incurred for packing, freight, and shipping
           from AHPC's or its Affiliates' distribution center and insurance
           directly related to such packing, freight, and shipping of such
           Product (excluding amounts reimbursed by Third Party customers and
           any amounts associated with packing, freight, and shipping to and
           holding at AHPC's or its Affiliate's distribution center, which
           amounts are included within the Cost of Goods Manufactured for Sale)
           and (b) is a periodic adjustment of the provision determined in (a)
           to reflect amounts actually incurred for (i), (ii), (iii), (iv), and
           (v). A "sale" of a Product is deemed to occur upon the invoicing, or
           if no invoice is issued, upon the earlier of shipment or transfer of
           title in the Product to a Third Party. If a Product is sold or
           distributed for use in combination with or as a component of another
           product or products (a "Combination Product"), the calculation of
           "Net Sales" from such Combination Product will be determined by
           multiplying the Net Sales for such Combination Product calculated as
           set forth above by a fraction, the numerator of which is the fair
           market value of the Product in such Combination Product, and the
           denominator of which is the fair market value of the Combination
           Product. If a Product is sold as part of a bundle of distinct
           products (i.e., not (i) packaged together with another product or
           (ii) in a Combination Product form alone,) the Net Sales for such
           Product will be based on the discounted unit price of such Product
           sales, which discounted unit price shall be proportional to the total
           discount provided for the entire bundle (e.g., if, the price for the
           bundle of products is twenty percent (20%) lower than the price that
           would be charged by AHPC, its Affiliates or sublicensees for the same
           group of products if sold separately, based on the average unit price
           of such products when sold separately, then the discounted unit price
           attributable to the Product when sold as part of such bundle would be
           eighty percent (80%) of the average unit price of the Product when
           sold separately by AHPC, its Affiliates or sublicensees.

     1.72  "Non-Collaboration Invention" of a Party shall mean an Invention
           owned or Controlled by either Party, which Invention (a) is made
           solely by such Party's employees, agents or subcontractors during the
           term of this Agreement or otherwise comes into the Control of such
           Party during the term of this Agreement and(b) is not made in the
           performance of the Research Program.

     1.73  "Patent Rights" shall mean any and all (a) patents, (b) pending
           patent applications, including, without limitation, all provisional
           applications, substitutions, continuations, continuations-in-part,
           divisions, renewals, and all patents granted thereon, and (c) all
           patents-of-addition, reissues, reexaminations

<PAGE>

           and extensions or restorations by existing or future extension or
           restoration mechanisms, including, without limitation, supplementary
           protection certificates or the equivalent thereof, that, (i) during
           the Term of this Agreement, are owned or Controlled by either Party,
           and (ii) claim any Invention.

     1.74  "Penalty Year" for a Party shall mean the calendar year following a
           Lapse Year.

     1.75  "Phase I Clinical Study" shall mean a study, conducted in accordance
           with a protocol approved by the JSC, of a Development Candidate in
           human volunteers or patients with the endpoint of determining initial
           tolerance, safety and/or pharmacokinetic information in single dose,
           single ascending dose, multiple dose and/or multiple ascending dose
           regimens.

     1.76  "Phase II Clinical Study" shall mean a study, conducted in accordance
           with a protocol approved by the JSC, of a Development Candidate in
           patients to determine initial efficacy and dose range finding before
           embarking on Phase III Clinical Studies.

     1.77  "Phase III Clinical Study" shall mean a pivotal study in patients, ,
           conducted in accordance with a protocol approved by the JSC, which
           protocol is designed to ascertain efficacy and safety of a Product
           for the purpose of preparing and submitting applications for
           Regulatory Approval to the competent Regulatory Authorities in a
           country of the world.

     1.78  "Post-Approval Research and Regulatory Expenses" shall mean those
           expenses incurred, on a Product by Product and country by country
           basis, by either Party directly attributable to (a) ongoing research
           and development of a Product after such Product has received
           Regulatory Approval in such country of the Copromotion Territory,
           including, without limitation, Phase IV clinical studies and clinical
           studies in support of additional indications within the Field or
           labeling changes for such Product in such country and/or (b)
           complying with its regulatory reporting obligations in the
           Copromotion Territory in accordance with Section 5.4.

     1.79  "Pre-Development Expenses" shall mean, on a Compound by Compound
           basis, the expenses (other than Third Party License Fees) incurred by
           the Parties after the Effective Date in performing the Screening
           Phase and the Research Phase of the Research Program.

     1.80  "Pre-Marketing Expenses" shall mean those expenses incurred on a
           country by country and Product by Product basis within the
           Copromotion Territory, by either Party, other than R&D Expenses,
           before Regulatory Approval of a Product in such country, directly
           attributable to the carrying out of such Party's obligations under
           the Copromotion Territory Commercialization Plan in preparation for
           the marketing, promotion, sale and distribution of such Product in
           such country. Such expenses may include, without limitation, costs
           incurred for professional

<PAGE>

           education, Product related public relations, relationships with
           opinion leaders and professional societies, market research, health
           care economics studies, and establishment of the supply chain for the
           distribution and sale of such Product in such country. Such expenses
           may include both internal expenses incurred by a Party as well as
           out-of-pocket expenses paid to Third Parties by a Party at reasonable
           rates pre-approved by the MSC.

     1.81  "Pre-Marketing Expense Shortfall" shall have the meaning set forth in
           Section 6.1.8(f).

     1.82  "Prior Invention" of a Party shall mean an Invention owned or
           Controlled by either Party, which Invention is made solely by the
           Party's employees, agents or subcontractors before the Effective Date
           or which otherwise came into the Control of such Party before the
           Effective Date.

     1.83  "Product" shall mean any pharmaceutical product, for use in the
           Field, containing one or more Development Candidates as an active
           ingredient.

     1.84  "Promotion" shall mean those activities, including, without
           limitation, Detailing and distributing Samples of a Product, normally
           undertaken by a pharmaceutical company's sales force to implement
           marketing plans and strategies aimed at encouraging the appropriate
           use of a particular Product. When used as a verb, "Promote" shall
           mean to engage in such activities.

     1.85  "R&D Account" shall have the meaning set forth in Section 4.6.3.

     1.86  "R&D Reimbursement Account" shall have the meaning set forth in
           Section 7.1(b).

     1.87  "R&D Shortfall" shall have the meaning set forth in Section 4.6.5.

     1.88  "Reduced Royalty Rate Period" for a Product in a country means the
           period beginning on the expiration of the Full Royalty Rate Period
           for the Product in that country, or if there is no Full Royalty Rate
           Period for that Product in that country, then beginning on the First
           Commercial Sale of the Product in that Country, and ending on the
           twenty-fifth (25/th/) anniversary of the Effective Date.

     1.89  "Regulatory Approval" shall mean the technical, medical and
           scientific licenses, registrations, authorizations and approvals
           (including, without limitation, approvals of NDAs, supplements and
           amendments, pre- and post-approvals, pricing and third party
           reimbursement approvals, and labeling approvals) of any national,
           supra-national, regional, state or local regulatory agency,
           department, bureau, commission, council or other governmental entity,
           necessary for the commercial manufacture, distribution, marketing,
           promotion, offer for sale, use, import, export and sale of Product(s)
           in a regulatory jurisdiction.

<PAGE>

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

     1.91  "Research" shall mean, on a Compound by Compound basis, those
           preclinical activities undertaken by or on behalf of either Party
           subsequent to Screening and prior to Development of such Compound,
           including, without limitation, medicinal chemistry, pharmacology,
           preclinical toxicology, and formulation of such Compound in the
           Field.

     1.92  "Research Phase" shall have the meaning set forth in Section 4.3.2.

     1.93  "Research Program" shall have the meaning set forth in Section 4.1.

     1.94  "Sales and Marketing Expenses" shall mean those expenses directly
           allocable, on a Product by Product and country by country basis, to
           the Parties' market development and/or Promotion of such Product in
           the Copromotion Territory, consistent with the Copromotion Territory
           Commercialization Plan for such Product. Sales and Marketing Expenses
           shall include: (a) costs for Promotion of the Product, excluding
           costs of the field sales force personnel (i.e., Detailing expenses,
           including, without limitation, salaries, bonus, benefits, sales force
           automation, and personnel expenses -- telephone, supplies, postage,
           meetings, travel and voice mail including all information
           technology); (b) out-of-pocket payments to Third Parties incurred by
           such Party and specifically attributable to such Party's performance
           under the Copromotion Territory Commercialization Plan, excluding
           Third Party License Fees, (c) costs for activities related to
           obtaining reimbursement from payers, (d) market research costs
           (including, without limitation, actual costs of sales and marketing
           data), (e) marketing and advertising costs (including, without
           limitation, cost for preparing and reproducing detail aids and other
           promotional materials), (f) professional education, (g) Product
           related public relations, (h) costs of pharmacoeconomics studies, (i)
           costs for manufacturing and distributing Product Samples, and (j)
           costs for conducting seminars and establishing relationships with
           opinion leaders and professional societies in connection with the
           Product. Such costs will include both internal costs (e.g., salaries,
           benefits, supplies and materials, etc.) as well as the actual amounts
           paid to outside service providers (e.g., consultants, agency fees,
           meeting costs, etc.). Sales and Marketing Expenses will specifically
           exclude the cost of activities that promote either Party's business
           as a whole without being Product specific (such as corporate image
           advertising) as well as Extra Effort Expenses, and Incremental Sales
           Force Expenses.

<PAGE>

     1.95   "Sample" shall mean a unit of a Product, as used by AHPC, that is
            not intended to be sold and is intended to promote the sale of such
            Product. When used as a verb, "Sample" shall mean to provide Samples
            to Target Physicians.

     1.96   "Sample Receipt Forms" shall mean those multi-part paper forms (or
            an electronic version thereof) supplied by AHPC for the purpose of
            recording Detail and Sample activity performed by ViroPharma sales
            representatives during Details. These forms are also used as Sample
            receipts on which to obtain a physician's signature in
            acknowledgment of the physician's receipt of Samples.

     1.97   "Screening" shall mean screening and identification of Compounds,
            including, without limitation, Compounds from the ViroPharma
            Chemical Library or the AHPC Chemical Library to determine whether
            such Compounds may have activity against an Active Collaboration
            Target.

     1.98   "Screening Phase" shall have the meaning set forth in Section 4.3.1.

     1.99   "Small Molecule" shall mean any Compound that is not a Biomolecule.

     1.100  "Surviving Entity" of a Change of Control of ViroPharma shall mean:
            (a) a Third Party that has acquired substantially all of the assets
            of ViroPharma or 100% of the outstanding shares of voting capital
            stock of ViroPharma pursuant to a Change of Control, (b) a company
            that results from the merger of ViroPharma and another entity
            pursuant to a Change of Control, or (c) ViroPharma if a Third Party
            acquires more than 50% but less than 100% of the outstanding shares
            of voting capital stock of ViroPharma pursuant to a Change of
            Control.

     1.101  "Tail Compound" shall have the meaning set forth in Section 4.3.3.

     1.102  "Target" shall mean a molecular entity for which there is sufficient
            information, data, or valid reason to believe that perturbation of
            such entity would be sufficient to prevent or affect the course of
            human disease caused by the HCV.

     1.103  "Target Market" shall mean the segments of the overall market for a
            Product to whom a Party will Promote such Product.

     1.104  "Target Physician" shall mean each physician and other health care
            professional and organization to whom either Party Details a Product
            in the Copromotion Territory.

     1.105  "Term of the Screening Phase" shall mean, with respect to any
            Compound, the Initial Term of the Screening Phase and all extensions
            made thereto with respect to such Compound in accordance with
            Section 4.3.1.

     1.106  "Third Part(y/ies)" shall mean any person(s) or entit(y/ies) other
            than AHPC, ViroPharma or their respective Affiliates.

<PAGE>

     1.107  "Third Party License Fee" shall mean license fees, royalties and
            other amounts paid to any Third Party for the license under
            intellectual property rights of technology necessary or useful for
            Screening, Research, Development or Commercialization, which license
            is entered into, during the term of this Agreement, by a Party
            pursuant to Section 8.2.3.

     1.108  "Trademark" shall mean those registered trademarks used in
            connection with the Commercialization of any Product by either Party
            hereunder, provided, however, that the term "Trademark" shall not
            include the tradename of either Party or any trademark or tradedress
            of either Party which is not used exclusively in connection with the
            Products Commercialized under this Agreement.

     1.109  "Valid Claim" shall mean a claim that (i) in the case of any
            unexpired United States or foreign patent, shall not have been
            donated to the public, disclaimed, nor held invalid or unenforceable
            by a court or government agency of competent jurisdiction in an
            unappealed or unappealable decision, or (ii) in the case of any
            United States or foreign patent application, shall not have been
            canceled, withdrawn, or abandoned without being refiled in another
            application or finally rejected by an administrative agency action
            from which no appeal can be taken, or shall not have been pending
            for more than five years. For purposes of this definition, time
            periods shall be measured cumulatively for claims in a later filed
            application in a country which are substantially the same as claims
            in an earlier filed application in that country. If a claim of a
            patent application that ceased to be a Valid Claim under (ii) due to
            the passage of time later issues as part of a patent described
            within (i) then it shall again be considered to be a Valid Claim
            effective as of the issuance of such patent.

     1.110  "ViroPharma Chemical Library" shall mean those Compounds that
            ViroPharma, as of the Effective Date owns or Controls, or that come
            into ViroPharma's Control during the term of the Research Program.

     1.111  "ViroPharma Know-How" shall mean Know-How, excluding the
            Collaboration Know-How, that ViroPharma owns or Controls as of the
            Effective Date or that comes into the Control of ViroPharma during
            the term of this Agreement.

     1.112  "ViroPharma Patent Rights" shall mean Patent Rights that ViroPharma
            owns or Controls as of the Effective Date or that come into the
            Control of ViroPharma during the term of this Agreement, which
            Patent Rights claim any ViroPharma Prior Invention and/or ViroPharma
            Non-Collaboration Invention. Those ViroPharma Patent Rights known to
            be existing as of the Effective Date are listed on Exhibit 1.112
            attached hereto.

     1.113  "ViroPharma Technology" shall mean the ViroPharma Patent Rights,
            ViroPharma's interest in the Collaboration Patent Rights, the
            ViroPharma Know-How, ViroPharma's interest in the Collaboration
            Know-How, and the ViroPharma Assay and Screening Technology.

<PAGE>

2.   LICENSES.

     2.1   Licenses to AHPC. Subject to the terms and conditions of this
           Agreement, including, without limitation, Sections 2.4 and 2.6
           hereof, ViroPharma hereby grants to AHPC:

           (a) the exclusive worldwide right and license, without the right to
               grant sublicenses (except to AHPC's Affiliates or ViroPharma), to
               use the ViroPharma Technology, the ViroPharma Chemical Library,
               and the Collaboration Targets only to the extent necessary for
               AHPC to exercise its rights and perform its obligations under the
               Research Program and to exercise its rights and perform its
               obligations during the Screening Phase Tail; and

           (b) the exclusive worldwide right and license, with the right to
               sublicense one or more of its Affiliates, ViroPharma and/or Third
               Parties (provided, however, that in the Copromotion Territory,
               AHPC may only grant sublicenses to one or more or its Affiliates
               and ViroPharma), to use the ViroPharma Technology, the
               Collaboration Targets, and the ViroPharma Chemical Library only
               to the extent necessary to Develop and Commercialize Hits, Lead
               Compounds, Development Candidates and Products for use in the
               Field.

     2.2   Licenses to ViroPharma. Subject to the terms and conditions of this
           Agreement, including, without limitation, Sections 2.4 and 2.6
           hereof, AHPC grants to ViroPharma:

           (a) the nonexclusive right and license, without the right to grant
               sublicenses (except to ViroPharma Affiliates), to use the AHPC
               Technology, the AHPC Chemical Library, the ViroPharma Technology,
               the ViroPharma Chemical Library, and the Collaboration Targets
               only to the extent necessary for ViroPharma to exercise its
               rights and perform its obligations under the Research Program and
               to exercise its rights and perform its obligations during the
               Screening Phase Tail;

           (b) the nonexclusive right and license, without the right to grant
               sublicenses (except to ViroPharma Affiliates), to use the AHPC
               Technology, the AHPC Chemical Library, the ViroPharma Technology,
               the ViroPharma Chemical Library, and the Collaboration Targets
               only to the extent necessary for ViroPharma to Promote Products
               in the Copromotion Territory in accordance with Section 6.1 of
               this Agreement; and

           (c) the nonexclusive right and license, without the right to grant
               sublicenses (except to ViroPharma Affiliates), to use the
               Trademarks and Copyrights

<PAGE>

               in the Copromotion Territory during the term of this Agreement
               only to the extent such license is necessary for ViroPharma to
               Promote Products in the Copromotion Territory in accordance with
               Section 6.1 of this Agreement.

     2.3  Sublicensing to Third Party Contractors. Notwithstanding any provision
          to the contrary in this Agreement, if pursuant to Section 4.5, the JSC
          approves the utilization of one or more Third Parties to perform
          certain tasks under the Research Program, the Party entering into a
          contract with such Third Party for the performance of such services,
          may, as part of such contract, grant to such Third Party a
          nonexclusive, nontransferable, nonsublicensable license or sublicense,
          as applicable, under the ViroPharma Technology or the AHPC Technology,
          as applicable, only to the extent and only for so long as such license
          or sublicense is necessary for such Third Party to perform such tasks
          under the Research Program. Likewise, to the extent that either Party
          enters into a contract with a Contract Sales Organization to perform
          all or part of its obligations in Promoting Products pursuant to
          Section 6.1.1 hereof, such Party may, as a part of such contract,
          grant to such Third Party a nonexclusive, nontransferable,
          nonsublicensable license or sublicense, as applicable, under the
          ViroPharma Terchnology or the AHPC Technology, as applicable, only to
          the extent and only for so long as such license or sublicense is
          necessary for such Third Party to perform such Promotion. All such
          contracts and sublicenses entered into by either Party with a Contract
          Sales Organization shall be subject to the prior written approval of
          the MSC, which approval shall not be unreasonably withheld or delayed.

     2.4  Dropped Compounds.  Upon the written determination of the JSC not to
          advance a Compound further in Screening, Research, Development, or
          Commercialization hereunder, such Compound shall no longer be included
          in the rights licensed by one Party to the other Party under Section
          2.1 or 2.2, provided, however, that for so long as either (a) there is
          at least one Development Candidate being studied hereunder during the
          Development Phase of the Research Program or (b) a Product is being
          marketed in the Field by AHPC pursuant to this Agreement, neither
          Party will develop or commercialize in the Field, independently or in
          collaboration with any Third Party, such Compound or any Derivative
          thereof without the prior written consent of the other Party.

     2.5  Direct Licenses to Party Affiliates. Either Party may at any time
          request and authorize the other Party to grant licenses directly to
          Affiliates of the requesting Party by giving written notice
          designating to whom a direct license is to be granted. Upon receipt of
          any such notice, the requested Party shall enter into and sign a
          separate direct license agreement with such designated Affiliate of
          the requesting Party. All such direct license agreements shall be
          consistent with the terms and conditions of this Agreement, except for
          such modifications as may be required by the laws and regulations in
          the country in which the direct license will be exercised. In
          countries where validity of the direct license agreement requires
          prior government approval or registration, such direct license
          agreement shall not

<PAGE>

          become binding between the parties thereto until such approval or
          registration is granted, which approval or registration shall be
          obtained by the requesting Party. All costs of making a direct license
          under this Section 2.5 shall be borne by the requesting Party.

     2.6  Exclusive Working Relationship.  Notwithstanding the licenses granted
          under Sections 2.1 and 2.2 hereof, it is expressly understood and
          agreed by the Parties that

          (a)  during the Screening Phase and the Screening Phase Tail,
               ViroPharma and its Affiliates shall work exclusively with AHPC
               and AHPC's Affiliates in the Screening, Research, Development and
               Commercialization of Compounds and pharmaceutical products for
               use in the Field, provided, however, that during the Screening
               Phase Tail, either Party and/or its Affiliates shall be free to
               continue the Screening of Tail Compounds either independently or
               exclusively with the other Party and the other Party's
               Affiliates, but not with any Third Party,

          (b)  after the end of the Screening Phase Tail ViroPharma and its
               Affiliates shall be free to conduct Screening of Compounds (other
               than Compounds from the AHPC Chemical Library or to which AHPC
               otherwise has proprietary rights) against Targets that are not
               Active Collaboration Targets and, provided that such Compounds
               are not active against any Active Collaboration Target,
               ViroPharma and its Affiliates shall be free to conduct Research,
               Development and Commercialization with respect to such Compounds,

          (c)  during the Research Program, AHPC and its Affiliates shall work
               exclusively with ViroPharma and its Affiliates on the development
               of Compounds which are directed against Active Collaboration
               Targets, and

          (d)  during the term of this Agreement, neither Party nor its
               Affiliates shall develop or commercialize any Active Compound for
               use outside of the Field, except in collaboration with the other
               Party and such other Party's Affiliates pursuant to an agreement
               to be negotiated by the Parties. Notwithstanding the foregoing,
               once a Compound has ceased to be an Active Compound, the Parties
               and their respective Affiliates shall be free to develop and/or
               commercialize such Compound for use outside of the Field,
               provided, however, that with respect to such Compound, as of the
               time such Compound ceases to be an Active Compound, AHPC and its
               Affiliates shall have no further rights or licenses under the
               ViroPharma Technology and ViroPharma and its Affiliates shall
               have no further rights or licenses under the AHPC Technology.

          For the sake of clarity, AHPC would have no obligation to work
          exclusively with ViroPharma (i) with respect to any Biomolecule based
          pharmaceutical products

<PAGE>

          regardless of the Target of such product, (ii) with respect to Small
          Molecules based pharmaceutical products directed against Targets that
          are not, at such time, Active Collaboration Targets, and (iii) during
          the Development Phase, with respect to Small Molecule based
          pharmaceutical products directed against Targets for which no Small
          Molecule based pharmaceutical product is then being Developed under
          this Agreement.

     2.7  Right of Reference.  Each Party hereby grants the other a "Right of
          Reference," as that term is defined in 21 C.F.R. (S) 314.3(b), to any
          data developed under this Agreement, and a Party shall provide a
          signed statement to this effect, if requested by the other, in
          accordance with 21 C.F.R. (S) 314.50(g)(3).

3.   MANAGEMENT OF COLLABORATION.

     3.1  Joint Steering Committee.

          3.1.1  Formation; Membership. Within thirty (30) days after the
                 Effective Date, ViroPharma and AHPC shall establish a Joint
                 Steering Committee (the "JSC") to oversee and control the
                 collaborative discovery and preclinical and clinical
                 development of Compounds and Products for use in the Field, as
                 further described below in this Agreement. The JSC shall be
                 composed of an equal number of from two (2) to four (4)
                 representatives from each Party as appointed by such Party,
                 which representatives shall have expertise suitable to the
                 then-current activities of the collaboration. The JSC shall
                 initially have two (2) representatives from each Party, but the
                 JSC may change its size from time to time by mutual consent of
                 its members, provided, however, that the size of the JSC shall
                 be no less than four (4) members and no greater than eight (8)
                 members. A Party may replace one or more of its representatives
                 from time to time upon written notice to the other Party. From
                 time to time, the JSC may establish subcommittees to oversee
                 specific projects or activities and such subcommittees shall be
                 constituted as the JSC shall determine, but shall always
                 include at least one (1) member from each Party. The JSC will
                 exist until the termination of the Research Program, as set out
                 in Section 4.3, unless the Parties otherwise agree in writing.

          3.1.2  Chairperson; Secretary. The chairperson of the JSC shall be
                 designated by AHPC. The chairperson will be responsible for
                 scheduling meetings of the JSC, preparing agendas for meetings,
                 sending to all JSC members notices of all regular meetings and
                 agendas for such meetings at least five (5) business days
                 before such meetings. The chairperson shall appoint a secretary
                 for each meeting who will record the minutes of the meeting,
                 circulate copies of meeting minutes to the Parties and each JSC
                 member promptly following the meeting for review, comment and
                 approval and finalize approved meeting minutes.

<PAGE>

          3.1.3  Meetings.  The JSC shall meet at least once each Calendar
                 Quarter during the term of the Research Program, unless
                 otherwise mutually agreed by the Parties. Either Party may call
                 a special meeting of the JSC on fifteen (15) days written
                 notice to the other Party and each of the JSC members. Such
                 written notice shall include an agenda for the special meeting.
                 Meetings, including, without limitation, special meetings, of
                 the JSC will alternate between the offices of the Parties,
                 unless otherwise agreed by the members of the JSC, or may be
                 held telephonically or by video-conference. Meetings of the JSC
                 shall be effective only if at least one (1) representative of
                 each Party is in attendance or participating in the meeting.
                 Members of the JSC shall have the right to participate in and
                 vote at meetings by telephone. The most senior attending
                 representative of each Party on the JSC shall have the right to
                 vote on behalf of any members of the JSC from such Party not
                 attending a JSC meeting in person or by telephone. Each Party
                 shall be responsible for expenses incurred by its employees and
                 its members of the JSC in attending or otherwise participating
                 in JSC meetings.

          3.1.4  Decision Making.  All decisions of the JSC shall be made by
                 majority vote. ************

          3.1.5  Responsibilities of the JSC.  In addition to its general
                 responsibility to oversee and coordinate the development of
                 Compounds and Products in the Field according to the Global
                 Research and Development Plan and ensure a regular flow of
                 research and development information between the Parties, the
                 JSC shall in particular:

                 (a) develop the Global Research and Development Plan and the
                     Annual Development Plan and Budget for the remainder of
                     calendar year 1999 and for calendar year 2000 within sixty
                     (60) days after the Effective Date;

                 (b) review and update as necessary the Global Research and
                     Development Plan and develop an Annual Development Plan and
                     Budget for activities under the Global Research and
                     Development Plan for subsequent calendar years no later
                     than the October 31 immediately preceding each such
                     subsequent calendar year;

                 (c) oversee the activities of each Party's project team that is
                     performing such Party's obligations under the Research
                     Program;

                 (d) facilitate the flow of information between the Parties with
                     respect to all development work being conducted for each
                     Compound and Product in the Field on a worldwide basis;

<PAGE>

                 (e)  review and approve all scientific and clinical protocols,
                      which shall provide that all preclinical and clinical
                      development work under this Agreement shall be conducted
                      in accordance with GLPs and GCPs;

                 (f)  review and approve the contents and filing of INDs,
                      applications for Regulatory Approval, and related and
                      supporting submissions to Regulatory Authorities; and

                 (g)  until such time as the MSC is formed, review and approve
                      premarketing activities and expenses.

     3.2  Marketing Steering Committee.

          3.2.1  Formation; Membership. As soon as agreed by the JSC, but not
                 later than thirty (30) days after the initiation of the first
                 Phase III Clinical Study of a Product, ViroPharma and AHPC
                 shall establish a Marketing Steering Committee (the "MSC") to
                 develop and coordinate a Copromotion Territory
                 Commercialization Plan and Annual Commercialization Plans and
                 Budgets and to oversee the execution of each Party's
                 responsibilities in the Copromotion Territory under the
                 Copromotion Territory Commercialization Plan and the applicable
                 Annual Commercialization Plan and Budget. The MSC shall be
                 composed of an equal number of from two (2) to four (4)
                 representatives from each Party as appointed by such Party,
                 which representatives shall have expertise suitable to the
                 then-current activities of the collaboration. The MSC shall
                 initially have two (2) representatives from each Party, but the
                 MSC may change its size from time to time by mutual consent of
                 its members, provided, however, that the size of the MSC shall
                 be no less than four (4) members and no greater than eight (8)
                 members. A Party may replace one or more of its representatives
                 from time to time upon written notice to the other Party. From
                 time to time, the MSC may establish subcommittees to oversee
                 specific projects or activities and such subcommittees shall be
                 constituted as the MSC shall determine, but shall always
                 include at least one (1) member from each Party. The MSC will
                 exist for so long as a Product is Promoted by both of the
                 Parties in the Copromotion Territory pursuant to this Agreement
                 unless otherwise agreed, in writing, by the Parties.

          3.2.2  Chairperson; Secretary.  The chairperson of the MSC shall be
                 designated by AHPC. The chairperson will be responsible for
                 scheduling meetings of the MSC, preparing agendas for meetings,
                 sending to all MSC members notices of all regular meetings and
                 agendas for such meetings at least five (5) business days
                 before such meetings. The chairperson shall appoint a secretary
                 for each meeting who will record the minutes of the meeting,
                 circulate copies of meeting minutes to the Parties and each MSC

<PAGE>

                 member promptly following the meeting for review, comment and
                 approval and finalize approved meeting minutes.

          3.2.3  Meetings.  After the MSC is formed in accordance with Section
                 3.2.1, the MSC shall meet at least once each Calendar Quarter,
                 unless otherwise mutually agreed by the Parties. Either Party
                 may call a special meeting of the MSC on fifteen (15) days
                 written notice to the other Party and each of the MSC members.
                 Such written notice shall include an agenda for the special
                 meeting. Meetings, including, without limitation, special
                 meetings, of the MSC will alternate between the offices of the
                 Parties, unless otherwise agreed by the members of the MSC, or
                 may be held telephonically or by video-conference. Meetings of
                 the MSC shall be effective only if at least one (1)
                 representative of each Party is in attendance or participating
                 in the meeting. Members of the MSC shall have the right to
                 participate in and vote at meetings by telephone. The most
                 senior attending representative of each Party on the MSC shall
                 have the right to vote on behalf of any members of the MSC from
                 such Party not attending a MSC meeting in person or by
                 telephone. Each Party shall be responsible for expenses
                 incurred by its employees and its members of the MSC in
                 attending or otherwise participating in MSC meetings.

          3.2.4  Decision Making.  All decisions of the MSC shall be made by
                 majority vote *******************.

          3.2.5  Responsibilities of the MSC.  In addition to its general
                 responsibility to oversee and coordinate the Commercialization
                 of Products in the Copromotion Territory according to the
                 Copromotion Territory Commercialization Plan, the MSC shall in
                 particular:

                 (a) not later than sixty (60) days after the filing of the
                     first application for Regulatory Approval of a Product in
                     the Copromotion Territory, complete and approve a
                     Copromotion Territory Commercialization Plan for such
                     Product and an Annual Commercialization Plan and Budget for
                     such Product covering the period through the end of the
                     first full calendar year after anticipated Regulatory
                     Approval;

                 (b) oversee and coordinate the activities of the Parties in
                     marketing, selling and distributing Products in the
                     Copromotion Territory during the Term of this Agreement
                     following Regulatory Approval of such Products in the
                     Copromotion Territory; and

                 (c) not later than September 30 of each year after formation of
                     the MSC establish an Annual Commercialization Plan and
                     Budget describing each of the Parties' Commercialization
                     activities and forecast the expected sales level of
                     Products each in the

<PAGE>

                     Copromotion Territory during the following calendar year,
                     which will guide the schedule of production of Products.

     3.3  Executive Steering Committee.

          3.3.1  Formation; Membership.  Within thirty (30) days after the
                 Effective Date, ViroPharma and AHPC shall establish an
                 Executive Steering Committee (the "ESC") to resolve disputes
                 arising within the JSC and the MSC. The ESC shall be composed
                 of two (2) representatives appointed by each of ViroPharma and
                 AHPC, provided, however, that no such representative is also a
                 member of either the JSC or the MSC. A Party may replace one
                 (1) or more of its representatives from time to time upon
                 written notice to the other Party. The ESC shall exist until
                 the expiration or earlier termination of this Agreement.

          3.3.2  Chairperson; Secretary.  The chairperson of the ESC shall be
                 designated by AHPC. The chairperson will be responsible for
                 scheduling meetings of the ESC, preparing agendas for meetings,
                 sending to all ESC members notices of all regular meetings and
                 agendas for such meetings at least five (5) business days
                 before such meetings. The chairperson shall appoint a secretary
                 for each meeting who will record the minutes of the meeting,
                 circulate copies of meeting minutes to the Parties and each ESC
                 member promptly following the meeting for review, comment and
                 approval and finalize approved meeting minutes.

          3.3.3  Meetings.  The ESC shall meet on an as needed basis, provided,
                 however, that the ESC shall meet and decide on each matter
                 presented to it within thirty (30) calendar days after each
                 such matter is referred to it by the JSC or the MSC, as
                 applicable. A matter shall be considered referred to the ESC as
                 of the date that either Party provides each member of the ESC
                 with a written description of the disputed matter, which
                 written description shall include the positions taken by each
                 member of the JSC or MSC, as applicable, as to such matter, all
                 other information relevant to such matter and a copy of the
                 minutes of each JSC or MSC meeting, as applicable, at which
                 such matter was discussed. Within ten (10) days after such
                 matter is so presented to the ESC, the chairman of the ESC
                 shall notify each member of the ESC of the date, time and
                 location of the ESC meeting to address such matter. The
                 meetings of the ESC will alternate between the offices of the
                 Parties, unless otherwise agreed by the members of the ESC, or
                 may be held telephonically or by video-conference. Meetings of
                 the ESC shall be effective only if at least one (1)
                 representative of each Party is in attendance or participating
                 in the meeting. An attending or participating representative of
                 a Party shall have the right to vote on behalf of non-attending
                 or non-participating member from such Party. Each Party shall
                 be responsible for expenses incurred by its employees and its

<PAGE>

                 members of the ESC in attending or otherwise participating in
                 ESC meetings.

          3.3.4  Decision Making.  All decisions of the ESC shall be made by
                 majority vote ************.

          3.3.5  Dispute Resolution.  If the ESC is unable to reach a decision
                 with respect to any matter, such matter shall be referred for
                 resolution ***********. The decision **************** with
                 respect to such matter pursuant to this Section 3.3.5 shall be
                 final and binding upon each of the Parties. Notwithstanding the
                 foregoing, if an unresolved matter is presented ***************
                 for resolution as provided in this Section 3.3.5,
                 ***************** refer the matter back to the ESC or the JSC,
                 as applicable, for further consideration with a specified date
                 by which the ESC or JSC, as applicable, must either resolve the
                 matter or resubmit the matter ************* for final
                 resolution.

     3.4  Authority.  The Parties agree that, in voting on matters as described
          in this Article 3, it shall be conclusively presumed that each voting
          member of the JSC, MSC and ESC has the authority and approval of such
          member's respective senior management in casting his or her vote and
          decisions of the JSC, MSC and ESC made in accordance with this Article
          3 shall be binding upon each of the Parties.

     3.5  Project Coordinators.  Each Party shall designate one or two of its
          employees as project coordinator(s) for all of the activities
          contemplated under this Agreement.  Such project coordinators will be
          responsible for the day-to-day coordination of the collaboration
          contemplated by this Agreement and will serve to facilitate
          communication between the Parties. A Party may, from time to time,
          replace its designated project coordinator(s) upon providing the other
          Party with written notice to that effect.

4.   RESEARCH AND DEVELOPMENT.

     4.1  The Research Program.

          4.1.1  General.  Under the terms and conditions set forth herein, AHPC
                 and ViroPharma will collaborate in the conduct of a
                 collaborative research program for the (i) identification and
                 validation of Targets and assay and screening methods utilizing
                 such Targets and (ii) the discovery, identification, screening,
                 and pre-clinical and clinical development of Compounds and
                 Products for use in the Field (collectively, the "Research
                 Program"). The Research Program shall consist of a Screening
                 Phase, a Screening Phase Tail, if applicable, and with respect
                 to any Compound identified by the JSC as a Hit during the
                 Screening Phase, a Research Phase and, if warranted, a
                 Development Phase. The Screening Phase of

<PAGE>

                 the Research Program (the "Screening Phase") will be focused on
                 the development of Targets, assays and Screening methods and
                 the Screening of the ViroPharma Chemical Library, the AHPC
                 Chemical Library and any other library selected by mutual
                 agreement of the Parties for the identification and validation
                 of Hits. The Research Phase of the Research Program (the
                 "Research Phase") will be focused on a medicinal chemistry
                 program for the further evaluation of Hits, the development and
                 validation of Lead Compound candidates, including, without
                 limitation, Derivatives of Hits, screening and testing of Lead
                 Compound candidates to identify and validate Lead Compounds,
                 the optimization of Lead Compounds and their Derivatives,
                 further preclinical Research and Screening of Lead Compounds to
                 identify and select Development Candidates, and the further
                 preclinical Development of Development Candidates. The
                 Development Phase of the Research Program (the "Development
                 Phase") will be focused on the clinical Development of
                 Development Candidates and Products.

     4.2  Research & Development Plans.

          4.2.1  Global Research and Development Plan.  Within thirty (30) days
                 following its formation, the JSC shall prepare and approve a
                 global research and development plan (the "Global Research and
                 Development Plan"). The Global Research and Development Plan
                 shall consist of those tasks that the Parties agree are
                 essential to the validation of Targets, the discovery,
                 validation and preclinical and clinical development of
                 Compounds and Products for use in the Field, and obtaining
                 Regulatory Approval for Products in the world. The Global
                 Research and Development Plan shall be kept current by the JSC,
                 updated on such schedule as the JSC may determine but not less
                 often than once per calendar year. The Global Research &
                 Development Plan may only be modified or amended upon written
                 approval of the JSC.

          4.2.2  Annual Development Plans.  Within thirty (30) days following
                 its formation, the JSC shall prepare and approve an annual
                 development plan and budget (the "Annual Development Plan and
                 Budget") addressing the collaborative Screening, Research and
                 Development activities to be carried out by the Parties during
                 the remainder of calendar year 1999 pursuant to this Agreement
                 and the Global Research and Development Plan. Thereafter, on or
                 before October 31 of each year, the JSC shall prepare and
                 approve an Annual Development Plan and Budget addressing the
                 collaborative Screening, Research and Development activities to
                 be undertaken by the Parties during the following calendar year
                 pursuant to this Agreement and the then current Global Research
                 and Development Plan. Each Annual Development Plan and Budget
                 shall include, without limitation, detailed plans for the
                 characterization and validation of Targets, the discovery and
                 validation of Compounds for use in the Field, the

<PAGE>

                 collaborative research and development of Compounds and
                 Products for use in the Field, designation of which Party is
                 responsible for each task, staffing levels required to carry
                 out such activities, and a budget setting forth the estimated
                 expenditures required to carry out such activities. The Annual
                 Development Plan and Budget may only be modified or amended
                 upon written approval of the JSC.

     4.3  Term of Research Program.  The Research Program shall extend until the
          termination of the latest of all of the following, including, if
          applicable, the last meeting of the JSC necessary to determine whether
          Hits in the Screening Phase Tail should be advanced to Development.

          4.3.1  Screening Phase.  The Screening Phase of the Research Program
                 shall begin on the Effective Date and, on a Collaboration
                 Target by Collaboration Target basis, unless extended in
                 accordance with this Section 4.3.1, shall extend until the
                 three (3) year anniversary of the Effective Date (the "Initial
                 Term of the Screening Phase") unless this Agreement is earlier
                 terminated in its entirety in accordance with Sections 11.4,
                 11.5, or 11.9.1 or with respect to such Collaboration Target in
                 accordance with Section 11.7. The Initial Term of the Screening
                 Phase of the Research Program may be extended by mutual
                 agreement of the Parties on terms substantially the same as
                 those set forth herein, unless otherwise agreed in writing by
                 the Parties. On or before the day one hundred eighty (180) days
                 before the expiration of the Initial Term of the Screening
                 Phase of the Research Program or the then current extension
                 thereof, as applicable, either Party may provide to the other
                 Party written notice of its desire to extend the Screening
                 Phase of the Research Program by one (1) additional year.
                 Promptly after the other Party's receipt of such written notice
                 the Parties shall commence discussions of the need and desire
                 to extend the Screening Phase of the Research Program and if
                 both Parties do not agree, in writing, to such extension on or
                 before the day sixty (60) days before the expiration of the
                 Initial Term of the Screening Phase or the then current
                 extension thereof, the Term of the Screening Phase shall expire
                 at the end of the Initial Term of the Screening Phase or the
                 then current extension thereof, as applicable.

          4.3.2  Research Phase.  The Research Phase of the Research Program
                 shall commence, on a Compound by Compound basis, upon the JSC's
                 designation of such Compound as a Hit, and shall extend until
                 the later of (a) the initiation of the Development Phase for
                 such Compound, or (b) such time as the JSC determines, in
                 writing, to discontinue all Research on such Compound and not
                 to advance such Compound to the Development Phase, unless
                 earlier terminated in accordance with Sections 11.4, 11.5, 11.7
                 or 11.9.1.

<PAGE>

          4.3.3  Screening Phase Tail. The Screening Phase Tail shall begin
                 during the term of this Agreement, on a Compound-by-Compound
                 basis, when such Compound is first screened and found by either
                 Party to have any activity against any Collaboration Target,
                 whether or not such Compound is determined to be a Hit (a "Tail
                 Compound"), and shall extend until the two (2) year anniversary
                 of the end of the Term of the Screening Phase, unless this
                 Agreement is earlier terminated in its entirety in accordance
                 with Section 11.4 or 11.9.1 or pursuant to Section 11.7, with
                 respect to any Collaboration Target identified pursuant to
                 Section 11.7(b) for which the Research Program has been
                 terminated in accordance with Section 11.7, but regardless of
                 whether this Agreement is earlier terminated in accordance with
                 Section 11.5. Within ten (10) business days after the end of
                 each Calendar Quarter during the Screening Phase Tail each
                 Party shall provide to the other a written report detailing all
                 data and information obtained by such Party with respect to any
                 Tail Compound studied by such Party during such Calendar
                 Quarter. For the Calendar Quarter during which the Screening
                 Phase Tail ends, such written reports shall be provided within
                 ten (10) business days after the last day of the Screening
                 Phase Tail. At any time during the Screening Phase Tail, either
                 Party may propose in writing to the JSC that a Tail Compound
                 subject to the Screening Phase Tail be designated a Hit or Lead
                 Compound and be further developed. Additionally, within thirty
                 (30) days after the last day of the Screening Phase Tail, the
                 JSC shall meet to determine whether any of the Tail Compounds
                 studied by the Parties during the Screening Phase Tail shall be
                 designated as a Hit or Lead Compound and further developed. If
                 the JSC designates a Tail Compound as a Hit or Lead Compound,
                 then the Parties shall collaborate on further, Research,
                 Development and Commercialization of such Compound consistent
                 with the terms of this Agreement, regardless of whether this
                 Agreement is earlier terminated in accordance with Section
                 11.5, in which event, such earlier termination shall be void
                 and the effects of any such termination arising in accordance
                 with Section 11.5.2 shall be reversed such that each Party
                 thereafter has the rights it had immediately prior to such
                 termination. If the JSC in good faith determines not to
                 designate any such Tail Compound as a Hit or a Lead Compound,
                 then the Party owning such Compound may further Develop and
                 Commercialize such Compound independently of the other Party
                 subject to the restrictions of Section 2.6.

          4.3.4  Development Phase. With respect to any Compound, the
                 Development Phase shall commence on the date an IND is filed
                 seeking permission from the appropriate Regulatory
                 Authority(ies) to conduct clinical studies of such Compound and
                 shall continue until the JSC agrees to cease the clinical
                 development of such Compound or until a Product containing such
                 Compound has received Regulatory Approval in the Copromotion
                 Territory and each country of the AHPC Territory where AHPC
                 determines to apply for Regulatory Approval.
<PAGE>

     4.4  Selection of Additional Targets, Biomolecules, Hits, Lead Compounds,
          Development Candidates and Products.

          4.4.1  Selection of Additional Targets. During the Screening Phase,
                 the JSC may select one or more additional Targets as
                 Collaboration Targets against which to Screen Compounds for
                 activity. Likewise, during the term of the Screening Program,
                 the JSC may determine to discontinue Screening Compounds for
                 activity against one or more Targets or to reinstate the
                 screening of Compounds for activity against one or more Targets
                 that were previously discontinued from Screening.

          4.4.2  Selection of Biomolecules as Compounds. Neither Party shall
                 Screen or conduct any Research or Development under this
                 Agreement on any Compound that is a Biomolecule unless the JSC
                 first approves, in writing, the inclusion of such Biomolecule
                 as a Compound under this Agreement.

          4.4.3  Selection of Hits. The JSC shall review the data obtained by
                 the Parties in the Screening of Compounds, and, upon agreement
                 that such data support a determination that such Compound has
                 activity against the applicable Collaboration Target that meets
                 or exceeds an active threshold established by the JSC for that
                 Collaboration Target, such Compound shall be deemed to be a
                 Hit.

          4.4.4  Selection of Lead Compounds. Based on criteria to be determined
                 by the JSC, the JSC may select Lead Compounds during the
                 Screening Phase, the Screening Phase Tail or the Research Phase
                 from (a) Hits in the ViroPharma Chemical Library, the AHPC
                 Chemical Library or any other library the Parties shall
                 mutually agree to screen in connection with the Research
                 Program, and/or (b) any Derivative of any such Hits.

          4.4.5  Selection of Development Candidates. During the Research Phase,
                 the JSC may select Development Candidates from those Compounds
                 designated by the JSC as Lead Compounds and any Derivatives
                 thereof. The JSC's selection of Development Candidates shall be
                 based upon the JSC's determination to develop such Compound
                 toward IND filing, based on criteria established by the JSC,
                 which criteria may include, without limitation, consideration
                 of the following factors: in vitro efficacy and potency, in
                 vivo oral activity, efficacy and potency, medicinal chemistry
                 criteria, toxicology studies required for IND filing, ancillary
                 pharmacology studies, clinical drug substance stability and
                 formulation, scale up compound synthesis and other competitive
                 and commercial factors, including without limitation, the
                 proprietary position of such Compound.

          4.4.6  Selection of Products. Development Candidates will become
                 Products upon the filing of an IND for such Development
                 Candidate, which filing
<PAGE>

                 will be made only after the JSC determines that such
                 Development Candidate is suitable for clinical trials based on
                 its preclinical profile and competitive and other commercial
                 considerations.

     4.5  Conduct of the Research Program. ViroPharma and AHPC shall each use
          its respective Commercially Reasonable Efforts to perform its
          obligations under the Research Program in accordance with the Global
          Research and Development Plan and the then current Annual Development
          Plan and Budget and each Party shall perform such obligations in
          accordance with applicable GLPs and GCPs. All activities to be
          undertaken in the performance of the Research Program shall be carried
          out by employees of the Parties and/or their respective Affiliates,
          provided, however, that if either Party is able to reasonably
          demonstrate, and the JSC agrees, that it would be in the best
          interests of both Parties to contract with one (1) or more Third
          Parties to perform certain tasks under the Research Program, the Party
          responsible for such task may enter into a contract with a Third Party
          to perform such task, which contract shall be subject to the prior
          written approval of the JSC. In determining whether to utilize the
          services of any Third Party in conducting activities under the
          Research Program, the Parties shall consider, inter alia, what would
          be the most efficient and cost-effective means for accomplishing the
          proposed activity, any relevant intellectual property issues that may
          impede a Third Party's ability to perform the proposed activity or
          that may warrant limiting the performance of the proposed activity to
          one of the Parties, and other relevant factors. The responsibility for
          performing clinical studies of each Product will be assigned to AHPC
          and/or Third Party contractors selected by the JSC in accordance with
          this Section 4.5. Notwithstanding the foregoing, ViroPharma shall be
          given the opportunity to perform three (3) clinical studies in the
          Development of Products in the Copromotion Territory under this
          Agreement, which clinical studies shall consist of one (1) Phase I
          Clinical Study, one (1) Phase II Clinical Study and one (1) Phase III
          Clinical Study ******************. Within thirty (30) days of the
          JSC's deciding that a clinical study on a Product is warranted,
          *****************. If the JSC agrees, in writing, such agreement not
          to be unreasonably withheld, ***********************, the Annual
          Development Plan and Budget for the calendar year in which such
          clinical study is to take place shall assign responsibility for such
          clinical study to ViroPharma, or be amended to reflect such assignment
          of responsibility. ****************************** Notwithstanding the
          foregoing, the JSC may assign to ViroPharma responsibility for
          conducting additional clinical trials beyond the three (3) described
          above in this Section 4.5.

     4.6  Funding of the Research Program.

          4.6.1  Pre-Development Expenses.  The Parties shall share the Pre-
                 Development Expenses *****************************.
<PAGE>

          4.6.2  Development Expenses. The Parties shall share the Development
                 Expenses, on a Product by Product basis, as follows:

                 (a)   AHPC shall be responsible for *************** and
                       ViroPharma shall be responsible for ****************** of
                       the Development Expenses incurred by either Party.

                 (b)   Expenses incurred by the Parties for the continued
                       development of a Product in a country of the Copromotion
                       Territory (i.e., for Phase IV clinical studies, studies
                       supporting approval of additional indications or labeling
                       changes or other post-marketing studies) will be treated
                       as Post-Approval Research and Regulatory Expenses
                       pursuant to Section 6.1.8(c).

          4.6.3  Payment of Expenses; R&D Accounts. Subject to reconciliation as
                 provided in Section 4.6.5, each Party shall be responsible and
                 pay for the expenses incurred by it in performing its
                 obligations under the Research Program. Subject to the
                 limitations set forth in Section 4.6.4, each Party shall charge
                 all such expenses so incurred by it or its Affiliates to a
                 separate account created by such Party on its books and records
                 solely for the purpose of tracking expenses incurred in
                 connection with the Research Program (each, a "R&D Account").
                 Within thirty (30) days after the end of each Calendar Quarter,
                 each Party shall submit to the other Party a written summary of
                 all expenses charged to its R&D Account during such Calendar
                 Quarter, which summary shall be accompanied by reasonable
                 supporting documentation for such expenses.

          4.6.4  Expense Limitations. The expenses charged by either Party to
                 its R&D Account in accordance with Section 4.6.3, shall not be
                 in an amount in excess of ************* of the amount included
                 for such expenses in the then current Annual Development Plan
                 and Budget unless the JSC recommends and the respective R&D
                 management of each Party approves such excess expenses.
                 Additionally, the Parties hereby agree that efforts of the
                 employees of a Party or its Affiliates in performing its
                 obligations under the Research Program shall be charged to such
                 Party's R&D Account at the rate of *******************, or such
                 other amount as may be agreed to from time to time in writing
                 by the Parties, for efforts in support of preclinical studies
                 of a Compound or otherwise performed in the Screening Phase or
                 the Research Phase of the Research Program and
                 ***********************, or such other amount as may be agreed
                 to from time to time in writing by the Parties, for efforts in
                 support of clinical studies of a Compound or Product or
                 otherwise performed as part of the Development Phase of the
                 Research Program, provided, however, that only those efforts
                 that are contemplated by the Global Research and Development
                 Plan and/or the applicable Annual Development Plan and Budget
                 shall be chargeable by a Party to its R&D Account, except as
<PAGE>

                 otherwise approved in writing by the JSC. All payments made by
                 a Party to a Third Party in connection with the performance of
                 its obligations under the Research Program shall be charged to
                 such Party's R&D Account at such Party's actual out-of-pocket
                 cost. Expenses incurred by each Party for equipment, materials
                 and supplies utilized in performing its obligations under the
                 Research Program shall not be separately charged to such
                 Party's R&D Account, except for those expenses incurred by a
                 Party, with the prior written consent of the JSC, in the
                 purchase or making of equipment, materials or supplies (other
                 than common laboratory supplies, e.g., pipettes, test tubes,
                 petri dishes, reagents, and the like) that are to be used
                 exclusively in connection with the performance of such Party's
                 obligations under the Research Program (e.g., laboratory
                 animals, compounds that are Development Candidates, Products,
                 placebo supplies, etc.), which expenses shall be charged to
                 such Party's R&D Account at such Party's actual out-of-pocket
                 expense incurred in purchasing or making such equipment,
                 materials or supplies. Notwithstanding the foregoing, in the
                 case of materials supplied to the Parties by AHPC for use in
                 clinical trials of Compounds or Products, AHPC shall charge to
                 its R&D Account its Fully Absorbed Standard Cost for such
                 materials, as adjusted to account for manufacturing cost
                 variances allocable to such materials.

          4.6.5  Reconciliation of Expenses. Within sixty (60) days after the
                 end of each calendar year, AHPC shall prepare a reconciliation
                 report, accompanied by reasonable supporting documents and
                 calculations, which reconciles the amounts charged to each
                 Party's R&D Account during such calendar year pursuant to
                 Section 4.6.3, including, without limitation, making any
                 necessary adjustments for prior period manufacturing cost
                 variances allocable to Products utilized in Development, and
                 the share of the Parties' aggregate Pre-Development Expenses
                 and Development Expenses to be allocated to each of the Parties
                 for such calendar year in accordance with Sections 4.6.1 and
                 4.6.2. Within thirty (30) days after AHPC delivers such
                 reconciliation report to ViroPharma, the net amount shown as
                 being due either AHPC or ViroPharma (the "R&D Shortfall") will
                 be paid by the Party owing such amount, provided, however, that
                 in the event ViroPharma is the Party owing such amount to AHPC,
                 ViroPharma may, by written notice to AHPC provided within such
                 thirty (30) day period, ************************************.
                 If, with respect to any calendar year, ViroPharma has an R&D
                 Shortfall for which it is to reimburse AHPC, the balance in the
                 R&D Reimbursement Account has been exhausted, and ViroPharma is
                 unable or otherwise fails to pay to AHPC all or part of the R&D
                 Shortfall before the end of the thirty (30) day period required
                 by this Section 4.6.5, then the unpaid portion of the R&D
                 Shortfall (the "Deferred Payment") shall accumulate interest at
                 the annual interest rate of twelve percent (12%), compounded
                 monthly, and shall be repaid to AHPC ************************
                 *****, until all
<PAGE>

                 such R&D Shortfalls and any interest accrued thereon are paid
                 in full. Notwithstanding the foregoing, all Deferred Payments
                 and all interest accumulating thereon shall be due and payable
                 to AHPC within seven (7) years after the end of the thirty (30)
                 day period described above in this Section 4.6.5. The failure
                 of ViroPharma to pay to AHPC all or part of an R&D Shortfall
                 prior to the end of such seven (7) year period shall not be a
                 material breach of this Agreement for purposes of Section 11.4.

          4.6.6  Records and Audits. During the term of this Agreement, each
                 Party shall keep and maintain accurate and complete records
                 showing the expenses incurred by it in performing its
                 obligations under the Research Program during the three (3)
                 preceding calendar years, which books and records shall be in
                 sufficient detail such that each such expense can be (i)
                 allocated as a Pre-Development Expense or a Development Expense
                 and (ii) in the case of Development Expenses, allocated to
                 particular clinical trials or activities such that each Party's
                 responsibility for such expenses as provided in Section 4.6.2
                 can accurately be determined. Upon fifteen (15) days prior
                 written notice from a Party (the "Auditing Party"), the other
                 Party (the "Audited Party") shall permit an independent
                 certified public accounting firm of nationally recognized
                 standing selected by the Auditing Party and reasonably
                 acceptable to the Audited Party, to examine the relevant books
                 and records of the Audited Party and its Affiliates as may be
                 reasonably necessary to verify the reports submitted by the
                 Audited Party in accordance with Section 4.6.3 and the accuracy
                 of the reconciliation report prepared in accordance with
                 Section 4.6.5. An examination by a Party under this Section
                 4.6.6 shall occur not more than once in any calendar year and
                 shall be limited to the pertinent books and records for any
                 calendar year ending not more than thirty-six (36) months
                 before the date of the request. The accounting firm shall be
                 provided access to such books and records at the Audited
                 Party's facility(ies) where such books and records are normally
                 kept and such examination shall be conducted during the Audited
                 Party's normal business hours. The Audited Party may require
                 the accounting firm to sign a standard non-disclosure agreement
                 before providing the accounting firm access to the Audited
                 Party's facilities or records. Upon completion of the audit,
                 the accounting firm shall provide both AHPC and ViroPharma a
                 written report disclosing whether the reports submitted by the
                 Audited Party are correct or incorrect and the specific details
                 concerning any discrepancies. No other information shall be
                 provided to the Auditing Party. If the accountant determines
                 that, based on errors in the reports so submitted, the
                 reconciliation report prepared in accordance with Section 4.6.5
                 is incorrect, the Parties shall promptly revise the
                 reconciliation report and any additional amount owed by one
                 Party to the other shall be paid within thirty days after
                 receipt of the accountant's report, along with interest at the
                 annual interest rate of twelve percent (12%), compounded
                 monthly from the date that such additional amount should have
                 first been paid,
<PAGE>

                 provided, however, that no such interest shall be payable if
                 the errors leading to the reconciliation report being incorrect
                 were in the reports provided by the Party to receive such
                 additional amount. Additionally, if the accountant determines
                 that the reports submitted by the Audited Party overstate the
                 Audited Party's expenses by more than ten percent (10%), the
                 Audited Party shall reimburse the Auditing Party for the
                 expenses incurred by the Auditing Party in conducting the
                 audit.

     4.7  Reporting and Disclosure.

          4.7.1  Reports. Before each quarterly meeting of the JSC, ViroPharma
                 and AHPC will each provide the other with written copies of all
                 materials they intend to present at the JSC meeting plus, to
                 the extent not set forth in the JSC materials, a written report
                 summarizing any other material data and information arising out
                 of the conduct of the Research Program. If after receipt of any
                 such report, either Party shall request additional data or
                 information relating to Research Program data or Collaboration
                 Technology licensed hereunder, the Party to whom such request
                 is made shall promptly provide to the other Party such data or
                 information that such Party reasonably believes is necessary
                 for the continued conduct of the Research Program.

          4.7.2  Quarterly Meeting. At the quarterly meeting of the JSC, AHPC
                 and ViroPharma will review in reasonable detail (i) all data
                 and information generated in the conduct of the Research
                 Program by each Party, and (ii) all Collaboration Technology
                 licensed hereunder developed by the Parties.

          4.7.3  Disclosure. During the term of the Research Program, the
                 Parties will promptly disclose to one another all data,
                 information, Inventions, techniques and discoveries (whether
                 patentable or not) arising out of the conduct of the Research
                 Program and all Inventions, techniques and discoveries (whether
                 patentable or not) included in Collaboration Technology
                 licensed hereunder.

5.   MANUFACTURING OF PRODUCTS; REGULATORY MATTERS.

     5.1  Manufacturing. Pursuant to the licenses granted to AHPC in Section 2,
          AHPC shall have the exclusive right to manufacture, either itself
          and/or through Third Parties selected by AHPC, Products under the
          Agreement. To the extent possible, AHPC shall notify ViroPharma at
          least one (1) year before any anticipated occurrence of the inability
          of AHPC to supply one hundred fifteen percent (115%) of the commercial
          demands for Product in the Co-Promotion Territory as forecast by the
          MSC. Within fifteen (15) days of such notice the MSC shall meet to
          discuss the need to identify and obtain a secondary source of Product
          supply to avoid or reduce the effect of any shortage. Additionally,
          after the First Commercial Sale of a Product in the Copromotion
          Territory, AHPC shall, by
<PAGE>

          December 1 of each year, provide ViroPharma with an estimate of AHPC's
          expected Fully Absorbed Standard Cost for manufacturing the full
          estimated commercial needs for such Product for sale in the
          Copromotion Territory for the upcoming calendar year. AHPC shall
          provide ViroPharma with an updated estimate from time to time if an
          unexpected event occurs that significantly raises or lowers the last
          estimate that AHPC provided to ViroPharma.

     5.2  Labeling. To the extent permitted by applicable laws and regulations,
          as may be reasonably requested by ViroPharma, AHPC shall include in
          all Product Labels, Labeling, and Packaging, as those terms are use in
          the FD&C Act, a statement indicating that such Product was developed
          in collaboration with ViroPharma.

     5.3  Regulatory Approvals. AHPC shall file, in its own name, all
          applications for Regulatory Approval for Products in the Copromotion
          Territory and in those countries of the AHPC Territory where AHPC, in
          its sole discretion, determines it is commercially advantageous to do
          so. AHPC shall have the primary responsibility for communicating with
          any Regulatory Authority regarding any application for Regulatory
          Approval or any Regulatory Approval once granted, provided, however,
          that ViroPharma shall, upon AHPC's request, and at ViroPharma's
          expense, (a) provide AHPC with advice and reasonable assistance in (i)
          developing a Regulatory Approval filing strategy for Products, (ii)
          reviewing study reports from clinical trials of Products, (iii)
          preparing applications for Regulatory Approval for Products, (iv)
          preparing supplements to applications for Regulatory Approval for
          Products, (v) responding to questions from Regulatory Authorities
          regarding applications for Regulatory Approval or any supplement
          thereto and (b) participate in interactions with Regulatory
          Authorities concerning the Products.

     5.4  Regulatory Reporting. AHPC shall be responsible for filing all reports
          required to be filed in order to maintain any Regulatory Approvals
          granted for Products in the world, including, without limitation,
          adverse drug experience reports. ViroPharma shall cooperate with AHPC
          in preparing and filing all such reports and, upon AHPC's request,
          provide AHPC with any information in ViroPharma's possession or
          Control which AHPC reasonably deems to be relevant to any such
          reports. Notwithstanding the foregoing, to the extent ViroPharma has
          or receives any information regarding any adverse drug experience
          which may be related to the use of any Product, ViroPharma shall
          promptly provide AHPC with all such information in accordance with the
          Adverse Event Reporting Procedures (as may be amended from time to
          time upon mutual agreement of the Parties) set forth in Exhibit 5.4
          attached hereto. Expenses (both internal expenses and out-pocket costs
          paid to a Third Party) incurred by a Party in performing its
          regulatory reporting obligations under this Section 5.4 in connection
          with Regulatory Approvals in the Copromotion Territory shall be
          charged by such Party to such Party's Marketing Account for such
          Product as a Post-Approval Research and Regulatory Expense. AHPC shall
          be solely responsible for expenses incurred by
<PAGE>

          it in performing its regulatory reporting obligations under this
          Section 5.4 in connection with Regulatory Approvals in the AHPC
          Territory.

6.   COMMERCIALIZATION OF PRODUCTS.

     6.1  Commercialization in the Copromotion Territory.

          6.1.1  Principles of Copromotion. Pursuant to the licenses granted to
                 AHPC in Section 2, AHPC shall have the exclusive right to
                 Commercialize each Product in the Field in the Copromotion
                 Territory during the term of this Agreement. Notwithstanding
                 the foregoing, ViroPharma, subject to this Section 6.1 and
                 Section 11.6, shall have the right to Promote each Product,
                 jointly with AHPC, in the Copromotion Territory, using
                 professional sales representatives that are full time employees
                 of ViroPharma or that are employees of Contract Sales
                 Organizations ("CSOs"). The Parties' marketing activities shall
                 comply with the terms of this Agreement and the Copromotion
                 Territory Commercialization Plan.

          6.1.2  Commercialization Plan. On a Product by Product basis, not
                 later than sixty (60) days after the filing of the first
                 application for Regulatory Approval of a Product in the
                 Copromotion Territory, the MSC shall prepare and approve a
                 rolling multiyear (not less than three (3) years) plan for
                 Commercializing such Product in the Copromotion Territory (the
                 "Copromotion Territory Commercialization Plan"), which plan
                 includes a comprehensive market development, marketing, sales,
                 supply and distribution strategy for such Product in the
                 Copromotion Territory. The Copromotion Territory
                 Commercialization Plan shall be updated by the MSC at least
                 once each calendar year such that it addresses no less than the
                 three (3) upcoming years. Not later than thirty (30) days after
                 the filing of the first application for Regulatory Approval of
                 a Product in the Copromotion Territory and thereafter on or
                 before September 30 of each calendar year, the MSC shall
                 prepare an annual commercialization plan and budget (the
                 "Annual Commercialization Plan and Budget"), which plan is
                 based on the then current Copromotion Territory
                 Commercialization Plan and includes a comprehensive market
                 development, marketing, sales, supply and distribution
                 strategy, including an overall budget for anticipated
                 marketing, promotion and sales efforts in the upcoming calendar
                 year (the first such Annual Development Plan and Budget shall
                 cover the remainder of the calendar year in which such Product
                 is anticipated to be approved plus the first full calendar year
                 thereafter). The Annual Commercialization Plan and Budget will
                 specify which Target Markets and distribution channels each
                 Party shall devote its respective Promotion efforts towards,
                 the personnel and other resources to be devoted by each Party
                 to such efforts, the number and positioning of Details to be
                 performed by each Party, as well as market and sales
<PAGE>

                 forecasts and related operating expenses, for the Product in
                 each country of the Copromotion Territory, and budgets for
                 projected Pre-Marketing Expenses, Sales and Marketing Expenses
                 and Post-Approval Research and Regulatory Expenses. In
                 preparing and updating the Copromotion Territory
                 Commercialization Plan and each Annual Commercialization Plan
                 and Budget, the MSC will take into consideration factors such
                 as market conditions, regulatory issues and competition.

          6.1.3  Allocation of Target Markets; Sales Effort. On a Product by
                 Product basis, at least ninety (90) days before the launch of
                 such Product in a country of the Copromotion Territory and
                 thereafter, at least ninety (90) days before the beginning of
                 each calendar year, the MSC *********** in such country and
                 ************** on the following criteria and conditions:

                 (a)   each ********* in each country of the Copromotion
                       Territory shall, as much as is reasonably possible,
                       *********** for such Product expected to be made in such
                       country of the Copromotion Territory in accordance with
                       the ************ for the Promotion of such Product in
                       such country;

                 (b)   the inclusion of ************;

                 (c)   AHPC's aggregate ***********; and

                 (d)   the MSC may not, without the prior written consent of the
                       President of ViroPharma, ***********.

                 The number of Details assigned to a Party by the MSC in
                 accordance with this Section 6.1.3 shall be such Party's
                 *************.

          6.1.4  Incremental Sales Force Effort. If a Party is asked by the MSC
                 to deliver more sales force effort than that which is agreed by
                 the Parties to be more than a 50/50 selling effort in any
                 Calendar Quarter, and if such Party provides such increased
                 sales force effort (the "Incremental Sales Force Effort"), such
                 Party shall be entitled to charge the cost of the Incremental
                 Sales Force Effort to such Party's Marketing Account as an
                 Incremental Sales Force Effort Expense. The cost to be so
                 charged shall be at a rate approved by the MSC at the time such
                 Incremental Sales Force Effort is requested and shall be on a
                 cost per Detail basis. If AHPC is the Party providing the
                 Incremental Sales Force Effort, AHPC shall be reimbursed for
                 its Incremental Sales Force Expense by deducting the
                 Incremental Sales Force Expense incurred for such Calendar
                 Quarter from the Net Sales of such Product sold during such
                 Calendar Quarter prior to the allocation of Net Profits for
                 such Calendar Quarter. If ViroPharma is the Party providing the
                 Incremental Sales Force Effort, AHPC shall
<PAGE>

                 reimburse ViroPharma for its Incremental Sales Force Expense by
                 deducting such Incremental Sales Force Expense from the Net
                 Sales of such Product sold during such Calendar Quarter prior
                 to the allocation of Net Products for such Calendar Quarter and
                 distributing such deducted amount to ViroPharma simultaneously
                 with the distribution of Net Profits to ViroPharma for such
                 Calendar Quarter. The Party incurring the Incremental Sales
                 Force Expense shall report the same to the other Party as part
                 of the reports submitted under Section 6.1.8(d).

          6.1.5  Extra Effort. If a Party expends more effort than originally
                 required of it by the Copromotion Territory Commercialization
                 Plan in order to perform Details that were part of the other
                 Party's Assigned Sales Force Effort, and that the other Party
                 fails to perform and which additional effort is approved in
                 advance by the MSC ("Extra Effort"), the first Party shall be
                 entitled to charge the costs of the Extra Effort ("Extra Effort
                 Expense") to its Marketing Account on a cost per Detail basis
                 consistent with Section 6.1.8(d), as well as twelve percent
                 (12%) annual interest, compounded monthly, accrued on the
                 amount charged for the period in which the Extra Effort is
                 expended. If AHPC is the Party providing the Extra Effort, AHPC
                 shall be reimbursed for its Extra Effort Expense by deducting
                 the Extra Effort Expense incurred for such Calendar Quarter
                 from the Net Sales of such Product sold during such Calendar
                 Quarter before the allocation of Net Profits for such Calendar
                 Quarter. If ViroPharma is the Party providing the Extra Effort,
                 AHPC shall reimburse ViroPharma for its Extra Effort Expense by
                 deducting such Extra Effort Expense from the Net Sales of such
                 Product sold during such Calendar Quarter before the allocation
                 of Net Products for such Calendar Quarter and distributing such
                 deducted amount to ViroPharma simultaneously with the
                 distribution of Net Profits to ViroPharma for such Calendar
                 Quarter. The Party incurring the Extra Effort Expense shall
                 report the same to the other Party as part of the reports
                 submitted under Section 6.1.8(d).

          6.1.6  Performance Metrics. The ********** or as part of any
                 ************ shall be determined according to Detail reporting
                 mechanisms and methodology that are approved and applied
                 consistently by the MSC.

          6.1.7  Sales and Distribution; Recalls. During the term of this
                 Agreement, AHPC shall be responsible for:

                 (a)   distribution of all Products in the Copromotion Territory
                       hereunder, the booking of all sales with respect to such
                       Products and the performance of related services. If
                       ViroPharma receives any order for the Product in the
                       Copromotion Territory during the term of this Agreement,
                       it shall promptly refer such orders to AHPC.
<PAGE>

               (b)  handling and implementing all recalls and market withdrawals
                    of any Product in the Copromotion Territory. ViroPharma will
                    make available to AHPC, upon request, all of ViroPharma's
                    pertinent records that AHPC may reasonably request to assist
                    it in effecting any recall or market withdrawals. Except as
                    expressly otherwise provided below in this Section 6.1.7(b),
                    the Parties shall share equally all other costs of a recall
                    or marketing withdrawal of a Product in the Co-Promotion
                    Territory. Notwithstanding the foregoing, a Party shall bear
                    any and all costs of a recall or market withdrawal of a
                    Product in the Co-Promotion Territory to the extent such
                    recall or market withdrawal results from a negligent act or
                    omission or intentional misconduct on the part of such
                    Party, including, without limitation, the breach of any of
                    such Party's warranties under Sections 10.3(d) or 10.3(e)
                    hereof, and not from a negligent act or omission or
                    intentional misconduct on the part of the other Party. A
                    Party shall have no obligation to reimburse or otherwise
                    compensate the other Party for any lost profits or income
                    that may arise in connection with any such recall or market
                    withdrawal.

               (c)  handling all aspects of order processing, invoicing and
                    collection, inventory and receivables.

               (d)  providing customer support, including handling medical
                    queries, and performing other functions consistent with
                    consumer practice for pharmaceutical products consistent
                    with the then current Copromotion Territory
                    Commercialization Plan and the applicable Annual
                    Commercialization Plan and Budget.

          6.1.8  Commercialization Expenses.

               (a)  Pre-Marketing Expenses. On a Product by Product and country
                    by country basis, before Regulatory Approval of such Product
                    in such country of the Copromotion Territory, the Pre-
                    Marketing Expenses incurred by the Parties with respect to
                    such Product in anticipation of obtaining Regulatory
                    Approval of such Product in such country shall
                    ***************. As such Pre-Marketing Expenses are incurred
                    they shall be paid for by the Party incurring such expenses,
                    subject to reimbursement as set forth in Section 6.1.8(g).

               (b)  Sales and Marketing Expenses. On a Product by Product and
                    country by country basis, after Regulatory Approval of such
                    Product in such country of the Copromotion Territory, the
                    Sales and Marketing Expenses incurred by the Parties shall
                    *********************. The costs of a Party's professional
<PAGE>

                    sales representatives and marketing personnel
                    *********************.

               (c)  Post-Approval Research and Regulatory Expenses. On a Product
                    by Product and country by country basis, after Regulatory
                    Approval of such Product in such country of the Copromotion
                    Territory, the Post-Approval Research and Regulatory
                    Expenses incurred by the Parties in connection with such
                    Product in such country shall *********************.

               (d)  Payment of Expenses; Marketing Accounts. Subject to
                    reconciliation as provided in Sections 6.1.8(f) or 6.1.8(g),
                    as applicable, *********************. Subject to the
                    limitations set forth in Section 6.1.8(e), each Party shall
                    charge all such expenses so incurred by it or its Affiliates
                    to a separate account created by such Party on its books and
                    records solely for the purpose of tracking expenses incurred
                    in connection with the marketing, Promotion, distribution
                    and sale of Products in the Copromotion Territory (each, a
                    "Marketing Account"). Within thirty (30) days after the end
                    of each Calendar Quarter, each Party shall submit to the
                    other Party a written summary of all Pre-Marketing Expenses,
                    Sales and Marketing Expenses, Post-Approval Research and
                    Regulatory Expenses, Incremental Sales Force Expenses and
                    Extra Effort Expenses incurred by it in performing its
                    obligations in connection with the marketing, Promotion,
                    distribution and sale of Products in the Copromotion
                    Territory, charged to its Marketing Account during such
                    Calendar Quarter, which summary shall be accompanied by
                    reasonable supporting documentation for such expenses.

               (e)  Expense Limitations. The Pre-Marketing Expenses, Sales and
                    Marketing Expenses and Post-Approval Research and Regulatory
                    Expenses charged by either Party to its Marketing Account in
                    accordance with this Section 6.1.8, shall not be in amount
                    in excess of *********************of the amount included for
                    such expenses in the then current Annual Commercialization
                    Plan and Budget, unless the MSC approves such excess
                    expenses. All payments made by a Party to any Third Party in
                    connection with the performance of its obligations in
                    connection with the Commercialization of a Product in the
                    Copromotion Territory shall be charged to such Party's
                    Marketing Account at such Party's actual out-of-pocket cost
                    incurred in accordance with the MSC approved contract
                    entered into with such Third Party.

               (f)  Reconciliation of Pre-Marketing Expenses. Within sixty (60)
                    days after the end of each Calendar Quarter, AHPC shall
                    prepare a
<PAGE>

                    reconciliation report, accompanied by reasonable supporting
                    documentation and calculations, which reconciles the Pre-
                    Marketing Expenses charged to each Party's Marketing Account
                    during such Calendar Quarter pursuant to this Section 6.1.8
                    and the share of the Parties' aggregate Pre-Marketing
                    Expenses to be allocated to each of the Parties for such
                    Calendar Quarter in accordance with this Section 6.1.8.
                    Within thirty (30) days after AHPC delivers such
                    reconciliation report to ViroPharma, *********************.
                    If, with respect to any Calendar Quarter, ViroPharma has a
                    Pre-Marketing Expense Shortfall for which it is to reimburse
                    AHPC and ViroPharma is unable or otherwise fails to pay to
                    AHPC all or part of the Pre-Marketing Expense Shortfall
                    before the end of the thirty (30) day period required by
                    this Section 6.1.8(f), the unpaid portion of the Pre-
                    Marketing Shortfall would accumulate interest at the annual
                    interest rate of twelve percent (12%), compounded monthly,
                    and would be combined with any R&D Shortfall and repaid to
                    AHPC in accordance with Section 4.6.5.

               (g)  Reimbursement of Sales and Marketing Expenses and Post-
                    Approval Research and Regulatory Expenses. At the time AHPC,
                    pursuant to Section 7.6.3, distributes to ViroPharma,
                    ViroPharma's share of Net Profits obtained from the sale of
                    a Product in a country of the Copromotion Territory during
                    any Calendar Quarter, AHPC shall also reimburse each of AHPC
                    and ViroPharma for those Sales and Marketing Expenses, Post-
                    Approval Research and Regulatory Expenses, Incremental Sales
                    Force Effort Expenses, and Extra Effort Expenses that are
                    (i) directly allocable to the Commercialization of such
                    Product in such country during such Calendar Quarter (ii)
                    properly charged by such Party to its Marketing Account and
                    (iii) reported to the other Party in accordance with this
                    Section 6.1.8. Such reimbursements shall be made solely from
                    revenues obtained by AHPC which are attributable to the Net
                    Sales of such Product in such country of the Copromotion
                    Territory, *********************. If the Net Sales
                    ********************* shall be carried over on such Party's
                    Marketing Account into subsequent Calendar Quarters
                    *********************.

        6.1.9  Marketing and Promotional Materials.  The MSC shall determine the
               content, quantity and method of distribution of any promotional
               materials related to the Product in the Copromotion Territory,
               provided, however, that all such marketing and promotional
               materials shall be subject to the approval of AHPC's and
               ViroPharma's legal, medical affairs, marketing and regulatory
               affairs department before any use thereof by either Party.  AHPC
               will be responsible for preparing and duplicating such marketing
<PAGE>

               and promotional materials and shall provide reasonable quantities
               of the same to ViroPharma for use by ViroPharma in connection
               with its Promotion of the Product in the Copromotion Territory
               hereunder. Each Party shall use only marketing and promotional
               materials approved by the MSC and provided by AHPC. All copyright
               and other intellectual property rights in said promotional
               materials shall remain vested in AHPC. Neither Party may not
               independently create, distribute or use sales, promotion or other
               similar material relating to a Product in the Copromotion
               Territory without the prior written consent of either the MSC or
               the other Party.

       6.1.10  Promotional Claims. Each Party shall limit the claims of safety
               and efficacy that such Party or its sales force makes for a
               Product in the Copromotion Territory to those that are consistent
               with the approved labeling for such Product in such country of
               the Copromotion Territory. Neither Party may add, delete or
               modify claims of efficacy or safety in its Promotion of any
               Product in the Copromotion Territory nor make any changes in
               Promotion materials and literature approved by the MSC. Each
               Party's Detailing and Promotion of a Product in the Copromotion
               Territory shall be in strict adherence to all regulatory,
               professional and legal requirements including, without
               limitation, FDA's regulations and guidelines concerning the
               advertising of prescription drug products, the American Medical
               Association's Guidelines on Gifts to Physicians, the PhRMA
               Guidelines for Marketing Practices, the ACCME Standards for
               Commercial Support of Continuing Medical Education, the then
               current Copromotion Territory Commercialization Plan for the
               Product and any updates thereto.

       6.1.11  Samples. When Detailing and Sampling the Product, each Party's
               professional sales representative shall complete Sample Receipt
               Forms provided by AHPC. A copy of the completed Sample Receipt
               Forms shall be left with the Physician receiving the Detail. Such
               professional sales representative shall mail to AHPC, in pre-
               addressed, postage-paid envelopes provided by AHPC, at the close
               of each business day the original completed Sample Receipt Forms
               for all Details performed by such professional sales
               representative that day. A copy of all such Sample Receipt Forms
               shall be kept by each such professional sales representative.
               Each Party shall ensure that each of its professional sales
               representatives fills out the Sample Receipt Forms accurately,
               completely and timely. The Fully-Absorbed Standard Cost incurred
               by AHPC in providing and processing Sample Receipt forms shall be
               charged by AHPC to its Marketing Account as a Sales and Marketing
               Expense.

       6.1.12  Communications. Each Party shall be fully responsible for
               disseminating accurate information regarding a Product to its
               professional sales
<PAGE>

               representatives based on the Product's approved labeling and
               information provided by the MSC.

       6.1.13  Training. Each Party shall be responsible for the training of its
               own professional sales representatives, in accordance with the
               training requirements and training programs and using training
               materials approved by the MSC and shall require each of its
               professional sales representatives to attend sales training for a
               Product before their Promotion of such Product in the Copromotion
               Territory hereunder. After the initial training meeting, each
               Party shall periodically provide additional training, in
               accordance with the training requirements and training programs
               and using training materials approved by the MSC, to each of its
               professional sales representatives Promoting Products hereunder.
               At the discretion and upon approval of the MSC, any such training
               meetings may be held jointly by the Parties. The expenses
               incurred by each Party in training its professional sales
               representatives before the launch of a Product shall be charged
               to such Party's Marketing Account as a Pre-Marketing Expense. The
               expenses incurred by each Party in training its professional
               sales representatives after the launch of a Product shall be
               charged to such Party's Marketing Account as a Sales and
               Marketing Expense.

       6.1.14  Compliance. In connection with its Promotion of the Product in
               the Copromotion Territory, each Party shall comply and shall
               cause each of its employees, representatives and agents,
               including, without limitation, each of its professional sales
               representatives, to comply with all laws and regulations of the
               Copromotion Territory and shall do nothing which such Party knows
               or reasonably should know would jeopardize the goodwill or
               reputation of either Party or the reputation of any Product.

       6.1.15  Generic Product. On a Product by Product and country by country
               (within the Copromotion Territory) basis, no later than three (3)
               years before the expiration of the last to expire of the Patent
               Rights conferring market exclusivity for such Product in such
               country of the Copromotion Territory, the Parties will determine
               by mutual agreement after good faith discussions whether to
               jointly launch a generic version of such Product in the
               Copromotion Territory and what the terms and conditions regarding
               such Product will be. If the Parties, on or before such time, are
               unable to agree to jointly launch such a generic Product in such
               country, then upon expiration of the relevant Patent Rights in
               such country, and notwithstanding any other exclusive or non-
               exclusive license granted under this Agreement, each Party shall
               have the right and license to utilize the Collaboration
               Technology and the other Party's Know-How solely to the extent
               necessary to launch and Commercialize its own generic version of
               such Product in such country and thereafter shall have no further
               obligations to the other Party with respect to such generic
               Product.
<PAGE>

          6.2  Commercialization in the AHPC Territory. AHPC shall have the sole
               right, either directly or through its Affiliates, sublicensees
               and/or distributors, to market, distribute and sell Products in
               the AHPC Territory. AHPC shall use its Commercially Reasonable
               Efforts to sell each Product in those countries of the AHPC
               Territory for which AHPC has obtained Regulatory Approval for
               such Product. AHPC shall be responsible for all marketing and
               selling expenses for the sale of Products in the AHPC Territory
               and AHPC shall have the sole right and discretion to determine
               the price of Products sold in the AHPC Territory and to make all
               other business decisions concerning the Commercialization of
               Products in the AHPC Territory.

7.   CONSIDERATION; PROFIT SHARING.

     7.1  Research Program Expense Reimbursements. AHPC agrees to provide
          ViroPharma *********************************:

          (a)  AHPC shall pay a nonrefundable fee of five million dollars
               ($5,000,000.00) to ViroPharma on the first business day after the
               Effective Date in consideration of ViroPharma's agreement to
               participate in the JSC, including the preparation, updating and
               implementation of the Global Research and Development Plan and
               the Annual Development Plans and Budgets; and

          (b)  AHPC shall reimburse ViroPharma for up to ************** of
               ViroPharma's *****************. AHPC shall create on its books
               and records an ***************** for this purpose, which
               ****************, but shall be subject to adjustment, from time
               to time, 7.2 Additional Development Expense Payments. AHPC shall
               pay to ViroPharma the following additional development expense
               payments, each such payment being due and payable within thirty
               (30) days after the occurrence of the corresponding event:
               ************************************.

7.2  *************************.

          Each of the additional development expense payments set forth above
          shall be payable one time only **********************, except in the
          case of the additional development expense payments payable for
          *******************, which additional development expense payments
          shall be payable with respect to ********************, provided,
          however, that, with respect to any Product that ****************, the
          receipt of *************, shall not result in ****************.

          If, with respect to any Product, any of the above events ************
          does not occur because the JSC determines that ***************, such
          event will be
<PAGE>

          deemed to have occurred on the date the JSC makes such a determination
          for purposes of determining *********************. Additionally, if
          certain of the above stated events occur ***************, if such
          later events occur in connection with the subsequent Development of
          another Product hereunder, ******************. For example,
          *************************.

     7.3  Purchase of Equity. On the Effective Date, AHPC and ViroPharma shall
          enter into the Stock Purchase Agreement attached to this Agreement as
          Exhibit 7.3, pursuant to which AHPC shall purchase, and ViroPharma
          will sell to AHPC, shares of the capital stock of ViroPharma on the
          terms and conditions set forth therein.

     7.4  Royalties.

          7.4.1  Royalty Rates. In consideration for the licenses granted to
                 AHPC under Section 2.1 hereof, AHPC, on a Product by Product
                 and calendar year by calendar year basis, will pay to
                 ViroPharma royalties based on Net Sales obtained by AHPC or its
                 Affiliates from the sale of such Product in the AHPC Territory,
                 which royalties shall be calculated as follows:

                         royalty = A + B + C, where:

                         A  = either (i) for **************** of the portion of
                              AHPC's and its Affiliates' Net Sales obtained from
                              the sale of such **************** in the AHPC
                              Territory (excluding Net Sales obtained from the
                              sale of such Product in any countries where the
                              obligation to pay royalties under this Section
                              7.4.1 has expired in accordance with Section 7.4.3
                              with respect to such Product), which, during the
                              calendar year in question are less than or equal
                              ******************, or (ii) for ************ of
                              the portion of AHPC's and its Affiliates' Net
                              Sales obtained from the sale of such
                              **************** in the AHPC Territory (excluding
                              Net Sales obtained from the sale of such Product
                              in any countries where the obligation to pay
                              royalties with under this Section 7.4.1 has
                              expired in accordance with Section 7.4.3 with
                              respect to such Product) which, during the
                              calendar year in question are less than or equal
                              to **************;

                         B  = either (i) for ************ of the portion of
                              AHPC's and its Affiliates' Net Sales obtained from
                              the sale of such **************** in the AHPC
                              Territory (excluding Net Sales obtained from the
                              sale of such Product in any countries where the
                              obligation to pay royalties with under this
                              Section 7.4.1 has expired in accordance with
                              Section
<PAGE>

                              7.4.3 with respect to such Product), which, during
                              the calendar year in question are greater than
                              ************ and less than or equal to
                              *****************, or (ii) for ************* of
                              the portion of AHPC's and its Affiliates' Net
                              Sales obtained from the sale of such
                              **************** in the AHPC Territory (excluding
                              Net Sales obtained from the sale of such Product
                              in any countries where the obligation to pay
                              royalties with under this Section 7.4.1 has
                              expired in accordance with Section 7.4.3 with
                              respect to such Product), which, during the
                              calendar year in question are greater
                              *******************; and

                         C  = either (i) for ************ of the portion of
                              AHPC's and its Affiliates' Net Sales obtained from
                              the sale of such **************** in the AHPC
                              Territory (excluding Net Sales obtained from the
                              sale of such Product in any countries where the
                              obligation to pay royalties with under this
                              Section 7.4.1 has expired in accordance with
                              Section 7.4.3 with respect to such Product),
                              which, during the calendar year in question are
                              greater than ***************** or (ii) for
                              ****************of the portion of AHPC's and its
                              Affiliates' Net Sales obtained from the sale of
                              such **************** in the AHPC Territory
                              (excluding Net Sales obtained from the sale of
                              such Product in any countries where the obligation
                              to pay royalties with under this Section 7.4.1 has
                              expired in accordance with Section 7.4.3 with
                              respect to such Product), which, during the
                              calendar year in question are greater than
                              *******************************.

               ViroPharma acknowledges and agrees that nothing in this Agreement
               (including, without limitation, any exhibits or attachments
               hereto) shall be construed as representing an estimate or
               projection of either (i) the number of Class A Products and/or
               Class B Products that will or may be successfully developed
               and/or commercialized or (ii) anticipated sales or the actual
               value of the ViroPharma Technology, and Compound or any Product
               and that the figures set forth in this Section 7.4 or elsewhere
               in this Agreement or that have otherwise been discussed by the
               Parties are merely intended to define AHPC's royalty obligations
               to ViroPharma in the event such sales performance is achieved.
               AHPC MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR
               IMPLIED, THAT IT WILL BE ABLE TO SUCCESSFULLY DEVELOP AND/OR
               COMMERCIALIZE ANY PRODUCT OR, IF COMMERCIALIZED THAT ANY IT WILL
               ACHIEVE ANY PARTICULAR SALES LEVEL OF SUCH PRODUCT(S).
<PAGE>

     7.4.2     Royalty Adjustments. For each Product sold in each country of the
               AHPC Territory in each Calendar Quarter, the royalties payable to
               ViroPharma, pursuant to Section 7.4.1 and/or, if applicable,
               Section 11.5 or 11.6, for the Net Sales of such Product in such
               country during such Calendar Quarter may be reduced as set forth
               below, provided, however, that in no event will such royalties in
               any country be reduced by more than ************* by reason of
               the adjustments set forth below:

               (a)  Unpatented Products. If in a given Calendar Quarter during
                    the Full Royalty Rate Period, neither of Section 1.49(a) or
                    (b) continues to be true because one or more of Valid Claims
                    are invalidated in such country, the royalties payable to
                    ViroPharma, pursuant to Section 7.4.1 and/or, if applicable,
                    Section 11.5 or 11.6, for the Net Sales of such Product in
                    such country during such Calendar Quarter shall be reduced
                    to ********** of the applicable marginal rate set forth in
                    Section 7.4.1 and/or, if applicable, Section 11.5 or 11.6.
                    To calculate such reduced royalty amount in such countries,
                    Net Sales will be allocated among the royalty increments in
                    Sections 7.4.1, 11.5 and/or 11.6, as applicable, based on
                    *******************.

               (b)  Competition. If Competition (as defined below in this
                    Section 7.4.2 (b)) exists during a given Calendar Quarter
                    with respect to a Product in any country, the royalties
                    payable to ViroPharma, pursuant to Section 7.4.1 and/or, if
                    applicable, Section 11.5 or 11.6, for the Net Sales of such
                    Product in such country during such Calendar Quarter shall
                    be reduced to ************* of the applicable marginal rate
                    set forth in Section 7.4.1 and/or, if applicable, Section
                    11.5 or 11.6. To calculate such reduced royalty amount when
                    Competition exists in such countries, Net Sales will be
                    allocated among the royalty increments in Sections 7.4.1,
                    11.5 and/or 11.6, as applicable, based on the
                    **************. For purposes of this Section 7.4.2(b),
                    Competition shall be deemed to exist if, during the
                    applicable Calendar Quarter, on a Product by Product and
                    country by country basis, (i) one or more Third Parties is
                    selling a pharmaceutical product for use in the Field
                    containing as an active ingredient, the Compound that is an
                    active ingredient in the Product being sold by or on behalf
                    of AHPC, its Affiliates or sublicensees in such country; and
                    (ii) the sales of such competing products (measured on a
                    unit basis) accounts for ******** or more of the total
                    market in such country. The total market in such country
                    shall be the sum of (x) the number of units of the affected
                    Product sold by AHPC, its Affiliates or sublicensees in such
                    country during such Calendar Quarter and (y) the number of
                    units of competing products sold by parties other than AHPC,
                    its
<PAGE>

                         Affiliates or sublicensees in such country during such
                         Calendar Quarter.

          7.4.3     Term of Royalty. The royalties payable pursuant to Section
                    7.4.1 and, if applicable, pursuant to Section 11.5 or 11.6,
                    as adjusted pursuant to Section 7.4.2, will be payable on a
                    country by country and Product by Product basis during the
                    Full Royalty Rate Period. During the Reduced Royalty Rate
                    Period for a Product, AHPC shall have an exclusive license,
                    except as otherwise provided under this Agreement, to use
                    the ViroPharma Know-How in the Field and ViroPharma's
                    interest in any Collaboration Know-How in the Field, to
                    make, have made, use, import, offer to sell and sell such
                    Product in such country. In consideration of such license,
                    AHPC shall pay to ViroPharma a royalty in the amount of
                    three percent (3%) of the Net Sales obtained from the sale
                    by AHPC and its Affiliates of such Product in such country,
                    which royalty shall be payable only for sales made during
                    the Reduced Royalty Rate Period. On a country by country
                    basis, upon expiration of the Reduced Royalty Rate Period,
                    the license granted to AHPC with respect to such country
                    under this Section 7.4.3 shall continue to be a perpetual
                    license which thereafter shall become irrevocable, fully-
                    paid and royalty-free license, exclusive except for the
                    license granted pursuant to Section 6.1.15.

     7.5  Profit Split Payments.

          7.5.1     Baseline Allocation of Profits. In consideration for
                    ViroPharma's provision of services in connection with the
                    Promotion of Products in the Copromotion Territory pursuant
                    to Section 6.1, AHPC, on a country by country basis, shall
                    pay to ViroPharma *********************of the Net Profits
                    obtained from the sale of a Product in such country of the
                    Co-Promotion Territory, which percentage may be adjusted
                    from time to time in accordance with Section 7.5.3, (the
                    most recently updated and adjusted allocation, ViroPharma's
                    "Baseline Allocation of Net Profits") which payment shall be
                    made to ViroPharma at the times and in the manner set forth
                    in Section 7.6.3. AHPC shall retain the remaining portion of
                    Net Profits (AHPC's "Baseline Allocation of Net Profits").
                    Notwithstanding the foregoing, in any Penalty Year, the
                    allocation of Net Profits will be adjusted in accordance
                    with Section 7.5.2.

          7.5.2     Temporary Adjustments to Distribution of Profits. In a
                    Penalty Year, each Party will be allocated a portion of Net
                    Profits which allocation will be made based on the following
                    formula:

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

                    where **************************
<PAGE>

          7.5.3  Permanent Adjustment to Baseline Allocation of Profits. If a
                 Party incurs *****************, and the other Party incurs no
                 Lapse Year during this period, then the Party incurring no
                 Lapse Years may, at its discretion, impose a permanent change
                 in the Baseline Allocation of Net Profits established in
                 Section 7.5.1. The new Baseline Allocation of Profits shall be
                 equivalent to the average proportion of Net Profits received by
                 such Party during the *************** and shall become
                 effective on January 1 of the year following the
                 ****************. Examples of the calculation of the
                 distribution of Net Profits during Penalty Years and the
                 imposition of new baseline distributions are set forth in
                 Exhibit 7.5.3.

          7.5.4  Term of Profit Split Payments. With respect to a Product, AHPC,
                 on a country by country basis in the Copromotion Territory,
                 shall pay to ViroPharma a portion of Net Profits obtained from
                 the sale of such Product in such country of the Copromotion
                 Territory as set forth in Section 7.5.1 for so long as both
                 Parties are Promoting such Product in such country pursuant to
                 this Agreement.

     7.6  Reports and Payments.

          7.6.1  Cumulative Royalties. The obligation to pay royalties under
                 this Agreement shall be imposed only once with respect to a
                 single unit of a Product regardless of how many Valid Claims
                 included within the Patent Rights would, but for this
                 Agreement, be infringed by the manufacture, use, import, offer
                 for sale or sale of such Product in the country of such
                 manufacture, use or sale.

          7.6.2  Royalty Statements and Payments. AHPC, within sixty (60) days
                 after the end of each Calendar Quarter shall deliver to
                 ViroPharma a report setting forth for such Calendar Quarter the
                 following information, on a Product by Product basis, with
                 respect to Products sold in the AHPC Territory, (a) the Net
                 Sales of such Product in the AHPC Territory, (b) the basis for
                 any adjustments to the royalty payable for the sale of such
                 Product, and (c) the royalty due hereunder for the sale of such
                 Product. No such reports shall be due for any Product before
                 the First Commercial Sale of such Product in the AHPC
                 Territory. The total royalty due for the sale of Products
                 during such Calendar Quarter less any deductions made in
                 accordance with Section 4.6.5 shall be remitted at the time
                 such report is made.

          7.6.3  Net Profit Statements and Payments.

                 (a)  Estimated Statements. Within the later of (i) thirty (30)
                      days after the end of each Calendar Quarter or (ii)
                      fifteen (15) days beyond the date on which AHPC receives
                      from ViroPharma the
<PAGE>

                      report required under Section 6.1.8(d) with respect to
                      such Calendar Quarter, AHPC shall deliver to ViroPharma a
                      report setting forth the following estimated information
                      with respect to Products sold in the Copromotion Territory
                      during such Calendar Quarter: (i) the Net Sales of such
                      Product in each country of the Copromotion Territory, (ii)
                      the Net Profits obtained from the sale of such Product in
                      each country of the Copromotion Territory, (iii) the
                      deductions made from Net Sales in calculating such Net
                      Profits, including, without limitation, the computation of
                      Cost of Goods Manufacture for Sale, each Party's Sales and
                      Marketing Expenses, Incremental Sales Force Expenses, if
                      any, Extra Effort Expenses, if any, and Post-Approval
                      Research and Regulatory Expenses, and (iv) the amount of
                      Net Profits to be allocated to each Party, including an
                      explanation of any deviation from the Baseline Allocation
                      of Net Profits made in accordance with Section 7.5.1. No
                      such reports shall be due with respect to any Product
                      before the First Commercial Sale of such Product in the
                      Copromotion Territory.

                 (b)  Actual Statements. After the First Commercial Sale of a
                      Product in the Copromotion Territory, AHPC, within sixty
                      (60) days after the end of each Calendar Quarter, shall
                      deliver to ViroPharma a report setting forth for such
                      Calendar Quarter the following information, on a Product
                      by Product and Country by Country basis: (i) the Net Sales
                      of such Product in each country of the Copromotion
                      Territory, (ii) the Net Profits obtained from the sale of
                      such Product in each country of the Copromotion Territory,
                      (iii) the deductions made from Net Sales in calculating
                      such Net Profits, including, without limitation, the
                      computation of Cost of Goods Manufactured for Sale in such
                      detail as AHPC customarily uses for its own internal
                      reporting purposes, or as reasonably requested by
                      ViroPharma, each Party's Sales and Marketing Expenses,
                      Incremental Sales Force Expenses, if any, Extra Effort
                      Expenses, if any, and Post-Approval Research and
                      Regulatory Expenses, and (iv) the amount of Net Profits to
                      be allocated to each Party, including an explanation of
                      any deviation from the Baseline Allocation of Net Profits
                      made in accordance with Section 7.5.1. No such reports
                      shall be due with respect to any Product before the First
                      Commercial Sale of such Product in the Copromotion
                      Territory. At the time such report is made, AHPC shall
                      remit to ViroPharma the amount of Net Profits allocated to
                      ViroPharma for such Calendar Quarter less any deductions
                      made in accordance with Section 4.6.5.

          7.6.4  Taxes and Withholding. All payments under this Agreement will
                 be made without any deduction or withholding for or on account
                 of any tax
<PAGE>

                 unless such deduction or withholding is required by applicable
                 laws or regulations. If the paying Party is so required to
                 deduct or withhold such Party will (i) promptly notify the
                 other Party of such requirement, (ii) pay to the relevant
                 authorities the full amount required to be deducted or withheld
                 promptly upon the earlier of determining that such deduction or
                 withholding is required or receiving notice that such amount
                 has been assessed against the other Party, (iii) promptly
                 forward to the other Party an official receipt (or certified
                 copy) or other documentation reasonably acceptable to the other
                 Party evidencing such payment to such authorities.

          7.6.5  Currency. All amounts payable and calculations hereunder shall
                 be in United States dollars. As applicable, Net Sales, Net
                 Profits and any expenses incurred by either Party shall be
                 translated into United States dollars in accordance with AHPC's
                 customary and usual translation procedures, consistently
                 applied. If, due to restrictions or prohibitions imposed by
                 national or international authority, payments cannot be made as
                 provided in this Article 7, the Parties shall consult with a
                 view to finding a prompt and acceptable solution, and AHPC will
                 deal with such monies as ViroPharma may lawfully direct at no
                 additional out-of-pocket expense to AHPC. Notwithstanding the
                 foregoing, if payments arising in connection with the sale of
                 Products in any country cannot be remitted to ViroPharma for
                 any reason within six (6) months after the end of the Calendar
                 Quarter during which they are earned, then AHPC shall be
                 obligated to deposit the royalties in a bank account in such
                 country in the name of ViroPharma.

     7.7  Maintenance of Records; Audits.

          7.7.1  Record Keeping for the Copromotion Territory. AHPC shall keep
                 and maintain accurate and complete records in connection with
                 the sale of Products in the Copromotion Territory hereunder and
                 each Party shall keep and maintain accurate and complete
                 records showing the expenses incurred and efforts employed by
                 or on behalf of it or its Affiliates in Promoting Products in
                 the Copromotion Territory hereunder, which books and records
                 shall be in sufficient detail to permit the accurate
                 determination of Net Sales, Net Profits (including, without
                 limitation, the deduction of each Party's expenses from Net
                 Profits pursuant to Section 1.70), and all other figures
                 necessary for the verification of the allocation of Net Profits
                 to be made under Section 7.5. Each Party shall maintain and
                 cause its Affiliates to maintain such records for a period of
                 at least three (3) years after the end of the calendar year in
                 which they were generated.

          7.7.2  Record Keeping for the AHPC Territory. AHPC shall keep and
                 shall cause its Affiliates and sublicensees to keep accurate
                 books and accounts of record in connection with the sale of
                 Products in the AHPC Territory in
<PAGE>

                 sufficient detail to permit accurate determination of all
                 figures necessary for verification of royalties to be paid
                 hereunder. AHPC and its Affiliates and sublicensees shall
                 maintain such records for a period of at least three (3) years
                 after the end of the calendar year in which they were
                 generated.

          7.7.3  Audits. Upon thirty (30) days prior written notice from a Party
                 (the "Auditing Party"), the other Party (the "Audited Party")
                 shall permit an independent certified public accounting firm of
                 nationally recognized standing selected by the Auditing Party
                 and reasonably acceptable to the Audited Party, to examine, at
                 the Auditing Party's sole expense, the relevant books and
                 records of the Audited Party and its Affiliates as may be
                 reasonably necessary to verify the accuracy of the reports
                 submitted by the Audited Party in accordance with Section 7.6
                 and the calculation and allocation of Net Profits or the
                 payment of royalties hereunder, as applicable. An examination
                 by a Party under this Section 7.7.3 shall occur not more than
                 once in any calendar year and shall be limited to the pertinent
                 books and records for any calendar year ending not more than
                 thirty-six (36) months before the date of the request. The
                 accounting firm shall be provided access to such books and
                 records at the Audited Party's facility(ies) where such books
                 and records are normally kept and such examination shall be
                 conducted during the Audited Party's normal business hours. The
                 Audited Party may require the accounting firm to sign a
                 standard non-disclosure agreement before providing the
                 accounting firm access to the Audited Party's facilities or
                 records. Upon completion of the audit, the accounting firm
                 shall provide both AHPC and ViroPharma a written report
                 disclosing whether the reports submitted by the Audited Party
                 are correct or incorrect, whether the calculation and
                 allocation of Net Profits are correct or incorrect, whether the
                 royalties paid are correct or incorrect, and, in each case, the
                 specific details concerning any discrepancies. No other
                 information shall be provided to the Auditing Party.

          7.7.4  Underpayments/Overpayments. If such accounting firm correctly
                 concludes that additional Net Profits were due to ViroPharma or
                 that additional royalties were due to ViroPharma, AHPC shall
                 pay to ViroPharma the additional Net Profits or additional
                 royalties, as applicable, together with any interest that may
                 be due thereon as provided in Section 7.8 within thirty (30)
                 days of the date AHPC receives such accountant's written report
                 so correctly concluding. If such underpayment exceeds five
                 percent (5%) of the Net Profits that were to be distributed to
                 ViroPharma or the royalties that were to be paid to ViroPharma,
                 as applicable, AHPC also shall reimburse ViroPharma for the
                 out-of-pocket expenses incurred in conducting the audit,
                 except in the event that such underpayment was due to any
                 inaccurate information provided by ViroPharma to AHPC. If such
                 accounting firm correctly concludes that additional Net Profits
                 were to be allocated to AHPC (i.e., there was an
<PAGE>

                 overpayment in the distribution of Net Profits to ViroPharma)
                 or that AHPC overpaid royalties to ViroPharma, ViroPharma will
                 refund such overpayments to AHPC, together with any interest
                 that may be due thereon as provided in Section 7.8, within
                 thirty (30) days of the date ViroPharma receives such
                 accountant's report so correctly concluding. If the amount of
                 such overpayment that is due to any inaccurate information
                 provided by ViroPharma to AHPC exceeds five percent (5%) of the
                 Net Profits that were to be paid to ViroPharma or the royalties
                 that were to be paid to ViroPharma, as applicable, ViroPharma
                 also shall reimburse AHCP for any out-of-pocket expenses
                 incurred by AHPC in conducting the audit.

          7.7.5  Confidentiality. All financial information of a Party which is
                 subject to review under this Section 7.7 shall be deemed to be
                 Confidential Information subject to the provisions of Article
                 9, and such Confidential Information shall not be disclosed to
                 any Third Party or used for any purpose other than verifying
                 payments to be made by one Party to the other hereunder,
                 provided, however, that such Confidential Information may be
                 disclosed to Third Parties only to the extent necessary to
                 enforce a Party's rights under this Agreement.

     7.8  Interest. Any payment under this Article 7 that is more than forty-
          five (45) days past due shall thereafter be subject to interest at an
          annual percentage rate of twelve percent (12%). Likewise, any
          overpayment that is not refunded within forty-five (45) days after the
          date such overpayment was identified shall thereafter be subject to
          interest at an annual percentage rate of twelve percent (12%),
          provided, however, that if the overpayment is due to errors in reports
          provided by the overpaid Party, such interest shall accrue from the
          date the overpayment was made.

8.   INTELLECTUAL PROPERTY.

     8.1  Inventions. Subject to the provisions of Article 2, a Party shall own:
          (a) all of its Prior Inventions, (b) all of its Non-Collaboration
          Inventions, and (c) all Patent Rights claiming such Prior Inventions
          and Non-Collaboration Inventions. Also, subject to the provisions of
          Article 2, both Parties shall jointly own all Collaboration
          Inventions, Collaboration Patent Rights and Collaboration Know-How.
          All determinations of inventorship under this Agreement shall be made
          in accordance with United States patent law.

     8.2  Patent Rights.

          8.2.1  Prosecution and Maintenance of Patent Rights.
<PAGE>

               (a)  ViroPharma's Prior Inventions and Non-Collaboration
                    Inventions. ViroPharma shall have the first right to
                    prepare, file, prosecute and maintain, throughout the world,
                    all Patent Rights claiming ViroPharma's Prior Inventions and
                    Non-Collaboration Inventions. With respect to any ViroPharma
                    Prior Invention or Non-Collaboration Invention that is
                    applicable in the Field, ViroPharma shall give AHPC an
                    opportunity to review and comment upon the text of the
                    applications before filing, shall consult with AHPC with
                    respect to such application, and shall supply AHPC with a
                    copy of the applications as filed, together with notice of
                    its filing date and serial number. ViroPharma shall keep
                    AHPC advised of the status of the actual and prospective
                    patent filings (including, without limitation, the grant of
                    any Patent Rights that are applicable in the Field), and
                    shall provide advance copies of any official correspondence
                    related to the filing, prosecution and maintenance of such
                    patent filings. If ViroPharma elects not to file a patent
                    application or to cease the prosecution and/or maintenance
                    of any Patent Right claiming a ViroPharma Prior Invention or
                    Non-Collaboration Invention that relates to any
                    Collaboration Target, any Active Compound and/or any Assay
                    and Screening Technology and that is applicable in the
                    Field, ViroPharma shall provide AHPC with written notice
                    immediately upon the decision to not file or continue the
                    prosecution of such patent application or maintenance of
                    such patent and at least sixty (60) days before ceasing
                    prosecution and/or maintenance of a particular Patent Right
                    that is applicable in the Field and, in such case, shall
                    permit AHPC, at AHPC's sole discretion, to file and/or
                    continue prosecution and/or maintenance of such Patent Right
                    on ViroPharma's behalf and at AHPC's own expense. If AHPC
                    elects to continue prosecution or maintenance, ViroPharma
                    shall execute such documents and perform such acts, at
                    AHPC's expense, as may be reasonably necessary to permit
                    AHPC to file, prosecute and/or maintain such Patent Rights.

               (b)  AHPC's Prior Inventions and Non-Collaboration Inventions.
                    AHPC, at its own expense, shall have the sole right to
                    prepare, file, prosecute and maintain, throughout the world,
                    all Patent Rights claiming any of AHPC's Prior Inventions
                    and/or Non-Collaboration Inventions in countries and regions
                    of the world of AHPC's choice. With respect to patent
                    applications filed or to be filed in the Copromotion
                    Territory claiming any AHPC Prior Invention or Non-
                    Collaboration Invention that relates to any Active Compound
                    and is applicable in the Field, AHPC shall give ViroPharma
                    an opportunity to review and comment upon the text of such
                    applications before filing, shall consult with ViroPharma
                    with respect to such applications, and shall supply
                    ViroPharma
<PAGE>

                    with a copy of such applications as filed, together with
                    notice of its filing date and serial number. AHPC shall keep
                    ViroPharma advised of the status of such actual and
                    prospective patent filings (including, without limitation,
                    the grant of any Patent Rights that are applicable in the
                    Field), and shall provide advance copies of any official
                    correspondence related to the filing, prosecution and
                    maintenance of such patent filings. If AHPC elects not to
                    file a patent application or to cease the prosecution and/or
                    maintenance of any such Patent Right, AHPC shall provide
                    ViroPharma with written notice immediately upon the decision
                    to not file or continue the prosecution of such patent
                    application or maintenance of such patent and at least sixty
                    (60) days before ceasing prosecution and/or maintenance of a
                    particular Patent Right that is applicable in the Field and,
                    in such case, shall permit ViroPharma, at the ViroPharma's
                    sole discretion, to file and/or continue prosecution and/or
                    maintenance of such Patent Right on behalf of AHPC at
                    ViroPharma's own expense. If ViroPharma elects to continue
                    prosecution or maintenance, AHPC shall execute such
                    documents and perform such acts, at ViroPharma's expense, as
                    may be reasonably necessary to permit ViroPharma to file,
                    prosecute and/or maintain such Patent Rights.

             (c)    Collaboration Inventions. AHPC shall have the first right to
                    prepare, file, prosecute and maintain any Patent Right
                    claiming any Collaboration Invention throughout the world.
                    AHPC shall give ViroPharma an opportunity to review the text
                    of the applications before filing, shall consult with
                    ViroPharma with respect thereto, and shall supply ViroPharma
                    with a copy of the applications as filed, together with
                    notice of its filing date and serial number. AHPC shall keep
                    ViroPharma advised of the status of the actual and
                    prospective patent filings (including, without limitation,
                    the grant of any Patent Rights), and shall provide advance
                    copies of any official correspondence related to the filing,
                    prosecution and maintenance of such patent filings.
                    ViroPharma shall reimburse AHPC for fifty percent (50%) of
                    the costs incurred by AHPC in preparing, filing, prosecuting
                    and maintaining such Patent Rights, which reimbursement will
                    be made pursuant to invoices submitted by AHPC to ViroPharma
                    no more often than once per Calendar Quarter. If either
                    Party at any time declines to share in the costs of filing,
                    prosecuting and maintaining any such Patent Right in the
                    Field, on a country by country basis, such Party shall
                    provide the other Party with thirty (30) days prior written
                    notice to such effect, in which event, such Party shall (i)
                    have no responsibility for any expenses incurred in
                    connection with such Patent Right after the end of such
                    thirty (30) day period and (ii) if the other Party elects to
                    continue prosecution or maintenance, assign to the other
                    Party
<PAGE>

                    all of its right, title and interest in and to such Patent
                    Right and the underlying Collaboration Invention. If the
                    other Party elects to continue prosecution or maintenance,
                    the assigning Party shall execute such documents and perform
                    such acts, at the receiving Party's expense, as may be
                    reasonably necessary to effect an assignment of such Patent
                    Rights to the receiving Party on a country by country basis
                    and to allow the receiving Party to continue the prosecution
                    and maintenance of such Patent Right. Any such assignment
                    shall be completed in a timely manner to allow the receiving
                    Party to continue such prosecution or maintenance. Upon the
                    assignment of such Patent Right to the other Party, such
                    Patent Right shall cease to be a Collaboration Patent Right
                    on a country by country basis for purposes of this
                    Agreement, and, thereafter shall be considered to be a Non-
                    Collaboration Invention of the Party receiving such
                    assignment for all purposes of this Agreement.

        8.2.2  Enforcement of Patent Rights.

               (a)  Notice and Discontinuance of Infringement - General. If
                    either AHPC or ViroPharma becomes aware of any infringement,
                    anywhere in the world, of any issued patent within the
                    Patent Rights, it will notify the other Party in writing to
                    that effect. Any such notice shall include evidence to
                    support an allegation of infringement by such Third Party.
                    The Party responsible for prosecuting and maintaining such
                    Patent Right in accordance with Section 8.2.1 shall have the
                    right, but not the obligation, to take action to obtain a
                    discontinuance of such infringement or bring suit against
                    the Third Party infringer within three (3) months from the
                    date of said notice. ViroPharma shall bear all the expenses
                    of any suit brought by it claiming infringement of any
                    ViroPharma Patent Rights. AHPC shall bear all the expenses
                    of any suit brought by it claiming infringement of any AHPC
                    Patent Rights. Subject to Section 8.2.2(c), the Parties
                    shall share equally the expenses of any suit brought by AHPC
                    claiming infringement of any Collaboration Patent Rights.

               (b)  AHPC Patent Rights and ViroPharma Patent Rights. With
                    respect to suits claiming infringement of either the AHPC
                    Patent Rights or the ViroPharma Patent Rights, the Party not
                    bringing such suit (the "Non-Prosecuting Party") shall have
                    the right, before commencement of the trial, suit or action
                    brought by the other Party (the "Prosecuting Party"), to
                    join any such suit or action, and in such event shall pay
                    one-half of the costs of such suit or action. In no event
                    shall the Prosecuting Party enter into any settlement,
                    consent judgment or other voluntary final disposition of
                    such suit
<PAGE>

                    which would adversely affect the Non-Prosecuting Party's
                    rights under this Agreement in any way without first
                    obtaining the Non-Prosecuting Party's written consent to do
                    so, which consent shall not be unreasonably withheld.
                    Additionally, if the Non-Prosecuting Party has joined in the
                    action and shared in the costs thereof as set forth above,
                    no settlement, consent judgment or other voluntary final
                    disposition of the suit may be entered into without the
                    consent of the Non-Prosecuting Party, which consent shall
                    not be unreasonably withheld. If the Non-Prosecuting Party
                    has not joined the suit or action, the Non-Prosecuting Party
                    will reasonably cooperate with the Prosecuting Party in any
                    such suit or action and shall have the right to consult with
                    the Prosecuting Party and be represented by its own counsel
                    at its own expense. Any recovery or damages derived from a
                    suit in which the Non-Prosecuting Party has joined and
                    shared costs shall be used first to reimburse each of the
                    Prosecuting Party and the Non-Prosecuting Party for its
                    respective documented out-of-pocket legal expenses relating
                    to the suit, with any remaining amounts to be shared equally
                    by the Parties. Any recovery or damages derived from a suit
                    that the Non-Prosecuting Party has not joined shall be
                    retained by the Prosecuting Party.

               (c)  Collaboration Patent Rights. With respect to suits claiming
                    infringement of the Collaboration Patent Rights, AHPC shall
                    have the first right to bring suit claiming infringement of
                    the Collaboration Patent Rights. ViroPharma shall have the
                    right, before commencement of the trial, suit or action
                    brought by AHPC, to join any such suit or action. In no
                    event shall AHPC enter into any settlement, consent judgment
                    or other voluntary final disposition of such suit which
                    would adversely affect ViroPharma's rights under this
                    Agreement in any way without first obtaining ViroPharma's
                    written consent to do so, which consent shall not be
                    unreasonably withheld. If AHPC declines to bring suit,
                    ViroPharma may proceed with an infringement suit. Any
                    recovery or damages derived from such a suit shall be used
                    first to reimburse each of AHPC and ViroPharma for their
                    respective documented out-of-pocket legal expenses relating
                    to the suit, with any remaining amounts to be shared equally
                    by the Parties. If either Party desires not to proceed with
                    or participate in a suit against a Third Party for
                    infringement of a Collaboration Patent Right, such Party
                    may, by written notice to the other Party, elect not to
                    share in the expenses of such suit. In such event, the Party
                    continuing to prosecute the infringement action shall have
                    the right, but not the obligation to bring or continue such
                    suit at its own expense and shall be entitled to retain any
                    recovery or damages derived from such suit, and the Party
                    electing not to
<PAGE>

                    participate in the suit shall reasonably cooperate with such
                    other Party in prosecuting such infringement action. The
                    Party bringing such action shall incur no liability to the
                    other Party as a consequence of such litigation or any
                    unfavorable decision resulting therefrom, including any
                    decision holding any of the Collaboration Patent Rights
                    invalid or unenforceable.

               (d)  Continuance of Infringement of the ViroPharma Patent Rights.
                    With respect to the ViroPharma Patent Rights, if, after the
                    expiration of the three (3) month period specified in
                    Section 8.2.2(a), ViroPharma has not obtained a
                    discontinuance of infringement of its Patent Rights, filed
                    suit against any Third Party infringer of its Patent Rights,
                    or provided AHPC with information and arguments
                    demonstrating to AHPC's reasonable satisfaction that there
                    is insufficient basis for the allegation of infringement of
                    ViroPharma's Patent Rights, then AHPC shall have the right,
                    but not the obligation, to bring suit against such infringer
                    under the ViroPharma Patent Rights and to join ViroPharma as
                    a party plaintiff, provided that AHPC shall bear all the
                    expenses of such suit. ViroPharma will cooperate with AHPC
                    in any suit for infringement of ViroPharma's Patent Rights
                    brought by AHPC against a Third Party, and shall have the
                    right to consult with AHPC and to participate in and be
                    represented by independent counsel in such litigation at its
                    own expense. AHPC shall incur no liability to ViroPharma as
                    a consequence of such litigation or any unfavorable decision
                    resulting therefrom, including any decision holding any of
                    the ViroPharma Patent Rights invalid or unenforceable.

               (e)  Continuance of Infringement of the AHPC Patent Rights. With
                    respect to the AHPC Patent Rights in the Copromotion
                    Territory which claim an Active Compound in the Field, if,
                    after the expiration of the three (3) month period specified
                    in Section 8.2.2(a), AHPC has not obtained a discontinuance
                    of infringement of such Patent Rights in the Field, filed
                    suit against any Third Party infringer of such Patent
                    Rights, or provided ViroPharma with information and
                    arguments demonstrating to ViroPharma's reasonable
                    satisfaction that there is insufficient basis for the
                    allegation of infringement of such Patent Rights in the
                    Field, then ViroPharma shall have the right, but not the
                    obligation, to bring suit against such infringer under such
                    of the AHPC Patent Rights and to join AHPC as a party
                    plaintiff, provided that ViroPharma shall bear all the
                    expenses of such suit. AHPC will cooperate with ViroPharma
                    in any suit for infringement of such of AHPC's Patent Rights
                    brought by ViroPharma against a Third Party, and shall have
                    the right to consult with ViroPharma and to participate in
                    and
<PAGE>

                    be represented by independent counsel in such litigation at
                    its own expense. ViroPharma shall incur no liability to AHPC
                    as a consequence of such litigation or any unfavorable
                    decision resulting therefrom, including any decision holding
                    any of such AHPC Patent Rights invalid or unenforceable.

     8.2.3     Infringement and Third Party Licenses.

               (a)  Infringement of Third Party Patents - Course of Action.  If
                    the making, having made, importing, exporting, using,
                    distributing, marketing, promoting, offering for sale or
                    selling any Compound and/or Product in the Field, under this
                    Agreement, is alleged by a Third Party to infringe a Third
                    Party's patent, the Party becoming aware of such allegation
                    shall promptly notify the other Party.  Additionally, if
                    either Party determines that, based upon the review of a
                    Third Party's patent or patent application, it may be
                    desirable to obtain a license from such Third Party with
                    respect thereto so as to avoid any potential suit between
                    either Party and such Third Party, such Party shall promptly
                    notify the other Party of such determination.

               (b)  AHPC Option to Negotiate.  AHPC shall in the first instance
                    have the right to negotiate with said Third Party for a
                    suitable license or assignment, provided, however, that AHPC
                    shall enter into no such agreement unless it has first
                    obtained ViroPharma's approval of the terms of such
                    agreement, including the amounts of any royalties or
                    payments, which approval shall not be unreasonably withheld.
                    If such negotiation results in a consummated agreement, AHPC
                    shall make all payments to the Third Party and such payments
                    shall be deemed Third Party License Fees for purposes of
                    this Agreement.

               (c)  Third Party Infringement Suit. If a Third Party sues a Party
                    (the "Sued Party") alleging that the Sued Party's, the Sued
                    Party's Affiliates' or the Sued Party's sublicensees' use of
                    any Collaboration Target for the Screening of Compounds
                    pursuant to this Agreement, or the Screening, Research,
                    Development, or Commercialization of any Compound and/or
                    Product in the Field during the term of and pursuant to this
                    Agreement infringes or will infringe said Third Party's
                    patent, then upon the Sued Party's request and in connection
                    with the Sued Party's defense of any such Third Party
                    infringement suit, the other Party shall provide reasonable
                    assistance to the Sued Party for such defense. The Parties
                    shall equally share in the litigation expenses, including
                    settlement costs, royalties paid in settlement of any such
                    suit, and the payment of any damages to the Third Party,
                    other than Third
<PAGE>

                    Party License Fees paid pursuant to Section 8.2.3(e). The
                    Party paying such expenses shall periodically, but no more
                    than once per Calendar Quarter, invoice the other Party for
                    its *********** share of expenses incurred, which invoices
                    shall be accompanied by supporting documentation reasonably
                    showing the expenses so incurred. Such invoices shall be
                    paid within thirty (30) days of receipt, provided, however,
                    that if AHPC is the Sued Party, ViroPharma has earned
                    royalties pursuant to Section 7.4 or Net Profits pursuant to
                    Section 7.5, and AHPC has invoiced ViroPharma for expenses
                    under this Section 8.2.3(c) but ViroPharma has not yet paid
                    them AHPC may deduct ViroPharma's ************* share of
                    such expenses from such royalties or Net Profits due to
                    ViroPharma. The obligation to share expenses pursuant to
                    this Section 8.2.3(c) shall not apply to activities
                    conducted by either Party: (a) with respect to any
                    Collaboration Target after such Target has ceased to be a
                    Collaboration Target pursuant to Section 4.4.1, (b) with
                    respect to any Compound that has not been declared a Hit in
                    accordance with Section 4.4.3, (c) with respect to any Hit,
                    Lead Compound or Development Candidate after the JSC, in
                    accordance with Section 4.4 and 2.4, has determined not to
                    advance the development of such Hit, Lead Compound, or
                    Development Candidate, or (d) after the expiration or any
                    termination of this Agreement.

               (d)  Other Third Party Licenses. If the Parties determine that,
                    after consultation with intellectual property counsel,
                    obtaining a license from a Third Party under such Third
                    Party's intellectual property rights is necessary or useful
                    for Screening, Research, Development or Commercialization of
                    any Compound or Product under this Agreement, the JSC or the
                    MSC shall determine which Party shall have the
                    responsibility to negotiate and enter into an agreement with
                    such Third Party for such a license. The Party entering into
                    such agreement shall pay the Third Party License Fees due
                    thereunder to such Third Party, subject to reimbursement in
                    accordance with Section 8.2.3(e).

               (e)  Third Party License Fees. ViroPharma shall be responsible
                    for ************** of all Third Party License Fees paid by
                    either Party pursuant to this Section 8.2.3 and AHPC shall
                    be responsible for ***************** of all Third Party
                    License Fees paid by either Party pursuant to this Sections
                    8.2.3. Notwithstanding the foregoing, if, pursuant to
                    Section 8.2.3(d), AHPC determines it is necessary or
                    desirable to obtain a license from a Third Party to allow
                    the Screening, Research, Development and/or
                    Commercialization of any Class A Compound or Product
                    containing a Class A Compound, ***************. The Party
<PAGE>

                    paying such Third Party License Fees shall periodically
                    invoice the other Party for its share of such Third Party
                    License Fees, which invoices shall be submitted no more
                    often than once per Calendar Quarter. The Party receiving
                    such invoice shall reimburse the other Party for its share
                    of such Third Party License Fees within forty-five (45) days
                    after receiving the invoice therefor.

     8.2.4     Patent Certifications. Each Party shall immediately give written
               notice to the other of any certification of which it becomes
               aware filed pursuant to 21 U.S.C. (S) 355(b)(2)(A), or (S)
               355(j)(2)(A)(vii) (or any amendment or successor statute thereto)
               claiming that Patent Rights covering any Product are invalid or
               that infringement will not arise from the manufacture, use or
               sale of such Product by a Third Party. Notwithstanding any
               provision to the contrary, in the event that the Patent Rights at
               issue are owned and/or Controlled by ViroPharma and ViroPharma
               has failed to bring an infringement action against such Third
               Party at least fourteen (14) days prior to expiration of the
               forty five (45) day period set forth in 21 U.S.C. (S)355(c)(3)(C)
               (or any amendment or successor statute thereto), AHPC shall have
               the right to bring such an infringement action, in its sole
               discretion and at its own expense, in its own name and/or in the
               name of ViroPharma. At AHPC's request, ViroPharma shall, at its
               own expense, provide AHPC reasonable assistance to conduct such
               infringement action, including, without limitation, causing the
               execution of such legal documents as AHPC may deem necessary for
               the prosecution of such action. AHPC shall incur no liability to
               ViroPharma as a consequence of such litigation or any unfavorable
               decision resulting therefrom, including any decision holding any
               of the Patent Rights invalid or unenforceable. In the event that
               AHPC recovers any sums in such litigation by way of damages or in
               settlement thereof, AHPC shall have the right to retain all such
               sums to offset its costs, losses and expenses.

     8.2.5     Patent Term Restoration. The Parties hereto shall cooperate with
               each other in obtaining patent term restoration or its equivalent
               in the world where applicable to Patent Rights. If elections with
               respect to obtaining such patent term restoration are to be made,
               the President, Wyeth-Ayerst Global Pharmaceuticals, and the
               President, ViroPharma Incorporated, or their designees, shall
               agree to an election and the Parties shall abide by such
               election.

     8.3       Trademarks. AHPC shall, in its sole discretion, select and own
               all Trademarks, Product names and Compound names to be used in
               connection with the marketing, promotion and sale of any Product
               hereunder. ViroPharma shall neither use nor seek to register,
               anywhere in the world, any trademarks which are confusingly
               similar to any Trademark or any other trademarks, trade names,
               trade dress or logos used by or on behalf of AHPC, its Affiliates
               or sublicensees in connection with any Product. Nothing in this
               Section 8.3 shall prevent or limit
<PAGE>

               ViroPharma in any way from continuing to use any trademark, trade
               name, trade dress or logo adopted by ViroPharma before the date
               that the same or a confusingly similar trademark, trade name,
               trade dress or logo is adopted by AHPC.

9.   CONFIDENTIALITY.

     9.1       Confidentiality. Except to the extent expressly authorized by
               this Agreement or otherwise agreed in writing, the Parties agree
               that, for the term of this Agreement and for five (5) years
               thereafter, each Party (the "Receiving Party"), receiving
               hereunder any Confidential Information of the other Party (the
               "Disclosing Party") shall keep such Confidential Information
               confidential and shall not publish or otherwise disclose or use
               such Confidential Information for any purpose other than as
               provided for in this Agreement except for Confidential
               Information that the Receiving Party can establish:

               (a)  was already known to the Receiving Party (other than under
                    an obligation of confidentiality), at the time of disclosure
                    by the Disclosing Party and such Receiving Party has
                    documentary evidence to that effect;

               (b)  was generally available to the public or otherwise part of
                    the public domain at the time of its disclosure to the
                    Receiving Party;

               (c)  became generally available to the public or otherwise part
                    of the public domain after its disclosure or development, as
                    the case may be, and other than through any act or omission
                    of a party in breach of this confidentiality obligation;

               (d)  was disclosed to that Party, other than under an obligation
                    of confidentiality, by a Third Party who had no obligation
                    to the Disclosing Party not to disclose such information to
                    others;

               (e)  was independently discovered or developed by or on behalf of
                    the Receiving Party without the use of the Confidential
                    Information belonging to the other Party and the Receiving
                    Party has documentary evidence to that effect.

     9.2       Authorized Disclosure and Use.

               9.2.1     Disclosure. Notwithstanding the foregoing Section 9.1,
                         each Party may disclose Confidential Information
                         belonging to the other Party to the extent such
                         disclosure is reasonably necessary to:
<PAGE>

                    (a)  file or prosecute patent applications claiming
                         Inventions included within the Collaboration
                         Technology,

                    (b)  prosecute or defend litigation,

                    (c)  exercise rights hereunder provided such disclosure is
                         covered by terms of confidentiality similar to those
                         set forth herein, and

                    (d)  comply with applicable governmental laws and
                         regulations.

                    In the event a Party shall deem it necessary to disclose
                    pursuant to this Section 9.2.1, Confidential Information
                    belonging to the other Party, the Disclosing Party shall to
                    the extent possible give reasonable advance notice of such
                    disclosure to the other Party and take reasonable measures
                    to ensure confidential treatment of such information.

          9.2.2     Use. Notwithstanding the foregoing Section 9.1, each Party
                    shall have the right to use the other Party's Confidential
                    Information in carrying out its respective responsibilities
                    under this Agreement in both the conduct of the Research
                    Program and the Development and Commercialization of Lead
                    Compounds and Products. Similarly, subject to the license
                    granted in Article 2 and the terms of this Article 9, each
                    Party shall have the right to use the Joint Confidential
                    Information for any purpose under this Agreement.

     9.3  SEC Filings. Either Party may disclose the terms of this Agreement to
          the extent required, in the reasonable opinion of such Party's legal
          counsel, to comply with applicable laws, including without limitation
          the rules and regulations promulgated by the United States Securities
          and Exchange Commission (the "SEC"). Notwithstanding the foregoing,
          before disclosing this Agreement or any of the terms hereof pursuant
          to this Section 9.3, the Parties will consult with one another on the
          terms of this Agreement to be redacted in making any such disclosure.
          If a Party discloses this Agreement or any of the terms hereof in
          accordance with this Section 9.3, such Party agrees, at its own
          expense, to seek confidential treatment of portions of this Agreement
          or such terms, as may be reasonably requested by the other Party.

     9.4  Publications. During the term of the Research Program, each Party will
          submit to the other Party for review and approval all proposed
          academic, scientific and medical publications and public presentations
          relating to the Research Program, Lead Compounds, Development
          Candidates, Products and/or Collaboration Technology for review in
          connection with preservation of exclusive Patent Rights and/or to
          determine whether Confidential Information should be modified or
          deleted. Written copies of such proposed publications and
          presentations shall be submitted to the nonpublishing Party no later
          than sixty (60) days before submission for publication or presentation
          and the non-publishing party shall
<PAGE>

          provide its comments with respect to such publications and
          presentations within fifteen (15) business days of its receipt of such
          written copy. The review period may be extended for an additional
          thirty (30) days in the event the nonpublishing Party can demonstrate
          a reasonable need for such extension including, but not limited to,
          the preparation and filing of patent applications. By mutual
          agreement, this period may be further extended. ViroPharma and AHPC
          will each comply with standard academic practice regarding authorship
          of scientific publications and recognition of contribution of other
          parties in any publications relating to Research Program, Lead
          Compounds, Development Candidates, Products and/or Collaboration
          Technology.

     9.5    Public Announcements.

            9.5.1   Coordination. The Parties agree on the importance of
                    coordinating their public announcements respecting this
                    Agreement and the subject matter thereof (other than
                    academic, scientific or medical publications that are
                    subject to the publication provision set forth above).
                    ViroPharma and AHPC will, from time to time, and at the
                    request of the other Party discuss and agree on the general
                    information content relating to this Agreement, the Research
                    Program, Lead Compounds, Development Candidates, Products
                    and/or Collaboration Technology which may be publicly
                    disclosed.

     9.5.2  Announcements. Except as may be expressly permitted under Sections
            9.3 and 9.4, neither Party will make any public announcement
            regarding this Agreement, the Research Program, Lead Compounds,
            Development Candidates, Products and/or Collaboration Technology
            without the prior written approval of the other Party.

10.  REPRESENTATIONS AND WARRANTIES.

     10.1   Representations, Warranties of Each Party. As of the Effective Date,
            each of ViroPharma and AHPC hereby represents, warrants, and
            covenants to the other Party hereto as follows:

            (a)  it is a corporation or entity duly organized and validly
                 existing under the laws of the state or other jurisdiction of
                 its incorporation or formation;

            (b)  the execution, delivery and performance of this Agreement by
                 such Party has been duly authorized by all requisite corporate
                 action and does not require any shareholder action or approval;

            (c)  it has the power and authority to execute and deliver this
                 Agreement and to perform its obligations hereunder;
<PAGE>

          (d)  the execution, delivery and performance by such Party of this
               Agreement and its compliance with the terms and provisions hereof
               does not and will not conflict with or result in a breach of any
               of the terms and provisions of or constitute a default under (i)
               a loan agreement, guaranty, financing agreement, agreement
               affecting a product or other agreement or instrument binding or
               affecting it or its property; (ii) the provisions of its charter
               or operative documents or bylaws; or (iii) any order, writ,
               injunction or decree of any court or governmental authority
               entered against it or by which any of its property is bound;

          (e)  it shall at all times comply with all applicable material laws
               and regulations relating to its activities under this Agreement;

          (f)  as of the Effective Date, its Patent Rights and Know-How are
               existing and, to the best of its knowledge, are not invalid or
               unenforceable, in whole or in part;

          (g)  it has the full right, power and authority to grant all of right,
               title and interest in the licenses granted to the other Party
               under this Agreement;

     10.2 Additional Representations and Warranties of ViroPharma. In addition
          to the and warranties made by ViroPharma elsewhere in this Agreement,
          ViroPharma, subject to Section 10.6, hereby represents, warrants, and
          covenants to AHPC that:

          (a)  except as disclosed in Exhibit 10.2(a), as of the Effective Date,
               no Third Party has any right, title or interest in or to:

               (i)   any Collaboration Target listed in Exhibit 1.23,

               (II)  any Class A Product, or

               (iii) any of the ViroPharma Patent Rights, ViroPharma Know-How,
                     or any of ViroPharma's interest in the Collaboration Patent
                     Rights to the extent that any of the foregoing in this
                     Section 10.2(a)(iii) cover any Collaboration Target listed
                     in Exhibit 1.23, or any Class A Product,

               with respect to which AHPC has been granted or is to be granted a
               license hereunder;

          (b)  except as disclosed in Exhibit 10.2(b),It is the sole and
               exclusive owner of the ViroPharma Patent Rights listed on Exhibit
               1.112 and the ViroPharma Know-How existing as of the Effective
               Date, all of which are free and clear of any liens, charges and
               encumbrances, and, with respect to such
<PAGE>

               Patent Rights and Know-How, ViroPharma has the right to grant to
               AHPC those licenses granted in Section 2.1 hereof;

          (c)  except as set forth in Exhibit 10.2(c) attached hereto, no
               ViroPharma Prior Invention and no ViroPharma Patent Right and no
               portion of the ViroPharma Know-How existing as of the Effective
               Date and relating to either any Class A Compound or to any
               Collaboration Target listed on Exhibit 1.23 is subject to any
               funding agreement with any government or government agency;

          (d)  to the best of its knowledge, as of November 1, 1999, the
               practice of the ViroPharma Patent Rights listed on Exhibit 1.112,
               the use of the ViroPharma Know-How, the use of the Collaboration
               Targets listed in Exhibit 1.23, and the manufacture, use or sale
               of any ViroPharma Compound each, as of the Effective Date, do not
               infringe on any issued patents owned or possessed by any Third
               Party;

          (e)  to the best of its knowledge, as of the Effective Date, there are
               no Third Party pending patent applications (other than those
               which have been disclosed, in writing, by ViroPharma to AHPC
               prior to the signing of this Agreement) which, if issued, would
               cover the development, manufacture or use of any Collaboration
               Target or the development, manufacture, use or sale of any Class
               A Compound arising from the ViroPharma Chemical Library or any
               Product containing any Class A Compound arising from the
               ViroPharma Chemical Library;

          (f)  as of the Effective Date, there are no claims, judgments or
               settlements against or owed by ViroPharma or, to the best of its
               knowledge, pending or threatened claims or litigation in either
               case relating to the ViroPharma Patent Rights listed in Exhibit
               1.112, the ViroPharma Know-How, any Collaboration Target, any
               ViroPharma Class A Compound or any ViroPharma Class B Compound
               that ViroPharma, as of the Effective Date, plans to Screen during
               the Screening Phase; and

          (g)  during the Term of this Agreement it will use diligent efforts
               not to diminish the rights under the ViroPharma Patent Rights or
               the ViroPharma Know-How granted to AHPC hereunder, including
               without limitation, by not committing or permitting any actions
               or omissions which would cause the breach of any agreements
               between itself and Third Parties which provide for intellectual
               property rights applicable to the development, manufacture or use
               of any Target or the development, manufacture, use or sale of any
               Active Compound arising from the ViroPharma Chemical Library
               and/or Product containing any Active Compound arising from the
               ViroPharma Chemical Library, that it will provide AHPC promptly
               with notice of any such alleged breach, and that as of the
               Effective Date, it is in compliance in all material respects with
               any agreements with Third Parties
<PAGE>

               relating to the ViroPharma Patent Rights, the ViroPharma Know
               How, the Targets and/or the Active Compounds arising from the
               ViroPharma Chemical Library.

     10.3 Additional Representations and Warranties of AHPC. In addition to the
          representations and warranties made by AHPC elsewhere in this
          Agreement, AHPC, subject to Section 10.6, hereby represents, warrants,
          and covenants to ViroPharma that:

          (a)  except as disclosed in Exhibit 10.3(a), it is the sole and
               exclusive owner of the AHPC Patent Rights listed on Exhibit 1.7
               and the AHPC Know-How existing as of the Effective Date, all of
               which are free and clear of any liens, charges and encumbrances,
               and, with respect to such Patent Rights and Know-How AHPC has the
               right to grant to ViroPharma those licenses granted in Section
               2.2 hereof;

          (b)  to the best of its knowledge, as of the Effective Date, the
               practice of the AHPC Patent Rights listed on Exhibit 1.7, the use
               of the AHPC Know-How, and the manufacture, use or sale of any
               AHPC Compound each, as of the Effective Date, do not  infringe on
               any issued patents owned or possessed by any Third Party;

          (c)  as of the Effective Date, there are no claims, judgments or
               settlements against or owed by AHPC or, to the best of its
               knowledge, pending or threatened claims or litigation in either
               case relating to the AHPC Patent Rights listed in Exhibit 1.7,
               the AHPC Know-How, or any AHPC Compound that AHPC, as of the
               Effective Date, plans to Screen during the Screening Phase;

          (d)  all units of Product supplied in the United States by AHPC
               pursuant to Section 5.1 will, as of the date of shipment or
               delivery of such Product to a common carrier, not be adulterated
               or misbranded within the meaning of the FD&C Act, and not be an
               article which may not, under the provisions of Sections 404, 505
               or 512 of the FD&C Act, be introduced into interstate commerce;

          (e)  all units of Product and containers for such Product supplied by
               AHPC pursuant to Section 5.1 for sale in the Copromotion
               Territory shall be manufactured, processed, prepared, packed,
               and, while in AHPC's possession, held in accordance with all
               applicable federal, state, and local laws and regulations,
               including, without limitation, all current Good Manufacturing
               Practices and with all applicable Regulatory Approvals in the
               Copromotion Territory; and

          (f)  during the Term of this Agreement it will use diligent efforts
               not to diminish the rights under the AHPC Patent Rights or the
               AHPC Know-
<PAGE>

               How granted to ViroPharma hereunder, including without
               limitation, by not committing or permitting any actions or
               omissions which would cause the breach of any agreements between
               itself and Third Parties which provide for intellectual property
               rights applicable to the development, manufacture, use or sale of
               any Active Compound arising from the AHPC Chemical Library and/or
               Product containing any Active Compound arising from the AHPC
               Chemical Library, that it will provide ViroPharma promptly with
               notice of any such alleged breach, and that as of the Effective
               Date, it is in compliance in all material respects with any
               agreements with Third Parties relating to the AHPC Patent Rights,
               the AHPC Know How and/or the Active Compounds arising from the
               AHPC Chemical Library.

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

     10.5 No Inconsistent Agreements.  Neither Party has in effect and after the
          Effective Date neither Party shall enter into any oral or written
          agreement or arrangement that would be inconsistent with its
          obligations under this Agreement.

     10.6 Disclaimer. THE FOREGOING WARRANTIES OF EACH PARTY ARE IN LIEU OF ANY
          OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
          ANY IMPLIED WARRANTIES OF NONINFRINGEMENT, ANY IMPLIED WARRANTIES OF
          MERCHANTABILITY OR ANY IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR
          PURPOSE ALL OF WHICH ARE HEREBY SPECIFICALLY EXCLUDED AND DISCLAIMED.

11.  GOVERNMENT APPROVALS; TERM AND TERMINATION.

11.1 Government Approvals.

     11.1.1    ViroPharma's and AHPC's Obligations. Each of ViroPharma and AHPC
               shall use its good faith efforts to eliminate any concern on the
               part of any court or government authority regarding the legality
               of the proposed transaction, including, if required by federal or
               state antitrust authorities, promptly taking all steps to secure
               government antitrust clearance, including, without limitation,
               cooperating in good faith with any government investigation
               including the prompt production of documents and information
               demanded by a second request for documents and of witnesses if
               requested.
<PAGE>

          11.1.2    Cooperation. ViroPharma and AHPC will cooperate and use
                    respectively all reasonable efforts to make all other
                    registrations, filings and applications, to give all notices
                    and to obtain as soon as practicable all governmental or
                    other consents, transfers, approvals, orders, qualifications
                    authorizations, permits and waivers, if any, and to do all
                    other things necessary or desirable for the consummation of
                    the transactions as contemplated hereby. Neither Party shall
                    be required, however, to divest or out-license products or
                    assets or materially change its business if doing so is a
                    condition of obtaining approval under the HSR Act or other
                    governmental approvals of the transactions contemplated by
                    this Agreement.

     11.2 Term. The term of this Agreement will commence on the Effective Date
          and extend, unless this Agreement is terminated earlier in accordance
          with this Section 11, on a Product by Product and country by country
          basis (a) in the AHPC Territory until such time as the obligation to
          pay royalties with respect to the sale of such Product in such country
          expires in accordance with Section 7.4.3 and (b) in the Copromotion
          Territory, until the later of (i) such time as the Parties are no
          longer copromoting such Product in such country or (ii) if the Parties
          discontinue the copromotion of Products pursuant to Section 11.6, such
          time as the obligation to pay royalties with respect to the sale of
          such Product in such country expires in accordance with Section 7.4.3.

     11.3 Expiration. If at any time after the expiration of the Screening Phase
          Tail, the Parties have determined, in accordance with Section 4.3.3,
          not to advance any Tail Compound as a Hit or Lead Compound and there
          is otherwise no Active Compound hereunder, this Agreement shall expire
          effective as of the later of (a) the date the Parties have determined,
          in accordance with Section 4.3.3, not to advance any Tail Compound as
          a Hit or a Lead Compound and (b) the date on which all Active
          Compounds have ceased to be Active Compounds hereunder.

     11.4 Termination for Cause.

          11.4.1    Termination for Cause. This Agreement may be terminated
                    effective immediately by written notice by either Party at
                    any time during the Term of this Agreement for material
                    breach by the other Party, which breach remains uncured for
                    ninety (90) days in the case of nonpayment of any amount due
                    (unless there exists a bona fide dispute as to whether such
                    payment is owing, in which case the ninety (90) day period
                    shall be tolled pending resolution of such dispute) and one
                    hundred eighty (180) days for all other breaches, each
                    measured from the date written notice of such breach is
                    given to the breaching Party, provided, however, that if
                    such breach is not susceptible of cure within the stated
                    period and the breaching Party uses diligent good faith
                    efforts to cure such breach, the stated period will be
                    extended by an additional ninety (90) days.
<PAGE>

          11.4.2    Effect of Termination for Cause on License. If a Party
                    terminates this Agreement pursuant to this Section 11.4 (the
                    "Terminating Party"):

                    (a)  all licenses granted by the Terminating Party to the
                         other Party hereunder will automatically terminate;

                    (b)  all licenses granted by the other Party to the
                         Terminating Party will become fully paid up,
                         irrevocable, perpetual, royalty-free licenses;

                    (c)  the other Party will assign the Terminating Party all
                         right, title and interest in and to: (i) all regulatory
                         filings and Regulatory Approvals pertaining to any
                         Product which regulatory filings and Regulatory
                         Approvals, if any, are owned or otherwise controlled by
                         the other Party, (ii) all of the other Party's interest
                         in the Collaboration Patent Rights and the
                         Collaboration Know-How, (iii) all of the other Party's
                         interest in any Trademark, including, without
                         limitation, the good will symbolized by such Trademark
                         used for Products, and (iv) all of the other Party's
                         interest in any copyrights necessary or useful for
                         Commercializing Products;

                    (d)  the other Party will have no right to receive
                         royalties, a share of Net Profits or any other payments
                         which may result from the sale of any Product, the
                         occurrence of any event or the conduct of any activity
                         after the effective date of such termination, provided,
                         however, that the other Party shall remain entitled to
                         receive any payments that accrued before the effective
                         date of such termination.

     11.5 Termination for Convenience.

          11.5.1    Right to Terminate. After the expiration of the Term of the
                    Screening Phase, either Party may terminate this Agreement
                    upon one hundred eighty days prior written notice to the
                    other Party (a "Termination for Convenience").

          11.5.2    Effect of Termination for Convenience. Upon a Termination
                    for Convenience the non-terminating Party shall have a
                    royalty-bearing, perpetual, irrevocable, worldwide,
                    exclusive license under the other Party's Technology and the
                    other Party's interest in any Collaboration Technology to
                    develop, make, have made, use, import, offer for sale and
                    sell Products in the Field in the world. For the sake of
                    clarity, in such event, the non-terminating Party shall have
                    no rights with respect to any Compound of the terminating
                    Party, which Compound, before the effective date of such
                    termination, was not yet designated as a Lead Compound or a
                    Development Candidate in accordance with Section 4.4.
                    Additionally, in the event of a Termination for Convenience,
                    the
<PAGE>

               terminating Party shall assign to the non-terminating Party all
               right, title and interest in and to any regulatory filings and
               Regulatory Approvals pertaining directly to the Products. If a
               Termination for Convenience occurs before the enrollment of the
               first patient in a Phase III Clinical Trial in any country of the
               world, the non-terminating Party, on a Product by Product basis,
               would pay to the terminating Party a royalty of ******** of the
               Net Sales obtained from the sale of such Product in the world by
               the non-terminating Party, its Affiliates or sublicensees. If a
               Termination for Convenience occurs after the completion of the
               first Phase III Clinical Trial in any country of the world, the
               non-terminating Party, on a Product by Product basis, would pay
               to the terminating Party a royalty of ************* of the Net
               Sales obtained from the sale of such Product in the world by the
               non-terminating Party, its Affiliates or sublicensees. Any
               royalty that becomes payable under this Section 11.5.2 will be
               payable on a country by country basis until the later of (i) the
               last to expire, in such country, of the Patent Rights included
               within the Collaboration Technology containing a Valid Claim
               which would be infringed by the manufacture, use, import, offer
               for sale, or sale of such Product in such country or (ii) ten
               (10) years from the First Commercial Sale of such Product in such
               country. The non-terminating Party shall provide reports and pay
               such royalties to the terminating Party in the manner set forth
               in Section 7.6.2.

     11.6 Termination of ViroPharma's Right to Promote Products.

               11.6.1    Failure to Provide Assigned Sales Force Effort. If
                         during any ********** ViroPharma fails *************,
                         such failure shall not be considered a material breach
                         for purposes of Section 11.4, but, AHPC, upon sixty
                         (60) days prior written notice to ViroPharma, given
                         within sixty (60) days after AHPC, pursuant to Section
                         7.6.3, distributes to ViroPharma its share of Net
                         Profits for the last Calendar Quarter of the third such
                         calendar year, may terminate ViroPharma's right to
                         Promote Products in the Copromotion Territory
                         hereunder. Upon the effective date of any such
                         termination, AHPC shall assume all of ViroPharma's
                         obligations with respect to the Promotion of the
                         Product in the Copromotion Territory and thereafter,
                         shall have the right to sublicense Third Parties the
                         rights granted to it by ViroPharma in the Copromotion
                         Territory hereunder. Additionally, if AHPC, pursuant to
                         this Section 11.6.1, terminates ViroPharma's right to
                         Promote Products in the Copromotion Territory
                         hereunder, ViroPharma shall no longer be entitled to
                         receive any share of Net Profits obtained from the sale
                         of Products in the Copromotion Territory after the
                         effective date of such termination, provided, however,
                         that, with respect to the sale of Products in the
                         Copromotion Territory by AHPC, its Affiliates or
                         sublicensees
<PAGE>

                         after the effective date of such termination, AHPC
                         shall pay to ViroPharma royalties, on a Product by
                         Product basis, which royalties will be the sum of X, Y
                         and Z, where

                         X   =     either (a) for ******** of the portion of the
                                   aggregate Net Sales obtained by AHPC, its
                                   Affiliates and sublicensees from the sale of
                                   such Product in the Copromotion Territory,
                                   which Net Sales, during the calendar year in
                                   question, are less than or equal to
                                   ************, or (b) for ************ of the
                                   portion of the aggregate Net Sales obtained
                                   by AHPC, its Affiliates and sublicensees from
                                   the sale of such Product in the Copromotion
                                   Territory, which Net Sales, during the
                                   calendar year in question, are less than or
                                   equal to ******************,

                         Y   =     either (a) for ***************** of the
                                   portion of the aggregate Net Sales obtained
                                   by AHPC, its Affiliates and sublicensees from
                                   the sale of such Product in the Copromotion
                                   Territory, which Net Sales, during the
                                   calendar year in question, are greater than
                                   **************** and less than or equal to
                                   ******************, or (b) for
                                   ***************** of the portion of the
                                   aggregate Net Sales obtained by AHPC, its
                                   Affiliates and sublicensees from the sale of
                                   such Product in the Copromotion Territory,
                                   which Net Sales, during the calendar year in
                                   question, are greater than
                                   ******************* and less than or equal to
                                   ***************, and

                         Z   =     either (a) for *************** of the portion
                                   of the aggregate Net Sales obtained by AHPC,
                                   its Affiliates and sublicensees from the sale
                                   of such Product in the Copromotion Territory,
                                   which Net Sales, during the calendar year in
                                   question, are greater than *****************,
                                   or (b) for ************** of the portion of
                                   the aggregate Net Sales obtained by AHPC, its
                                   Affiliates and sublicensees from the sale of
                                   such Product in the Copromotion Territory,
                                   which Net Sales, during the calendar year in
                                   question, are greater than **************.

          11.6.2    Payment and Term of Royalty. If ViroPharma's right to
                    Promote Products in the Copromotion Territory is terminated
                    pursuant to this Section 11.6, the royalties payable
                    pursuant to this Section 11.6, and as adjusted pursuant to
                    Section 7.4.2, will be payable as set forth in Section
                    7.4.3.
<PAGE>

          11.6.3    Effect on Other Rights and Obligations. Except as expressly
                    provided in this Section 11.6, any termination of
                    ViroPharma's right to Promote Products in the Copromotion
                    Territory pursuant to this Section 11.6 shall have no effect
                    on any of the other rights and obligations of the Parties
                    under this Agreement, including, without limitation, the
                    rights or obligations of the Parties in conducting the
                    Research Program or the rights or obligations of the Parties
                    in the AHPC Territory.

     11.7 Blocking Patents.  If during the term of the Research Program:

          (a)  a Third Party is granted a Patent relating to a Collaboration
               Target in the Copromotion Territory;

          (b)  either Party determines, based on the advice of patent counsel,
               that such Patent may be infringed by the activities of either
               Party under the Research Program with respect to one or more
               Collaboration Targets; and

          (c)  the Parties, within ninety (90) days of making the determination
               in Section 11.7(b) above, determine that no license is available
               on commercially reasonable terms after having attempted in good
               faith to obtain such a license from such Third Party;

          AHPC shall have the right, exercisable within sixty (60) days after
          the determination in Section 11.7(c) is made, upon thirty (30) days
          prior written notice to ViroPharma to terminate that portion of the
          Research Program under this Agreement covering the Collaboration
          Targets identified in Section 11.7(b).  Upon such termination, subject
          to Section 11.8 hereof, with respect to such Collaboration Targets
          neither Party shall have any further rights or obligations under this
          Agreement, each Party shall retain all rights to its respective Know-
          How, Prior Inventions and Non-Collaboration Inventions covering only
          such Collaboration Targets and each Party shall be free to practice
          any Collaboration Invention and use any Joint-Know-How covering only
          such Collaboration Targets created by the Parties prior to such
          termination.

     11.8 Survival of Certain Obligations.  Expiration or termination of the
          Agreement shall not relieve the Parties of any obligation accruing
          before such expiration or termination, and the provisions of Articles
          9 and 12 and Sections 2.6, 4.3.3, 4.6.5, 4.6.6, 6.1.7(b), 6.1.8(f-g),
          7.4.3, 7.7, 7.8, 8.1, 8.3, 10.3(d-e), 11.4.2, 11.5.2, 11.8, 13.4,
          13.8, 13.9 and 13.11 shall survive the expiration of the Agreement.
          Any expiration or early termination of this Agreement shall be without
          prejudice to the rights of either Party against the other accrued or
          accruing under this Agreement before termination, including, without
          limitation, the obligations to pay royalties and distribute Net
          Profits for Product(s) sold before such termination.
<PAGE>

     11.9 Provision for Insolvency.

          11.9.1    Termination. This Agreement may be terminated by written
                    notice by either Party at any time during the Term of this
                    Agreement upon the declaration by a court of competent
                    jurisdiction that the other Party is bankrupt and, pursuant
                    to the U.S. Bankruptcy Code such other Party's assets are to
                    be liquidated, the filing or institution of bankruptcy,
                    liquidation or receivership proceedings (other than
                    reorganization proceedings under Chapter 11 of the U.S.
                    Bankruptcy Code), or upon an assignment of a substantial
                    portion of the assets for the benefit of creditors by the
                    other Party, or in the event a receiver or custodian is
                    appointed for such Party's business, or if a substantial
                    portion of such Party's business is subject to attachment or
                    similar process; provided, however, that in the case of any
                    involuntary bankruptcy proceeding such right to terminate
                    shall only become effective if the proceeding is not
                    dismissed within sixty (60) days after the filing thereof.
                    To the extent permitted by applicable law, the effect of a
                    termination under this section 11.9.1 shall be as described
                    in Section 11.5.2, i.e., as if the Insolvent Party elected
                    to Terminate for Convenience.

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

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

                         (i)    perform all of the obligations provided in this
                                Agreement to be performed by the Title 11 Party
                                including, where applicable and without
                                limitation, providing to the other Party
                                portions of such intellectual property
                                (including embodiments thereof) held by the
                                Title 11 Party and such successors and assigns
                                or otherwise available to them; or

                         (ii)   provide to the other Party all such intellectual
                                property (including all embodiments thereof)
                                held by the Title 11
<PAGE>

                                Party and such successors and assigns or
                                otherwise available to them; and

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

          11.9.3    Rights to Intellectual Property. If a Title 11 case is
                    commenced by or against the Title 11 Party, and this
                    Agreement is rejected as provided in Title 11, and the other
                    Party elects to retain its rights hereunder as provided in
                    Title 11, then the Title 11 Party (in any capacity,
                    including debtor-in-possession) and its successors and
                    assigns (including, without limitation, a Title 11 Trustee)
                    shall provide to the other Party all such intellectual
                    property (including all embodiments thereof) held by the
                    Title 11 Party and such successors and assigns, or otherwise
                    available to them, immediately upon the other Party's
                    written request. Whenever the Title 11 Party or any of its
                    successors or assigns provides to the other Party any of the
                    intellectual property licensed hereunder (or any embodiment
                    thereof) pursuant to this Section 11.9, the other Party
                    shall have the right to perform the obligations of the Title
                    11 Party hereunder with respect to such intellectual
                    property, but neither such provision nor such performance by
                    the other Party shall release the Title 11 Party from any
                    such obligation or liability for failing to perform it.

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

                    (a)  the right of access to any intellectual property
                         (including all embodiments thereof) of the Title 11
                         Party, or any Third Party with whom the Title 11 Party
                         contracts to perform an obligation of the Title 11
                         Party under this Agreement, and, in the case of the
                         Third Party, which is necessary for the Development,
                         registration, manufacture and Commercialization of
                         licensed Compounds and/or licensed Products; and
<PAGE>

                    (b)  the right to contract directly with any Third Party
                         described in 11.9.4(a) to complete the contracted work.

12.  INDEMNIFICATION AND INSURANCE.

     12.1      Indemnification by AHPC. AHPC will indemnify, defend and hold
               harmless ViroPharma, its Affiliates, and each of its and their
               respective employees, officers, directors and agents (each, a
               "ViroPharma Indemnified Party") from and against any and all
               liability, loss, damage, expense (including reasonable attorneys'
               fees and expenses) and cost (collectively, a "Liability") that
               the ViroPharma Indemnified Party may be required to pay to one or
               more Third Parties resulting from or arising out of:

               (a)  any claims of any nature, other than claims by Third Parties
                    relating to patent infringement, arising out of the conduct
                    of the Research Program by, on behalf of, or under the
                    authority of AHPC (other than by ViroPharma);

               (b)  any AHPC representation or warranty set forth herein being
                    untrue in any material respect when made;

               (c)  the Promotion of any Product by AHPC in the world;

               (d)  any claim of any nature, including any products liability
                    claim, directly arising from the failure of a Product or its
                    container to have been manufactured, processed, prepared,
                    packed, or held in accordance with federal, state, and local
                    laws and regulations, Regulatory Approvals, or AHPC's
                    representations or warranties hereunder; and/or

               (e)  any claims of any nature to the effect that any Trademark
                    selected by AHPC in accordance with Section 8.3 and used by
                    the Parties, their Affiliates, or their sublicensees in
                    conjunction with the Promotion, marketing or sale of any
                    Product pursuant to this Agreement infringes the rights of
                    any Third Party;

               except in each case, to the extent caused by the negligence or
               willful misconduct of ViroPharma or any ViroPharma Indemnified
               Party. Notwithstanding the foregoing, AHPC shall have no
               obligation to defend, indemnify or hold harmless any ViroPharma
               Indemnified Party from and against any Liability arising out of
               or resulting from the infringement of a Third Party patent.
<PAGE>

     12.2      Indemnification by ViroPharma. ViroPharma will indemnify, defend
               and hold harmless AHPC, its Affiliates, sublicensees,
               distributors and each of its and their respective employees,
               officers, directors and agents (each, an "AHPC Indemnified
               Party") from and against any and all Liabilities that the AHPC
               Indemnified Party may be required to pay to one or more Third
               Parties arising out of:

               (a)  any claims of any nature, other than claims by Third Parties
                    relating to patent infringement, arising out of the conduct
                    of the Research Program by, on behalf of, or under the
                    authority of ViroPharma (other than by AHPC);

               (b)  any ViroPharma representation or warranty set forth herein
                    being untrue in any material respect when made; and/or

               (c)  the Promotion of any Product by ViroPharma in the
                    Copromotion Territory;

               except in each case, to the extent caused by the negligence or
               willful misconduct of AHPC or any AHPC Indemnified Party.
               Notwithstanding the foregoing, ViroPharma shall have no
               obligation to defend, indemnify or hold harmless any AHPC
               Indemnified Party from and against any Liability arising out of
               or resulting from the infringement of a Third Party patent.

     12.3      Procedure. Each Party will notify the other in the event it
               becomes aware of a claim for which indemnification may be sought
               hereunder. In case any proceeding (including any governmental
               investigation) shall be instituted involving any Party in respect
               of which indemnity may be sought pursuant to this Article 12,
               such Party (the "Indemnified Party") shall promptly notify the
               other Party (the "Indemnifying Party") in writing and the
               Indemnifying Party and Indemnified Party shall meet to discuss
               how to respond to any claims that are the subject matter of such
               proceeding. The Indemnifying Party, upon request of the
               Indemnified Party, shall retain counsel reasonably satisfactory
               to the Indemnified Party to represent the Indemnified Party and
               shall pay the fees and expenses of such counsel related to such
               proceeding. In any such proceeding, the 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 the
               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. All such fees and
               expenses shall be reimbursed as they are incurred. The
               Indemnifying
<PAGE>

               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. The Indemnifying Party shall not, without the written
               consent of the Indemnified Party, effect any settlement of any
               pending or threatened proceeding in respect of which the
               Indemnified Party is, or arising out of the same set of facts
               could have been, a party and indemnity could have been sought
               hereunder by the Indemnified Party, unless such settlement
               includes an unconditional release of the Indemnified Party from
               all liability on claims that are the subject matter of such
               proceeding.

     12.4      Insurance. Each Party further agrees to use its Commercially
               Reasonable Efforts to obtain and maintain, during the term of
               this Agreement, Commercial General Liability Insurance, including
               Products Liability Insurance, with reputable and financially
               secure insurance carriers to cover its indemnification
               obligations under Sections 12.1 or 12.2, as applicable, or self-
               insurance, with limits of not less than five million dollars
               ($5,000,000.00) per occurrence and in the aggregate.

13.  MISCELLANEOUS.

     13.1      Assignment. Neither this Agreement nor any interest hereunder
               shall be assignable by either Party without the prior written
               consent of the other Party, except for assignment in connection
               with a Change of Control of a Party. This Agreement shall be
               binding upon the successors and permitted assigns of the Parties
               and the name of a Party appearing herein shall be deemed to
               include the names of such Party's successors and permitted
               assigns to the extent necessary to carry out the intent of this
               Agreement. Any assignment not in accordance with this Section
               13.1 shall be void.

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

     13.3      Force Majeure. Neither Party shall be liable to the other for
               delay or failure in the performance of the obligations on its
               part contained in this Agreement if and to the extent that such
               failure or delay is due to circumstances beyond its control which
               it could not have avoided by the exercise of reasonable
               diligence. It shall notify the other Party promptly should such
               circumstances arise, giving an indication of the likely extent
               and duration thereof, and shall use all Commercially Reasonable
               Efforts to resume performance of its obligations as soon as
               practicable, provided,
<PAGE>

     however, that neither Party shall be required to settle any labor dispute
     or disturbance. Actions taken by a Party to resume performance of its
     obligations with respect to Screening, Research and Development matters
     shall be taken in consultation with the JSC, and actions taken by a Party
     to resume performance of its Commercialization obligations in the
     Copromotion Territory shall be taken in consultation with the MSC.

13.4 Correspondence and Notices.

     13.4.1  Ordinary Notices. Correspondence, reports, documentation, and any
             other communication in writing between the Parties in the course of
             ordinary implementation of this Agreement shall be delivered by
             hand, sent by facsimile transmission (receipt verified), or by
             airmail to the employee or representative of the other Party who is
             designated by such other Party to receive such written
             communication.

     13.4.2  Extraordinary Notices. Extraordinary notices and other
             communications hereunder (including, without limitation, any notice
             of force majeure, breach, termination, change of address, exercise
             of rights to negotiate additional agreements, etc.) shall be in
             writing and shall be deemed given if delivered personally or by
             facsimile transmission (receipt verified), mailed by registered or
             certified mail (return receipt requested), postage prepaid, or sent
             by nationally recognized express courier service, to the Parties at
             the following addresses (or at such other address for a Party as
             shall be specified by like notice, provided, however, that notices
             of a change of address shall be effective only upon receipt
             thereof):

             All correspondence to AHPC shall be addressed as follows:

                    Wyeth-Ayerst Laboratories
                    555 East Lancaster Avenue
                    St. Davids, Pennsylvania 19087
                    Attn: Senior Vice President, Global Business Development
                    Fax: (610) 688-9498

                         with a copy to:

                         American Home Products Corporation
                         5 Giralda Farms
                         Madison, New Jersey 07940
                         Attn: Senior Vice President and General Counsel
                         Fax: (973) 660-7156
<PAGE>

            All correspondence to ViroPharma shall be addressed as follows:

                    ViroPharma Incorporated
                    405 Eagleview Boulevard
                    Exton, Pennsylvania 19341
                    Attn: Vice President, Business Development
                    Fax: (610) 458-7380

                         with a copy to:

                         ViroPharma Incorporated
                         405 Eagleview Boulevard
                         Exton, Pennsylvania  19341
                         Attn: General Counsel
                         Fax: (610) 458-7380

13.5   Amendment. No amendment, modification or supplement of any provision of
       this Agreement shall be valid or effective unless made in writing and
       signed by a duly authorized officer of each Party.

13.6   Waiver. No provision of the Agreement shall be waived by any act,
       omission or knowledge of a Party or its agents or employees except by an
       instrument in writing expressly waiving such provision and signed by a
       duly authorized officer of the waiving Party.

13.7   Severability. If any clause or portion thereof in this Agreement is for
       any reason held to be invalid, illegal or unenforceable, the same shall
       not affect any other portion of this Agreement, as it is the intent of
       the Parties that this Agreement shall be construed in such fashion as to
       maintain its existence, validity and enforceability to the greatest
       extent possible. In any such event, this Agreement shall be construed as
       if such clause of portion thereof had never been contained in this
       Agreement, and there shall be deemed substituted therefor such provision
       as will most nearly carry out the intent of the Parties as expressed in
       this Agreement to the fullest extent permitted by applicable law unless
       doing so would have the effect of materially altering the right and
       obligations of the Parties in which event this Agreement shall terminate
       and all the rights and obligations granted to the Parties hereunder shall
       cease and be of no further force and effect.

13.8   Descriptive Headings. The descriptive headings of this Agreement are for
       convenience only, and shall be of no force or effect in construing or
       interpreting any of the provisions of this Agreement.
<PAGE>

     13.9   Governing Law. This Agreement shall be governed by and interpreted
            in accordance with the substantive laws of the State of New Jersey,
            without regard to conflict of law principles thereof.

     13.10  Entire Agreement of the Parties. This Agreement constitutes and
            contains the complete, final and exclusive understanding and
            agreement of the Parties and cancels and supersedes any and all
            prior negotiations, correspondence, understandings and agreements
            including, without limitation, the Prior Agreement, whether oral or
            written, among the Parties respecting the subject matter hereof and
            thereof.

     13.11  Independent Contractors. Both Parties are independent contractors
            under this Agreement. Nothing herein contained shall be deemed to
            create an employment, agency, joint venture or partnership
            relationship between the Parties hereto or any of their agents or
            employees, or any other legal arrangement that would impose
            liability upon one Party for the act or failure to act of the other
            Party. Neither Party shall have any express or implied power to
            enter into any contracts or commitments or to incur any liabilities
            in the name of, or on behalf of, the other Party, or to bind the
            other Party in any respect whatsoever.

     13.12  Debarment. Each Party agrees that it will not Use, in any capacity,
            in connection with any of its obligations to be performed under the
            Research Program any individual who has been debarred under the FD&C
            Act or the Generic Drug Enforcement Act.

     13.13  Counterparts. This Agreement may be executed in any number of
            counterparts, each of which need not contain the signature of more
            than one Party but all such counterparts taken together shall
            constitute one and the same agreement.

     IN WITNESS WHEREOF, duly authorized representatives of the Parties have
duly executed this Agreement to be effective as of the Effective Date.

AMERICAN HOME PRODUCTS CORPORATION    VIROPHARMA INCORPORATED

By /s/ Robert Essner                  By /s/ Claude H. Nash
  -----------------------------         --------------------------------
Name: Robert Essner                   Name: Claude H. Nash
Title: Executive Vice President       Title:  President & CEO
<PAGE>

                                  EXHIBIT 1.7

                              AHPC PATENT RIGHTS
                              ------------------

                                     NONE.

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 1.7         Page 1
<PAGE>

                                 EXHIBIT 1.18

                        CLASS A PRODUCT CHEMICAL SERIES
                        -------------------------------

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

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 1.18        Page 1
<PAGE>

                                 EXHIBIT 1.23

                             COLLABORATION TARGETS
                             ---------------------

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

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 1.23        Page 1
<PAGE>

                                 EXHIBIT 1.50

                   ELEMENTS OF FULLY-ABSORBED STANDARD COSTS
                   -----------------------------------------

The following expenses are included in Fully Absorbed Standard Costs for
purposes of this Agreement:

1.   Direct Materials
     ----------------

     Materials used in the manufacturing process that are traced directly to the
     completed materials, Compound or Product, as applicable, and include:

     -    Inert raw materials or excipients
     -    Active substances/ingredients at market prices
     -    Packaging components such as bottles, caps, labels, etc.

2.   Direct Labor
     ------------

     The cost of employees engaged in production activities which are directly
     identifiable with manufacturing the materials, Compound or Product, as
     applicable. Excludes supervision and production support activities such as
     inspection, plant and equipment maintenance labor, and material handling
     personnel. Direct Labor cost includes:

     -    Base pay, overtime, vacation and holidays, illness, personal time with
          pay and shift differential.
     -    Cost of employee fringe benefits such as health and life insurance,
          payroll taxes, welfare, pension and profit sharing.

3.   Allocated Costs
     ---------------

     Costs which are allocated to manufacturing the Ingredient based on standard
     direct labor hours of the manufacturing process. These allocated costs
     include:

     -    Utilities - expenses incurred for fuel, electricity and water in
          ---------
          providing power for production and other plant equipment

     -    Maintenance and repairs - amount of expense incurred in-house or
          -----------------------
          purchased to provide services for plant maintenance and repairs of
          facilities and equipment.

     -    Depreciation - of plant and equipment utilizing the straight-line
          ------------
          method of calculation.

     -    Insurance - cost of comprehensive and other insurance necessary for
          ---------
          the safeguard of manufacturing plant and equipment.

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 1.50        Page 1
<PAGE>

     -    Permits and Licenses - fees payable to governmental agencies or
          --------------------
          authorities to obtain or maintain permits or licenses that are
          necessary for the operation of facilities used to manufacture the
          materials, Compound or Product, as applicable.

     -    Costs of the following manufacturing services
          ---------------------------------------------

               .    Purchasing and Accounting
               .    Production Scheduling
               .    Inventory Management
               .    Plant Materials Management
               .    Supervision and Production Support

          Various bases may be used for allocating these costs to manufacturing
          operating departments including headcount, square feet, metered
          utilities use, estimated services rendered, EDP computer hours, etc.

4.   Testing Costs - direct labor costs for Quality Assurance ("QA") testing and
     -------------
     approving materials used in manufacturing and completed manufacturing
     batches and finished Products. This includes all manufacturing in-process
     testing and testing of finished materials. Excluded costs are QA costs
     related to research and development, stability testing, etc.

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 1.50        Page 2
<PAGE>

                                 EXHIBIT 1.112

                           VIROPHARMA PATENT RIGHTS
                           ------------------------

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

--------------------------------------------------------------------------------
December 9, 1999      Collaboration Agreement - Exhibit 7.35.4    Page 11.112
                                    Page 1
<PAGE>

                                  EXHIBIT 5.4

                      ADVERSE EVENT REPORTING PROCEDURES
                      ----------------------------------

     The Parties hereby agree that the following terms will govern disclosures
of each Party to the other with respect to adverse event reporting relating to
any Development Candidate or Product as clinically tested or marketed by or on
behalf of either Party.

1.   Definitions.

     1.1  Adverse Experience or Event (AE): An AE is defined by AHPC as any
          untoward, undesired, or unplanned event in the form of signs,
          symptoms, disease, or laboratory or physiological observations
          occurring in a human being in a temporal relationship to use of an
          AHPC product regardless of causal relationship. This includes:

          .    any clinically significant worsening of a pre-existing condition;

          .    an AE occurring from overdose (i.e., a dose higher than that
               prescribed by a health care professional for clinical reasons) of
               an AHPC product, whether accidental or intentional;

          .    an AE occurring from abuse (i.e., use for non-clinical reasons)
               of an AHPC product;

          .    an AE that has been associated with the discontinuation of the
               use of an AHPC product;

          .    any failure of expected pharmacological action (for spontaneous
               reports).

          If there is any doubt whether the information constitutes an AE, the
          information will be treated as an AE.

     1.2  Serious AE: A serious AE is defined by AHPC as an AE occurring at any
          dose that: results in death; is life-threatening (see below); requires
          inpatient hospitalization or prolongation of an existing
          hospitalization; results in a persistent or significant disability or
          incapacity (see below); results in cancer; results in a congenital
          anomaly or birth defect. Additionally, important medical events that
          may not result in death, be life-threatening, or require
          hospitalization may be considered a serious AE when, based upon
          appropriate medical judgment, they may jeopardize the patient or
          subject and may require medical or surgical intervention to prevent
          one of the outcomes listed in this definition. Examples of such
          medical events include allergic bronchospasm requiring intensive
          treatment in an emergency room or at home; blood dyscrasias or
          convulsions that do not result in hospitalization; or the development
          of drug dependency or abuse.

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 5.4        Page 1
<PAGE>

          1.2.1   Life-threatening refers to immediate risk of death as the
                  event occurred. A life-threatening experience does not include
                  an experience that, had it occurred in a more severe form,
                  might have caused death but as it actually occurred did not
                  create an immediate risk of death. For example, hepatitis that
                  resolved without evidence of hepatic failure would not be
                  considered life-threatening even though hepatitis of a more
                  severe nature can be fatal. Similarly, an allergic reaction
                  resulting in angioedema of the face would not be life-
                  threatening, even though angioedema of the larynx, allergic
                  bronchospasm, or anaphylaxis can be fatal.

          1.2.2  Disability is defined as a substantial disruption in a person's
                 ability to conduct normal life functions.

          1.2.3  For studies, all pregnancies and all overdoses will be reported
                 to GSSE in the same time frame as serious AEs.

          1.2.4  A serious AE obtained from tests in laboratory animals includes
                 any experience suggesting a significant risk for human
                 subjects, including any findings of mutagenicity,
                 teratogenicity, or carcinogenicity.

          1.2.5  If there is any doubt whether the information constitutes a
                 serious AE, the information will be treated as a serious AE.

     1.3  Non-Serious AE: is any AE which does not meet the criteria for a
          serious AE.

     1.4  Unexpected AE: An unexpected AE is one that is not listed in the
          current product labeling. The current product labeling is either the
          package insert (for marketed AHPC products) or the current
          investigator's brochure (for investigational AHPC products). An
          unexpected AE includes any event that may be symptomatically and
          pathophysiologically related to an event listed in the labeling, but
          differs from the labeled event because of greater severity or
          specificity. For example, hepatic necrosis would be unexpected (by
          virtue of greater severity) if the product labeling referred only to
          elevated hepatic enzymes or hepatitis. Similarly, cerebral
          thromboembolism and cerebral vasculitis would be unexpected (by virtue
          of greater specificity) if the labeling only listed cerebral vascular
          accidents.

     1.5  Product (Drug, Vaccine, Biological, Device)-Related: For the purposes
          of regulatory reporting for investigational products, an AE will be
          considered "product-related" (i.e., drug-related, vaccine-related,
          etc.) for studies if either the investigator, the Medical Monitor, the
          CR&D Clinical Project Team Medical Monitor (or designee), or the Local
          Monitor (if applicable) assesses the AE(s) as possibly, probably, or
          definitely related.

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 5.4           Page 2

<PAGE>

               1.  An AE will be considered "not product-related" for studies if
               the investigator and the medical monitor(s) and the local monitor
               (if applicable) assess the AE(s) as probably not related or
               definitely not related, or "relationship remote."

               2.  Whenever the investigator's or monitor's assessment is
               unknown or unclear, the AE(s) will be treated as product-related
               for the purposes of reporting to regulatory authorities.

     1.6  Protocol-Related: AEs from studies that are not product-related may
          nevertheless be considered by the investigator or the medical
          monitor(s) or the local monitor (if applicable) to be protocol-
          related. For purposes of reporting to GSSE and regulatory authorities,
          these will be reported in the same manner as product-related events.

     1.7  NDA Holder is defined as: An "Applicant" as defined in 21 C.F.R.
          Section 314.3(b), for regulatory approval of a Product in any
          regulatory jurisdiction, including a holder of a foreign equivalent
          thereto.

     1.8  IND Holder is defined as: A "Sponsor" as defined in 21 C.F.R. Section
          312.3(b) of an investigational new drug in any regulatory
          jurisdiction, including a holder of a foreign equivalent thereto.

     1.9  Capitalized terms not defined in this Exhibit shall have the meaning
          assigned thereto in the Agreement.

2.   With respect to any Development Candidate or Product, the Parties agree as
     follows:

     a.   All initial reports and any follow-up information (oral or written)
          for any and all Serious AEs as defined above, (other than with respect
          to animal studies) which become known to either Party (other than from
          disclosure by or on behalf of the other Party) must be communicated by
          telephone, telefax or electronically directly to the other Party
          and/or the NDA Holder, IND Holder (individually and collectively
          referred to as "Holders") within forty-eight hours of receipt of the
          information. Written confirmation of the Serious AE received by such
          Party should be sent to the other Party and/or the Holders as soon as
          it becomes available, but in any event within forty-eight hours of
          initial report of the Serious AE by such Party.

     b.   Both Parties shall exchange Medwatch and/or CIOMs forms and other
          health authority reports within forty-eight hours of submission to any
          Regulatory Authority.

     c.   All initial reports and follow-up information received for all Non-
          Serious AEs for marketed Product which become known to a Party (other
          than from disclosure by or on behalf of the other Party) must be
          communicated in writing, by telefax or

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 5.4            Page 3
<PAGE>

          electronically to the other Party within ten days, on Medwatch or
          CIOMs forms (where possible).

     d.   Each Party shall coordinate and cooperate with the other whenever
          practicable to prepare a single written report regarding all Serious
          and/or Non-Serious AEs, provided, however, that neither Party shall be
          obligated to delay reporting of any AE in violation of applicable law
          or regulations regarding the reporting of AEs.

3.   The Parties further agree that:

     a.   A written report be forwarded to the other Party within forty-eight
          hours of receipt by the Party making the report, for AEs for animal
          studies which suggest a potential significant risk for humans;

     b.   Each Party will give the other Party a report via a print-out or
          computer disk of all AEs reported to it and its Affiliates relating to
          any Development Candidate or Product within the last year, within
          thirty days of receipt of a request from the other Party but not more
          often than four times a year;

     c.   If either Party wishes access to AE Reports of the other Party
          relating to a Development Candidate or Product, upon request of that
          Party, the other Party shall make available its AE records relating to
          the Product or Substance (including computer disks) for viewing and
          copying by the other Party. The Parties may discuss the transfer of AE
          Reports by computer disk.

     d.   Disclosure of information hereunder by a Party to the other Party
          shall continue as long as either Party and/or its Affiliates or
          designees continue to clinically test or market a Development
          Candidate or Product.

4.   Each Party shall diligently undertake the following further obligations
     where both Parties are or will be commercializing the Development Candidate
     or Product pursuant to the Agreement and/or performing clinical trials with
     respect to the Development Candidate or Product:

     a.   Upon the Effective Date, each Party shall identify individuals who
          shall be responsible for identifying all AE reporting requirements in
          all countries of the world as set forth in the Agreement, and any
          amendments thereto;

     b.   To immediately consult with the other Party, with respect to the
          investigation and handling of any Serious AE disclosed to it by the
          other Party or by a third Party and to allow the other Party to review
          the Serious AE and to participate in the follow-up investigation;

     c.   To immediately advise the other Party of any Development Candidate
          and/or Product safety communication received from a health authority
          and consult with the other Party with respect to any Product and/or
          Substance warning, labeling change

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 5.4            Page 4
<PAGE>

          or change to an investigators' brochure involving safety issues
          proposed by the other Party, including, but not limited to the safety
          issues agreed to by the Parties;

     d.   To diligently handle in a timely manner the follow-up investigation
          and resolution of each AE reported to it;

     e.   To provide the other Party mutually agreed upon audit rights of its AE
          reporting system and documentation, upon prior notice, during normal
          business hours, at the expense of the auditing Party and under the
          confidentiality obligations set forth in the Agreement;

     f.   To meet in a timely fashion from time to time as may be reasonably
          required to implement the adverse event reporting and consultation
          procedures described in this Exhibit 5.4, including identification of
          those individuals in each Party's Drug Safety group who will be
          responsible for reporting to and receiving AE information from the
          other Party, and the development of a written standard operating
          procedure with respect to adverse event reporting responsibilities,
          including reporting responsibilities to investigators;

     g.   Where possible, to transmit all data electronically;

     h.   to report to each other any addenda, revisions or changes to the
          Agreement (e.g., change in territories, local regulations, addition of
          new licensors/licensees to the Agreement, etc.) which might alter the
          adverse event reporting responsibilities hereunder;

     i.   to utilize English as the language of communication and data exchange
          between the Parties;

     j.   to develop a system of exchange of documents and information if the
          Agreement involves more than two Parties;

     k.   to work together to develop an electronic system to transmit AE data.

5.   The Parties may meet after the Effective Date of the Agreement to establish
     a separate agreement for adverse event exchange which will supersede this
     Exhibit 5.4.

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 5.4            Page 5
<PAGE>

                                  EXHIBIT 7.3

                           STOCK PURCHASE AGREEMENT
                           ------------------------

                                 See attached.

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 7.3           Page 1
<PAGE>

                                 EXHIBIT 7.4.1

                  SAMPLE CALCULATION OF ROYALTY DISTRIBUTIONS
                  -------------------------------------------

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

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 7.4.1         Page 1
<PAGE>

                                 EXHIBIT 7.5.3

                SAMPLE CALCULATIONS OF NET PROFIT DISTRIBUTIONS
                -----------------------------------------------

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

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 7.5.3         Page 1
<PAGE>

                                EXHIBIT 10.2(a)

                   THIRD PARTY RIGHTS, TITLE OR INTEREST IN
                   -----------------------------------------
                       VIROPHARMA INTELLECTUAL PROPERTY
                       --------------------------------

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

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 10.2(a)       Page 1
<PAGE>

                                EXHIBIT 10.2(b)

                             THIRD PARTY CLAIMS ON
                             ---------------------
                     VIROPHARMA PATENT RIGHTS AND KNOW-HOW
                     -------------------------------------

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

--------------------------------------------------------------------------------
December 9, 1999      Collaboration Agreement - Exhibit 10.3(a) 10.2.(b)  Page 1
<PAGE>

                                EXHIBIT 10.2(c)

                  VIROPHARMA INTELLECTUAL PROPERTY SUBJECT TO
                  -------------------------------------------
                         GOVERNMENT FUNDING AGREEMENTS
                         -----------------------------

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

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 10.2(c)        Page 1
<PAGE>

                                EXHIBIT 10.3(a)

                             THIRD PARTY CLAIMS ON
                             ---------------------
                        AHPC PATENT RIGHTS AND KNOW-HOW
                        -------------------------------

                                     None.

--------------------------------------------------------------------------------
December 9, 1999         Collaboration Agreement - Exhibit 10.3(a)       Page 1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00003-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00003-of-00352.parquet"}]]