ViroPharma (VPHM)

Note 14. Commitments and Contingencies

In March 2008, the Company entered into a lease, comprising 78,264 square feet of office and related space, for the Company’s new headquarters located in Exton, Pennsylvania. The lease expires seven years and six months from the point in which the Company began to occupy the space, which was in the fourth quarter of 2008. In connection with the new lease, the Company also received a leasehold improvement allowance of $2.3 million.

In May 2008, the Company entered into a lease in Maidenhead, United Kingdom, comprising 8,000 square feet of office space, for our European operations. The lease expires in May 2018.

The Company’s future minimum lease payments under the Company’s operating leases related to buildings and equipment for periods subsequent to March 31, 2009 are as follows (in thousands):

The Company has severance agreements for certain employees and change of control agreements for executive officers and certain other employees. Under its severance agreements, certain employees may be provided separation benefits from the Company if they are involuntarily separated from employment. Under the Company’s change of control agreements, certain employees are provided separation benefits if they are either terminated or resign for good reason from the Company within 12 months from a change of control.

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In addition to the merger consideration paid at closing as described in Note 13, Lev shareholders received the non-transferrable contractual right to two contingent payments (“CVR Payments”) of $0.50 each that could deliver up to an additional $174.6 million, or $1.00 per share in cash, if Cinryze meets certain targets. The first CVR payment of $0.50 per share would become payable when either (i) Cinryze is approved by the FDA for acute treatment of HAE and the FDA grants orphan exclusivity for Cinryze encompassing the acute treatment of HAE to the exclusion of all other human C1 inhibitor products or, (ii) orphan exclusivity for the acute treatment of HAE has not become effective for any third party’s human C1 inhibitor product for two years from the later of the date of closing and the date that orphan exclusivity for Cinryze for the prophylaxis of HAE becomes effective. The second CVR payment of $0.50 per share would become payable when Cinryze reaches at least $600.0 million in cumulative net product sales within 10 years of closing.

Note 17. Commitments and Contingencies

The Company has commitments of approximately $89.6 million at December 31, 2008 in connection with several long-term supply contracts related to Cinryze.

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ViroPharma Incorporated

Notes to the Consolidated Financial Statements (continued)

In March 2008, the Company entered into a lease, comprising 78,264 square feet of office and related space, for the Company’s new headquarters located in Exton, Pennsylvania. The lease expires seven years and six months from the point in which the Company began to occupy the space, which occurred in October 2008. In connection with the new lease, the Company also received a leasehold improvement allowance of $2.3 million, which will be amortized over the term of the lease.

In May 2008, the Company entered into a lease in Maidenhead, United Kingdom, comprising 8,000 square feet of office space, for our European operations. The lease expires in May 2018.

The Company’s future minimum lease payments under the Company’s other operating leases related to buildings and equipment for years subsequent to December 31, 2008 are as follows (in thousands):

Rent expense for the years ended December 31, 2008, 2007, and 2006 aggregated $1.4 million, $53,000 and $0.7 million, respectively.

The Company has a severance plan for certain employees and change of control agreements for executive officers and certain other employees. Under its severance plan, certain employees may be provided separation benefits from the Company if they are involuntarily separated from employment. Under the Company’s change of control agreements, certain employees are provided separation benefits if they are either terminated or resign for good reason from the Company within 12 months from a change of control.

Note 13. Commitments and Contingencies

In March 2008, the Company entered into a lease, comprising 78,264 square feet of office and related space, for the Company’s new headquarters located in Exton, Pennsylvania. The lease expires seven years and six months from the point in which the Company begins to occupy the space, which is expected in the fourth quarter of 2008. In connection with the new lease, the Company also received a leasehold improvement allowance of $2.3 million.

In May 2008, the Company entered into a lease in Maidenhead, United Kingdom, comprising 8,000 square feet of office space, for our European operations. The lease expires in May 2018.

The Company’s future minimum lease payments under the Company’s operating leases related to buildings and equipment for periods subsequent to September 30, 2008 are as follows (in thousands):

The Company has severance agreements for certain employees and change of control agreements for executive officers and certain other employees. Under its severance agreements, certain employees may be provided separation benefits from the Company if they are involuntarily separated from employment. Under the Company’s change of control agreements, certain employees are provided separation benefits if they are either terminated or resign for good reason from the Company within 12 months from a change of control.

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ViroPharma Incorporated

Notes to the Unaudited Consolidated Financial Statements (continued)

In addition to the merger consideration paid at closing as described in footnote 12, Lev shareholders received the non-transferrable contractual right to two contingent payments (“CVR Payments”) of $0.50 each that could deliver up to an additional $174.6 million, or $1.00 per share in cash, if Cinryze meets certain targets. The first CVR payment of $0.50 per share would become payable when either (i) Cinryze is approved by the FDA for acute treatment of HAE and the FDA grants orphan exclusivity for Cinryze encompassing the acute treatment of HAE to the exclusion of all other human C1 inhibitor products or, (ii) orphan exclusivity for the acute treatment of HAE has not become effective for any third party’s human C1 inhibitor product for two years from the later of the date of closing and the date that orphan exclusivity for Cinryze for the prophylaxis of HAE becomes effective. The second CVR payment of $0.50 per share would become payable when Cinryze reaches at least $600 million in cumulative net product sales within 10 years of closing.

Note 13. Commitments and Contingencies

In March 2008, the Company entered into a lease, comprising 78,264 square feet of office and related space, for the Company’s new headquarters located in Exton, Pennsylvania. The lease expires seven years and six months from the point in which the Company begins to occupy the space, which is expected in the fourth quarter of 2008.

In May 2008, the Company entered into a lease in Maidenhead, United Kingdom, comprising 8,000 square feet of office space, for our European operations. The lease expires in May 2018.

The Company’s future minimum lease payments under the Company’s operating leases related to buildings and equipment for periods subsequent to June 30, 2008 are as follows (in thousands):

The Company has severance agreements for certain employees and change of control agreements for executive officers and certain other employees. Under its severance agreements, certain employees may be provided separation benefits from the Company if they are involuntarily separated from employment. Under the Company’s change of control agreements, certain employees are provided separation benefits if they are either terminated or resign for good reason from the Company within 12 months from a change of control.

Note 13. Commitments and Contingencies

In March 2008, the Company entered into a lease, comprising 78,264 square feet of office and related space, for the Company’s new headquarters located in Exton, Pennsylvania. The lease expires seven years and six months from the point in which the Company begins to occupy the space, which is expected in the fourth quarter of 2008.

The Company’s future minimum lease payments under the Company’s operating leases related to buildings and equipment for periods subsequent to March 31, 2008 are as follows (in thousands):

The Company has severance agreements for certain employees and change of control agreements for executive officers and certain other employees. Under its severance agreements, certain employees may be provided separation benefits from the Company if they are involuntarily separated from employment. Under the Company’s change of control agreements, certain employees are provided separation benefits if they are either terminated or resign for good reason from the Company within 12 months from a change of control.

Note 15. Commitments and Contingencies

The Company’s future minimum lease payments under the Company’s other operating leases related to equipment for years subsequent to December 31, 2007 are as follows (in thousands):

Rent expense for the years ended December 31, 2007, 2006, and 2005 aggregated $53,000, $0.7 million and $0.7 million, respectively.

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ViroPharma Incorporated

Notes to the Consolidated Financial Statements (continued)

Notes to the Consolidated Financial Statements (continued)

The Company has a severance plan and severance agreements for certain employees and change of control agreements for executive officers and certain other employees. Under its severance plan and severance agreements, certain employees may be provided separation benefits from the Company if they are involuntarily separated from employment. Under the Company’s change of control agreements, certain employees are provided separation benefits if they are either terminated or resign for good reason from the Company within 12 months from a change of control.

Note 15. Commitments and Contingencies

15.    Commitments and Contingencies

The Company currently leases 33,000 square feet in Exton, Pennsylvania for its marketing, development and corporate activities under an operating lease expiring in 2017. The total remaining obligation under this lease is $8.1 million. The lease provides the Company two consecutive optional renewal terms of five years each.

As part of the manufacturing agreement with Lilly, the Company has certain minimum purchase requirements of Vancocin for a period of time less than one year, on a rolling basis, which at December 31, 2005 totaled $3.4 million. The Company is not contractually obligated to any amount of purchases other than in connection with the purchase orders processed for finished goods based on the rolling basis, and cannot reasonably estimate the amount of Vancocin which it may be obligated to purchase in the future. In December

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ViroPharma Incorporated

Notes to the Consolidated Financial Statements (continued)

2005, the Company entered into an agreement with OSG Norwich Pharmaceuticals, Inc. (“OSG Norwich”) for the manufacture of finished product, which expires in December 2010. In this agreement for Vancocin finished product, the Company is obligated to purchase 80% of its finished product requirements from OSG Norwich (other than such requirements filled by Lilly through September 2006), provided that OSG Norwich has sufficient capacity to meet such requirements.

The Company’s future minimum lease payments under the aforementioned lease and other operating leases related to equipment for years subsequent to December 31, 2005 are as follows (in thousands):

Rent expense for the years ended December 31, 2005, 2004, and 2003 aggregated $0.7 million, $0.9 million and $1.8 million, respectively.

The Company has a severance plan and severance agreements for certain employees and change of control agreements for executive officers and certain other employees. Under its severance plan and severance agreements, certain employees may be provided separation benefits from the Company if they are involuntarily separated from employment. Under the Company’s change of control agreements, certain employees are provided separation benefits if they are either terminated or resign for good reason from the Company within 12 months from a change of control.

14.    Commitments and Contingencies

As of December 31, 2004, the Company leased an aggregate of 119,000 square feet in two facilities located in Exton, Pennsylvania for its corporate and development activities under operating leases expiring in 2008 and 2017, respectively. The total remaining obligation under these leases total $12.2 million. During February 2005, the Company reached a tentative agreement with its landlord to exit the lease that expires in 2008. The Company recorded a $1.1 million charge during 2004 related to this transaction, which is an estimate of the payment it will make to the landlord to exit the lease, which it expects to occur in the second quarter of 2005. Should the Company finalize this agreement, the total remaining obligation it will owe under these leases will be $9.2 million, which includes the expected termination charge. The facility the Company is exiting represents 86,000 square feet of space to which the lease expires in 2008. After the termination, the Company will have 33,000 square feet in one facility under an operating lease that expires in 2017. As of December 31, 2004, the Company had a $1.5 million liability on its consolidated balance sheet related to the remaining lease payments and the expected termination payment.

During the third quarter of 2003, the Company recorded a non-cash charge of approximately $1.7 million in its marketing, general and administrative expenses relating to 33,000 square feet of leased space in the facility leased through 2017. This charge was an estimate of the then present value of the loss it might incur over the remaining 13 years of the lease and was net of assumed sublease income estimated at that time. During July

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ViroPharma Incorporated

Notes to the Consolidated Financial Statements (continued)

2004, it moved to this facility and reversed the remaining accrual. As a result of this move, it no longer occupied the 86,000 square feet in the building with a lease expiring in 2008 and established a new provision in July 2004 based upon the new space requirements, which represented the value of the lease payments, net of expected future rental income.

As part of the Company’s manufacturing agreement with Eli Lilly & Company, it has certain minimum purchase requirements of Vancocin for a period of time less than one year, on a rolling basis, which at December 31, 2004 totaled $7.7 million. The Company is not contractually obligated to any amount of purchases past this time period, and cannot reasonably estimate the amount of Vancocin which it may be obligated to purchase in the future.

The Company’s future minimum lease payments under the aforementioned leases, including the entire contractual amounts for the lease the Company expects to terminate in 2005, and other operating leases related to equipment for years subsequent to December 31, 2004 are as follows (in thousands):

Rent expense for the years ended December 31, 2004, 2003, and 2002 aggregated $0.9 million, $1.8 million and $1.1 million, respectively.

The Company has a severance plan and severance agreements for certain employees and change of control agreements for executive officers and certain other employees. Under its severance plan and severance agreements, certain employees may be provided separation benefits from the Company if they are involuntarily separated from employment. Under the Company’s change of control agreements, certain employees are provided separation benefits if they are either terminated or resign for good reason from the Company within 12 months from a change of control.