<PAGE>

                                                                   EXHIBIT 10.18

Confidential                                                Final Execution Copy

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.

                        DEVELOPMENT AND LICENSE AGREEMENT

         This Development and License Agreement (the "Agreement"), entered into
as of the July 18, 2003 (the "Effective Date"), is made by and between ADVANCIS
PHARMACEUTICAL CORP., a company organized and existing under the laws of the
state of Delaware and having a place of business at 20425 Seneca Meadows
Parkway, Germantown, Maryland 20876 ("ADVANCIS"), and GLAXO GROUP LIMITED, a
company incorporated in England and Wales, having its registered office at Glaxo
Wellcome House, Berkeley Avenue, Greenford, Middlesex, England UB6 0NN ("GSK").

         WHEREAS, ADVANCIS is the owner of certain patents and know-how relating
to formulations for the delivery of antibiotics; and

         WHEREAS, GSK desires to obtain, and ADVANCIS desires to grant to GSK,
an exclusive right and license to such patents and know-how with respect to any
product that contains Compound (as defined below) and a Beta Lactamase
Inhibitor, on the terms and conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the mutual promises and other good
and valuable consideration, the parties agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

         As used in this Agreement, the following capitalized terms shall have
the meanings set forth below

         1.1      "ADVANCIS PATENTS" means (1) all Patents in the Territory in
existence as of the Effective Date or during the Term of this Agreement claiming
generically or specifically: Compound or Products, a method for manufacturing or
formulating Compound or Products, an intermediate used in such process or a use
of Compound or Products, or any other process which claims the making, use,
sale, offer for sale or importation of Compound or Products in the Territory;
that is owned or Controlled, in whole or in part, by license, assignment, or
otherwise by ADVANCIS as of the Effective Date, or during the Term of the
Agreement. The current list of patent applications and patents encompassed
within ADVANCIS Patents is set forth in Schedule 1.2, and such list shall be
updated by ADVANCIS on a semi-annual basis during the Term of

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the Agreement. For the avoidance of doubt, ADVANCIS Patents does not include any
Program Intellectual Property. Unpublished ADVANCIS Patents shall be
Confidential Information of ADVANCIS subject to Section 9.1. Notwithstanding the
foregoing, ADVANCIS Patents do not include any patent or patent application
licensed to ADVANCIS after the Effective Date that requires ADVANCIS to pay a
royalty based on Product sold by GSK, its Affiliates or their Sublicensees
unless GSK agrees to pay such royalty, which royalty shall be deductible under
Section 4.6.

         1.2      "ADVANCIS KNOW-HOW" means Know-How owned or Controlled by
ADVANCIS as of the Effective Date or during the Term of this Agreement. ADVANCIS
Know-How shall be Confidential Information of ADVANCIS subject to Section 9.1.
For the avoidance of doubt, ADVANCIS Know-How does not include any Program
Intellectual Property. Notwithstanding the foregoing, ADVANCIS Know-How does not
include any of the foregoing licensed to ADVANCIS after the Effective Date that
requires ADVANCIS to pay a royalty based on Product sold by GSK, its Affiliates
or their Sublicensees unless GSK agrees to pay such royalty, which royalty shall
be creditable under Section 4.6.

         1.3      "AFFILIATE" means any legal entity (such as a corporation,
partnership, or limited liability company) that directly or indirectly Controls,
is Controlled by, or is under common Control with a Party to this Agreement. For
the purposes of this definition, the term "Control" means: (1) beneficial
ownership of at least fifty percent (50%) of the voting securities of a
corporation or other business organization with voting securities (or such
lesser percentage required under local jurisdiction); (2) a fifty percent (50%)
or greater interest in the net assets or profits of a partnership or other
business or other business organization without voting securities; or (3) the
ability to direct the affairs of any such entity.

         1.4      "ARISING TECHNOLOGY" means Patents and Know-How other than
Program Intellectual Property developed by either Party in the course of
performing activities subject to this Agreement.

         1.5      "BETA LACTAMASE INHIBITOR" means [***]

         1.6      "COMMERCIALLY REASONABLE EFFORTS" means, [***]

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[***]

         1.7      "COMPOUND" means [***]

         1.8      "COMMERCIALIZATION" means the marketing, promotion,
advertising, selling or distribution of a Product in a country after approval
for commercial sale has been obtained in such country. The term "Commercialize"
has a correlative meaning.

         1.9      "CONFIDENTIAL INFORMATION" means, subject to Section 9.1, (1)
any proprietary or confidential information or material in tangible form
disclosed by the Disclosing Party hereunder that is marked as "Confidential" at
the time it is delivered to the Receiving Party, and/or (2) proprietary or
confidential information disclosed orally hereunder that is identified as
confidential or proprietary when disclosed and such disclosure of confidential
information is confirmed in writing within a reasonable period of time
thereafter by the Disclosing Party.

         1.10     "CONSULTANTS" has that meaning ascribed to such term in
Section 3.4(c) below.

         1.11     "CONTROL," "CONTROLS," "CONTROLLED" or "CONTROLLING" means
(except with respect to "Affiliate" as defined in Section 1.3) possession of the
ability to grant the licenses or sublicenses as provided herein without
violating the terms of any license agreement or other arrangement with any Third
Party, or any government regulation or statute.

         1.12     "DISCLOSING PARTY" means a Party that discloses its
Confidential Information to the other Party.

         1.13     "EFFECTIVE PROFILE" means a pharmacokinetic profile for
Product which: [***]

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         1.14     "FDA" means the Food and Drug Administration of the United
States Department of Health and Human Services, or any successor agency(ies)
thereof performing similar functions.

         1.15     "FIRST COMMERCIAL SALE" means the date of the first commercial
invoice for Product sold by GSK or its Affiliate(s) or Sublicensee(s) to a Third
Party in a country of the Territory, as part of a nationwide introduction of
Product and after approval for commercial sale by the FDA or a Regulatory
Authority, as the case may be.

         1.16     "GSK PATENT" means (1) all Patents in the Territory filed or
granted after the Effective Date and during the Term of this Agreement claiming
generically or specifically: Compound or Products, a method for manufacturing or
formulating Compound or Products, an intermediate used in such process or a use
of Compound or Products, or which covers the making, use, sale, offer for sale
or importation of Compound or Products in the Territory that are owned or
Controlled in whole or in part, by GSK or its Affiliate.

         1.17     "GSK PROPRIETARY TECHNOLOGY" means (i) all ideas, inventions,
data, instructions, processes, procedures, formulas, expert opinions and
information, including, without limitation, biological, chemical, toxicological,
pharmacological, physical and analytical, clinical, analytical, stability,
safety, manufacturing and quality control data and information which are in
existence as of the Effective Date or which come into existence after the
Effective Date and which are owned or Controlled by GSK(other than through a
license granted to GSK under this Agreement by ADVANCIS), and which are
identified by GSK to ADVANCIS as GSK Proprietary Technology (ii) all GSK Sole
Inventions and Program Intellectual Property which are improvements to or are
based on, incorporate, or derived from anything in subsection (i) above. GSK may
identify GSK Proprietary Technology to ADVANCIS in (1) any tangible form that is
marked as "GSK Proprietary Technology" at the time it is disclosed to ADVANCIS
or (2) if disclosed orally hereunder, such disclosure is confirmed as GSK
Proprietary Technology, in writing, within a reasonable period of time
thereafter. For the avoidance of doubt, "GSK Proprietary Technology" does not
include published patent applications or granted patents or information or data
or know-how or inventions disclosed therein to the extent such information was
published or disclosed prior to the identification of such information as GSK
Proprietary Technology by GSK to ADVANCIS.

         1.18     "INDEPENDENT PRODUCT" means [***]

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         1.19     "INVENTION" means any invention or discovery, whether
patentable or unpatentable made while performing under this Agreement.

         1.20     "JOINT INVENTION(S)" means any Invention that is conceived or
made by at least one employee or agent of ADVANCIS and at least one employee or
agent of GSK.

         1.21     "KNOW-HOW" means all data, information, methods, procedures,
processes and materials, but only to the extent that such inventions, data,
information, methods, procedures, processes and materials relate to the
manufacture, research, development, testing or use of a Compound or a Product,
including but not limited to, biological, chemical, biochemical, toxicological,
pharmacological, metabolic, formulation, clinical, analytical and stability
information and data.

         1.22     "LICENSED TECHNOLOGY" means ADVANCIS Know-How and ADVANCIS
Patents that are licensed to GSK under this Agreement.

         1.23     "NEW DRUG APPLICATION" or "NDA" means a New Drug Application
as defined in the United States Federal Food, Drug and Cosmetic Act and
applicable regulations promulgated thereunder as amended from time to time.

         1.24     "NDA ACCEPTANCE" means the earlier of: (i) receipt by GSK of
written notice of acceptance from the FDA of an NDA filed by or on behalf of GSK
under this Agreement necessary for Commercialization of Product in the United
States, or (ii) sixty (60) days following filing of such an NDA with the FDA so
long as GSK has not received a "Notice of Refusal to File" from the FDA with
respect to such NDA.

         1.25     "NDA APPROVAL" means approval by the FDA to market Product in
the United States, including, the issuance by the FDA of an action letter
indicating that an NDA is approved, final FDA approval of promotional materials
for Product sufficient for launch, and final FDA approval of manufacturing
processes and facilities for Product sufficient that commercial quantities of
Product can be manufactured prior to launch. For avoidance of doubt, NDA
Approval does not mean that the FDA issues an action letter indicating that an
NDA is approvable.

         1.26     "NET SALES" means the [***] sales of Product to Third Parties
by GSK and/or its Affiliates and/or their Sublicensees, as recorded by the
selling party in accordance with generally accepted accounting principals, less
the following:

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                                     [***]

"Net Sales" excludes any amounts invoiced or received in connection with any
transfers of a Product between GSK and its Affiliates prior to final disposition
to Third Party customers but only where Product is to be resold to a Third
Party. "Net Sales" excludes transfers of Product made or used for tests or
development purposes, or distributed as donations or samples and for which no
payment is received by GSK, or its Affiliates or Sublicensees. In the event that
GSK or its Affiliate or Sublicensee sells, transfers or disposes of any Product
for consideration, in whole or in part, other than cash, the gross amount used
for calculating Net Sales for such Product shall be deemed to be the standard
invoice price then being invoiced by GSK, its Affiliates or Sublicensees in
arm's length transactions with similar customers . In the event that GSK sells a
Product as part of a bundle or group sale with other products not covered by
this Agreement, and GSK provides a discount, allowance or rebate to the
purchaser of such products based on the invoiced prices for all products sold,
such

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discount must be allocated pro rata based on average wholesale prices across all
such products and may not be applied disproportionately to the Product sold as
part of such bundle.

         1.27     "PATENT" means patents, applications for patents, provisional
applications for patents, and any patents issuing therefrom (including any
divisionals, continuations, continued prosecution applications and
continuations-in-part thereof), reexamination certificates, reissue patents,
patent extensions, patent term restorations, supplementary protection
certificates, and any foreign equivalents of any of the foregoing.

         1.28     "PARTY" means ADVANCIS or GSK and, when used in the plural,
shall mean ADVANCIS and GSK.

         1.29     "PHASE I CLINICAL TRIAL" means the first phase of human
clinical trials with the principal purpose of determining the metabolism and
pharmacologic actions of a pharmaceutical product for its intended use in
healthy individuals or patients, and an early safety profile of the product in
order to support its continued testing in similar clinical trials.

         1.30     "PHASE III CLINICAL TRIAL" means a clinical trial, conducted
in accordance with 21 C.F.R. 312.21(c) or other applicable regulatory
requirements outside the United States, that is conducted after preliminary
evidence suggesting effectiveness has been obtained, that is of appropriate size
and design to establish that a pharmaceutical product is safe and effective for
its intended use, to define warnings, precautions and adverse reactions that are
associated with the pharmaceutical product in the dosage range to be prescribed,
and to support regulatory approval of such pharmaceutical product or label
expansion of such pharmaceutical product.

         1.31     "PRIME RATE" means the prime rate published during the
applicable period in the Wall Street Journal, Eastern Edition.

         1.32     "PRODUCT(S)" means any of the following:

                                    [* * *]

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                                     [***]

         1.33     "PROGRAM INTELLECTUAL PROPERTY" means all Inventions,
discoveries and Know-How which are made, conceived, reduced to practice or
generated in the course of (i) work performed by ADVANCIS for GSK pursuant to
Section 3.1 below or (ii) activities conducted under the process described in
3.4 (c) below, each regardless of whether the invention, discovery or know-how
is patentable and regardless of whether it was made solely by an employee or
agent of ADVANCIS, GSK, or jointly by ADVANCIS and GSK, or jointly by ADVANCIS
and a Third Party.

         1.34     "PRSP" means penicillin-resistant S. pneumoniae with a
breakpoint of 2 mcg/ml for amoxicillin.

         1.35     "PRSP CLAIM" means a claim for the treatment of PRSP in a
proposed Product label filed by GSK with the FDA in connection with an NDA.

         1.36     "PRSP LABELING" means, in connection with a Product for which
GSK has received NDA Approval from the FDA to include a PRSP Claim in the
approved label and to Commercialize such Product for PRSP in the United States.

         1.37     "RECEIVING PARTY" means a Party that receives Confidential
Information from a Disclosing Party, including, but not limited to, employees,
directors and officers of the Receiving Party.

         1.38     "REGULATORY AUTHORITY" means those regulatory authorities in a
particular country of the Territory outside of the United States that have
equivalent authority in the relevant country to the FDA.

         1.39     "SOLE INVENTION" means any Invention conceived solely by the
employees or agents of a Party or its Affiliates.

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         1.40     "SUBLICENSEE" means a Third Party to which GSK has granted
sublicense rights under the licenses granted to GSK hereunder.

         1.41     "TERM" means the term of this Agreement as set forth in
Section 10.1.

         1.42     "TERRITORY" means all countries of the world.

         1.43     "THIRD PARTY" means any party(ies) other than ADVANCIS, GSK,
or an Affiliate of either of them.

         1.44     "UNITED STATES" means the fifty states of the United States of
America and all of its territories and possessions, including, without
limitation, the District of Columbia and the Commonwealth of Puerto Rico.

         1.45     "VALID CLAIM" means either (i) a claim of an issued or
unexpired patent within ADVANCIS Patents that has not been held unenforceable,
unpatentable or invalid by a governmental agency or a court of competent
jurisdiction in any unappealable or unappealed decision within the time allowed
for appeal, and that has not been admitted to be unenforceable, unpatentable or
invalid through abandonment, reissue, disclaimer or otherwise, or (ii) a claim
of a pending patent application within ADVANCIS Patents that has not been
abandoned or finally rejected by ADVANCIS without the possibility of appeal or
refiling, provided that the claim at issue has been under examination for less
than four (4) years.

                                    ARTICLE 2

                     GRANT OF LICENSES AND NEGOTIATION RIGHT

         2.1      LICENSE GRANT FROM ADVANCIS TO GSK. (a) Subject to the terms
and conditions of this Agreement, ADVANCIS hereby grants to GSK an exclusive
license, even as to ADVANCIS, with the right to grant sublicenses, under the
ADVANCIS Patents and ADVANCIS Know-How to make, have made, use, sell, offer for
sale and import Products in the Territory.

                  (b)      GSK agrees that it will use ADVANCIS Technology and
ADVANCIS Patents only as licensed under this Agreement, only as long as licensed
under this Agreement and in each case in accordance with the terms and
conditions of this Agreement.

                  (c)      GSK shall have the right to grant sublicenses to a
Third Party under the license granted pursuant to Section 2.1(a) provided that
(i) GSK shall be responsible for the making of all payments due, the making of
reports under this Agreement, including milestones achieved and sales of Product
by its Sublicensees and their Sublicensees' compliance with all applicable
licensing terms of this Agreement to the extent that they are applicable to a
Sublicensee; and (ii) each Sublicensee agrees in writing to comply with

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Sections 2.1(b), 6.4, 6.5, 10.5(d), Article 8 and Article 9 (with respect to
Confidential Information of ADVANCIS). Any sublicense granted by GSK to a Third
Party shall include a provision prohibiting further sublicenses and a provision
terminating the sublicense when the license to GSK terminates.

         2.2          CATEGORY B AND C PRODUCTS

         GSK will only develop or Commercialize a Category B Product or Category
C Product if such development and/or Commercialization is approved in writing by
ADVANCIS.

         2.3      It is expressly understood and agreed that the only licenses
granted under this Agreement are the licenses expressly granted under this
Agreement and that there is no implied license or license by estoppel.

                                    ARTICLE 3

                         DEVELOPMENT; COMMERCIALIZATION;

                         SUPPLY OF COMPOUND TO ADVANCIS

         3.1               PAYMENTS FOR ADVANCIS WORK PRODUCT. From time to time
GSK may request ADVANCIS to conduct specific work or provide consultation beyond
the transfer of ADVANCIS Know-How to GSK (which transfer includes the initial
technology transfer as outlined in Section 3.4 and patent review). GSK shall
make such request in writing, and ADVANCIS shall provide notice as to whether
ADVANCIS accepts such request. ADVANCIS' agreement to perform such work is in
ADVANCIS sole discretion and ADVANCIS may decline to perform such work for any
reason or no reason. If ADVANCIS agrees to perform such work, ADVANCIS will also
provide GSK with an estimate of the resources required to conduct such effort.
As consideration for such effort actually conducted by ADVANCIS Qualified
Employees (as defined below) and as authorized by GSK, in writing, GSK shall pay
per ADVANCIS Qualified Employee a rate of [***] per hour, which rate shall
change each calendar year upon the anniversary date of the Effective Date in
accordance with the annual percentage change in the Consumer Price Index (U.S.
Bureau of Labor Statistics for all urban consumers, U.S. city average - all
items). The maximum amount GSK will be required to pay for any agreed upon scope
of work is the estimate amount agreed to in advance by GSK unless GSK requests
in writing that additional work be performed in addition to the original scope
of work. Any work performed on a specific project or task assigned by GSK under
this Agreement shall be performed only by an ADVANCIS Qualified Employee, i.e.,
an employee of ADVANCIS who is qualified, in GSK's sole discretion, to perform
such work. GSK shall make payment to ADVANCIS on

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a quarterly basis for work conducted by ADVANCIS and authorized by GSK within
forty-five (45) days after receipt of an invoice from ADVANCIS. Each invoice
shall describe in detail the work performed by ADVANCIS Qualified Employees and
a breakdown of hours of work performed, as is customary for the industry and the
type of work being performed. ADVANCIS shall be responsible for paying all
salaries, benefits, and payroll (or similar) taxes to all ADVANCIS Qualified
Employees whether or not such individuals are actual employees of ADVANCIS and
in no event will such ADVANCIS Qualified Employees be construed to be employees
of GSK. It is understood that ADVANCIS shall keep weekly records of the hours of
work of ADVANCIS Qualified Employees in a manner which will enable GSK or its
authorized representative to audit such records and in sufficient detail to
permit GSK to confirm the accuracy of payments due hereunder. No cost other than
such hourly reimbursement rate of ADVANCIS Qualified Employees (e.g., per diem
or out-of-pocket costs) shall be reimbursed by GSK unless specifically
authorized by GSK in writing in advance.

         3.2      GSK DEVELOPMENT RESPONSIBILITY. As of the Effective Date, and
at its sole cost and expense, GSK shall be solely responsible for, and have sole
control over, clinical development including, but not limited to, clinical
trials, manufacturing, and Commercialization of Product in the Territory. In
addition, at its sole cost and expense, GSK shall be solely responsible for, and
have sole control over, the development of the formulation of Product.

         3.3      GSK OBLIGATIONS/DEVELOPMENT AND FILINGS.

                  (a)      GSK shall use Commercially Reasonable Efforts to
develop a Product in the United States and to obtain NDA Approval. In the event
that the first NDA Approval does not include PRSP labeling, GSK agrees to use
Commercially Reasonable Efforts to try to obtain NDA Approval with PRSP
Labeling.

                  (b)      After obtaining NDA Approval for a Product, GSK
shall, within six (6) months thereafter, launch such Product in the United
States. GSK shall thereafter use Commercially Reasonable Efforts to
Commercialize such Product in the United States.

                  (c)      Development, regulatory filing, and Commercialization
of Product outside of the United States shall be at GSK's sole discretion.

                  (d)      Within sixty (60) days after the end of each calendar
half-year, GSK shall provide a written summary report substantially in the form
of and including the categories of information described in Schedule 3.3(d)
attached hereto to ADVANCIS with respect to the efforts exerted by GSK to obtain
NDA Approval and, after such approval is obtained, launch of Product in the
United States. Notwithstanding the

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foregoing, it is understood and agreed that GSK has no obligation to disclose
GSK Confidential Information to ADVANCIS under this provision, including, but
not limited to, GSK Proprietary Technology.

                  (e)      GSK shall comply with all applicable laws, rules and
regulations with respect to the import, export, manufacture, use and sale of
Product.

                  (f)      If GSK decides to discontinue (or suspend) the use of
Commercially Reasonable Efforts with respect to development and/or marketing of
Product, GSK shall notify ADVANCIS in writing within thirty (30) days after such
decision.

                  (g)      Subject to Section 11.1, in the event that GSK
conducts no material activity toward the development or Commercialization of
Product for a period of [***], ADVANCIS shall have the right, but not the
obligation, to terminate this Agreement upon thirty (30) days written notice to
GSK.

                                     [***]

                  (j)      For the avoidance of doubt, a material breach of this
Section 3.3 shall be a material breach of this Agreement subject to the terms of
Section 10.2 below.

                  (k)      The remedies available under Section 3.3(g), (h) and
(i) are cumulative to any other remedies available under this Agreement,
including those available for breach of Section 3.3(a).

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         3.4      ADVANCIS TECHNOLOGY TRANSFER. (a) Within thirty (30) days
after the Effective Date, ADVANCIS shall transfer, or cause to be transferred,
to GSK, a copy of all documented ADVANCIS Know-How and orally communicate all
material undocumented ADVANCIS Know-How licensed to GSK under this Agreement to
enable GSK to develop, manufacture and commercialize Product. Such transfer will
include, at a minimum, the information set forth in Schedule 3.4 to this
Agreement, attached hereto and incorporated herein. ADVANCIS shall promptly
disclose and supply to GSK any further material ADVANCIS Know-How licensed to
GSK under this Agreement which may become known to ADVANCIS and which may be
useful to GSK for purposes of this Agreement.

         (b)      GSK may ask follow-up questions with regard to the transfer
and implementation of the ADVANCIS Know-How and the contents of the ADVANCIS
Patents. Such questions will be submitted to ADVANCIS in writing and ADVANCIS
will provide written answers within a reasonable time free of charge to the
extent that such questions can be answered without ADVANCIS having to conduct
additional research or development.

         (c)      GSK may determine that it wishes to obtain further
understanding or conduct further discussions with ADVANCIS with respect to the
application of ADVANCIS Patents and ADVANCIS Know-How (beyond that which is
reasonably answered as described in subsection (b) above) and may request in
writing that ADVANCIS participate in such discussions. ADVANCIS' participation
in such discussions will be at its sole discretion and ADVANCIS may decline to
participate for any reason or no reason.. If ADVANCIS agrees to participate,
such further discussions will occur through the use of a team of one or more
consultants who are (a) experts in formulation technology or development, (b)
not employees of either GSK or ADVANCIS, and (c) mutually acceptable to both
Parties ("Consultant(s)"). The role of such Consultants shall be to learn the
relevant ADVANCIS Know-How necessary or useful for development or
commercialization of Product to explain and assist GSK with implementing the
ADVANCIS Know-How. Such Consultants shall be contractually bound to each of GSK
and ADVANCIS and each such Consultant shall agree, in writing, that (x) all
Inventions which are made, conceived, reduced to practice or generated by such
Consultant in the course of or as a result of such contract will be Program
Intellectual Property and will be solely owned by GSK, regardless of whether the
invention is patentable and regardless of whether it was made solely by such
Consultant, jointly by such Consultant and an employee of ADVANCIS and/or GSK,
or jointly by such Consultant and a Third Party; (y) no information such
Consultant learns from GSK as a result of any such contract shall be revealed to
ADVANCIS unless such revelation is expressly authorized by GSK, in writing,
prior to such disclosure, and (z) all

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information which such Consultant learns from either Party under such contract
shall be kept confidential by such Consultant in accordance with confidentiality
obligations to the disclosing Party which are at least as stringent as those
which the Parties have undertaken under this Agreement. GSK shall be liable for
all costs charged by such Consultants.

         3.5      TRADEMARKS. GSK, its Affiliates, and its Sublicensees shall
have the right to market Product under their own labels, tradenames, and
trademark(s) (collectively, the "GSK Marks") and GSK shall solely own such
trademarks, labels and tradenames. GSK shall be responsible for the selection of
all GSK Marks that it employs in connection with Product in the Territory and
shall own and control such GSK Marks and retain ownership upon termination or
expiration of this Agreement. GSK shall be responsible for filing, registering
and maintaining any GSK Marks throughout the Territory.

         3.6      SUPPLY OF COMPOUND. In the event that ADVANCIS requires
Compound to fulfill its internal manufacturing needs for Compound or its
manufacturing needs for Compound under any agreement relating to Compound which
it enters into with a Third Party, ADVANCIS shall present an offer to GSK to
purchase Compound from GSK. In the event that within thirty (30) days GSK
accepts the offer to supply Compound to ADVANCIS, the parties shall negotiate
the terms of such supply in a definitive supply agreement (the "Supply
Agreement") within sixty (60) days after the acceptance of the offer to supply,
or such later date as is agreed upon in writing between the Parties. The Supply
Agreement will contain terms and conditions as are customary in the
pharmaceutical industry and shall include, but not be limited to terms covering
the quality, specifications, yield, quantity, payment, batch failure, change
control, regulatory obligations and audits, audit rights, information related to
manufacture of Product, QA release, testing and shipping requirements.
Notwithstanding the above, in no event shall such Supply Agreement require
ADVANCIS to use GSK as its single source for its requirements of Compound for
either its internal needs or for any agreement for Compound which it enters into
with a Third Party, or require ADVANCIS to make such an offer only to GSK and
not a Third Party.

                                    ARTICLE 4

                      FEE; MILESTONE PAYMENTS AND ROYALTIES

         4.1      INITIAL FEE BY GSK. In consideration for the license to the
Licensed Technology with respect to Product granted by ADVANCIS to GSK
hereunder, GSK shall pay to ADVANCIS five million US

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dollars (US $5,000,000) within fifteen (15) days after the Effective Date. This
amount shall be non-refundable and non-creditable.

         4.2      MILESTONE PAYMENTS BY GSK FOR COVERED PRODUCT. In
consideration for the license to the Licensed Technology with respect to Product
granted by ADVANCIS to GSK hereunder, GSK shall pay to ADVANCIS the following
non-refundable, non-creditable amounts following the first achievement of each
of the following milestone events with respect to a Product, the manufacture,
use or sale of which infringes a Valid Claim of an ADVANCIS Patent in the United
States if it was manufactured, used or sold in the United States at the time the
milestone is achieved ("Milestones"), but only in the event that such Product is
the first to reach a particular milestone event:

                                     [***]

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                                     [***]



         (a)      The achievement of Milestones 4 and 5 will occur with respect
to the same NDA Acceptance in the event the first NDA Acceptance includes FDA
Acceptance of an NDA for Product with a PRSP Claim.

         (b)      The achievement of Milestones 6 and 7 will occur with respect
to the same NDA Approval in the event the first NDA Approval includes FDA's
approval of an NDA filed by or on behalf of GSK for marketing of Product in the
United States for PRSP.

         (c)      In the event that Milestone 3 of Section 4.2 is reached and
Milestone 1 and/or Milestone 2 of Section 4.2 has not been paid, then such
unpaid Milestone 1 and/or 2 of Section 4.2, as the case may be, shall become due
and payable as of the date for payment of Milestone 3 of Section 4.2.

         (d)      The achievement of Milestones 8, 9, and 10 may occur in the
same calendar year and, thus, payments of Milestones 8, 9 and 10 may be
cumulative and more than one of such Milestones may be made for the same
calendar year. By way of illustration only: if aggregate sales of Product in a
calendar year exceeds [***] and Milestone 8 has not been previously paid, then
Milestones 8, and 9 are due for that calendar year.

         (e)      Except as provided in Section 4.4 below, each milestone
payment shall be made only one time regardless of how many times such milestones
are achieved, and except as expressly provided otherwise in this Section 4.2, no
payment will be made for Milestones that have not been achieved.

         (f)      Milestone payments shall be payable by GSK to ADVANCIS within
[***] after achievement of the relevant Milestone and receipt of an invoice for
such amounts.

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         (g)      Milestone payments shall be payable when achieved, regardless
of the order in which they are achieved.

         (h)      Upon marketing of Product in the United States without PRSP
labeling any of Milestones 1-4 and 6 that have not been paid shall be payable
and upon marketing of Product in the United Sates with PSRP labeling any of
Milestone's 1-7 that have not been paid shall be payable.

         (i)      In the event that any of milestones 4, 5, 6 or 7 has been
achieved, and any of milestones 1-3 has not been paid, then each such unpaid
milestone is payable when any of milestones 4, 5, 6 or 7 is payable.

         (j)      GSK agrees to promptly notify ADVANCIS in writing of the
achievement of a milestone, in any event no later than ten (10) days after
achievement thereof.

         4.3      MILESTONE PAYMENTS BY GSK FOR PRODUCT NOT COVERED BY A VALID
CLAIM. In the event that the first Product to reach a particular Milestone would
not infringe a Valid Claim of an ADVANCIS Patent in the United States if it was
manufactured, used or sold in the United States at the time the Milestone is
achieved, GSK shall pay to ADVANCIS [***] of the amount due for such event as
provided in the chart in Section 4.2 above. If such a Product subsequently would
infringe a Valid Claim of an ADVANCIS Patent in the United States, if such
Product were manufactured, used or sold in the United States at the time the
next relevant Milestone is achieved, all subsequent relevant Milestones will be
paid at the full amount described in chart in provided in Section 4.2. If a
Product which would not infringe a Valid Claim of an ADVANCIS Patent in the
United States if it was manufactured, used or sold in the United States at the
time the Milestone is achieved is the first Product to reach a particular
Milestone, and subsequently a different Product the manufacture, use or sale of
which would infringe a Valid Claim of an ADVANCIS Patent in the United States if
it was manufactured, used or sold in the United States at the time the Milestone
is achieved subsequently reaches such Milestone, then on the first occurrence of
such a Product the manufacture, use or sale of such Product would infringe a
Valid Claim of an ADVANCIS Patent in the United States if it was manufactured,
used or sold in the United States at the time the Milestone is achieved the
remaining [***] of the relevant Milestone will become payable. In each case,
such amounts are non-refundable and non-creditable.

         4.4      ROYALTIES. (a) In consideration for the license to the
Licensed Technology with respect to Product granted by ADVANCIS to GSK
hereunder, GSK shall pay to ADVANCIS a royalty in an amount equal to the
following percentages of the specified portions of the aggregate annual Net
Sales of Products sold by GSK, its Affiliates, and its Sublicensees throughout
the Territory in a calendar year as provided below:

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<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
                                               Column A
                                       Applicable Royalty Rate
                                      for Product in country of                     Column B
                                      sale where Product infringes         Applicable Royalty Rate for
                                      a Valid Claim of an ADVANCIS         Product in countries where
  Worldwide annual Net Sales of       Patent in such country at time        royalties are not due for
       Licensed Products                       of sale                       Product under Column A
------------------------------------------------------------------------------------------------------
<S>                                   <C>                                  <C>
Up to and including [***]                     [***]                                  [***]
------------------------------------------------------------------------------------------------------
Over [***] up to and
including [***]                               [***]                                  [***]
------------------------------------------------------------------------------------------------------
Over [***] up to and
including [***]                               [***]                                  [***]
------------------------------------------------------------------------------------------------------
Over [***] up to and
including [***]                               [***]                                  [***]
------------------------------------------------------------------------------------------------------
Over [***] up to and
including [***]                               [***]                                  [***]
------------------------------------------------------------------------------------------------------
    Over [***]                                [***]                                  [***]
------------------------------------------------------------------------------------------------------
</TABLE>

         (b)      Achievement of the annual Net Sales thresholds recited above
shall be determined by adding the total annual Net Sales of Product in all
countries of the Territory where such sales are subject to royalties pursuant to
this Agreement ; and the incremental royalty rates set forth in the chart above
will only be applicable to the total annual Net Sales calculated as described in
this Section 4.4(b). By way of illustration only, if worldwide net sales in a
given year on Product are [***], then the royalty payable to ADVANCIS would be
[***].

         (c)      The obligation of GSK to pay royalties using the rates set
forth in Section 4.4(a) above on Net Sales of Product in any country of the
Territory will continue, on a country by country and Product-by-Product basis,
until the later of (i) the date upon which all Valid Claims in such country have
expired, or (ii) the date which is [***] from the date of First Commercial Sale
of such Product in such country (the "Royalty Payment Period"). For the
avoidance of doubt, it is understood and agreed that in countries where all
Valid Claims in such country have expired sooner than the date which is [***]
from the date of First Commercial Sale of Product in such country, GSK will pay
royalties at the applicable reduced rates specified in the far right

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column of the chart in Section 4.4(a) above or as specified in Section 4.5, 4.6
or 478, if applicable, for the remainder of the Royalty Payment Period.

         4.5      COMPETING PRODUCTS. In each country in which a Third Party
sells a product that is a pharmaceutical presentation or presentations of a
combination of the Compound and a Beta Lactamase Inhibitor, which combination is
in a formulation that results in a once a day formulation with similar label
claims to Product sold by GSK or its Affiliate or Sublicensee for which
royalties are due under this Agreement (such product sold by a Third Party being
a "Third Party Product") , then any royalties due under Column A of Section
4.4(a) with respect to such Product in each such country shall be reduced by
[***] in each calendar quarter in which such Third Party Product is on sale in
each such country; and if due under Column B of Section 4.4(a), the royalty rate
for such Net Sales will be [***]; provided further, that in all such cases GSK
can demonstrate through any industry recognized survey that such sales of the
Third Party Product in such country exceeds [***], on a unit sales basis, of the
sales in such country of such Product by GSK during such calendar quarter.

         4.6      THIRD PARTY ROYALTIES. In the event that it becomes
commercially necessary for GSK to obtain a patent license from a Third Party in
order to make, have made, use, offer for sale, sell or import a Product sold by
GSK or its Affiliate or Sublicensee for which royalties are due under this
Agreement in a country of the Territory ("Third Party License"), [***] of the
royalties paid under a Third Party License for sale of such Product in such
country in a calendar quarter shall be creditable against the royalties owed to
ADVANCIS hereunder with respect to such Product in such country in such calendar
quarter up to an amount equal to [***] of the total royalties otherwise due for
such Product in such country in such calendar quarter.

         4.7      COMPULSORY LICENSES. Should a compulsory license be granted by
ADVANCIS to a Third Party under the applicable laws of any country in the
Territory with respect to Product the royalty rate payable hereunder for sales
of Products in such country will be adjusted to match any lower royalty rate
granted to such Third Party for such country, with respect to the sales of such
Products, and during such periods, for which such Third Parties sell, under the
compulsory license, material quantities of articles that compete with Products
then marketed and sold by GSK in that country.

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                                    ARTICLE 5

                            WARRANTIES AND COVENANTS

         5.1      REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES. Each Party
represents and warrants to the other Party that, as of the Effective Date such
Party is duly organized and validly existing and has full corporate power and
authority to enter into this Agreement and to carry out the provisions hereof;

         5.2      REPRESENTATIONS AND WARRANTIES OF ADVANCIS. As of the
Effective Date, ADVANCIS represents and warrants to GSK that:

(a)      ADVANCIS has the right to grant the licenses granted to GSK under
         Section 2.1 and, to the knowledge of ADVANCIS, there is nothing in any
         Third Party agreement that ADVANCIS has entered into as of the
         Effective Date that limits ADVANCIS' ability to grant the licenses
         granted to GSK under Section 2.1.

(b)      To the knowledge of ADVANCIS, ADVANCIS owns or Controls all of the
         ADVANCIS Patents licensed to GSK under Section 2.1 that exist as of the
         Effective Date.

(c)      Except for termination that may result under applicable bankruptcy
         laws, ADVANCIS has not encumbered Licensed Technology with liens,
         mortgages, security interests or otherwise that, if enforced, will
         result in termination of the licenses granted to GSK under Section 2.1.

(d)      There are no existing or threatened actions, suits or claims pending
         against ADVANCIS with respect to ADVANCIS' right to grant the licenses
         granted to GSK, under Section 2.1.

(e)      ADVANCIS has not granted any right, license or interest in or to the
         Licensed Technology that is in conflict with the rights or licenses
         granted to GSK under Section 2.1 of this Agreement.

(f)      Without having made an investigation, ADVANCIS has no actual knowledge
         that the use of ADVANCIS Patent Rights for the purpose licensed to GSK
         under this Agreement would infringe a valid claim of a granted United
         States patent owned by a Third Party. The warranty of this Section
         5.2(f) does not apply to any patent that is listed in Schedule 5.2(f).

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(g)      ADVANCIS has no actual knowledge that ADVANCIS Know-How licensed to GSK
         would constitute a misappropriation of a Third Party's trade secrets.

(h)      To the knowledge of ADVANCIS, (i) the technical information and data
         provided to GSK by ADVANCIS with respect to ADVANCIS Know-How licensed
         to GSK under this Agreement is complete and accurate in all material
         respects and (ii) ADVANCIS has not withheld from GSK any technical
         information or data with respect to ADVANCIS Know-How licensed to GSK
         under this Agreement that would make such technical information
         provided to GSK misleading in any material respect.

(i)      ADVANCIS has not intentionally concealed from GSK the existence of any
         material adverse data or information known to ADVANCIS concerning the
         quality, toxicity, safety and/or efficacy of ADVANCIS Know-How licensed
         to GSK under this Agreement.

(j)      The ADVANCIS Patents that exist as of the Effective Date and that are
         licensed to GSK hereunder do not include any patent or patent
         application licensed to ADVANCIS that requires ADVANCIS to pay a
         royalty or other consideration based on Product sold by GSK, its
         Affiliates or their Sublicensees.

         5.3      COVENANTS. (a) ADVANCIS covenants and agrees that it will not
enter into any agreement or grant any rights that are inconsistent with the
licenses granted to GSK under Section 2.1.

         (b)      Except for termination that may result from applicable
bankruptcy laws, ADVANCIS agrees that it will not encumber Licensed Technology
with liens, mortgages, security interests or otherwise that, if enforced, will
result in termination of the licenses granted to GSK under Section 2.1.

         5.4      REPRESENTATIONS AND WARRANTIES OF GSK. GSK represents and
warrants to ADVANCIS that, as of the Effective Date, there are no existing or
threatened actions, suits or claims pending against GSK that will limit GSK's
ability to perform all of the obligations undertaken by GSK hereunder.

         5.5      DISCLAIMER OF WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN THIS AGREEMENT OR MANDATED BY APPLICABLE LAW (WITHOUT THE RIGHT TO
WAIVE OR DISCLAIM), NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY WITH
RESPECT TO THE PRODUCT, ANY TECHNOLOGY, GOODS, SERVICES, RIGHTS, OR OTHER
SUBJECT

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MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ALL WARRANTIES, CONDITIONS OR
REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF
PERFORMANCE, MERCHANTABILITY, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR
PURPOSE OR NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

                                    ARTICLE 6

                              PAYMENTS AND REPORTS

         6.1      ROYALTY PAYMENTS. All royalty payments due hereunder shall be
paid quarterly within [***] of the end of each calendar quarter. Each such
payment shall be accompanied by a statement, on a Product-by-Product and
country-by-country basis as to the amount of Net Sales, the amount of royalties
due on such Net Sales, including an explanation and separate calculation of
royalty reductions taken under Section 4.5, 4.6 and 4.7, and the conversion
rates used in converting to United States Dollars. [***] The Parties acknowledge
and agree that because certain deductions required to calculate Net Sales may
take months before being confirmed with Third Parties (such as Medicare and
Medicaid rebates), and that a final reconciliation of the royalties due
hereunder will be completed nine (9) months after the end of the calendar year
in which the estimated royalties were paid, and any balancing amount will be
paid to ADVANCIS by GSK within [***] of ADVANCIS' receipt of such final
reconciliation report.

         6.2      MODE OF PAYMENT. Each of ADVANCIS and GSK shall make all
payments to the other required under this Agreement in United States Dollars. If
governmental regulations prevent remittances from a foreign country with respect
to sales made in that country, the obligation of GSK to pay royalties on sales
in that country shall be suspended until such remittances are possible. ADVANCIS
shall have the right, upon giving written notice to GSK, to receive payment in
that country in local currency. Monetary conversion from the currency of a
foreign country, in which Product is sold, into United States currency, shall be
calculated at the actual average rates of exchange for the year to date as used
by GSK in producing its quarterly and annual accounts, as confirmed by GSK's
independent public auditors.

         6.3      MANNER OF PAYMENT. All sums due to ADVANCIS under this
Agreement shall be payable in United States Dollars by wire transfer in
immediately available funds to the designated account below in

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accordance with the following wire instructions, or such other account and
instructions as may from time to time be designated in writing by an officer of
ADVANCIS:

         CASH-WIRE TRANSFER

         [***]


         6.4      RECORDS RETENTION. GSK and its Affiliates and Sublicensees
shall keep complete and accurate records pertaining to the sale of Products in
the Territory and covering all transactions from which Net Sales are derived for
a period of three (3) calendar years after the year in which such sales
occurred, and in sufficient detail to permit ADVANCIS to confirm the accuracy of
payments due hereunder.

         6.5      AUDIT REQUEST. At the request and expense (except as provided
below) of ADVANCIS, GSK and its Affiliates and Sublicensees shall permit an
independent, certified public accountant appointed by ADVANCIS and reasonably
acceptable to GSK, at reasonable times and upon reasonable notice, to examine
those records and all other material documents relating to or relevant to Net
Sales in the possession or control of GSK and/or its Affiliates and/or its
Sublicensees. GSK shall provide such auditors with access to the records during
reasonable business hours. Such access need not be given to, not shall request
for access be requested for, any such set of records more often than once each
calendar year, or more than three (3) years after the date of any report to be
audited, and the auditors shall report to ADVANCIS no information other than the
amount of royalty due. ADVANCIS shall provide GSK with written notice of its
election to inspect and audit the records related to the royalty due hereunder
not less than thirty (30) days prior to the proposed date of review of such
records by ADVANCIS auditors. Results of any such examination shall be made
available to both Parties. If, as a result of any inspection of the books and
records of GSK or its Affiliates and/or its Sublicensees, it is shown

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that GSK's royalty payments under this Agreement were less than the amount which
should have been paid, then GSK shall make all payments required to be made to
eliminate any discrepancy revealed by said inspection within forty five (45)
days after ADVANCIS' demand therefor. Any over-payment will be credited against
future amounts due to ADVANCIS hereunder and in the event no further payments
are owed by GSK to ADVANCIS, ADVANCIS shall remit such amounts to GSK within
forty-five (45) days after receipt of an invoice from GSK. Furthermore, if the
royalty payments were less than the amount that should have been paid by an
amount in excess of [***] not including the Medicare/Medicaid rebate
adjustments estimated in good faith as described in Section 1.26 of the royalty
payments actually made during the period in question, GSK shall also reimburse
ADVANCIS for ADVANCIS' reasonable out-of-pocket costs related to such
inspection.

         6.6      TAXES. GSK may withhold taxes in the event that revenue
authorities in any country require the withholding of taxes on amounts paid
hereunder to ADVANCIS. Any tax, duty or other levy paid or required to be
withheld by GSK on account of royalties or other payments payable to ADVANCIS
under this Agreement shall be deducted from the amount of royalties or other
payments otherwise due. GSK shall secure and send to ADVANCIS proof of any such
taxes, duties or other levies withheld and paid by GSK or its sublicensees for
the benefit of ADVANCIS. Each Party agrees to cooperate with the other Party in
claiming exemptions from such deductions or withholdings under any agreement or
treaty from time to time in effect.

         6.7      INTEREST.

                  Any payment due pursuant to this Agreement that is not made
within [***] of the date due will accrue interest, compounded daily, for the
number of days elapsed between the due date and the payment date at the Prime
Rate plus [***]. The Parties agree this provision, unless otherwise
provided, will not apply to payments that are the result of a subsequent
adjustment of an estimated payment, including rebates, adjustments, returns or
true-ups.

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                                    ARTICLE 7

                 PATENT PROSECUTION; ENFORCEMENT; INFRINGEMENT,

                             OWNERSHIP OF INVENTIONS

         7.1      OWNERSHIP OF INVENTIONS AND TECHNOLOGY.

                  (a)      Ownership. All ADVANCIS Patents and ADVANCIS Know-How
existing as of the Effective Date will remain the property of ADVANCIS, and
GSK's right to use such Licensed Technology shall be limited to the license
grant set forth in Section 2.1. All GSK Patents and Know-How (including, but not
limited to, those related to GSK Proprietary Technology) existing as of the
Effective Date shall remain the property of GSK, and ADVANCIS shall acquire no
rights to such Patents and Know-How.

                  (b)      Program Intellectual Property. GSK will own all
right, title and interest in and to the Program Intellectual Property ,
including any intellectual property rights appurtenant thereto. ADVANCIS hereby
assigns to GSK all its rights to and interest in Inventions within Program
Intellectual Property made by ADVANCIS, its Affiliates or their Contractors
engaged in the work performed pursuant to Sections 3.1 or Section 3.4(c), and
will ensure that any agreements with Affiliates and Contractors include the
assignment of such Inventions to ADVANCIS or directly to GSK. ADVANCIS will
cooperate with GSK with respect to patent filing, prosecution and enforcement of
such inventions within Program Intellectual Property.

                  (c)      Subject to the provisions of Section 7.1(b) above,
each Party will own all right, title and interest in Arising Technology that is
its Sole Invention. ADVANCIS and GSK will each own an undivided 1/2 interest in,
to and under Arising Technology that is a Joint Invention and all rights
appurtenant thereto, and may practice and grant licenses to such Joint
Inventions without a duty of accounting to, or the requirement of obtaining
consent from, the other Party (subject to the express provisions of this
Agreement), except for use in breach of the exclusivity provisions of this
Agreement.

                  (d)      Inventorship of Inventions will be determined in
accordance with United States Patent law in the cause of patentable inventions,
and in accordance with U.S. federal or state law, as appropriate in the case of
non-patentable inventions.

         7.2      DISCLOSURE OF ADVANCIS PATENTS. ADVANCIS shall disclose to GSK
the complete texts of all patent applications filed by ADVANCIS as of the
Effective Date that are Licensed Technology, as well as all information received
as of the Effective Date concerning the institution or possible institution of
any interference, opposition, re-examination, reissue, revocation, nullification
or any official proceeding involving such an ADVANCIS Patent Right anywhere in
the Territory. ADVANCIS further agrees that it will disclose to GSK the complete
texts of all patent applications filed by ADVANCIS after the Effective Date that
are Licensed Technology as well as all information received after the Effective
Date concerning the institution or possible institution of any interference,
opposition, re-examination, reissue, revocation, nullification or any

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official proceeding involving such an ADVANCIS Patent Right anywhere in the
Territory. GSK shall have the right to review all such pending applications and
other proceedings and make recommendations to ADVANCIS concerning them and their
conduct. ADVANCIS agrees to keep GSK promptly and fully informed of the course
of patent prosecution or other proceedings by means that include providing GSK
with copies of substantive communications, search reports and Third Party
observations submitted to or received from patent offices throughout the
Territory. GSK shall provide such patent consultation to ADVANCIS at no cost to
ADVANCIS and shall treat all information disclosed to it under this Section as
Confidential Information and subject to the provisions of this Agreement.

         7.3      PATENT FILING, MAINTENANCE AND PROSECUTION.

                  (a)      GSK shall have the first right, using in-house or
outside legal counsel selected at GSK's sole discretion, to prepare, file,
prosecute, maintain and extend all GSK Sole Inventions and Joint Inventions in
countries of GSK's choice throughout the Territory with appropriate credit to
ADVANCIS representatives, including the naming of such Parties as inventors
where appropriate and in accordance with the relevant legal requirements, for
which GSK shall bear the costs relating to such activities which occur at GSK's
request or direction. With respect to any Joint Inventions, GSK shall solicit
ADVANCIS' advice and review of the nature and text of any such patent
applications and important prosecution matters related thereto in reasonably
sufficient time prior to filing thereof, and GSK shall take into account
ADVANCIS' reasonable comments related thereto.

         (b)      ADVANCIS shall have the first right, using in-house or outside
legal counsel selected at ADVANCIS' sole discretion, to prepare, file,
prosecute, maintain and extend patent applications and patents concerning all
ADVANCIS Patents and ADVANCIS Sole Inventions in countries of ADVANCIS' choice
throughout the Territory, for which ADVANCIS shall bear the costs. ADVANCIS
shall solicit GSK's advice and review of the nature and text of such patent
applications to the extent such are Licensed Technology and important
prosecution matters related thereto in reasonably sufficient time prior to
filing thereof, and ADVANCIS shall take into account GSK's reasonable comments
related thereto.

         (c)      If GSK, prior or subsequent to filing patent applications on
any Joint Invention in the Territory elects not to file, prosecute or maintain
such patent applications or ensuing patents or claims encompassed by such patent
applications or ensuing patents in any country of the Territory, as the case may
be, GSK shall give ADVANCIS notice thereof within a reasonable period prior to
allowing such patent applications or patents or

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such claims encompassed by such patent applications or patents to lapse or
become abandoned or unenforceable, and ADVANCIS shall thereafter have the right,
at its sole expense, to prepare, file, prosecute and maintain patent
applications and patents or divisional applications related to such claims
encompassed by such patent applications or patents concerning all such
inventions and discoveries in countries of its choice throughout the world.

         (d)      If ADVANCIS, prior or subsequent to filing patent applications
on any ADVANCIS Patents or ADVANCIS Sole Invention that is Licensed Technology,
ADVANCIS elects not to file, prosecute or maintain such patent applications or
ensuing patents or claims encompassed by such patent applications or ensuing
patents in any country of the Territory, ADVANCIS shall give GSK notice thereof
within a reasonable period prior to allowing such patent applications or patents
or such claims encompassed by such patent applications or patents to lapse or
become abandoned or unenforceable, and GSK shall thereafter have the right, at
its sole expense, to prepare, file, prosecute and maintain patent applications
and patents or divisional applications related to such claims encompassed by
such patent applications or patents concerning all such inventions and
discoveries in countries of its choice throughout the world.

         (e)      The Party filing patent applications for Joint Inventions
shall do so in the name of and on behalf of both GSK and ADVANCIS.

         (f)      Each of ADVANCIS and GSK shall hold all information it
presently knows or acquires under this Section 7.3 that is related to all such
patents and patent applications of the other Party as confidential subject to
the provisions of this Agreement.

         (g)      Each Party shall cooperate with the other as reasonably
requested to effect the provisions of this Section 7.3.

         7.4      ENFORCEMENT.

                  (a)      ADVANCIS Patents. Subject to Section 7.4(b) below, in
the event that a Party learns that any ADVANCIS Patents are infringed by
manufacture, use or sale of Product by a Third Party in any country in the
Territory, such Party shall promptly notify the other Party hereto. GSK shall
have the initial right (but not the obligation) to enforce such ADVANCIS Patents
against such Third Party infringer, at its expense, and to use ADVANCIS' name in
connection therewith; provided that such use without ADVANCIS' written consent
may only occur where required by law for GSK to bring such action. In the event
that GSK fails to initiate a suit to enforce such ADVANCIS Patents against such
a Third Party against such Product in any jurisdiction in the Territory within
ninety (90) days after notification of such infringement, ADVANCIS may

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initiate such suit in the name of the ADVANCIS with regard to the applicable
ADVANCIS Patents against such infringement, at the expense of ADVANCIS, and to
use GSK's name in connection therewith. The Party involved in any such claim,
suit or proceeding (the "Enforcing Party"), shall keep the other Party hereto
reasonably informed of the progress of any such claim, suit or proceeding.
ADVANCIS and GSK shall recover their respective actual out-of-pocket expenses,
or equitable proportions thereof, associated with any litigation or settlement
thereof from any recovery made by any Party. Any excess amount shall be retained
by the Enforcing Party except if GSK is an Enforcing Party in which case, such
excess amount shall be Net Sales subject to royalty under Column A of Section
4.4. Within the sole discretion of ADVANCIS, ADVANCIS may jointly institute such
action with GSK (ADVANCIS shall be responsible for its expenses), in which case
ADVANCIS shall have joint control over such action with GSK insofar as the
action affects the validity and/or enforceability and/or scope and/or ownership
of ADVANCIS Patents. In any such action, GSK shall make no admission, decision,
agreement, settlement or compromise that will or is likely to adversely affect
the validity and/or enforceability and/or scope and/or ownership of any ADVANCIS
Patents unless agreed to in writing by ADVANCIS.

                  (b)      Jointly Owned Patents. Notwithstanding Section 7.4(a)
above, in the event that any patent related to a Joint Invention is infringed or
misappropriated by a Third Party, GSK and ADVANCIS shall discuss whether, and,
if so, how, to enforce such jointly owned patent or defend such jointly owned
patent in an infringement action, declaratory judgment or other proceeding. In
the event only one Party wishes to participate in such proceeding, it shall have
the right to proceed alone, at its expense and may retain any recovery;
provided, at the request and expense of the participating Party, the other Party
agrees to cooperate and join in any proceedings in the event that a Third Party
asserts that the co-owner of such Joint Invention is necessary or indispensable
to such proceedings.

                  (c)      In any infringement suit that either Party may
institute pursuant to the terms hereof to enforce any ADVANCIS Patents Rights
pursuant to this Agreement, the other Party hereto shall, at the request of the
Party initiating such suit, cooperate in all respects and, to the extent
possible, have its employees testify when requested and make available relevant
records, papers, information, samples, specimens, and the like. All reasonable
out-of-pocket costs incurred in connection with rendering cooperation requested
hereunder shall be paid by the Party requesting cooperation.

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         7.5.     INFRINGEMENT CLAIMS. If the manufacture, sale or use of
Product in the Territory pursuant to this Agreement results in any claim, suit
or proceeding alleging patent infringement against ADVANCIS or GSK, such Party
shall promptly notify the other Party hereto. If GSK is not named as a party in
such a claim, suit or proceeding, GSK may, at its own expense and through
counsel of its own choice, seek leave to intervene in such claim, suit or
proceeding. ADVANCIS agrees not to oppose such intervention If GSK, and not
ADVANCIS, is named as a party to such claim, suit or proceeding, GSK shall have
the right to control the defense and settlement of such claim, suit or
proceeding, at its own expense, using counsel of its own choice, however
ADVANCIS, at its own expense and through counsel of its own choice, may seek to
intervene if the claim, suit or proceeding relates to the commercialization of
the Product in the Territory, and in such event, GSK agrees not to oppose such
intervention. If GSK is named as a party and ADVANCIS shall, at any time, tender
its defense to GSK, then GSK shall defend ADVANCIS in such claim, suit or
proceeding, at GSK's own expense and through counsel of its own choice, and GSK
shall control the defense and settlement of any such claim, suit or proceeding;
provided, GSK shall not enter into any agreement, settlement or compromise or
make any decision or admission (i) that extends or purports to exercise GSK's
rights under Licensed Technology beyond the rights granted pursuant to this
Agreement, (ii) regarding (a) wrongdoing on the part of ADVANCIS, or (b) that
adversely affects the validity, enforceability, infringement or scope of any
ADVANCIS Patents or patent claiming a Joint Invention, without the prior written
consent of ADVANCIS, which consent shall not be unreasonably withheld. The
Parties shall cooperate with each other in connection with any such claim, suit
or proceeding and shall keep each other reasonably informed of all material
developments in connection with any such claim, suit or proceeding. Subject to
the terms of Section 4.6, GSK shall assume full responsibility for the payment
of any award for damages, or of any amount due pursuant to any settlement
entered into by GSK with such Third Party with respect to any such claim, suit
or proceeding.

         7.6      LITIGATION ACTIVITIES UPDATE. The Parties shall keep one
another informed of the status of and of their respective activities regarding
any litigation or settlement thereof concerning Licensed Technology, provided
however that no settlement or consent judgment or other voluntary final
disposition of any suit defended or action brought by a Party pursuant to this
Article 7 may be entered into without the written consent of the other Party,
which consent shall not be unreasonably withheld or delayed.

         7.7      THIRD PARTY ACTIONS AS TO ADVANCIS PATENTS. In the event a
Third Party brings an action with respect to the validity or enforceability of
ADVANCIS Patents, ADVANCIS shall have the sole right to defend such action at
the cost and expense of ADVANCIS, except if such claim of invalidity or

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unenforceability is part of an infringement action initiated by GSK under an
ADVANCIS Patent Right pursuant to Section 7.2, in which case, GSK shall have the
right to defend such claim at the cost and expense of GSK alone, or within the
sole discretion of ADVANCIS, jointly with ADVANCIS.

                                    ARTICLE 8

                                 INDEMNIFICATION

         8.1      GSK INDEMNIFICATION. GSK shall defend, indemnify and hold
harmless ADVANCIS and its Affiliates and their respective directors, officers,
employees, agents and counsel and the successors and assigns of the forgoing
(the "ADVANCIS Indemnitees"), from and against any and all liabilities, damages,
costs or expenses (including reasonable attorneys' and professional fees and
other expenses of litigation and/or arbitration actually incurred) resulting
from a claim, suit or proceeding (including any manufacturing or other product
defects, failure to comply with regulatory and other legal requirements, failure
to provide adequate warnings and misuse of the Product) brought by a Third Party
against an ADVANCIS Indemnitee arising from or occurring as a result of: (i) the
research, testing, development, manufacture, use, distribution or sale of any
Product by GSK, its Affiliates, distributors, co-marketers or Sublicensees,
their agents or any person or entity that prepares or manufactures Product for
or on behalf of any of the foregoing or (ii) GSK's material breach of any
representation or any warranty set forth in Sections 5.1 or 5.4 (each a "Third
Party Claim"), except those losses which have been determined by a court to
solely arise out of the willful misconduct of ADVANCIS or to the extent that
ADVANCIS is obligated to indemnify GSK under Section 8.1 below.

         8.2      ADVANCIS INDEMNIFICATION. ADVANCIS shall indemnify and hold
harmless GSK and its Affiliates, and their respective directors, officers,
employees, agents and counsel, and the successors and assigns of the foregoing
(the "GSK Indemnitees"), from and against any and all liabilities, damages,
losses, costs or expenses (including reasonable attorneys' and professional fees
and other expenses of litigation and/or arbitration actually incurred) arising
from or occurring as a result of ADVANCIS material breach of any representation
or any warranty set forth in Sections 5.1 or 5.2, except, in each case, to the
extent caused by the willful misconduct of GSK or to the extent that GSK is
obligated to indemnify ADVANCIS under Section 8.1 above.

         8.3      COSTS OF ENFORCEMENT. As the parties intend complete
indemnification, all costs and expenses of enforcing any provision of this
Article 8 shall also be reimbursed by the indemnifying Party.

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         8.4      CONDITIONS TO INDEMNIFICATION. A Party that intends to claim
indemnification under this Section (the "Indemnitee") shall promptly notify the
other Party (the "Indemnitor") of any loss, claim, damage, liability or action
in respect of which the Indemnitee intends to claim such indemnification, and
the Indemnitor shall assume the defense thereof with counsel mutually
satisfactory to the Parties, whether or not the underlying Third Party Claim is
rightfully brought. In addition to counsel provided by the Indemnitor, an
Indemnitee shall have the right to retain its own counsel at its own cost in
such proceedings. The indemnity agreement in this Article 8 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Indemnitor, which consent
shall not be withheld or delayed unreasonably. The failure to deliver notice to
the Indemnitor within a reasonable time after Indemnitee has knowledge of any
claim, suit or demand or the commencement of any suit, if prejudicial to its
ability to defend such action, shall relieve such Indemnitor of any liability to
the Indemnitee under this Article 8. At the Indemnitor's request, the Indemnitee
under this Article 8, and its employees and agents, shall cooperate fully with
the Indemnitor and its legal representatives in the investigation and defense of
any action, claim or liability covered by this indemnification and provide full
information with respect thereto. The Indemnitor shall not settle or compromise
any such Third Party Claim without the written consent of the Indemnitee which
consent shall not be unreasonably withheld, but such consent shall not be
required if the settlement or compromise involves only the payment of monies and
the Indemnitee obtains a complete release thereunder.

         8.5      CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL EITHER PARTY OR THEIR
AFFILIATES BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, TREBLE OR
CONSEQUENTIAL DAMAGES, WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER LEGAL
THEORY; PROVIDED, HOWEVER, THAT THIS LIMITATION SHALL NOT LIMIT THE
INDEMNIFICATION OBLIGATION OF SUCH PARTY UNDER THE PROVISIONS OF SECTIONS 8.1 or
8.2 OF THIS ARTICLE 8 FOR SUCH DAMAGES CLAIMED BY A THIRD PARTY.

                                    ARTICLE 9

                   EXCHANGE OF INFORMATION AND CONFIDENTIALITY

         9.1      NON-DISCLOSURE. Except as expressly provided in Section 9.2,
the Parties agree that, for the Term of this Agreement and for five (5) years
thereafter, the Receiving Party shall keep completely confidential and shall not
publish or otherwise disclose and shall not use for any purpose except for the
purposes

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contemplated by this Agreement, any Confidential Information furnished to it by
the Disclosing Party hereto pursuant to this Agreement, except that to the
extent that it can be established by the Receiving Party by competent proof that
such Confidential Information:

         (i)      was already known to the Receiving Party, other than under an
                  obligation of confidentiality, at the time of disclosure;

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

         (iii)    became generally available to the public or otherwise part of
                  the public domain after its disclosure and other than through
                  any act or omission of the Receiving Party in breach of this
                  Agreement;

         (iv)     was independently developed by the Receiving Party without
                  reference to any information or materials disclosed by the
                  Disclosing Party; or

         (v)      was subsequently disclosed to the Receiving Party by a person
                  other than a Party without breach of any legal obligation to
                  the Disclosing Party.

         9.2      PERMITTED DISCLOSURES. Each Party hereto may disclose the
other's Confidential Information to the extent such disclosure is reasonably
necessary in connection with the conduct of the development, manufacturing and
commercialization activities to be conducted hereunder, in filing or prosecuting
patent applications, prosecuting or defending litigation, complying with
applicable governmental regulations or otherwise submitting information to tax
or other governmental authorities, conducting clinical trials, or making a
permitted sublicense or otherwise exercising its rights hereunder, provided that
if a Party is required to make any such disclosure of another Party's
Confidential Information, other than pursuant to a confidentiality agreement, it
will give reasonable advance notice to the latter Party of such disclosure and,
save to the extent inappropriate in the case of patent applications, will secure
confidential treatment of such information prior to its disclosure (whether
through protective orders or otherwise).

         9.3      TAX TREATMENT. (a) GSK or any Affiliate of GSK (a "GSK
Entity") that has received (or whose agents or representatives have received) a
statement made by (or on behalf of) ADVANCIS or any Affiliate of ADVANCIS (an
"ADVANCIS Entity") as to the tax consequences to the GSK Entity of any of the
arrangements, agreements, or transactions provided for in this Agreement may
disclose as it wishes the tax treatment and tax structure of such arrangement,
agreement, or transaction, including any tax opinions or tax analyses related
thereto.

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         (b)      Any ADVANCIS Entity that has received (or whose agents or
representatives have received) a statement made by (or on behalf of) a GSK
Entity as to the tax consequences to the ADVANCIS Entity of any of the
arrangements, agreements, or transactions provided for in this Agreement may
disclose as it wishes the tax treatment and tax structure of such arrangement,
agreement, or transaction, including any tax opinions or tax analyses related
thereto

         9.4      PUBLIC ANNOUNCEMENTS. No public announcement or any other
disclosure to Third Parties concerning the terms or subject matter of this
Agreement or public announcement as to the existence or termination of this
Agreement may be made, either directly or indirectly, by any Party to this
Agreement, except as may be required by applicable law, rule, regulation or
court order or 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, which approval shall not be
withheld or delayed unreasonably. The Party desiring to make any such public
announcement or other public disclosure (including those that are legally
required or may be required for recording purposes) shall inform the other Party
of the proposed announcement at least five (5) business days prior to proposed
release of such announcement or such disclosure, and shall provide the other
Party with a written copy thereof, in order to allow such other Party to comment
upon and approve or disapprove where approval is required, such announcement or
such disclosure.

         9.5      The material terms of this Agreement will be the Confidential
Information of each Party subject to the special authorized disclosure
provisions set forth below in this Section 9.5 and the authorized disclosure
provisions set forth in Section 9.4. The Parties acknowledge that either Party
may be obligated to file a copy of this Agreement with the U.S. Securities and
Exchange Commission (the "SEC") with its next quarterly report on Form 10-Q,
annual report on Form 10-K or current report on Form 8-K or with any
registration statement filed with the SEC pursuant to the Securities Act of
1933, as amended. Each Party will be entitled to make any such required filing;
provided that it requests confidential treatment of the more sensitive terms
hereof to the extent such confidential treatment is reasonably available to the
filing Party under the circumstances then prevailing. In the event of any such
filing, the filing Party will provide the non-filing Party with an advance copy
of the Agreement marked to show provisions for which the filing Party intends to
seek confidential treatment and will reasonably consider the non-filing Party's
timely comments thereon. A Party may disclose the terms of this Agreement to a
Third Party with the consent of the other Party, which will not be unreasonably
withheld. Notwithstanding the foregoing, a Party may disclose the terms and
conditions of this Agreement to a Third Party without such consent or approval
under an obligation of non-disclosure at least as strict as in this Agreement
and

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an obligation of non-use other than for the purposes disclosed (i) in connection
with a transaction or proposed transaction involving a merger, consolidation,
stock purchase, a sale of the business and/or assets of a Party in the entirety
and/or the portion thereof to which this Agreement is directed or similar
transaction, or (ii) in connection with a public or private financing, loan,
equity investment or similar transaction , (iii) or in connection with a
licensing transaction, where such disclosure is solely with respect to the scope
of the license granted under this Agreement. In the event that after good faith
efforts, ADVANCIS can not obtain a confidentiality agreement with respect to the
events of (i) or (ii) of the preceding sentence, ADVANCIS will have the right to
make such disclosure without an obligation of confidentiality.

         9.6      THIRD PARTY PUBLICATIONS. ADVANCIS shall not submit for
written or oral publication any manuscript, abstract or the like which includes
data or other information pertaining to Product without first obtaining the
prior written consent of GSK (which consent shall not be withheld and/or delayed
unreasonably).

         9.7      BANKRUPTCY. All Confidential Information disclosed by a
Disclosing Party to a Receiving Party shall remain the intellectual property of
the Disclosing Party. 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 (1) that Confidential
Information received from a Disclosing Party under this Agreement remains the
property of the Disclosing Party, and (2) of the confidentiality obligations
under this Agreement. 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 Disclosing Party's Confidential Information and to ensure
that the court, other tribunal or appointee maintains such information in
confidence in accordance with the terms of this Agreement.

         9.8      LIABILITY. A Party shall be liable for a breach of the
obligations of this Article 9 by an employee or agent of such Party.

                                   ARTICLE 10

                                TERM; TERMINATION

         10.1     TERM.

                  (a)      This Agreement shall commence as of the Effective
Date and, unless sooner terminated pursuant to Section 10.2, 10.3, 10.4, shall
continue in full force and effect on a country by country and Product by Product
basis for the Royalty Payment Period.

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                  (b)      Upon expiration of the Royalty Payment Period in a
particular country of the Territory, GSK will have a fully paid up, royalty
free, perpetual, irrevocable, exclusive, worldwide license under Section 2.1,
with the right to sublicense and GSK will be free to make, have made, use and
sell Compound and Product and to use Licensed Technology under such license in
such country, without further royalty payments or any other remuneration to
ADVANCIS.

         10.2     TERMINATION FOR MATERIAL BREACH. Either Party may terminate
this Agreement in the event the other Party has materially breached or defaulted
in the performance of any of its obligations hereunder. The breaching Party will
have [***] (the "Cure Period") to cure such breach. If such default is not
corrected within the Cure Period after receiving written notice from such Party
with respect to such default or such plan is not offered, such notifying Party
shall have the right to terminate this Agreement by giving written notice of
termination to the Party in default, provided the notice of default is given
within [***] of when the Party giving notice knew of the default and prior to
correction of the default. Any termination of this Agreement after the
expiration of the applicable Cure Period will take effect upon delivery of the
notice of termination. The right to terminate this Agreement is in addition to
any other remedies available at law or in equity.

         10.3     TERMINATION FOR BANKRUPTCY; RETENTION OF LICENSE. If voluntary
or involuntary proceedings by or against a Party are instituted in bankruptcy
under any insolvency law, or a receiver or custodian is appointed for such
Party, or proceedings are instituted by or against such Party for corporate
reorganization or the dissolution of such Party, which proceedings, if
involuntary, shall not have been dismissed within sixty (60) days after the date
of filing, or if such Party makes an assignment for the benefit of creditors, or
substantially all of the assets of such Party are seized or attached and not
released within sixty (60) days thereafter, the other Party may immediately
terminate this Agreement effective upon notice of such termination.
Notwithstanding the bankruptcy of a Party, or the impairment of performance by a
Party of its obligations under this Agreement as a result of bankruptcy or
insolvency of such Party, and subject to such Party's rights to terminate this
Agreement for reasons other than bankruptcy or insolvency as expressly provided
in this Agreement, the other Party shall be entitled to retain the licenses
under the terms and conditions granted herein, provided that such other Party
has not terminated this Agreement.

         10.4     TERMINATION FOR CONVENIENCE BY GSK. GSK shall have the right
to terminate this Agreement in its sole discretion for any reason on a
country-by-country basis, or in its entirety, by giving ADVANCIS at least sixty
(60) days prior written notice.

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         10.5     EFFECT OF EXPIRATION OR TERMINATION.

         (a)      Termination of this Agreement shall terminate the rights and
obligations of the Parties under this Agreement; provided, however, termination
of this Agreement for any reason will not release any Party hereto from any
liability that, at the time of such termination, has already accrued to the
other Party or that is attributable to a period prior to such termination, nor
will termination preclude either Party from pursuing any rights and remedies it
may have hereunder or at law or in equity that have accrued or are based upon
any event occurring prior to such termination nor will termination affect the
rights and obligations of the Parties that survive termination under Section
10.6.

         (b)      Upon termination of this Agreement (other than expiration
under Section 10.1), GSK shall not develop or Commercialize Product that was
developed or Commercialized pursuant to this Agreement prior to termination of
the Agreement.

         (c)      Upon the termination of any rights granted hereunder, in whole
or in part as to any country in the Territory, for any reason other than a
failure to cure a material breach of this Agreement by GSK, GSK shall have the
right to dispose of all Product then on hand to which such termination applies,
and the royalties and Milestones shall be paid to ADVANCIS with respect to such
as though such rights had not terminated.

         (d)      Upon any termination of this Agreement, GSK and ADVANCIS shall
promptly return to the other Party all materials and tangible Confidential
Information received from the other Party (except one copy of which may be
retained by legal counsel for archival purposes).

         10.6     BANKRUPTCY PROVISIONS. All rights and licenses rights granted
under or pursuant to the Agreement by ADVANCIS to GSK are, and shall otherwise
be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code,
licenses of rights to "intellectual property" as defined under Section 101(52)
of the U.S. Bankruptcy Code. The Parties agree that GSK, as licensee of such
rights under this Agreement, shall retain and may fully exercise all of its
rights and elections under the U.S. Bankruptcy Code, subject to performance by
GSK of its pre-existing obligations under the Agreement. The Parties further
agree that, in the event of the commencement of a bankruptcy proceeding by or
against ADVANCIS under the U.S. Bankruptcy Code, GSK shall be entitled to a
complete duplicate of (or complete access to, as appropriate) any such
intellectual property and all embodiments of such intellectual property, and
same, if not already in its possession, shall be promptly delivered to GSK (1)
upon any such commencement of a bankruptcy proceeding upon written request
therefore by GSK, unless ADVANCIS elects to continue to perform all of its
obligations

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under this Agreement, or (2) if not delivered under (1) above, upon the
rejection of this Agreement by or on behalf of ADVANCIS upon written request
therefore by GSK.

         10.7     SURVIVING OBLIGATIONS.

         Sections 2.1(b), 5.5, 6.1, 6.4, 6.5, 7.1, 8.1-8.5, 9.1-9.8, 10.3, 10.5,
10.6 and 10.7 and Articles 1 and 12 will survive the expiration or termination
of this Agreement for any reason. In addition, any other provision required to
interpret and enforce the Parties' rights and obligations under this Agreement
shall also survive, but only to the extent required for the observation and
performance of the aforementioned surviving portions of this Agreement.

                                   ARTICLE 11

                                  FORCE MAJEURE

         11.1     EVENTS OF FORCE MAJEURE. Except for payments due under this
Agreement, neither Party shall be held liable or responsible to the other Party
nor be deemed to be in default under or in breach of any provision of this
Agreement for failure or delay in fulfilling or performing any obligation of
this Agreement when such failure or delay is due to force majeure, and without
the fault or negligence of the Party so failing or delaying. For purposes of
this Agreement, force majeure is defined as causes beyond the control of the
Party, including, without limitation, earthquakes, riots, civil commotion,
terrorism, war, hostilities between nations, governmental laws, order or
regulation, embargo, action by the government or any agency thereof, acts of
God; storm, fire, accident, labor dispute or strike, sabotage, explosion or
other similar or different contingencies, in each case, beyond the reasonable
control of the respective Party. In such event, the Party affected by force
majeure shall provide the other Party with full particulars thereof as soon as
it becomes aware of the same (including its best estimate of the likely extent
and duration of the interference with its activities), and will use its best
endeavors to overcome the difficulties created thereby and to resume performance
of its obligations as soon as practicable. If the performance of any obligation
under this Agreement is delayed owing to a force majeure for any continuous
period of more than six (6) months, the parties hereto shall consult with
respect to an equitable solution including the possible termination of this
Agreement.

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                                   ARTICLE 12

                                  MISCELLANEOUS

         12.1     RELATIONSHIP OF PARTIES. In making and performing this
Agreement, the Parties are acting, and intend to be treated, as independent
entities and nothing contained in this Agreement shall be construed or implied
to create an agency, partnership, joint venture, or employer and employee
relationship between GSK and ADVANCIS. Except as otherwise expressly provided
herein, neither Party may make any representation, warranty or commitment,
whether express or implied, on behalf of or incur any charges or expenses for
the act of any other Party, unless such act is expressly authorized in writing
by both Parties hereto.

         12.2     ASSIGNMENT. Neither Party shall be entitled to assign its
rights or duties hereunder without the express written consent of the other
Party hereto, except that both GSK and ADVANCIS may otherwise assign their
respective rights and transfer their respective duties hereunder without such
consent (1) to an Affiliate of such Party, or (2) to an assignee or transferee
of all or substantially all of the business or assets of such Party to which
this Agreement pertains (whether by merger, reorganization, acquisition, sale,
consolidation or similar transaction) and provided that the assignee agrees in
writing to be bound by the terms and conditions of this Agreement and the
assigning party remains liable thereunder. The terms and conditions of this
Agreement shall be binding upon and inure to the benefit of the permitted
successors and assigns of the Parties. Nothing in this Section 12.2 shall be
construed to prevent GSK from sublicensing its rights to develop, manufacture or
commercialize Product under this Agreement.

         12.3     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 this
Agreement.

         12.4     NOTICE. Any notice or request required or permitted to be
given under or in connection with this Agreement shall be deemed to have been
sufficiently given if in writing and personally delivered or sent by certified
mail (return receipt requested), facsimile transmission (receipt verified), or
overnight express courier service (signature required), prepaid, to the Party
for which such notice is intended, at the address set forth for such Party
below:

         (a)      In the case of GSK, to:
                  Glaxo Group Limited
                  Glaxo Wellcome House
                  Berkeley Avenue
                  Greenford, Middlesex
                  England UB6 0NN

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                  Attention: The Company Secretary Facsimile
                  Facsimile: 44 208 047 6905

                  With a copy to:

                  GlaxoSmithKline

                  709 Swedeland Rd.

                  King of Prussia, PA 19406

                  Attention:       Senior Vice President,

                                   Worldwide Business Development

                  Telephone:       [***]

                  Facsimile:       [***]

                  With a copy to:

                  GlaxoSmithKline

                  Corporate Legal Department

                  2301 Renaissance Blvd.

                  Mail Code RN0220

                  King of Prussia, PA 19406-2772

                  Attention:       Head, Business Development Transactions Team

                  Telephone:       [***]

                  Facsimile:       [***]

         (b)      In the case of ADVANCIS, to:

                  ADVANCIS PHARMACEUTICAL CORP.

                  20425 Seneca Meadows Parkway

                  Germantown, Maryland 20876

                  Attention: CEO

                  Telephone:       [***]

                  Facsimile:       [***]

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or to such other address for such Party as it shall have specified by like
notice to the other Party, provided that notices of a change of address shall be
effective only upon receipt thereof. If delivered personally or by facsimile
transmission, the date of delivery shall be deemed to be the date on which such
notice or request was given. If sent by overnight express courier service, the
date of delivery shall be deemed to be the next business day after such notice
or request was deposited with such service. If sent by certified mail, the date
of delivery shall be deemed to be the third business day after such notice or
request was deposited with the U.S. Postal Service.

         12.5     USE OF NAME. Except as otherwise provided herein, neither
Party shall have any right, express or implied, to use in any manner the name or
other designation of the other Party or any other trade name or trademark of the
other Party for any purpose in connection with the performance of this
Agreement.

         12.6     WAIVER. A waiver by either Party of any of the terms and
conditions of this Agreement in any instance shall not be deemed or construed to
be a waiver of such term or condition for the future, or of any subsequent
breach hereof. All rights, remedies, undertakings, obligations and agreements
contained in this Agreement shall be cumulative and none of them shall be in
limitation of any other remedy, right, undertaking, obligation or agreement of
either Party.

         12.7     SEVERABILITY. When possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement and the parties shall negotiate, in good faith, a new provision
which will, as closely as possible, carry out the intentions of the parties
provided for in the invalidated provision. If such agreement is not reached in
sixty (60) days, the affected Party(ies) may terminate this Agreement. In the
event that in any country the payment of royalties over the entire Term is
invalid or illegal, then this Agreement shall be amended so that royalty
payments are made only over the portion of the Term that is legal and valid,
with such royalty payments being increased during the new term so that the total
amount of royalties over the shortened term in any such country is equal to the
total amount of royalties that would have been paid over the entire Term in any
such country.

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         12.8     AMENDMENT. No amendment, modification or supplement of any
provisions of this Agreement shall be valid or effective unless made in writing
and signed by a duly authorized officer of each Party.

         12.9     GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York, without regard
to its choice of law principles.

         12.10    ENTIRE AGREEMENT. This Agreement, together with the Exhibits
hereto, sets forth the entire agreement and understanding between the Parties as
to the subject matter hereof and merges all prior discussions and negotiations
between them, and neither of the Parties shall be bound by any conditions,
definitions, warranties, understandings or representations with respect to such
subject matter other than as expressly provided herein or as duly set forth on
or subsequent to the date hereof in writing and signed by a proper and duly
authorized officer or representative of the Party to be bound thereby.

         12.11    PARTIES IN INTEREST. All the terms and provisions of this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the Parties hereto and their respective permitted successors and assigns.

         12.12    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.

         12.13    CONSTRUCTION. Except where the context otherwise requires,
where used, the singular will include the plural, the plural the singular, the
use of any gender will be applicable to all genders and the word "or" is used in
the inclusive sense (and/or). The term "including" as used herein will mean
including, without limiting the generality of any description preceding such
term. All references to "$" and dollars shall be deemed to refer to United
States currency unless otherwise specifically provided herein. All references to
the word "will" are interchangeable with the word "shall" and shall be
understood to be imperative or mandatory in nature. "Herein," "hereby,"
"hereunder," "hereof" and other equivalent words refer to this Agreement as an
entirety and not solely to the particular portion of this Agreement in which any
such word is used. The language of this Agreement is English. No rule of strict
construction will be applied against either Party hereto. Unless expressly
provided herein to the contrary, all time limits, notice periods, deadlines or
the like described herein will be governed by the follow parameters: (i) for all
time periods that are 5 days in length or less, such periods will be deemed to
be business days and (ii) for all time periods greater than 5 days in length
will be deemed to be calendar days.

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         12.13    RECORDING. GSK shall have the right, at any time, to record,
register, or otherwise notify this Agreement in appropriate governmental or
regulatory offices anywhere in the Territory and ADVANCIS shall provide
reasonable assistance to GSK in effecting such recording, registering or
notifying.

         12.14    COUNTERPARTS. This Agreement may be executed simultaneously in
any number of counterparts, any one 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. A signature on a copy of this Agreement received by
either Party by facsimile is binding upon the other Party as an original. Both
Parties agree that a photocopy of such facsimile may also be treated by the
Parties as a duplicate original.

         12.15    PERFORMANCE BY AFFILIATES AND SUBCONTRACTORS. The Parties
recognize that each Party may perform some or all of its obligations under this
Agreement through Affiliates or Third Party subcontractors unless otherwise
expressly limited herein; provided, however, that each Party will remain
responsible for the performance by its Affiliates and subcontractors and will
cause its Affiliates and subcontractors to comply with the provisions of this
Agreement in connection with such performance. Wherever in this Agreement the
Parties delegate responsibility to Affiliates or local operating entities, the
Parties agree that such entities may not make decisions inconsistent with this
Agreement, amend the terms of this Agreement or act contrary to its terms in any
way.

              THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK

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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
by its duly authorized officer as of the day and year first above written.

                                            ADVANCIS PHARMACEUTICAL CORP.

                                    By: /s/ Edward M. Rudnic
                                        ---------------------------------------
                                    Name: Edward M. Rudnic, PhD
                                    Title President & Chief Executive Officer

                                            GLAXO GROUP LIMITED,

                                            D/B/A GLAXOSMITHKLINE

                                    By: /s/ Jean-Pierre Garnier
                                        ---------------------------------------
                                    Name: Jean-Pierre Garnier
                                    Title Attorney-in-Fact

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