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                                                                   EXHIBIT 10.11

                       ADVANCIS PHARMACEUTICAL CORPORATION

                             NOTE ISSUANCE AGREEMENT

                  THIS NOTE ISSUANCE AGREEMENT, dated March _28, 2003, (this
"AGREEMENT") is entered into by and among Advancis Pharmaceutical Corporation, a
Delaware corporation (the "CORPORATION"), Healthcare Ventures VI, L.P., as
Collateral Agent and the persons listed on Schedule 1 attached hereto (the
"LENDERS").

                                   BACKGROUND

                  The Corporation desires to borrow from the Lenders the amount
of Five Million Dollars ($5,000,000) (the "LOAN"), which will be evidenced by
convertible secured promissory notes in substantially the form of Exhibit A
attached hereto (the "NOTES"). The Lenders are willing to provide the Loan to
the Corporation pursuant to the terms and conditions specifically set forth
hereinafter.

                  NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto, intending to be legally bound,
hereby agree as follows:

         SECTION 1. The Loan.

                  1.1      Closing. The closing of the Loan (the "CLOSING")
shall take place at the offices of Pepper Hamilton LLP, 400 Berwyn Park, 899
Cassatt Road, Berwyn, Pennsylvania 19312-1183 at 10:00 am., at such place and at
such time and date as is agreed to by the Corporation and the Lenders.

                  1.2      Notes. At the Closing, the Corporation shall deliver
to each Lender a Note in such Lender's name in the principal amount set forth
opposite such Lender's name on Schedule 1.

                  1.3      Pari Passu Notes. Lenders and the Corporation
acknowledge and agree that the right of payment of all or any portion of the
outstanding principal amount of each of the Notes and all interest thereon shall
be pari passu in right of payment and in all other respects to all of the other
Notes. In the event a Lender receives payments in excess of its pro rata share
of the Corporation's payments to all of the Lenders, then such Lender shall hold
in trust all such excess payments for the benefit of the other Lenders and shall
pay such amounts held in trust to such other Lenders upon demand by such
Lenders.

         SECTION 2. Representations and Warranties of the Corporation to the
Lenders. The Corporation hereby represents and warrants to the Lenders that,
except as set forth in the Schedule of Exceptions attached hereto as Exhibit B
(the "SCHEDULE"):

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                  2.1      Bringdown of Series D Representations and Warranties.
The representations and warranties made by the Corporation in the Series D
Convertible Preferred Stock Purchase Agreement dated as of October 25, 2001
among the Corporation and the investors thereunder (as amended, the "SERIES D
PURCHASE AGREEMENT"), as such representations and warranties are updated and/or
excepted in Section 2.1 of the Schedule, are true and complete as though made on
the date of this Agreement; provided, however, that the Corporation makes no
representation and warranty in this Agreement in regards to Sections 5.3, 5.4,
5.5 and 5.7 of the Series D Purchase Agreement.

                  2.2      Authorization of this Agreement, the Notes and IP
Security Agreement. The execution, delivery and performance by the Corporation
of this Agreement, the Notes, the IP Security Agreement and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all requisite action on the part of the Corporation. Each of this Agreement, the
Notes and the IP Security Agreement has been duly executed and delivered by the
Corporation and constitutes a valid and binding obligation of the Corporation,
enforceable in accordance with its respective terms. The execution, delivery and
performance of this Agreement, the Notes, and the IP Security Agreement and the
compliance with the provisions hereof and thereof by the Corporation, will not:

                           (a) materially violate any provision of law, statute,
ordinance, rule or regulation or any ruling, writ, injunction, order, judgment
or decree of any court, administrative agency or other governmental body;

                           (b) conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute (with due notice or lapse
of time, or both) a default (or give rise to any right of termination,
cancellation or acceleration) under (i) any agreement, document, instrument,
contract, understanding, arrangement, note, indenture, mortgage or lease to
which the Corporation is a party or under which the Corporation or any of its
assets is bound or affected, (ii) the Corporation's Certificate of Incorporation
as currently in effect, or (iii) the Corporation's Bylaws as currently in
effect; or

                           (c) result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Corporation, except as contemplated by this Agreement, the Notes, and the IP
Security Agreement.

                  2.3      Consents and Approvals. No authorization, consent,
approval or other order of, or declaration to or filing with, any governmental
agency or body (other than filings required to be made under applicable federal
and state securities laws) or any other person, entity or association is
required for: (a) the valid authorization, execution, delivery and performance
by the Corporation of this Agreement, the Notes and the IP Security Agreement;
or (b) the valid authorization, issuance, sale and delivery of the Notes. The
Corporation has obtained all other consents that are necessary to permit the
consummation of the transactions contemplated hereby and thereby.

                  2.4      Securities Laws. Based in part on the representations
and warranties of the Lenders set forth in Section 3, neither the Corporation
nor anyone acting on its behalf has offered securities of the Corporation for
sale to, or solicited any offers to buy the same from, or sold

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securities of the Corporation to, any person or organization, in any case so as
to subject the Corporation, its promoters, directors and/or officers to any
liability under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
the Securities and Exchange Act of 1934, as amended, or any state securities or
"blue sky" law (collectively, the "SECURITIES LAWS"). The offer, grant, sale
and/or issuance of the Notes and the securities into which the Notes may be
converted were not, are not, or, as the case may be, will not be, in violation
of the Securities Laws when offered, sold and issued in accordance with the
operative documents relating to their issuance.

         SECTION 3. Representations and Warranties of the Lenders to the
Corporation. Each of the Lenders, severally, but not jointly, as to and on
behalf of itself only, represents and warrants to the Corporation as follows:

                           (a) It is acquiring the Note and, in the event it
should acquire other securities of the Corporation upon conversion of the Note,
it will be acquiring such securities, for its own account, for investment and
not with a view to the distribution thereof within the meaning of the Securities
Act.

                           (b) It is an "accredited investor" as such term is
defined in Rule 501(a) promulgated under the Securities Act.

                           (c) It agrees that the Corporation may place a legend
on the Notes that the Notes have not been registered under the Securities Act,
and, therefore, cannot be offered, sold or transferred unless they are
registered under the Securities Act or an exemption from such registration is
available.

                           (d) The execution, delivery and performance by it of
this Agreement have been duly authorized by all requisite action of it.

                           (e) It further understands that the exemptions from
registration afforded by Rule 144 and Rule 144A (the provisions of which are
known to it) promulgated under the Securities Act depend on the satisfaction of
various conditions, and that, if applicable, Rule 144 may afford the basis for
sales only in limited amounts.

                           (f) It has such knowledge and experience in business
and financial matters and with respect to investments in securities of
privately-held companies so as to enable it to understand and evaluate the risks
of the Lender's investment in the Notes and form an investment decision with
respect thereto. It has been afforded the opportunity during the course of
negotiating the transactions contemplated by this Agreement to ask questions of,
and to secure such information from, the Corporation and its officers and
directors as it deems necessary to evaluate the merits of entering into such
transactions.

                           (g) If it is a natural person, it has full power and
authority to enter into this Agreement. If it is not a natural person, it is
duly organized and validly existing and has the power and authority to enter
into this Agreement. Any Lender which is a corporation, partnership or trust
represents that it has not been organized, reorganized or recapitalized
specifically for the purpose of acquiring the securities of the Corporation.

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                           (h) It has adequate net worth and means of providing
for its current needs and personal contingencies to sustain a complete loss of
its investment in the Corporation.

                  3.2      Voting Rights. As long as any of the Notes remain
outstanding, the Corporation shall not, without the affirmative approval of the
Lenders that have lent a majority of the then outstanding principal under the
Notes (the "MAJORITY LENDERS"), given by written consent in lieu of a meeting or
by vote at a meeting called for such purpose:

                           (a)      sell, abandon, transfer, lease or otherwise
dispose of all or substantially all of its properties or assets other than in
the ordinary course of its business;

                           (b)      purchase, lease or otherwise acquire all or
substantially all of the assets of another entity;

                           (c)      except as otherwise required by the
Corporation's Fourth Restated Certificate of Incorporation, declare or pay any
dividend or make any distribution with respect to shares of its capital stock
(whether in cash, shares of capital stock or other securities or property);

                           (d)      except as otherwise required by the
Corporation's Fourth Restated Certificate of Incorporation or in any agreement
approved by the Corporation's Board of Directors, with a director, officer,
employee, consultant or independent contractor of or to the Corporation
providing for the repurchase of any of its capital stock owned by such director,
officer, employee, consultant or independent contractor at the option of the
Corporation, provided that such agreements are either: (A) set forth on Schedule
3.2 to the Series D Purchase Agreement, or (B) entered into pursuant to any
stock option plan which has been adopted by the Corporation and approved by the
Board of Directors and by the holders of at least a majority of the combined
voting power of the Corporation's Preferred Stock, par value $.01 per share
("PREFERRED STOCK") then outstanding (including any outstanding shares of the
Corporation's Common Stock, par value $.01 per share ("COMMON STOCK") issued
upon conversion thereof), and the form of option agreement under such stock
option satisfactory in form and in substance, except for immaterial changes
thereto made from time to time by officers of the Corporation, to the Board of
Directors and by the holders of at least a majority of the combined voting power
of the Preferred Stock then outstanding (including any outstanding shares of
Common Stock issued upon conversion thereof), make any payment on account of the
purchase, redemption or other retirement of any share of capital stock of the
Corporation, or distribute to the holders of the Common Stock shares of the
Corporation's capital stock (other than Common Stock) or other securities of
other entities, evidences of indebtedness issued by the Corporation or other
entities, or other assets or options or rights (excluding options to purchase
and rights to subscribe for shares of Common Stock or the securities of the
Corporation convertible into or exchangeable for shares of Common Stock), as
then in effect;

                           (e)      merge or consolidate with or into, or permit
any subsidiary to merge or consolidate with or into, any other corporation,
corporations or other entity or entities;

                           (f)      voluntarily dissolve, liquidate or wind-up
or carry out any partial liquidation or distribution or transaction in the
nature of a partial liquidation or distribution;

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                           (g)      in any manner alter or change the
designations, powers, preferences, rights, qualifications, limitations or
restrictions of the Corporation's outstanding Preferred Stock;

                           (h)      take any action to cause any amendment,
alteration or repeal of any of the provisions of the Corporation's Fourth
Restated Certificate of Incorporation or the Bylaws of the Corporation as then
in effect ("BYLAWS");

                           (i)      except for the issuance of capital stock or
other securities constituting shares of Excluded Stock (as defined in Section
A.7(d)(ii) of the Corporation's Fourth Restated Certificate of Incorporation),
authorize, designate, create, issue or agree to issue any equity or debt
security of the Corporation or any security, right, option or warrant
convertible into, or exercisable or exchangeable for, shares of the capital
stock of the Corporation or any capitalized lease with an equity feature with
respect to the capital stock of the Corporation;

                           (j)      amend, modify or terminate any stock option
plan of the Corporation or any stock option agreement or restricted stock
purchase agreement entered into between the Corporation and its employees,
directors or consultants, except for immaterial changes made thereto from time
to time by officers of the Corporation;

                           (k)      accelerate the vesting schedule or exercise
date or dates of any such options or in any stock option agreement entered into
between the Corporation and its directors, officers, employees, consultants or
independent contractors, or waive or modify the Corporation's repurchase rights
with respect to any shares of the Corporation's stock issuable pursuant to any
restricted stock purchase agreement entered into between the Corporation and its
directors, officers, employees, consultants or independent contractors.

                           (l)      grant any stock options with an exercise
price per share of less than the fair market value of such share on the date of
such grant (as determined by the Board of Directors) or issue or sell capital
stock of the Corporation pursuant to restricted stock awards or restricted stock
purchase agreements at a price per share less than the fair market value of such
share on the date of such issuance or sale (as determined by the Board of
Directors);

                           (m)      increase the number of directors of which
the Board of Directors consists;

                           (n)      enter into any financing arrangement in
excess of $500,000 including, without limitation, loan agreements, credit lines,
letters of credit or capitalized leases;

                           (o)      enter into any contract, agreement or
license or series of related contracts, agreements or licenses in excess of
$750,000 whether in a single disbursement or a series of related disbursements;

                           (p)      enter into any transaction or agreement with
any officer or director of the Corporation or with any corporation, partnership
or other organization (an "OUTSIDE ENTITY") in which one or more of the officers
or directors of the Corporation is an officer or director of, or has a financial
interest in, such Outside Entity;

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                           (q)      enter into or become subject to any
agreement which restricts or purports to restrict the Corporation from engaging
or otherwise competing in any material aspect of its business other than
pursuant to a duly authorized license agreement of the Corporation's
intellectual property;

                           (r)      take any action or enter into any other
transaction outside the ordinary course of business or effect any material
change in the conduct or operation of the Corporation's business;

                           (s)      establish or approve of any Corporation
policies delegating or delineating the authority of any officer or employee to
act on behalf of the Corporation outside of the ordinary course of business;

                           (t)      appoint, terminate or remove the Chief
Executive Officer or President or the Chief Financial Officer, Treasurer or Vice
President-Finance without the approval of the Board of Directors;

                           (u)      adopt and amend the budgets of the
Corporation and authorize budget variances for expenditures in excess of ten
percent (10%) without the approval of the Board of Directors;

                           (v)      adopt and materially amend the strategic or
business plan of the Corporation without the approval of the Board of Directors;
or

                           (w)      take any action to cause any amendment,
alteration or repeal of any of the provisions of the Bylaws, or the bylaws of
any of its subsidiaries with the exception of ministerial amendments which would
not have any adverse affect on the outstanding Preferred Stock or the Notes.

         SECTION 4. Registration Rights. The Corporation shall take, and shall
seek to have its stockholders take, all action necessary to cause the securities
issued upon the conversion of the Notes to be Restricted Shares, as that term is
defined in the Third Amended and Restated Stockholders' Agreement dated as of
October 25, 2001, as it may from time to time be amended, among the Corporation
and the Investors thereunder (the "STOCKHOLDERS' AGREEMENT"), such that a Lender
holding such securities shall be able to avail itself of the registration rights
of Section 3 of the Stockholders' Agreement with respect to such securities.

         SECTION 5. Publicity. The Corporation shall not make any public
statement relating to this Agreement, the Notes, the IP Security Agreement or
the transactions contemplated hereby and thereby, whether in any advertisement,
news release or professional or trade publication, or in any other manner,
unless (a) otherwise required by law, (b) such statement is made to potential
equity investors in connection with discussions among the Corporation and such
potential equity investors about an equity investment in the Corporation, or (c)
such statement is made with HealthCare Ventures VI, L.P.'s prior written
consent.

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         SECTION 6. Collateral Agent.

                  6.1      Definitions. As used in this Section 6, the following
terms shall have the meanings assigned to them in this Section 6.1 or in the
provisions of this Agreement referred to below:

                           (a)      AGGREGATE PRINCIPAL INDEBTEDNESS: As of any
date of determination, the aggregate principal amount of the Notes outstanding.

                           (b)      COLLATERAL: This term shall have the meaning
given it in the Notes.

                           (c)      COLLATERAL AGENT: HealthCare Ventures VI,
L.P. in its capacity as collateral agent hereunder and under the Notes and the
IP Security Agreement or any Successor Collateral Agent appointed pursuant to
Section 6.3(g) hereof.

                           (d)      EVENT OF DEFAULT: This term shall have the
meaning given it in the Notes.

                           (e)      LIABILITIES: This term shall have the
meaning given to it in the Notes.

                           (f)      NOTICE DATE: The date on which the
Collateral Agent first receives instructions from the Majority Lenders to
enforce rights under the Notes or the IP Security Agreement.

                           (g)      PERSON: Any individual, partnership,
corporation, trust, joint venture or unincorporated organization, including any
government or agency or political subdivision thereof.

                           (h)      SECURITY DOCUMENT: Any or all of (i) the IP
Security Agreement, (ii) the Notes, (iii) the ancillary documents relating to
any of the foregoing including but not limited to financing statements and stock
powers and (iv) all extensions, renewals, amendments, substitutions or
replacements to any of the foregoing.

                           (i)      STATEMENT OF EVENT OF DEFAULT: A written
statement delivered by any Lender to the Collateral Agent referring to the Note
and/or the IP Security Agreement, stating that an Event of Default has occurred
thereunder.

                           (j)      SUCCESSOR COLLATERAL AGENT: This term shall
have the meaning given it in Section 6.3(g) hereof.

                  6.2      Appointment and Authorization of Collateral Agent.

                           (a)      Appointment of Authority. Each Lender hereby
designates and appoints the Collateral Agent to act as collateral agent for such
Lender under this Agreement and the Security Documents, and each Lender hereby
authorizes the Collateral Agent, as Collateral Agent acting on behalf of and for
the benefit of such Lender, to execute and enter into any of the Security
Documents as appropriate on such Lender's behalf and to take such action under
the

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provisions of the Security Documents and all other instruments relating thereto
and to exercise such powers and perform such duties as are expressly delegated
to the Collateral Agent by the terms hereof and thereof, together with such
other powers as are reasonably incidental thereto.

                           (b)      Limited Agency. Notwithstanding any
provision to the contrary set forth elsewhere in this Agreement or the Security
Documents, the Collateral Agent shall not have any duties or responsibilities in
its capacity as Collateral Agent except those expressly set forth herein or
therein or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties or liabilities shall be read into this
Agreement or any Security Document or otherwise exist against the Collateral
Agent.

                  6.3      Agency Provisions.

                           (a)      Delegation of Duties. The Collateral Agent
may exercise its powers and execute any of its duties under this Agreement and
the Security Documents by or through employees, agents or attorneys-in-fact and
shall be entitled to take and to rely on advice of counsel concerning all
matters pertaining to such powers and duties. The Collateral Agent shall not be
responsible for the negligence or misconduct of any employees, agents or
attorneys-in-fact selected by it with reasonable care. The Collateral Agent may
utilize the services of such Persons as the Collateral Agent in its sole
discretion may determine, and all reasonable fees and expenses of such Persons
shall be borne by the Corporation pursuant to the terms of the Security
Documents and this Agreement.

                           (b)      Exculpatory Provisions. The Collateral Agent
and each of its employees, agents, attorneys-in-fact and affiliates shall not be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any Security Document
(except for its personal liability for its own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Corporation or
any officer thereof contained in any Security Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by, the Collateral Agent under or in connection with this Agreement or any
Security Document, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of the Security Documents or for any failure of
the Corporation to perform its Liabilities thereunder. The Collateral Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, the Security Documents.

                           (c)      Reliance by Collateral Agent. The Collateral
Agent shall be entitled to rely, and shall be fully protected in relying, upon
(i) any writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and (ii) advice
and statements of legal counsel (including, without limitation, counsel to the
Corporation), independent accountants and other experts selected by the
Collateral Agent with reasonable care. The Collateral Agent shall be fully
justified in failing or refusing to take action under this Section 6 or the
Security Documents unless it shall first receive such advice or concurrence of
the Majority Lenders as is contemplated by Section 6.4 hereof and it shall first
be indemnified to its

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reasonable satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking, continuing to take or
refraining from taking any such action. The Collateral Agent, in all cases,
shall be fully protected in acting, or in refraining from acting, under this
Section 6 and the Security Documents in accordance with the provisions of
Section 6.4 hereof and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders.

                           (d)      Notice of Default. The Collateral Agent
shall not be deemed to have knowledge or notice of the occurrence of any Event
of Default unless it has received from a Lender a Statement of Event of Default.
The Collateral Agent may rely on a Statement of Event of Default without further
inquiry. When the Collateral Agent receives a Statement of Event of Default, the
Collateral Agent promptly (but in any event within three (3) business days of
receipt of such notice) shall give notice thereof to the Lenders and shall
schedule a meeting (which may be telephonic) of all Lenders to be held within
five (5) business days of the sending of such notice at a mutually convenient
time and place. At such meeting the Lenders shall consult with one another in an
attempt to determine a mutually acceptable course of conduct regarding the
Corporation and the collection of the outstanding Liabilities. The Collateral
Agent shall take such action with respect to such Event of Default as shall be
directed by the Majority Lenders in accordance with Section 6.4 hereof, provided
that unless and until the Collateral Agent shall have received such directions,
the Collateral Agent may (but shall not be obligated to) take such action under
Section 6.4(c) hereof with respect to such Event of Default as it shall deem
advisable in the furtherance of the interests of the Lenders.

                           (e)      Non-Reliance on Collateral Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Collateral Agent
nor any of its employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to such Lender and that no act by the Collateral
Agent hereinafter taken, including any review of the affairs of the Corporation,
shall be deemed to constitute any representation or warranty by the Collateral
Agent to any Lender. Each Lender represents to the Collateral Agent that it has,
independently and without reliance upon the Collateral Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and credit-worthiness of the
Corporation and made its own decision to lend monies to the Corporation and
acquire its Note and enter into such agreements. Each Lender also represents
that it will, independently and without reliance upon the Collateral Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking (or directing the Collateral Agent to take
or not take) action under the Security Documents and this Agreement, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Corporation. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Collateral Agent hereunder, the Collateral
Agent shall not have any duty or responsibility to provide the Lenders with any
credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of the Corporation which may
come into the possession of the Collateral Agent or any of its employees,
agents, attorneys-in-fact or affiliates.

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                           (f)      Indemnification. The Lenders agree to
indemnify (promptly upon request) the Collateral Agent in its capacity as such
(to the extent not reimbursed by the Corporation and without limiting the
obligation of the Corporation to do so), ratably according to their respective
share of the Aggregate Principal Indebtedness from and against any and all
liabilities, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Liabilities) be imposed on, incurred by or asserted against the Collateral Agent
in any way relating to or arising out of actions or omissions of the Collateral
Agent specifically required or permitted by this Section 6 or by written
instructions of the Majority Lenders or all of the Lenders delivered pursuant
thereto, provided that no Lender shall be liable for the payment of any portion
of such liabilities, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Collateral Agent's gross
negligence or willful misconduct. The agreements in this subsection shall
survive the payment of the Liabilities.

                           (g)      Successor Collateral Agent. The Collateral
Agent may resign as Collateral Agent hereunder upon ninety (90) days' notice to
the Lenders and the Corporation and may be removed at any time, with or without
cause, by the Majority Lenders upon ninety (90) days' notice to the Lenders, the
Corporation, and the Collateral Agent. If at any time the Collateral Agent shall
resign or be removed as Collateral Agent under this Section 6, then the Majority
Lenders shall appoint a successor agent for the Lenders, whereupon such
successor agent shall, following written notice to the Corporation, succeed to
the rights, powers and duties of the Collateral Agent; provided, however, that
any successor agent so appointed shall be authorized under the laws of the
jurisdiction of its incorporation or organization to assume the functions of an
agent (any successor agent meeting each of the foregoing requirements, a
"SUCCESSOR COLLATERAL AGENT"). If the appointment of such successor shall not
have become effective (as hereafter provided) within such ninety-day period
after the Collateral Agent's resignation or upon removal of the Collateral
Agent, then (i) the Collateral Agent may assign the security interests granted
pursuant to the Security Documents and its duties hereunder and under the
Security Documents to the Lenders, as their interests may appear, and in such
case all references herein to "Collateral Agent" shall be deemed to refer to
"Majority Lenders" and (ii) the Lenders may petition a court of competent
jurisdiction for the appointment of a successor Collateral Agent and such court
shall, after such notice as it may deem proper, appoint a successor Collateral
Agent meeting the qualifications specified in this Section 6.3(g). The Lenders
hereby consent to such petition and appointment so long as such criteria are
met. The term "Collateral Agent" shall mean the successor agent effective upon
its appointment and upon its acceptance of such appointment, and the former
Collateral Agent's rights, powers and duties as Collateral Agent shall be
terminated, without any other or further act or deed on the part of such former
Collateral Agent or any of the parties to this Section 6 or the Security
Documents, and the Successor Collateral Agent shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent. The resigning or removed Collateral Agent agrees that it shall take all
actions and execute all documents which may be reasonably required by the
Lenders and the Successor Collateral Agent to give effect to its replacement as
the Collateral Agent hereunder and shall be fully indemnified under the terms of
this Section 6 in so doing. After the Collateral Agent's resignation or removal
hereunder as Collateral Agent, the provisions of this Section 6.3 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Collateral Agent under this Section 6.

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                  6.4      Actions by Collateral Agent.

                           (a)      Duties; Liabilities. The only duties and
liabilities which the Collateral Agent shall have are those set forth in this
Agreement and in the Security Documents.

                           (b)      Requesting Instructions. The Collateral
Agent may at any time request directions from the Lenders as to any course of
action or other matter relating to the performance of its duties under this
Agreement and the Security Documents, and the Lenders shall promptly comply with
such request. Directions given to the Collateral Agent by the Majority Lenders
shall be binding on each of the Lenders. The Collateral Agent, in taking action
pursuant to this Section 6.4, shall be entitled to rely on instructions given by
the Majority Lenders.

                           (c)      Emergency Actions. If the Collateral Agent
requests instructions from the Lenders as to any action to be taken with regard
to an Event of Default and if the Lenders do not respond to such request within
two (2) days after transmittal of such request by the Collateral Agent, the
Collateral Agent shall be authorized to take such actions with regard to such
Event of Default which the Collateral Agent, in good faith, believes to be
reasonably required to promote and protect the interests of the Lenders and to
maximize both the value of the Collateral and the present value of the recovery
by each of the Lenders on the Liabilities; provided, however, that once
instructions have been received from the Majority Lenders which comply with
Section 6.4(h) hereof, the actions of the Collateral Agent shall be governed
thereby and the Collateral Agent shall not take any further action which would
be contrary thereto regardless of whether compliance with such instructions by
the Collateral Agent would cause any loss to the Lenders or to the value of the
Collateral because of any actions in progress which were undertaken by the
Collateral Agent prior to receiving such instructions.

                           (d)      Changes to Security Documents. Any term of
the Security Documents may be amended, and the performance or observance by the
parties to a Security Document of any term of such Security Document may be
waived (either generally or in a particular instance and either retroactively or
prospectively) by the Collateral Agent only upon the written consent of the
Majority Lenders. In any case, no amendment, waiver, or consent shall, unless in
writing and signed by the Collateral Agent, affect the rights or duties of the
Collateral Agent under such Security Documents. This provision shall not
restrict the right of the Lenders to amend documents other than the Security
Documents as long as such amendments do not change the terms of the Security
Documents.

                           (e)      Release of Collateral. The Collateral Agent
shall not release any Collateral without the written consent of all the Lenders,
except releases of Collateral as may be expressly permitted by the Notes or the
IP Security Agreement.

                           (f)      Expenses of Release and Reinstatement. The
Corporation shall pay all costs and expenses of the Collateral Agent and the
Lenders incurred in connection with any release of Collateral, including, but
not limited to, all costs and fees of all lien searches deemed necessary by the
Collateral Agent and all costs and expenses relating to financing statement
filings and terminations and document review and preparation, including but not

                                      -11-

<PAGE>

limited to reasonable fees and expenses of counsel for the Collateral Agent
relating to any of the foregoing.

                           (g)      Administrative Actions. The Collateral Agent
shall have the right to take such actions, or omit to take such actions,
hereunder and under the Security Documents not inconsistent with the
instructions of the Majority Lenders, or the terms of this Agreement, including
without limitation actions the Collateral Agent deems necessary or appropriate
to perfect or continue the perfection of the liens on the Collateral for the
benefit of the Lenders or to protect or insure the Collateral. Except as
provided above and as otherwise provided pursuant to applicable law, the
Collateral Agent shall have no duty as to the collection or protection of the
Collateral or any income thereon, nor as to the preservation of rights against
prior parties, nor as to the preservation of rights pertaining to the Collateral
beyond the safe custody of any Collateral in the Collateral Agent's possession.

                           (h)      Exercise of Remedies. Except as otherwise
provided in Section 6.4(c), the Collateral Agent shall only be authorized to
take such actions under the Security Documents and to enforce or prepare to
enforce the remedies available under such Security Documents as are approved in
a written notice by the Majority Lenders. In furtherance of the foregoing, the
Collateral Agent agrees to make such demands and give such notices under the
Security Documents as may be requested by the Majority Lenders, and to take such
action to enforce the Security Documents and to foreclose upon, collect and
dispose of the Collateral or any portion thereof as may be directed by the
Majority Lenders; provided, however, that (i) the Collateral Agent shall not be
required to take any action that is in its opinion contrary to law or the terms
of any Note, the Security Documents or this Section 6 and (ii) the Collateral
Agent shall not be required to take any action unless, upon its request, it is
indemnified in accordance with the provisions of Section 6.3(f) hereof.

                           (i)      Application of Proceeds. All amounts owing
with respect to the Liabilities shall be secured pro rata by the Collateral
without distinction as to whether some Liabilities are then due and payable and
other Liabilities are not then due and payable. Upon any realization upon the
Collateral by the Collateral Agent, the Lenders agree that the proceeds thereof
shall be applied (i) first, to the payment of expenses incurred by the
Collateral Agent with respect to maintenance and protection of the Collateral
and of expenses incurred with respect to the sale of or realization upon any of
the Collateral or the perfection, enforcement or protection of the rights of the
Lenders (including reasonable attorneys' fees and expenses of every kind,
including, without limitation, reasonable allocated costs of staff counsel);
(ii) second, equally and ratably to all amounts of interest, expenses and fees
constituting a part of the Liabilities, according to the aggregate amounts
thereof owing to each Lender on the Notice Date; (iii) third, equally and
ratably to all amounts of principal constituting a part of the Liabilities,
according to the aggregate amounts thereof owing to each Lender on the Notice
Date; (iv) fourth, equally and ratably to other amounts then due to the Lenders
under the Notes (including but not limited to all fees, expenses and premiums)
with amounts prorated, if necessary, based on the aggregate amounts thereof then
owing to each Lender; and (v) fifth, the balance, if any, shall be returned to
the Corporation or such other Persons as are entitled thereto.

                           (j)      Retention and Investment of Proceeds.
Proceeds which, due to their nature, due to a restraining order or otherwise are
not permitted to be applied as set forth

                                      -12-

<PAGE>

above, or due to the Collateral Agent determining it to be impractical to divide
and apply such proceeds to the payment of the Liabilities, shall be held by the
Collateral Agent or, as the case may be, the Lender receiving such proceeds as
agent for the Lenders until such proceeds (i) are converted into cash, (ii) are
permitted to be applied or (iii) become practical to divide at which time such
proceeds shall be applied in accordance with the terms of this Agreement.

                  6.5      Other Collateral, Duty to Notify, Cooperation,
Marshalling.

                           (a)      Additional Collateral. The Lenders agree
that all of the provisions of this Section 6 shall apply to any and all
properties, assets and rights of the Corporation in which the Collateral Agent,
at any time, acquires a security interest or lien pursuant to the Security
Documents.

                           (b)      Notification of Default or Event of Default.
Upon the occurrence of any Event of Default, the Corporation or any Lender with
knowledge thereof shall promptly notify the Collateral Agent thereof, such
notice to be given in accordance with Section 6.3(d) and Section 12.2 hereof.

                           (c)      Cooperation; Accountings. To the extent that
the exercise of the rights, powers and remedies of the Collateral Agent in
accordance with this Agreement requires that any Lender take (or omit to take)
any action, such Lender shall take (or omit to take) such action and cooperate
with the Collateral Agent to ensure that the rights, powers and remedies of all
Lenders are exercised in full. Each of the Lenders will, upon the reasonable
request of another Lender, from time to time execute and deliver or cause to be
executed and delivered such further instruments and do and cause to be done (or
refrain from doing) such further acts as may be necessary or proper to carry out
more effectively the provisions of this Section 6.

                           (d)      Marshalling. The Collateral Agent shall not
be required to marshal any present or future security for (including, without
limitation, the Collateral), or guarantees of, the Liabilities or any of them,
or to resort to such security or guaranties in any particular order; and all of
each of such Person's rights in respect of such security and guaranties shall be
cumulative and in addition to all other rights, however existing or arising. To
the extent that they lawfully may, the Lenders hereby agree that they will not
invoke any law relating to the marshalling of collateral which might cause delay
in or impede the enforcement of the Lenders' rights under the Security Documents
or under any other instrument evidencing any of the Liabilities or under which
any of the Liabilities is outstanding or by which any of the Liabilities is
secured or guaranteed, and to the extent that they lawfully may, the Lenders
hereby irrevocably waive the benefits of all such laws.

                           (e)      No Other Collateral. No Lender shall take
any security interest in the personal property or liens upon the real property
of the Corporation other than security interests and liens which are governed by
the terms of this Section 6 and held in the name of the Collateral Agent for the
benefit of all Lenders.

                           (f)      Purchase of Collateral. Any Lender may
purchase all or any part of the Collateral at any public or private sale of such
Collateral and may make payment on account thereof by using any claim then due
and payable to such Lender from the Persons which

                                      -13-

<PAGE>

granted a security interest in such Collateral as a credit against the purchase
price only to the extent approved by the Majority Lenders. Such Lender shall
comply with Article 9 of the UCC of the relevant jurisdiction as an Lender,
notwithstanding that the Collateral Agent holds the security interest pursuant
to this Agreement. Each of the Lenders shall cooperate with each other Lender
and with the Collateral Agent in order to obtain the maximum sale price
reasonably possible upon any foreclosure or other sale of all or any part of the
Collateral. In addition to the foregoing, all sales, transfers and other
dispositions of any Collateral shall be accomplished in a commercially
reasonable manner.

                  6.6 Corporation's Dealings with Collateral Agent. In all of
its dealings with the Collateral Agent, the Corporation shall be entitled to
rely on the acts of the Collateral Agent as being the authorized acts of the
Lenders and the Collateral Agent as being authorized and empowered to take all
such action or failure to take such action, as the case may be, provided that
the Corporation has no knowledge to the contrary.

         SECTION 7. Expenses and Fees. The Corporation shall pay, and hold
HealthCare Ventures VI, L.P. harmless against all liability for the payment of,
all reasonable costs and other reasonable expenses incurred by HealthCare
Ventures VI, L.P. in connection with the Corporation's performance of and
compliance with all agreements, instruments and conditions contained herein or
contemplated hereby on its part to be performed or complied with. The
Corporation agrees to pay all reasonable costs, expenses and transfer taxes
incurred by HealthCare Ventures VI, L.P., in connection with, arising out of, or
incidental to the discussion, evaluation, negotiation, preparation,
documentation, execution, delivery, filing, administration, modification,
amendment and enforcement of this Agreement, the IP Security Agreement, the
Notes and any other documents to be delivered under this Agreement, including
the fees and out-of-pocket expenses of counsel for HealthCare Ventures VI, L.P.
with respect thereto and with respect to advising the Lenders as to their rights
and responsibilities under this Agreement, the IP Security Agreement, the Notes
and the other Security Documents. The Corporation further agrees that it will
pay, and hold each of the Lenders harmless from, any and all liability with
respect to any stamp or similar taxes which may be determined to be payable in
connection with the execution and delivery of this Agreement or any
modification, amendment or alteration of the terms or provisions of this
Agreement and that it will similarly pay, and hold each of the Lenders harmless
from, all issue taxes in respect of the issuance of the Notes and/or the
securities into which the Notes may be converted to each of the Lenders;
provided that the Corporation shall have no obligation to pay for any income or
similar taxes incurred by the Lenders in connection with the issuance of the
Notes and/or the securities into which the Notes may be converted.

         SECTION 8. Brokers or Finders. The Corporation represents and warrants
to each of the Lenders, and each of the Lenders, as to itself, represents and
warrants to the Corporation, that no person or entity has or will have, as a
result of the Loan, the issuance of the Notes or the securities into which the
Note may be converted, any right, interest or valid claim against or upon the
Corporation or the Lenders for any commission, fee or other compensation as a
finder or broker because of any act or omission by the Corporation or the
Lenders or by any agent of the Corporation or the Lenders.

                                      -14-

<PAGE>

         SECTION 9. Indemnification.

                  9.1 The Corporation, on the one hand, and the Lenders, on the
other hand (for the purposes of this Section 9, each of the Corporation and the
group of Lenders is a "PARTY") (each, an "INDEMNIFYING PARTY"), shall indemnify,
defend and hold the other party and their respective officers, directors,
agents, employees, subsidiaries, partners, members and controlling persons
(each, an "INDEMNIFIED PARTY") harmless against any and all liabilities, loss,
cost or damage, together with all reasonable costs and expenses related thereto
including legal and accounting fees and expenses (collectively, "LOSSES"),
arising from, relating to, or connected with the untruth, inaccuracy or breach
of any material statements, representations, warranties or covenants by such
party contained herein, including, but not limited to, all statements,
representations, warranties or covenants concerning environmental matters of
such party.

                  9.2 The Corporation shall indemnify, defend and hold each
Indemnified Party harmless against any and all Losses arising from, relating to
or connected with any material claims, actions, suits or arbitrations relating
to any Indemnified Party's role in connection with the Corporation as a Lender,
stockholder, director or otherwise.

         SECTION 10. Remedies. In case any one or more of the representations,
warranties, covenants and/or agreements set forth in this Agreement shall have
been breached by any party hereto, the party or parties entitled to the benefit
of such representations, warranties, covenants or agreements may proceed to
protect and enforce their rights either by suit in equity and/or action at law,
including, but not limited to, an action for damages as a result of any such
breach and/or an action for specific performance of any such covenant or
agreement contained in this Agreement, in addition to, and not to the exclusion
of, any other remedy. The rights, powers and remedies of the parties under this
Agreement are cumulative and not exclusive of any other right, power or remedy
which such parties may have under any other agreement or law. No single or
partial assertion or exercise of any right, power or remedy of a party hereunder
shall preclude any other or further assertion or exercise thereof.

         SECTION 11. Pre-Conditions to Loan.

                  11.1     Conditions Precedent of Lenders. The several
obligations of the Lenders to make the Loan to the Corporation are subject to
the satisfaction of the following conditions precedent:

                           (a)      All waivers and consents to be obtained in
connection with the transactions contemplated by or incident to the Loan, this
Agreement, the IP Security Agreement, the issuance of the Notes shall be
satisfactory to each Lender and its counsel, and each Lender and its counsel
shall have received copies (executed or certified, as may be appropriate) of all
documents which such Lender or its counsel may reasonably have requested in
connection with such transactions.

                           (b)      All legal matters incident to the Loan and
the transactions contemplated by the Loan, this Agreement, the IP Security
Agreement, the issuance of the Notes and the securities into which the Notes may
be converted shall be satisfactory to each Lender's counsel, and the Lenders
shall have received from Piper Rudnick LLP, counsel for the

                                      -15-

<PAGE>

Corporation, such firm's opinion addressed to the Lenders and dated the date of
the Closing in form and substance satisfactory to Lender's counsel.

                           (c)      All consents, permits, approvals,
qualifications and/or registrations required to be obtained or effected prior to
or upon the Loan and the issuance of the Notes under any applicable securities
or "Blue Sky" laws of any jurisdiction shall have been obtained or effected.

                           (d)      The Corporation shall have delivered to the
Lenders a certificate or certificates, dated the Closing Date, of the Secretary
of the Corporation certifying as to (i) the resolutions of the Corporation's
Board of Directors and stockholders authorizing the execution and delivery of
this Agreement and the IP Security Agreement, the issuance to the Lenders of the
Notes, the execution and delivery of such other documents and instruments as may
be required by this Agreement, the IP Security Agreement or the Notes, and the
consummation of the transactions contemplated hereby, and certifying that such
resolutions were duly adopted and have not been rescinded or amended as of said
date, and (ii) the name and the signature of the officers of the Corporation
authorized to sign, as appropriate, this Agreement and the other documents and
certificates to be delivered pursuant to this Agreement by either the
Corporation or any of its officers.

                           (e)      The Corporation shall have duly executed the
IP Security Agreement in substantially the form attached hereto as Exhibit C.

                           (f)      The Corporation shall have delivered to the
Lenders a certificate or certificates, dated the date of Closing, of the
President of the Corporation certifying that the representations and warranties
made by the Corporation in this Agreement are true, correct and complete as of
the date of such Certificate and that all actions required to be taken by the
Corporation under this Agreement have been taken.

                           (g)      Certain members of the Corporation's Board
of Directors have delivered to Lenders a letter, in form and substance
satisfactory to the Lenders, regarding their roles on the Corporation's Board of
Directors.

                  11.2     Conditions to Obligations of the Corporation. It
shall be a condition precedent to the obligations of the Corporation hereunder
to be performed at the Closing, as to each Lender severally, but not jointly,
that the representations and warranties contained in Section 3 of this Agreement
of each of the Lenders hereunder shall be true and correct as of the date
hereof.

         SECTION 12. Miscellaneous.

                  12.1     Successors and Assigns. Except as otherwise expressly
provided herein, this Agreement shall bind and inure to the benefit of the
Corporation and each of the Lenders and the respective permitted successors and
assigns of each of the Lenders and the permitted successors and assigns of the
Corporation. Neither this Agreement nor any of the rights or duties of the
Corporation set forth herein shall be assigned by the Corporation, in whole or
in part, without having first received the written consent of the Majority
Lenders. Neither this Agreement nor any of the rights or duties of the Lenders
set forth herein shall be assigned by the

                                      -16-

<PAGE>

Lenders, in whole or in part, without having first received the written consent
of the Corporation (other than a transfer to an Affiliate of such Lender or a
Person that is a member of such Lender's Group, as such term is defined in the
Stockholders' Agreement). For purposes of this Section 12.1 only, "AFFILIATE"
means (a) with respect to any Lender who is a natural person, each member of
such Lender's immediate family; and (b) with respect to any Lender that is a
corporation, partnership, trust or limited liability company (collectively, an
"ENTITY"), (i) each Entity that such Lender controls and (ii) each Entity that
is under common control with such Lender.

                  12.2     Entire Agreement. This Agreement, together with the
other writings referred to herein or delivered pursuant hereto which form a part
hereof, contains the entire agreement among the parties with respect to the
subject matter hereof and amends, restates and supersedes all prior and
contemporaneous arrangements or understandings, whether written or oral, with
respect thereto.

                  12.3     Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or duly sent by first
class registered, certified or overnight mail, postage prepaid, or telecopied
with a confirmation copy by regular mail, addressed or telecopied, as the case
may be, to such party at the address or telecopier number, as the case may be,
set forth below or such other address or telecopier number, as the case may be,
as may hereafter be designated in writing by the addressee to the addressor
listing all parties:

                           (a)      if to the Corporation, to:

                                         Advancis Pharmaceutical Corporation
                                         656 Quince Orchard Road, Suite 220
                                         Gaithersburg, MD 20878
                                         Attention: Edward M. Rudnic, Ph.D.,
                                                    President and CEO
                                         Telecopier: (240) 683-9853

                                         with a copy to:

                                         Piper Rudnick LLP
                                         6225 Smith Avenue
                                         Baltimore, Maryland 21209-3600
                                         Attention: Howard S. Schwartz, Esquire
                                         Telecopier: (410) 580-3251

                           (b)      if to Lenders, as set forth on Schedule 1

                                         with a copy to:

                                         Pepper Hamilton LLP
                                         400 Berwyn Park
                                         899 Cassatt Road
                                         Berwyn, Pennsylvania 19312

                                      -17-

<PAGE>

                                         Attention: Jeffrey P. Libson, Esquire
                                         Telecopier: (610) 640-7835

All such notices, requests, consents and other communications shall be deemed to
have been received: (a) in the case of personal delivery, on the date of such
delivery; (b) in the case of mailing, on the third business day following the
date of such mailing; (c) in the case of overnight mail, on the first business
day following the date of such mailing; and (d) in the case of facsimile
transmission, when confirmed by the sender's facsimile machine report.

                  12.4     Changes. The terms and provisions of this Agreement
may not be modified or amended, or any of the provisions hereof waived,
temporarily or permanently, except pursuant to a writing executed by a duly
authorized representative of the Corporation and the Majority Lenders.

                  12.5     Counterparts. This Agreement may be executed in any
number of counterparts, and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.

                  12.6     Headings. The headings of the various sections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be a part of this Agreement.

                  12.7     Nouns and Pronouns. Whenever the context may require,
any pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice-versa.

                  12.8     Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

                  12.9     Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard for the conflicts or choice of laws rules of any jurisdiction.

                                  [SIGNATURE PAGES FOLLOW]

                                      -18-

<PAGE>

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

                                      ADVANCIS PHARMACEUTICAL CORPORATION

                                      By: /s/ Edward M. Rudnic
                                          -----------------------------
                                          Edward M. Rudnic, Ph.D.
                                          President and Chief Executive Officer

                                      COLLATERAL AGENT:

                                      HEALTHCARE VENTURES VI, L.P.

                                      By: HealthCare Partners VI, L.P.,
                                          as General Partner

                                      By: /s/ Jeffrey Steinberg
                                          ------------------------------
                                          General Partner

                                      LENDERS:

                                      HEALTHCARE VENTURES VI, L.P.

                                      By: HealthCare Partners VI, L.P.,
                                          as General Partner

                                      By: /s/ Jeffrey Steinberg
                                          -------------------------------
                                          General Partner

                                          /s/
                                      -----------------------------------
                                      By: _______________________________
                                      Its: ______________________________

                                      -19-

<PAGE>

                                   SCHEDULE 1

<TABLE>
<CAPTION>
             LENDER                                 ADDRESS                            PRINCIPAL
                                                                                          LOAN
                                                                                         AMOUNT

--------------------------------------------------------------------------------------------------------------
<S>                                      <C>                                          <C>
HealthCare Ventures VI, L.P.             44 Nassau Street                             $4,375,000
                                         Princeton, New Jersey  08542-4511
                                         Attn: Jeff Steinberg
                                         Tel.: (609) 430-3900
                                         Fax:  (609) 430-9525

--------------------------------------------------------------------------------------------------------------
Targeted Entrepreneurial Services        900 Route 9                                  $   25,000
                                         Woodbridge, New Jersey  07095
                                         Attn: Len Green
                                         Tel.: (732) 634-5100
                                         Fax:  (732) 634-8602

                                         with a copy to:

                                         Targeted Entrepreneurial Services
                                         c/o Salomon Smith Barney
                                         388 Greenwich Street, 29th Floor
                                         New York, New York  10013
                                         Attn: Marshall V. Kaplan
                                         Tel.: (212) 816-6704
                                         Fax:  (212) 816-9005
--------------------------------------------------------------------------------------------------------------
Rho Management Trust, I                  c/o Rho Capital Partners, Inc.               $  473,500
                                         152 West 57th Street, 23rd Floor
                                         Ne York, New York  10019
                                         Attn: Mark Leschly

--------------------------------------------------------------------------------------------------------------
Private Equity Holding, L.L.C.           c/o Howard Hughes Medical Institute          $   76,000
                                         4000 Jones Bridge Road
                                         Chevy Chase, Maryland  20815
                                         Attn: Lisa G. Snyder
                                         Tel.: (301) 215-8684
                                         Fax:  (301) 347-3064
--------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -20-

<PAGE>

<TABLE>
<S>                                      <C>                                          <C>
--------------------------------------------------------------------------------------------------------------
DC 1998 NFA Trust FBO Lee Casty          c/o IFX Corporation                          $   45,500
                                         707 Skokie Boulevard
                                         Suite 580
                                         Northbrook, Illinois  60062
                                         Attn: Lee S. Casey
                                         Tel.: (847) 412-1184
                                         Fax: (847) 412-9264
--------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -21-

<PAGE>

                                    EXHIBIT A

                   FORM OF CONVERTIBLE SECURED PROMISSORY NOTE

                                      -22-

<PAGE>

                                    EXHIBIT B

                             SCHEDULE OF EXCEPTIONS

                                      -23-

<PAGE>

                                    EXHIBIT C

                              IP SECURITY AGREEMENT

                                      -24-<PAGE>

                                                                   EXHIBIT 10.12

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THE SECURITIES
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION AND
QUALIFICATION WITHOUT, EXCEPT AS OTHERWISE AGREED BY BORROWER, AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO BORROWER THAT SUCH REGISTRATION AND
QUALIFICATION ARE NOT REQUIRED.

                       CONVERTIBLE SECURED PROMISSORY NOTE

$_________                                                        March __, 2003

                  FOR VALUE RECEIVED, Advancis Pharmaceutical Corporation, a
Delaware corporation with offices at 656 Quince Orchard Road, Suite 220,
Gaithersburg, Maryland 20878 (herein, "BORROWER") promises to pay to the order
of ______________, at its office at ______________, or its designee ("LENDER"),
or at such other place as Lender may designate from time to time in writing, the
principal amount of $__________ (_______) Dollars in lawful money of the United
States of America, together with such interest as is payable, as hereinafter
provided. This Convertible Secured Promissory Note (this "Note") is one of a
series of convertible secured promissory notes issued by Borrower as set forth
in more detail in that certain Note Issuance Agreement dated March __, 2003 (the
"NOTE ISSUANCE AGREEMENT") among Borrower, Lender and the other Lenders (as
defined in the Note Issuance Agreement). Such promissory notes are collectively
referred to as "NOTES" and the holders of the Notes are collectively referred to
as "LENDERS."

                  1.       Advance; Payments.

                           (a) Advance. All principal amounts borrowed under
this Note (each, an "ADVANCE") shall be advanced and delivered to Borrower on
the date of issuance of this Note.

                           (b) Payments. Subject to Sections 6 and 13 below, the
principal balance outstanding hereunder, together with any remaining unpaid
principal and any and all costs, fees, expenses and accrued interest then
outstanding, shall be due and payable on the Maturity Date. The "MATURITY DATE"
shall be the date of the earliest to occur of: (i) the date ninety (90) days
after the date of issuance of this Note; (ii) the consummation of a financing in
which Borrower receives gross proceeds in excess of Fifteen Million Dollars
($15,000,000) exclusive of any amounts converted under the Notes (a "QUALIFIED
FINANCING"); and (iii) the consummation of the sale of all or substantially all
of Borrower's assets or any other transaction (other than an equity investment
in Borrower led by institutional investors, venture capital investors and/or
strategic investors), the result of which is that the holders of Borrower's
issued and outstanding voting capital stock immediately prior to such
transaction own less than a majority of the voting power of the surviving
corporation in such transaction (a "SALE TRANSACTION").

<PAGE>

                  2.       Interest. Interest shall accrue on all amounts
outstanding from time to time hereunder until the Maturity Date at a rate equal
to seven percent (7%) per annum compounding monthly. Following the date on which
any amount is due under this Note, all such amounts outstanding shall thereafter
bear interest until such amounts are paid, at a rate equal to twelve percent
(12%) per annum compounding monthly. The annual interest rate shall be
calculated for the actual days elapsed on the basis of a 360-day year.

                  3.       Transaction Premium. In the event Borrower enters
into a definitive agreement to consummate a Sale Transaction while any amounts
are owed under this Note, in addition to the amounts due under Section 1, upon
consummation of such Sale Transaction, Borrower shall pay to Lender an amount
equal to the maximum amount of principal and interest owed under this Note at
any time from the time immediately prior to the execution of such definitive
agreement through the consummation of the Sale Transaction.

                  4.       Security.

                           (a) Grant of Security Interest. As collateral
security for the prompt and complete payment and performance of all of
Borrower's obligations and liabilities to Lenders under the Notes (the
"LIABILITIES"), Borrower hereby pledges to, mortgages, assigns, transfers, sets
over and grants to the Collateral Agent, as that term is defined in the Note
Issuance Agreement, a continuing general lien on and security interest in all of
Borrower's right, title and interest in and to all tangible and intangible
property of Borrower, whether now owned or hereafter acquired, including, but
not limited to, Borrower's interest now and in the future in the following types
or items of property (collectively being referred to herein as the
"COLLATERAL"):

                                    (i)      ACCOUNTS - All presently owned and
hereafter acquired accounts, accounts receivable, contract rights, bills,
acceptances, and other forms of obligations arising out of the sale, lease or
consignment of goods or the rendition of services by Borrower; together with any
property evidencing or relating to the Accounts (such as guaranties, credit
insurance, Letters of Credit), any security for the Accounts, all Books and
Records (as hereinafter defined) relating thereto, and all Proceeds (as
hereinafter defined) of any of the foregoing, including returned or reclaimed
inventory.

                                    (ii)     INVENTORY - All presently owned and
hereafter acquired inventory of every nature, kind, and description, wherever
located, including, without limitation, raw materials, goods, work in process,
finished goods, parts or supplies; all goods and property held for sale or lease
or to be furnished under contracts of service; and all goods and inventory
returned, reclaimed or repossessed, together with all Proceeds of any of the
foregoing.

                                    (iii)    EQUIPMENT - All presently owned and
hereafter acquired equipment, whether or not affixed to realty, including,
without limitation, trucks, trailers, motors, tools, dies, parts, jigs, goods,
accessories, handling and delivery equipment, fixtures, improvements, office
machines and furniture, together with all Proceeds of any of the foregoing, and
all accessions, accessories, replacements and the rights of Borrower under any
manufacturer's warranties relating to the foregoing.

                                      -2-
<PAGE>

                                    (iv)     CHATTEL PAPER - All presently owned
and hereafter acquired chattel paper, including, but not limited to, any writing
or writings which evidence both a monetary obligation and a security interest in
or a lease of specific goods, together with all Proceeds of any of the
foregoing.

                                    (v)      GENERAL INTANGIBLES AND
INTELLECTUAL PROPERTY - All presently owned and hereafter acquired intellectual
property and other general intangibles, including, without limitation, any
personal property, choses in action, causes of action, designs, plans, goodwill,
tax refunds, licenses, franchises, trademarks, trademark applications, trade
names, service marks, copyrights, copyright applications, customer lists,
patents, patent applications and specifically including Borrower's software, in
both object code and source code form, and all rights under license agreements
for use of the same, except to the extent that certain agreements may prohibit
the transfer or assignment of the rights thereunder to a third party without the
licensor's or the other party's consent, in which case such rights shall not be
deemed Collateral hereunder, together with all Proceeds of any of the foregoing.

                                    (vi)     INSTRUMENTS - All presently owned
and hereafter acquired instruments, including, without limitation, bills of
exchange, notes, and all negotiable instruments, all certificated securities,
all certificates of deposit and any other writing which evidences a right to the
payment of money and is not itself a security agreement or lease and is of a
type which is in the ordinary course of business transferred by delivery with
any necessary endorsement or assignment, together with all Proceeds of any of
the foregoing.

                                    (vii)    DOCUMENTS - All presently owned and
hereafter acquired documents, including, but not limited to, documents of title
(as that term is defined in the Uniform Commercial Code) and any and all
receipts, including, but not limited to, receipts of the kind described in
Article 7 of the Uniform Commercial Code, together with all Proceeds of any of
the foregoing.

                                    (viii)   LETTERS OF CREDIT - All presently
owned and hereafter acquired letters of credit, including, but not limited to,
any written undertaking to pay money conditioned upon presentation of specified
documents, and advices of letters of credit, together with all Proceeds of any
of the foregoing.

                                    (ix)     PROCEEDS - All presently owned and
hereafter acquired proceeds, as that term is defined in the Uniform Commercial
Code, including, without limitation, whatever is received upon the use, lease,
sale, exchange, collection, any other utilization or any disposition of any of
the Collateral described in this Section 3, whether cash or non-cash, all rental
or lease payments, accounts, chattel paper, instruments, documents, contract
rights, general intangibles, equipment, inventory, substitutions, additions,
accessions, replacements, products, and renewals of, for, or to such property
and all insurance therefor.

                  For purposes of this Note, the term "BOOKS AND RECORDS" means
all of Borrower's books and records, including, but not limited to, records
indicating, summarizing, or evidencing the Collateral, the Liabilities, and
Borrower's property, business operations, or financial condition; computer runs,
invoices, tapes, processing software, processing contracts (such as contracts
for computer time and services) and any computer prepared information, tapes, or
data

                                      -3-
<PAGE>

of every kind and description, whether in the possession of Borrower or in the
possession of third parties. The liens and security interests of the Collateral
Agent in the Collateral shall be first priority perfected liens and security
interests, subject to no liens, encumbrances or security interests of any kind
except those in favor of the Collateral Agent. The liens, encumbrances and
security interests in favor of the Collateral Agent may be retained by the
Collateral Agent until all of Borrower's obligations to Lender hereunder have
been satisfied in full.

                  Notwithstanding anything hereinto the contrary, the property
of Borrower identified on Schedule 4(a) (the "EXCLUDED PROPERTY") shall not be
considered Collateral and the Collateral Agent shall have no lien on, security
interest in, or other right to the Excluded Property.

                           (b) Financing Statements. At the request of the
Collateral Agent, Borrower shall execute and/or deliver financing statements to
the Collateral Agent, in form satisfactory to the Collateral Agent, evidencing
the Collateral Agent's security interest in the Collateral (collectively, the
"FINANCING STATEMENTS"). Moreover, Borrower hereby authorizes the Collateral
Agent to file one or more Financing Statement or continuations thereof, and
amendments thereto pursuant to the Uniform Commercial Code, relative to all or
any part of the Collateral without the signature of Borrower where permitted by
law. A carbon, photographic or other reproduction of this Note, as executed by
all parties, or any financing statement covering the Collateral or any part
thereof shall be sufficient as a Financing Statement where permitted by law.

                           (c) Intellectual Property Security Agreement and
Patent and Trademark Office Filings. Concurrently with the execution hereof,
Borrower shall execute and deliver to the Collateral Agent an Intellectual
Property Security Agreement in form and substance satisfactory to the Collateral
Agent (the "IP SECURITY AGREEMENT"), together with such documents and
instruments as are requested by the Collateral Agent, in form satisfactory to
the Collateral Agent, evidencing the Collateral Agent's security interest in
such of the Collateral as comprises intellectual property, for filing with the
United States Patent and Trademark Office in order to properly perfect the
Collateral Agent's security interest therein (collectively, with the IP Security
Agreement, the "PTO DOCUMENTATION" and together with the Note Issuance
Agreement, the Financing Statements, the Notes, the "LOAN DOCUMENTS").

                           (d) Delivery of Documents; Inspection of Collateral.
At any time and from time to time, upon the demand of the Collateral Agent,
Borrower will, at Borrower's expense: (i) immediately deliver and pledge to the
Collateral Agent, properly endorsed to the Collateral Agent and/or accompanied
by such instruments of assignment and transfer in such form and substance as the
Collateral Agent may request, any and all instruments, documents, and/or chattel
paper as the Collateral Agent may specify in its demand; (ii) give, execute,
deliver, file, and/or record any notice, statement, instrument, document,
agreement, or other papers that may be necessary or desirable, or that the
Collateral Agent may reasonably request, in order to create, preserve, perfect,
or validate any security interest granted pursuant hereto or intended to be
granted hereunder or to enable the Collateral Agent to exercise or enforce its
rights hereunder or with respect to such security interest; (iii) keep, stamp,
or otherwise mark any and all documents, instruments, chattel paper, and its
Books and Records relating to the Collateral in such manner as the Collateral
Agent may require; and/or (iv) permit representatives and agents

                                      -4-
<PAGE>

of the Collateral Agent access to its premises at any reasonable time requested
by the Collateral Agent, following prior notice to Borrower, to inspect the
Collateral and the Books and Records and to audit and make abstracts from the
Books and Records.

                  5.       Events of Default. The occurrence, after the date
hereof, of one or more of the following events shall constitute an event of
default hereunder (an "EVENT OF DEFAULT"):

                           (a) Borrower shall fail to make any payment due to
Lender under this Note or to any other Lender under any of the other Notes as
and when due, whether at maturity, as a result of the occurrence of an Event of
Default, or otherwise.

                           (b) Borrower shall fail to observe or perform any
other covenant or agreement required to be observed or performed by Borrower
under this Note or any other Loan Document or under any document, instrument or
agreement executed and delivered in connection with this note or the
transactions contemplated hereby (collectively, the "RELATED DOCUMENTS"), and
such failure shall continue after the expiration of ten (10) days following the
earlier of (i) notice from the Lender or the Collateral Agent to Borrower of
such failure, or (ii) the date on which Borrower knew or should have known of
such failure.

                           (c) Any representation or warranty of Borrower under
this Note or under any other Loan Document, or under any Related Document, shall
be false or misleading in any material respect.

                           (d) Borrower shall default in the payment of any
other obligation for borrowed money, which default is not cured within any grace
or cure period applicable thereto.

                           (e) If custody or control of any substantial part of
the property of Borrower or any subsidiary shall be assumed by any governmental
agency or any court of competent jurisdiction at the instance of any
governmental agency; if any material license or franchise shall be suspended,
revoked or otherwise terminated; or if any governmental regulatory authority or
judicial body shall make any other final non-appealable determination the effect
of which would be to affect materially and adversely the operations of Borrower
as now conducted.

                           (f) If Borrower shall create, permit or suffer the
creation of any liens, security interests, or any other encumbrances on any of
its property, real or personal, except (i) those in favor of the Collateral
Agent as security for the loans represented by the Notes, (ii) the other valid
and perfected security interests existing as of the date hereof as set forth on,
or additional liens, security interests or other encumbrances as permitted by or
set forth on Schedule 4(a), (iii) those for taxes, assessments or charges of any
governmental authority for claims not yet due or that are being contested in
good faith by appropriate proceedings promptly instituted and diligently
conducted, (iv) those of materialmen, mechanics, warehousemen, carriers or other
similar liens arising in the ordinary course of business, and (v) those liens in
existence on the date hereof in favor of landlords for premises leased by
Borrower; provided that Borrower shall have ten (10) days from the date on which
Borrower became aware or should have become aware of the existence of any
non-permitted lien, security interest or encumbrance to remove, or purge or
satisfy any such lien, security interest or encumbrance that is both
non-consensual and not in favor of any government entity.

                                      -5-
<PAGE>

                           (g) If Borrower shall sell, lease, transfer or
otherwise dispose of all or any portion of its assets, real or personal, other
than such transactions in the normal and ordinary course of business for value
received; or discontinue, liquidate, or change in any material respect any
substantial part of its operations or business(es).

                           (h) If Borrower: becomes bankrupt or generally fails
to pay its debts as such debts become due; is adjudicated insolvent or bankrupt;
admits in writing its inability to pay its debts; or shall suffer a custodian,
receiver or trustee for it or substantially all of its property to be appointed
and if appointed without its consent, not be discharged within thirty (30) days;
makes an assignment for the benefit of creditors; or suffers proceedings under
any law related to bankruptcy, insolvency, liquidation or the reorganization,
readjustment or the release of debtors to be instituted against it and if
contested by it not dismissed or stayed within thirty (30) days; if proceedings
under any law related to bankruptcy, insolvency, liquidation, or the
reorganization, readjustment or the release of debtors is instituted or
commenced by Borrower; if any order for relief is entered relating to any of the
foregoing proceedings; if Borrower shall call a meeting of its creditors with a
view to arranging a composition or adjustment of its debts; or if Borrower shall
by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing.

                           (i) An Event of Default shall occur under the IP
Security Agreement.

                  6.       Remedies.

                           (a) General Rights of Lenders. Upon the occurrence of
an Event of Default, the entire unpaid principal sum hereunder plus any and all
interest accrued hereon shall become due and payable immediately without
presentment, demand, notice of nonpayment, protest, notice of protest, or other
notice of dishonor, all of which are hereby expressly waived by Borrower.

                           (b) Remedies Under IP Security Agreement. Upon the
occurrence of an Event of Default, the Collateral Agent may employ any or all of
the remedies available to it under the IP Security Agreement.

                           (c) Right of Setoff. Lender, upon the affirmative
vote or consent of the Lenders who have lent to Borrower a majority of the then
outstanding principal under the Notes (the "MAJORITY LENDERS"), shall have the
right, without notice to Borrower and regardless of the adequacy of the
Collateral for the Liabilities or other means of obtaining repayment of the
Liabilities, and is specifically authorized hereby to apply toward and set-off
against and apply to the then unpaid balance of the Liabilities any items or
funds of Borrower held by the Lender or any affiliate of the Lender (herein an
"AFFILIATE"), or any other property of Borrower, including, without limitation,
securities, now or hereafter maintained by Borrower for its own account with the
Lender or any Affiliate, and any other indebtedness at any time held or owing by
the Lender or any Affiliate to or for the credit or the account of Borrower. For
such purpose, the Collateral Agent shall have, and Borrower hereby grants to the
Collateral Agent, a first lien on and security interest in such deposits,
property, funds and accounts and the proceeds thereof. Such right of set-off
shall exist whether or not the Lender or the Collateral Agent shall have made
any demand

                                      -6-
<PAGE>

under this Note or any Related Document, or any other document executed in
connection therewith, and whether or not the Liabilities are matured or
unmatured.

                           (d) Additional Rights and Remedies. In addition to
the rights and remedies available to Lenders or the Collateral Agent, as set
forth above, upon the occurrence of an Event of Default hereunder, or at any
time thereafter so long as an Event of Default is continuing, Lenders, upon the
affirmative vote or consent of the Majority Lenders, or the Collateral Agent,
may immediately and without notice, do any or all of the following, which rights
and remedies are cumulative, may be exercised from time to time, and are in
addition to any rights and remedies available to Lenders or the Collateral Agent
under any other agreement or instrument by and between Borrower and Lenders or
the Collateral Agent:

                                    (i)      Exercise any and all of the rights
and remedies of a secured party under the Uniform Commercial Code, including,
without limitation, the right to require Borrower to assemble the Collateral and
make it available to Lenders and the Collateral Agent at a place reasonably
convenient to the parties;

                                    (ii)     Notify the account debtors for any
of the Accounts to make payment directly to the Collateral Agent, or to such
post office box as the Collateral Agent may direct;

                                    (iii)    Demand, sue for, collect, or
retrieve any money or property at any time payable, receivable on account of, or
in exchange for, or make any compromise, or settlement deemed desirable with
respect to any of the Collateral;

                                    (iv)     Notify the post office authorities
to change the address for delivery of Borrower's mail to an address designated
by the Collateral Agent and to receive, open, and distribute all mail addressed
to Borrower, retaining all mail relating to the Collateral and forwarding all
other mail to Borrower; and/or

                                    (v)      Upon not less than ten (10)
calendar days' prior written notice to Borrower (or one (1) day notice by
telephone with respect to Collateral that is perishable or threatens to decline
rapidly in value), which Borrower hereby acknowledges to be sufficient,
commercially reasonable and proper, the Collateral Agent may sell, lease or
otherwise dispose of any or all of the Collateral at any time and from time to
time at public or private sale, with or without advertisement thereof, and apply
the proceeds of any such sale first to Lenders' expenses in preparing the
Collateral for sale (including reasonable attorneys' fees and costs and fees of
the Collateral Agent), second to the complete satisfaction of the Liabilities in
any order deemed appropriate by the Collateral Agent in its sole discretion, and
third, the balance, if any, shall be returned to Borrower. Borrower waives the
benefit of any marshaling doctrine with respect to Lenders' or the Collateral
Agents exercise of their rights hereunder. Borrower grants a royalty-free
license to Lenders for all patents, service marks, trademarks, tradenames,
copyrights, computer programs and other intellectual property and proprietary
rights sufficient to permit Lenders to exercise all rights granted to Lenders
and the Collateral Agent under this Section. Lenders or anyone else may be the
purchaser of any or all of the Collateral so sold and thereafter hold such
Collateral absolutely, free from any claim or right of whatsoever kind,
including any

                                      -7-
<PAGE>

equity of redemption of Borrower or any other obligor, any such notice, right
and/or equity of redemption being hereby expressly waived and released.

                           (e) Grant of Power of Attorney.

                                    (i)      Collateral Agent as
Attorney-in-Fact. Borrower hereby irrevocably appoints the Collateral Agent, on
behalf of the Lenders (and any of its attorneys, officers, employees, or agents)
as its true and lawful attorney-in-fact, said appointment being coupled with an
interest, with full power of substitution, in the name of Borrower, Lenders, or
otherwise, for the sole use and benefit of Lenders in its sole discretion, but
at Borrower's expense, to exercise, to the extent permitted by law, in its name
or in the name of Borrower or otherwise, the powers set forth herein, following
the occurrence of an Event of Default hereunder (except as to clause (iii),
which power may be exercised at any time), such powers, including, but not
limited to, the power at any time: (i) to endorse the name of Borrower upon any
instruments of payment, invoice, freight, or express bill, bill of lading,
storage, or warehouse receipt relating to the Collateral; (ii) to demand,
collect, receive payment of, settle, compromise, or adjust all or any of the
Collateral; (iii) to sign and file one or more financing statements naming
Borrower as debtor and Lenders as secured party and indicating therein the types
or describing the items of Collateral herein specified; (iv) to correspond and
negotiate directly with insurance carriers; and (v) to execute any notice,
statement, instrument, agreement, or other paper that Lenders may require to
create, preserve, perfect, or validate any security interest granted pursuant
hereto or to enable Lenders to exercise or enforce its rights hereunder, under
any Related Document, or with respect to such security interest.

                                    (ii)     Liability of Lenders as
Attorney-in-Fact. Neither the Collateral Agent nor its attorneys, officers,
employees, or agents shall be liable for acts, omissions, any error in judgment,
or mistake in fact in its/their capacity as attorney-in-fact. Borrower hereby
ratifies all lawful acts of the Collateral Agent as its attorney-in-fact. This
power, being coupled with an interest is irrevocable until the liabilities have
been fully satisfied. Lenders shall not be required to take any steps necessary
to preserve any rights against prior parties with respect to any of the
Collateral.

                           (f) Termination. Collateral Agent's lien and security
interest in the Collateral shall terminate upon Borrower's satisfaction of the
Liabilities (whether through repayment of amounts owed to Lender hereunder,
conversion of this Note in accordance with Section 13 below or otherwise) and
upon such termination Collateral Agent shall execute any and all releases and
other documentation reasonably requested by Borrower.

                  7.       Remedies Cumulative, etc.

                           (a) No right or remedy conferred upon or reserved to
Lenders or the Collateral Agent hereunder or now or hereafter existing at law or
in equity is intended to be exclusive of any other right or remedy, and each and
every such right or remedy shall be cumulative and concurrent, and in addition
to every other such right or remedy, and may be pursued singly, concurrently,
successively or otherwise, at the sole discretion of Lenders or the Collateral
Agent, as applicable, and shall not be exhausted by any one exercise thereof but
may be exercised as often as occasion therefor shall occur.

                                      -8-
<PAGE>

                           (b) Borrower hereby waives presentment, demand,
notice of nonpayment, protest, notice of protest, notice of dishonor and any and
all other notices in connection with any default in the payment of, or any
enforcement of the payment of, all amounts due under this Note. To the extent
permitted by law, Borrower waives the right to any stay of execution and the
benefit of all exemption laws now or hereafter in effect.

                           (c) Borrower agrees that any action or proceeding
against it to enforce the Note may be commenced in state or federal court in any
county in the State of Delaware or in state or federal court in any county in
which any of the Lenders or any subsequent Note holder has an office, and
Borrower waives personal service of process and agrees that a summons and
complaint commencing an action or proceeding in any such court shall be properly
served and shall confer personal jurisdiction if served by registered or
certified mail in accordance with the notice provisions set forth herein.

                  8.       Costs and Expenses. Following the occurrence of any
Event of Default, Borrower shall pay upon demand all reasonable costs and
expenses (including all attorneys' fees and expenses) incurred by Lenders
(including fees and costs of or related to the Collateral Agent) in the exercise
of any of its rights, remedies or powers under this Note and any amount thereof
not paid promptly following demand therefor shall bear interest as set forth in
Section 2 hereof, from the date of such demand until paid in full.

                  9.       Pari Passu Notes. Lender acknowledges and agrees that
the payment of all or any portion of the outstanding principal amount of this
Note and all interest hereon shall be pari passu in right of payment and in all
other respects to the other Notes. In the event Lender receives payments in
excess of its pro rata share of Borrower's payments to all of the Lenders, then
Lender shall hold in trust all such excess payments for the benefit of the other
Lenders and shall pay such amounts held in trust to such other Lenders upon
demand by such Lenders.

                  10.      Payments Free of Taxes, Etc. All payments made by
Borrower under this Note shall be made by Borrower free and clear of and without
deduction for any and all present and future taxes, levies, charges, deductions
and withholdings unless required by law. In addition, Borrower shall pay upon
demand any stamp or other taxes, levies or charges of any jurisdiction with
respect to the execution, delivery, registration, performance and enforcement of
this Note. Upon request by Lenders or the Collateral Agent, Borrower shall
furnish evidence satisfactory to Lenders that all requisite authorizations and
approvals by, and notices to and filings with, governmental authorities and
regulatory bodies have been obtained and made and that all requisite taxes,
levies and charges have been paid.

                                      -9-
<PAGE>

                  11.      Prepayment. Borrower may not prepay any amounts owed
under this Note unless it has received the prior written consent of the Majority
Lenders to such prepayment. Any amount prepaid under this Section 11 shall be
applied first to accrued and unpaid interest under this Note and then to
outstanding principal hereon.

                  12.      Replacement. Upon receipt by Borrower from Lender of
evidence of the loss, theft, destruction, or mutilation of this Note, Borrower
shall, at Lender's expense, execute and deliver a replacement Note,
substantially in the same form as the form of this Note. Such replacement Note
shall be dated the date of this Note.

                  13.      Conversion of Note.

                           (a) Option to Convert. Upon or at any time after the
consummation of a Qualified Financing and while any amounts are owed under this
Note, Lender may, at its option, elect to convert all or a portion of such owed
amounts into the class and type of securities sold in the first such Qualified
Financing on a dollar for dollar basis at the purchase price per security in
such Qualified Financing, subject to adjustment in the manner prescribed in
Section 13(g) (the "CONVERSION PRICE").

                           (b) Notice of Sale. Not less than 10 days prior to
the occurrence of the next proposed Qualified Financing after the date of
issuance of this Note, Borrower shall give written notice to Lender of such
proposed financing. Such notice shall explain in reasonable detail the per
security purchase price at which such securities are proposed to be sold or
issued, and the per security purchase price of all other securities of Borrower
that are to be sold within two weeks of the first such sale or issuance, the
date on which the first sale occurred or is expected to occur, and the rights,
preferences and obligations of such securities proposed to be sold.

                           (c) Election to Convert. If Lender decides to convert
any amounts owed under the Note, it shall deliver written notice, in a form
substantially similar to Exhibit A (the "NOTICE OF CONVERSION") to Borrower of
its intent to convert such amounts into securities issued or to be issued in the
Qualified Financing (the "CONVERTED AMOUNT"). Until such time as the Converted
Amount is, in fact, converted into such securities, it shall continue to accrue
interest at the rate prescribed in this Note. The securities to be issued
hereunder shall have the same terms, rights and preferences as those securities
issued or sold by Borrower in the Qualified Financing, subject to the adjustment
of the per security purchase price as prescribed in Section 13(g). Except for
the delivery of the Notice of Conversion to Borrower, Lender need not take any
further action to effect the conversion; provided, however, that Borrower will
not be obligated to issue certificates evidencing the securities issuable upon
such conversion unless this Note is either delivered to Borrower, or Lender
provides evidence to Borrower as of the date of conversion that this Note has
been lost, stolen or destroyed. Borrower shall issue and deliver, promptly upon
receiving the surrendered Note or the evidence that the Note has been lost,
stolen or destroyed, a certificate or certificates for (i) such number of full
securities to which Lender is entitled upon such conversion in the name of
Lender or to Lender's order; and (ii) a cash payment in the amount of the sum of
the value of any fractional unit, as provided in Section 13(e).

                                      -10-
<PAGE>

                           (d) Automatic Conversion. In the event that the
rights, privileges and preferences of the securities issued in the first
Qualified Financing consummated after the date of this Note are at least as
favorable to the holders thereof as the rights, privileges and preferences of
Borrower's Series D Convertible Preferred Stock are to the holders thereof
solely with respect to the dividends, liquidation preference, conversion,
redemption, and voting rights as set forth in the Borrower's current Certificate
of Incorporation, then, upon the consummation of such Qualified Financing, all
of the amounts owed under this Note shall automatically convert into the class
and type of securities sold in such Qualified Financing on a dollar for dollar
basis at the Conversion Price. Borrower and Lender agree for purposes of the
foregoing sentence that the date after which such securities may be redeemed by
the holder thereof (other than a redemption as a result of a breach of any
representation, warranty, covenant or the like) shall not be a factor to be
considered for purposes of determining whether the rights, privileges and
preferences of the securities sold in such Qualified Financing are at least as
favorable as those of the Series D Convertible Preferred Stock. Upon an
automatic conversion pursuant to this Section 13(d), the Borrower will not be
obligated to issue certificates evidencing the securities issuable upon such
conversion unless this Note is either delivered to Borrower, or Lender provides
evidence to Borrower as of the date of conversion that this Note has been lost,
stolen or destroyed. Borrower shall issue and deliver, promptly upon receiving
the surrendered Note or the notice and evidence stating that the Note has been
lost, stolen or destroyed, a certificate or certificates for (i) such number of
full securities to which Lender is entitled upon such conversion in the name of
Lender or to Lender's order; and (ii) a cash payment in the amount of the sum of
the value of any fractional unit, as provided in Section 13(e).

                           (e) Fractional Units. No fractional units may be
issued upon any conversion of the amounts under this Note. In lieu of any
fractional unit to which Lender would otherwise be entitled, Borrower shall pay
Lender cash equal to the product of such fraction multiplied by the Conversion
Price as of the date of conversion.

                           (f) Effect of Conversion. Upon conversion of this
Note, the Converted Amount in the event of a conversion pursuant to Section
13(c) or all of the amounts owed under this Note in the event of a conversion
pursuant to Section 13(d) shall be deemed paid and this Note will be deemed
cancelled with no further force or effect other than as evidence of Lender's
right to Borrower securities. Notwithstanding the foregoing, if Lender converts
less than all of the amounts owed by Borrower under this Note pursuant to
Section 13(c), Borrower shall, at its own expense, execute and deliver a new
promissory note, substantially in the same form as the form of this Note,
evidencing Borrower's obligation to pay all amounts that remain unpaid under
this Note. Such new promissory note shall be dated the date of this Note.

                           (g)      Adjustments to Conversion Price.

                                    (i)      Dividend, Split or Subdivision of
Securities. If the number of securities issued in the Qualified Financing (the,
"SECURITIES") is increased or deemed increased by a dividend payable in
Securities or securities convertible into or exchangeable for Securities
("EQUIVALENTS") or by a subdivision or split-up of Securities or Equivalents,
then, following the effective date fixed for the determination of holders of
Securities or Equivalents entitled to receive such dividend, subdivision or
split-up, the Conversion Price shall be appropriately decreased so that the
number of Securities issuable upon a conversion of this Note

                                      -11-
<PAGE>

(the "CONVERSION SECURITIES") following such effective date shall be increased
in proportion to such increase in outstanding Securities (on an as fully
converted basis).

                                    (ii)     Combination of Securities. If, at
any time after the date of the first Qualified Financing following the date of
issuance of this Note, the number of Securities outstanding is decreased by any
sort of combination of the outstanding Securities, then, following the effective
date for such combination, the Conversion Price shall be appropriately increased
and the number of Conversion Securities issuable following such effective date
shall be decreased in proportion to such decrease in outstanding Securities (on
an as fully converted basis).

                                    (iii)    Reorganization; Merger; Etc. If, at
any time after the date of the first Qualified Financing following the date of
issuance of this Note, there shall be any merger, consolidation, exchange of
Securities, recapitalization, reorganization, or other similar event, other than
a Sale Transaction, as a result of which Securities shall be changed into the
same or a different number of securities of another class or classes of
securities of Borrower or another entity, then Lender shall thereafter have the
right to receive upon conversion of this Note, upon the bases and upon the terms
and conditions specified herein and in lieu of the Conversion Securities
theretofore issuable upon conversion, such securities or assets to which Lender
would have been entitled in such transaction had this Note been converted in
full immediately prior to such transaction (without regard to any limitations on
conversion set forth herein), and in any such case appropriate provisions shall
be made with respect to the rights and interests of Lender of this Note such
that the provisions hereof (including, without limitation, provisions for
adjustment of the Conversion Price and of the number of Conversion Securities
issuable upon conversion of the Note) shall thereafter be applicable, as nearly
as may be practicable in relation to any securities or assets thereafter
deliverable upon the conversion hereof. The above provisions shall similarly
apply to successive consolidations, mergers, sales, transfers or share
exchanges.

                                    (iv)     Dividends and Distributions. If
Borrower declares or makes any distribution of its assets (or rights to acquire
its assets) to holders of any class or series of securities as a dividend,
security repurchase, by way of return of capital or otherwise (including any
dividend or distribution to Borrower's stockholders in cash or securities of a
subsidiary) (a "DISTRIBUTION"), Borrower shall provide notice to Lender of such
Distribution at least ten (10) days prior to the record date for the
determination of stockholders entitled to such Distribution.

                                    (v)      Calculations. All calculations
under this Section 13(g) shall be made to the nearest one hundredth of a cent
($.0001) or to the nearest hundredth of a share, as the case may be.

                                    (vi)     Notice of Adjustments. Upon the
occurrence of each adjustment or readjustment pursuant to this Section 13(g),
Borrower, at its own expense, will promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to Lender a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. Borrower will,
upon the written request, at any time, of Lender, furnish or cause to be
furnished to Lender a like

                                      -12-
<PAGE>

certificate setting forth: (i) such adjustments and readjustments; (ii) the
Conversion Price at the time in effect; and (iii) the number of Securities and
the amount, if any, of other property that at the time would be received upon
the conversion of the Note.

                           (h) Reservation of Securities. Borrower shall take
all necessary actions to reserve and keep available out of its authorized
capital stock, solely for the purpose of issuance upon conversion of this Note,
such number and kind of shares of capital stock as may then be issuable upon the
direct and indirect conversion of all amounts owing under this Note. Borrower
covenants that all shares of capital stock which shall be so issuable will, upon
the conversion of this Note as herein provided, be duly and validly issued and
fully paid and nonassessable by Borrower.

                  14.      Notices. All notices required to be given to any of
the parties hereunder shall be in writing and shall be deemed to have been
sufficiently given for all purposes when presented personally to such party or
sent by United States mail, postage prepaid or sent by telecopier, with written
confirmation of successful transmission received by the sender, to such party at
its address set forth below:

                  Borrower:        Advancis Pharmaceutical Corporation
                                   656 Quince Orchard Road
                                   Suite 220
                                   Gaithersburg, Maryland 20878
                                   Attention: Edward M. Rudnic, Ph.D., President
                                              and CEO
                                   Telecopier: (240) 683-9853

                  with a copy to:  Piper Rudnick LLP
                                   6225 Smith Avenue
                                   Baltimore, Maryland 21209-3600
                                   Attention: Howard S. Schwartz, Esquire
                                   Telecopier: (410) 580-3251

                  Lender:          [NAME]
                                   [ADDRESS]
                                   [CITY], [STATE] [ZIP CODE]
                                   Attention: __________________
                                   Telecopier: _________________

                  with a copy to:  Pepper Hamilton LLP
                                   400 Berwyn Park
                                   899 Cassatt Road
                                   Berwyn, Pennsylvania 19312-1183
                                   Attention: Jeffrey P. Libson, Esquire
                                   Telecopier No.: 610.640.7835

Such notice shall be deemed to be given when received if delivered personally or
two days after the date mailed if sent by certified or registered mail. Any
notice of any change in such address

                                      -13-
<PAGE>

shall also be given in the manner set forth above. Whenever the giving of notice
is required, the giving of such notice may be waived in writing by the party
entitled to receive such notice.

                  15.      Severability. In the event that any provision of this
Note is held to be invalid, illegal or unenforceable in any respect or to any
extent, such provision shall nevertheless remain valid, legal and enforceable in
all such other respects and to such extent as may be permissible. Any such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Note, but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.

                  16.      Amendments and Waivers. Except as otherwise provided
in this Note, no modification or amendment hereof, or waiver or consent
hereunder, shall be effective unless (i) made in a writing signed by appropriate
officers of Borrower, (ii) such amendment or modification is approved by the
Majority Lenders, and (iii) such amendment or modification is made to all of the
Notes.

                  17.      Successors and Assigns. This Note may not be sold,
assigned or otherwise transferred by Lender to any party without the prior
written consent of Borrower (other than a transfer to an Affiliate of such
Lender or a Person that is a member of such Lender's Group, as such term is
defined in the Stockholders' Agreement dated as of October 25, 2001, as it may
from time to time be amended, among Borrower and the Investors thereunder). For
purposes of this Section 17 only, "AFFILIATE" means (a) with respect to any
Lender who is a natural person, each member of such Lender's immediate family;
and (b) with respect to any Lender that is a corporation, partnership, trust or
limited liability company (collectively, an "ENTITY"), (i) each Entity that such
Lender controls and (ii) each Entity that is under common control with such
Lender. This Note inures to the benefit of Lender and binds Borrower, and its
permitted successors and assigns, and the words "LENDER" and "BORROWER" whenever
occurring herein shall be deemed and construed to include such respective
permitted successors and assigns.

                  18.      Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of Delaware.

                  19.      Consent to Jurisdiction and Service of Process.
Borrower irrevocably appoints each and every executive officer of Borrower as
its attorneys upon whom may be served, by regular or certified mail at the
address set forth in this Note, any notice, process or pleading in any action or
proceeding against it arising out of or in connection with this Note or any of
the other Loan Documents. Borrower hereby consents that any action or proceeding
against it may be commenced and maintained in any court within the State of
Delaware or in the United States District Court for any District of Delaware by
service of process on any such owner, partner and/or officer. Borrower further
agrees that such courts of the Commonwealth of Delaware and the United States
District Court for any District of Delaware shall have jurisdiction with respect
to the subject matter hereof and the person of Borrower and all Collateral for
the Liabilities.

                            [Signature Page Follows.]

                                      -14-
<PAGE>

                  IN WITNESS WHEREOF, Borrower has duly executed this
Convertible Secured Promissory Note the day and year first above written.

ATTEST:                                   ADVANCIS PHARMACEUTICAL
                                          CORPORATION

By: ________________________________      By: __________________________________
         Name:                                     Name:
         Title:                                    Title:

<PAGE>

                                  SCHEDULE 4(a)
                                EXCLUDED PROPERTY

                  1. All Borrower property pledged in favor of General Electric
Capital Corporation (assignee of Oxford Venture Finance, LLC) pursuant to that
certain Master Loan and Security Agreement dated January 23, 2001, covering
certain scheduled equipment and all additions and attachments thereto, and any
licenses, trademarks, other tangible or intangible property ancillary to such
scheduled equipment, and as to all products, proceeds, rents and profits from
such scheduled equipment including insurance proceeds.

                  2. All Borrower property pledged in favor of General Electric
Capital Corporation pursuant to that certain Master Security Agreement dated
February 12, 2002 (covering certain scheduled equipment and all additions,
attachments, accessories and accession thereto and all substitutions,
replacements or exchange therefor and all insurance and/or other proceeds
thereof).

                  3. All Borrower property pledged in favor of Allfirst Bank
pursuant to that certain Revolving Credit Facility Loan Agreement dated March
15, 2002 (covering certain scheduled equipment and all interests of Borrower in
the securities maintained with Allfirst Bank).

                  4. All Borrower property that may be pledged to Allfirst Bank
pursuant to a loan facility that may be entered into between the Borrower and
Allfirst Ban for up to $5,500,000. It is anticipated that any such facility
would be secured by the equipment to be purchased with the proceeds of the loan
and a cash collateral deposit of $500,000.

                  5. All Borrower property pledged in favor of Seneca Meadows
Corporate Center II LLC, in the form of a Letter of Credit for the benefit of
landlord, pursuant to that certain Lease Agreement dated August 1, 2002.

                  6. Borrower's leasehold interest arising from and created
pursuant to that certain Lease Agreement with Seneca Meadows Corporate Center
II, LLC dated August 1, 2002.

                  7. Borrower's leasehold interest arising from and created
pursuant to that certain Lease Agreement with ARE-940 Clopper Road, LLC dated
August 7, 2000.

                  8. Borrower's leasehold interest arising from and created
pursuant to that certain Lease Agreement with Federal Realty Investment Trust
dated March 1, 2003.

                  9. Borrower's leasehold interest arising from and created
pursuant to that certain Sublease Agreement with ACS Government Services, Inc.
dated November 7, 2001.

                  10. Borrower's leasehold interest in certain office equipment
leased pursuant to those certain Office Equipment Lease Agreements with IOS
Capital, Inc., dated January 1, 2001 and October 1, 2001, respectively.

                  11. All Borrower equipment that may be purchased in the future
and pledged to a lender as collateral for the loans used to finance such
equipment purchases.

<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION

                              NOTICE OF CONVERSION

To: ____________________________                  Dated: ______________________

                  The undersigned, pursuant to the provisions set forth in the
Convertible Secured Promissory Note delivered to ________ on March __, 2003 (the
"NOTE"), hereby irrevocably elects to convert _____________ of the amount owed
by Advancis Pharmaceutical Corporation ("BORROWER") under the Note into the
securities issued by Borrower in the first Qualified Financing following the
date of issuance of the Note, as provided in the Note.

                                    Signature: _________________________________

                                    Name of Entity (if applicable): ____________

                                    Title: _____________________________________

                                    Address:____________________________________

                                    ____________________________________________

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