REIMBURSEMENT AGREEMENT


         THIS REIMBURSEMENT AGREEMENT (this "Agreement") dated as of November 1,
1999, is made by and among NORTH AMERICAN VACCINE,  INC., a Canadian corporation
("Borrower"), and BAXTER INTERNATIONAL INC., a  Delaware corporation ("Baxter").

                                 R E C I T A L S

         A. Borrower  and  Bank of  America,  N.A.  ("Bank")  are  party to that
certain loan  agreement  dated as of November 1, 1999 (as  amended,  modified or
restated  from time to time the "Loan  Agreement"),  pursuant  to which Bank has
agreed to make a revolving  credit  facility  available to Borrower.  Borrower's
obligations  under the Loan  Agreement  are  secured,  in part,  by liens on the
collateral  described in that certain Security Agreement dated as of November 1,
1999,  and that certain Patent and Trademark  Assignment and Security  Agreement
dated as of November 1, 1999 (collectively, the "Bank Security Agreements"). The
Loan Agreement, Bank Security Agreements,  notes, financing statements and other
collateral  documents  related  thereto  are  referred  to  herein  as the "Loan
Documents."

         C. Borrower has requested in connection with such financing that Baxter
guaranty  certain  obligations of Borrower under the Loan Agreement.  Baxter has
entered into that  certain  Guaranty  dated as of November 1, 1999,  in favor of
Bank (the "Guaranty") to guarantee such obligations of Borrower.

         D. Borrower  and  Baxter   have  a  substantial  business  relationship
independent of the Guaranty and Baxter anticipates  obtaining continued benefits
from that  relationship as a result of Borrower's  access to financing under the
Loan Documents.

         E. In consideration of Baxter entering into the Guaranty,  Borrower has
agreed to  indemnify  and  reimburse  Baxter if  Baxter is  required  to pay any
amounts  under  or in  connection  with the  Guaranty.  The  obligations  of the
Borrower  pursuant  to this  Agreement  shall be secured  by certain  collateral
described in that certain  Security  Agreement dated as of November 1, 1999, and
that certain Patent and Trademark  Assignment and Security Agreement dated as of
November 1, 1999 (collectively, the "Baxter Security Agreements").

         NOW, THEREFORE, in consideration  of  the  mutual  covenants  contained
herein, the parties agree as follows:

         1. INDEMNIFICATION BY BORROWER.



                                       1.
<PAGE>

               1.1  Borrower  undertakes  (to the fullest  extent  permitted  by
applicable  law) to indemnify  Baxter and its  affiliates  and their  respective
directors,  officers,  employees  and  agents  (collectively,  the  "Indemnified
Parties") from, and hold said Indemnified Parties harmless against,  any and all
losses,  liabilities,  claims, actions,  proceedings,  suits, damages, costs and
expenses  of any nature  whatsoever  in  connection  with or arising  out of the
Guaranty (collectively, "Losses"), including, without limitation, the reasonable
attorneys' fees and disbursements  (other than attorneys' fees and disbursements
incurred  in  connection  with  the  preparation  of the  Guaranty  and  related
documents) (the "Indemnified Matters").

               1.2  If any Indemnified  Party is  presented  with  any  claim in
writing or any action or proceeding is formally commenced against an Indemnified
Party  which  may  give  rise  to a right  of  indemnification  hereunder,  such
Indemnified  Party shall  promptly  give  written  notice  thereof to  Borrower.
Borrower  may, by delivery of written  notice to such  Indemnified  Party within
thirty (30) days following receipt of such notice,  elect to contest such claim,
action or proceeding in such manner as it deems necessary or advisable, and each
Indemnified  Party  shall  cooperate  with  Borrower  in  connection  therewith.
Notwithstanding  Borrower's  election  to  contest  any such  claim,  action  or
proceeding, if the Indemnified Party reasonably determines that it needs its own
counsel (separate from Borrower's counsel), the Indemnified Party shall have the
right to  participate in its own defense and to have legal counsel of its choice
and  participate in such defense,  at the  Indemnified  Party's cost and expense
(unless such legal counsel is retained as a result of a representation  conflict
with Borrower's counsel),  without in any way impairing  Borrower's  obligations
under this Section 1 to indemnify and hold harmless such Indemnified  Party from
all  Indemnified  Matters.  In the event of any payment by an Indemnified  Party
under the  Guaranty,  Borrower  shall  immediately  upon demand by the  relevant
Indemnified  Party  reimburse  the  Indemnified  Party  for such  payment,  plus
interest  from  the  date  of  payment  by  Indemnified  Party  to the  date  of
reimbursement at an annual rate equal to _____________ percent or, if lower, the
highest rate  permitted by law.  Nothing in this  Agreement  shall  restrict any
Indemnified Party from making any payment under the Guaranty without  contesting
the necessity of such payment if the  Indemnified  Party in good faith  believes
that such payment is due, and any such payment by an Indemnified  Party shall be
subject to reimbursement by Borrower as provided above.

         2.  REPRESENTATIONS  AND  WARRANTIES.  Borrower  hereby  represents and
warrants as follows:

               2.1 ORGANIZATIONAL  STATUS.   Borrower  is  a  corporation   duly
organized,  validly existing and in good standing under the laws of the State of
Canada.

               2.2 POWER AND AUTHORITY. Borrower has full power and authority to
enter into this  Agreement  and perform all of its  obligations  hereunder.  The
execution,  delivery  and  performance  by  Borrower  of this  Agreement  do not
contravene Borrower's charter or bylaws or violate any provision of any statute,
law, rule, regulation,  judgment, order or decree and will not conflict with, or
constitute a breach or default under, any indenture, loan agreement, contract or
other  agreement or instrument to which Borrower is a party or by which Borrower
or any of its property is bound.



                                       2.
<PAGE>

               2.3 GOVERNMENTAL  AUTHORIZATION.  No  authorization,  consent  or
approval  or other  action  by,  and no  notice  to or other  filing  with,  any
governmental  authority or regulatory body is required for the due execution and
delivery by Borrower of this Agreement or the  performance by Borrower of any of
its obligations hereunder.

         3. COVENANTS. Borrower covenants that until Baxter is fully released
from the Guaranty and all indemnity obligations of Borrower under Section 1
above have been met with respect to then existing Losses, Borrower will comply
with Sections 3 and 4 of the Loan Agreement and, if for any reason the Loan
Agreement is terminated or otherwise ceases to be in effect, to comply with the
provisions of Sections 3 and 4 thereof as last in effect.

         4. EXPENSES. Borrower will on demand pay to Baxter the amount of any
and all reasonable costs and expenses, including but not limited to the
reasonable fees and disbursements of its counsel and of any experts or agents,
which Baxter may incur in connection with (i) the exercise or enforcement by
Baxter of any of its rights or remedies hereunder, or (ii) any failure by
Borrower to perform any of its obligations hereunder.

         5. ASSIGNMENT. Without the other party's prior written consent, no
party may assign or delegate any of its rights or obligations hereunder, except
that Baxter may assign its rights (including indemnity rights under Section 1)
as part of any merger, consolidation or restructuring of Baxter or as part of a
transfer of a substantial portion of Baxter's assets. If at any time or times by
sale, assignment, negotiation, pledge or otherwise, Baxter transfers any of the
Obligations (as defined in the Loan Agreement), such transfer shall carry with
it Baxter's rights and remedies under this Agreement with respect to the
Obligations transferred, and the transferee shall become vested with such rights
and remedies whether or not they are specifically referred to in the transfer.
If and to the extent Baxter retains any other Obligations, Baxter shall continue
to have the rights and remedies herein set forth with respect thereto.

         6.  NOTICES.  Any  notice or other communication required or desired to
be served, given or delivered  hereunder shall be  in writing to  the parties at
the addresses set forth below  and shall be deemed to have  been validly served,
given or delivered if given in accordance with the notice provisions of the Loan
Agreement as then in effect or, if the Loan Agreement is not then in effect,  in
accordance with the notice provisions of the Loan Agreement last in effect.

         7.  GOVERNING  LAW. This  Agreement  shall be governed by and construed
under the laws of the State of New York  applicable to contracts  made and to be
performed  in the State of New York.  This  Agreement  shall be given a fair and
reasonable  construction  in  accordance  with the  intention of the parties and
without  regard  to, or aid of,  any  provision  of law which  provides  that an
agreement shall be construed against the drafter thereof.

         8.  SECURITY.  Borrower's  obligations  under this  Agreement  shall be
secured by each of the Baxter Security Agreements.

         9.  MISCELLANEOUS.  Neither this Agreement nor any provision hereof may
be changed,  waived,  discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change,  waiver,
discharge  or  termination  is sought.  This  Agreement  shall be  binding  upon



                                       3.
<PAGE>

Borrower and its  successors  and  assigns,  and all persons  claiming  under or
through  Borrower or any of its  successors  or assigns,  and shall inure to the
benefit of and be enforceable by Baxter and its successors and assigns.



                                       4.

<PAGE>


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

                                      NORTH AMERICAN VACCINE, INC.


                                      By     /s/ Randal Chase
                                             -------------------------------

                                      Name:  Randal Chase, Ph.D.
                                             -------------------

                                      Title: Chief Executive Officer & President
                                             -----------------------------------







                                       BAXTER INTERNATIONAL, INC.

                                       By:     /s/ Steven J. Meyer
                                               ---------------------------

                                       Name:   Steven J. Meyer
                                               ---------------------------

                                       Title:  Corp. Treasurer
                                               ---------------------------



                   [Signature Page to Reimbursement Agreement]