NORTH AMERICAN VACCINE, INC.

                                                                    July 1, 1999
BioChem Pharma Inc.
275 Armand Frappier Blvd
Laval, Quebec H7V 4A7
Canada

Re:   GUARANTY OF $6 MILLION (US) LINE OF CREDIT

Gentlemen:

      As you know, North American  Vaccine,  Inc. ["NVX"] is presently seeking a
line of credit [the "Line of Credit"] from Royal Bank of Canada in the principal
amount of Six Million Dollars (US) [$6,000,000  (US)] [the "Principal  Amount"].
The bank has  indicated  its  intention  to  provide  the Line of  Credit in the
Principal  Amount  to NVX in  accordance  with  the  term  sheet a copy of which
attached hereto provided that it receives an unsecured guaranty [the "Guaranty"]
from BioChem Pharma Inc.  ["BioChem"] in favor of, and in a form  acceptable to,
the bank supporting all amounts drawn down under the Line of Credit.

      This letter is to confirm  the  agreement  between  NVX and BioChem  under
which BioChem will provide the Guaranty of up to the Principal Amount to support
the Line of Credit  proposed to be  extended to NVX by Royal Bank of Canada,  or
any other mutually acceptable lending institution ["Lender"].

1.    PROVISION OF GUARANTY

      a. Subject to approval by its board of directors,  which shall be obtained
on or before July 9, 1999,  BioChem  hereby  agrees to provide  the  Guaranty in
favor of, and in a form  acceptable  to, the Lender up to the Principal  Amount.
The Guaranty shall be furnished to the Lender in  consideration  of the Lender's
commitment  to extend a Line of Credit to NVX in the Principal  Amount.  BioChem
shall execute and deliver such  documents  and  agreements as may be required by
the Lender to  implement  the  Guaranty  in favor of the Lender  within five (5)
business  days of  receiving  the  request of the Lender.  BioChem  shall not be
required  to provide  the  Guaranty  if the Lender  does not provide the Line of
Credit to NVX.

      b. BioChem agrees that the Guaranty shall remain in effect for a period of
not less than twenty-four (24) continuous months ["Guaranty  Period"] to support
the Line of Credit and/or any successor line of credit or other credit  facility
obtained by or for NVX; provided,  however, at no time shall the Guaranty exceed
the Principal  Amount and provided  further that no successor  line of credit or
other credit facility contain terms and condition that are less favorable to NVX
than those  contained in the Line of Credit  collateralized  by the Guaranty and
provided  further that no successor line of credit or other credit facility that
will be  collateralized  by the  Guaranty  shall be entered  into by NVX without
BioChem's  express  written  consent  that  will not be  unreasonably  withheld,
conditioned or delayed.

      c. BioChem  agrees  to provide  NVX with all  reasonable  cooperation  and
assistance  in  obtaining a successor  or  replacement  line of credit,  loan or
credit  facility for NVX if the Line of Credit  expires  unrenewed or unextended
before the  expiration  of the Guaranty  Period,  including  without  limitation
executive and delivery of all documents requested by Lender;  provided,  however
that such cooperation shall not be more onerous to BioChem than that required of
it in the initial  issuance of the Guaranty and provided further that the amount
of the successor or replacement  line of credit that will be  collateralized  by
the Guaranty shall not exceed the Principal Amount.

      d. As a condition  to  BioChem's  obligation  to issue the  Guaranty,  NVX
agrees to give BioChem at least two (2) business days notice of its intention to
draw any borrowings under the Line of Credit. In addition, NVX understands,  and
the relevant  documents  and  agreements  shall  reflect to the greatest  extent
possible, that BioChem's guarantee obligation under the Guaranty shall be one of
collection and that the Lender shall be required to exercise all commercially

<TABLE>
<CAPTION>
<S>                      <C>                    <C>                    <C>

10150 Old Columbia Road  o  Columbia, MD 21046  o  Phone 410-309-7100  o  Fax 410-309-4077

</TABLE>


<PAGE>

BioChem Pharma Inc
July 1, 1999
Page 2 of 8

reasonable  remedies,  short of litigation to final  judgment,  to satisfy NVX's
obligations  under the Line of Credit  prior to  requiring  payments  by BioChem
pursuant to the Guaranty.

2. ISSUANCE OF WARRANT   In consideration  of  BioChem providing the Guaranty to
the Lender as contemplated by Article 1 above, NVX agrees that it shall issue to
BioChem one or more Stock Purchase Warrant(s)  (individually  referred to herein
as the "Warrant" and collectively  referred to herein as the "Warrants") in form
and content  substantially  the same as that  attached  hereto and  incorporated
herein by this reference on the following terms and conditions:

      a.  The exercise price of the Warrants shall be the average of the closing
prices of the common stock of NVX on the American  Stock  Exchange over a period
of five trading days commencing on June 28, 1999 and ending July 2, 1999.

      b.  If the Line of Credit is drawn down by NVX for the full  amount of the
Principal  Amount,  BioChem  shall  be  entitled  to one or more  Warrant(s)  to
purchase a total of Seven  Hundred  Fifty  Thousand  (750,000)  shares of common
stock of NVX.  Accordingly,  a Warrant shall be issued ratably as NVX draws down
on the Line of Credit as follows:  for each One Million Dollars (US) [$1,000,000
(US)] (or fraction thereof) of principal amount drawn down by NVX under the Line
of Credit,  NVX shall issue to BioChem a Warrant to acquire  One Hundred  Twenty
Five Thousand (125,000) shares of common stock of NVX.

      c.  Each  Warrant  shall  have a term of two (2)  years  from  the date of
issuance and shall be non-negotiable and non-transferable except under the terms
and conditions set forth therein.

      d.  The shares of  common  stock of NVX  issuable  upon  exercise  of each
Warrant [the "Warrant Shares"] shall be fully reserved for issuance at all times
during which the Warrant is issued and outstanding  and, at the time of delivery
if such  Warrant is duly and  properly  exercised,  shall be validly  issued and
outstanding, fully paid and non-assessable.

3. TRANSFER  RESTRICTIONS AND REPRESENTATIONS   In  connection with the issuance
of the Warrants and the Warrant Shares [collectively the "Securities"],  BioChem
hereby  acknowledges  that the  Securities  will be issued to it  pursuant to an
exemption  from the  registration  provisions of the  Securities Act of 1933, as
amended,  and other  applicable  securities laws  [collectively  the "Securities
Acts"]. BioChem specifically acknowledges and agrees that:

      a.  the purchase of the Securities  involves a high degree of risk in that
an investment in the Company is highly speculative and BioChem may suffer a loss
of its entire investment;

      b.  the transferability  of the  Securities  will be  limited as set forth
below  and  thus  it may  not be able to  liquidate  all or any  portion  of the
investment;

      c.  it is  able,  either  alone  or with an  investor  representative,  to
evaluate  the merits and risks of this  investment  and that it  recognizes  the
highly speculative nature of this investment;

      d.  it has  had  access  to all  information  regarding  NVX  that  it has
requested  or desired to know,  that all  documents  which  could be  reasonably
provided have been made  available for its inspection and review and that it has
been afforded the  opportunity to ask question of and receive  answers from duly
authorized  officers  or  other  representatives  of  the  NVX  concerning  this
transaction and any additional information that it has requested;

      e.  the Securities  are being acquired for its own account, for investment
purposes only and not with a view to  distribution  or resale to others and that
the exemption  from the  registration  requirements  of the Securities Act being
claimed  by NVX for  this  transaction  is  dependent,  in  part,  on  BioChem's
investment intent;

      f.  it understands  there is no public market for the Warrants and none is
likely to develop;


<PAGE>

BioChem Pharma Inc
July 1, 1999
Page 3 of 8

      g.  it is an  "accredited  investor" within the  meaning of Section  2(15)
and/or Rule 501 under the Securities Act;

      h.  it understands  that the Securities are being offered in a transaction
not involving any public  offering  within the meaning of the  Securities  Acts,
that the Securities will not be registered under the Securities Acts and that it
may not resell,  pledge or  otherwise  transfer  any such  Securities  except in
accordance  with the terms and  restrictions  contained in the Warrants and in a
transaction exempt from the registration requirements of the Securities Acts.

      i.  it consents to the placement of a legend  on  the  Securities  stating
that they have not been  registered  under the Securities Acts and setting forth
or referring to the restrictions on transferability and sale thereof.

4.    OTHER REPRESENTATIONS AND WARRANTIES

      a.    BioChem represents and warrants as follows:

            i   BioChem is a corporation  duly organized and existing  under the
laws of Canada and has the  corporate  power to  conduct  the  business  that it
conducts and proposes to conduct;

            ii  Upon  pproval of this  agreement  by the Board of  Directors  of
BioChem,  the execution,  delivery and  performance of this agreement by BioChem
will be duly approved by all necessary corporate action, and all other corporate
authorities,  approvals and actions  required to authorize  BioChem to issue the
Guaranty and to receive the  Warrants and purchase the Warrant  Shares will have
been duly taken and approved;

            iii The  consummation  of  the  transactions  contemplated  by  this
agreement   will  not  violate  or   constitute   a  default   under   BioChem's
organizational  documents or any material agreements to which BioChem is a party
or by which its  properties  are bound or constitute a violation of any material
order,  rule,  regulation,  writ,  injunction,  or  decree  of  any  government,
governmental instrumentality or court, domestic or foreign;

            iv  It has not  retained a  placement  or selling  agent,  broker or
dealer to represent it in the  acquisition of the Warrants or the Warrant Shares
and no person has any claim or right to any commission or other  remuneration as
a result of contract or agreement with BioChem in connection  with the execution
or consummation of the transactions contemplated by this agreement.

      b.    NVX represents and warrants as follows:

            i   NVX  is  a corporation duly organized and existing under the law
of Canada  and has the corporate  power to conduct the business that it conducts
and proposes to conduct;

            ii  The  execution, delivery  and  performance of  this agreement by
NVX has been  duly  approved  by the  Board of  Directors  of NVX and all  other
corporate  actions required to authorize and effect the issuance of the Warrants
and sale of the Warrant Shares have been duly taken and approved;

            iii The  Warrant Shares have been duly and  validly  authorized  and
when  issued and paid for in  accordance  with the terms and  conditions  of the
Warrants will be validly issued, fully paid and non-assessable  shares of common
stock of NVX;

            iv  NVX  is   not  in  violation  or  default under,  nor  will  the
execution  and delivery of this  agreement,  the issuance of the Warrants or the
Warrant  Shares and the  incurrence  of the  obligations  herein and therein set
forth and the consummation of the transaction  contemplated  hereby and thereby,
result in a violation of, or constitute a default  under,  NVX's  certificate of
incorporation or by-laws;


<PAGE>

BioChem Pharma Inc
July 1, 1999
Page 4 of 8

            v.  The  consummation  of  the  transactions  contemplated  by  this
agreement will not violate or constitute a default under any material agreements
to which NVX is a party or by which its  properties  are bound or  constitute  a
violation of any material order, rule, regulation,  writ, injunction,  or decree
of any government, governmental instrumentality or court, domestic or foreign.

            vi. no consent,  approval or filing with any governmental  authority
or other  party is  required  by NVX for the  consummation  of the  transactions
contemplated by this agreement  including in connection with the issuance of the
Warrants and the Warrant Shares other than the required and  applicable  notices
and filings to be made with the U.S. Securities & Exchange Commission,  notices,
filings and approvals  requited by state and  provincial  securities  regulatory
authorities,  and  notices  and  listing  agreements  with  the  American  Stock
Exchange.

5.   REGISTRATION  RIGHTS NVX and BioChem agree that the Warrant Shares shall be
included in the definition of  "Registrable  Securities" as that term is defined
in Schedule 4 to the Share Purchase  Agreement between the parties dated January
17, 1990, as amended, ("Share Purchase Agreement") and that as such, the Warrant
Shares shall be subject to all terms and  conditions  of BioChem's  registration
rights  as  specified  in  Section  One  of  Schedule  4 to the  Share  Purchase
Agreement.  As a consequence of this Section 5, the  definition of  "Registrable
Securities"  as set forth in  Schedule  4,  Section  1.1 to the  Share  Purchase
Agreement is hereby  modified to add new  Subsections  (iii) and (iv) at the end
thereof to read in its entirety as follows:

     "Registrable  Securities"  shall mean (i) the Common Shares,  (ii) any NAVA
     common  shares  issued  pursuant  to the  Options or issued or  issuable in
     respect  of the  Common  Shares,  upon any  stock  split,  stock  dividend,
     recapitalization,  or similar  event,  so long as the Common Shares and any
     NAVA  common  shares  issued in respect  of the Common  Shares are owned by
     BioChem,  (iii) any NAVA common shares  issued  pursuant to the exercise of
     one or more Warrant(s)  ("Warrant  Shares"),  which Warrant or Warrants are
     granted to BioChem  pursuant to the terms of that certain letter  agreement
     dated July 1, 1999 between NAVA and BioChem and (iv) any NAVA common shares
     issued or issuable in respect of the Warrant Shares,  upon any stock split,
     stock dividend, recapitalization,  or similar event, so long as the Warrant
     Shares and any NAVA common shares  issued in respect of the Warrant  Shares
     are owned by BioChem.

 6.   OTHER MATTERS

      a.  No modification, amendment, deletion, addition or other change in this
agreement  or any  provision  hereof,  or waiver  of any right or remedy  herein
provided,  shall be effective for any purpose unless specifically set forth in a
writing  signed  by the  Party to be bound  thereby.  No  waiver of any right in
respect of an  occurrence  or event on one occasion  shall be deemed a waiver of
such  right or  remedy  in  respect  of such  occurrence  or event on any  other
occasion.

      b.  Any  notice  required  to  be  given  hereunder  shall  be  in English
language,  in writing  and shall be deemed to have been duly given and  received
upon  transmission when telecopied with verification of receipt or upon delivery
if sent by Federal Express, DHL or other internationally recognized overnight or
express courier. Addresses for the delivery of notices shall be as follows:

      For BioChem:  BioChem Pharma Inc., 275 Armand Frappier  Boulevard,  Laval,
Quebec  H7V  4A7,   Canada;   Attn:   Chief   Financial   Officer  ;   Telecopy:
1-450-978-7755.

      For NVX: North American Vaccine,  Inc.; 10150 Old Columbia Road; Columbia,
MD 21046 USA; Attn: Vice President Finance; Telecopy: (410) 309-4077

      c.  Notwithstanding  the place where this agreement may be executed by any
of the  parties  hereto,  the  parties  expressly  agree  that all the terms and
provision  hereof shall be construed in accordance with and governed by the laws


<PAGE>

BioChem Pharma Inc
July 1, 1999
Page 5 of 8

of the State of New York  (regardless of the laws that might be applicable under
principles of conflicts of law),  including without limitation as to all matters
of validity, construction, effect and performance.

      d.  This agreement  may be executed in one or more  counterparts,  each of
which  shall  be  deemed  to be an  original  but all of  which  together  shall
constitute one and the same instrument.

      e.  This agreement  shall be  binding  on and inure to the  benefit of the
parties hereto and to their respective  successors and permitted  assigns.  This
agreement may not be assigned by operation of law, by "change of control" of NVX
or otherwise,  without the express written  consent of BioChem.  For purposes of
this  agreement,  the term  "change  of  control"  shall  include  either of the
following  events:  (i) any "Person"  and/or  "Group" (as such terms are used in
Section 13(d) of the Securities Exchange Act of 1934, as amended, (the "Exchange
Act")] other than BioChem or its  affiliates,  becomes the beneficial  owner (as
defined in Rules 13d-3 and 13d-5 under the Exchange  Act] directly or indirectly
of more than thirty percent (30%) of NVX's total outstanding  voting securities,
provided however the acquisition of beneficial ownership by such Person or Group
of more than thirty percent (30%) of NVX's total outstanding  voting securities,
which  acquisition was  accomplished in whole or in part by virtue of a purchase
or a series of related  purchases of securities,  rights,  or  instruments  from
BioChem and/or its affiliates,  shall not be considered a change of control;  or
(b) NVX consolidates or merges with or into any Person,  or conveys,  transfers,
leases or otherwise  disposes of all or  substantially  all of its assets to any
Person,  or any Person  consolidates  with or merges into NVX, in any such event
pursuant to a transaction in which the outstanding  voting  securities of NVX is
converted  into or exchanged for cash,  securities or other  properties.  In the
event of a "change of  control" of NVX,  BioChem  shall have the right to cancel
this  agreement and the Guaranty.  The  cancellation  of this  agreement and the
Guaranty  in  connection  with a change of control of NVX shall in no way modify
the terms and conditions of the Warrant(s) that might have been issued by NVX to
BioChem hereunder.

      f.  This agreement sets forth the entire understanding of the  parties  as
to the  subject  matter hereof and merges and  supercedes all prior discussions,
agreements and understandings of any and very nature among them.

      g.  Each  party  agrees to take or cause to be taken such further actions,
to execute,  deliver and file or cause to be executed,  delivered and filed such
further  documents  and  instruments,  and to  obtain  such  consents  as may be
necessary or as may be  reasonably  requested in order fully to  effectuate  the
purposes, terms and conditions of this agreement.

      h.  This agreement is written and executed in the English  language. It is
understood  that,  for  purposes of  obtaining  the  regulatory  approval of the
agreement  by  appropriate  governmental  authorities,  that  the  text  of this


<PAGE>

BioChem Pharma Inc
July 1, 1999
Page 6 of 8

agreement, if necessary, may be translated into appropriate language(s).  In the
event of a difference in the meaning between the translated text and the English
text, the English text shall govern.  Il est de la volonte  expresse des parties
que cette  convention et touts les documents s'y  rattachant  soient  rediges et
signes en anglais.

      *                 *                 *                       *

      Please  acknowledge  your  acceptance and agreement with the terms of this
agreement by signing and returning the enclosed copy of this letter.

                                          Sincerely,

                                          North American Vaccine, Inc.


                                          By:   /s/ Daniel J. Abdun-Nabi
                                                --------------------------
                                          Name: Daniel J. Abdun-Nabi
                                          Title:Senior Vice President
                                          Legal Affairs & General Counsel



ACCEPTED AND AGREED
this 1st day of July, 1999

BioChem Pharma Inc

By:    /s/ Francois Legault
       -----------------------------------
Name:  Francois Legault
Title: Executive V.P. Corporate Development


By:    /s/ Charles A. Tessier
       -----------------------------------
Name:  Charles A. Tessier
Title: V.P. Legal Affairs & General Counsel


<PAGE>

        THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE HEREOF
    HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
     UNDER THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR PROVINCE
       OF CANADA AND SUCH SECURITIES MAY NOT BE SOLD, PLEDGED OR OTHERWISE
        TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
                               EXEMPTION THEREFROM


                          NORTH AMERICAN VACCINE, INC.

                  WARRANT FOR THE PURCHASE OF COMMON SHARES

No.  W-1                                                    _____________ Shares
     ---


      FOR VALUE  RECEIVED,  NORTH  AMERICAN  VACCINE,  INC. (the  "Company"),  a
Canadian corporation, hereby certifies that BioChem Pharma Inc. or its permitted
assigns (the "Holder") is entitled to purchase from the Company,  at any time or
from time to time after the date set forth on the signature  page,  but prior to
5:00 p.m.  on  ___________,  200_,  _________________  (_______)  fully paid and
non-assessable  common  shares,  no par value,  of the Company for an  aggregate
purchase  price of  $____________  (computed  on the basis of $_____ per share).
(Hereinafter,  (i) said common shares, together with any other equity securities
which may be issued by the Company in substitution  therefor, are referred to as
the "Common Shares":,  (ii) the Common Shares purchasable hereunder are referred
to as the "Warrant Shares", (iii) the aggregate purchase price payable hereunder
for the Warrant Shares is referred to as the "Aggregate Warrant Price", (iv) the
price  payable  hereunder  for each of the  Warrant  Shares,  as adjusted in the
manner set forth in Section 3, is referred to as the "Per Share  Warrant  Price"
and  (v)  this  Warrant  and  all  warrants  hereafter  issued  in  exchange  or
substitution  for this Warrant are referred to as the  "Warrants") The Aggregate
Warrant Price is not subject to adjustment.  The Per Share Warrant Price and the
number of Warrant Shares are subject to adjustment as hereinafter provided.

      1.  EXERCISE OF WARRANT.  This Warrant may be  exercised,  in whole at any
time or in part from time to time (such  partial  exercises  to be in amounts of
not less  than  1,000  Warrant  Shares),  on and after the date set forth on the
signature  page,  but prior to 5:00 p.m. on _____,  200_,  by the Holder of this
Warrant by the surrender of this Warrant (with the subscription  form at the end
hereof duly  executed) at the  principal  office of the Company in Columbia,  MD
together with proper payment of the Aggregate  Warrant Price  applicable on such
date,  or the  proportionate  part thereof if this Warrant is exercised in part.
Payment for Warrant  Shares  shall be made by (i) check  payable to the order of
the Company,  (ii) wire transfer to an account  designated by and in the name of
the Company, (iii) by delivery to the Company of debt securities for which it is
the issuer and bound to make payment in the stated principal  amount,  where the
principal  amount on such debt security  delivered to the Company for retirement
is equal to the  Aggregate  Warrant  Price;  or (iv) by any  combination  of the
methods set forth in (i) through (iii),  above.  If this Warrant is exercised in
part, this Warrant must be exercised for a number of whole Warrant  Shares,  and
the Holder is entitled to receive a new Warrant  covering  the number of Warrant
Shares in respect of which this Warrant has not been exercised and setting forth
the proportionate part of the Aggregate Warrant Price applicable to such Warrant
Shares.  Upon  such  surrender  of  this  Warrant,  the  Company  will  issue  a
certificate or  certificates in the name of the Holder for the largest number of
whole Warrant  Shares to which the Holder shall be entitled and, if this Warrant
is  exercised in whole,  in lieu of any  fractional  Warrant  Share to which the
Holder shall be entitled,  cash equal to the fair value of such fractional share
(determined in such  reasonable  manner as the Board of Directors of the Company
shall determine).


                                       1
<PAGE>

      2.  RESERVATION OF WARRANT SHARES.  The Company agrees that,  prior to the
expiration of this Warrant,  the Company will at all times have  authorized  and
reserve,  and will keep  available,  solely for  issuance or  delivery  upon the
exercise of this Warrant,  the Warrant Shares free and clear of all restrictions
on sale or transfer (except as may arise under  applicable  securities laws) and
free and clear of all preemptive rights.

      3.  PROTECTION  AGAINST DILUTION. (a) If, at any time or from time to time
after the date of this  Warrant,  the Company  shall (i) issue to the holders of
the Common Shares any Common Shares by way of a stock  dividend;  (ii) subdivide
its outstanding Common Shares into a greater number of shares; (iii) combine its
outstanding number of Common Shares into a smaller number (i.e., a reverse stock
split);  or (iv) issue by  reclassification  of its Common  Shares any shares of
capital stock of the Company then,  and in each such case, the Per Share Warrant
Price in effect  immediately prior to the date of such action shall be adjusted,
or further adjusted, to a price (to the nearest cent) determined by dividing (x)
an amount equal to the number of Common Shares outstanding  immediately prior to
such issuance  multiplied  by the Per Share Warrant Price in effect  immediately
prior to such  issuance  by (y) the total  number of Common  Shares  outstanding
immediately  after such issuance.  Upon each adjustment in the Per Share Warrant
Price  resulting  from a stock  split or stock  dividend,  the number of Warrant
Shares  shall be adjusted by dividing  the  Aggregate  Warrant  Price by the Per
Share Warrant Price in effect immediately after such adjustment.  Notice of each
such  adjustment  and each such  readjustment  shall be forthwith  mailed to the
Holder.

      (b) If the  Company shall  be  consolidated  with or merged  into  another
corporation,  or shall sell all or substantially  all of its assets as part of a
reorganization  to which  the  Company  is a party  within  the  meaning  of the
Internal Revenue Code of 1986, as presently in effect, or shall issue a security
convertible  into its Common  Shares as a dividend  on its Common  Shares,  each
Warrant  Share shall be replaced for the purposes  hereof by the  securities  or
properties  issuable  or  distributed  in respect of one Common  Share upon such
consolidation,  merger, sale,  reclassification or reorganization,  and adequate
provisions  to that  effect  shall be made at the time  thereof.  Notice of such
consolidation,  merger,  sale,  reclassification or reorganization,  and of said
provisions  so proposed to be made,  shall be mailed to the Holder not less than
15 days prior to such event.

      (c) If the Board of Directors of the Company shall declare any dividend or
other distribution in cash with respect to the Common Shares,  other than out of
surplus,  the Company  shall mail notice  thereof to the Holder not less than 15
days prior to the record  date fixed for  determining  shareholders  entitled to
participate in such dividend or other distribution.

      (d) If, during  the term of this Warrant,  the Company shall issue or sell
its Common Shares for a consideration  per share less than the Per Share Warrant
Price  immediately  prior to the time of such issue or sale, then forthwith upon
such issue or sale, the Per Share Warrant Price in effect  immediately  prior to
such issue or sale shall be  reduced to the lower of the prices  (calculated  to
the nearest cent) determined as follows:

          (1) by  dividing  (A) an amount  equal to the sum of (i) the number of
shares of  Common  Stock  outstanding  immediately  prior to such  issue or sale
multiplied  by  the   then-existing  Per  Share  Warrant  Price,  and  (ii)  the
consideration,  if any,  received by the Company upon such issue or sale, by (B)
the total number of Common Shares  outstanding  immediately  after such issue or
sale; and

          (2) by multiplying  the Per Share Warrant Price in effect  immediately
prior to the time of such issue or sale by a fraction,  the  numerator  of which
shall be (A) the sum of (i) the number of Common Shares outstanding  immediately
prior to such issue or sale multiplied by the market price  immediately prior to
such issue or sale; and (ii) the consideration received by the Company upon such
sale, divided by (B) the total number of Common Shares  outstanding  immediately
after such issue or sale, and the denominator of which shall be the market price
immediately prior to such issue or sale.

      4.  FULLY PAID SHARES;  TAXES.  The Company  agrees that the Common Shares
represented by each and every  certificate  for Warrant Shares  delivered on the
exercise of this Warrant shall, at the time of such delivery,  be validly issued


                                       2
<PAGE>

and outstanding,  fully paid and  non-assessable.  The Company further covenants
and agrees that it will pay, when due and payable, any and all Federal and state
stamp,  original  issue or similar  taxes which may be payable in respect of the
issue of any Warrant Share or certificate therefor.

      5.  TRANSFERABILITY. This Warrant and the  Warrant  Shares  shall  not  be
sold, transferred, assigned or hypothecated by the Holder except (i) pursuant to
an  effective  registration  statement  under  the  Securities  Act of 1933,  as
amended,  and  qualification  for sale  under  all  other  applicable  state and
provincial  securities  rules  and  regulations  [collectively  the  "Securities
Acts"]; or (ii) in full compliance with all requirements  necessary to establish
an exemption from the registration requirements of the Securities Acts. In order
to properly establish compliance with (ii), above, the Company shall be entitled
to request and receive in advance of authorizing any sale, transfer,  assignment
or hypothecation  of this Warrant or any of the Warrant Shares:  (x) appropriate
transferor and transferee representation letters supporting a claimed expemption
from registration requirements of the Securities Acts; (y) an opinion of counsel
for the holder of the Warrant and/or Warrant Shares  reasonably  satisfactory to
the Company that the  proposed  transfer  from the holder of the Warrant  and/or
Warrant Shares to the transferee is exempt from the registration requirements of
the  Securities  Act;  and (z) such  other  documentation,  representations  and
filings as may be reasonably required by counsel in order to issue the foregoing
opinion.  The  Company  may treat the  registered  holder of this  Warrant as it
appears on the Company's books at any time as the Holder for all purposes.

      6.  LOSS, ETC. OF WARRANT.  Upon receipt of evidence  satisfactory  to the
Company of the loss,  theft,  destruction or mutilation of this Warrant,  and of
indemnity reasonably  satisfactory to the Company, if lost, stolen or destroyed,
and upon  surrender and  cancellation  of this Warrant,  if mutilated,  and upon
reimbursement of the Company's reasonable incidental expenses, the Company shall
execute  and  deliver  to the  Holder a new  Warrant  of like  date,  tenor  and
denomination.

      7.  WARRANT HOLDER NOT SHAREHOLDER.  Except as otherwise  provided herein,
this  Warrant does not confer upon the Holder any right to vote or to consent or
to receive  notice as a shareholder  of the Company,  as such, in respect of any
matters whatsoever,  or any other rights or liabilities as a shareholder,  prior
to the exercise hereof.

      8.  COMMUNICATION.  No notice or other  communication  under this  Warrant
shall be  effective  unless,  but any  notice  or other  communication  shall be
effective  and shall be deemed to have been given if, the same is in writing and
is mailed by first-class mail, postage prepaid, addressed to:

      (a) the Company at North American Vaccine,  Inc., 10150 Old Columbia Road,
Columbia, MD 21046 Attention:  Vice President-Finance,  or such other address as
the Company has designated in writing to the Holder, or

      (b) the Holder at BioChem  Pharma  Inc.,  275 Armand  Frappier  Boulevard,
Laval, H7V 4A7 Quebec, Canada Attention:  Executive Vice President-Investments &
Subsidiaries,  or such other address as the Holder has  designated in writing to
the Company.

      9.  HEADINGS.  The headings of this Warrant have been inserted as a matter
of convenience and shall not affect the construction hereof.

      10.  APPLICABLE  LAW.  This Warrant  shall be governed by and construed in
accordance with the laws of the State of New York.


                                       3
<PAGE>

      IN WITNESS WHEREOF,  NORTH AMERICAN VACCINE,  INC. has caused this Warrant
to be signed by its Chief Executive Officer and President and its corporate seal
to be hereunto affixed and attested by its Secretary this ____ day of July 1999.

ATTEST:                                  NORTH AMERICAN VACCINE, INC.



_____________________________            By: _______________________________
[Corporate Seal]                             Randal Chase
                                             Chief Executive Officer & President


                                       4
<PAGE>

                  SUMMARY OF PRINCIPAL TERMS AND CONDITIONS
                  -----------------------------------------

                           NORTH AMERICAN VACCINE INC.

                                                                   JUNE 28, 1999

                                   TERM SHEET

THE TERMS AND CONDITIONS  SET FORTH HEREIN ARE FOR DISCUSSION  PURPOSES ONLY AND
MAY NOT BE  CONSTRUED  IN ANY WAY TO  REPRESENT  A  COMMITMENT  BY ROYAL BANK OF
CANADA TO PROVIDE  CREDIT OR TO ARRANGE A FACILITY.  THIS SUMMARY OF  INDICATIVE
TERMS AND CONDITIONS IS NOT INTENDED TO COVER ALL OF THE TERMS AND CONDITIONS OF
A DEFINITIVE TERM SHEET AND RELATED DOCUMENTATION THAT WILL BE NEGOTIATED IN DUE
COURSE.  THIS DOCUMENT IS CONFIDENTIAL AND IS FOR INTERNAL  DISCUSSION  PURPOSES
ONLY.

BORROWER:               North American Vaccine Inc., a  corporation organized
                        under the laws of Canada ("the Borrower")

LENDERS:                Royal Bank of Canada (the "Lender").

PURPOSE:                Bridge capital market debt or equity issue.

CREDIT FACILITY:        Up to a maximum of US$6,000,000 committed revolving
                        operating loan (the "Operating Loan").

AVAILABILITY:           Available by way of US rate loans ("USLoans") and/or
                        Libor loans ("LIBOR"). Libor loans must be for a minimum
                        of $US500,000  and in whole multiples of $US100,000; 2
                        days notice prior to funding.

INTEREST RATES:         US Base rate + 265bp
                        Libor + 265bp

INTEREST
PAYMENT DATES:          Interest periods for LIBOR Loans shall be, at the
                        Borrower's option, one, two or three months.
                        Interest on LIBOR Loans shall be payable on the last
                        business day of the applicable interest period for
                        such loans and, if earlier, the 90th day following
                        the commencement of such interest period.  Interest
                        on Prime Loans shall be payable monthly in arrears.

REPAYMENT:              No later than December 31, 1999.

MANDATORY
REPAYMENT:              100% of any debt or equity issue above $US21,000,000
                        to be applied as a permanent reduction of the Credit
                        Facility.


<PAGE>

"NORTH AMERICAN VACCINE, INC. - JUNE 28, 1999"                                 2


SECURITY:               Guarantee and Postponement of Claims for
                        $US6,000,000 from Biochem Pharma Inc. and Biochem
                        Pharma Holdings Inc. in favour of the Borrower.

DOCUMENTATION:          Letter loan agreement signed by the Borrower

CONDITIONS
PRECEDENT:              The obligation of the Bank to make available the
                        Borrowings to the Borrower is subject to and
                        conditional upon:

                        a)    Satisfactory credit documentation including
                              receipt of all necessary closing certificates
                              required by the Lender, including legal opinion
                              and security documentation.

                        b)    Satisfactory review of Y2K issue.

EVIDENCE OF
INDEBTEDNESS:           The Bank shall open and maintain at the Branch of
                        Account accounts and records evidencing the
                        Borrowings made available to the Borrower by the Bank
                        under this agreement.  The Bank shall record the
                        principal amount of such Borrowings, the payment of
                        principal and interest on account of the loans, and
                        all other amounts becoming due to the Bank under this
                        agreement.

                        The Bank's accounts and records constitute, in the
                        absence of manifest error, prima facie evidence of the
                        indebtedness of the Borrower to the Bank pursuant to
                        this agreement.

                        The Borrower authorises and directs the Bank to
                        automatically debit, by mechanical, electronic or manual
                        means, any bank account of the Borrower for all amounts
                        payable under this agreement, including but not limited
                        to, the repayment of principal and the payment of
                        interest, fees and all charges for the keeping of such
                        bank accounts.

REPRESENTATIONS
AND WARRANTIES:         Borrower shall provide representations and warranties
                        as customary for a transaction of this nature.

AFFIRMATIVE
COVENANTS:              The Borrower shall be subject to affirmative
                        covenants as customary for a transaction of this
                        nature, including, without limitation:

                        1.    Reporting requirements on the Borrower for annual
                              budgets, audited annual financial statements and
                              company-prepared monthly financial statements.

                        2.    Maintenance of a program of insurance for the
                              Borrower consistent with industry practice.

NEGATIVE
COVENANTS:              The Borrower shall be subject to negative covenants
                        as customary for a transaction of this nature,
                        including, without limitation:


<PAGE>

"NORTH AMERICAN VACCINE, INC. - JUNE 28, 1999"                                 3


                        1.    Prohibitions on any payments or capital
                              distributions.

EVENTS OF
DEFAULT:                The Borrower shall be subject to events of default as
                        customary for a transaction of this nature,
                        including, without limitation:

                        1.    Change of ownership whereby Biochem Pharma Inc.
                              cease to own at least (TO BE DETERMINED)
                              outstanding and issued voting shares of the
                              Borrower.

FEES AND EXPENSES:      The Borrower will pay all reasonable out of pocket
                        fees and expenses of the Lender in connection with
                        consummation of the Agreement.