November 1, 1999


North American Vaccine, Inc.
10150 Old Columbia Road
Columbia, Maryland  21046
Attention:   Dr. Randal Chase
             Chief Executive Officer and President


     Re:   Revolving Credit Facility
           -------------------------

Ladies/Gentlemen:

BANK OF AMERICA,  N.A. ("LENDER") is pleased to make available to NORTH AMERICAN
VACCINE, INC., a Canadian corporation ("BORROWER"),  a revolving credit facility
on the terms and subject to the  conditions  set forth below.  Terms not defined
herein have the meanings assigned to them in EXHIBIT A hereto.

1. THE FACILITY.

   (a)   THE  COMMITMENT.  Subject to the terms and conditions set forth herein,
         Lender agrees to make  available to Borrower  until the Maturity Date a
         revolving line of credit  providing for loans ("LOANS") in an aggregate
         principal  amount  not  exceeding  at  any  time   US$30,000,000   (the
         "COMMITMENT");  PROVIDED,  HOWEVER,  Lender  shall not be  obligated to
         advance Loans in an aggregate  principal  amount  exceeding  $5,000,000
         until  such time as Lender  (I) shall have  received  written  evidence
         satisfactory  to Lender of the  approval  of the finance  committee  of
         Guarantor to permit Loans in an aggregate amount  exceeding  $5,000,000
         (but in no event  greater  than the  Commitment),  (II) shall have been
         granted a first priority  security interest in the collateral set forth
         in SCHEDULE 3(K) attached hereto and (III) shall otherwise  comply with
         the terms and conditions set forth in PARAGRAPH 2(B) hereof. Subject to
         the foregoing  limits,  Borrower may borrow,  repay and reborrow  Loans
         until the Maturity Date.

   (b)   BORROWINGS, CONVERSIONS, CONTINUATIONS. Borrower may request that Loans
         be (i) made as or converted to Base Rate Loans by irrevocable notice to
         be received by Lender not later than 11 a.m. on the Business Day of the
         borrowing or conversion, or (ii) made or continued as, or converted to,

<PAGE>

         Offshore Rate Loans by irrevocable  notice to be received by Lender not
         later than 11 a.m. three Business Days prior to the Business Day of the
         borrowing,  continuation  or  conversion.  If Borrower  fails to give a
         notice of conversion or  continuation  prior to the end of any Interest
         Period in respect of any Offshore Rate Loan,  Borrower  shall be deemed
         to have  requested  that such Loan be  converted to a Base Rate Loan on
         the last day of the applicable Interest Period.

         Each  Offshore  Rate  Loan  shall be in a minimum  principal  amount of
         $1,000,000 or a multiple of $500,000 in excess thereof.  Each Base Rate
         Loan shall be in a minimum  principal  amount of $500,000 or a multiple
         of  $100,000 in excess  thereof.  There shall not be more than five (5)
         different Interest Periods in effect at any time.  Notwithstanding  the
         foregoing, except for the initial Loan, Borrower shall not be permitted
         to  borrow  Loans  in  an  aggregate  principal  amount  in  excess  of
         $2,500,000 during any consecutive fourteen (14) day period (measured on
         a rolling  fourteen (14) day basis) (unless  otherwise  consented to in
         writing by Guarantor)  and only for the purposes set forth in PARAGRAPH
         3(F) hereof.

   (c)   INTEREST.  At the option of  Borrower,  Loans shall bear  interest at a
         rate per annum equal to (i) the Offshore  Rate PLUS .625%;  or (ii) the
         Base Rate. Interest on Base Rate Loans when the Base Rate is determined
         by Lender's  prime rate shall be  calculated  on the basis of a year of
         365 or 366 days and actual days elapsed.  All other interest  hereunder
         shall be  calculated on the basis of a year of 360 days and actual days
         elapsed.

         Borrower  promises to pay interest (i) for each  Offshore Rate Loan, on
         the last day of the applicable  Interest  Period,  and, if the Interest
         Period is longer  than one  month,  on the  respective  dates that fall
         every month after the beginning of the Interest  Period;  (ii) for Base
         Rate Loans, on the last Business Day of each calendar month;  and (iii)
         for all Loans,  on the  Maturity  Date.  If the time for any payment is
         extended by operation of law or otherwise,  interest  shall continue to
         accrue for such extended period.

         After  the date any  principal  amount  of any Loan is due and  payable
         (whether on the maturity date,  upon  acceleration  or  otherwise),  or
         after any other monetary obligation hereunder shall have become due and
         payable,  Borrower shall pay, but only to the extent  permitted by law,
         interest  (after as well as before  judgment) on such amounts at a rate
         per  annum  equal to the Base  Rate  plus 2%.  Such  interest  shall be
         payable on demand.

         In no case shall interest  hereunder  exceed the amount that Lender may
         charge or collect under applicable law.



                                      -2-
<PAGE>

   (d)   EVIDENCE  OF  LOANS.  The  Loans  and all  payments  thereon  shall  be
         evidenced by Lender's  loan  accounts and records;  PROVIDED,  HOWEVER,
         that upon the request of Lender,  the Loans may be  evidenced by a grid
         promissory  note in the form of  EXHIBIT  B  hereto,  instead  of or in
         addition to such loan accounts and records. Such loan accounts, records
         and promissory  note shall be conclusive  absent  manifest error of the
         amount of the Loans and  payments  thereon.  Any  failure to record any
         Loan or  payment  thereon  or any  error in doing so shall not limit or
         otherwise  affect the  obligation  of Borrower to pay any amount  owing
         with respect to the Loans.

   (e)   FEES.  Borrower  promises to pay the following fees in accordance  with
         the terms hereof:

         (i)  STRUCTURING  FEE.   Borrower  shall  pay  to  Lender  a  fee  (the
         "STRUCTURING  FEE") in accordance with the terms and conditions of that
         certain letter  agreement  dated as of November 1, 1999 among Borrower,
         Guarantor and Lender.  The  Structuring Fee shall be due and payable to
         Lender upon the execution  and delivery of this  Agreement and shall be
         non-refundable once paid.

         (ii) COMMITMENT FEE. Borrower shall pay to Lender a commitment fee (the
         "COMMITMENT  FEE") of .25% per annum on the daily unused portion of the
         Commitment,  payable  in  arrears  on the  last  Business  Day of  each
         calendar month and on the Maturity Date, and calculated on the basis on
         a year of 360 days and actual  days  elapsed;  provided  that  Borrower
         shall not be  obligated to pay the  Commitment  Fee with respect to the
         portion of the Commitment that is not available (in accordance with the
         terms of PARAGRAPH 1(A) hereof) for borrowing by Borrower.

   (f)   REPAYMENT.  Borrower  promises to pay all Loans then outstanding on the
         Maturity Date, unless earlier  accelerated in accordance with the terms
         of this Agreement.

         Borrower  shall make all payments  required  hereunder not later than 1
         p.m. on the date of payment in same day funds in United States  Dollars
         at the office of Lender  located at 100 North Tryon Street,  Charlotte,
         North  Carolina  28255 or such other address as Lender may from time to
         time designate in writing.


                                      -3-
<PAGE>

         All payments by Borrower to Lender hereunder shall be made to Lender in
         full without set-off or  counterclaim  and free and clear of and exempt
         from, and without  deduction or  withholding  for or on account of, any
         present  or  future  taxes,  levies,  imposts,  duties  or  charges  of
         whatsoever   nature   imposed  by  any   government  or  any  political
         subdivision or taxing authority  thereof.  If any taxes are required to
         be withheld or deducted from any amount payable under this Agreement or
         the Note (if any), then the amount payable under this Agreement or such
         Note shall be increased to the amount which,  after deduction from such
         increased  amount of all taxes  required  to be  withheld  or  deducted
         therefrom,  will yield to Lender the amount  stated to be payable under
         this Agreement or such Note.  Borrower shall  reimburse  Lender for any
         taxes  imposed on or  withheld  from such  payments  and paid by Lender
         (other  than taxes  imposed on Lender's  income,  and  franchise  taxes
         imposed on Lender,  by the jurisdiction  under the laws of which Lender
         is organized or any  political  subdivision  thereof) not later than 10
         days after written demand by Lender,  and Borrower shall be responsible
         for  any  interest,  penalties  and  expenses  incurred  by  Lender  in
         connection with the collection of such amounts.

   (g)   PREPAYMENTS.  Borrower may, upon three  Business  Days' notice,  in the
         case of Offshore Rate Loans,  and upon  same-day  notice in the case of
         Base Rate  Loans,  prepay  Loans on any  Business  Day;  PROVIDED  that
         Borrower  pays  all  Breakage  Costs  (if  any)  associated  with  such
         prepayment on the date of such prepayment. Prepayments of Offshore Rate
         Loans must be  accompanied  by a payment of  interest  on the amount so
         prepaid. Prepayments must be in a principal amount of at least $500,000
         or a multiple of $100,000 in excess thereof.

   (h)   COMMITMENT  REDUCTIONS.  Borrower may, upon five Business Days' notice,
         reduce or cancel the undrawn portion of the Commitment,  PROVIDED, that
         the  amount  of such  reduction  is not less than  $500,000  or a whole
         multiple thereof.

2. (a)   CONDITIONS  PRECEDENT TO INITIAL LOAN. As a condition  precedent to the
         initial   Loan   hereunder   (which  such   amount   shall  not  exceed
         US$5,000,000),  Lender must receive the following  from or on behalf of
         Borrower and/or Guarantor in form  satisfactory to Lender and Guarantor
         (provided that with respect to items  delivered by Guarantor to Lender,
         such items need only be satisfactory to Lender in its discretion):

         (i)   the  enclosed  duplicate  of this  Agreement  duly  executed  and
               delivered on behalf of Borrower;

         (ii)  (A) the Security  Agreement and the IP Security  Agreement,  each

               duly  executed and  delivered on behalf of Borrower to Lender and
               (I) UCC  financing  statements  executed on behalf of Borrower to


                                      -4-
<PAGE>


               Lender for each  appropriate  jurisdiction  as is  necessary,  in
               Lender's  and  Guarantor's  discretion,  to perfect its  security
               interest     in    such     collateral     and/or    (II)    such
               patent/trademark/copyright filings executed on behalf of Borrower
               to be made with the United States Patent and Trademark  Office as
               requested  by  Lender  in  order  to  perfect  Lender's  security
               interest  in such  collateral  and (B) a security  agreement  and
               intellectual  property security  agreement executed and delivered
               on behalf of Borrower to Guarantor in consideration of Borrower's
               obligations  under  the  Reimbursement   Agreement  and  (I)  UCC
               financing  statements executed on behalf of Borrower to Guarantor
               for each appropriate jurisdiction as is necessary, in Guarantor's
               discretion,  to perfect its security  interest in such collateral
               and/or (II) such  patent/trademark/copyright  filings executed on
               behalf of Borrower to be made with the United  States  Patent and
               Trademark  Office as  requested  by Guarantor in order to perfect
               Guarantor's security interest in such collateral;

         (iii) legal documentation deemed necessary or appropriate by Lender and
               Guarantor under Canadian law to pledge  Borrower's  interest with
               respect to the collateral described in the Security Agreement and
               the IP Security Agreement;

         (iv)  the Guaranty duly executed and delivered on behalf of Guarantor;

         (v)   the Reimbursement Agreement duly executed and delivered on behalf
               of Borrower;

         (vi)  a  favorable  legal  opinion of (A) U.S.  counsel(s)  to Borrower
               acceptable to Lender and Guarantor regarding, but not limited to,
               the due authorization,  execution, delivery and enforceability of
               this  Agreement  and the  perfection  of the  security  interests
               granted to Lender by the Security  Agreement  and the IP Security
               Agreement  and (B)  Canadian  counsel to Borrower  acceptable  to
               Lender  and  Guarantor  regarding,  but not  limited  to, the due
               authorization,  execution,  delivery  and  enforceability  of the
               Canadian collateral  documents and the perfection of the security
               interests granted thereunder;

         (vii) the execution and delivery of that certain letter agreement dated
               as of November 1, 1999 among  Borrower,  Guarantor and Lender and
               the payment of the fees referenced therein;


                                      -5-
<PAGE>

         (viii) the  execution  and  delivery of that certain  letter  agreement
                between Borrower and Guarantor regarding the payment by Borrower
                of certain break-up fees;

         (ix)   a copy of (A) the articles of  incorporation  (or other  charter
                documents)  and bylaws of Borrower  certified  by a secretary or
                assistant secretary of Borrower to be true and correct as of the
                Closing  Date and (B) the  articles of  incorporation  (or other
                charter  documents)  and  bylaws  of  Guarantor  certified  by a
                secretary  or  assistant  secretary  of Guarantor to be true and
                correct as of the Closing Date;

         (x)    a certified borrowing resolution or other evidence of Borrower's
                authority to borrow hereunder;

         (xi)   a certified resolution or other evidence of Guarantor's\
                authority to deliver the Guaranty;

         (xii)  a certificate of incumbency for each of Borrower and Guarantor;

         (xiii) a certificate of good standing, existence or its equivalent with
                respect to each of  Borrower  and  Guarantor  certified  as of a
                recent date by the appropriate  governmental  authorities of the
                state or other  jurisdiction  of  incorporation  and each  other
                jurisdiction  in which the  failure to so qualify and be in good
                standing would have a Material Adverse Effect;

         (xiv)  if requested by Lender,  a promissory  note as  contemplated  in
                PARAGRAPH 1(D) above;

         (xv)   receipt of (A) audited consolidated balance sheet and statements
                of earnings and cash flow of Borrower and its Subsidiaries as of
                December 31, 1998 and (B) unaudited  consolidated  balance sheet
                and  statements  of earnings  and cash flow of Borrower  and its
                Subsidiaries  for the fiscal  quarters ending March 31, 1999 and
                June 30, 1999, respectively;

         (xvi)  receipt   of   copies   of   (A) the Royal Bank of Canada Credit
                Facility  certified  by an officer of  Borrower to be a true and
                accurate  copy and (B) each other  credit  agreement of Borrower
                and/or its Subsidiaries evidencing liabilities, in each case, of
                Borrower and/or its Subsidiaries in excess of $1,000,000; and


                                      -6-
<PAGE>

         (xvii) such other  documents  as Lender  or  Guarantor  may  reasonably
                request.

   (b)   CONDITIONS  PRECEDENT TO SECOND BORROWING.  As a condition precedent to
         the second  borrowing under this Agreement (which such second borrowing
         shall not exceed U.S.  $25,000,000  and together  with the initial Loan
         shall not  exceed  in the  aggregate  U.S.  $30,000,000),  Lender  must
         receive the following from or on behalf of Borrower and/or Guarantor in
         form  satisfactory to Lender and Guarantor  (provided that with respect
         to items  delivered  by  Guarantor  to Lender,  such items need only be
         satisfactory to Lender in its discretion):

         (i)   written  evidence  satisfactory  to Lender of the approval of the
               finance  committee  of  Guarantor to permit Loans in an aggregate
               amount exceeding $5,000,000;

         (ii)  (A)  Borrower  shall  have  granted  to  Lender a first  priority
               security interest in additional  unencumbered collateral existing
               at such time  which is  reasonably  satisfactory  to  Lender  and
               Guarantor and Borrower  shall have executed and delivered (I) all
               necessary  documents  to  be  filed  with  the  U.S.  Patent  and
               Trademark Office and other appropriate  filing locations and (II)
               all UCC financing statements for each appropriate jurisdiction as
               deemed  necessary  by  Lender  and  Guarantor,  in  Lender's  and
               Guarantor's discretion, to Lender or its designee for filing with
               the  appropriate  offices and (B) Borrower  shall have granted to
               Guarantor  a  security  interest  in  the  additional  collateral
               referred  to in  subsection  (A) above and  Borrower  shall  have
               executed and delivered  (I) all  necessary  documents to be filed
               with the U.S. Patent and Trademark  Office and other  appropriate
               filing  locations and (II) all UCC financing  statements for each
               appropriate  jurisdiction  as  deemed  necessary  by  Lender  and
               Guarantor, in Lender's and Guarantor's  discretion,  to Guarantor
               or its designee for filing with the appropriate offices; and

         (iii) a legal opinion of  counsel(s)  to Borrower  acceptable to Lender
               and   Guarantor   regarding,   but  not   limited   to,  the  due
               authorization,  execution,  delivery and  enforceability  of such
               documents related to the additional collateral;

         (iv)  an   officer's   certificate   of  Borrower   stating   that  all
               representations  and warranties set forth in PARAGRAPH 3 continue
               to be true and correct in all material respects as of the date of
               such borrowing and that no Default or Event of Default shall have
               occurred and be continuing on the date of such borrowing;


                                      -7-
<PAGE>

         (v)   the North American Vaccine Acquisition  Agreement shall have been
               executed and delivered on or before November 16, 1999;

         (vi)  no Material  Adverse Change shall have occurred since the Closing
               Date; and

         (vii) such other documents,  filings or opinions as Lender or Guarantor
               may reasonably request.

   (c)   CONDITIONS  TO  EACH  BORROWING,  CONTINUATION  AND  CONVERSION.  As  a
         condition   precedent  to  each   borrowing   (including   the  initial
         borrowing), conversion and continuation of any Loan:

         (i)   Borrower must furnish Lender and Guarantor  with, as appropriate,
               a notice of borrowing, conversion or continuation;

         (ii)  each  representation  and warranty set forth in PARAGRAPH 3 below
               shall be true and correct in all material  respects as if made on
               the date of such borrowing, continuation or conversion; and

         (iii) no  Default  or Event  of  Default  shall  have  occurred  and be
               continuing  on  the  date  of  such  borrowing,  continuation  or
               conversion.

               Each notice of borrowing and notice of conversion or continuation
               shall be deemed a  representation  and warranty by Borrower  that
               the  conditions  referred to in clauses (ii) and (iii) above have
               been met.

3.  REPRESENTATIONS  AND  WARRANTIES.  Borrower  represents  and warrants to the
    Lender that:

    (a)  EXISTENCE  AND  QUALIFICATION;  POWER;  COMPLIANCE  WITH LAWS.  It is a
         corporation  duly  organized  or formed,  validly  existing and in good
         standing under the laws of Canada,  has the power and authority and the
         legal right to own and operate its properties,  to lease the properties
         it operates and to conduct its business,  is duly qualified and in good
         standing under the laws of each jurisdiction where its ownership, lease
         or operation of properties or the conduct of its business requires such
         qualification,  and is in compliance with all laws except to the extent
         that noncompliance does not have a Material Adverse Effect.

    (b)  POWER; AUTHORIZATION;  ENFORCEABLE OBLIGATIONS. The execution, delivery
         and  performance  of this  Agreement  and the other Loan  Documents  by
         Borrower  are within its  powers and have been duly  authorized  by all

                                      -8-
<PAGE>

         necessary  action,  and this Agreement is and the other Loan Documents,
         when  executed,  will be,  legal,  valid  and  binding  obligations  of
         Borrower, enforceable in accordance with their respective terms, except
         as the  enforceability  thereof  may be  limited by  applicable  Debtor
         Relief Laws and general principles of equity.  The execution,  delivery
         and  performance of this Agreement and the other Loan Documents are not
         in contravention of law or of the terms of Borrower's organic documents
         and will not result in the breach of or constitute a default under,  or
         result in the  creation  of a lien under any  indenture,  agreement  or
         undertaking to which Borrower is a party or by which it or its property
         may be bound or affected.

(c)      FINANCIAL  STATEMENTS;  NO  MATERIAL  ADVERSE  EFFECT.  (I) The audited
         consolidated  balance sheet and statements of earnings and cash flow of
         Borrower and its  Subsidiaries for the fiscal year ended as of December
         31,  1998 have  heretofore  been  furnished  to Lender  and filed  with
         Borrower's  Form 10-K for the fiscal  year then  ended.  The  unaudited
         consolidated  balance  sheet and  statements of earnings and cash flows
         for the  fiscal  quarters  ending  March  31,  1999 and June 30,  1999,
         respectively,  have  heretofore been furnished to Lender and filed with
         Borrower's  Form 10-Q for such quarters.  The financial  statements for
         Borrower's   fiscal  quarter  ending  June  30,  1999   (excluding  any
         amendments,  restatements or subsequent  filings with respect  thereto)
         present fairly the consolidated financial condition of Borrower and its
         Subsidiaries  as of June 30,  1999,  and since June 30,  1999 there has
         been no  event or  circumstance  that has a  Material  Adverse  Effect,
         except as has been  publicly  disclosed  by Borrower  prior to the date
         hereof or except as set forth in Schedule  3(c).  All of the  foregoing
         historical  financial  statements have been prepared in accordance with
         generally accepted accounting principles consistently applied except as
         disclosed in the notes thereto.

         (II) On and as of the Closing Date,  the  Projections  delivered to the
         Lender  have been  prepared  in good faith and are based on  reasonable
         assumptions,  and there are no statements,  calculations or conclusions
         in the Projections which are based upon or include information known to
         Borrower to be misleading in any material respect or which fail to take
         into  account  material  information  known to Borrower  regarding  the
         matters reported therein.  On the Closing Date,  Borrower believes that
         the Projections are reasonable.

    (d)  NO MATERIAL LITIGATION. Except as set forth in SCHEDULE 3(D) hereof, no
         litigation  or  governmental  proceeding  is  pending  or,  to the best
         knowledge of Borrower,  threatened  by or against  Borrower  which,  if
         adversely determined, has a Material Adverse Effect.

    (e)  NO  DEFAULT.  No  Default  or  Event of  Default  has  occurred  and is
         continuing.


                                      -9-
<PAGE>

    (f)  USE OF  PROCEEDS.  The  proceeds  of the Loans will be used  solely for
         working  capital  purposes of Borrower  (and in any event in accordance
         with the restrictions set forth in Section 4(c) hereof) and not for any
         other purposes except as set forth in SCHEDULE 3(F) hereto.

    (g)  ERISA.  Each Plan is in  compliance  in all material  respects with the
         applicable  provisions of ERISA,  the Code,  and other Federal or state
         law,  including  all  requirements  under the Code or ERISA for  filing
         reports,  and benefits have been paid in accordance with the provisions
         of such  Plan  except  where the  failure  to be in  compliance  in all
         material respects does not have a Material Adverse Effect.

    (h)  ENVIRONMENTAL  MATTERS.  All facilities  owned or leased by Borrower or
         its  Subsidiaries  have been and continue to be in material  compliance
         with all material environmental laws and regulations.

    (i)  YEAR 2000.  Borrower has (i)  initiated a review and  assessment of all
         areas within its and each of its Subsidiaries'  business and operations
         (including  those  affected by  customers  and  vendors)  that could be
         adversely  affected by the "Year 2000 Problem"  (that is, the risk that
         computer  applications and devices  containing  imbedded computer chips
         used  by  Borrower  or any of its  Subsidiaries  (or  their  respective
         customers and vendors) may be unable to recognize and perform  properly
         date-sensitive  functions involving certain dates prior to and any date
         after  December  31,  1999),  (ii)  developed a plan and  timeline  for
         addressing the Year 2000 Problem on a timely basis,  and (iii) to date,
         implemented  that plan in accordance with that timetable.  Based on the
         foregoing, Borrower believes that all computer applications and devices
         containing  imbedded  computer  chips  (including  those of its and its
         Subsidiaries' customers and vendors) that are material to its or any of
         its Subsidiaries'  business and operations are reasonably expected on a
         timely basis to be able to perform  properly  date-sensitive  functions
         for all dates before and after  January 1, 2000 (that is, be "Year 2000
         compliant"), except to the extent that a failure to do so does not have
         a Material Adverse Effect.

    (j)  FULL  DISCLOSURE.  No written  statement  made by Borrower to Lender in
         connection  with  this  Agreement,  or in  connection  with  any  Loan,
         contains any untrue  statement  of a material  fact or omits a material
         fact necessary to make the statement made not misleading.

    (k)  INTELLECTUAL  PROPERTY.  Borrower  owns, or has the legal right to use,
         all  trademarks,   tradenames,  copyrights,  technology,  know-how  and
         processes (the "INTELLECTUAL PROPERTY") necessary for it to conduct its
         business as currently conducted,  except for such Intellectual Property
         for which the  failure to own or have the legal  right to use could not

                                      -10-
<PAGE>

         have a Material Adverse Effect. Set forth on SCHEDULE 3(K) is a list of
         all  Intellectual  Property  that Borrower is pledging as collateral on
         the Closing  Date.  Except as provided on SCHEDULE  3(K),  no claim has
         been asserted and is pending by any Person  challenging  or questioning
         the  use  of  any  such  Intellectual   Property  or  the  validity  or
         effectiveness of any such Intellectual Property, nor does Borrower have
         knowledge of any such claim, and the use of such Intellectual  Property
         by Borrower  does not infringe on the rights of any Person,  except for
         such claims and infringements that, in the aggregate,  could not have a
         Material Adverse Effect.

    (l)  NO OTHER LIENS.  Other than as disclosed in SCHEDULE  3(K) or otherwise
    disclosed  in  writing  to  Lender  and  Guarantor,   with  respect  to  the
    "Collateral"  (as defined in the Security  Agreement) and the  "Intellectual
    Property Collateral" (as defined in the IP Security Agreement), Borrower has
    not assigned rights of payment in or otherwise  granted a security  interest
    with respect to such rights or collateral to any other Person.

4.  COVENANTS. So   long   as  principal   of   and  interest on any Loan or any
    other  amount  payable  hereunder or under any other Loan  Document  remains
    unpaid or unsatisfied and the Commitment has not been terminated:

    (a)  INFORMATION.  Borrower shall deliver to Lender:

         (i)   (A) as  soon   as  available  and  in any  event  within  90 days
               after the end of each  fiscal  year of  Borrower  a  consolidated
               balance sheet of Borrower and its  Subsidiaries  as of the end of
               such  fiscal  year and the  related  consolidated  statements  of
               income and cash flows for such fiscal year, setting forth in each
               case in  comparative  form the  figures for the  previous  fiscal
               year,  all  prepared  in  accordance   with  generally   accepted
               accounting principles applied on a consistent basis and certified
               by  independent  public  accountants  of  nationally   recognized
               standing and (B) as soon as available  and in any event within 30
               days after the end of each fiscal year of Borrower a  preliminary
               consolidated balance sheet of Borrower and its Subsidiaries as of
               the  end  of  such  fiscal  year  and  the  related   preliminary
               consolidated  statements of income and cash flows for such fiscal
               year,  setting forth in each case in comparative form figures for
               (I) Borrower's previous fiscal year and (II) the projected budget
               for the fiscal year then ended, all in reasonable detail and duly
               certified  (subject to normal year-end  adjustments) by the chief
               financial   officer  of  Borrower  as  having  been  prepared  in
               accordance with generally accepted accounting  principles applied
               on a  consistent  basis,  and,  in  addition  to the  preliminary
               statements  required  to be  delivered  pursuant  to  (B)  above,
               Borrower shall provide to Lender any changes or

                                      -11-
<PAGE>

               modifications (if any) to such preliminary  financial  statements
               every two weeks  after the initial  delivery of such  preliminary
               statements;

         (ii)  (A) as  soon   as   available  and in any  event  within  30 days
               after the end of each of the first three  quarters of each fiscal
               year of Borrower,  a  consolidated  balance sheet of Borrower and
               its  Subsidiaries  as of the end of such  quarter and the related
               consolidated statements of income and cash flows for such quarter
               and for the portion of Borrower's fiscal year ended at the end of
               such quarter,  setting forth in each case in comparative form the
               figures  for the  corresponding  quarter  and  the  corresponding
               portion of  Borrower's  previous  fiscal year,  all in reasonable
               detail   and  duly   certified   (subject   to  normal   year-end
               adjustments) by the chief financial officer of Borrower as having
               been prepared in accordance  with generally  accepted  accounting
               principles  applied  on a  consistent  basis  and  (B) as soon as
               available  and in any event  within 15 days after the end of each
               of the  first  three  fiscal  quarters  of  each  fiscal  year of
               Borrower a preliminary consolidated balance sheet of Borrower and
               its  Subsidiaries  as of the  end of  such  quarter  and  related
               preliminary  consolidated  statements of income and cash flow for
               such quarter then ended;

         (iii) as soon as  available   and   in  any event  within 20 days after
               the end of each  month  (except  the  final  month of its  fiscal
               year),  a copy of the  unaudited  consolidated  balance  sheet of
               Borrower  and  its  Subsidiaries  and  the  related  consolidated
               statements of income and cash flows for such month, setting forth
               in  each  case  in  comparative  form  the  figures  for  (A) the
               corresponding  month of Borrower's  previous  fiscal year and (B)
               the projected  budget for the month then ended, all in reasonable
               detail   and  duly   certified   (subject   to  normal   year-end
               adjustments) by the chief financial officer of Borrower as having
               been prepared in accordance  with generally  accepted  accounting
               principles applied on a consistent basis;

         (iv)  within  20  days  after  the  end of each month (except the final
               month of its fiscal year), a certificate of Borrower certified by
               the chief  financial  officer  of  Borrower  that (A) each of the
               representations  and  warranties  set forth in PARAGRAPH 3 hereof
               are true and  accurate as of the end of such fiscal month and (B)
               no  Default  or Event  of  Default  shall  have  occurred  and be
               continuing as of the end of such fiscal month;

         (v)   promptly  upon  transmission  or receipt  thereof,  (A)  complete
               copies  of  any  filings  and  registrations  with,  and  reports
               (special or otherwise) to or from, the Securities and

                                      -12-
<PAGE>

               Exchange   Commission   or  any  successor   agency,   (B)  proxy
               statements,  notices  and  reports  that  Borrower  sends  to its
               shareholders  and (C)  copies  of all  press  releases  issued by
               Borrower;

         (v)   promptly upon  Borrower's  obtaining  knowledge of any Default or
               Event of Default, a certificate of the chief financial officer of
               Borrower  setting  forth the details  thereof and any action that
               Borrower is taking or proposes to take with respect thereto; and

         (vi)  from  time to time  such  additional  information  regarding  the
               financial  condition or business of Borrower and its Subsidiaries
               as Lender may reasonably request.

         (b)  OTHER AFFIRMATIVE COVENANTS.  Borrower shall, and shall cause each
              of its Subsidiaries to:

              (i)  preserve  and  maintain  all of its rights,  privileges,  and
                   franchises  necessary or  desirable in the normal  conduct of
                   its business;

              (ii) comply with the requirements of all applicable  laws,  rules,
                   regulations,  and  orders  of  governmental  authorities  the
                   violation of which could result in a Material Adverse Effect;

             (iii) pay and  discharge  when  due  all  taxes,  assessments,  and
                   governmental charges or levies imposed on it or on its income
                   or profits or any of its  property,  except for any such tax,
                   assessment,  charge,  or levy the  payment  of which is being
                   contested in good faith and by proper proceedings and against
                   which adequate reserves are being maintained;

              (iv) maintain all of its properties  owned or used in its business
                   in good working  order and  condition  ordinary wear and tear
                   excepted;

              (v)  permit  representatives  of Lender,  during  normal  business
                   hours and upon reasonable notice, to examine,  copy, and make
                   extracts   from  its  books  and  records,   to  inspect  its
                   properties,  and to discuss its business and affairs with its
                   officers, directors, and accountants;

              (vi) cause  (A) all of its  Intellectual  Property  set  forth  on
                   SCHEDULE  3(K)  and  (B)  all of its  receivables  and  other
                   collateral subject to the Security Agreement to be subject at
                   all  times to  first  priority,  perfected  Liens in favor of
                   Lender  to  secure  the  obligations   under  this  Agreement
                   pursuant  to the  terms  and  conditions  of the IP  Security

                                      -13-
<PAGE>

                   Agreement and the Security Agreement. Borrower shall promptly
                   notify Lender of the acquisition of any Intellectual Property
                   subsequent to the Closing Date; and

             (vii) maintain  insurance in such amounts,  with such  deductibles,
                   and against such risks as is customary for similarly situated
                   businesses.

         (c)   NEGATIVE  COVENANTS.  Borrower shall not, nor shall it permit any
               of its Subsidiaries to:

               (i)  INDEBTEDNESS.  Create,  incur, assume or suffer to exist any
                    Indebtedness,   EXCEPT:  (A)  Indebtedness  under  the  Loan
                    Documents  and  (B)  Indebtedness  outstanding  on the  date
                    hereof and listed on SCHEDULE  4(C)(I);  provided  that from
                    and  after  the date of this  Agreement,  in no event  shall
                    Borrower  or its  Subsidiaries  be  permitted  to  make  any
                    additional  borrowings under the Royal Bank of Canada Credit
                    Facility (not to include  conversions  or  continuations  of
                    existing borrowed amounts).

               (ii) LIENS  AND  NEGATIVE  PLEDGES.  Incur,  assume  or suffer to
                    exist, any Lien or Negative Pledge upon any of its property,
                    assets or revenues, whether now owned or hereafter acquired,
                    EXCEPT  Liens  and  Negative  Pledges  existing  on the date
                    hereof and listed on SCHEDULE 4(C)(II).

              (iii) FUNDAMENTAL CHANGES.  Except as provided for or contemplated
                    under the North America Vaccine Acquisition Agreement, merge
                    or  consolidate  with or into any  Person or enter  into any
                    other  agreement  contemplating a merger,  consolidation  or
                    disposition of all or  substantially  all of its assets with
                    any other Person  (other than  Guarantor or any Affiliate of
                    Guarantor)  or  liquidate,  wind-up or dissolve  itself,  or
                    permit or suffer any  liquidation  or dissolution or use the
                    proceeds  of any  Loan in  connection  with  any  merger  or
                    acquisition of assets.


               (iv) DISPOSITIONS.   Make  any   Dispositions,   other   than (A)
                    Dispositions of inventory and (B) other than Dispositions in
                    the ordinary  course of  Borrower's  business and in amounts
                    not to exceed $25,000 for any single Disposition.

               (v)  INVESTMENTS. Make any Investments.

               (vi) LEASE OBLIGATIONS. Create or suffer to exist any obligations
                    for the  payment  of rent for any  property  under  lease or
                    agreement to lease,  EXCEPT  leases in existence on the date
                    hereof and any  renewal,  extension or  refinancing  thereof

                                      -14-
<PAGE>

                    provided  that the rental  payments or financed  amount with
                    respect to such lease does not increase.

              (vii) RESTRICTED   PAYMENTS.   Make  any  Restricted  Payments  or
                    otherwise prepay any obligations or liabilities  (whether in
                    the ordinary course or otherwise).

             (viii) ERISA. At  any  time engage in a transaction  which could be
                    subject to Sections 4069 or 4212(c) of ERISA,  or permit any
                    Pension  Plan to (a)  engage in any  non-exempt  "prohibited
                    transaction"  (as defined in Section 4975 of the Code);  (b)
                    fail to comply with ERISA or any other  applicable  Laws; or
                    (c) incur any material  "accumulated funding deficiency" (as
                    defined in Section  302 of ERISA),  which,  with  respect to
                    each event listed above, has a Material Adverse Effect.

               (ix) CHANGE IN NATURE OF BUSINESS.  Make any change in the nature
                    of the business of Borrower or its Subsidiaries as conducted
                    and as proposed to be conducted as of the date hereof.

               (x)  TRANSACTIONS WITH AFFILIATES.  Enter into any transaction of
                    any  kind  with  any   Affiliate  of  Borrower   other  than
                    arm's-length transactions with Affiliates that are otherwise
                    permitted hereunder.

               (xi) CAPITAL EXPENDITURES.  Except as set forth in SCHEDULE  3(f)
                    hereto,  mmake,  or become  legally  obligated to make,  any
                    capital  expenditure  in excess of $100,000 from the Closing
                    Date to and including the Maturity Date.

              (xii) CHANGE IN AUDITORS.  Change the certified public accountants
                    auditing  the  books of  Borrower  without  the  consent  of
                    Lender.

5. EVENTS OF DEFAULT. The following are "EVENTS OF DEFAULT" hereunder:

   (a)  Borrower  fails to pay any principal of any Loan as and on the date when
        due; or

   (b)  Borrower fails to pay any interest on any Loan, or any  commitment  fees
        due hereunder,  or any portion thereof, within three days after the date
        when due; or Borrower  fails to pay any other fees or amount  payable to
        Lender under any Loan Document, or any portion thereof, within five days
        after the date due; or

   (c)  Any default  occurs in the  observance or  performance  of any agreement
        contained in PARAGRAPH 4(a) or 4(c) hereof; or

   (d)  Borrower  fails to perform or observe any other  covenant  or  agreement
        (not specified  above)  contained in any Loan Document on its part to be
        performed or observed and such failure continues for 10 days; or


                                      -15-
<PAGE>

   (e)  Any   representation  or  warranty  in  any  Loan  Document  or  in  any
        certificate,  agreement,  instrument or other document made or delivered
        by Borrower  pursuant to or in connection  with any Loan Document proves
        to have been incorrect when made or deemed made; or

   (f)  Borrower  (i)  defaults  in any  payment  when  due of  principal  of or
        interest on any indebtedness  (other than  indebtedness  hereunder),  or
        (ii) defaults in the observance or performance of any other agreement or
        condition   relating  to  any  indebtedness   (other  than  indebtedness
        hereunder)  or contained  in any  instrument  or  agreement  evidencing,
        securing or relating thereto, or any other event shall occur, the effect
        of which default or other event is to cause,  or to permit the holder or
        holders  of such  indebtedness  (or a trustee or agent on behalf of such
        holder or holders or beneficiary or  beneficiaries)  to cause,  with the
        giving of notice if required, indebtedness having an aggregate principal
        amount in excess of $100,000 to be demanded or become due (automatically
        or otherwise) prior to its stated maturity,  or any guaranty  obligation
        in such  amount to become  payable,  or  Borrower is unable or admits in
        writing its inability to pay its debts as they mature; or

   (g)  Any Loan Document,  at any time after its execution and delivery and for
        any reason other than the agreement of Lender or satisfaction in full of
        all the indebtedness hereunder, ceases to be in full force and effect or
        to give Lender the Liens, rights,  powers and privileges purported to be
        created  thereby,  or any  Loan  Document  is  declared  by a  court  of
        competent  jurisdiction to be null and void, invalid or unenforceable in
        any respect;  or Borrower denies that it has any or further liability or
        obligation under any Loan Document, or purports to revoke,  terminate or
        rescind any Loan Document; or

   (h)  The Guaranty or any  provision  thereof  shall cease to be in full force
        and  effect  or  Guarantor  or any  Person  acting  by or on  behalf  of
        Guarantor  shall deny or  disaffirm  Guarantor's  obligations  under the
        Guaranty, or Guarantor shall otherwise default in the due performance or
        observance  of  any  term,  covenant  or  agreement  on its  part  to be
        performed  or  observed  pursuant  to the  Guaranty,  including  without
        limitation the occurrence of any Guaranty Event of Default; or

   (i)  A final judgment against Borrower is entered for the payment of money in
        excess  of  $100,000  and  such  judgment  remains  unsatisfied  without
        procurement  of a stay of  execution  within 10 calendar  days after the
        date of entry of judgment; or


                                      -16-
<PAGE>

   (j)  Borrower  or any of  its  Subsidiaries  institutes  or  consents  to the
        institution  of any  proceeding  under Debtor  Relief Laws,  or makes an
        assignment  for the benefit of creditors;  or applies for or consents to
        the  appointment  of  any  receiver,  trustee,  custodian,  conservator,
        liquidator,  rehabilitator  or similar  officer for it or for all or any
        material part of its  property;  or any  receiver,  trustee,  custodian,
        conservator,  liquidator,  rehabilitator or similar officer is appointed
        without the  application or consent of Borrower or such  Subsidiary;  or
        any  proceeding  under  Debtor  Relief Laws  relating to Borrower or any
        Subsidiary  or to all or any  part of  Borrower's  or such  Subsidiary's
        property  is  instituted   without  the  consent  of  Borrower  or  such
        Subsidiary, or an order for relief is entered in any such proceeding; or

   (k)  Any event occurs which has a Material Adverse Effect; or

   (l)  An "Event of  Default"  (as such term is  defined  in the Royal  Bank of
        Canada  Credit  Facility)  occurs under the Royal Bank of Canada  Credit
        Facility; or

   (m)  The North American Vaccine  Acquisition  Agreement shall not be executed
        by the  Borrower  and  Guarantor on or prior to November 16, 1999 or the
        North  American  Vaccine  Acquisition  shall  be  unwound,  reversed  or
        otherwise  rescinded in whole or in any material  part for any reason or
        the North American Vaccine Acquisition Agreement or any letter of intent
        associated therewith shall be terminated by any party thereto; or

   (n)  An  "Event of  Default"  (as such term is  defined  in (x) that  certain
        Indenture  dated as of May 7, 1996 between  Borrower and Marine  Midland
        Bank (the "MARINE  MIDLAND  INDENTURE"),  or (y) that certain  Indenture
        dated November 12, 1998, between Borrower and Bankers Trust Company (the
        "BT  Indenture"))  occurs under the Marine  Midland  Indenture or the BT
        Indenture; or

   (o)  Any Change of Control.

   Upon the occurrence of an Event of Default, Lender may declare the Commitment
   to be  terminated,  whereupon  the  Commitment  shall be  terminated,  and/or
   declare all sums outstanding  hereunder and under the other Loan Documents to
   be immediately due and payable,  together with all interest thereon,  without
   notice of default,  presentment  or demand for payment,  protest or notice of
   nonpayment or dishonor, or other notices or demands of any kind or character,
   all of which are hereby expressly waived;  PROVIDED,  HOWEVER,  that upon the
   occurrence of any event  specified in Paragraph  5(j) above,  the  Commitment
   shall automatically  terminate,  and all sums outstanding hereunder and under
   each other Loan Document shall become  immediately due and payable,  together
   with all interest thereon,  without notice of default,  presentment or demand

                                      -17-
<PAGE>

   for payment, protest or notice of nonpayment or dishonor, or other notices or
   demands of any kind or character, all of which are hereby expressly waived.

6. MISCELLANEOUS.

   (a)   All financial computations required under this Agreement shall be made,
         and all financial  information  required under this Agreement  shall be
         prepared,  in accordance with generally accepted accounting  principles
         consistently applied.

   (b)   All  references  herein and in the other Loan  Documents to any time of
         day shall mean the local  (standard or daylight,  as in effect) time of
         Charlotte, North Carolina.

   (c)   All Breakage Costs shall be for the account of Borrower.

   (d)   If at any time  Lender,  in its sole  discretion,  determines  that (i)
         deposits  in the  amount of any  requested  Offshore  Rate Loan for any
         requested  Interest  Period are not available to Lender in the offshore
         dollar interbank  market, or (ii) the Offshore Rate does not accurately
         reflect the  funding  cost to Lender of lending  such  Loans,  Lender's
         obligation  to make  Offshore  Rate  Loans  shall  cease for the period
         during which such circumstance exists.

   (e)   Borrower shall  reimburse or compensate  Lender,  upon demand,  for all
         costs  incurred,  losses  suffered or payments made by Lender which are
         applied  or  reasonably   allocated  by  Lender  to  the   transactions
         contemplated  herein  (all as  determined  by Lender in its  reasonable
         discretion) by reason of any and all future reserve,  deposit,  capital
         adequacy  or similar  requirements  against (or against any class of or
         change in or in the amount of) assets,  liabilities or commitments  of,
         or extensions of credit by,  Lender;  and compliance by Lender with any
         directive,  or requirements from any regulatory  authority,  whether or
         not having the force of law.

   (f)   No  amendment or waiver of any  provision  of this  Agreement or of any
         other Loan Document and no consent by Lender to any departure therefrom
         by Borrower shall be effective unless such amendment, waiver or consent
         shall be in writing and signed by a duly authorized  officer of Lender,
         and any such amendment,  waiver or consent shall then be effective only
         for the  period and on the  conditions  and for the  specific  instance
         specified in such writing.  No failure or delay by Lender in exercising
         any  right,  power or  privilege  hereunder  shall  operate as a waiver
         thereof,  nor shall any single or partial exercise thereof preclude any
         other or further  exercise thereof or the exercise of any other rights,
         power or privilege.


                                      -18-
<PAGE>

   (g)   Except  as  otherwise  expressly  provided  herein,  notices  and other
         communications  to each party  provided  for herein shall be in writing
         and shall be delivered by hand or overnight courier service,  mailed or
         sent by  telecopy  or  electronic  mail to the address set forth on the
         signature page hereto or as otherwise  provided in writing from time to
         time by such  party.  Any such  notice or other  communication  sent by
         overnight  courier service,  mail or telecopy shall be effective on the
         earlier of actual receipt and (i) if sent by overnight courier service,
         the scheduled  delivery date, (ii) if sent by mail, the fourth Business
         Day after  deposit in the U.S. mail first class  postage  prepaid,  and
         (iii)  if  sent by  telecopy,  when  transmission  in  legible  form is
         complete.  All notices and other communications sent by the other means
         listed in the first sentence of this paragraph  shall be effective upon
         receipt. Notwithstanding anything to the contrary contained herein, all
         notices (by whatever means) to Lender pursuant to PARAGRAPH 1(B) hereof
         shall be effective only upon receipt.

   (h)   This  Agreement  shall inure to the  benefit of the parties  hereto and
         their respective  successors and assigns,  except that Borrower may not
         assign its rights and obligations hereunder. LENDER MAY AT ANY TIME (I)
         ASSIGN ALL OR ANY PART OF ITS RIGHTS AND  OBLIGATIONS  HEREUNDER TO ANY
         OTHER  PERSON  WITH THE  CONSENT OF  BORROWER,  SUCH  CONSENT NOT TO BE
         UNREASONABLY   WITHHELD,    PROVIDED   BORROWER   HEREBY   SPECIFICALLY
         ACKNOWLEDGES  AND AGREES THAT NO SUCH CONSENT  SHALL BE REQUIRED IF THE
         ASSIGNMENT IS TO (A) AN AFFILIATE OF LENDER,  (B) GUARANTOR OR (C) IF A
         DEFAULT OR EVENT OF DEFAULT EXISTS,  AND (II) GRANT TO ANY OTHER PERSON
         PARTICIPATING  INTERESTS  IN ALL OR PART OF ITS RIGHTS AND  OBLIGATIONS
         HEREUNDER  WITHOUT NOTICE TO BORROWER.  Borrower  agrees to execute any
         documents  reasonably  requested by Lender in connection  with any such
         assignment.  All  information  provided  by or on behalf of Borrower to
         Lender or its  affiliates  may be furnished by Lender to its affiliates
         and to any actual or proposed assignee or participant.

   (i)   Borrower  shall pay Lender,  on demand,  all  reasonable  out-of-pocket
         expenses and legal fees  (including  the  allocated  costs for in-house
         legal  services)  incurred by Lender in connection with the enforcement
         of  this  Agreement  or  any  instruments  or  agreements  executed  in
         connection herewith.

   (j)   If any provision of this  Agreement or any other Loan Document shall be
         held invalid or  unenforceable  in whole or in part, such invalidity or
         unenforceability  shall not affect the remaining  provisions  hereof or
         thereof.  This  Agreement  supersedes  all  prior  agreements  and oral
         negotiations with respect to the subject matter hereof.


                                      -19-
<PAGE>

   (k)   This  Agreement may be executed in one or more  counterparts,  and each
         counterpart, when so executed, shall be deemed an original but all such
         counterparts shall constitute but one and the same instrument.

   (l)   This  Agreement and the other Loan Documents are governed by, and shall
         be construed in accordance  with, the laws of the State of New York and
         the applicable  laws of the United States of America.  Borrower  hereby
         submits to the nonexclusive  jurisdiction of the United States District
         Court and each state court in the City of New York for the  purposes of
         all legal  proceedings  arising  out of or  relating to any of the Loan
         Documents   or  the   transactions   contemplated   thereby.   Borrower
         irrevocably  consents to the service of any and all process in any such
         action or  proceeding  by the  mailing  of copies  of such  process  to
         Borrower  at its  address  set  forth  beneath  its  signature  hereto.
         Borrower  irrevocably  waives,  to the fullest extent permitted by law,
         any objection  which it may now or hereafter  have to the laying of the
         venue of any such proceeding brought in such a court and any claim that
         any such  proceeding  brought  in such a court has been  brought  in an
         inconvenient forum.

   (m)   BORROWER  AND LENDER EACH WAIVE THEIR  RESPECTIVE  RIGHTS TO A TRIAL BY
         JURY OF ANY CLAIM OR CAUSE OF ACTION  BASED UPON OR  ARISING  OUT OF OR
         RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
         CONTEMPLATED HEREBY OR THEREBY.

   (n)   THIS  AGREEMENT  AND THE  OTHER  LOAN  DOCUMENTS  REPRESENT  THE  FINAL
         AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE  CONTRADICTED BY EVIDENCE
         OF  PRIOR,  CONTEMPORANEOUS,  OR  SUBSEQUENT  ORAL  AGREEMENTS  OF  THE
         PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


                                      -20-
<PAGE>


Please  indicate your  acceptance of the  Commitment on the foregoing  terms and
conditions  by returning an executed copy of this  Agreement to the  undersigned
not later than November 1, 1999.


                                      BANK OF AMERICA, N.A.


                                      By:/s/ Lawrence J. Gordon
                                         -----------------------------------
                                      Name:    Lawrence J. Gordon
                                      Title:   Vice President

                                      Notice Address:

                                      Bank of America Center
                                      700 Louisiana Street, TX4-213-08-10
                                      Houston, Texas  77002-2700
                                      Attention: Lawrence J. Gordon
                                                 Vice President
                                      Fax No.:   713-247-6719

ACCEPTED AND AGREED TO:


NORTH AMERICAN VACCINE, INC.


By:    /s/ Randal Chase
       -------------------------------
Name:  Randal Chase, Ph.D.
       -------------------------------
Title: Chief Executive Officer & President
       -----------------------------------

Date: November 1, 1999

Notice Address:

10150 Old Columbia Road
Columbia, Maryland  21046
Attention:  Vice-President
Fax No.:  (410) 309-4077


                                      -21-
<PAGE>

                                                                       EXHIBIT A

                                   DEFINITIONS

Affiliate:       Any Person directly or indirectly  controlling,  controlled by,
                 or under direct or indirect  common control with,  Borrower.  A
                 Person shall be deemed to be  "controlled  by" any other Person
                 if such other Person possesses,  directly or indirectly,  power
                 (a) to vote 10% or more of the  securities  (on a fully diluted
                 basis)  having  ordinary  voting  power  for  the  election  of
                 directors  or managing  general  partners;  or (b) to direct or
                 cause the  direction  of the  management  and  policies of such
                 Person whether by contract or otherwise.

Agreement:       This  letter  agreement,  as  amended,  restated,     extended,
                 supplemented  or  otherwise  modified  in writing  from time to
                 time.

Base Rate:       A fluctuating rate  per  annum  equal  to the higher of (a) the
                 Federal  Funds Rate plus 1/2 of 1% and (b) the rate of interest
                 publicly  announced  from  time to time by  Lender as its prime
                 rate.  The  Lender's  prime rate is a rate set by Lender  based
                 upon  various  factors  including  Lender's  costs and  desired
                 return,  general economic conditions and other factors,  and is
                 used as a reference point for pricing some loans,  which may be
                 priced at, above,  or below such announced  rate. Any change in
                 the prime rate  announced  by Lender  shall take  effect at the
                 opening  of  business  on  the  day  specified  in  the  public
                 announcement of such change.

Base Rate Loan:  A Loan bearing interest based on the Base Rate.

Breakage Costs:  Any  loss,  cost  or expense incurred by Lender  (including any
                 loss of  anticipated  profits  and any loss or expense  arising
                 from the  liquidation  or  reemployment  of funds  obtained  by
                 Lender to maintain the relevant Offshore Rate Loan or from fees
                 payable to terminate  the  deposits  from which such funds were
                 obtained)  as a  result  of (i) any  continuation,  conversion,
                 payment or  prepayment of any Offshore Rate Loan on a day other
                 than the  last day of the  Interest  Period  therefor  (whether
                 voluntary,  mandatory, automatic, by reason of acceleration, or
                 otherwise); or (ii) any failure by Borrower (for a reason other
                 than the  failure of Lender to make a Loan when all  conditions
                 to making  such Loan have been met by  Borrower  in  accordance
                 with the terms hereof) to prepay,  borrow,  continue or convert
                 any Offshore  Rate Loan on a date or in the amount  notified by

                                      A-1
<PAGE>

                 Borrower.  The  certificate of Lender as to its costs of funds,
                 losses  and  expenses   incurred  shall  be  conclusive  absent
                 manifest error.

Business Day:    Any day other than a  Saturday,  Sunday,  or other day on which
                 commercial  banks are authorized to close under the laws of, or
                 are in fact  closed  in,  the  State  of North  Carolina  where
                 Lender's  lending office is located and, if such day relates to
                 any Offshore Rate Loan, means any such day on which dealings in
                 dollar  deposits  are  conducted  by and  between  banks in the
                 offshore dollar interbank market.

Change of
Control:         Any  of  the  following  events:  (a)  any "person"  or "group"
                 (within the meaning of Section 13(d) or 14(d) of the Securities
                 Exchange  Act)  (other  than  one  or  more  of  the  Principal
                 Shareholders)   has  become,   directly  or   indirectly,   the
                 "beneficial  owner" (as  defined in Rules 13d-3 and 13d-5 under
                 the  Securities  Exchange  Act,  except that a Person  shall be
                 deemed to have a "beneficial  ownership" of all shares that any
                 such  Person has the right to  acquire,  whether  such right is
                 exercisable  immediately or only after the passage of time), by
                 way of merger,  consolidation  or otherwise,  of 20% or more of
                 the  voting  power  of  the  Voting  Stock  of  Borrower  on  a
                 fully-diluted  basis, after giving effect to the conversion and
                 exercise  of  all  outstanding  warrants,   options  and  other
                 securities  of Borrower  convertible  into or  exercisable  for
                 Voting Stock of Borrower  (whether or not such  securities  are
                 then currently  convertible or exercisable);  or (b) during any
                 period of two consecutive  calendar  years,  individuals who at
                 the beginning of such period constituted the board of directors
                 of Borrower  (together with any new directors whose election to
                 such board or whose nomination for election by the stockholders
                 of  Borrower  was  approved  by a  vote  of a  majority  of the
                 directors then still in office who were either directors at the
                 beginning of such period or whose  election or  nomination  for
                 election  was  previously  approved)  cease  for any  reason to
                 constitute  a majority  of the board of  directors  of Borrower
                 then in office;  or (c) the  failure of Biochem  Pharma Inc. at
                 any time to directly own  beneficially and of record on a fully
                 diluted basis at least 35% of the Voting Stock of Borrower.

Closing Date:    Means the date of this Agreement.

Code:            The  Internal  Revenue  Code  of  1986, as amended from time to
                 time.

Contractual
Obligation:      Any  provision of any security  issued by such Person or of any
                 agreement,  instrument or undertaking to which such Person is a
                 party or by which it or any of its property is bound.


                                      A-2
<PAGE>

Debtor Relief
Laws:            The  Bankruptcy  Code of the United States of  America, and all
                 other liquidation, conservatorship,  bankruptcy, assignment for
                 the   benefit   of   creditors,   moratorium,    rearrangement,
                 receivership,  insolvency,  reorganization,  or similar  debtor
                 relief laws of the United States of America or other applicable
                 jurisdictions  from time to time in effect affecting the rights
                 of creditors generally.

Default:         Any event that,  with the giving of any notice,  the passage of
                 time, or both, would be an Event of Default.

Disposition:     The sale, transfer, license or other disposition (including any
                 sale and leaseback  transaction) of any property by any Person,
                 including any sale, assignment, transfer or other disposal with
                 or without recourse of any notes or accounts  receivable or any
                 rights and claims associated therewith.

ERISA:           The  Employee  Retirement  Income  Security Act of 1974 and any
                 regulations  issued pursuant  thereto,  as amended from time to
                 time.

Event of
Default:         Has the meaning set forth in Paragraph 5.

Federal Funds
Rate:            For any day, the rate per annum (rounded upwards, if necessary,
                 to the nearest  1/100 of 1%) equal to the  weighted  average of
                 the rates on overnight Federal funds  transactions with members
                 of the Federal Reserve System arranged by Federal funds brokers
                 on such day, as  published  by the Federal  Reserve Bank of New
                 York on the Business  Day next  succeeding  such day;  PROVIDED
                 that (a) if such day is not a Business  Day, the Federal  Funds
                 Rate for such day  shall be such rate on such  transactions  on
                 the next  preceding  Business  Day as so  published on the next
                 succeeding  Business  Day,  and  (b)  if  no  such  rate  is so
                 published  on such next  succeeding  Business  Day, the Federal
                 Funds Rate for such day shall be the  average  rate  charged to
                 Lender  on  such  day on such  transactions  as  determined  by
                 Lender.

Governmental
Authority:       Any (a)  international,  foreign,  federal,  state,  county  or
                 municipal  government,  or political  subdivision  thereof, (b)
                 governmental or quasi-governmental  agency,  authority,  board,
                 bureau, commission, department,  instrumentality,  central bank
                 or public body, or (c) court, administrative tribunal or public
                 utility.

Guarantor:       [*]

Guaranty:        The  Guaranty  dated as of the date of the  Agreement  given by
                 Guarantor for the benefit of Lender.

---------------

*  Confidential treatment requested.


                                      A-3
<PAGE>

Guaranty Event
of Default:      Has the meaning set forth in the Guaranty.

Guaranty
Obligation:      Any (a)  guaranty  by a Person  of  Indebtedness  of,  or other
                 obligation  payable or performable  by, any other Person or (b)
                 assurance,  agreement,  letter  of  responsibility,  letter  of
                 awareness,  undertaking or arrangement  given by a Person to an
                 obligee of any other  Person  with  respect  to the  payment or
                 performance of an obligation by, or the financial condition of,
                 such other  Person,  whether  direct,  indirect or  contingent,
                 including  any purchase or repurchase  agreement  covering such
                 obligation or any collateral  security therefor,  any agreement
                 to provide funds (by means of loans,  capital  contributions or
                 otherwise) to such other  Person,  any agreement to support the
                 solvency  or  level of any  balance  sheet  item of such  other
                 Person or any  "keep-well"  or other  arrangement  of  whatever
                 nature  given for the purpose of  assuring or holding  harmless
                 such obligee  against loss with  respect to any  obligation  of
                 such other Person;  PROVIDED,  HOWEVER,  that the term Guaranty
                 Obligation  shall not include  endorsements  of instruments for
                 deposit or collection in the ordinary  course of business.  The
                 amount  of any  Guaranty  Obligation  shall be  deemed to be an
                 amount  equal  to the  stated  or  determinable  amount  of the
                 related primary obligation, or portion thereof, covered by such
                 Guaranty  Obligation  or, if not  stated or  determinable,  the
                 maximum reasonably  anticipated liability in respect thereof as
                 determined by the Person in good faith.

Indebtedness:    As to any Person at a particular  time,  all items which would,
                 in conformity  with GAAP, be  classified  as  liabilities  on a
                 balance sheet of such Person as at such time  (excluding  trade
                 and other accounts  payable in the ordinary  course of business
                 in  accordance  with  customary  trade  terms and which are not
                 overdue  for a  period  of  more  than 60  days  and  excluding
                 deferred  taxes),   but  in  any  event   including:   (a)  all
                 obligations   of  such  Person  for  borrowed   money  and  all
                 obligations  of such  Person  evidenced  by bonds,  debentures,
                 notes  or  other  similar   instruments;   (b)  any  direct  or
                 contingent  obligations of such Person arising under letters of
                 credit   (including    standby   and   commercial),    banker's
                 acceptances,   bank   guaranties,   surety  bonds  and  similar
                 instruments;  (c) net obligations under any Swap Contract in an
                 amount equal to (i) if such Swap  Contract has been closed out,
                 the  termination  value thereof,  or (ii) if such Swap Contract
                 has not been  closed  out,  the  mark-to-market  value  thereof
                 determined  on  the  basis  of  readily  available   quotations
                 provided by any recognized  dealer in such Swap  Contract;  (d)

                                      A-4
<PAGE>

                 whether or not so included as  liabilities  in accordance  with
                 GAAP,  all  obligations  of such  Person  to pay  the  deferred
                 purchase  price  of  property  or  services,  and  indebtedness
                 (excluding  prepaid  interest  thereon)  secured  by a Lien  on
                 property  owned or being  purchased  by such Person  (including
                 indebtedness  arising  under  conditional  sales or other title
                 retention  agreements),  whether or not such indebtedness shall
                 have been assumed by such Person or is limited in recourse; (e)
                 lease payment  obligations  under  capital  leases or Synthetic
                 Lease  Obligations;  and (f) all Guaranty  Obligations  of such
                 Person in respect of any of the foregoing.

                 For all purposes of this  Agreement,  the  Indebtedness  of any
                 Person shall include the  Indebtedness  of any  partnership  or
                 joint  venture in which such  Person is a general  partner or a
                 joint venturer.

Intellectual
Property:        Has the meaning set forth in PARAGRAPH 3(K).

Interest
Period:          For  each  Offshore  Rate  Loan,  (a)  initially,   the  period
                 commencing  on the date the Offshore  Rate Loan is disbursed or
                 converted from a Base Rate Loan and (b) thereafter,  the period
                 commencing  on the last day of the preceding  Interest  Period,
                 and, in each case,  ending on the  earlier of (x) the  Maturity
                 Date and (y) one month  thereafter,  as  requested by Borrower;
                 PROVIDED that:

                 (i) any Interest  Period that would otherwise end on a day that
                     is not a  Business  Day  shall  be  extended  to  the  next
                     succeeding  Business Day unless such  Business Day falls in
                     another  calendar month, in which case such Interest Period
                     shall end on the next preceding Business Day; and

                (ii) any Interest  Period which begins on the last  Business Day
                     of a  calendar  month  (or on a day for  which  there is no
                     numerically  corresponding day in the calendar month at the
                     end of such Interest Period) shall end on the last Business
                     Day of the  calendar  month  at the  end of  such  Interest
                     Period.

Investment:      Any  acquisition or any  investment by such Person,  whether by
                 means of the  purchase or other  acquisition  of stock or other
                 securities of any other Person or by means of a loan,  creating
                 a debt, capital contribution,  guaranty or other debt or equity
                 participation  or interest in any other  Person,  including any
                 partnership and joint venture interests in such other Person.


                                      A-5
<PAGE>

IP Security
Agreement:       The Patent and  Trademark  Assignment  and  Security  Agreement
                 dated as of the Closing Date between Borrower, as assignor, and
                 Lender, as assignee.

Lien:            Any  mortgage,  pledge,  hypothecation,   assignment,   deposit
                 arrangement  (in the  nature  of  compensating  balances,  cash
                 collateral accounts or security interests),  encumbrance,  lien
                 (statutory or other), charge, or preference,  priority or other
                 security  interest or  preferential  arrangement of any kind or
                 nature   whatsoever   (including,   without   limitation,   any
                 conditional  sale  or  other  title  retention  agreement,  any
                 financing lease having  substantially  the same economic effect
                 as  any of the  foregoing,  and  the  filing  of any  financing
                 statement under the Uniform  Commercial Code or comparable laws
                 of any jurisdiction),  including the interest of a purchaser of
                 accounts receivable.

Loan Documents:  This  Agreement,   the   Security  Agreement,  the  IP Security
                 Agreement and any  promissory  note,  certificate,  fee letter,
                 financing statement and other instrument, document or agreement
                 delivered  in  connection  with this  Agreement or the Security
                 Agreement or the IP Security Agreement.

Material
Adverse Effect:  Any  set  of circumstances or events  which   (a ) has or could
                 reasonably  be expected  to have any  material  adverse  effect
                 whatsoever  upon the  validity  or  enforceability  of any Loan
                 Document, (b) is or could reasonably be expected to be material
                 and adverse to the condition (financial or otherwise), business
                 operations or prospects of Borrower or (c)  materially  impairs
                 or could  reasonably  be  expected  to  materially  impair  the
                 ability of Borrower to perform its  obligations and liabilities
                 under  this  Agreement  or any other Loan  Document;  provided,
                 however,  that a Material  Adverse  Effect under this Agreement
                 shall not  include  any  circumstances  or  events  (including,
                 without limitation,  any loss of personnel,  loss of customers,
                 loss of  suppliers or the delay or  cancellation  of any orders
                 for  products):  (i)  relating to the economy in general,  (ii)
                 relating to the industry in which Borrower operates in general,
                 (iii)  relating  to any  actions  taken by The  American  Stock
                 Exchange  with  respect  to its  letter to the  Borrower  dated
                 September  24,  1999,  (iv)  arising out of or  resulting  from
                 actions  contemplated  by the  Borrower  and the  Guarantor  in
                 connection  with, or which is attributable to, the announcement
                 of this Agreement and/or the transactions  contemplated  hereby
                 (including,  without limitation, the Guarantor's acquisition of
                 the  Borrower),  or (v)  relating to the release of  Borrower's
                 financial results or Borrower's  failure to meet any publicized
                 financial  projections  for so long as  Borrower's  revenue and

                                      A-6
<PAGE>


                 expenses are substantially in accordance with the Projections.

Maturity Date:   March 31, 2000, or  such  earlier  date on which the Commitment
                 may terminate in accordance with the terms hereof.

Multiemployer
Plan:            Any  employee  benefit  plan of the type  described  in Section
                 4001(a)(3) of ERISA.

Negative
Pledge:          A Contractual Obligation that restricts Liens on property.

North American   The  acquisition by Guarantor of Borrower pursuant to the North
Vaccine          American   Vaccine   Acquisition   Agreement  and   all   other
Acquisition:     transactions   contemplated  by  the  North  American   Vaccine
                 Acquisition Agreement.

North American   The  Agreement  and  Plan  of Merger to be entered into between
Vaccine          Guarantor and Borrower, in  substantially  the form  of EXHIBIT
Acquisition      C hereto, as amended or modified from time to time as agreed to
Agreement:       by the parties thereto.

Offshore Rate:   For any Interest Period with respect to any Offshore Rate Loan,
                 a rate per annum  determined pursuant to the following formula:

                      Offshore Rate =      Offshore Base Rate
                                     -------------------------------------
                                     1.00 - Eurodollar Reserve Percentage
                      Where,

                           "OFFSHORE BASE RATE" means, for such Interest Period:

                           (a) the  rate per  annum  (carried  out to the  fifth
                               decimal  place) equal to the rate  determined  by
                               Lender to be the offered rate that appears on the
                               page of the  Telerate  Screen  that  displays  an
                               average  British  Bankers  Association   Interest
                               Settlement  Rate (such page currently  being page
                               number   3750)  for   deposits  in  dollars  (for
                               delivery  on  the  first  day  of  such  Interest
                               Period) with a term  equivalent  to such Interest
                               Period, determined as of approximately 11:00 a.m.
                               (London  time)  two  Business  Days  prior to the
                               first day of such Interest Period, or

                           (b) in the event the rate referenced in the preceding
                               clause  (a)  does  not  appear  on  such  page or
                               service or such page or service shall cease to be
                               available,  the rate per  annum  (carried  to the
                               fifth decimal place) equal to the rate determined

                                      A-7
<PAGE>

                               by Lender to be the  offered  rate on such  other
                               page or other  service  that  displays an average
                               British Bankers  Association  Interest Settlement
                               Rate for deposits in dollars (for delivery on the
                               first day of such  Interest  Period)  with a term
                               equivalent to such Interest Period, determined as
                               of  approximately  11:00 a.m.  (London  time) two
                               Business  Days  prior  to the  first  day of such
                               Interest Period, or

                           (c) in  the  event  the  rates   referenced   in  the
                               preceding  clauses (a) and (b) are not available,
                               the rate per  annum  determined  by Lender as the
                               rate of interest at which  dollar  deposits  (for
                               delivery  on  the  first  day  of  such  Interest
                               Period)  in same  day  funds  in the  approximate
                               amount of the  applicable  Offshore Rate Loan and
                               with a term  equivalent to such  Interest  Period
                               would be offered  by  Lender's  London  Branch to
                               major  banks in the  offshore  dollar  market  at
                               their request at approximately 11:00 a.m. (London
                               time) two Business Days prior to the first day of
                               such Interest Period.


                           "EURODOLLAR  RESERVE  PERCENTAGE"  means, for any day
                           during any Interest  Period,  the reserve  percentage
                           (expressed as a decimal,  rounded  upward to the next
                           1/100th  of 1%) in effect on such day  applicable  to
                           Lender under regulations  issued from time to time by
                           the Board of Governors of the Federal  Reserve System
                           for  determining  the  maximum  reserve   requirement
                           (including  any  emergency,   supplemental  or  other
                           marginal   reserve   requirement)   with  respect  to
                           Eurocurrency   funding  (currently   referred  to  as
                           "Eurocurrency  liabilities").  The Offshore  Rate for
                           each outstanding Offshore Rate Loan shall be adjusted
                           automatically  as of the effective date of any change
                           in the Eurodollar Reserve Percentage.

Offshore Rate
Loan:            A Loan bearing interest based on the Offshore Rate.

Pension Plan:    Any  "employee  pension  benefit plan" (as such term is defined
                 in Section 3(2) of ERISA),  other  than  a  Multiemployer Plan,
                 that  is  subject  to  Title  IV  of  ERISA and is sponsored or
                 maintained  by  Borrower  or any ERISA  Affiliates  or to which
                 Borrower  or  any  ERISA   Affiliate   contributes  or  has  an
                 obligation to contribute, or in the case of a multiple employer

                                      A-8
<PAGE>

                 plan (as  described  in  Section  4064(a)  of  ERISA)  has made
                 contributions at any time during the immediately preceding five
                 plan years.

Person:          Any  individual,  trustee,  corporation,  general  partnership,
                 limited  partnership,  limited liability  company,  joint stock
                 company,  trust,  unincorporated  organization,  bank, business
                 association,  firm, joint venture,  governmental  authority, or
                 otherwise.

Plan:            Any  employee  benefit plan  maintained  or  contributed  to by
                 Borrower  or  by  any  trade  or   business   (whether  or  not
                 incorporated)  under common control with Borrower as defined in
                 Section  4001(b) of ERISA and  insured by the  Pension  Benefit
                 Guaranty Corporation under Title IV of ERISA.

Principal
Shareholder:     Each of  Guarantor,  Biochem  Pharma Inc.,  Dr.  Phillip  Frost
                 and/or Frost-Nevada Limited Partnership

Projections:     The projections of balance sheets, statements of cash flows and
                 comparative   statements  of  operations  (2000  Forecast)  for
                 Borrower  dated  October  25, 1999 and  delivered  to Lender by
                 Borrower prior to the Closing Date.

Reimbursement
Agreement:       That certain  Reimbursement  Agreement  dated as of November 1,
                 1999 between Borrower and Guarantor.

Restricted
Payment:         (a) The  declaration or payment of any dividend or distribution
                 by  Borrower  or any of its  Subsidiaries,  either  in  cash or
                 property,  on any shares of the  capital  stock of any class of
                 Borrower  or  any  of  its  Subsidiaries;   (b)  the  purchase,
                 repayment,  redemption  or retirement by Borrower or any of its
                 Subsidiaries of any shares of its capital stock of any class or
                 any  warrants,  rights or options to  purchase  or acquire  any
                 shares of its capital  stock,  whether  directly or indirectly;
                 (c) any other payment or distribution by Borrower or any of its
                 Subsidiaries  in respect of its capital stock,  either directly
                 or  indirectly;  (d) any  Investment  other than an  Investment
                 otherwise  permitted  under  any  Loan  Document;  and  (e) the
                 prepayment,   repayment,   redemption,   defeasance   or  other
                 acquisition  or  retirement  for value  prior to any  scheduled
                 maturity,   scheduled   repayment  or  scheduled  sinking  fund
                 payment,  of any Indebtedness not otherwise permitted under any
                 Loan Document to be so paid.

Royal Bank of
Canada Credit    (A) That certain letter agreement dated July 12, 1999 delivered
Facility:        by  Royal  Bank  of  Canada  and  accepted by Borrower, Biochem


                                      A-9
<PAGE>

                 Pharma Inc. and Biochem  Pharma  Holdings Inc., in an aggregate
                 principal  amount  of up  to  US$6.0MM  and  (B)  that  certain
                 Guarantee and  Postponement  of Claims from Biochem Pharma Inc.
                 and  Biochem  Pharma  Holdings  Inc.  in favor of Royal Bank of
                 Canada dated July 1, 1999.

Securities
Exchange Act:    The Securities Exchange  Act of 1934, as amended, and all rules
                 and regulations issued pursuant thereto.

Security
Agreement:       The  Security  Agreement  dated as of the Closing  Date between
                 Borrower, as debtor, and Lender, as secured party.

Subsidiary:      A corporation,  partnership,  joint venture,  limited liability
                 company or other  business  entity of which a  majority  of the
                 shares of securities or other interests  having ordinary voting
                 power for the  election of directors  or other  governing  body
                 (other than  securities or interests  having such power only by
                 reason  of the  happening  of a  contingency)  are at the  time
                 beneficially  owned,  or the  management  of which is otherwise
                 controlled,   directly,  or  indirectly  through  one  or  more
                 intermediaries, or both, by Borrower.

Swap Contract:   (a)  Any  and all rate swap transactions,  basis swaps, forward
                 rate transactions,  commodity swaps, commodity options, forward
                 commodity  contracts,  equity or equity index swaps or options,
                 bond or bond  price or bond  index  swaps or options or forward
                 bond or forward bond price or forward bond index  transactions,
                 interest rate options,  forward foreign exchange  transactions,
                 cap  transactions,  floor  transactions,  collar  transactions,
                 currency   swap   transactions,    cross-currency   rate   swap
                 transactions,   currency   options,   or  any   other   similar
                 transactions  or  any  combination  of  any  of  the  foregoing
                 (including  any  options to enter  into any of the  foregoing),
                 whether or not any such  transaction  is governed by or subject
                 to any master agreement, or (b) any and all transactions of any
                 kind, and the related  confirmations,  which are subject to the
                 terms and  conditions  of, or  governed  by, any form of master
                 agreement  published by the International Swaps and Derivatives
                 Association,  Inc.,  or any other  master  agreement  (any such
                 master  agreement,  together  with any  related  schedules,  as
                 amended, restated, extended, supplemented or otherwise modified
                 in writing from time to time, a "MASTER AGREEMENT"),  including
                 but not  limited to any such  obligations  or liabilities under
                 any Master Agreement.

Synthetic Lease
Obligations:     All  monetary  obligations  of a Person  under (a) a  so-called
                 synthetic  lease, or (b) an agreement for the use or possession

                                      A-10
<PAGE>

                 of  property  creating  obligations  which do not appear on the
                 balance sheet of such Person but which,  upon the insolvency or
                 bankruptcy  of  such  Person,  would  be  characterized  as the
                 Indebtedness  of such  Person  (without  regard  to  accounting
                 treatment).

Voting Stock:    All classes  of  capital stock of Borrower then outstanding and
                 normally entitled to vote in the election of directors.




                                      A-11
<PAGE>
                                                                       EXHIBIT B

                             FORM OF PROMISSORY NOTE


$30,000,000                                                        _____________


         FOR VALUE RECEIVED,  the undersigned,  NORTH AMERICAN VACCINE,  INC., a
___________  corporation  ("BORROWER"),  hereby  promises to pay to the order of
BANK OF AMERICA,  N.A.  ("LENDER") the principal sum of Thirty  Million  Dollars
(US$30,000,000)  or, if less, the aggregate unpaid principal amount of all Loans
made by  Lender  to  Borrower  pursuant  to the  letter  agreement,  dated as of
[__________,  1999] (such  letter  agreement,  as it may be  amended,  restated,
extended,   supplemented  or  otherwise   modified  from  time  to  time,  being
hereinafter  called  the  "AGREEMENT"),  between  Borrower  and  Lender,  on the
Maturity Date. Borrower further promises to pay interest on the unpaid principal
amount of the Loans  evidenced  hereby  from time to time at the  rates,  on the
dates, and otherwise as provided in the Agreement.

         Lender is  authorized  to endorse the amount and the date on which each
Loan is made or converted, the Interest Period therefor (if applicable) and each
payment of principal  with respect  thereto on the schedules  annexed hereto and
made a part hereof,  or on continuations  thereof which shall be attached hereto
and made a part hereof; PROVIDED that any failure to so endorse such information
on such  schedule  or  continuation  thereof  or any error in doing so shall not
limit or otherwise affect any obligation of Borrower under the Agreement or this
promissory note.

         This  promissory  note is the  promissory  note  referred to in, and is
entitled to the benefits of, the Agreement, which Agreement, among other things,
contains  provisions  for  acceleration  of the maturity of the Loans  evidenced
hereby upon the happening of certain  stated events and also for  prepayments on
account of principal  of the Loans prior to the maturity  thereof upon the terms
and conditions therein specified.

         Unless  otherwise  defined  herein,  terms defined in the Agreement are
used herein with their defined meanings  therein.  This promissory note shall be
governed by, and  construed in accordance  with,  the laws of the State of North
Carolina.

                                      NORTH AMERICAN VACCINE, INC.


                                      By:
                                         ---------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------



                                      B-1
<PAGE>


<TABLE>
<CAPTION>
                                                                                                                 SCHEDULE A TO NOTE
                BASE RATE LOANS AND REPAYMENT OF BASE RATE LOANS
                ------------------------------------------------

      (1)                        (2)                             (3)                         (4)                      (5)
                                                           Amount of Base Rate
                           Amount of Base Rate               Loan Repaid or          Unpaid Principal
                         Loan Made or Converted           Converted to Offshore      Balance of Base               Notation
     Date                from Offshore Rate Loan               Rate Loan                 Rate Loans                Made By
     ----                -----------------------               ---------                 ----------                --------

<S>                      <C>                              <C>                        <C>                        <C>


 -------------              -------------                   -------------               -------------            -------------

 -------------              -------------                   -------------               -------------            -------------

 -------------              -------------                   -------------               -------------            -------------

 -------------              -------------                   -------------               -------------            -------------

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</TABLE>


                                      B-2
<PAGE>


<TABLE>
<CAPTION>

                                                                                                                 SCHEDULE B TO NOTE

            OFFSHORE RATE LOANS AND REPAYMENT OF OFFSHORE RATE LOANS
            --------------------------------------------------------

        (1)          (2)                      (3)                  (4)                      (5)                      (6)
                     Amount of                                     Amount of
                     Offshore Rate                                 Offshore Rate            Unpaid Principal
                     Loan Made or                                  Loan Repaid or           Balance of
                     Converted from                                Converted to Base        Offshore Rate            Notation
       DATE          BASE RATE LOAN           INTEREST PERIOD      RATE LOAN                LOANS                    MADE BY
       ----          --------------           ---------------      ---------                -----                    -------
<S>                  <C>                      <C>                  <C>                      <C>                      <C>

----------           -------------            ------------         -------------            -------------            -------------

----------           -------------            ------------        -------------            -------------            -------------

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</TABLE>


                                      B-3
<PAGE>


                                                                       EXHIBIT C


             [Form of North American Vaccine Acquisition Agreement]


<PAGE>


                           SCHEDULE 3(D) TO AGREEMENT
                               MATERIAL LITIGATION

1.)     On November 2, 1998, Sharon Mates, Ph.D., then a director of the Company
and the  Company's  former  president,  initiated  litigation  in United  States
District  Court,  District  of  Maryland  (Civil  Action  No. AW  98-3678)  (the
"Complaint") against the Company, two of its directors and BioChem.

2.)     By letter dated October 7, 1999,  Chiron Behring  GmbH  & Co. ("Chiron")
notified  Borrower that Chiron was  terminating  "for cause" the parties' Supply
and  Distribution  Agreement  dated  December 3, 1996,  as  amended.  Chiron has
alleged that Borrower  misrepresented  the status of regulatory  approval of its
products and  fraudulently  induced Chiron to enter into the agreement,  and has
demanded  repayment from Borrower of $3 million in nonrefundable  payments under
the agreement.


<PAGE>
                           SCHEDULE 3(F) TO AGREEMENT
                                 USE OF PROCEEDS

-------------------------------------------------------------------------------
                                 SCHEDULE 3 (F)
-------------------------------------------------------------------------------
                      NON-WORKING CAPITAL USES OF PROCEEDS
                            (THROUGH MARCH 31, 2000)
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
PRELIMINARY CAPITAL ADDITIONS FORECAST
-------------------------------------------------------------------------------
10/28/99

-------------------------------------------------------------------------------
         DESCRIPTION                          IN PROGRESS VENDOR
-------------------------------------------------------------------------------

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                                                                           [*]
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---------------
*  Confidential treatment requested.


<PAGE>

                                                                           [*]
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-------------------------------------------------------------------------------
                                                                           [*]
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-------------------------------------------------------------------------------
         TOTAL CAPEX ADDITIONS 6 MONTHS                            $       [*]
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
INTEREST PAYMENTS
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
         6.5 % Notes                                               $ 2,448,095
-------------------------------------------------------------------------------
         4.5 % Notes                                                   562,500
-------------------------------------------------------------------------------
           TOTAL INTEREST PAYMENTS                                 $ 3,010,595
-------------------------------------------------------------------------------

---------------
*  Confidential treatment requested.

<PAGE>


                           SCHEDULE 3(K) TO AGREEMENT
            LIST OF INTELLECTUAL PROPERTY TO BE PLEDGED AS COLLATERAL


Intellectual Property to be Assigned in Connection with Initial Loan
(up to US$5MM)





<PAGE>


                          SCHEDULE 4(C)(I) TO AGREEMENT
                            OUTSTANDING INDEBTEDNESS


                                     Annex B
                       Liabilities Greater than $1,000,000

Indenture  dated May 7, 1996 between NAV and Marine Midland Bank,  together with
related 6.5% Convertible Subordinated Notes.

Master Agreement dated November 1, 1996 between NAV and General Electric Capital
Corporation

Indenture  dated  November 12, 1998 by and between the Company and Bankers Trust
Company, as Trustee

<PAGE>



                         SCHEDULE 4(C)(II) TO AGREEMENT
                           LIENS AND NEGATIVE PLEDGES


                                Schedule 4(c)(ii)
                           Liens and Negative Pledges


Master Agreement dated November 1, 1996 between NAV and General Electric Capital
Corporation, including Security Agreement dated November 1, 1996.

Security and Pledge Agreement dated November 12, 1998 by and between the Company
and Bankers Trust Company, as trustee

Lease dated September 9, 1999 between Borrower and WRIT Limited Partnership

Lease dated February 19, 1999 between  Borrower and Newcourt  Financial USA Inc.
(capital lease for mass spectrometer)

Lease dated March 25, 1998 between Borrower and ARE-10150 Old Columbia LLC

Assignment of Deposit Account dated April 2, 1998 by Borrower to Chase Manhattan
Bank,  with Notice of  Assignment  and Notice of Letter of Credit dated April 3,
1998