<PAGE>

                                                                    Exhibit 4.12




                             DRAXIS HEALTH INC.

                 EMPLOYEE PARTICIPATION SHARE PURCHASE PLAN

               MADE EFFECTIVE THE 16TH DAY OF FEBRUARY, 1995



<PAGE>


                             DRAXIS HEALTH INC.

                 EMPLOYEE PARTICIPATION SHARE PURCHASE PLAN

<TABLE>
<S>  <C>                                                              <C>
1.   Definitions.....................................................  1

2.   Administration..................................................  9

3.   Subscription for Employee Participation Shares..................  9

4.   Issuance of Employee Participation Shares....................... 11

5.   Conversion...................................................... 11

6.   Change in Employee Participation Shares......................... 11

7.   Merger, etc..................................................... 12

8.   Redemption...................................................... 13

9.   Termination of Employment....................................... 13

10.  Conditions Precedent to Exercise of Conversion Right............ 14

11.  Right of Corporation............................................ 14

12.  No Additional Amounts Payable................................... 14

13.  Amendment or Discontinuance of Plan............................. 15

14.  Shareholders' Approval.......................................... 15

15.  Notice.......................................................... 15

16.  Governing Law................................................... 16

17.  Entire Agreement................................................ 16

18.  No Assignment or Transfer....................................... 16

19.  Benefit of Plan................................................. 17
</TABLE>


<PAGE>


                             DRAXIS HEALTH INC.

                 EMPLOYEE PARTICIPATION SHARE PURCHASE PLAN


                 Made Effective the 16th day of February, 1995.


     WHEREAS the Corporation has an authorized share capital which includes
Employee Participation Shares;

     AND WHEREAS the Corporation desires to enable its designated employees
to acquire Employee Participation Shares on the terms hereinafter set forth;

     NOW THEREFORE the Corporation hereby establishes this Employee
Participation Share Purchase Plan with effect as of the 16th day of February,
1995, as follows:

1.   DEFINITIONS

     In this Plan and in each Employee Participation Share Purchase
Agreement, unless the context otherwise requires:

     "Act" means the Canada Business Corporations Act as now enacted or as
     the same may from time to time be amended, re-enacted or replaced;

     "Administrator" means the Compensation Committee of the Board of
     Directors of the Corporation;

     "Automatic Conversion Date" in respect of Employee Participation Shares
     of a particular series means and refers to the date that is the fifth
     anniversary date of the date of issue of such shares as described in the
     Series Provisions and is the date on which all Employee Participation
     Shares of that series subscribed for


<PAGE>


                                      -2-

     thereunder will, to the extent not theretofore redeemed, be converted
     into Common Shares;

     "Board of Directors" means the Board of Directors of the Corporation;

     "Business Day" means a day other than a Saturday, Sunday or statutory
     holiday in the Province of Ontario, provided that the principal offices of
     the Corporation in Mississauga, Ontario are open for business on the
     particular day;

     "Change of Control" shall mean circumstances where:

     (a)   an offeror makes a cash offer or an exchange offer to purchase 50%
           or more of the outstanding Common Shares to substantially all
           holders of the Common Shares;

     (b)   an insider of the Corporation makes an offer to purchase Common
           Shares to substantially all holders of the Common Shares;

     (c)   an offeror makes an offer, by way of merger, amalgamation,
           reorganization, consolidation, exchange or otherwise, the result of
           which would be the acquisition by such offeror directly or indirectly
           of 50% or more of the outstanding equity securities of the
           Corporation or the successor entity; or

     (d)   an offeror makes an offer to purchase substantially all of the
           assets of the Corporation;

     and the Board of Directors recommends acceptance of such offer to the
     shareholders of the Corporation or, if the Board of Directors has made
     no recommendation, the shareholders have approved or accepted the
     proposed offer.


<PAGE>


                                      -3-


     "Common Share" means a common share in the capital of the Corporation,
     the rights, privileges, restrictions and conditions attaching to which
     include provisions to the effect that each Common Share entitles the
     holder:

     (i)   to receive notice of and to attend all annual and special meetings
           of the shareholders of the Corporation and to one vote in respect of
           each Common Share held at all such meetings;

     (ii)  to receive rateably with the holders of Common Shares such
           dividends, if, as and when declared by the Board of Directors out
           of the assets of the Corporation properly applicable to the
           payment of dividends in such amounts and payable in such manner,
           as the Board of Directors may from time to time declare, subject
           to the rights of the holders of any other class of shares of the
           Corporation entitled to receive dividends in priority to or rateably
           with the holders of the Common Shares; and

     (iii) in the event of the liquidation, dissolution or winding-up of the
           Corporation or other distribution of the assets of the Corporation
           among its shareholders for the purpose of winding-up its affairs,
           the holders of the Common Shares shall, subject to the rights of
           the holders of any other class of shares of the Corporation
           entitled to receive the assets of the Corporation upon such
           distribution in priority to or rateably with the holders of the
           Common Shares, be entitled to participate rateably in any
           distribution of the remaining assets of the Corporation, after
           preferential distributions to holders of any other shares of the
           Corporation the holders of which are entitled to participate in a
           distribution of assets in priority to holders of the Common Shares;

     "Compensation Committee" means a committee comprised of certain members
     of the Board of Directors and vested with responsibility to address issues
     relating to matters of compensation;


<PAGE>


                                      -4-

     "Conversion Date" in respect of Employee Participation Shares of a
     particular series means any Business Day following the date on which
     Employee Participation Shares of that series were issued, provided however
     no Conversion Date shall include a date other than the Automatic Conversion
     Date unless on or prior to such date the Minimum Vesting Period has expired
     and the Fair Market Value of the Common Shares on such date is at least
     twenty-five percent (25%) greater than the Fair Market Value of the Common
     Shares on the issue date of the particular series of Employee
     Participation Shares;

     "Corporation" means Draxis Health Inc.;

     "Employee" means each full-time employee of the Corporation with whom
     the Corporation enters into an Employee Participation Share Purchase
     Agreement and such directors and other employees of the Corporation as the
     Compensation Committee in its sole discretion determines;

     "Employee Participation Share" means a special share of any series in
     the capital of the Corporation, which is designated as an "Employee
     Participation Share", a separate series of which shall be created for all
     shares having identical attributes in respect of each Subscription Date on
     which Employee Participation Shares are issued and which provides that:

     (i)   each Employee Participation Share entitles the holder to receive
           cash dividends, if any, as may from time to time be declared payable
           thereon, at the same time as dividends, if any, are paid on Common
           Shares, in an amount for each Employee Participation Share of a
           particular series which is equal to the proportion of the amount of
           the dividend declared on each common share that the applicable
           Subscription Price is of the Fair Market Value of the Common Shares
           at the date of issuance of the Employee Participation Share.



<PAGE>


                                      -5-

     (ii)  in the event of a proposal, order or resolution for the liquidation,
           dissolution or winding-up of the Corporation, whether voluntary or
           involuntary, the Employee Participation Shares will become Common
           Shares on the basis of the formula described in paragraph (iii)
           below;

     (iii) each Employee Participation Share of a particular series issued
           and outstanding automatically becomes part of a Common Share on the
           Automatic Conversion Date or at the option of a holder of an
           Employee Participation Share on a Conversion Date other than the
           Automatic Conversion Date and the number of Common Shares an
           employee receives is the number of Common Shares which is
           determined by multiplying the number of Employee Participation
           Shares of a particular series which the Employee elects to convert
           by the following fraction:

           A.  the numerator of which shall be the Employee Participation
               Share Value of an Employee Participation Share of a particular
               series as at the earlier of the Automatic Conversion Date and a
               Conversion Date as the case may be; and

           B.  the denominator of which shall be the Fair Market Value of a
               Common Share as at the earlier of the two dates described in A,

           provided that no fractional Common Shares will be issued. No
           payment will be made in respect of fractional Common Shares;

     (iv)  no Employee Participation Share shall entitle the holder to vote
           at meetings of shareholders of the Corporation except in special
           circumstances prescribed under the Act;

     (v)   the Corporation may purchase an Employee Participation Share at
           any time for cancellation at its issue price.


<PAGE>


                                      -6-


     (vi)  any right of conversion of an Employee Participation Share into a
           Common Share, other than a conversion of such a share occurring on
           an Automatic Conversion Date, shall be exercised by notice in writing
           given to the Corporation.

     "Employee Participation Share Purchase Agreement" means a subscription
     agreement substantially in the form annexed hereto as Exhibit A entered
     into between an Employee and the Corporation pursuant to which the
     Employee subscribes for, and the Corporation issues, Employee
     Participation Shares;

     "Employee Participation Share Value" in respect of an Employee
     Participation Share of a particular series as at a particular time means
     the greater of:

     (i)   the amount, if any, by which the Fair Market Value of a Common
           Share as at that time exceeds the Fair Market Value of a Common
           Share as at the date on which the first Employee Participation Share
           of that series was issued; and

     (ii)  the Subscription Price;

     "Fair Market Value" of a Common Share at a particular time means the
     average of the daily high and low board lot trading prices on The Toronto
     Stock Exchange on each of the five trading days immediately preceding
     the date on which such value is to be determined;

     "Minimum Vesting Period" in respect of a particular Employee Participation
     Share means, except as otherwise mutually agreed upon by the Employee and
     the Corporation, the period of time commencing at the time of issuance of
     such Employee Participation Share of a particular series and ending on an
     anniversary date of such issuance and occurring in such percentages as
     follows:


<PAGE>


                                      -7-


<TABLE>
     <S>                       <C>

     Year 1         -          20%

     Year 2         -          20%

     Year 3         -          20%

     Year 4         -          40%
</TABLE>

     "Plan" means this Employee Participation Share Purchase Plan, as amended
     or supplemented from time to time;

     "Redemption Amount" of an Employee Participation Share of a particular
     series at a particular time means the aggregate of:

     (i)   the Subscription Price; and

     (ii)  the amount, if any, of all dividends theretofore declared thereon
           but unpaid at that time;

     "Redemption Date" means any Business Day before the Automatic Conversion
     Date on which the Corporation proposes to purchase for cancellation an
     Employee Participation Share;

     "Reserved Shares" means the number of Common Shares reserved by the
     Board of Directors and approved by shareholders for issuance under the
     Plan, and stock option plans, options for services and treasury stock
     purchase plans of the Corporation;

     "Series Provisions" means the rights, privileges, restrictions and
     conditions attaching to a series of Employee Participation Shares
     including those described in the definition of an Employee Participation
     Share;


<PAGE>


                                      -8-


     "Subscription Date" means the date on which an Employee subscribes for
     Employee Participation Shares and executes an Employee Participation Share
     Purchase Agreement;

     "Subscription Price" means the subscription price paid by an Employee
     pursuant to the Employee Participation Share Purchase Agreement for an
     Employee Participation Share; and

     "Termination" in respect of an Employee means the termination of all
     employment, offices or directorship of the Employee with the Corporation
     whether for any cause or for no cause and whether at the instance of the
     Corporation, the Employee or otherwise, including termination by reason
     of the death of the Employee.

2.   ADMINISTRATION

     Subject to Section 13, this Plan shall be administered by the
Administrator; provided that the Board of Directors may exercise any powers
reserved herein for the Administrator. Subject to the terms of the Plan, the
Administrator is authorized to construe and interpret the Plan, to prescribe,
amend, and rescind rules and regulations relating to the Plan, and to make
all determinations and take all actions necessary or advisable for the Plan's
administration. The Administrator shall act by vote or written consent of a
majority of its members. Whenever the Plan authorizes or requires the
Administrator to take any action, make any determination or decision, or form
any opinion, then any such action, determination, decision, or opinion by or
of the Administrator shall be in the absolute discretion of the
Administrator. The specified maximum number of Employee Participation Shares
issuable pursuant to this Plan shall be 2,500,000.


<PAGE>


                                      -9-


3.   SUBSCRIPTION FOR EMPLOYEE PARTICIPATION SHARES

     The Administrator may, from time to time, in its sole discretion,
determine those Employees who shall be entitled to subscribe for Employee
Participation Shares under this Plan, the number of Employee Participation
Shares available to be subscribed for by each such Employee and the
Subscription Price to be paid for each such share.

     An Employee may subscribe for Employee Participation Shares by executing
and delivering to the Corporation an Employee Participation Share Purchase
Agreement entitling that Employee to subscribe for the number of Employee
Participation Shares therein specified and by paying to the Corporation on or
before the Subscription Date therein specified the Subscription Price therein
specified in respect of each Employee Participation Share for which the
Employee desires to subscribe; provided, however, that if it is subsequently
determined:

     (a)   by BONA FIDE agreement between the parties;

     (b)   by agreement among the parties and the Department of National
           Revenue; or

     (c)   by a court of competent jurisdiction;

that the Subscription Price referred to above is not equal to the fair market
value of the Employee Participation Shares to be subscribed for hereunder,
then the Subscription Price shall be adjusted to be increased or decreased so
as to equal the fair market value as so determined and such adjusted
Subscription Price shall be effective for all purposes from the date hereof;
provided that an adjustment under paragraph (b) above shall preclude an
adjustment under paragraph (a) and an adjustment under paragraph (c) above
shall be final and binding. Any such adjustment shall bear interest from the
Subscription Date at a rate equal to the prescribed rate of interest
calculated pursuant to Regulation 4301(a) of regulations to the Income Tax Act
(Canada). The Corporation agrees that if the

<PAGE>

                                     -10-


Subscription Price is subsequently adjusted to increase the cost of Employee
Participation Shares to the Employee, the Corporation shall lend to the
Employee under an interest-free, limited recourse loan an amount equal to the
aggregate of the amount of any such increase in the Subscription Price and
applicable interest thereon (the "Share Loan"). The Employee must apply the
proceeds of the Share Loan to pay such increased Subscription Price and
applicable interest thereon.

4.   ISSUANCE OF EMPLOYEE PARTICIPATION SHARES

     After receipt by the Corporation from the Employee of the Subscription
Price for Employee Participation Shares pursuant to section 3 hereof, the
Corporation shall, effective on the particular Subscription Date, issue to
the Employee as fully paid and non-assessable shares the number of Employee
Participation Shares of the particular series to which the Employee is
thereby entitled.

     Nothing herein contained or done pursuant hereto shall obligate the
Employee to purchase or pay for any Employee Participation Shares except
those in respect of which the Employee shall have so subscribed.

5.   CONVERSION

     An Employee may prior to the Automatic Conversion Date exchange an
Employee Participation Share of a particular series held by such Employee for
Common Shares subject to the Minimum Vesting Period and except as otherwise
provided herein. The number of Common Shares to which an Employee will be
entitled at any particular Conversion Date will be in accordance with the
particular Series Provisions as hereinbefore described.
<PAGE>


                                     -11-


6.   CHANGE IN EMPLOYEE PARTICIPATION SHARES

     In the event of any subdivision, redivision or consolidation or other
change of Common Shares, corresponding adjustments shall be made in
accordance with the Series Provisions with respect to any Common Shares to be
issued upon conversion of the Employee Participation Shares of each series.

7.   MERGER, ETC.

     (a)   In the event that the Corporation enters into an agreement with a
           person for the sale of all or substantially all of its assets or
           the Corporation sells all or substantially all of its assets, and in
           the event of a Change of Control of the Corporation, the Corporation,
           or failing the Corporation, the Administrator, shall forthwith
           deliver written notice of such event to the Employee and the Employee
           shall have the right, for a period of 21 days or such longer period
           as the Administrator may determine following receipt of the notice,
           to convert such of the Employee Participation Shares into Common
           Shares as the Employee may elect notwithstanding the fact that the
           Minimum Vesting Period has not expired.

     (b)   In the event that the Corporation enters into an agreement with a
           person for the merger, amalgamation or consolidation of the
           Corporation with or into any other company which is not a subsidiary
           of the Corporation within the meaning of the Act or the Corporation
           is merged, amalgamated or consolidated with or into any other company
           which is not a subsidiary of the Corporation within the meaning of
           the Act, the Corporation, or failing the Corporation, the
           Administrator, shall forthwith deliver written notice of such event
           to the Employee and the Employee shall have the right, for a period
           of 21 days following receipt of the notice, to convert such of the
           Employee Participation Shares into Common Shares as the Employee may


<PAGE>


                                     -12-


           elect notwithstanding the fact that the Minimum Vesting Period has
           not expired.

8.   REDEMPTION

     The Corporation reserves the right at any time without notice to redeem
or purchase for cancellation at any time all or part of the Employee
Participation Shares held by an Employee, whether or not a Minimum Vesting
Period has occurred.

9.   TERMINATION OF EMPLOYMENT

     In the event of a Termination of the Employee's employment, office or
directorship with the Corporation for any reason including death, compulsory
or voluntary retirement, disability, dismissal or resignation, (the date of
such event referred to herein as the "Termination Date"), the following rules
apply:

     (i)   if the Termination Date precedes the expiration of an applicable
           Minimum Vesting Period pertaining to any Employee Participation
           Shares then owned by the former Employee, unless the Administrator in
           its sole and unfettered discretion otherwise determines, the former
           Employee shall not be entitled to exercise any rights under the Plan
           or under the conditions attaching to any such Employee Participation
           Shares, including any right of conversion, and instead the
           Corporation shall redeem any such Employee Participation Shares for
           an amount equal to the Redemption Amount thereof and the former
           Employee shall forthwith surrender all such Employee Participation
           Shares to the Corporation for cancellation; or

     (ii)  if the Termination Date follows the expiration of an applicable
           Minimum Vesting Period pertaining to any Employee Participation
           Shares then owned by the former Employee, unless the Administrator
           in its sole and unfettered discretion otherwise determines, the
           former Employee shall be deemed to


<PAGE>


                                     -13-


           have converted all such Employee Participation Shares into Common
           Shares with effect on the date that is 30 days after the Termination
           Date, on the basis of the conversion ratio contemplated in the Series
           Provisions attaching to such Employee Participation Shares.

10.  CONDITIONS PRECEDENT TO EXERCISE OF CONVERSION RIGHT

     The automatic conversion of the Employee Participation Shares into
Common Shares on the fifth anniversary date of their issue shall be subject
to the condition that if at any time the Corporation shall determine in its
discretion that the satisfaction of withholding tax or other withholding
liabilities, or that the listing, registration or qualification of any shares
otherwise deliverable upon such exercise upon any securities exchange or
under any law, or the consent or approval of any regulatory body, is necessary
or desirable as a condition of, or in connection with, such change or the
delivery of shares thereunder, then in any such event such conversion shall
not be effective unless such withholding, listing, registration,
qualification, consent or approval shall have been effected or obtained free
of any conditions not acceptable to the Corporation.

11.  RIGHT OF CORPORATION

     Nothing herein shall affect the right of the Corporation to terminate
the employment of an Employee.

12.  NO ADDITIONAL AMOUNTS PAYABLE

     No interest, penalty, bonus or other amount (other than any dividend
declared on an Employee Participation Share or the Redemption Amount in
respect thereof) shall be payable by the Corporation by reason of the
operation of the Plan.


<PAGE>


                                     -14-


13.  AMENDMENT OR DISCONTINUANCE OF PLAN

     The Board of Directors may amend or discontinue the Plan at any time
subject to the consent of The Toronto Stock Exchange, but no such amendment
may alter or impair any Employee Participation Shares previously issued
except with the written consent of the holder of such Employee Participation
Shares.

14.  SHAREHOLDERS' APPROVAL

     The Plan shall be subject to the approval of The Toronto Stock Exchange
and any other applicable securities regulatory authority and the shareholders
of the Corporation to be given by resolution passed at a meeting of the
shareholders. The rights attaching to any Employee Participation Shares
issued prior to such approval have no force or effect unless such approval is
given. If the Plan is not approved, the Corporation will redeem the Employee
Participation Shares at their Redemption Amount.

15.  NOTICE

     Any notice or other document required or permitted to be given,
delivered or sent hereunder shall be in writing and shall be given, delivered
or sent by registered mail, postage prepaid, mailed and addressed to the
parties hereto respectively as follows:

To the Employee:            To the address noted in the particular Employee
                            Participation Share Purchase Agreement.

To the Corporation:         Draxis Health Inc.
                            6870 Goreway Drive
                            Mississauga, Ontario L4V 1P1

                            Attention:

or to such other address as the party entitled to receive the notice or other
document shall have communicated in writing to the other parties. Any such
notice or other document


<PAGE>


                                     -15-


given, delivered or sent as aforesaid shall be deemed to have been given,
delivered or sent and received on the fifth next Business Day following the
day on which it is mailed.

16.  GOVERNING LAW

     The Plan and each Employee Participation Share Purchase Agreement shall
be governed by and construed in accordance with the laws of Ontario.

17.  ENTIRE AGREEMENT

     This Plan and each particular Employee Participation Share Purchase
Agreement together constitute the entire agreement between the parties
thereto respecting the matters dealt with herein and therein.

18.  NO ASSIGNMENT OR TRANSFER

     Employee Participation Shares issued under the Plan and the Employee
Participation Share Purchase Agreement shall not be transferable by an
Employee, except

     (i)   to a trust governed by a registered retirement savings plan of the
           Employee, or

     (ii)  by way of devolution to one or more legal personal representatives
           of the Employee on the death of the Employee,

provided that in any case any such transferee of Employee Participation
Shares agrees to be bound by the terms of the Plan.


<PAGE>


                                     -16-


19.  BENEFIT OF PLAN

     All rights and obligations under the Plan shall enure to the benefit of
and be binding upon the heirs, executors, administrators, or other legal
personal representatives of the Employee and the successors and assigns of
the Corporation.


<PAGE>

[INDUSTRY CANADA LETTERHEAD]


July 14, 1995                                    Your file

MCCARTHY TETRAULT                                Our file
                                                            304758-0

Re

DRAXIS HEALTH INC./
SANTE DRAXIS INC.

Enclosed herewith is the document issued in the above matter.

A notice of issuance of CBCA documents will be published in the Canada
Corporations Bulletin. A notice of issuance of CCA documents will be published
in the Canada Corporations Bulletin and the Canada Gazette.

IF A NAME OR CHANGE OF NAME IS INVOLVED, THE FOLLOWING CAUTION SHOULD BE
OBSERVED:

This name is available for use as a corporate name subject to and conditional
upon the applicants assuming full responsibility for any risk of confusion with
existing business names and trade marks (including those set out in the relevant
NUANS search report(s)). Acceptance of such responsibility will comprise an
obligation to change the name to a dissimilar one in the event that
representations are made and established that confusion is likely to occur. The
use of any name granted is subject to the laws of the jurisdiction where the
company carries on business.

/s/      [ILLEGIBLE]

For the Director General, Corporations Directorate


[INDUSTRY CANADA LETTERHEAD]

                                                 Votre reference
le 14 juillet 1995

                                                 Notre reference
                                                    304758-0
Objet
DRAXIS HEALTH INC./
SANTE DRAXIS INC.

Vous trouverez ci-inclus le document emis dans l'affaire precitee.

Un avis de l'emission de documents en vertu de la LCSA sera publie dans le
Bulletin des societes canadiennes. Un avis de l'emission de documents en vertu
de la LCC sera publie dans le Bulletin des societes canadiennes et dans la
Gazette du Canada.

S'IL EST QUESTION D'UNE DENOMINATION SOCIALE OU D'UN CHANGEMENT DE DENOMINATION
SOCIALE, L'AVERTISSEMENT SUIVANT DOIT ETRE RESPECTE:

Cette denomination sociale est disponible en autant que les requerants assument
toute responsabilite de risque de confusion avec toutes denominations
commerciales et toutes marques de commerce existantes (y compris celles qui sont
citees dans le(s) rapport(s) de recherches de NUANS pertinent(s)). Cette
acceptation de responsabilite comprend l'obligation de changer la denomination
de la societe en une denomination differente advenant le cas ou des
representations sont faites etablissant qu'il y a une probabilite de confusion.
L'utilisation de tout nom octroye est sujette a toute loi de la juridiction ou
la societe exploite son entreprise.

/s/ Madeline Gigluie

pour le Directeur general, Direction generale des Corporations

[LOGO]

<PAGE>

[LOGO]

CERTIFICATE                                            CERTIFICAT
OF AMENDMENT                                           DE MODIFICATION

CANADA BUSINESS                                        LOI CANADIENNE SUR
CORPORATIONS ACT                                       LES SOCIETES PAR ACTIONS

<TABLE>
<CAPTION>

DRAXIS HEALTH INC./                                           304758-0
SANTE DRAXIS INC.

----------------------------------------------         ------------------------------------------------
Name of corporation-Denomination de la societe         Corporation number--Numero de la societe
<S>                                             <C>    <C>
I hereby certify that the articles of the              Je certifie que les statuts de la societe
above-named corporation were amended                   susmentionnee ont ete modifies:

(a) under section 13 of the CANADA BUSINESS     / /    a) en vertu de l'article 13 de la LOI
CORPORATIONS ACT in accordance with the                CANADIENNE SUR LES SOCIETES PAR ACTIONS,
attached notice;                                       conformement a l'avis ci-joint;

(b) under section 27 of the CANADA BUSINESS     / /    b) en vertu de l'article 27 de la LOI
CORPORATIONS ACT as set out in the attached            CANADIENNE SUR LES SOCIETES PAR ACTIONS, tel
articles of amendment designating a series             qu'il est indique dans les clauses modificatrices
of shares;                                             ci-jointes designant une serie d'actions;

(c) under section 179 of the CANADA BUSINESS    /X/    c) en vertu de l'article 179 de la LOI
CORPORATIONS ACT as set out in the attached            CANADIENNE SUR LES SOCIETES PAR ACTIONS, tel
articles of amendment;                                 qu'il est indique dans les clauses modificatrices
                                                       ci-jointes;

(d) under section 191 of the CANADA BUSINESS    / /    d) en vertu de l'article 191 de la LOI
CORPORATIONS ACT as set out in the attached            CANADIENNE SUR LES SOCIETES PAR ACTIONS, tel
articles of reorganization.                            qu'il est indique dans les clauses de
                                                       reorganisation ci-jointes.

/s/  [ILLEGIBLE]

Director - Directeur                                 JULY 14, 1995/LE 14 JUILLET 1995
                                                     Date of Amendment - Date de modification
</TABLE>

[LOGO]

<PAGE>

                                      FORM 4
                              ARTICLES OF AMENDMENT
                               (SECTION 27 OR 177)

                                     FORMULE 4
                             CLAUSES MODIFICATRICES
                              (ARTICLES 27 OU 177)

[LOGO]
Consumer and Corporate Affairs Canada
Canada Business Corporations Act

Consommation et Affaires commerciales Canada
Loi regissant les societes par actions de regime federal

-------------------------------------------------------------------------------
1. Name of corporation - Denomination de la societe
   DRAXIS HEALTH INC.
   SANTE DRAXIS INC.
-------------------------------------------------------------------------------
2. Corporation No. - No de la societe
   304-758-0
-------------------------------------------------------------------------------
3. The articles of the above-named corporation are amended as follows:

   Les statuts de la societe mentionnee ci-dessus sont modifies de la facon
   suivante:

(a) to create an unlimited number of employee participation shares ("EP
    Shares")

(b) to declare that the capital of the Corporation after giving effect to the
    foregoing consists of an unlimited number of common shares, an unlimited
    number of preferred shares and an unlimited number of EP Shares; and

(c) to provide that the rights, privileges, restrictions and conditions
    attaching to the EP Shares are set out in the annexed Exhibit I.

-------------------------------------------------------------------------------
DATE July 4, 1995

SIGNATURE /s/ J. Le Saux

TITLE-TITRE
VICE PRESIDENT, CORPORATE DEVELOPMENT, GENERAL COUNSEL AND SECRETARY
-------------------------------------------------------------------------------
FOR DEPARTMENTAL USE ONLY - A L'USAGE DU MINISTERE SEULE

FILED-DEPOSEE   JUIL 14 1995

<PAGE>

                                  EXHIBIT I

The rights, privileges, restrictions and conditions attaching to the EP
Shares are as follows:

(a)  SERIES:     The EP Shares may at any time or from time to time be issued
                 in one of more series. Subject to the following provisions,
                 the board of directors of the Corporation (the "Board") may
                 by resolution fix from time to time, before the issue thereof,
                 the number of shares in, and determine the designation, rights,
                 privileges, restrictions and conditions attaching to the shares
                 of, each series of EP Shares.

(b)  DIVIDENDS:  Each EP Share entitles the holder to receive cash dividends,
                 if any, as may from time to time be declared payable thereon,
                 at the same time as dividends, if any, are paid on Common
                 Shares of the Corporation, in an amount for each EP Share of a
                 particular series which is equal to the proportion of the
                 amount of the dividend declared on each Common Share that the
                 subscription price of such EP Share is of the Fair Market
                 Value of the Common Shares at the date of issuance of such
                 EP Share.

                 For the purpose hereof, the Fair Market Value of a Common
                 Share at a particular time means the average of the daily
                 high and low board lot trading prices on the Toronto Stock
                 Exchange ("TSE") on each of the five trading days immediately
                 preceding the date on which such value is to be determined.

(c)  CONVERSION: In the event of a proposal, order or resolution for the
                 liquidation, dissolution or winding-up of the Corporation,
                 whether voluntary or involuntary; or on the Automatic
                 Conversion Date (as defined below); or at the option of a
                 holder on a Conversion Date (as defined below) other than
                 the Automatic Conversion Date, the EP Shares will become
                 Common Shares, and the number of Common Shares a holder
                 receives on conversion is the number of Common Shares which
                 is determined by multiplying the number of EP Shares held, or
                 in the case of conversion on a Conversion Date other than the
                 Automatic Conversion Date, the number of EP Shares which the
                 holder elects to convert, by a fraction:

                 (i)  the numerator of which shall be the Employee
                      Participation Share Value (as defined below) of an EP
                      Share of a particular series as at the earlier of the
                      Automatic Conversion Date and a Conversion Date, as the
                      case may be; and

<PAGE>

                                      - 2 -

                 (ii) the denominator of which shall be the Fair Market Value
                      of a Common Share as at the earlier of the two dates
                      described in (i);

                 provided that no fractional Common Shares will be issued and
                 no payment will be made in respect of fractional Common Shares.

                 For the purposes hereof, the Automatic Conversion Date means
                 and refers to the date that is the fifth anniversary date of
                 the date of issue of the EP Shares of a particular series
                 and is the date on which all EP Shares of such series
                 will, to the extent not theretofore redeemed, be
                 converted into Common Shares. Conversion Date means any
                 Business Day following the date on which the EP Shares of
                 a particular series were issued, provided, however, that
                 no Conversion Date shall include a date other than the
                 Automatic Conversion Date unless on or prior to such date
                 the Minimum Vesting Period (as defined below) has expired
                 and the Fair Market Value of the Common Shares on such
                 date is at least twenty-five percent (25%) greater than
                 the Fair Market Value of the Common Shares on the issue
                 date of the EP Shares of such series. Business Day means
                 a day other than a Saturday, Sunday and statutory holiday
                 in the Province of Ontario, provided that the principal
                 offices of the Corporation in Mississauga, Ontario are
                 open for business on the particular day. Minimum Vesting
                 Period means, except as otherwise mutually agreed upon
                 by the holder and the Corporation, the period of time
                 commencing at the time of issuance of the EP Shares of a
                 particular series and ending on an anniversary date of
                 such issuance and occurring in the following percentages:

                    Year 1 - 20%
                    Year 2 - 20%
                    Year 3 - 20%
                    Year 4 - 40%

                 Employee Participation Share Value in respect of an EP Share
                 of a particular series at a particular time means the greater
                 of (i) the amount, if any, by which the Fair Market Value of
                 a Common Share as at that time exceeds the Fair Market Value
                 of a Common Share as at the date on which the first EP Share
                 of a particular series was issued; and (ii) the issue price.

                 Any right to conversion of an EP Share into a Common
                 Share on a Conversion Date other than the Automatic
                 Conversion Date shall be exercised by notice in writing
                 given by the holder to the Corporation.

<PAGE>

                                      - 3 -

(d)  NO VOTE:    No EP Share entitle the holder to vote at meetings of
                 shareholders of the Corporation except in special
                 circumstances prescribed under the CANADA BUSINESS
                 CORPORATIONS ACT as now enacted or as the same may from
                 time to time be amended, re-enacted or replaced.

(e)  TRANSFERABILITY:   No EP Share is transferable except to a holder's
                        registered retirement savings plan (as defined
                        pursuant to the INCOME TAX ACT (Canada) or by reason
                        of testate or intestate succession.

(f)  CANCELLATION: The Corporation may purchase an EP Share at any time for
                   cancellation at its issue price with no notice.

<PAGE>

                                      FORM 4
                              ARTICLES OF AMENDMENT
                               (SECTION 27 OR 177)

                                     FORMULE 4
                             CLAUSES MODIFICATRICES
                              (ARTICLES 27 OU 177)

[LOGO]
Consumer and Corporate Affairs Canada
Canada Business Corporations Act

Consommation et Affaires commerciales Canada
Loi regissant les societes par actions de regime federal

-------------------------------------------------------------------------------
1. Name of corporation - Denomination de la societe
   DRAXIS HEALTH INC.
   SANTE DRAXIS INC.
-------------------------------------------------------------------------------
2. Corporation No. - No de la societe
   293391-8
-------------------------------------------------------------------------------
3. The articles of the above-named corporation are amended as follows:

   Les statuts de la societe mentionnee ci-dessus sont modifies de la facon
   suivante:

(a) to create an unlimited number of employee participation shares ("EP
    Shares")

(b) to declare that the capital of the Corporation after giving effect to the
    foregoing consists of an unlimited number of common shares, an unlimited
    number of preferred shares and an unlimited number of EP Shares; and

(c) to provide that the rights, privileges, restrictions and conditions
    attaching to the EP Shares are set out in the annexed Exhibit I.

-------------------------------------------------------------------------------
DATE July 4, 1995

SIGNATURE /s/ J. Le Saux

TITLE-TITRE
VICE PRESIDENT, CORPORATE DEVELOPMENT, GENERAL COUNSEL AND SECRETARY
-------------------------------------------------------------------------------
FOR DEPARTMENTAL USE ONLY - AL'USAGE DU MINISTERE SEULE

FILED-DEPOSEE

<PAGE>

                                  EXHIBIT I

The rights, privileges, restrictions and conditions attaching to the EP
Shares are as follows:

(a)  SERIES:     The EP Shares may at any time or from time to time be issued
                 in one of more series. Subject to the following provisions,
                 the board of directors of the Corporation (the "Board") may
                 by resolution fix from time to time, before the issue thereof,
                 the number of shares in, and determine the designation, rights,
                 privileges, restrictions and conditions attaching to the shares
                 of, each series of EP Shares.

(b)  DIVIDENDS:  Each EP Share entitles the holder to receive cash dividends,
                 if any, as may from time to time be declared payable thereon,
                 at the same time as dividends, if any, are paid on Common
                 Shares of the Corporation, in an amount for each EP Share of a
                 particular series which is equal to the proportion of the
                 amount of the dividend declared on each Common Share that the
                 subscription price of such EP Share is of the Fair Market
                 Value of the Common Shares at the date of issuance of such
                 EP Share.

                 For the purpose hereof, the Fair Market Value of a Common
                 Share at a particular time means the average of the daily
                 high and low board lot trading prices on the Toronto Stock
                 Exchange ("TSE") on each of the five trading days immediately
                 preceding the date on which such value is to be determined.

(c)  CONVERSION: In the event of a proposal, order or resolution for the
                 liquidation, dissolution or winding-up of the Corporation,
                 whether voluntary or involuntary; or on the Automatic
                 Conversion date (as defined below); or at the option of a
                 holder on a Conversion Date (as defined below) other than
                 the Automatic Conversion Date, the EP Shares will become
                 Common Shares, and the number of Common Shares a holder
                 receives on conversion is the number of Common Shares which
                 is determined by multiplying the number of EP Shares held, or
                 in the case of conversion on a Conversion Date other than the
                 Automatic Conversion date, the number of EP Shares which the
                 holder elects to convert, by a fraction:

                 (i)  the numerator of which shall be the Employee
                      Participation Share Value (as defined below) of an EP
                      Share of a particular series as at the earlier of the
                      Automatic Conversion Date and a Conversion Date, as the
                      case may be; and

<PAGE>

                                      - 2 -

                 (ii) the denominator of which shall be the Fair Market Value
                      of a Common Share as at the earlier of the two dates
                      described in (i);

                 provided that no fractional Common Shares will be issued and
                 no payment will be made in respect of fractional Common Shares.

                 For the purposed hereof, the Automatic Conversion date means
                 and refers to the date that is the fifth anniversary date of
                 the date of issue of the EP Shares of a particular series
                 and is the date on which all EP Shares of such series
                 will, to the extent not theretofore redeemed, be
                 converted into Common Shares. Conversion date means any
                 Business Day following the date on which the EP Shares of
                 a particular series were issued, provided, however, that
                 no Conversion Date shall include a date other than the
                 Automatic Conversion Date unless on or prior to such date
                 the Minimum Vesting Period (as defined below) has expired
                 and the Fair Market Value of the Common Shares on such
                 date is at least twenty-five percent (25%) greater than
                 the Fair Market Value of the Common Shares on the issue
                 date of the EP Shares of such series. Business Day means
                 a day other than a Saturday, Sunday and statutory holiday
                 in the Province of Ontario, provided that the principal
                 offices of the Corporation in Mississauga, Ontario are
                 open of business on the particular day. Minimum Vesting
                 Period means, except as otherwise mutually agreed upon
                 by the holder and the Corporation, the period of time
                 commencing at the time of issuance of the EP Shares of a
                 particular series and ending on an anniversary date of
                 such issuance and occurring in the following percentages:

                    Year 1 - 20%
                    Year 2 - 20%
                    Year 3 - 20%
                    Year 4 - 40%

                 Employee Participation Share Value in respect of an EP Share
                 of a particular series at a particular time means the greater
                 of (i) the amount, if any, by which the Fair Market Value of
                 a Common Share as at that time exceeds the Fair Market Value
                 of a Common Share as at the date on which the first EP Share
                 of a particular series was issued; and (ii) the issue price.

                 Any right to conversion of an EP Share into a Common
                 Share on a Conversion Date other than the Automatic
                 Conversion Date shall be exercised by notice in writing
                 given by the holder to the Corporation.

<PAGE>

                                      - 3 -

(d)  NO VOTE:    No EP Share entitle the holder to vote at meetings of
                 shareholders of the Corporation except in special
                 circumstances prescribed under the CANADA BUSINESS
                 CORPORATIONS ACT as now enacted or as the same may from
                 time to time be amended, re-enacted or replaced.

(e)  TRANSFERABILITY:   No EP Share is transferable except to a holder's
                        registered retirement savings plan (as defined
                        pursuant to the INCOME TAX ACT (Canada) or by reason
                        of testate or intestate succession.

(f)  CANCELLATION: The Corporation may purchase an EP Share at any time for
                   cancellation at its issue price with no notice.