<PAGE>

                                                                    EXHIBIT 4.8

                                TECHNOLOGY GROUP


[LOGO - NATIONAL BANK OF CANADA]

                                                         Montreal, June 9, 1998

DRAXIS PHARMA INC.
16751 Trans-Canada Highway
Kirkland, Quebec
H9H 4J4

ATTENTION OF MR. JIM A.H. GARNER, VICE-PRESIDENT

RE:      OFFER OF FINANCING

Dear Sir:

We are pleased to confirm you that the National Bank of Canada (the "Bank")
agrees to make available to Draxis Pharma Inc. (the "Borrower"), the term loan
described herein subject to the terms and conditions presented in the schedules
attached to this offer of financing to form an integral part thereof
(collectively the "Offer").

Should the present Offer meet with your approval, please indicate your
acceptance thereof by signing and initialling each page of the attached copy of
the Offer and returning same to the offices of the Bank, to the attention of Mr.
Paul-Henri Rouleau, Account Manager, before 5:00 O'clock on June 15, 1998,
failing which the Bank, at its discretion reserves the right to cancel and/or
modify the Offer, without notice.

Once this Offer has been accepted, this will constitute a binding agreement and
we will ask our legal advisers to draw up the applicable security documents in
accordance with standards acceptable to the Bank.

Hoping that our financial support will contribute to your company's development.

                                             Yours truly,

[LOGO - NATIONAL BANK OF CANADA]


Per: /s/ Michel Gendron                      Per: /s/ Paul-Henri Rouleau
     -----------------------------                -----------------------------
     Michel Gendron                               Paul-Henri Rouleau
     Vice-President                               Account Manager

================================================================================
DRAXIS PHARMA INC.

                              National Bank Tower
                              600, rue de La Gauchetiere Ouest
                              27th Floor
                              Montreal, Quebec H3B 4L2
                              Fax: (514) 394-8043

<PAGE>

                                                                          Page 2

ACCEPTANCE

The undersigned declares having taken cognizance of this Offer and accepts all
its terms, conditions and obligations.

Executed in the City of Toronto, Province of Ontario, this 12th day of June,
1998.

DRAXIS PHARMA INC.

Per: /s/ Jim A.H. Garner                     Per: /s/ Leanne M. Hewlin
     -----------------------------                -----------------------------
     Jim A.H. Garner                              Leanne M. Hewlin
     Vice-president                               Secretary

<PAGE>

                                   SCHEDULE A

                      TERMS AND CONDITIONS OF THE TERM LOAN


1.       THE CREDIT

         The Bank, subject to the terms and conditions hereof, agrees to grant
         to the Borrower a term loan in the amount of $11,000,000, in Canadian
         Dollars, to finance (i) up to 45% the cost of acquisition by the
         Borrower of all substantially movable and immovable property of Baker
         Cummins Inc. and (ii) up to 55% the cost of acquisition and
         installation, before taxes, of new equipments and site improvements
         related to the assets acquired from Baker Cummins Inc., the whole as
         described in Section 2 hereof.

2.       DESCRIPTION OF THE PROJECT

         The project (the "Project") submitted to the Bank by the Borrower, to
         which this term loan applies, can be summarized as follows:

         2.1      APPLICATION OF FUNDS

<TABLE>
<S>                                                                                    <C>
                  Immovable property:                                                  $12,300,000
                  Capital expenditures:                                                 $9,000,000
                  Borrower's working capital:                                           $4,500,000
                  Unforeseen and sundry expenses:                                         $900,000
                  Transaction costs:                                                      $700,000
                                                                                      ------------

                                                           Total:                      $27,400,000
</TABLE>

         2.2      SOURCES OF FUNDS

<TABLE>
<S>                                                                                    <C>
                  Bank's term loan:                                                    $11,000,000
                  Governmental's subvention:                                            $1,760,000
                  Equity investment and subordinated debt by Draxis Health Inc.:       $13,000,000
                  Equity investment by the Borrower's management:                         $200,000
                  Balance of sale due to Baker Cummins Inc.:                            $1,440,000
                                                                                      ------------

                                                           Total:                      $27,400,000
</TABLE>

         2.3      CHANGES TO THE PROJECT

                  No material changes shall be made to the Project without the
                  prior written consent of the Bank.

3.       TERM

         This term loan is granted for a term of 10 years effective as of the
         date of the last disbursement.

<PAGE>

                                                                        Page 2

4.       INTEREST RATE AND STANDBY FEES

         4.1      FLOATING RATE

                  Subject to Section 4.2 hereof, this term loan shall bear
                  interest, from the date of the first disbursement until the
                  date of its complete reimbursement, at the Canadian Prime Rate
                  of the Bank plus 0.75%, with interest at the same rate on any
                  amount in arrears. Interest shall be payable monthly on the
                  26th day of each month.

         4.2      FIXED RATE CONVERSION OPTION

                  As of the date of the last disbursement, the Borrower will
                  have the option from time to time of converting all or part of
                  its Floating Rate term loan to a fixed rate term loan, on the
                  following terms and conditions:

                  4.2.1    upon prior notice of 2 Business Days to the Bank;

                  4.2.2    the fixed rate term shall be no less than 1 year and
                           shall not exceed the term of the loan;

                  4.2.3    the aggregate amount of fixed rate advances shall
                           never exceed the amount of the authorized credit
                           taking into account the capital repayments stipulated
                           in Section 6;

                  4.2.4    the fixed rate shall be equal to the Rate Offered by
                           the Bank to be effective on the conversion date, as
                           accepted by the Borrower in accordance with the
                           present Section 4.2 plus 1.75%, with interest at the
                           same rate on any amount in arrears;

                  4.2.5    the interest during the fixed rate term shall be
                           payable monthly on the 26th day of each month;

                  4.2.6    upon notice of 2 Business Days to the Bank prior to
                           the maturity date of a fixed rate term, the fixed
                           rate conversion option may be renewed by the
                           Borrower, at such rate then determined, the whole in
                           accordance with and subject to the provisions hereof;
                           failing renewal, at maturity of a fixed rate term,
                           the interest rate payable shall revert to the
                           Floating Rate established at Section 4.1 hereof;

                  4.2.7    prior to each fixed rate conversion and/or renewal
                           option, the Borrower may verbally accept, by
                           telephone, the Rate Offered in the above-mentioned
                           delay, and confirm its acceptance in writing to the
                           Bank branch concerned, in the form provided in
                           Schedule B hereof, before the close of business of
                           the Bank, at least one Business Day before the
                           conversion or renewal date, failing which the chosen
                           amounts, shall be calculated on the basis of the
                           Floating Rate established at Section 4.1 hereof;


<PAGE>

                                                                        Page 3

                  4.2.8    the fixed rate conversion or renewal option is
                           conditional upon the availability of fixed rate
                           funding and is at the Bank's discretion.

         4.3      STANDBY FEES

                  Standby fees of 0.50% per annum on the average daily unused
                  term loan made available to the Borrower are payable monthly
                  on the 26th day of each month (it is acknowledged that
                  pursuant to Section 5 hereof, no amount of the term loan will
                  be unused after August 31, 1999).

5.       DISBURSEMENTS

         The Borrower shall use its loan by way of progressive advances which
         shall be disbursed prior to August 31, 1999. Thereafter, the Bank
         reserves the right to discontinue making advances under the said
         financing.

         The disbursements shall be made as follows:

         5.1      a first disbursement of $5,500,000 to finance up to 45% the
                  cost of acquisition of all assets of Baker Cummins Inc.;

         5.2      a maximum of five progressive advances up to a maximum amount
                  of $5,500,000 to finance up to 55%, before taxes, (i) the cost
                  of acquisition of new production equipments, information
                  system equipments and software, and (ii) costs related to
                  consulting services, installation costs and site improvements.

         Prior to any disbursement, the Borrower shall satisfy the terms and
         conditions specified herein and shall execute any document that may
         reasonably be requested by the Bank in order to give effect to the
         provisions contained herein including, without limitation, notes.

         Concurrently with each advance requisition, the Borrower shall furnish
         to the Bank a certificate from its accountants confirming that the
         advance requested is justified by the costs of acquisition and
         installation incurred together with copy of the deeds of sale and
         invoices related to the said acquisition and installation.

6.       REIMBURSEMENT

         The amount of principal of the loan shall be repaid on the basis of an
         amortization period of 120 months in equal and consecutive monthly
         instalments of principal, the amount of which shall be established at
         the date of the last disbursement. The first of such instalments shall
         become due and payable on the 26th day of the first month following the
         last disbursement and subsequent instalments shall be made on the 26th
         day of each following month. The balance of principal, interests, fees,
         accessories and all other sums that may be due to the Bank shall be
         repaid in full at maturity of the term loan, without further notice.

<PAGE>

                                                                          Page 4


7.       PREPAYMENTS

         7.1      FLOATING RATE TERM LOAN

                  The Borrower may not prepay, before June 30, 2003, the
                  Floating Rate term loan, in whole or in part, unless it pays
                  to the Bank a penalty of three (3) months' interest on the
                  prepaid principal. Thereafter, the Borrower may repay the
                  Floating Rate term loan, on whole or in part, at any time and
                  without penalty.

         7.2      FIXED RATE TERM LOAN

                  The Borrower may not prepay all or part of the fixed rate term
                  loan provided for herein. If, however, under the law or
                  otherwise, the Borrower is authorized to make a prepayment,
                  then the Borrower covenants to pay to the Bank at the same
                  time as the prepayment, an amount equal to one of the two
                  following amounts whichever is higher:

                  i)       three months' interest computed on the prepayment
                           amount at the loan interest rate; or

                  ii)      the interest that would have been earned on the
                           prepaid principal during the remaining period between
                           the prepayment date and the fixed rate term at the
                           rate in effect at the Bank on the prepayment date for
                           a new loan of the same type and for the term
                           remaining.

                  the sum payable under Section 7.2 hereof is intended, in
                  particular, to indemnify the Bank for the loss of income it
                  would suffer as a result of a prepayment. This sum shall also
                  be payable if prepayment is made following a demand for
                  payment in any of the events of default provided herein.

8.       SECURITY

         The repayment of the advances made hereunder to the Borrower, as well
         as the payment of the interest, fees and all other amounts payable
         under these presents or the security documents and the performance of
         all the Borrower's obligations towards the Bank shall always be secured
         by the following security in accordance with forms in use at the Bank:

         8.1      a first ranking hypothec in the amount of $11,000,0000 on the
                  universality of the Borrower's movable property, present and
                  future, tangible and intangible, including, without
                  limitation, a first ranking hypothec in the amount of
                  $11,000,000 on the proceeds of all-risk insurance covering the
                  property given as security by the Borrower up to the full
                  replacement value;

         8.2      a first ranking immovable hypothec in the amount of
                  $11,000,000 on the immovable property of the Borrower located
                  at 16751 Trans-Canada Highway, Kirkland, province


<PAGE>

                                                                          Page 5


                  of Quebec, including, without limitation, a first ranking
                  hypothec in the amount of $11,000,000 on the proceeds of
                  all-risk insurance covering the property given as security by
                  the Borrower up to the full replacement value;

         8.3      a first ranking security under Section 427 of the BANK ACT on
                  all the Borrower's goods, wares and merchandise;

         8.4      a rider designating the Bank as loss payee of the proceeds of
                  all-risk insurance on the property given as security by the
                  Borrower;

         8.5      a subordination of debts agreement executed in favour of the
                  Bank by Draxis Health Inc.;

         8.6      a cession of rank in favour of the Bank by Baker Cummins Inc.
                  with regards to any security held by it as guarantee of the
                  payment the balance of price sale related to the assets
                  acquired under the Project or a letter from Baker Cummins Inc.
                  confirming that it has no such security;

         8.7      a written undertaking by Draxis Health Inc. confirming that:

                  8.7.1    Draxis Health Inc. and all of its affiliated
                           corporations will transfer to the Borrower the
                           manufacturing of all of their respective products,
                           according to the business plan submitted to the Bank,
                           as well as a schedule of such transfers to be
                           submitted prior to disbursement;

                  8.7.2    all transactions between the Borrower and its
                           affiliated corporations, including, without
                           limitation, the transactions referred to in Section
                           8.7.1 above will be done at a fair market value;

                  8.7.3    management fees or any other fees exchanged between
                           the Borrower, Draxis Health Inc. and affiliated
                           corporations will only be payable for administrative
                           services actually provided;

                  8.7.4    Draxis Health Inc. will not transfer or sell any of
                           its shares in the Borrower without the written
                           agreement from the Bank;

                  8.7.5    Draxis Health Inc. will provide to the Borrower upon
                           its request or upon demand by the Bank, additional
                           funds of $2,000,000 by way of a non-revolving credit
                           to be used by the Borrower without conditions and the
                           payment of all advances under that credit shall be
                           subordinated to the Bank's financing.

9.       REPRESENTATIONS AND WARRANTIES OF THE BORROWER

         The Borrower represents and warrants to the Bank that:

         9.1      It is a corporation duly incorporated, registered and
                  organized subsisting under the CANADA BUSINESS CORPORATION ACT
                  and in compliance with the legislation governing it, and



<PAGE>

                                                                          Page 6


                  that it has the corporate power, permits and licenses required
                  to operate its business and to own, manage and administer its
                  property.

         9.2      It is not involved in any dispute or legal proceeding likely
                  to materially affect adversely its financial position or its
                  capacity to operate its business.

         9.3      It has valid title to all its goods and property free and
                  clear of any prior claims, mortgages, hypothecs, charges or
                  other similar encumbrances, except for the Permitted
                  Encumbrances hereunder.

         9.4      It is not in material default under the material contracts to
                  which it is a party or under the applicable legislation and
                  regulations governing the operation of its business or its
                  property, including, without limitation, all environmental
                  requirements.

         9.5      Any taxes, assessments, deductions at source, income taxes or
                  other levies, the payment of which is secured by a legal
                  privilege, prior claim or legal hypothec have been/will be
                  paid by the Borrower without subrogation or consolidation.

10.      CONDITIONS PRECEDENT TO ANY DISBURSEMENT

         Prior to any disbursement under this Offer, the following documents
         shall be furnished to the Bank in form and substance satisfactory to it
         and the following conditions, as applicable, shall be satisfied at the
         satisfaction of the Bank:

         10.1     a duly certified copy of all the documents of incorporation of
                  the Borrower and Draxis Health Inc. together with any
                  amendments, if the case may be;

         10.2     originals, of recent date, of the "certificate d'attestation"
                  and the certificate of compliance of the Borrower and Draxis
                  Health Inc. issued by both the Inspector General of Financial
                  Institutions and Industry Canada;

         10.3     a duly certified copy of the borrowing by-law and the
                  resolution of the Board of Directors of the Borrower
                  establishing the Borrower's authority to execute these
                  presents and the security documents and to perform its
                  obligations hereunder and under said security documents;

         10.4     a duly certified copy of the resolution of Draxis Health Inc.
                  establishing its authority to execute the undertaking required
                  under Section 8.7 herein;

         10.5     a certificate setting forth the functions and signatures of
                  the individuals authorized to represent the Borrower and
                  Draxis Health Inc. in their dealings with the Bank;

         10.6     the Bank's year 2000 questionnaire duly filed in by the
                  Borrower as well as (i) the internal or external audit of all
                  date-sensitive or date-dependent equipment, (ii) the proposed
                  action plan including its schedule and any contingency plan,
                  if need be, and budget to comply with the year 2000 issue,
                  verified and approved by the Board of Directors of the
                  Borrower;



<PAGE>

                                                                          Page 7


         10.7     a certified copy of all documents pertaining to the Project
                  that the Bank might reasonably request including, without
                  limitation, a certified copy of the contracts evidencing the
                  purchase of the assets and equipment financed hereunder;

         10.8     evidence satisfactory to the Bank of the compliance of the
                  Borrower, Draxis Health Inc. and their affiliated corporations
                  to the obligations and undertakings stipulated in Section 8.7
                  herein;

         10.9     evidence satisfactory to the Bank that the Borrower's
                  shareholders and/or directors have made an equity investment
                  of $7,000,000 and have disbursed a term loan of $6,000,000
                  subordinated to the bank's financing, both used by the
                  Borrower for the purposes of the Project;

         10.10    evidence satisfactory to the Bank of the granting of the
                  sources of financing described herein;

         10.11    a copy of the financial statements for the last fiscal year of
                  Baker Cummins Inc. and an explanatory report on the cost
                  optimization from the Baker Cummins Inc.'s operation to the
                  projected operation of the Borrower; the content of such
                  report shall be at the satisfaction of the Bank;

         10.12    a copy of all agreements related to Anipryl between Pfizer
                  Inc. and Draxis Health Inc. and/or its affiliated
                  corporations;

         10.13    evidence, in form and substance acceptable to the Bank and its
                  legal advisers, that the Borrower has complied with the
                  provisions dealing with insurance herein and in the security
                  documents contemplated herein;

         10.14    the instruments or contracts creating the security
                  contemplated in Section 8 duly executed by the Borrower and
                  duly registered or filed in all places in Quebec where such
                  registration or filing is necessary and duly signified or
                  served when such signification or service is required under
                  the terms thereof, requested by the Bank during the term of
                  the financing;

         10.15    a written opinion from the legal advisors of the Borrower and
                  Draxis Health Inc. regarding their status and capacity to
                  perform the obligations described herein and in the security
                  documents, including a confirmation that the deed of sale
                  between Baker Cummins Inc. and the Borrower has been duly
                  signed in accordance with the applicable legislation,
                  including, without limitation, the conformity to the rules
                  applicable to the sale of an enterprise;

         10.16    the written opinion of the Bank's legal advisors as to the
                  registration and rank of the security encumbering the property
                  given as security by the Borrower, as well as confirmation
                  that the Borrower holds good and valid title to said property,
                  which is of saleable quality and free of all liens, mortgages
                  and other encumbrances;



<PAGE>

                                                                          Page 8

         10.17    all titles of ownership regarding the property given as
                  security by the Borrower as well as a copy of receipts for
                  property taxes and transfer or conveyance duties;

         10.18    an up-to-date certificate of location regarding the immovable
                  property charged as security by the Borrower prepared by a
                  Quebec-approved land surveyor showing that all is in order
                  with the said immovable property;

         10.19    payment in full of the non-refundable fees charged by the Bank
                  in accordance with Sections 16.2, 16.3 and 16.4.1; and

         10.20    any documents which the Bank may reasonably request.

11.      OBLIGATIONS, REPRESENTATIONS AND WARRANTIES OF THE BORROWER

         11.1     POSITIVE COVENANTS

                  Until payment in full of any amounts due under the terms of
this Offer, the Borrower shall:

                  11.1.1   carry on its business in a diligent manner;

                  11.1.2   use the proceeds of the financing for the purposes
                           provided for herein;

                  11.1.3   keep and maintain books of account and other
                           accounting records in accordance with generally
                           accepted accounting principles and shall furnish to
                           the Bank its audited annual financial statements,
                           within 120 days of the end of its fiscal year, as
                           well as its In-house financial statements, on a
                           monthly basis, within 60 days of the end of each
                           month;

                  11.1.4   maintain, at all times, a Debt Ratio not exceeding
                           1.6:1.0;

                  11.1.5   at all times, give the Bank's representatives the
                           right to inspect its establishments and provide
                           reasonable access thereto, and further permit the
                           Bank's representatives to examine its books of
                           account and other records, and take extracts
                           therefrom and/or copies thereof;

                  11.1.6   maintain, at all times, insurance coverage on its
                           property against loss or damage caused by fire and
                           any other risk satisfactory to the Bank;

                  11.1.7   obtain and maintain in effect the permits and
                           licenses required to carry on its business; more
                           specifically, the Borrower shall complete in the 12
                           months following the acquisition of the new assets
                           all the necessary documentation to obtain FDA and HPB
                           for its solid dosage production lines;

                  11.1.8   furnish, when required by the Bank, not before April
                           15, 1998 a certificate of compliance to the year 2000
                           duly signed by an authorized officer of the Borrower;




<PAGE>

                                                                          Page 9


                  11.1.9   notify the Bank, without delay, of any event of
                           default or any event which following notice or the
                           expiry of a delay, could constitute an event of
                           default;

                  11.1.10  punctually pay all taxes, assessments, deductions at
                           source, income tax or annuities for which the payment
                           thereof is guaranteed by prior claim and/or legal
                           hypothec, without subrogation or consolidation; and

                  11.1.11  conduct all or the greater part of its business with
                           the Bank provided such services are made available
                           to the Borrower on reasonable terms;

                  11.1.12  supply the Bank with legal opinions from its
                           solicitors confirming that the statement of claim
                           filed by Dr. Knoll against Draxis Health Inc. is
                           materially without merit.

         11.2     NEGATIVE COVENANTS

                  The Borrower undertakes not to carry out the following
                  transactions or operations without obtaining the prior written
                  consent from the Bank:

                  11.2.1   substantially change the nature of its operations or
                           business;

                  11.2.2   merge with another company, dissolve or wind up the
                           company;

                  11.2.3   create or permit the existence of security on present
                           and/or future property, except for Permitted
                           Encumbrances;

                  11.2.4   declare or pay dividends on its shares, purchase or
                           redeem its shares or otherwise reduce its capital;

                  11.2.5   grant loans to its officers, directors or
                           shareholders other than in the ordinary course of
                           business;

                  11.2.6   grant a loan or make an investment or provide
                           financial assistance to a third party by way of a
                           guarantee or otherwise.

         11.3     REPRESENTATIONS AND WARRANTIES

                  The representations and warranties contained in the section
                  entitled "Representations and Warranties of the Borrower"
                  hereof shall continue to be true and exact and shall remain
                  during all the time of the financing described herein.

12.      ENVIRONMENTAL OBLIGATIONS

         12.1     The Borrower shall comply with the requirements of all legally
                  binding legislative and regulatory environmental provisions
                  (the "Environmental Requirements") and shall at all times
                  maintain the authorizations, permits and certificates required
                  under these provisions.


<PAGE>

                                                                         Page 10


         12.2     The Borrower shall immediately notify the Bank in the event a
                  spill or emission occurs or any contaminant is discovered
                  which has a material adverse effect on its property,
                  operations or those of any neighboring property. In addition,
                  it shall report to the Bank forthwith any notice, order,
                  decree or fine that it may receive or be ordered to pay with
                  respect to the Environmental Requirements relating to its
                  business or property.

         12.3     At the request of and in accordance with the conditions set
                  forth by the Bank, the Borrower shall, at its own cost provide
                  any information or document which the Bank may require with
                  respect to its environmental situation, including, if a
                  material adverse effect is suspected by the Bank, any study or
                  report prepared by a reputable firm. In the event that such
                  studies or reports reveal that any Environmental Requirements
                  are not being respected, the Borrower shall effect the
                  necessary work to ensure that its business and property
                  materially comply with the Environmental Requirements within a
                  period acceptable to the Bank. All information obtained,
                  collected and submitted by the Borrower to the Bank pursuant
                  to this Section 12.3 will be kept confidential.

         12.4     The Borrower undertakes to indemnify the Bank for any damage
                  which the Bank may suffer or any liability which it may incur
                  as a result of any non-compliance of the Borrower with
                  Environmental Requirement or such non-compliance by a third
                  party which affects the Borrower's assets.

         12.5     The provisions, undertakings and indemnification set out in
                  this Section 12.4 shall survive the cancellation and release
                  of the security, and/or the final payment in full of any
                  indebtedness and liability of the Borrower to the Bank.

13.      DEFAULT

         13.1     EVENTS OF DEFAULT

                  The occurrence of one or more of the following events, shall
                  constitute a default under this Offer:

                  13.1.1   if the Borrower, on demand or when due and eligible,
                           fails to make a payment of principal, interest, fees
                           or any other amount which may become payable
                           hereunder or under any of the security documents
                           provided for herein and such failure continues for
                           three business days after notice specifying such
                           failure has been given by the Bank to the Borrower;

                  13.1.2   if the Borrower or Draxis Health Inc. fails to
                           perform or otherwise breaches any obligation
                           hereunder or pursuant to any of the security
                           documents or any other document provided for herein
                           and such failure or breach continues for ten business
                           days after notice specifying such failure or breach
                           has been given by the Bank to the Borrower;

                  13.1.3   if the Borrower or Draxis Health Inc. becomes
                           insolvent, bankrupt or is in the process of winding
                           up, assigns its assets for the benefit of its
                           creditors, files a proposal or gives notice of its
                           intention to file such proposal;


<PAGE>

                                                                         Page 11


             13.1.4   if for any reason whatsoever, the Borrower ceases to
                      operate all or major part of its business, changes the
                      nature of its operations or if a material adverse
                      change occurs in the nature of the risk inherent in the
                      financing described herein or in the financial position
                      of the Borrower or Draxis Health Inc. which would
                      materially adversely affect their respective
                      obligations towards the Bank;

             13.1.5   if proceedings are instituted by the Borrower, Draxis
                      Health Inc. or by a third party with respect to the
                      Borrower or Draxis Health Inc. for the dissolution,
                      winding-up, reorganization, composition, arrangement or
                      readjustment of the indebtedness of the Borrower or
                      Draxis Health Inc.;

             13.1.6   if a creditor, trustee in bankruptcy, sequestrator,
                      receiver or trustee takes possession of the property of
                      the Borrower or a material portion thereof or if such
                      property is subject to a prior notice of the exercise
                      of a hypothecary right or a notice to withdraw
                      authorization to collect claims, or is seized, except
                      if such proceedings are contested in good faith by the
                      Borrower; in the event of such contestation, the Bank
                      reserves the right to require the Borrower to provide
                      additional security, the form and substance of which
                      shall be acceptable to the Bank and the amount of which
                      shall be deemed sufficient by the Bank to protect its
                      security;

             13.1.7   if the Borrower or Draxis Health Inc. is in default
                      under the terms and conditions of any other agreement,
                      contract or writing with the Bank or any other financial
                      institution, the effect of which could affect materially
                      adversely the ability of the Borrower to perform its
                      obligations hereunder or the ability of Draxis Health Inc.
                      to perform its obligation under its undertaking as
                      specified in Section 8.7;

             13.1.8   if any representation or warranty made by the Borrower
                      or by Draxis Health Inc. herein or made in any document
                      or certificate furnished to the Bank in connection
                      herewith proves to be materially incorrect or erroneous;

             13.1.9   if Draxis Health Inc. sells, transfers or otherwise
                      disposes of all or part of its shares in the capital
                      stock of the Borrower without the written consent of
                      the Bank; or

             13.1.10  Draxis Health Inc. will not proceed to any change in
                      the management or in the board of directors of the
                      Borrower that would be unacceptable in the opinion of
                      the Bank without the written consent of the Bank.

      13.2   RIGHTS AND RECOURSE OF THE BANK

             Without limiting the Bank's rights hereunder or under the
             security and subject to its other rights and recourse in the event
             of default:

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                                                                         Page 12


             13.2.1   the Bank may declare liquid and exigible all monetary
                      obligations of the Borrower still outstanding at that
                      time and claim from the Borrower, with no other notice
                      of default, immediate payment of the principal,
                      interest, fees and any other amount, including the
                      fees incurred by the Bank for the collection and
                      protection of the debt and the execution of any other
                      obligation of the Borrower;

             13.2.2   the Borrower shall lose all its rights and privileges
                      hereunder, including and without limitation the right
                      to receive additional advances;

             13.2.3   the Bank may charge the Borrower reasonable analysis,
                      administration and follow-up charges and may also incur
                      and pay any reasonable amount for services rendered
                      (including the fees for legal counsel, accountants or
                      any other professional whose services may be required
                      or deemed necessary) with respect to the realization,
                      sale, transfer, delivery or payment to be made in the
                      exercise of any security held by the Bank and may
                      withhold such charges and fee amounts from the proceeds
                      of the realization on security;

             13.2.4   any amount collected or received by the Bank, including
                      the balance of any proceeds of the realization on
                      security, may be withheld by the Bank and may, at the
                      Bank's discretion, be applied to any portion of the
                      Borrower's indebtedness to the Bank;

             13.2.5   any amount incurred and paid by the Bank to realize,
                      retain or preserve any security given by the Borrower
                      to the Bank hereunder or by law, shall bear interest at
                      the Canadian Prime Rate of the Bank plus 3% per annum
                      until payment of said amount.

      13.3   WAIVER, OMISSION AND CUMULATIVE RECOURSE

             The Bank may set deadlines, take or waive security, accept
             compromises, grant a discharge and recognition of cancellation
             and make arrangements with the Borrower as it deems appropriate
             without such action reducing the Borrower's responsibility or
             affecting the rights of the Bank with respect to the security
             provided hereunder.

             Any omission on the part of the Bank to notify the Borrower
             and/or any guarantor of any case of default under the terms and
             conditions hereof or to exercise its rights hereunder shall not
             be considered a renunciation on the part of the Bank of its
             right to exercise its recourse in a case of default or to
             exercise any right.

             Acceptance by the Bank, following a default by the Borrower, of
             an amount owed to it, or the exercise by the Bank of any
             recourse or right shall not prevent the Bank from exercising any
             other right or recourse, the rights and recourses of the Bank
             being cumulative and non-interchangeable, and in addition to and
             not in substitution of, any other right or recourse by the Bank,
             whether by agreement or otherwise provided for by law.

<PAGE>

                                                                         Page 13


14.   INTERPRETATION

      14.1   DEFINITIONS

             For the purposes hereof, the following words and phrases shall
             have the following meaning:

             "BUSINESS DAY": means any day, other than Saturday, Sunday or
             statutory holiday, on which the offices of the Bank are open in
             the Province of Quebec.

             "CANADIAN DOLLARS" "CDN DOLLARS" "CDN$": means lawful money of
             Canada.

             "CANADIAN PRIME RATE": means the annual variable rate of
             interest announced from time to time by the Bank and used to
             determine the interest rates on Canadian dollar commercial
             loans granted by the Bank in Canada.

             "DEBT", INDEBTEDNESS" OR TOTAL LIABILITY": means the aggregate
             amount of principal, interest and accessories due by the
             Borrower excluding the debt subordinated to the Bank.

             "DEBT RATIO": means the ratio of total liability to Shareholders'
             Equity.

             "FLOATING RATE": means the interest rate applicable to floating
             rate advances made hereunder in Canadian Dollars.

             "PERMITTED ENCUMBRANCES": refers collectively to charges created
             by the security documents granted from time to time by virtue to
             these presents and any other charge which constitutes a
             "Permitted Encumbrance", as may be defined in the said documents.

             "RATE OFFERED": means the annual interest rate determined from
             time to time by the Bank, on the basis of its cost of funds, for
             the term chosen by the Borrower, as being the fixed interest
             rate applicable to its commercial fixed rate terms loans granted
             in Canada for the same term.

             "SHAREHOLDERS' EQUITY": means the aggregate of the paid-up
             capital, retained earnings and Subordinated Debt less intangible
             assets and less any investment and/or advance of the Borrower to
             any of its shareholders, affiliated companies and/or directors
             within the meaning of the CANADA BUSINESS CORPORATIONS ACT.

             "SUBORDINATED DEBT": means any debt of the Borrower towards a
             shareholder and/or an affiliate company of the Borrower within
             the meaning of the CANADA BUSINESS CORPORATION ACT which are
             entirely subordinated to the amounts due or which could become
             due to the Bank hereunder.

      14.2   ACCOUNTING TERMS

             Unless another definition is provided hereunder, each accounting
             term used in this Offer

<PAGE>

                                                                         Page 14


             shall have the meaning ascribed to it in accordance with
             accounting principles generally accepted by the Canadian Institute
             of Chartered Accountants.

15.   MISCELLANEOUS PROVISIONS

      15.1   CURRENCY AND PLACE OF PAYMENT

             All amounts due by the Borrower under this Offer shall be paid by
             the Borrower to the Bank in Canadian Dollars.

      15.2   CALCULATION OF INTEREST AND ARREARS

             15.2.1   Unless otherwise provided for herein, interest on any
                      amount due hereunder shall be calculated and accrues daily
                      and not in advance on the basis of a 365-day year.

             15.2.2   For the purposes of the Interest Act (Canada) in the
                      case of a leap year, the annual interest corresponding to
                      the interest calculated on the basis of a 365-day year is
                      equal to the interest rate thus calculated multiplied by
                      366 and divided by 365.

             15.2.3   Any amount of principal, interest, commission, discount
                      or of any other nature remaining due hereunder, shall bear
                      interest at the rate provided for herein, being understood
                      that the said interest rate on arrears shall not exceed
                      the maximum rate provided by law.

             15.2.4   Interest on arrears shall be compounded monthly and
                      payable on demand.

      15.3   RECORDS

             The Bank shall keep records evidencing the transactions effected
             under this financing. Such records shall be presumed to reflect
             these transactions and the debt due to the Bank.

      15.4   ACCOUNT DEBITS

             The Borrower irrevocably authorizes the Bank to debit periodically
             or from time to time any bank account it may maintain with the Bank
             in order to pay all or part of the amounts it may owe to the Bank
             hereunder, including, without limitation, the amounts owed under
             Sections 16.2, 16.3 and 16.4.1 hereunder.

      15.5   LEGAL COUNSEL

             The Bank reserves its right to choose its legal counsel for the
             purposes hereof.

      15.6   NON-BUSINESS DAYS

             Should any payment of principal or interest hereunder become due
             on a day which is not

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                                                                         Page 15


             a Business Day, the due date thereof shall be extended to the
             immediately following Business Day.

      15.7   INVALIDITY OF ANY PROVISIONS HEREUNDER

             Any decision of a court to the effect that any of the provisions
             hereunder are null and void or non-executory shall in no way
             affect, invalidate or render unenforceable the other provisions
             hereunder.

      15.8   FINAL AGREEMENT AND INTERPRETATION

             As soon as this Offer is signed by the Borrower, it shall
             constitute the final agreement between the parties hereto with, the
             exception of any further written modification agreed by the parties
             and replaces and supersedes any prior agreements verbal or written
             between the parties related to the financing described herein.

      15.9   MODIFICATIONS

             Any modifications hereto or waiver of a right thereunder is
             without effect if it is not expressly made and evidenced in a
             written document executed between the parties hereto.

      15.10  OTHER DOCUMENTS

             The Borrower and Draxis Health Inc. shall do all things and sign
             all documents which may be deemed necessary or appropriate by the
             Bank for the purposes of giving full effect to the terms,
             conditions, undertakings and security provided herein.

      15.11  ADDITIONAL CHARGES

             The Borrower undertakes to pay the Bank for the following
             charges, as determined by the Bank:

             15.11.1   in the event that the cost for the Bank of the credit
                       were to increase as a result of a law, regulation or
                       administrative guideline or decision (including, without
                       limitation, as a result of the application of reserves,
                       taxes or requirements regarding the capital adequacy of
                       the Bank),the Borrower shall pay such additional cost on
                       demand; and

             15.11.2   the Borrower shall pay all taxes and additional fees
                       that could result from the application of the Goods and
                       Services Tax (Canada) and of any applicable provincial
                       taxes of a similar nature.

      15.12  ASSIGNMENT

             All rights and obligations of the Borrower hereunder and all
             proceeds of the financing may not be transferred or assigned by the
             Borrower, any such transfer or assignment being null and void
             insofar as the Bank is concerned and rendering any balance then
             outstanding of


<PAGE>

                                                                         Page 16


         the financing immediately due and exigible at the option of the Bank
         and relieving the Bank from the obligation of making any further
         advances hereunder.

15.13    COUNTERPARTS

         This Offer may be executed in any number of counterparts, and each of
         which so executed shall be deemed to be an original, and all such
         counterparts taken together shall be deemed to constitute one and the
         same instrument.

16.      FEES

         16.1     APPLICATION STUDY FEES

                  As evidence of our mutual good faith, and in consideration of
                  certain expenses incurred by the Bank in establishing the
                  described financing arrangements, the Bank has received a
                  deposit in the amount of $10,000.

         16.2     COMMITMENT FEES

                  The Borrower agrees to pay the Bank non-refundable commitment
                  fees of $20,000 upon acceptance hereof and $15,000 on the date
                  of the first disbursement.

         16.3     MONITORING FEES

                  The Borrower agrees to pay the Bank monitoring fees of $500
                  per month on the 26th day of each month.

         16.4     LEGAL FEES AND EXPENSES

                  16.4.1   Legal fees of $10,000 related to the preparation of
                           the instruments and part of the security documents
                           required herein (except the immovable hypothec) shall
                           be at the Borrower's expense, whether the financing
                           is completed or not and shall be payable upon
                           acceptance hereof.

                  16.4.2   The legal fees and expenses related to the
                           preparation of notarial deeds required herein and the
                           publication of the security documents required in
                           connection herewith and searches regarding their
                           rank, shall be at the Borrower's expense, wherever
                           the financing contemplated herein is completed or
                           not.

                  16.4.3   The legal fees related to the opinions given by the
                           Borrower's legal advisors as described in Sections
                           10.2.15 and 10.2.16 hereof will also be at the
                           Borrower's expense.

17.      ACCESS TO INFORMATION

         The Borrower hereby authorize any personal information agent, financial
         institution, creditor, tax authority, employer or any other person,
         including any public entity, having information concerning


<PAGE>

                                                                         Page 17


         the Borrower or its property, more particularly any financial
         information or information with respect to any undertaking, guarantee
         or suretyship given by the Borrower, to furnish such information to the
         Bank in order to verify the accuracy of all information furnished or to
         be furnished subsequently to the Bank and to ensure the solvency of the
         Borrower at all times.

18.      GOVERNING LAW

         This Offer shall be construed and interpreted in accordance with the
         laws of the Province of Quebec.

17.      LANGUAGE (QUEBEC)

         The parties declare that they have requested and do hereby confirm
         their request that the present Offer and the ancillary documents
         related thereto be in English; les parties declarent qu'elles ont exige
         et par la presente confirment leur demande que la presente offre ainsi
         que les documents connexes soient rediges en anglais.

<PAGE>

                                   SCHEDULE B

                      NOTICE OF ACCEPTANCE OF RATE OFFERED


TO:     NATIONAL BANK OF CANADA         DATE:
        (address)


Reference is made to the Offer of financing dated June 9, 1998 and which we
accepted on _____________, 1998.

We hereby confirm our verbal acceptance of the fixed rate of ____% offered by
your Bank as at this date regarding the following conversion (or renewal):

-        amount; and

-        conversion and/or renewal term.


DRAXIS PHARMA INC.

By:
   --------------------------


By:
   --------------------------