Document:

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                                                                    EXHIBIT 4.13

         LOAN AGREEMENT entered into in Montreal as of March 28, 2002.

AMONG:         DRAXIS PHARMA INC., a corporation having an office at 16751
               Trans-Canada, Kirkland, Quebec, H9H 4J4

               (the "Borrower")

AND:           SGF SANTE INC. a corporation having an office at 600 de la
               Gauchetiere Street, Suite 1700, Montreal, Quebec, H3B 4L8 ("SGF")

AND:           DRAXIS HEALTH INC. a corporation having an office at 6870 Goreway
               Drive, Mississauga, Ontario, L4V 1P1

               ("DHI" and collectively with SGF the "Lenders")

         WHEREAS the Borrower has requested the Lenders to make available to the
Borrower term loans in an initial principal amount of $9,139,335;

         WHEREAS the Lenders agreed to make such loans facilities available to
the Borrower.

         NOW, THEREFORE THE PARTIES AGREE AS FOLLOWS :

1.       INTERPRETATION

1.1      DEFINITIONS

         In this Agreement, unless the context otherwise requires,

         1.1.1    "Business Day" means a day on which the Lenders are open for
                  business in the Province of Quebec;

         1.1.2    "Capital Plan" means the capital plan of the Borrower annexed
                  as Schedule 1.1.2 and prepared by the Borrower and ratified on
                  March 28, 2002, as amended from time to time in accordance
                  with the Shareholders' Agreement;

         1.1.3    "EBITDA" means, for any fiscal period, the net income (or, as
                  the case may be, net loss) of the Borrower and its
                  consolidated subsidiaries determined in accordance with GAAP
                  (but excluding extraordinary items) increased by the sum of,
                  without duplication (i) the total of all items properly
                  classified as interest expense for such period in accordance
                  with GAAP, (ii) the aggregate of all taxes (including future
                  income taxes) based on the net income of the Borrower and its
                  consolidated subsidiaries

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                  for such period determined in accordance with GAAP; and (iii)
                  the aggregate of all depreciation, amortisation and other like
                  reductions to income of the Borrower and its consolidated
                  subsidiaries not involving or requiring an outlay of cash for
                  such period determined in accordance with GAAP;

         1.1.4    "Event of Default" has the meaning ascribed to such term in
                  Section 9.1;

         1.1.5    "First Term Credit" means the credit facility referred to in
                  Section 2.1.1 of this Agreement;

         1.1.6    "Free Cash Flow" means, for any fiscal period, (i) EBITDA for
                  such period, less (ii) an amount equal to any increase in
                  working capital for such period or plus an amount equal to any
                  decrease in working capital for such period, as the case may
                  be, less (iii) any capital expenditures made during such
                  period other than capital expenditures provided for in the
                  Capital Plan and in respect of which such plan provides for
                  funding of such capital expenditures from the proceeds of
                  financing from Investissement Quebec, DHI and SGF or
                  additional equity contributions, less (iv) an amount equal to
                  any payments of principal or interest made, or required to be
                  made, during such period on account of indebtedness of the
                  Borrower to the National Bank of Canada or Investissement
                  Quebec, and less (v) an amount equal to any payment made by
                  the Borrower on account of Large Corporation Tax;

         1.1.7    "GAAP" means accounting principles generally accepted by the
                  Canada Institute of Chartered Accountants, consistently
                  applied;

         1.1.8    "Indebtedness" means, at any time, the aggregate outstanding
                  amounts in Principal of the Indebtedness, interest, fees and
                  accessories owed by the Borrower pursuant to this Agreement;
                  "Principal of the Indebtedness" means the aggregate amounts of
                  the advances made by the Lenders hereunder, together with
                  amounts added thereto pursuant to Sections 4.2.1 and 4.2.2;

         1.1.9    "Maturity Date" shall mean March 28, 2007, or such later date
                  as the Lenders may agree;

         1.1.10   "Prime Rate" means the annual rate of interest announced from
                  time to time by the National Bank of Canada as its reference
                  rate then in effect for determining interest rates on Canadian
                  dollar commercial loans made in Canada;

         1.1.11   "Second Term Credit" means the credit facility referred to in
                  Section 2.1.2 of this Agreement;

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         1.1.12   "Security" means any and all security mentioned in Section
                  3.1.1 of this Agreement; "Security Agreements" means all
                  agreements and documents evidencing the Security or made in
                  relation thereto;

         1.1.13   "Shareholders' Agreement" means the amended and restated
                  unanimous shareholders' agreement entered as of the date
                  hereof among DHI, SGF, the Borrower, Dwight Gorham, Mohammed
                  Barkat and Michel Sauvageau;

         1.1.14   "Subscription Agreement"; means the Subscription Agreement
                  dated February 18, 2000 among the Borrower, SGF and DHI, as
                  such agreement may be amended from time to time;

         1.1.15   "Term Credits" means the First Term Credit, the Second Term
                  Credit and the Third Term Credit; and

         1.1.16   "Third Term Credit" means the credit facility referred to in
                  Section 2.1.3 of this Agreement.

1.2      ACCOUNTING TERMS AND EXPRESSIONS

         Unless otherwise provided, the accounting terms and expressions shall
have the meaning assigned to them under generally accepted accounting principles
in Canada and calculations shall be made according to the same principles.

1.3      HEADINGS

         The headings have been inserted for convenience only, and do not affect
in any way the interpretation of this Agreement.

1.4      APPLICABLE LAW

         This Agreement shall be governed by and construed in accordance with
the laws of the Province of Quebec and the laws of Canada applicable therein.

2.       THE CREDITS

2.1      THE TERM CREDITS

         2.1.1    Subject to the provisions of this Agreement, DHI makes
                  available to the Borrower a term credit (the "First Term
                  Credit") in the principal amount of $4,597,517;

         2.1.2    Subject to the provisions of this Agreement, DHI makes
                  available to the Borrower a term credit (the "Second Term
                  Credit") in the principal amount of $1,557,708, which may be
                  increased in accordance with the provisions of this Agreement;
                  and

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         2.1.3    Subject to the provisions of this Agreement, SGF makes
                  available to the Borrower a term loan (the "Third Term
                  Credit") in the amount of $2,984,110, which may be increased
                  in accordance with the provisions of this Agreement.

2.2      ADDITIONAL CREDIT

         DHI and SGF hereto agree that, inasmuch as credit conditions are
         reasonable, the Borrower will use senior debt from third party
         financing (through a renegociation of the Borrower's existing bank debt
         or otherwise on terms and conditions satisfactory to DHI and SGF) to
         fund the residual portion of the Capital Plan. In the event that such
         senior debt financing is not available, DHI and SGF agree to fund the
         residual portion of the Capital Plan with additional debt on the same
         terms and conditions as provided herein for the Second Term Credit and
         the Third Term Credit, up to a maximum amount of $2,372,182 in
         proportion to the then shareholdings of DHI and SGF in the Borrower, on
         a non-diluted basis. Such additional funding by DHI and SGF shall be
         made available to the Borrower as needed to ensure that the Capital
         Plan has been fully implemented by no later than December 31, 2003.

2.3      AVAILABILITY OF THE CREDITS

         The Term Credits shall not revolve and shall be available until the
         Maturity Date.

2.4      PURPOSE OF THE CREDITS

         The Borrower shall use the Term Credits to implement the Capital Plan.

3.       CONDITIONS PRECEDENT

3.1      CONDITIONS PRIOR TO THE FIRST DISBURSEMENT

         Prior to the disbursement of the Term Credits:

         3.1.1    the Borrower shall have provided the Lenders with a hypothec
                  on the universality of its property, which hypothec shall rank
                  only behind existing security granted in favour of National
                  Bank of Canada and Investissement Quebec;

         3.1.2    the Borrower shall have entered into a loan agreement with
                  Investissement Quebec providing for loans in the amount of
                  $4,800,000 on terms and conditions satisfactory to the
                  Lenders;

         3.1.3    DHI and SGF shall have subscribed for additional common shares
                  of the Borrower for an amount of not less than $6,286,000 in
                  the aggregate pursuant to a subscription agreement on terms
                  and conditions satisfactory to the Lenders;

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         3.1.4    the Borrower shall have obtained such consents and waivers
                  from National Bank of Canada and Investissement Quebec as may
                  be required by the Lenders;

         3.1.5    the Borrower shall have obtained such intercreditor agreements
                  as the Lenders may reasonably require;

         3.1.6    the Borrower shall provide the Lenders with a certificate of a
                  senior officer attesting that no Event of Default has occurred
                  and is continuing;

         3.1.7    the Lenders shall have obtained an opinion of counsel to the
                  Borrower on terms and conditions satisfactory to Lenders; and

         3.1.8    the Borrower shall have at all times respected and complied
                  within the obligations incumbent on it (i) pursuant to Article
                  3 of the unanimous shareholders' agreement entered into by and
                  among the Borrower, SGF, DHI, Dwight Gorham and Mohammed
                  Barket as of February 18, 2000 to which Michel Sauvageau
                  intervened on January 5, 2001 and (ii) pursuant to Article 5
                  of the Subscription Agreement.

3.2      BENEFIT OF THE FOREGOING SECTIONS

         The provisions of Section 3.1 are for the sole benefit of the Lenders
         and the Lenders may waive any of their rights thereunder.

4.       INTEREST

4.1      INTEREST RATE

         The Principal of the Indebtedness owed under the Term Credits shall
         bear interest, before and after maturity, at the Prime Rate in effect
         from time to time, plus 1.50%.

4.2      INTEREST ACCRUAL AND PAYMENT

         Interest on the Term Credits shall accrue and be paid as follows:

         4.2.1    from the date of this Agreement until December 31, 2002,
                  interest shall accrue and be capitalised quarterly such that
                  it shall form part of the Principal of the Indebtedness;

         4.2.2    from January 1, 2003 until December 31, 2003, interest on the
                  Term Credits shall accrue quarterly and shall be payable prior
                  to March 31, 2004 from Free Cash Flow, up to a maximum amount
                  of 50% of Free Cash Flow for the period from January 1, 2003
                  to December 31, 2003 provided that, to the extent that the
                  interest so accrued has not been paid on such date, such
                  unpaid interest shall be capitalised and form part of the
                  Principal of the Indebtedness; and

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         4.2.3    for the period from January 1, 2004 until the Maturity Date,
                  interest shall accrue and be payable quarterly in arrears.

4.3      Any amount payable hereunder, including fees and expenses, which is not
         paid when due shall bear interest at the rate set forth in Section 4.1
         and such interest on arrears is payable on demand.

4.4      CALCULATION OF RATES

         4.4.1    Any rate of interest under this Agreement is calculated daily
                  on the basis of a 365-day year.

         4.4.2    For the purposes of the INTEREST ACT (Canada), in the case of
                  a leap year, the annual rate to which a rate calculated on the
                  basis of 365 days is equivalent, is equal to the rate so
                  calculated multiplied by 366 and divided by 365.

5.       REPAYMENTS

5.1      MANDATORY PAYMENTS

         5.1.1    The Indebtedness is repayable in full on the Maturity Date;

         5.1.2    From and after March 31, 2004, until the Maturity Date, the
                  Principal of the Indebtedness under the Term Credits is
                  repayable from that portion of 50% of the Free Cash Flow
                  calculated for each annual period beginning with the year
                  ending December 31, 2003 until the Maturity Date which is not
                  applied to the repayment of interest pursuant to Section
                  4.2.2. Such payment is due no later than March 31 of the year
                  following the year in respect of which the Free Cash Flow is
                  calculated; and

         5.1.3    The Indebtedness shall also be repayable immediately upon the
                  Lenders demanding payment of same further to the occurrence of
                  an Event of Default.

5.2      OPTIONAL PAYMENTS

         Subject to Section 11.1, the Principal of the Indebtedness may be
         repaid by the Borrower at any time in whole or in part without penalty
         after receipt by the Lenders of a twenty day written notice to that
         effect. However, all unpaid and accrued interest must first be paid in
         full before any Principal.

5.3      IMPUTATION OF PAYMENTS

         All payments of principal, interest, fees and expenses by the Borrower
         shall be made and imputed to the Lenders prorata the Principal of the
         Indebtedness owed to them under the Term Credits.

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6.       PLACE OF PAYMENT

         Any payment shall be made to the relevant Lender at its address
         indicated on the first page of this Agreement, or at any other place
         notified by such Lender to the Borrower.

7.       REPRESENTATIONS

         The Borrower represents that:

7.1      POWERS

         It is a duly incorporated and validly existing corporation, in good
         standing under the corporate laws governing it, and has taken all
         corporate action necessary to authorize the execution and delivery of
         this Agreement and the performance of its obligations hereunder.

7.2      DEFAULTS

         It is not in default under any contract to which it is party or under
         the laws and regulations applicable to its business, except for
         default, if any, which could not materially and adversely affect its
         financial situation, its ability to carry on its business or its
         ability to fulfil its obligations under this Agreement.

7.3      DISPUTES

         There is no litigation or legal proceedings pending or threatened
         against the Borrower which could materially and adversely affect its
         financial situation, its ability to carry on its business or its
         ability to fulfil its obligations under this Agreement.

7.4      PROPERTY

         The Borrower owns all of its assets by good and valid title, free and
         clear of all hypothecs, security interests, liens and other
         encumbrances of any kind, except for the hypothecs granted in favour of
         National Bank of Canada and in favour of Investissement Quebec, as more
         fully described in Schedule 7.4.

8.       DEFAULTS

8.1      EVENTS OF DEFAULT

         Each of the following events is an event of default ("Event of
         Default"):

         8.1.1    if the Borrower fails to pay when due the whole or any part of
                  the Principal of the Indebtedness;

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         8.1.2    if the Borrower fails to pay any other amount payable to the
                  Lenders pursuant to this Agreement or otherwise and if such
                  failure continues for 10 Business Days;

         8.1.3    if the Borrower is in default under any other agreement for
                  the borrowing of money and such default is not cured or waived
                  by the Lenders;

         8.1.4    if the Borrower becomes insolvent or bankrupt or subject to
                  any insolvency or bankruptcy law or if it ceases to carry on
                  its business;

         8.1.5    if the assets of the Borrower, or any substantial part
                  thereof, are seized (except if such seizure is contested in
                  good faith within ten days and for so long as such
                  contestation lasts), or are subject to an hypothecary recourse
                  by a creditor, or are placed under sequestration, receivership
                  or guardianship, or if a liquidator is appointed in respect of
                  the Borrower;

         8.1.6    if the Borrower amalgamates or merges with another corporation
                  without the prior written consent of the Lenders, or initiates
                  proceedings for its corporate dissolution or winding-up;

         8.1.7    if any of the representations made by the Borrower in this
                  Agreement or if a document supplied by the Borrower in
                  connection or in execution to this Agreement proves to be
                  erroneous or inaccurate in any material adverse respect;

         8.1.8    if the Borrower otherwise fails to fulfil any of its
                  obligations or undertakings under this Agreement or any of the
                  Security Agreements and if such failure is not remedied within
                  15 Business Days after a notice of such failure is given to
                  the Borrower by a Lender; or

         8.1.9    if there occurs a default or a breach of a representation and
                  warranty of the Borrower under the Subscription Agreement or
                  under the subscription agreement entered into between the
                  Borrower and the Lenders on the date hereof and that such
                  default or breach is not waived by SGF.

8.2      REMEDIES

         Upon the occurrence of an Event of Default, the Lenders may:

         8.2.1    upon giving a notice to the Borrower, terminate the right of
                  the Borrower to use the Term Credits, demand immediate payment
                  of the whole or part of the Indebtedness and same shall become
                  payable immediately; and

         8.2.2    exercise all their legal rights and remedies.

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8.3      ABSENCE OF SOLIDARITY

         It is hereby stipulated for greater clarity that there shall be no
         solidarity between the Lenders and that each Lender shall at all times
         retain the right to exercise alone its rights and recourses under this
         Agreement, DHI being the sole Lender of the First Term Credit and of
         the Second Term Credit and SGF being the sole Lender of the Third Term
         Credit.

9.       MISCELLANEOUS

9.1      BOOKS AND ACCOUNTS

         The Lenders may keep books and accounts evidencing the Indebtedness and
         the transactions made pursuant to this Agreement. Such books and
         accounts shall, in the absence of manifest error, be deemed to
         represent accurately the Indebtedness and these transactions.

9.2      UNASSIGNABILITY

         The Borrower may not assign its rights or the amounts to be received
         under this Agreement.

9.3      EXPENSES

         The Borrower shall pay, upon demand, all reasonable expenses incurred
         by the Lenders in connection with this Agreement and the Security
         Agreements and the exercise of the rights resulting therefrom,
         including fees and expenses of counsel to the Lenders.

9.4      NO WAIVER

         The failure of a Lender to exercise any of its rights shall not
         constitute a waiver to exercise such right in the future.

9.5      NON-BUSINESS DAY

         If a payment must be made on a day which is not a Business Day, this
         payment may be made on the following Business Day.

9.6      PREVIOUS AGREEMENTS

         This Agreement supersedes any previous agreement in connection with the
         credits.

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9.7      SEVERABILITY

         In the event that any provision of this Agreement is held invalid or
         unenforceable, such invalidity or unenforceability shall not affect the
         validity or enforceability of the remainder of this Agreement.

10.      NOTICES

10.1     FORWARDING

         Unless indicated otherwise, any notice that a party must give to the
         other shall be in writing, and shall be either delivered, or forwarded
         by registered mail or transmitted by telecopier, at the Following
         address or at any other address which may be notified by a party to the
         other in accordance with this Article 10:

         IN THE CASE OF THE BORROWER:

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

         Attention:  President
         Fax: (514) 694-3841

         IN THE CASE OF THE LENDERS:

         SGF SANTE INC.
         c/o Societe Generale de Financement du Quebec
         600, de la Gauchetiere Street,
         Suite 1700
         Montreal, Quebec
         H3B 4L8

         Attention: The Secretary
         Fax: (514) 395-8055

         AND

         DRAXIS HEALTH INC.
         6870 Goreway Drive
         Mississauga, Ontario
         L4V 1P1

         Attention: The Secretary
         Fax: (905) 677-5494

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10.2     RECEIPT

         Any such notice shall be deemed to have been received by its addressee
         at the time of its delivery, if delivered, or the third Business Day
         following its mailing, if it is forwarded by registered mail, or, when
         transmitted by telecopier, on the Business Day following the actual
         receipt thereof. If mail or telecopier services are interrupted by a
         strike, slowdown, force majeure, or any other cause, the party giving
         the notice shall use service which is not interrupted or it shall
         deliver the notice in question, the whole in a manner to ensure the
         receipt of the notice by the party to whom it is sent.

11.      CONVERSION OF DEBT

11.1     Each Lender shall have the right, upon providing 15 Business Days prior
         written and irrevocable notice to the Borrower and the other Lender, to
         exercise its right to convert the whole or a portion only of the
         Indebtedness due to it under the Term Credits into common shares of the
         Borrower. The sending of said notice by a Lender within the 20 day
         period referred to in Section 5.2 shall render void any prior notice
         given by the Borrower respecting optional payments pursuant to Section
         5.2, but only with respect to such Lender.

11.2     Conversions made pursuant to Section 11.1 shall be made on the basis of
         a conversion price of $1.80 per common share in respect of the First
         Term Credit and $2.00 per common share in respect of the Second and
         Third Term Credits.

11.3     The Borrower shall issue share certificates representing the common
         shares issued pursuant to this Agreement within the delay referred to
         in Section 11.1.

11.4     No fractional shares shall be issued by the Borrower pursuant to the
         exercise by the Lender of its right to convert the Indebtedness into
         common shares of the Borrower pursuant to this Agreement.

11.5     In the event that the common shares of the Borrower are subdivided,
         consolidated, converted or reclassified by the Borrower, or that any
         other action of a similar nature affecting such common shares is taken
         by the Borrower, then the conversion price provided for in Section 11.2
         of this Agreement shall be appropriately increased or decreased.

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         AND THE PARTIES HAVE SIGNED AT THE PLACE AND AT THE DATE SET FORTH ON
THE FIRST PAGE OF THIS AGREEMENT.

                                           DRAXIS PHARMA INC.

                                           Per:   /s/ Douglas M. Parker
                                                  ------------------------------
                                                  Douglas M. Parker
                                                  Secretary

                                           SGF SANTE INC.

                                           Per:   /s/ Gerald Andre
                                                  ------------------------------
                                                  Gerald Andre
                                                  Vice-President

                                           Per:   /s/ Michel Sainte-Marie
                                                  ------------------------------
                                                  Michel Sainte-Marie
                                                  Secretaire adjoint

                                           DRAXIS HEALTH INC.

                                           Per:   /s/ Jim A.H. Garner
                                                  ------------------------------
                                                  Jim A.H. Garner
                                                  Senior Vice-President, Finance
                                                  and Chief Financial Officer<Page>
                                                                    EXHIBIT 4.14

         LOAN AGREEMENT entered into in Montreal as of March 28, 2002.

BETWEEN:              DRAXIS PHARMA INC., a corporation having an office at
                      16751 Trans-Canada, Kirkland, Quebec, H9H 4J4

                      (the "Borrower")

AND:                  Investissement Quebec, a legal person having an office at
                      393 St-Jacques Street, Suite 500, Montreal, Quebec, H2Y
                      1N9

                      (the "Lender")

WITH THE              DRAXIS HEALTH INC. a corporation having an office at
INTERVENTION OF:      6870 Goreway Drive, Mississauga, Ontario, L4V 1P1

                      ("DHI")

         WHEREAS the Borrower has requested that the Lender make available to
the Borrower a term loan in a maximum principal amount of $4,800,000 for the
implementation of the Capital Plan; and

         WHEREAS the Lender has agreed to make such a loan facility available to
the Borrower as provided for in the letter of intent of the Lender dated January
23, 2002 and accepted by the Borrower on January 28, 2002 and in accordance with
the dispositions of the Programme sur le Fonds pour l'accroissement de
l'investissement prive et la relance de l'emploi ("FAIRE").

         NOW, THEREFORE THE PARTIES AGREE AS FOLLOWS :

1.       INTERPRETATION

1.1      DEFINITIONS

         In this Agreement, unless the context otherwise requires,

         1.1.1    "Business Day" means a day on which the Lender is open for
                  business in the Province of Quebec;

         1.1.2    "Capital Plan" means the capital plan of the Borrower annexed
                  as Schedule 1.1.2, prepared by the Borrower and ratified on
                  March 28, 2002, as amended from time to time in accordance
                  with the Shareholders' Agreement;

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         1.1.3    "Current Ratio" means the Borrower's short term non-financial
                  assets (limited for this purpose to its accounts receivable,
                  inventory and prepaid expenses) divided by its short term
                  non-financial liabilities (limited for this purpose to
                  accounts payable);

         1.1.4    "Disbursement Certificate" has the meaning ascribed to such
                  Term in section 3.1.10;

         1.1.5    "Eligible Capital Expenditures" means capital expenditures
                  incurred by the Borrower for a maximum of $19,339,000 from
                  August 1, 2001 to July 31, 2004;

         1.1.6    "Equipment" means the production/packaging equipment or assets
                  financed by the Term Credit in accordance with the Capital
                  Plan, including the lyo unit;

         1.1.7    "Event of Default" has the meaning ascribed to such term in
                  Section 9.1;

         1.1.8    "Hazardous Substances" means the hazardous substances
                  described in Section 7.11.2 of this Agreement;

         1.1.9    "Indebtedness" means, at any time, the aggregate outstanding
                  amounts in Principal of the Indebtedness, interest, fees and
                  accessories owed by the Borrower pursuant to this Agreement;
                  "Principal of the Indebtedness" means the aggregate amounts of
                  the advances made by the Lender hereunder;

         1.1.10   "Intellectual Property Rights" means the intellectual property
                  rights described in Section 7.9 of this Agreement;

         1.1.11   "Long Term Debt" means the Borrowers's outstanding
                  interest-bearing long term debt (but expressly excludes for
                  this purpose loans and advances from shareholders);

         1.1.12   "Maturity Date" shall mean March 28, 2008, or such later date
                  as the Lender may agree;

         1.1.13   "Prime Rate" means the simple average of the annual rates of
                  interest announced from time to time by each of the Royal Bank
                  of Canada, the Toronto Dominion Bank, the National Bank of
                  Canada, the Canadian Imperial Bank of Commerce, the Laurentian
                  Bank of Canada and The Bank of Nova Scotia as their reference
                  rate then in effect for determining interest rates on Canadian
                  dollar commercial loans made in Canada;

         1.1.14   "Security" means any and all security mentioned in Section
                  3.1.1 and 3.1.2 of this Agreement; "Security Agreements" means
                  all agreements and documents evidencing the Security or made
                  in relation thereto;

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         1.1.15   "Shareholders' Agreement" means the amended and restated
                  unanimous shareholders' agreement entered into as of the date
                  hereof among DHI, SGF Sante Inc., the Borrower, Dwight Gorham,
                  Mohammed Barkat and Michel Sauvageau;

         1.1.16   "Shareholders' Equity" means the Borrower's common stock,
                  retained earnings (deficit), loans and advances from
                  shareholders; and

         1.1.17   "Term Credit" means the credit described in Section 2.1 of
                  this Agreement.

1.2      ACCOUNTING TERMS AND EXPRESSIONS

         Unless otherwise provided, the accounting terms and expressions shall
have the meaning assigned to them under generally accepted accounting principles
in Canada and calculations shall be made according to the same principles.

1.3      HEADINGS

         The headings have been inserted for convenience only, and do not affect
in any way the interpretation of this Agreement.

1.4      APPLICABLE LAW

         This Agreement shall be governed by and construed in accordance with
the laws of the Province of Quebec and the laws of Canada applicable therein.

2.       THE CREDIT

2.1      THE TERM CREDIT

         Subject to the provisions of this Agreement, the Lender makes available
         to the Borrower a term credit in the principal maximum amount of
         $4,800,000 (the "Term Credit").

2.2      AVAILABILITY OF THE CREDITS

         The Term Credit shall not revolve and shall be disbursed in quarterly
         instalments up to a maximum aggregate amount of $4,800,000 which
         represents 24,8% of the Eligible Capital Expenditures.

2.3      PURPOSE OF THE TERM CREDIT

         The Borrower shall use the Term Credit to implement the Capital Plan.

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3.       CONDITIONS PRECEDENT

3.1      CONDITIONS PRIOR TO THE FIRST DISBURSEMENT

         Prior to the first disbursement of the Term Credit:

         3.1.1    the Borrower shall have provided the Lender with a hypothec on
                  the universality of its property, which hypothec (i) shall be
                  first-ranking with respect to the Equipment and (ii) shall
                  rank behind existing security granted in favour of National
                  Bank of Canada with respect to all other property;

         3.1.2    DHI shall have executed a guarantee agreement with respect to
                  the obligations of the Borrower under the Term Credit up to a
                  maximum amount of $4,800,000;

         3.1.3    the Borrower shall have entered into a loan agreement with DHI
                  and SGF Sante Inc. providing for loans and credits in the
                  amount of $9,139,335;

         3.1.4    DHI and SGF Sante Inc. shall have entered into a subscription
                  agreement providing for subscription of additional common
                  shares of the Borrower for an amount of not less than
                  $6,286,000 in the aggregate;

         3.1.5    the Borrower shall have obtained such consents and waivers
                  from DHI and National Bank of Canada as may be required by the
                  Lender, including an assignment of rank with respect to the
                  hypothec on the Equipment;

         3.1.6    the Borrower shall have obtained such intercreditor agreements
                  as the Lender may reasonably require;

         3.1.7    the Lender shall have obtained a satisfactory quarterly
                  external auditors' certificate establishing the Eligible
                  Capital Expenditures;

         3.1.8    the Borrower shall provide the Lender with a certificate of a
                  senior officer attesting that no Event of Default has occurred
                  and is continuing;

         3.1.9    the Lender shall have obtained an opinion of counsel to the
                  Borrower on terms and conditions satisfactory to the Lender;
                  and

         3.1.10   the Borrower shall provide the Lender with a certificate
                  containing a complete description of the assets being Eligible
                  Capital Expenditures and which are to be financed through the
                  proceeds of the first disbursement, and an acknowledgement by
                  National Bank of Canada that, with respect to such assets, the
                  Security shall have prior ranking on any security held by
                  National Bank of Canada, the whole substantially in the form
                  of Schedule 3.1.10 (a "Disbursement Certificate").

<Page>

3.2      CONDITIONS PRIOR TO THE OTHER DISBURSEMENTS

         Prior to the other disbursements of the Term Credit:

         3.2.1    the Lender shall have obtained a satisfactory quarterly
                  external auditors' certificate establishing the Eligible
                  Capital Expenditures; and

         3.2.2    the Borrower shall provide the Lender with a Disbursement
                  Certificate with respect to the assets being Eligible Capital
                  Expenditures which are to be financed through the proceeds of
                  such disbursement.

3.3      BENEFIT OF THE FOREGOING SECTIONS

         The provisions of Section 3.1 are for the sole benefit of the Lender
         and the Lender may waive any of its rights thereunder.

4.       INTEREST AND COMMITMENT FEE

4.1      INTEREST RATE

         The Principal of the Indebtedness owed under the Term Credit shall bear
         interest, before and after maturity, at the Prime Rate in effect from
         time to time, plus 2.50%.

4.2      INTEREST ACCRUAL AND PAYMENT

         4.2.1    Interest on the Term Credit shall accrue on a daily basis and
                  shall be paid monthly; and

         4.2.2    Any amount which is not paid when due shall bear interest at
                  the rate set forth in section 4.1 and such interest on arrears
                  is payable on demand.

4.3      CALCULATION OF RATES

         4.3.1    Any rate of interest under this Agreement is calculated daily
                  on the basis of a 365-day year; and

         4.3.2    For the purposes of the INTEREST ACT (Canada), in the case of
                  a leap year, the annual rate to which a rate calculated on the
                  basis of 365 days is equivalent, is equal to the rate so
                  calculated multiplied by 366 and divided by 365.

4.4      COMMITMENT FEE

         Upon the execution of this Agreement, the Borrower shall pay to the
         Lender an amount of $12,000 representing the second half of the
         commitment fee in the total amount of $24,000, the first half of such
         fee having already been paid to the Lender on January 28, 2002.

<Page>

5.       REPAYMENTS

5.1      MANDATORY PAYMENTS

         5.1.1    From and on the first day following the second anniversary
                  date of the first disbursement made under this Agreement,
                  until the Maturity Date, the Principal of the Indebtedness
                  under the Term Credit is repayable in sixteen (16) equal and
                  consecutive quarterly payments;

         5.1.2    The balance of Indebtedness is repayable in full on the
                  Maturity Date; and

         5.1.3    The Indebtedness shall also be repayable immediately upon the
                  Lender demanding payment of same further to the occurrence of
                  an Event of Default.

5.2      OPTIONAL PAYMENTS

         The Principal of the Indebtedness may be repaid by the Borrower at any
         time in whole or in part without penalty. However, all unpaid and
         accrued interest must first be paid in full before any principal may be
         repaid.

6.       PLACE OF PAYMENT

         Any payment shall be made to the Lender at its address indicated on the
         first page of this Agreement, or at any other place notified by the
         Lender to the Borrower.

7.       REPRESENTATIONS

         The Borrower represents that and will represent that said
         representations continue to be true before each disbursement of the
         Term Credit:

7.1      POWERS

         The Borrower (i) is a corporation duly incorporated, organised and
         validly existing and in good standing under the laws of its
         jurisdiction of incorporation; (ii) is licensed, authorised and
         qualified to carry on the business in all jurisdictions where, by
         virtue of the nature of its business or the vocation or character of
         its assets, such licensing, authorisation or qualification is
         necessary; (iii) the only jurisdiction in which the Borrower has a
         permanent establishment or owns assets is in the province of Quebec;
         and (iv) has taken all corporate action necessary, in accordance with
         the law of its jurisdiction and its by-laws and regulations, to
         authorise the execution and delivery of this Agreement and the
         performance of its obligations hereunder.

7.2      DEFAULTS

         It is not in default under any contract to which it is party or under
         the laws and regulations applicable to its business or under any
         decree, order or under permits

<Page>

         or certificates or licenses issued to it under the laws and regulation
         applicable to its business, except for a default, if any, which could
         not materially and adversely affect its financial situation, its
         ability to carry on its business or its ability to fulfil its
         obligations under this Agreement. The entering into this Agreement will
         not create such default, and there is no motive which could lead to the
         suspension or cancellation of the above mentioned permits, certificates
         and licenses.

7.3      DISPUTES

         There is no litigation or legal proceedings pending or threatened
         against the Borrower which could materially and adversely affect its
         financial situation, its ability to carry on its business or its
         ability to fulfil its obligations under this Agreement.

7.4      PROPERTY

         The Borrower owns all of its assets by good and valid title, free and
         clear of all hypothecs, security interests, liens and other
         encumbrances of any kind, except for the hypothecs and other changes
         granted in favour of National Bank of Canada, DHI and SGF Sante Inc. as
         more fully described in Schedule 7.4 and does not own any assets other
         than those set forth in the financial projections dated January 31,
         2002 which have been provided to the Lender.

7.5      SUBSIDIARIES

         The Borrower at the date hereof has no subsidiary, as such term is
         defined in the COMPANIES ACT (Quebec), nor any other interest of any
         kind in any corporate body, partnership, joint venture, association or
         other entity of any nature.

7.6      INSURANCE

         The Borrower is insured by reputable insurers against liability, loss
         and damage in such amounts and against such risks as are customarily
         carried and insured against by owners of comparable businesses,
         properties and assets. Such insurance policies are sufficient for
         compliance with all laws and contracts to which the Borrower is a party
         or by which it is otherwise bound.

7.7      TAXES

         7.7.1    All tax returns required to be filled by or on behalf of the
                  Borrower and any election forms in this connection have been
                  accurately prepared, duly executed and filed within the
                  prescribed period (save and except for the tax returns for the
                  year ended December 31, 1998 which were filed on January 12,
                  2000). To the best of the knowledge of the Borrower, all
                  information provided in such tax returns pertaining to the
                  Borrower is true, complete and accurate, all taxes
                  attributable to the Borrower that were due and payable have
                  been paid and adequate provision has been made on the

<Page>

                  books of the Borrower for all taxes payable for the current
                  year for which tax returns are not yet required to be filed.

         7.7.2    The Borrower has not received any notice of assessment of
                  additional taxes or any other claim or notice of any nature
                  whatsoever that any tax or additional tax is due which has not
                  been paid or otherwise finally settled or satisfied. There are
                  no actions, suits, proceedings, investigations or claims
                  pending or, to the best of the knowledge of the Borrower,
                  threatened in respect of any taxes, nor are there any matters
                  under discussion with any governmental authority relating to
                  any taxes asserted by any such authority. No waiver of any
                  statute of limitations as to any tax return with respect to
                  any taxation year, has been executed by the Borrower. There
                  are no encumbrances for taxes on the assets of the Borrower,
                  except for encumbrances for taxes not yet due.

         7.7.3    The Borrower has withheld from its employees, officers,
                  directors, customers and any other applicable payees (and
                  timely paid to the appropriate governmental authority) proper
                  and accurate amounts in compliance with all tax withholding
                  and has remitted such withheld amounts within the prescribed
                  periods to the appropriate governmental authority. The
                  Borrower has remitted all pension plan contributions,
                  unemployment insurance premiums, employee health taxes and the
                  equivalent in applicable jurisdictions and other taxes payable
                  by it in respect of its employees and has or will have
                  remitted such amounts to the proper governmental authority
                  within the time required by applicable law. the Borrower has
                  charged, collected and remitted on a timely basis all taxes
                  required by applicable law on any sale, supply or delivery
                  whatsoever made by the Borrower.

7.8      LABOUR DISPUTE

         To the best knowledge of the Borrower, there is no pending or
         threatened labour dispute grievance, strike or work stoppage.

7.9      INTELLECTUAL PROPERTY

         The Borrower owns or is licensed or otherwise has the right to use in
         the manner that the same are now being used all intellectual property
         rights necessary or useful to enable it to operate its business,
         develop, manufacture or have manufactured, market and sell its products
         in conformity with all applicable laws and in total respect of the
         rights of third parties, if any, including patents, trade marks,
         industrial drawings, industrial designs, copyrights, trade names,
         know-how, trade secrets and secret processes (the "Intellectual
         Property Rights"), and the Borrower has not granted any license, permit
         or right to use its Intellectual Property Rights. The Borrower has no
         knowledge of any material infringement of, material passing-off related
         to, or other material interference with the Intellectual Property
         Rights by third parties or any claim by any person that any of the

<Page>

         Intellectual Property Rights are, or may be, invalid or unenforceable.
         The Borrower is not a party to nay claim, or subject to any liability,
         contingent or otherwise, for trademark, trade name, industrial design,
         patent or copyright infringements as to any product manufactured,
         produced, used or sold by the Borrower, either as plaintiff or as
         defendant or any other claim or liability relating to Intellectual
         Property Rights owned or licensed by the Borrower. The Borrower has not
         infringed or misappropriated the rights and third parties with respect
         to the Intellectual Property Rights.

7.10     PENSION PLANS

         The Borrower does maintain or contribute to plans that provide
         retirement or health benefits for its employee and the Borrower has
         performed all of the material obligations provided in said plans in
         accordance with the terms thereunder and in accordance with all
         statutes, rules or regulations applicable to such plans.

7.11     ENVIRONMENTAL PROTECTION

         7.11.1   Except as disclosed in Schedule 7.11, the assets and the
                  operation of the business of the Borrower are and have been
                  during the past two years in compliance with all environmental
                  laws of each jurisdiction in which it carries on business. The
                  Borrower has obtained and is in compliance with all permits,
                  licenses, certificates, authorisations, approvals, consents
                  and registrations issued or granted pursuant to environmental
                  laws and required for the assets and the operation of its
                  business.

         7.11.2   There is no claim, suit, action, written notice of
                  non-compliance, administrative order or other proceeding,
                  outstanding or pending or threatened against the Borrower, nor
                  is there, to the best of the knowledge of the Borrower, any
                  pending investigation in respect of its business or assets
                  pursuant to any environmental laws. Except as disclosed in
                  Schedule 7.11, the Borrower is not responsible for any
                  clean-up, corrective or remedial action in respect of the
                  business or the assets pursuant to any environmental law.
                  Except as disclosed in Schedule 7.11, the operations of the
                  Borrower have not, in the past two years caused, and the
                  Borrower has not permitted to occur, the release, emission,
                  deposit, issuance, disposal or discharge of any contaminant,
                  pollutant, waste, hazardous waste, hazardous material,
                  dangerous goods, toxic substances, prescribed substances (as
                  these terms are defined pursuant to environmental laws)
                  ("Hazardous Substances") nor are any Hazardous Substances
                  present in, on or under the assets or on the Assets owned by
                  the Borrower nor were any Hazardous Substance present in, on
                  or under 7.11.3 at the time of its acquisition by the
                  Borrower, all Hazardous Substances have at all times been
                  stored, handled, treated and eliminated in compliance with
                  environmental laws in the operation of its business by the
                  Borrower. Except as disclosed in Schedule 7.11, the assets
                  owned by

<Page>

                  the Borrower do not contain any polychlorinated biphenyls,
                  asbestos, or urea formaldehyde foam insulation or any
                  Hazardous Substances, nor do they contain or have they
                  contained any underground storage tanks, nor have they been
                  used by the Borrower as a waste site.

7.11.3            Except as disclosed on Schedule 7.11, the Borrower has not
                  conducted and is not aware of any environmental or
                  occupational health and safety evaluations, assessments,
                  audits, studies or tests with respect to its assets or
                  business.

8.       COVENANTS OF THE BORROWER

8.1      FINANCIAL STATEMENTS AND OTHER INFORMATION

         The Borrower shall deliver to the Lender:

         8.1.1    as soon as available and, in any event, within 140 days after
                  the end of each fiscal year, audited annual financial
                  statements of the Borrower and DHI; and

         8.1.2    within 90 days after the beginning of each fiscal year, annual
                  financial forecasts of the Borrower together with the
                  underlying working assumptions.

8.2      LONG TERM DEBT TO SHAREHOLDERS' EQUITY

         The Borrower shall maintain, at all times, a ratio of Long Term Debt to
         Shareholders' Equity of not more than 2.50 to 1.00.

8.3      CURRENT RATIO

         The Borrower shall maintain at all times, a Current Ratio of not less
         than 1.30 to 1.00.

8.4      DIVIDENDS AND DISTRIBUTIONS

         Otherwise than in accordance with the Equity Participation Plan of the
         Borrower dated February 18, 2000, as such may be amended from time to
         time (the "Equity Participation Plan") the Borrower shall not purchase
         or redeem any of its shares, declare or pay dividends or make any other
         distribution to its shareholders, except with the prior written consent
         of the Lender.

8.5      LOAN

         The Borrower shall not grant loans or advances to its shareholders,
         otherwise than in the ordinary course of business and in accordance
         with the Equity Participation Plan.

<Page>

8.6      ADVANCES BY SHAREHOLDERS

         Except as provided in the loan agreement mentioned in paragraph 3.1.3
         of this Agreement, the Borrower shall not reimburse any loans or
         advances made to it by its shareholders.

8.7      NON-ARM'S LENGTH TRANSACTIONS

         The Borrower covenants that all dealings among the Borrower and its
         affiliates shall be on market terms and conditions and that the
         Borrower shall not enter into transactions with its affiliates that are
         detrimental to the Borrower.

9.       DEFAULTS

9.1      EVENTS OF DEFAULT

         Each of the following events is an event of default if it is not
         remedied within a delay of 30 Business Days following receipt by the
         Borrower of a written notice to that effect, except for the event
         mentioned in paragraph 9.1.4 which is immediately an event of default
         ("Event of Default"):

         9.1.1    if the Borrower fails to pay when due the whole or any part of
                  the Principal of the Indebtedness;

         9.1.2    if the Borrower fails to pay any other amount payable to the
                  Lender pursuant to this Agreement or otherwise;

         9.1.3    if the Borrower is in default under any other agreement for
                  the borrowing of money and such default is not cured or waived
                  by the Lender;

         9.1.4    if the Borrower becomes insolvent or bankrupt or subject to
                  any insolvency or bankruptcy law or if it ceases to carry on
                  its business;

         9.1.5    if the assets of the Borrower, or any substantial part
                  thereof, are seized (except if such seizure is contested in
                  good faith within ten days and for so long as such
                  contestation lasts), or are subject to an hypothecary recourse
                  by a creditor, or are placed under sequestration, receivership
                  or guardianship, or if a liquidator is appointed in respect of
                  the Borrower;

         9.1.6    if the Borrower amalgamates or merges with another corporation
                  without the prior written consent of the Lender, or initiates
                  proceedings for its corporate dissolution or winding-up;

         9.1.7    if any of the representations made by the Borrower in this
                  Agreement or if a document supplied by the Borrower in
                  connection or in execution to this Agreement proves to be
                  erroneous or inaccurate in any material adverse respect; and

<Page>

         9.1.8    if the Borrower otherwise fails to fulfil any of its
                  obligations or undertakings under this Agreement or any of the
                  Security Agreements.

9.2      REMEDIES

         Upon the occurrence of an Event of Default, the Lender may:

         9.2.1    upon giving a notice to the Borrower, terminate the right of
                  the Borrower to use the Term Credit, demand immediate payment
                  of the whole or part of the Indebtedness and same shall become
                  payable immediately; and

         9.2.2    exercise all its legal rights and remedies.

10.      MISCELLANEOUS

10.1     BOOKS AND ACCOUNTS

         The Lender may keep books and accounts evidencing the Indebtedness and
         the transactions made pursuant to this Agreement. Such books and
         accounts shall, in the absence of manifest error, be deemed to
         represent accurately the Indebtedness and these transactions.

10.2     UNASSIGNABILITY

         The Borrower may not assign its rights or the amounts to be received
         under this Agreement.

10.3     EXPENSES

         The Borrower shall pay all reasonable expenses incurred by the Lender
         in connection with this Agreement and the Security Agreements and the
         exercise of the rights resulting therefrom, including fees and expenses
         of counsel to the Lender.

10.4     NO WAIVER

         The failure of the Lender to exercise any of its rights shall not
         constitute a waiver to exercise such right in the future.

10.5     NON-BUSINESS DAY

         If a payment must be made on a day which is not a Business Day, this
         payment may be made on the following Business Day.

10.6     PREVIOUS AGREEMENTS

         This Agreement supersedes and cancels any previous agreement in
         connection with the Term Credit.

<Page>

10.7     SEVERABILITY

         In the event that any provision of this Agreement is held invalid or
         unenforceable, such invalidity or unenforceability shall not affect the
         validity or enforceability of the remainder of this Agreement.

11.      NOTICES

11.1     FORWARDING

         Unless indicated otherwise, any notice that a party must give to the
         other shall be in writing, and shall be either delivered, or forwarded
         by registered mail or transmitted by telecopier, at the following
         address or at any other address which may be notified by a party to the
         other in accordance with this Article 11:

         IN THE CASE OF THE BORROWER:

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

         Attention: President
         Fax: (514) 694-3841

         WITH A COPY TO:

         SGF SANTE INC.
         c/o Societe generale de financement du Quebec
         600, de la Gauchetiere Street,
         Suite 1700
         Montreal, Quebec
         H3B 4L8

         Attention: The Secretary
         Fax: (514) 395-8055

<Page>

         IN THE CASE OF THE LENDER:

         INVESTISSEMENT QUEBEC,
         393 St-Jacques Street
         Suite 500
         Montreal, Quebec,
         H2Y 1N9

         Attention: Secretaire general
         Fax: (514) 873-9917

         IN THE CASE OF DHI:

         DRAXIS HEALTH INC.
         6870 Goreway Drive, 2nd Floor
         Mississauga, Ontario
         L4V 1P1

         Attention: The Secretary
         Fax: (905) 677-5494

11.2     RECEIPT

         Any such notice shall be deemed to have been received by its addressee
         at the time of its delivery, if delivered, or the third Business Day
         following its mailing, if it is forwarded by registered mail, or, when
         transmitted by telecopier, on the Business Day following the actual
         receipt thereof. If mail or telecopier services are interrupted by a
         strike, slowdown, force majeure, or any other cause, the party giving
         the notice shall use service which is not interrupted or it shall
         deliver the notice in question, the whole in a manner to ensure the
         receipt of the notice by the party to whom it is sent.

<Page>

         AND THE PARTIES HAVE SIGNED AT THE PLACE AND AT THE DATE SET FORTH ON
THE FIRST PAGE OF THIS AGREEMENT.

                                  DRAXIS PHARMA INC.

                                  Per: /s/ Douglas M. Parker
                                       -----------------------------------------
                                       Douglas M. Parker
                                       Secretary
                                       Investissement Quebec

                                  Per: /s/ Tai LeMinh
                                       -----------------------------------------
                                       Tai LeMinh
                                       Directeur, Montages Financiers

                                  DRAXIS HEALTH INC.

                                  Per: /s/ Jim A.H. Garner
                                       -----------------------------------------
                                       Jim A.H. Garner
                                       Senior Vice-President, Finance and
                                       Chief Financial Officer

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