Exhibit 10.14 


 


EXECUTION COPY


 


 


 


AMENDED AND RESTATED 

EMPLOYMENT AGREEMENT


 


This Amended and Restated Employment Agreement (“Agreement”),
dated as of the date of last signature below and effective as of February 7, 2011 (“Effective Date”), is by and between
Patheon Pharmaceutical Services Inc. (the “Company”) and James Mullen (“Executive”).


 


RECITALS


 


A.          The
Company is a subsidiary of Patheon Inc. (“Patheon”). Patheon is in the business of providing its customers with pharmaceutical
development services, clinical trial manufacturing and packaging, and commercial manufacturing and packaging. The Company serves
as the corporate shared services entity for Patheon and the other members of the Patheon Group. As used in this Agreement, “Patheon
Group” means Patheon and any entity controlled by Patheon.


 


B.          The
Company wishes to employ Executive pursuant to the terms and conditions of this Agreement. The Executive will serve as Chief Executive
Officer of Patheon (“CEO”).


 


C.          Executive
wishes to be employed by the Company and to serve in such capacity under the terms and conditions set forth in this Agreement.


 


D.          The
Company and Executive agree that the terms, provisions and mutual covenants of this Agreement suffice as adequate consideration
for their mutual promises made in this Agreement.


 


NOW, THEREFORE, the parties agree as follows:


 


1.           Position
and Duties; Location.


 


(a)          During
the Term (as defined below), Executive shall serve as the CEO, with such authority, duties and responsibilities as are commensurate
with such position and Executive will report directly to the Board of Directors of Patheon (the “Board”). In addition,
Patheon shall cause Executive to be appointed as a member of the Board as of the Effective Date. During Executive’s tenure
as CEO, the Board will recommend to Patheon’s shareholders that Executive be re-elected to the Board. Other than Executive,
no other employee or executive will report directly to the Board during the Term.


 


(b)          The
location of Executive’s employment will be the Company’s Raleigh/Durham offices, located at 4721 Emperor Boulevard,
Suite 200, Durham, North Carolina 27703, USA, or such other location where the principal executive offices may be relocated from
time to time by the Board. Executive will be permitted to commute to the Company’s Raleigh/Durham offices from his primary
residence in Boston, Massachusetts, provided that Executive will be expected to devote his full working time and attention to his
duties as CEO and, except as permitted in Section 2 below, shall render no material business services to any other person or company.
Executive will be expected to be at the Company’s Raleigh/Durham offices or any other offices of the Company or otherwise
engaged in the performance of his duties at least five days per week, subject to required business travel, vacation and holidays.
For the initial six months of the Term, (i) Executive will be entitled to a reasonable housing allowance from the Company for the cost of housing
arrangements in the Raleigh/Durham area and (ii) the Company will pay for or reimburse travel expenses related to Executive’s
weekly commute between Boston and the Raleigh/Durham area.


 



    	 



    	 



    



 



2.           Standards
of Performance. Executive will, at all times, faithfully, industriously and to the best of his ability, experience and talents,
perform all of the duties required of and from him pursuant to the terms of this Agreement. Notwithstanding the foregoing, Executive
is permitted (i) to spend reasonable amounts of time to manage his personal, financial and legal affairs, (ii) to continue to serve
on the boards of PerkinElmer, Inc. and Percivia, LLC and (iii) with the Company’s consent, which will not be unreasonably
withheld, to serve on civic, charitable, not-for-profit, industry or other for profit corporate boards, provided that such activities,
individually and collectively, do not materially interfere with the performance of Executive’s duties hereunder. Executive
shall be subject to the Company’s policies, procedures and approval practices, as generally in effect from time to time.


 


3.           Term.
The Company hereby agrees to employ Executive, and Executive hereby agrees to be employed by the Company, on the terms and subject
to the conditions of this Agreement (including, without limitation, Section 6), for the period commencing on the Effective Date
and ending on the second anniversary of the Effective Date. Unless terminated prior to that date, the Term shall be automatically
renewed for successive one-year periods on the terms and subject to the conditions of this Agreement (including, without limitation,
Section 6), commencing on the second anniversary of the Effective Date, and on each anniversary date thereafter, unless either
the Company or Executive gives the other party written notice (in accordance with Section 11 hereof), at least 90 days prior to
the end of such initial or extended Term, of its or his intention not to renew this Agreement. Any reference to the “Term”
of this Agreement shall include the original term and any extension thereof.


 


4.           Compensation,
Benefits and Policies.


 


(a)          Base
Salary. As an annual base salary (“Base Salary”), the Company will pay Executive an annual initial Base Salary
at a rate of nine hundred thousand dollars ($900,000.00) US, less necessary withholdings and authorized deductions, and payable
pursuant to the Company’s regular payroll practices in effect at the time. For the Fiscal Year 2011, Executive’s Base
Salary will be prorated from the Effective Date. During the Term, Executive’s Base Salary shall be reviewed annually by the
Board, at such time as the salaries of other senior executives of the Company are reviewed generally, and is subject to increase,
but not decrease, at the Board’s discretion. If so increased, the Base Salary shall be increased for all purposes of this
Agreement.


 


(b)          Paid
Time Off and Benefits. Executive will accrue paid time off for vacation at the rate of four (4) weeks for each year of employment,
in addition to four (4) floating holidays annually in accordance with the Company’s policies, as may be in effect from time
to time, for its senior executives generally. Executive will accrue paid time off for illness pursuant to the Company’s regular
policies. In addition, Executive is entitled to (i) participate in any plans regarding benefits of employment, including pension,
profit sharing, group health, disability insurance, employee pension and welfare benefit plans for U.S. resident-based senior executives
now existing or hereafter established and (ii) participate in any other perquisite program of the Company on a basis at least as
favorable as other senior level executives of the Company. Executive may also waive participation under the Company’s medical
benefits plans and receive such benefits on a cost-equivalent basis. The Company may, in its sole discretion and from time to time,
establish additional senior management benefit plans as it deems appropriate. Executive understands that any such plans may
be modified or eliminated in the Company’s sole discretion in accordance with applicable law, provided that no such modification
or elimination shall result in reducing or eliminating any benefits in which Executive’s right has vested.


 


    	 



    	 



    



 


(c)          Reimbursement
of Business Expenses. The Company will promptly reimburse to Executive his business expenses in connection with the performance
of his duties under this Agreement in accordance with the policies and procedures established by the Company.


 


(e)          Retirement
Benefits. Executive will be entitled to participate in the 401(k) retirement plan and any other qualified or nonqualified deferred
compensation and retirement plans on a basis at least as favorable as other senior executives of the Company generally, in each
case as amended from time to time.


 


(f)           Equity
Compensation.


 


(i)            As
soon as practicable after the end of the current period during which certain activities with respect to Patheon’s shares
are prohibited or restricted (any such period, a “Blackout Period”)1, Executive will be granted (the date
of such grant, the “Grant Date”), of an option to acquire 5,000,000 of Patheon’s restricted voting shares (the
“Initial Grant”). The Initial Grant will have a per-share exercise price equal to the closing price of the underlying
shares on the Toronto Stock Exchange on the Grant Date and will vest in five (5) equal installments on each of the first five anniversaries
of the Effective Date, in accordance with the Patheon’s 2011 Amended and Restated Incentive Stock Option Plan. In the event
of a Change in Control, Executive’s unvested portion of the Initial Grant will become immediately vested and exercisable
and remain in force for the duration of their original term (as described in clause (ii) below).


 


(ii)           All
options granted to Executive will expire ten (10) years from the date of grant.


 


(iii)         
Executive will be required to comply with the terms of any share ownership guidelines applicable to senior executives of Patheon
generally, as amended from time to time. Patheon will count ownership of any vested Options or other vested equity of Patheon (either
from the Initial Grant or otherwise) toward meeting any ownership requirements instituted by Patheon.


 


(iv)          As
used in this Agreement, a “Change in Control” shall mean any of the following events:


 


(i)            any
“Person” (within the meaning of Section 13(d)(3) or 14(d)(2)) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), other than JLL Partners or its affiliates, becomes a Beneficial Owner (within the meaning of Exchange
Act Rule 13d-3) of more than fifty (50%) of the voting power of the then outstanding voting securities of Patheon entitled to vote
generally in the election of directors;


 


(ii)           there
is consummated a merger or consolidation of Patheon or any direct or indirect subsidiary of Patheon with any other company, other
than a merger or consolidation that would result in the voting securities of Patheon outstanding immediately
prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof) at least fifty percent (50%) of the combined voting power of the securities
of Patheon or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation; or


 


 






1 The current Blackout
Period is expected to end on March 10, 2011.


 



    	 



    	 



    


 


(iii)          the
stockholders of Patheon approve a plan of complete liquidation or dissolution of the company or there is consummated an agreement
for the sale or disposition by Patheon of all or substantially all of its assets.


 


However, in no event shall a “Change in
Control” be deemed to have occurred for purposes of this Agreement solely because Patheon (or any member of the Patheon Group)
engages in an internal reorganization, which may include a transfer of assets to, or a merger or consolidation with, one or more
affiliates.


 


(g)          Sarbanes-Oxley
Act Loan Prohibition. To the extent that any Company benefit, program, practice, arrangement or this Agreement would or might
otherwise result in Executive’s receipt of an illegal loan (the “Loan”), the Company shall use commercially reasonable
efforts to provide Executive with a substitute for the Loan that is lawful and of at least equal value to Executive. If this cannot
be done, or if doing so would be significantly more expensive to the Company than making the Loan, the Company need not make the
Loan to Executive or provide him a substitute for it.


 


(h)          Executive
Performance Bonus. Executive will be eligible to receive an annual bonus (a “Performance Bonus”) with a target
bonus equal to 100% of Executive’s Base Salary (based on achieving 100% of the financial and other targets recommended by
Executive and approved by the Board). Executive may earn amounts greater than the target bonus pursuant to the terms of the annual
incentive targets. These annual incentive targets will be pre-determined by the Compensation Committee of the Board, after consultation
with, and recommendation from, Executive from time to time. For Fiscal Year 2011, Executive’s Performance Bonus will be no
less than 50% of his Base Salary, pro-rated from the Effective Date. Nothing contained in this Section 4(h) will prevent the Board
from establishing performance goals and compensation targets applicable only to Executive.


 


5.           Termination
of Employment.


 


(a)          By
Company Without Cause. The Company may terminate Executive’s employment without Cause (as defined below), effective immediately
upon written notice (pursuant to Section 11 below) (such date of termination, the “Termination Date”). If the Company
delivers to Executive a notice of non-renewal upon the expiration of the Term as provided in Section 3 above, the expiration of
the Term shall constitute a termination by the Company without Cause. In the event of such a termination and subject to the other
provisions of this Agreement, Executive will be entitled to the following from the Company:


 


(i)            
payment of all earned but unpaid compensation (including accrued unpaid vacation) through the effective date of termination, payable
on or before the Termination Date;


 



    	 



    	 



    


 


(ii)           reimbursement
of expenses incurred on or before the Termination Date in accordance with Section 4(c), above; and


 


(iii)          continued
payment for two years of his then current Base Salary rate (less necessary withholdings and authorized deductions) (the “Severance
Payments”), payable in equal monthly installments over the two-year period following the Termination Date (the “Severance
Period”).


 


In addition, with respect to the Initial Grant,
a pro-rata portion of the shares subject to the Initial Grant in which Executive would have become vested on the following anniversary
of the Effective Date will become immediately vested and exercisable on the Termination Date; provided however, that if Executive’s
Termination Date is within six (6) months of the Effective Date, 500,000 of the shares subject to the Initial Grant will immediately
become vested and exercisable as of the Termination Date (either such amount, the “Equity Severance”).


 


If Executive is terminated under circumstances
in which he becomes entitled to the Equity Severance, Executive will be permitted to exercise his vested options within three (3)
months after his Termination Date (the “QT Exercise Period”); provided however, that if Executive would be prevented
from selling his shares during the QT Exercise Period due to law or applicable Patheon policy preventing the sale of shares (a
“Blackout Period”) that occurs or is ongoing during the QT Exercise Period, the QT Exercise Period shall be extended
to a date that is ten (10) days after the last day of the Blackout Period.


 


The Severance Payments and the Equity Severance
shall be referred to collectively as the “Severance Benefits”. Executive shall not receive the Severance Benefits unless
Executive executes the release attached hereto as Schedule A (the “Release”), and the same becomes effective pursuant
to its terms and is not revoked. In addition, Executive’s rights to the Severance Benefits are subject to Executive’s
continued compliance with the provisions of Section 6 below.


 


(b)          By
Company With Cause. The Company may terminate Executive’s employment for Cause at any time and without prior notice,
written or otherwise, effective immediately upon notice. As used in this Agreement, “Cause” shall mean the determination,
in good faith, by the Board, after notice to Executive, that one or more of the following events has occurred:


 


(i)            Executive
has willfully failed to perform his material duties, and such failure has not been cured after a period of thirty (30) days’
notice from the Company;


 


(ii)           any
reckless or grossly negligent act by Executive having the effect of injuring the interest, business or reputation of the Company,
or any member of the Patheon Group in any material respect;


 


(iii)          Executive’s
commission of any felony (including entry of a nolo contendere plea);


 


(iv)          any
misappropriation or embezzlement of the property of the Company or any member of the Patheon Group; or


 



    	 



    	 



    


 


(v)          a
breach of any material provision of this Agreement by Executive, which breach, if curable, remains uncured for a period of thirty
(30) days after receipt by Executive of written notice from the Company of such breach, which notice shall contain the specific
reasonable cure requested by the Company.


 


In the event Executive is terminated for Cause,
Executive will be entitled only to the Accrued Benefits through the Termination Date. The Company (and Patheon) will have no further
obligation to pay any compensation of any kind (including, without limitation, any bonus or portion of a bonus that otherwise may
have become due and payable to Executive with respect to the year in which such termination date occurs), or severance payment
of any kind, nor will the Company (or Patheon) have any obligation to make any payment in lieu of notice. The definition of Cause
set forth in this Agreement shall govern for purposes of Executive’s equity compensation and any other compensation containing
such a concept. For purposes of this agreement, Accrued Benefits shall mean (i) payment of Base Salary through the Termination
Date, (ii) payment of any Performance Bonus for performance periods completed prior to the Termination Date (provided that Executive
is not terminated for Cause or does resign without Good Reason) and (iii) any payments or benefits under the Company’s benefit
plans that are earned or accrued prior to the Termination Date.


 


(c)          Incapacity
or Death.


 


(i)          If
a healthcare provider selected by the Board or its insurers determines Executive has become unable, due to physical or mental illness
or injury, to perform the essential duties of his position for more than twelve (12) weeks, whether or not the days of disability
are consecutive, in any twelve (12) month period during this Agreement with or without reasonable accommodation (“Incapacity”),
the Company has the right to terminate Executive’s employment on fifteen (15) days’ written notice. In the event of
termination for Incapacity, Executive will be entitled to receive the Accrued Benefits and, subject to Executive (or his legal
representative on his behalf) executing the Release and the same becoming effective pursuant to its terms and not revoked, the
Equity Severance; and


 


(ii)          Executive’s
employment pursuant to this Agreement shall be immediately terminated without notice by the Company upon the death of Executive.
If Executive dies while actively employed pursuant to this Agreement (or if Executive’s employment is terminated (a) by the
Company without Cause, (b) by Executive for Good Reason (as defined below), or (c) due to Executive’s Incapacity, but Executive
dies prior to the date that is seven (7) days after the day the Company presents him with the Release), his estate or designated
beneficiaries will be entitled to receive from the Company the Accrued Benefits and subject to the trustee of Executive’s
estate or Executive’s designated beneficiaries signing and executing a release of all claims against the Company and the
same becoming effective pursuant to its terms and not revoked, the Equity Severance.


 


(d)          Resignation
for Good Reason. Executive may terminate this Agreement for Good Reason (as defined below) by giving written notice of such
termination, which termination will become effective on the thirtieth (30th) day following receipt by the Company. As used in this
Agreement, “Good Reason” shall mean the occurrence of any of the following events without the prior consent of Executive:


 


(i)          removal
of Executive from Executive’s position;


 


    	 



    	 



    


 


(ii)          material
reduction of Executive’s duties or responsibilities or the assignment to Executive of duties materially inconsistent with
such position; or


 


(iii)          material
breach of this Agreement, which breach remains uncured for a period of thirty (30) days after receipt by the Company of written
notice from Executive.


 


No termination for Good Reason shall be
effective until (a) Executive has given the Company written notice (pursuant to Section 11 below) within sixty (60) days of
Executive becoming aware of the initial occurrence of any of the foregoing specifying the event or condition constituting the
Good Reason (the date of such notice, the “Measurement Date”), and the specific reasonable cure requested by
Executive (b) the Company has failed to cure the occurrence within thirty (30) days of the Measurement Date, and (c)
Executive resigns within three (3) months following the initial occurrence. Further, Executive shall not have “Good
Reason” under clauses (i) –  (iii) above if, on the Measurement Date, (x) grounds exist for a termination by the
Company for Cause or (y) Executive has already given the Company notice of (1) non-renewal of his Agreement at the end of the
Term pursuant to Section 3 above or (2) his intention to resign without Good Reason. In the event of a termination for Good
Reason, Executive will be entitled to the Accrued Benefits and, subject to the same conditions as are set forth in the final
paragraph of Section 5(a), the Severance Benefits.


 


(e)          Voluntary
Resignation without Good Reason. Executive may terminate this Agreement without Good Reason effective on sixty (60) day’s
written notice (pursuant to Section 11 below), unless the Company in its sole discretion accepts the resignation earlier. In the
event that Executive resigns without Good Reason as defined above in Section 5(d), Executive will be entitled only to the Accrued
Benefits through the Termination Date. Executive’s equity awards (including the Initial Grant) shall be treated in accordance
with their terms. The Company will have no further obligation to pay any compensation of any kind (including, without limitation,
any bonus or portion of a bonus that otherwise may have become due and payable to Executive with respect to the year in which such
Termination Date occurs), or severance payments of any kind.


 


(f)          Resignation
from All Positions. Notwithstanding any other provision of this Agreement, upon the termination of Executive’s employment
for any reason, unless otherwise requested by the Board, Executive shall immediately resign as of the Termination Date from all
positions that he holds or has ever held with the Company, including his positions as an officer of Patheon and a member of the
Board (and with any other entities with respect to which the Company has requested Executive to perform services). Executive hereby
agrees to execute any and all documentation to effectuate such resignations upon request by the Company, but he shall be treated
for all purposes as having so resigned upon termination of his employment, regardless of when or whether he executes any such documentation.


 


(i)          Effect
of Accrued Benefits and Severance Benefits Payments. Executive shall not be entitled to any other severance pay or benefits
under any severance plan, program or policy of the Company or any member of the Patheon Group, unless otherwise specifically provided
therein in a specific reference to this Agreement.


 


    	 



    	 



    


 


6.            Proprietary
Information Obligations.


 


(a)          Proprietary
Information, Confidentiality and Non-Disparagement. Both before and during the term of Executive’s employment, Executive
will have access to and become acquainted with confidential and proprietary information of the Patheon Group (together “Proprietary
Information”), including but not limited to information or plans concerning the Patheon Group’s customer relationships;
personnel; sales, marketing and financial operations and methods; trade secrets, formulae, devices; secret inventions; processes;
and other compilations of information, records, and specifications. As a result, Executive confirms that he is bound by the provisions
of and agrees to execute, effective as of the Effective Date, the Company’s customary confidentiality agreement (the “Confidentiality
Agreement”). Executive also agrees not to criticize, denigrate, or otherwise disparage the Company, any members of the Patheon
Group, or any of their respective directors, officers, products, processes, experiments, policies, practices, standards of business
conduct, or areas or techniques of research. The Company agrees to use its reasonable commercial efforts not to permit, authorize
or condone denigrating or disparaging statements about Executive in any press release or other formally released announcement.
Factually accurate statements in legal or public filings shall not violate this provision. In addition, nothing in this Section
6(a) shall prohibit Executive or any member of the Patheon Group, or any of their respective officers, employees or directors from
complying with any lawful subpoena or court order or taking any other actions affirmatively authorized by law (including testifying
truthfully in any legal proceeding).


 


(b)          Non-Solicitation
of Customers and Other Business Partners. Executive recognizes that by virtue of his employment with the Company, he will be
introduced to and involved in the solicitation and servicing of existing customers and other business partners of the Patheon Group
and new customers and business partners obtained by the Patheon Group during his employment. Executive understands and agrees that
all efforts expended in soliciting and servicing such customers and business partners shall be for the benefit of the Company.
In addition, Executive agrees that, for a period beginning on the Effective Date and ending two (2) years after his Termination
Date, regardless of the reason for such termination, Executive shall not use any Proprietary Information to, directly or indirectly
(i) solicit, direct, interfere with, or entice away from the Patheon Group any existing customer, business partner, licensee, licensor,
vendor, contractor or distributor of the Patheon Group or (ii) solicit, encourage or otherwise direct any customer or other business
partner to expand its business with a Competitor, without the prior written consent of the Board.


 


(c)          Non-Solicitation
of Employees. Executive recognizes the substantial expenditure of time and effort which the Company and the other members of
the Patheon Group devote to the recruitment, hiring, orientation, training and retention of their respective employees. Accordingly,
Executive agrees that, for a period beginning on the Effective Date and ending two (2) years after his Termination Date, regardless
of the reason for such termination, Executive shall not intentionally use any Proprietary Information, directly for himself, or
on behalf of any other person or entity, to knowingly solicit, offer employment to, hire or otherwise retain the services of any
salaried employee of any member of the Patheon Group. For purposes of the foregoing, “employee of any member of the Patheon
Group” shall include any person who was an employee of any member of the Patheon Group at any time within six (6) months
prior to the prohibited conduct.


 



    	 



    	 



    


 

(d)          Non-Competition. Executive recognizes that his loyal and complete fulfillment of employment subsequent to his employment with the Company may
inevitably require him to reveal or utilize the Proprietary Information. Accordingly, for a period beginning on the Effective
Date and ending two (2) years after his Termination Date, regardless of the reason for such termination, Executive shall not in
any manner, directly or indirectly, compete with the Patheon Group by (a) becoming an officer, agent, employee, partner, director,
consultant, independent contractor of a Competitor, or (b) acquiring an ownership interest in a Competitor, provided that Executive
may, for investment purposes, own not more than 1% of the outstanding stock of any class of a Competitor that is listed on a recognized
stock exchange or traded in the over-the-counter market in Canada or the United States, without the Company’s written consent
if the CEO then serving reasonably determines that Executive’s subsequent competition would compromise any Proprietary Information.
For purposes of this Agreement, the term “Competitor” means any person or entity that is primarily or principally
engaged in the business of contract drug manufacturing or contract drug development in Canada, the United States (including the
Commonwealth of Puerto Rico), India, Europe or other geographic location in which any member of the Patheon Group is doing business
at the time.


 


(e)          Company
Property and Materials.


 


(i)           All
files, records, documents, computer-recorded or electronic information, drawings, specifications, equipment, and similar items
relating to Company business or the business of any member of the Patheon Group, whether prepared by Executive or otherwise coming
into his possession, will remain the Company’s (or applicable Patheon Group member’s) exclusive property and will not
be removed from Company’s (or applicable Patheon Group member’s) premises under any circumstances whatsoever without
the Company’s prior written consent, except when, and only for the period, necessary to carry out Executive’s duties
hereunder;


 


(ii)          In
the event of termination of Executive’s employment for any reason, Executive will promptly deliver to the Company all Company
equipment (including, without limitation, any cellular phones, beeper/pagers, computer hardware and software, fax machines and
other tools of the trade) and all originals and copies of all documents, including without limitation, all books, customer lists,
forms, documents supplied by customers, records, product lists, writings, manuals, reports, financial documents and other documents
or property in Executive’s possession or control, which relate to the Company’s or any member of the Patheon Group’s
business in any way whatsoever, and in particular to customers of any member of the Patheon Group, or which may be considered to
constitute or contain Proprietary Information as defined above, and Executive will neither retain, reproduce, nor distribute copies
thereof (other than copies of Executive’s rolodex or similar electronic or hardcopy address and telephone directories).


 


(f)           Remedies for Breach. Executive acknowledges that any breach by Executive of the covenants set forth in either this Section
6 or the Confidentiality Agreement (collectively, the “Restrictive Covenants”) would cause the Company irreparable
injury and damage for which monetary damages are inadequate. Accordingly, in the event of a breach or a threatened breach of the
Restrictive Covenants by Executive, Executive agrees that (i) the Company will be entitled to seek an injunction restraining such
breach and (ii) the Company’s obligation to pay any unpaid portion of the Severance Benefits or other benefits as set forth
in Sections 5(a) and (d) of this Agreement will be extinguished. Nothing contained herein will be construed as prohibiting the
Company from pursuing any other remedy available to the Company for such breach or such threatened breach. Executive agrees not
to circumvent the spirit of these restrictions by attempting to accomplish indirectly what Executive is otherwise restricted from
doing directly.


 


(g)          Reasonableness
and Revision. Executive has carefully read and considered the restrictions and limitations set forth in the Restrictive Covenants
and agrees and acknowledges that the Restrictive Covenants (i) are reasonable and necessary for the protection of the Company’s
business interests and goodwill due to the uniqueness of Executive’s services and the confidential nature of the information
he will possess and (ii) do not prevent Executive from working or from supporting his family and obligations. Moreover, Executive
agrees that the geographic restriction on competitive activities by Executive is reasonable, given the global nature of the Patheon Group’s
business and Executive’s role in that business. If, at the time of enforcement of this Section 6 and/or the Confidentiality
Agreement, a court or other tribunal holds that the Restrictive Covenants are in whole or in part unreasonable under circumstances
then existing, the parties agree that (i) the maximum period or scope reasonable under such circumstances will be substituted for
the stated period or scope and that the court or other tribunal shall be authorized and directed by the parties to revise the restrictions
contained herein to cover the maximum period or scope permitted by law and (ii) the remaining provisions of the Restrictive Covenants
shall be enforced as written.


 



    	 



    	 



    


 


(h)          Section
6 Acknowledgement. Executive agrees and acknowledges that the promises and obligations made by the Company in this Agreement
(specifically including, but not limited to, the payments and benefits provided for under Section 5) constitute sufficient consideration
for the Restrictive Covenants. Executive further acknowledges that it is not the Company’s intention to interfere in any
way with his employment opportunities, except in such situations where the same conflict with the legitimate business interests
of the Patheon Group. Executive agrees that he will notify the Company in writing if he has, or reasonably should have, any questions
regarding the applicability of this Section 6.


 


(i)           Section 6 Survival. Subject to any limits on applicability contained therein, the Restrictive Covenants shall survive and continue
in full force in accordance with its terms notwithstanding any expiration or termination of this Agreement.


 


7.          
Interpretation, Governing Law and Exclusive Forum. The validity, interpretation, construction, and performance of this Agreement
shall be governed by the laws of the State of New York (excluding any that mandate the use of another jurisdiction’s laws).
Any arbitration (unless otherwise mutually agreed), litigation or similar proceeding with respect to such matters only may be brought
within New York, and all parties to this Agreement consent to New York’s jurisdiction.


 


8.           Entire
Agreement. The recitals set forth above constitute an integral part of this Agreement and are incorporated herein by reference
with the same force and effect as if set forth herein as agreements of the parties. This Agreement, together with Schedule A attached
hereto and the Confidentiality Agreement referred to herein, when executed by the parties shall constitute the entire agreement
pertaining to Executive’s employment with the Company and supersedes all prior agreements, understandings, term sheets,
negotiations and discussions, whether written or oral, pertaining to Executive’s employment, and there are no representations,
undertakings or agreements of any kind between the parties respecting the subject matter hereof except those contained herein.
This Agreement amends, restates, supersedes, and replaces the Employment Agreement dated February 7, 2011 between the Company
and Executive, which shall have no further force or effect.


 


9.           Severability.
In the event that one or more of the provisions contained in this Agreement are held to be invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such holding shall not impair the validity, legality or enforceability of the
remaining provisions herein.


 


10.         Successors
and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of, Executive and his estate, but Executive
may not assign or pledge this Agreement or any rights arising under it, except to the extent permitted under the terms of the benefit
plans in which he participates. No rights or obligations of the Company under this Agreement may be assigned or transferred except
that the Company shall require any successor (whether direct or indirect, by purchase, merger, reorganization, sale, transfer of
stock, consideration or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume
and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it
if no succession had taken place. As used in this Agreement, “Company” means the Company as hereinbefore defined and any successor to its business and/or assets (by merger, purchase or otherwise as provided in this Section 10) which executes and delivers the agreement provided for in this Section 10 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. In the event that any successor refuses to assume the obligations hereunder, the Company as hereinbefore defined shall remain fully responsible for all obligations hereunder.


 



    	 



    	 



    










11.          Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be given by hand delivery,
electronic mail, facsimile, telecopy, overnight courier service, or by United States certified or registered mail, return receipt
requested. Each such notice, request, demand or other communication shall be effective (i) if delivered by hand or by overnight
courier service, when delivered at the address specified in this Section 11; (ii) if given by electronic mail, facsimile or telecopy,
when such electronic mail, facsimile or telecopy is transmitted to the electronic mail address or facsimile or telecopy number
specified in this Section 11 and confirmation is received if during normal business hours on a business day, and otherwise, on
the next business day; and (iii) if given by certified or registered mail, three (3) days after the mailing thereof. Notices shall
be addressed to the parties as follows (or at such other address, email address or fax number as either party may from time to
time specify in writing by giving notice as provided herein):


 


If
to the Company:


 


Human
Resources 


Patheon
Pharmaceutical Services Inc.

4721 Emperor Blvd., Suite 200

Durham, North Carolina 27703


 


with
a copy to:


 


Legal
Department

Patheon Pharmaceutical Services Inc.

4721 Emperor Blvd., Suite 200

Durham, North Carolina 27703


  


If
to Executive:


 


James
Mullen

636 Charles River St.

Needham, MA 02492


 


12.          Indemnification.
The Company will indemnify Executive to the fullest extent permitted by the laws of the State of New York.


 


13.          Dispute
Resolution. The parties agree that all disputes, claims or controversies between them and between Executive and any of the
Company’s affiliated entities and the successor of all such entities, including any dispute, claim or controversy arising
from or otherwise in connection with this Agreement and/or Executive’s employment with the Company, will be resolved as
follows:


 


(a)          Prior
to initiating any other proceeding, the complaining party will provide the other party with a written statement of the claim identifying
any supporting witnesses or documents and the requested relief. The responding party shall within forty-five (45) days furnish
a statement of the relief, if any, that it is willing to provide, and identify supporting witnesses or documents. The parties
then shall meet to attempt informal resolution.


 






    	 



    	 



    

 


(b)          If
the parties cannot informally resolve the dispute between them, any controversy or claim between Executive and the Company and
any of its current or former directors, officers and employees, including any arising out of or relating to this Agreement or
breach thereof, shall be settled by final and binding arbitration in the state of New York, or elsewhere as mutually agreed by
the parties, by a single arbitrator pursuant to the Employment Arbitration Rules & Procedures of Judicial Arbitration &
Mediation Services (“JAMS”), unless the parties to the dispute agree to another arbitration service or independent
arbitrator. The parties may conduct discovery to the extent permitted in a court of law; the arbitrator will render an award together
with a written opinion indicating the bases for such opinion; and the arbitrator will have full authority to award all remedies
that would be available in court. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. Each party shall bear its own attorney’s fees and costs, unless the claim is based on a statute that provides otherwise.
Where required by law, the Company will pay the arbitrator’s fees and any administrative charges of the arbitration service,
except that if Executive initiates the claim, he will pay a portion of the administrative charges equal to the amount he would
have paid to initiate the claim in a court of general jurisdiction.


 


(c)          EXECUTIVE
AND THE COMPANY AGREE THAT THIS ARBITRATION PROCEDURE WILL BE THE EXCLUSIVE MEANS OF REDRESS FOR ANY DISPUTES RELATING TO OR ARISING
FROM EXECUTIVE’S EMPLOYMENT WITH THE COMPANY OR TERMINATION THEREFROM, INCLUDING DISPUTES OVER UNPAID WAGES, BREACH OF CONTRACT
OR TORT, VIOLATION OF PUBLIC POLICY, RIGHTS PROVIDED BY FEDERAL, STATE OR LOCAL STATUTES, REGULATIONS, ORDINANCES, AND COMMON
LAW, LAWS THAT PROHIBIT DISCRIMINATION BASED ON ANY PROTECTED CLASSIFICATION, AND ANY OTHER STATUTES OR LAWS RELATING TO AN EXECUTIVE’S
RELATIONSHIP WITH THE COMPANY. THE FOREGOING NOTWITHSTANDING, CLAIMS FOR WORKERS’ COMPENSATION BENEFITS OR UNEMPLOYMENT
INSURANCE, OR ANY OTHER CLAIMS WHERE MANDATORY ARBITRATION IS PROHIBITED BY LAW, ARE NOT COVERED BY THIS ARBITRATION PROVISION.
THE PARTIES EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL, AND AGREE THAT THE ARBITRATOR’S AWARD SHALL BE FINAL AND BINDING
ON THE PARTIES. THIS ARBITRATION PROVISION IS TO BE CONSTRUED AS BROADLY AS IS PERMISSIBLE UNDER APPLICABLE LAW.


 


14.          Representations.
Each person executing this Agreement hereby represents and warrants on behalf of himself and of the entity/individual on whose
behalf he is executing the Agreement that he is authorized to represent and bind the entity/individual on whose behalf he is executing
the Agreement. Executive specifically represents and warrants to the Company that he reasonably believes (a) he is not under any
contractual or other obligations, including but not limited to any employment contract, non-competition or other covenants or
restrictions, that would prevent, limit or impair Executive’s ability to commence work on the Effective Date or otherwise
limit his ability to perform all responsibility and obligations of the position of CEO, (b) that entering into this Agreement
will not result in a breach of any other agreement to which he is a party, and (c) that he will not knowingly use any trade secret,
confidential information, or other intellectual property right of any former employer or any other person to whom Executive has
an obligation of confidentiality in the performance of his duties hereunder and that the Company has not requested the disclosure
by Executive of any such information.


 


15.          Amendments
and Waivers. No provisions of this Agreement may be modified, waived, or discharged except by a written document signed by
Executive and a duly authorized Company officer. Thus, for example, promotions, commendations, and/or bonuses shall not, by themselves, modify, amend, or extend this Agreement. A waiver
of any conditions or provisions of this Agreement in a given instance shall not be deemed a waiver of such conditions or provisions
at any other time.


 






    	 



    	 



    

  


16.          Taxes.


 


(a)          Withholdings. The Company may withhold from any compensation and benefits payable under this Agreement all federal, state, city and other
taxes or amounts as shall be determined by the Company to be required to be withheld pursuant to applicable laws, or governmental
regulations or rulings. Executive shall be solely responsible for the satisfaction of any taxes (including employment taxes) imposed
on employees and penalty taxes on nonqualified deferred compensation.


 


(b)          Net
Proceeds Maximization. Notwithstanding any provision of this Agreement to the contrary, if all or any portion of the payments
or benefits received or realized by Executive pursuant to this Agreement either alone or together with other payments or benefits
that Executive receives or realizes or is then entitled to receive or realize from the Company or any member of the Patheon Group
would constitute an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code (the
“Code”), the payments or benefits provided to Executive under this Agreement will be reduced by reducing the amount
of payments or benefits payable to Executive to the extent necessary so that no portion of Executive’s payments or benefits
will be subject to the excise tax imposed by Section 4999 of the Code. Notwithstanding the foregoing, a reduction will be made
under the previous sentence only if, by reason of that reduction, Executive’s net after tax benefit exceeds the net after
tax benefit he would realize if the reduction were not made. For purposes of this paragraph, “net after tax benefit”
means the sum of (i) the total amount received or realized by Executive pursuant to this Agreement that would constitute a “parachute
payment” within the meaning of Section 280G of the Code, plus (ii) all other payments or benefits that Executive receives
or realizes or is then entitled to receive or realize from the Company and any member of the Patheon Group that would constitute
a “parachute payment” within the meaning of Section 280G of the Code and any corresponding and applicable state law
provision, less (iii) the amount of federal or state income taxes payable with respect to the payments or benefits described in
(i) and (ii) above calculated at the maximum marginal individual income tax rate for each year in which payments or benefits are
realized by Executive (based upon the rate in effect for that year as set forth in the Code at the time of the first receipt or
realization of the foregoing), less (iv) the amount of excise taxes imposed with respect to the payments or benefits described
in (i) and (ii) above by Section 4999 of the Code. All determinations and calculations made in this paragraph shall be made by
an independent accounting firm (the “Accounting Firm”) selected by the Company prior to the Change in Control. The
Accounting Firm shall be a nationally recognized United States public accounting firm which has not, during the two (2) years
preceding the date of its selection, acted in any way on behalf of (x) the Company or any member of the Patheon Group or (y) Executive.


 


(c)          Section
409A Compliance.


 


 (i)
          Section 409A Six-Month Delay Rule. If any amounts that become due under this Agreement on account of Executive’s
termination of employment constitute “nonqualified deferred compensation” within the meaning of Code section 409A
(“Section 409A”), payment of such amounts shall not commence until Executive experiences a “separation from
service” within the meaning of Treasury Regulation Section 1.409A-1(h). If, at the time of Executive’s separation
from service, Executive is a “specified employee” (under Section 409A), then to the extent necessary to comply with
Section 409A, any such amounts will not be paid until after the first business day of the seventh (7th) month after Executive’s
separation from service (the “409A Suspension Period”). Within fourteen (14) calendar days after the end of the 409A
Suspension Period, Employee shall be paid a lump sum payment in cash equal to any payments delayed because of the preceding sentence,
together with interest on them for the period of delay at a rate equal to the average prime interest rate published in the Wall
Street Journal on any day chosen by the Company during that period. Thereafter, Executive shall receive any remaining benefits
as if there had not been an earlier delay.


 






    	 



    	 



    

 


(ii)
          Interpretation. This Agreement is intended to comply with or be exempt from Section 409A, and shall be interpreted and
construed by the Company in a manner that the Company reasonably believes, after consultation with Executive, establishes an exemption
from (or otherwise conforms them to) the requirements of Section 409A. To the extent that any regulations or other guidance issued
under Section 409A (after application of the previous sentence) would result Executive being subject to the payment of interest
or any additional tax under Section 409A, the parties agree, to the extent reasonably possible, to amend this Agreement in order
to avoid the imposition of any such interest or additional tax under Section 409A, which such amendment shall have the minimum
economic effect necessary and be reasonably determined in good faith by Executive and the Company, provided it does not increase
the overall expense to the Company in providing the benefits.


 


Although
the Company shall use its best efforts to avoid the imposition of taxation, interest and penalties under Section 409A of the Code,
the tax treatment of the benefits provided under this Agreement is not warranted or guaranteed. Neither the Company nor its directors,
officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by Executive
or other taxpayer pursuant to Section 409A as a result of the Agreement. Any reference in this Agreement to Section 409A of the
Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section
409A by the U.S. Department of Treasury or the Internal Revenue Service.


 


17.          U.S.
Citizenship and Immigration Services. Executive agrees to timely file all documents required by the Department of Homeland
Security to verify his identity and lawful employment in the United States.


 


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


 


19.          Legal
Fees. The Company will pay up to $10,000 of any reasonable legal fees and expenses Executive incurs during the negotiation
of this Agreement, provided that such fees and expenses are supported by reasonable supporting documentation.


 


20.          Executive’s
Acknowledgement.


 


EXECUTIVE
ACKNOWLEDGES THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY AND HIM RELATING TO THE SUBJECTS COVERED IN THIS AGREEMENT
ARE CONTAINED IN IT (INCLUDING THE AGREEMENTS SET FORTH AS EXHIBITS) AND THAT HE HAS ENTERED INTO THIS AGREEMENT VOLUNTARILY AND
NOT IN RELIANCE ON ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.


 






    	 



    	 



    

 


EXECUTIVE
FURTHER ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT (INCLUDING THE AGREEMENTS SET FORTH AS EXHIBITS), THAT HE UNDERSTANDS
ALL OF SUCH AGREEMENTS, AND THAT HE HAS BEEN GIVEN THE OPPORTUNITY TO DISCUSS SUCH AGREEMENTS WITH HIS PRIVATE LEGAL COUNSEL AND
HAS AVAILED HIMSELF OF THAT OPPORTUNITY TO THE EXTENT HE WISHED TO DO SO. EXECUTIVE UNDERSTANDS THAT THE DISPUTE RESOLUTION PROVISIONS
OF THIS AGREEMENT GIVE UP THE RIGHT TO A JURY TRIAL ON MATTERS COVERED BY THEM.


 


[Signature
page follows.]


 




    	 



    	 



    

 


IN
WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.


 


“Executive”


 





	 	 
	James
Mullen	 






  


Date:
April 22, 2011


 


“Company” 


Patheon
Pharmaceutical Services Inc. 





	 	 
	 	 
	By: 
Eric Evans

Title:
        Chief Financial Officer	 






 


 


Date: April 25, 2011


 

With
respect only to Sections 1(a) and 4(f), and 5: 


 


“Patheon”


 


Patheon
Inc. 




	 	 
	 	 
	By: 
Eric Evans

Title:
        CFO	 


 

 


Date:
April 25, 2011 





    	 



    	 



    

  


 


 


SCHEDULE
A 

TO 


AMENDED
AND RESTATED 

EMPLOYMENT AGREEMENT WITH 

JAMES MULLEN 


 






 


GENERAL
RELEASE


 


This
General Release (“Release”), dated as of ____________, 20__ confirms the following understandings and agreements
between James Mullen, an individual (“Executive”), and Patheon Pharmaceutical Services Inc. (the
“Company”).


 


In
consideration of the promises set forth in that certain amended and restated employment agreement between Executive and the Company,
entered into as of March 18, 2011 (the “Employment Agreement”), Executive agrees as follows:


 


1.           Release
by Executive.


 


(a)          For
and in consideration of the severance payments and benefits described in the Employment Agreement (the “Consideration”),
which are being provided in exchange for your execution of this Release and would not be provided absent your execution of this
Release, Executive, for himself and his heirs, executors, administrators, assigns, successors and agents (collectively, the “Executive’s
Affiliates”) hereby fully and without limitation releases and forever discharges the Company and all other members of the
Patheon Group and each of their respective agents, representatives, shareholders, owners, officers, directors, employees, consultants,
attorneys, auditors, accountants, investigators, affiliates, successors and assigns (collectively, the “Patheon Releasees”),
both individually and collectively, from any and all waivable rights, claims, demands, liabilities, actions, causes of action,
damages, losses, costs, expenses and compensation, of whatever nature whatsoever, known or unknown, fixed or contingent, which
Executive or any of Executive’s Affiliates has or may have or may claim to have against any of the Patheon Releasees by
reason of any matter, cause, or thing whatsoever, from the beginning of time to the date Executive signs this Release (“Claims”),
arising out of, based upon, or relating to his employment or the termination of his employment with the Company and/or his service
as an officer of any of the Patheon Releasees, and/or any agreement or compensation arrangement between Executive and any of the
Patheon Releasees, to the maximum extent permitted by law.


 






    	 



    	 



    

 


(b)          The
Claims released by Executive include, but are not limited to, any Claims arising out of or based on: Title VII of the Civil Rights
Act of 1964, the Americans with Disabilities Act, the National Labor Relations Act, the Equal Pay Act, the Age Discrimination
in Employment Act (“ADEA”), the Civil Rights Act of 1991, the Family Medical Leave Act, Sections 1981 through 1988
of Title 42 of the United States Code, the Employee Retirement Income Security Act of 1974 (“ERISA”) (except for any
vested benefits under any tax qualified benefit plan), the Immigration Reform and Control Act, the Worker Adjustment and Retraining
Notification Act, the Occupational Safety and Health Act, the Fair Credit Reporting Act, and the Sarbanes- Oxley Act of 2002 (in
each case as the same may be amended from time to time); fraud, misrepresentation, negligence, defamation, infliction of emotional
distress or other tort, common law, breach of contract (whether express or implied, written or oral) or covenant, violation of
public policy or wrongful termination; state or federal wage and hour laws; or any other state or federal law, rule, or regulation
dealing with the employment relationship, except those claims which may not be released herein as a matter of law. The released
Claims also include any Claims by Executive for compensation, wages, back pay, reinstatement or reemployment, bonuses, or benefits
of any kind or any nature arising out of, based upon, or relating to his employment or the termination of his employment with
the Company and/or his service as an officer of any of the Patheon Releasees, and/or any agreement or compensation arrangement
between Executive and any of the Patheon Releasees.


 


(c)
         Nothing contained in this Section 1 or any other provision of this Release shall release or waive any right that Executive has
to (i) the Consideration, which shall be deemed to include the Initial Grant (as defined in the Employment Agreement) and any
other equity awards Executive has received from the Company, (ii) any employee benefit Executive is entitled to receive from the
Company pursuant to any Company employee benefit plan or program, including any health claim or (iii) indemnification and/or reimbursement
of expenses by the Company with respect to which Executive may be eligible as provided by law, the Company’s or any member
of the Patheon Group’s Certificates of Incorporation, Bylaws and any applicable directors and officers, errors & omissions,
umbrella or general liability insurance policies, or any indemnification agreements, including the Employment Agreement. Further,
nothing contained in this Release shall restrict or inhibit any communications by Executive with the Equal Employment Opportunity
Commission (“EEOC”) or any other government or law enforcement agency.


 


2.          Waiver
of Applicable Release Laws.


 


(a)          Executive
understands and agrees that the release provided herein extends to all Claims released above whether known or unknown, suspected
or unsuspected, which may be released as a matter of law. Executive expressly waives and relinquishes any and all rights he may
have under state law that prohibits the general release of unknown claims.


 


(b)          It
is the intention of each party through this Release to fully, finally and forever settle and release the Claims as set forth above.
In furtherance of such intention, the release herein given shall be and remain in effect as a full and complete release of such
matters notwithstanding the discovery of any additional Claims or facts relating thereto.


 


3.          Review
and Revocation Rights. Executive hereby is advised of the following:


 


(a)          Executive
has the right to consult with an attorney before signing this Release and is encouraged by the Company to do so;


 


(b)          Executive
has twenty-one (21) days from his receipt of this Release to consider it, although Executive may sign and return the Release at
any earlier time, in which case Executive waives all rights to the balance of this twenty-one (21) day review period; and


 


(c)          Executive
has seven (7) days after signing this Release to revoke this Release, and this Release will not be effective until that revocation
period has expired without revocation. Executive agrees that in order to exercise his right to revoke this Release within such
seven (7) day period, he must do so in a signed writing delivered to the Board of Directors of the Company (“Board”)
before the close of business on the seventh calendar day after he signs this Release.


 






    	 



    	 



    

 


(d)
         Nothing in this Release prevents or precludes Executive from challenging or seeking a determination in good faith of the validity
of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs for doing so, unless specifically
authorized by federal law.


 


4.           No
Filings. Executive represents that he has not filed any waivable lawsuits, claims, charges or complaints, which are pending
as of the date hereof, against any of the Patheon Releasees with any local, state or federal agency or court from the beginning
of time to the date of execution of this Release, and he agrees that he shall not accept any award, damages, recovery or settlement
from any proceeding brought by him or on his behalf relating to his employment or the termination of his employment with the Company
and/or his service as an officer of any of the Patheon Releasees or otherwise.


 


5.           Cooperation
Clause.


 


(a)
         To facilitate the orderly conduct of the Patheon Group, Executive agrees to cooperate, at no charge, with the Company’s
reasonable requests for information or assistance related to (i) the time of his employment, (ii) any investigations (including
internal investigations) and audits of any member of the Patheon Group’s management’s current and past conduct and
business and accounting practices and (iii) any member of the Patheon Group’s defense of, or other participation in, any
administrative, judicial, or other proceeding arising from any charge, complaint or other action which has been or may be filed
relating to the period during which Executive was employed by the Company. The Company will promptly reimburse Executive for his
reasonable, customary and documented out-of-pocket business expenses in connection with the performance of his duties under this
Section 5.


 


6.           Governing
Law. This Release shall be governed by and construed in accordance with the laws of the State of New York, without giving
effect to principles of conflict of laws.


 


7.           Dispute
Resolution. The parties hereby agree that all disputes, claims or controversies arising from or otherwise in connection with
this Release (except for injunctive relief sought by either party) between them and between Executive and any member of the Patheon
Group and the successor of all such entities, and any director, officer, shareholder or employee of any member of the Patheon
Group will be resolved in accordance with Section 13 of the Employment Agreement, except for its attorneys’ fee provision.


 


8.           Attorneys’
Fees. Except as otherwise provided herein or as prohibited by law, in any action, litigation or proceeding between the parties
arising out of or in relation to this Release, including any purported breach of this Release, each party shall bear its own attorney’s
fees and costs.


 


9.           Non-Admission
of Liability. The parties understand and agree that neither the furnishing of the Consideration nor the execution of this
Release by the parties will constitute or be construed as an admission of any wrongdoing or liability whatsoever by any party.


 


10.         Severability. If
any one or more of the provisions contained herein (or parts thereof), or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the validity and enforceability of any such
provision in every other respect and of the remaining provisions hereof will not be in any way impaired or affected, it being
intended that all of the rights and privileges shall be enforceable to the fullest extent permitted by law.


 






    	 



    	 



    

 


11.        Entire
Agreement. This Release represents the sole and entire agreement among the parties and, except as expressly stated herein,
supersedes all prior agreements, negotiations and discussions among the parties with respect to the subject matters contained
herein.


 


12.        Waiver.
No waiver by any party hereto at any time of any breach of, or compliance with, any condition or provision of this Release
to be performed by any other party hereto may be deemed a waiver of similar or dissimilar provisions or conditions at the same
time or at any prior or subsequent time.


 


13.        Counterparts.
This Release may be executed in counterparts, each of which will be deemed to be an original as against any party that has
signed it, but both of which together will constitute one and the same instrument.


 


14.        Miscellaneous
Provisions.


 


(a)          The
parties represent that they have read this Release and fully understand all of its terms; that they have conferred with their
attorneys, or have knowingly and voluntarily chosen not to confer with their attorneys about this Release; that they have executed
this Release without coercion or duress of any kind; and that they understand any rights that they have or may have, and they
are signing this Release with full knowledge of any such rights.


 


(b)          Both
parties have participated in the drafting of this Release with the assistance of counsel to the extent they desired. The language
in all parts of this Release must be in all cases construed simply according to its fair meaning and not strictly for or against
any party. Whenever the context requires, all words used in the singular must be construed to have been used in the plural, and
vice versa, and each gender must include any other gender. The captions of the Sections of this Release are for convenience only
and must not affect the construction or interpretation of any of the provision herein.


 


(c)          Each
provision of this Release to be performed by a party hereto is both a covenant and condition, and is a material consideration
for the other party’s performance hereunder, and any breach thereof by the party will be a material default hereunder. All
rights, remedies, undertakings, obligations, options, covenants, conditions and agreements contained in this Release are cumulative
and no one of them is exclusive of any other. Time is of the essence in the performance of this Release.


 


(d)          Each
party acknowledges that no representation, statement or promise made by any other party, or by the agent or attorney of any other
party, except for those in this Release, has been relied on by him or it in entering into this Release.


 


(e)          Unless
expressly set forth otherwise, all references herein to a “day” are deemed to be a reference to a calendar day. Unless
expressly stated otherwise, cross-references herein refer to provisions within this Release and are not references to any other
document.


 






    	 



    	 



    

 


(f)
          Each party to this Release will cooperate fully in the execution of
any and all other documents and in the completion of any additional actions that may be necessary or appropriate to give full
force and effect to the terms and intent of this Release.


 


(g)         
Executive represents that he has returned all Patheon Group property and materials in accordance with paragraph 6(e) of the Employment
Agreement.


 


EACH
OF THE PARTIES ACKNOWLEDGES THAT HE/IT HAS READ THIS AGREEMENT, UNDERSTANDS IT AND IS VOLUNTARILY ENTERING INTO IT, AND THAT IT
INCLUDES A WAIVER OF THE RIGHT TO A TRIAL BY JURY, AND, WITH RESPECT TO EXECUTIVE, HE UNDERSTANDS THAT THIS AGREEMENT INCLUDES
A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS OTHER THAN AS PROVIDED FOR HEREIN.


 


IN
WITNESS WHEREOF, the parties have executed this Release as of the dates indicated below.


 


“Executive”


 





	 	 
	James
Mullen	 






  


Date:



 


“Company” 


 


Patheon
Pharmaceutical Services Inc. 





	 	 
	By:  

Title: 	 






 





Date:


 

With
respect only to Articles 7, 8, and 9:


 


“Patheon”


 


Patheon
Inc. 




	 	 
	By: 

Title: 	 
	 

        Date: