EXHIBIT 10.46

 

BIOVAIL LABORATORIES INTERNATIONAL SRL
EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is made by and between Biovail Laboratories International SRL
(hereinafter the “Corporation”) and Michel Chouinard (hereinafter the
“Executive”).

 

ARTICLE ONE — GENERAL DUTIES AND TERM

 

SCOPE OF EMPLOYMENT / DUTIES

 

1.01         The Corporation will employ the Executive as the Chief Operating
Officer (“COO”) of the Corporation.  The Executive will serve as an officer of
the Corporation.  During the Employment Term (as defined below in Section 1.04),
the Executive will devote substantially all of the Executive’s business efforts
and time to the Corporation.  The Executive agrees, during the Employment Term,
not to actively engage in any other employment, occupation or consulting
activity for any direct or indirect compensation without the prior approval of
the President of the Corporation (the “President”); provided, however, that the
Executive may (a) serve on the boards of directors of other companies (subject
to reasonable approval of the President) and boards of trade associations or
charitable organizations; (b) engage in charitable activities and community
affairs; and (c) manage the Executive’s personal investments and affairs, as
long as such activities do not violate Section 4.02 and do not materially
interfere with the Executive’s duties and responsibilities for the Corporation.

 

1.02         The Corporation reserves the right to change the employment
relationship over time, as it deems necessary or appropriate to comply with
legal requirements or for ease of administration of employee benefits programs
or other matters. The parties agree that, at the discretion of the Corporation,
the Executive’s employment may be transferred to the Corporation’s affiliates or
subsidiaries, as they may exist from time to time.

 

1.03         Notwithstanding 1.02, the Corporation acknowledges and agrees that
the Executive’s principal residence is and shall remain in Barbados.

 

TERM OF AGREEMENT

 

1.04         The Corporation hereby agrees to employ the Executive and the
Executive hereby accepts employment, in accordance with the terms and conditions
of this Agreement, commencing on February 24, 2010 (the “Employment Commencement
Date”).  The period of the Executive’s employment under this Agreement will be
referred to as the “Employment Term.”  Subject to the Corporation’s obligation
to provide severance benefits and the parties’ obligation to provide a Notice of
Termination (as defined below), the Executive and the Corporation acknowledge
that this employment relationship may be terminated at any time and for any or
no cause or reason at the option of either the Executive or the Corporation.

 

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

 

ARTICLE TWO — COMPENSATION

 

BASE SALARY

 

2.01         As of the Employment Commencement Date, the Executive’s annualized
base salary will be $343,120 (USD), payable in accordance with the Corporation’s
normal payroll practices for employees generally, and will be subject to annual
review in accordance with the Corporation’s normal review process for other
similarly situated senior executives.

 

INCENTIVE COMPENSATION

 

2.02         The Executive will be eligible to participate in Biovail
Corporation’s (“Biovail’s”) short term annual incentive compensation plan as
such plan may be amended from time to time (the “Short Term Incentive Plan”) in
accordance with the terms of the Short Term Incentive Plan.

 

EQUITY COMPENSATION

 

2.03         Eligibility and Terms.

 

The Executive will be eligible to participate in Biovail’s equity compensation
plan, as such plan may be amended from time to time (the “Equity Compensation
Plan”), in accordance with the terms of the Equity Compensation Plan, except as
may be otherwise indicated in this Agreement.

 

EMPLOYEE BENEFITS

 

2.04         During the Employment Term, the Executive will be eligible to
participate in employee benefit plans and programs that are offered to the
Corporation’s other similarly-situated senior executives in accordance with the
terms of such plans as they may change from time to time.  Nothing in this
Agreement shall preclude the Corporation or any affiliate of the Corporation
from terminating or amending any employee benefit plan or program from time to
time before or after the Employment Commencement Date.

 

EXPENSES

 

2.05         The Executive shall be reimbursed for reasonable out of pocket
business expenses, including travel and entertainment expenses, actually and
properly incurred by the Executive in the course of performing the Executive’s
services hereunder, upon furnishing to the Corporation reasonable supporting
statements and vouchers; provided, however, that in any financial year in which
the Corporation has provided to the Executive an approved budget, such expenses
must not exceed the amount so budgeted without the prior written approval from
the President.

 

2

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

 

Housing Allowance

 

2.06         While on assignment in Barbados, the Executive will receive a
housing allowance in the amount of $6,000 USD per month.

 

Travel Allowance

 

2.07         While on assignment in Barbados, the Executive will be provided
with reimbursement for the cost of two return airline tickets for travel home
twice per year.

 

Company Vehicle

 

2.08         A company car will be provided to the Executive and related
expenses will be paid or reimbursed by the Corporation.

 

VACATION

 

2.09         The Executive will be eligible for four (4) weeks of vacation
annually, to be taken in accordance with the terms of the Corporation’s Vacation
Policy, without regard to any lesser amount of vacation time set forth therein. 
Notwithstanding the foregoing, the Executive’s eligibility for vacation in the
year the Employment Term commences will be pro-rated in the manner specified in
the Corporation’s Vacation Policy.  Eligibility for increases to vacation
entitlement will be in accordance with local regulations.

 

ARTICLE THREE — TERMINATION AND RESIGNATION

 

TERMINATION DATE

 

3.01         For the purposes of this Agreement, “Termination Date” shall mean
the date designated as the last day of the Executive’s employment or term of
office with the Corporation as specified in a notice of termination given by the
party that issues a notice of termination to the other party.

 

TERMINATION OF EMPLOYMENT BY THE CORPORATION WITHOUT CAUSE OR BY THE EXECUTIVE
FOR GOOD REASON

 

3.02         If the Executive’s employment with the Corporation is terminated
involuntarily either by a termination by the Corporation without Cause or a
termination by the Executive for Good Reason, then, in addition to any benefits
or compensation accrued, earned and due to the Executive but not yet paid as of
the Termination Date, the Executive will be eligible for the severance payments
and benefits as described in this Section 3.02; provided that (i) the Executive
continues to comply with the Restrictive Covenants (as defined below in
Article Four); and (ii) the Executive executes, and does not revoke, a written
waiver and release of all claims, demands and causes of action against the
Corporation and related parties in a form prescribed by the Corporation, as
limited by Section 3.10 (“Release”):

 

3

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

 

(a)           Within 60 days following the Executive’s Termination Date, the
Executive will be paid a lump sum severance payment equal to (i) an amount that
is one (1) times the Executive’s base salary (calculated using the Executive’s
highest annual base salary in the three years prior to the Executive’s
Termination Date) plus (ii) an amount that is one (1) times the Executive’s
target level of annual incentive compensation for the year prior to the year in
which the Executive’s Termination Date occurs;

 

(b)           The Executive will be entitled to a pro-rated portion of the
Executive’s target level of annual incentive compensation under the Short Term
Incentive Plan for the year in which the Executive’s Termination Date occurs.
The pro-rated portion will be based on the number of months (rounded to the next
highest number for a partial month) of the calendar year that elapsed prior to
the Executive’s Termination Date and will be calculated and paid in accordance
with the terms of the Corporation’s Short Term Incentive Plan; and

 

(c)           Until the earlier of (i) the date that ends a period of one
(1) year following the Executive’s Termination Date, and (ii) the date, or
dates, on which the Executive is eligible to receive benefits under the same
type of plan of a subsequent employer (the “Benefit Period”), the Corporation
will pay to the Executive a monthly payment on the first payroll date of each
month equal to the cost of continued medical and dental coverage for the
Executive and the Executive’s covered dependents under the medical and dental
plans of the Corporation, less the amount that the Executive would be required
to contribute for medical and dental coverage if the Executive were an active
employee.  These payments will commence on the Corporation’s first payroll date
after the Executive’s Termination Date and will continue until the end of the
Benefit Period (and not beyond the end of the Benefit Period).

 

TERMINATION OF EMPLOYMENT BY THE CORPORATION FOR CAUSE OR THE EXECUTIVE’S
VOLUNTARY RESIGNATION WITHOUT GOOD REASON

 

3.03         If the employment of the Executive is terminated by the Corporation
for Cause or if the Executive voluntarily resigns from employment without Good
Reason, then the Executive will forfeit the Executive’s right to receive any
salary, Short Term Incentive Plan compensation, Equity Compensation Plan
compensation or other compensation that has not been fully accrued at the time
the Executive’s employment terminates; provided, however, that the Executive
will be entitled to receive any benefits or compensation accrued, earned and due
to the Executive but not yet paid as of the Executive’s Termination Date.

 

DEATH OR DISABILITY

 

3.04         The Executive’s employment will terminate automatically upon the
Executive’s death.  The Corporation may terminate the Executive’s employment if
illness, disease, or physical or mental incapacity render the Executive
generally incapable of performing the Executive’s duties or unfit to advance or
represent the Corporation on a daily basis for a period of twelve (12)
consecutive months and within such twelve (12) months, the Executive fails to
produce to the Corporation a medical opinion indicating a reasonable

 

4

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

 

time for the return of the Executive to the full-time assumption of the
Executive’s past duties and responsibilities.  Nothing herein is intended to
circumvent or abridge the Corporation’s short-term disability policy or
long-term disability plan.  In the event of termination pursuant to the terms of
this Section 3.03, the Executive or the Executive’s estate, as applicable, will
be entitled to receive any salary, benefits or other amounts accrued, earned and
due to the Executive but not yet paid as of the Executive’s Termination Date.

 

CAUSE

 

3.05         For purposes of this Agreement, Cause includes:

 

(a)           conviction of the Executive, or the entering of a guilty plea or a
plea of no contest by the Executive, with respect to a felony, any crime
involving fraud, larceny or embezzlement or any other crime involving moral
turpitude which may subject the business to damage in any way, or if generally
known, would damage the business interests or reputation of the Corporation or
any of its affiliates;

 

(b)           any act of fraud, misappropriation, material dishonesty,
embezzlement or similar conduct involving the Corporation or any affiliates;

 

(c)           a material breach by the Executive of the Executive’s duties
hereunder (other than as a result of incapacity due to physical or mental
impairment) which is demonstrably willful and deliberate on the part of the
Executive or which is committed in bad faith or without reasonable belief that
such breach is in the best interests of the Corporation;

 

(d)           a material breach by the Executive of the Executive’s duties
hereunder (other than as a result of incapacity due to physical or mental
impairment), except as identified in Section 3.05(c) above, which breach is not
remedied by the Executive within 30 days after receipt of written notice from
the Corporation specifying such breach; or

 

(e)           the Executive’s failure to comply in any material way with any of
the provisions of this Agreement.

 

GOOD REASON

 

3.06         For purposes of this Agreement, a voluntary resignation by the
Executive will be deemed to be a termination for Good Reason if:

 

(a)           The Corporation makes:  (i) any assignment to the Executive of any
duties which are materially inconsistent with the Executive’s position; (ii) any
material reduction in the Executive’s authority, responsibilities or status; or
(iii) a material reduction to the Executive’s base salary;

 

5

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

 

(b)           The Executive notifies the Corporation in writing of the
Executive’s belief that the Corporation has taken an action identified in
Section 3.06(a) within thirty (30) days of the event at issue;

 

(c)           The Corporation has not remedied the situation within thirty (30)
days after receipt of written notice from the Executive;

 

(d)           The Executive provides a Notice of Termination within thirty (30)
days after the Corporation’s opportunity to remedy the situation has expired;
and

 

(e)           After a period of 5 years from the commencement of the assignment
in Barbados (February 28, 2011), the Corporation is unable to provide the
Executive with a position deemed comparable by the Corporation in another
location other than Barbados.

 

CHANGE IN CONTROL

 

3.07         (a)           The Corporation shall provide the payments and
benefits described in Section 3.07(b) below only if:  (i) the Executive
continues to comply with the Restrictive Covenants (as such term is defined
below in Article Four); and (b) the Executive executes, and does not revoke, a
Release (as defined above in Section 3.02).

 

(b)           Upon a Change in Control (as defined below in Section 3.07(c)),
and an involuntary termination of the Executive’s employment either by the
Corporation without Cause or by the Executive for Good Reason, which termination
occurs within a period of twelve (12) months following the Change in Control,
the Corporation shall provide to the Executive, in addition to any benefits or
compensation accrued, earned and due to the Executive but not yet paid as of the
Executive’s Termination Date, but in lieu of any payments or benefits to which
the Executive is or might be entitled under Section 3.02 above:

 

(i)                                     a lump sum severance payment of (a) an
amount that is equal to two (2) times the Executive’s base salary (calculated
using the Executive’s highest annual base salary in the three years prior to the
Executive’s Termination Date) plus (b) an amount that is equal to two (2) times
the Executive’s target level of annual incentive compensation under the Short
Term Incentive Plan for the year prior to the year in which the Executive’s
Termination Date occurs, payable within thirty (30) days of the Executive’s
Termination Date; and

 

(ii)                                  any unvested equity compensation awards
held by the Executive shall automatically accelerate and become one hundred
percent (100%) vested and, as applicable, exercisable, as of the Executive’s
Termination Date.

 

(c)           For the purpose of this Section 3.07, “Change in Control” means
the happening of any of the following events:

 

6

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

 

(i)             the completion of a transaction pursuant to which (A) the
Corporation goes out of existence or (B) any person, or any Associate (as such
terms defined in National Instrument 45-106 - Prospectus and Registration
Exemptions, as amended from time to time, or such other successor rules,
instruments or policies from time to time of Canadian provincial securities
regulatory authorities which may govern trades of securities to employees,
officers, directors or consultants (“NI45-106”)) or Related Entity (as such term
is defined in NI45-106) of such person (other than the Corporation, any trustee
or other fiduciary holding securities under any employee benefit plan of the
Corporation or a Related Entity, or any company owned, directly or indirectly,
by the shareholders of the Corporation in substantially the same proportions as
their ownership of common shares of the Corporation) hereafter acquires the
direct or indirect “beneficial ownership” (as defined by the Canada Business
Corporations Act) of securities of the Corporation representing 50% or more of
the aggregate voting power of all of the Corporation’s then issued and
outstanding securities;

 

(ii)          the lease, exchange, license, sale or other similar disposition of
all or substantially all of the Corporation’s assets in one transaction or a
series of related transactions to a person, or any Associate or Related Entity
of such person (other than an Associate or Related Entity of the Corporation,
any trustee or other fiduciary holding securities under any employee benefit
plan of the Corporation or a Related Entity, or any company owned, directly or
indirectly, by the shareholders of the Corporation in substantially the same
proportions as their ownership of common shares of the Corporation);

 

(iii)       the dissolution or liquidation of the Corporation except in
connection with the distribution of assets of the Corporation to one or more
persons which were Related Entities prior to such event;

 

(iv)      during any period of 24 consecutive months beginning on or after the
date of the Equity Compensation Plan, the persons who were members of the Board
immediately before the beginning of such period (the “Incumbent Directors”)
cease (for any reason other than death) to constitute at least a majority of the
Board or the board of directors of any successor to the Corporation, provided
that any director who was not a director as of the date of the Equity
Compensation Plan shall be deemed to be an Incumbent Director if such director
is elected to the Board by, or on the recommendation of or with the approval of,
at least two-thirds of the directors who then qualified as Incumbent Directors
either actually or by prior operation of the foregoing unless such election,

 

7

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

 

recommendation or approval occurs as a result of an actual or threatened
election contest or other actual or threatened solicitation of proxies or
contests by or on behalf of a person other than a member of the Board; or

 

(v)         a merger, amalgamation, arrangement or consolidation of the
Corporation with any other corporation other than a merger, amalgamation,
arrangement or consolidation that would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the combined voting power of the voting
securities of the Corporation or such surviving entity outstanding immediately
after such merger, amalgamation, arrangement or consolidation; provided,
however, that a merger, amalgamation, arrangement or consolidation effected to
implement a recapitalization of the Corporation (or similar transaction) in
which no person (other than those covered by the exceptions in (i) above)
acquires more than 50% of the combined voting power of the Corporation’s then
outstanding securities shall not constitute a Change in Control.

 

NOTICE OF TERMINATION

 

3.08         Any termination of employment by the Corporation or by the
Executive shall be communicated by notice of termination to the other party
hereto given in accordance with Section 5.09 (a “Notice of Termination”).  For
purposes of this Agreement, Notice of Termination means a written notice that
(a) identifies the specific termination provision in the Agreement relied upon,
and (b), to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision identified, and (c)(i), in the case of a
termination by the Corporation, specifies the Executive’s Termination Date which
shall not be less than fifteen (15) nor more than sixty (60) days after the
giving of such notice; or (ii) in the case of a termination by the Executive
without Good Reason, shall not be less than ninety (90) days after the giving of
such notice.

 

PAYMENTS AFTER TERMINATION OF EMPLOYMENT

 

3.09         Payments made by the Corporation to the Executive pursuant to this
Agreement after the Executive’s Termination Date will be made by courier
delivery service to the last address provided for notices to the Executive
pursuant to Section 5.09 of this Agreement.

 

RELEASE

 

3.10         The Release identified in Sections 3.02 and 3.07 will not require
the Executive to release any right the Executive may have to indemnification as
an officer, director or

 

8

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

 

employee of the Corporation (or any affiliate thereof) pursuant to the articles
of incorporation or bylaws (or other governing instruments) of the Corporation
(or any affiliate thereof) or any vested benefits to which the Executive may be
entitled under any employee benefit plan.

 

ARTICLE FOUR — EXECUTIVE’S OBLIGATIONS

 

CONFIDENTIALITY

 

4.01         The Executive agrees to be bound by the terms of the
confidentiality agreement (the “Confidentiality Agreement”) dated the date
hereof, which Confidentiality Agreement has been read, understood and executed
by the Executive, is attached hereto as Schedule A, and is incorporated by
reference into this Agreement.  In the event of a conflict between the terms of
this Agreement and the terms of the Confidentiality Agreement, the terms of this
Agreement shall govern.

 

NON-COMPETITION

 

4.02         The Executive acknowledges that the Corporation currently conducts
business activities in North America and Barbados (the “Territory”).  The
Executive further acknowledges that, in the future, the business activities are
expected to substantially expand territorially.  Accordingly, the Executive
hereby agrees and covenants that he shall not during the Employment Term and for
a period of one (1) year following the Executive’s Termination Date for
involuntary termination by the Corporation for Cause, voluntary termination by
the Executive, or termination following a Change in Control, directly or in any
manner whatsoever, including without limitation, either individually, in
partnership, jointly or in conjunction with any other individual, partnership,
corporation, unincorporated organization, trust, joint venture, the Crown or any
agency or instrumentality thereof of any juridical entity, in the Territory
(excluding, as applicable, any portions of the Territory in which the
Corporation is no longer carrying on business at the relevant time) or in any
other regions or countries where the Corporation may be carrying on business at
the relevant time:

 

(a)                                  carry on, be engaged in, take part in or be
a party to any Competitive Activity, directly or indirectly; or

 

(b)                                 consult, advise, render services to, lend
money to, guarantee the debts or obligations of or permit the use of his name or
any part thereof for any Competitive Activity.

 

For the purposes of this Section 4.02, a Competitive Activity shall be defined
as that part, division or unit of any business: (i) that competes with or plans
to actively compete with the business activities of the Corporation through, but
not limited to, the formulation, clinical testing, registration, manufacturing
or marketing of specialty pharmaceuticals and/or drug delivery technologies in
the therapeutic categories on which the Corporation is focused, which include
central nervous system disorders, pain

 

9

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

 

management, cardiovascular disease, type II diabetes, and any other category in
which the Corporation is focused in the future and excludes areas in which the
Corporation is not actively engaged at the relevant time, (ii) with which the
Corporation has a product(s) licensing agreement, (iii) in which the Corporation
has a minority equity interest, or (iv) with which the Corporation is at the
time actively negotiating a commercial relationship. For greater certainty, any
specific and separate part, division or unit of any business that is not as
described above in this paragraph shall not constitute a Competitive Activity
for the purposes of this non-competition covenant.

 

During the continuance of his employment, the Executive shall not (other than
solely as a holder of not more than three per cent (3%) of the issued and
outstanding voting shares of any public corporation or as a shareholder of the
Corporation) without the written approval of the board of directors of the
Corporation, directly or indirectly, either individually or in partnership or in
conjunction with any person, firm, association, syndicate, company or
corporation as principal, agent, director, manager, servant, shareholder or in
any other manner whatsoever) carry on or be engaged in or be concerned with or
interested in any business or vocation whatsoever which would be reasonably
judged to be a Competitive Activity or would impede the Executive in performing
his duties as outlined herein.

 

The Executive may at any time, or from time to time, request the Corporation to
advise the Executive in writing whether or not the Corporation considers a
specified business to be a Competitive Activity.  Any such request shall be made
by written notice to the Corporation that includes:  (i) the name of the
specific business unit for which the Executive proposes to provide services;
(ii) the name or names of any parent companies of such business unit; (iii) a
description of the specific services which the Executive proposes to perform for
such business unit; (iv) a statement as to why the Executive believes that the
performance of such services will not adversely affect the Corporation’s
legitimate interests.

 

NON-SOLICITATION

 

4.03         The Executive hereby covenants and agrees that the Executive shall
not, during the Employment Term and for a period of twelve (12) months
thereafter, solicit or contact, either directly or indirectly, any of the
Customers, Prospective Customers or any suppliers of the pharmaceutical
compounds used by the Corporation on the Executive’s own behalf, or on behalf of
any entity, by which the Executive is hired or retained where such solicitation
or contact has the purpose, intent or effect of inducing or attempting to induce
any of the Customers, Prospective Customers or suppliers of the pharmaceutical
compounds used by the Corporation to cease to deal or to decline to deal with
the Corporation, to alter the products or quantities of products acquired from
or supplied to the Corporation, or to alter the terms on which any of them deal
with the Corporation. “Customers” means customers of the Corporation with which
the Executive had personal contact or had supervision over the efforts of those
who had direct personal contact with such customers during the last two
(2) years of the

 

10

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

 

Employment Term.  “Prospective Customer” means any organizations or entities
with which the Executive had contact, and which had been actively contacted and
solicited for their business by representatives of the Corporation, both during
the last two (2) years of the Employment Term.

 

Non-Hiring

 

4.04         The Executive hereby covenants and agrees that the Executive shall
not, during the Employment Term and for a period of twelve (12) months
thereafter, either directly or indirectly, solicit or endeavour to solicit any
of the Corporation’s employees with the purpose, intent or effect of having such
employees cease their employment with the Corporation, and shall not for a
period twelve (12) months from the end of the term of this Agreement hire or
assist in the hiring of any of the Corporation’s employees on the Executive’s
own behalf or on behalf of any entity by which the Executive is hired or
retained or with which he is associated in any other manner.  Notwithstanding
the foregoing, the Executive shall not be considered in breach of this section
should the Executive solicit for hiring such Executive’s administrative
assistant.

 

Injunctive Relief

 

4.05         The Executive acknowledges and agrees that the agreements and
covenants in this Article Four are essential to protect the business and
goodwill of the Corporation and that a breach by the Executive of the covenants
in Sections 4.01, 4.02, 4.03 and 4.04 hereof could result in irreparable harm to
the Corporation for which the Corporation could not be adequately compensated in
damages and that, accordingly, the Corporation may have no adequate remedy at
law if the Executive breaches such provisions.  Consequently, if the Executive
breaches any of such provisions, the Corporation shall have, in addition to and
not in lieu of, any other rights and remedies available to it under any law or
in equity, the right to obtain injunctive relief to restrain any breach or
threatened breach thereof and to have such provisions specifically enforced by
any court of competent jurisdiction.

 

SEVERABILITY OF COVENANTS IN FULL OR IN PART

 

4.06         The parties acknowledge that the provisions of Article Four hereof
(the “Restrictive Covenants”) are reasonable in geographic and temporal scope
and in all other respects.  If any court of competent jurisdiction determines
that any of the Restrictive Covenants or any part thereof, is or are invalid or
unenforceable, the Executive and the Corporation agree that the remainder of the
Restrictive Covenants shall not be affected by the deemed invalid portions.

 

ASSIGNMENT OF IP

 

4.07         The Executive shall disclose to the Corporation any and all
Intellectual Property (as defined in the Confidentiality Agreement) which the
Executive may make solely, jointly, or in common with other employees during the
term of the Executive’s employment within the Corporation and which relates to
the business.  Any Intellectual Property coming within the scope of the business
made and/or developed by the

 

11

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

 

Executive while in the employ of the Corporation, whether or not conceived or
made during regular working hours, and whether or not the Executive is
specifically instructed to make or develop same, shall be for the benefit of the
Corporation and shall be regarded as work made in the course of employment for
the purposes of the Copyright Act (Canada).  The Executive assigns, sets over
and transfers to the Corporation the Executive’s entire right, title and
interest in and to any and all of the Intellectual Property and to all letters
patent and applications for letters patent which may be, or may have been filed
and/or issued by or to the Executive or on the Executive’s behalf and the
Executive agrees to execute and deliver to the Corporation any and all
instruments necessary or desirable to accomplish the foregoing and, in addition,
to do all lawful acts which may be necessary or desirable to assist the
Corporation to obtain and enforce protection of the Intellectual Property,
without the requirement for additional compensation.  To the extent of any
rights the Executive may have with respect to the Intellectual Property which
are not assignable, including but not limited to moral rights, the Executive
hereby waives same.  The Executive will execute and deliver to the Corporation
or its successors and assigns, including after the Employment Term, such other
and further assignments, instruments and documents as the Corporation from time
to time reasonably may request for the purpose of establishing, evidencing, and
enforcing or defending its complete, exclusive, perpetual, and world-wide
ownership of all rights, titles, and copyrights, in and to the Intellectual
Property, without the requirement for additional compensation. The Executive
constitutes and appoints the Corporation as agent and attorney-in-fact, with
full power of substitution, to execute and deliver such assignments,
instruments, documents as the Executive may fail to or refuse to execute and
deliver, this power and agency being coupled with an interest and being
irrevocable.

 

STANDARDS OF BUSINESS CONDUCT

 

4.08         The Executive acknowledges and agrees that the Executive has read
and understood and agrees to be bound by Biovail’s Standards of Business
Conduct, which is attached hereto as Schedule B.

 

NO CONFLICTING OBLIGATIONS

 

4.09         The Executive warrants to the Corporation that:

 

(a)           the performance of the Executive’s duties as an employee of the
Corporation will not breach any agreement or other obligation to keep
confidential the Confidential Information of any third party; and

 

(b)           the Executive is not bound by any agreement with or obligation to
any third party that conflicts or interferes with the Executive’s obligations as
an employee of the Corporation.

 

12

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

 

ARTICLE FIVE - INTERPRETATION AND ENFORCEMENT

 

INDEPENDENT LEGAL ADVICE

 

5.01         The Executive has had the opportunity to receive independent legal
advice regarding this Agreement (for which the Executive has been reimbursed by
the Corporation), and the Executive agrees to the terms and conditions of this
Agreement.

 

SEVERABILITY

 

5.02         The parties further acknowledge that if any provision contained in
this Agreement is determined to be invalid or unenforceable in whole or in part,
such invalidity or unenforceability shall attach only to such provision or part
thereof and the remaining part of such provision and all other provisions hereof
shall continue in full force and effect.

 

SECTIONS AND HEADINGS

 

5.03         The division of this Agreement into Articles and Sections and the
insertion of headings are for the convenience of reference only and shall not
affect the construction or interpretation of this Agreement.

 

NUMBER AND GENDER

 

5.04         In this Agreement words importing the singular number only shall
include the plural and vice versa and words importing the masculine gender shall
include the feminine and neuter genders and vice versa.

 

ENTIRE AGREEMENT

 

5.05         This Agreement and all the Schedules hereto constitute the entire
Agreement between the parties with respect to the subject matters hereof and
cancel and supersede any prior understandings and agreements between the parties
with respect thereto (including, but not limited to, the Executive’s employment
agreement dated June 16, 2008 and any agreement involving an entity for whom the
Executive provides or has provided consulting services).  There are no
representations, warranties, forms, conditions, undertakings or collateral
agreements, express or implied, between the parties other than as expressly set
forth in this Agreement.

 

AMENDMENTS AND WAIVERS

 

5.06         No amendment to this Agreement shall be valid or binding unless set
forth in writing and duly executed by both parties.  No waiver of any breach of
any term or provision of this Agreement shall be effective or binding unless
made in writing and signed by the party purporting to give the same and, unless
otherwise provided in written waiver, shall be limited to the specific breach
waived.

 

13

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

 

GOVERNING LAW

 

5.07         This Agreement shall be deemed to have been made in and shall be
construed in accordance with the laws of Barbados and all legal proceedings
contemplated in this Agreement shall be brought in, and be governed by, the laws
of Barbados, without regard to principles of conflicts of law.

 

NOTICES

 

5.08         Any demand, notice or other communication (hereinafter in this
Section 5.09 referred to as a “Communication”) to be made or given in connection
with this Agreement shall be made or given in writing and may be made or given
by personal delivery addressed respectively to the recipients:

 

To the Executive:

 

Michel Chouinard

 

To the Corporation:

 

Biovail Laboratories International, SRL

Welches  Christ Church

Barbados, WI 17154

Attn: President

 

or such other address or individual as may be designated by notice by either
party to the other.  Any communication made or given by personal delivery shall
be conclusively deemed to have been given on the day of the actual delivery
thereof.

 

BENEFIT OF AGREEMENT

 

5.09         This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, legal personal
representatives, successors and assigns.

 

ASSIGNMENT

 

5.10         The Executive may not assign the Executive’s rights or obligations
under this Agreement without the prior written consent of the Corporation which
consent may be unreasonably withheld.  The Corporation may unilaterally assign
this agreement to an affiliate without consent but on notice to the Executive.

 

14

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

 

EXECUTION OF AGREEMENT

 

5.11         The Executive acknowledges that the Executive has executed this
Agreement freely; that the Executive has reviewed this Agreement thoroughly;
that the Executive agrees with its contents; and that the terms herein are
reasonable for the fair protection of both the Executive and the Corporation.

 

[SIGNATURE PAGE FOLLOWS]

 

15

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

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
identified below at St. Michael, Barbados.

 

BIOVAIL LABORATORIES

EXECUTIVE

INTERNATIONAL SRL

 

 

 

 

 

 

 

 

 

By:

/s/ WILLIAM WELLS

 

/s/ MICHEL CHOUINARD

Name:

WILLIAM WELLS

 

MICHEL CHOUINARD

Title:

President

 

 

 

 

 

 

 

 

 

 

Date:

February 24, 2010

 

Date: February 24, 2010

 

16

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

 

SCHEDULE A

 

CONFIDENTIALITY AGREEMENT

 

“SCHEDULE A”

 

BIOVAIL CORPORATION

 

(and its Subsidiaries, Divisions, and Affiliates)

 

CONFIDENTIALITY AGREEMENT

 

As an employee of Biovail Corporation (the “Corporation”), I acknowledge that I
may acquire or have disclosed to me by the Corporation or by any affiliate,
associate, or technology partner of the Corporation, either directly or
indirectly, in writing, conversation, or through observation, various
information about the business of the Corporation which is not in the public
domain and which the Corporation does not wish to be divulged to other persons,
companies, or third parties.  I further understand that the Corporation’s
Confidential Information (as defined below) is essential to its competitive
advantage and to its ability to be financially viable.  I further understand
that the unauthorized disclosure of such Confidential Information may cause the
Corporation irreparable injury that may not be rectified in the future.

 

Therefore, as a condition and in consideration of my employment with the
Corporation, I understand and agree that while employed with the Corporation and
for a period of time thereafter (as more particularly described below), I am
required to hold confidential and not to disclose to anyone without the written
authority from the Corporation any knowledge, information, or facts concerning
the Corporation’s:

 

·                  research and development activities

·                  technological plans, advances, applications and inventions

·                  technical specifications, designs and plans

·                  materials and sources of supply

·                  discoveries, inventions, trade secrets, patents

·                  financial affairs, contracts, licensing agreements, customer
lists, pricing practices, marketing strategies

 

·                  any other information regarding the Corporation, its products
and their development which is not in the public domain

 

17

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

 

All of the foregoing shall hereinafter collectively be referred to as the
“Confidential Information”.

 

For a period commencing on the date I commenced my employment with the
Corporation and ending ten (10) years from the date of the termination of my
employment with the Corporation, I shall keep confidential any and all
Confidential Information which has been disclosed to me in writing or through
oral communications and shall not divulge in any manner whatsoever any such
information to any person, firm, corporation, partnership or similar entities
without the Corporation’s written authority.

 

Should I breach or threaten to breach this Agreement, I shall be liable to the
Corporation in equity and/or in law for damages that may be suffered by the
Corporation as a result of the breach or threatened breach.  I understand that a
breach of this Agreement may result in irreparable harm to the Corporation such
as to warrant the entitlement by the Corporation to an interlocutory and/or
permanent injunction or other equitable relief against me, and an award of
damages including punitive, exemplary and aggravated damages, together with
legal costs and expense and I specifically agree that I will not argue the
adequacy of damages or the Corporation’s ability to seek equitable relief in any
such proceeding.

 

All Confidential Information supplied by the Corporation to me during the course
of my employment and any rights related thereto, including but not limited to
rights of know how, patent, trademark and copyright, with respect to existing
products or those that are developed during or after my employment, are and
remain the exclusive and absolute property of the Corporation.

 

I shall not, except as and to the extent required to enable me to carry out my
duties with the Corporation, make any copies or reproduce the Confidential
Information nor shall I remove or cause to have removed from the premises of the
Corporation during my employment any Confidential Information unless required to
do so in order to fulfill my duties with the Corporation.  Such copies or
reproductions shall be strictly subject to the terms and conditions of this
Agreement.  I shall take such steps as are necessary to restrict access to and
protect the confidentiality of such copies or reproductions of the Confidential
Information. Any such copies or reproductions made shall become the exclusive
and absolute property of the Corporation.

 

Upon request of the Corporation, I agree to immediately surrender to the
Corporation all documentation and information - notes, drawings, recordings,
manuals, letters, correspondence,

 

18

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

 

computer data and programs, records, books or any other materials relating to
the Confidential Information which is in my possession without my retaining any
copies or duplicates thereof.

 

I agree that this Agreement shall be construed in accordance with the laws of
the Province of Ontario and I agree that the applicable courts of the Province
of Ontario shall have exclusive jurisdiction with respect to any dispute or
breach herein and I hereby attorn to the exclusive jurisdiction of the courts of
the Province of Ontario.

 

This Agreement shall enure to the benefit of and shall be binding upon my
successors, heirs and attorneys.

 

The disclosure or divulging of any Confidential Information contrary to this
Agreement, or the violation of this Agreement in any way shall result in my
immediate termination of employment, in addition to which I may be subject to
criminal prosecution and civil liability.

 

19

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

 

I acknowledge and agree that I have executed this Agreement freely and with the
benefit of independent legal advice and the terms herein are fair and
reasonable.

 

 

I acknowledge and agree to the foregoing.

 

 

Employee Signature:

 

 

Date:

 

 

 

Witness Signature:

 

 

Date:

 

 

20

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

 

SCHEDULE B

 

STANDARDS OF BUSINESS CONDUCT

 

[See Standards of Business Conduct posted on http://www.biovail.com]

 

21

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