AFFILIATES OR WHICH ARE UNDER DEVELOPMENT BY, OR WHICH OTHERWISE PERTAIN TO THE
BUSINESS OF, THE COMPANY, PSI OR THEIR AFFILIATES.
HOWEVER, "INVENTIONS" SHALL
NOT INCLUDE ANY INVENTIONS, DEVELOPMENTS, IMPROVEMENTS, OR COPYRIGHTABLE WORK
(I) FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY, OR TRADE SECRET INFORMATION OF
THE COMPANY, PSI OR THEIR AFFILIATES WERE USED, (II) WHICH THE EXECUTIVE
DEVELOPED ENTIRELY ON THE EXECUTIVE'S OWN TIME (III) WHICH DOES NOT RELATE
DIRECTLY TO THE BUSINESS OF THE COMPANY, PSI OR THEIR AFFILIATES OR TO THEIR
ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR (IV) WHICH DOES
NOT RESULT FROM ANY WORK PERFORMED BY THE EXECUTIVE FOR THE COMPANY, PSI OR
THEIR AFFILIATES.
THE EXECUTIVE REPRESENTS THAT HE HAS PROVIDED PSI, ON OR
PRIOR TO THE DATE HEREOF, A COMPLETE WRITTEN DESCRIPTION OF ALL UNPATENTED
INVENTIONS AND IMPROVEMENTS IN WHICH THE EXECUTIVE HAS ANY RIGHTS THAT ARE NOT
INCLUDED IN THE TERM "INVENTIONS", IN A FORM ACKNOWLEDGED IN WRITING BY THE
CHIEF EXECUTIVE OFFICER OF PSI.
SECTION
9.
COVENANT NOT TO COMPETE.
A.
NONCOMPETITION.
THE EXECUTIVE HEREBY AGREES THAT DURING THE
"NONCOMPETITION PERIOD" (AS HEREINAFTER DEFINED), HE WILL NOT, EXCEPT AS
OTHERWISE PERMITTED UNDER THIS AGREEMENT, DIRECTLY OR INDIRECTLY (WHETHER AS AN
EMPLOYEE, CONSULTANT, SHAREHOLDER OR DIRECTOR, OR WHETHER ACTING ALONE OR
THROUGH ANY OF HIS AFFILIATES, AS A MEMBER OF A PARTNERSHIP OR A JOINT VENTURE
OR AN INVESTOR IN, OR A HOLDER OF SECURITIES OF, ANY CORPORATION OR OTHER
ENTITY, OR OTHERWISE), ENGAGE IN ANY BUSINESS CONDUCTED BY THE COMPANY, PSI OR
ITS AFFILIATES IN THE AREA OF PARTICLE IMPACT DRILLING (THE "NONCOMPETITION
AREA").
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION 9, THE
EXECUTIVE MAY PASSIVELY INVEST HIS ASSETS IN SUCH A FORM OR MANNER AS WILL NOT
CONFLICT WITH THE TERMS OF THIS AGREEMENT AND WILL NOT REQUIRE SERVICES ON THE
PART OF THE EXECUTIVE IN THE OPERATION OF THE BUSINESS OF THE COMPANIES OR OTHER
ENTERPRISES IN WHICH SUCH INVESTMENTS ARE MADE.
THE EXECUTIVE ACKNOWLEDGES THAT
(I) THE PROVISIONS SET FORTH IN THIS SECTION 9 ARE FOR THE BENEFIT OF THE
COMPANY, PSI AND ITS AFFILIATES, (II) HIS AGREEMENT TO SUCH PROVISIONS IS AN
EXPRESS CONDITION TO HIS EMPLOYMENT BY THE COMPANY AND (III) SUCH PROVISIONS ARE
REASONABLY NECESSARY TO PROTECT THE GOODWILL AND OTHER BUSINESS INTERESTS OF THE
COMPANY, PSI AND ITS AFFILIATES.
THE "NONCOMPETITION PERIOD" SHALL BE THE
PERIOD COMMENCING ON THE EFFECTIVE DATE AND ENDING ON THE SECOND ANNIVERSARY OF
THE DATE OF TERMINATION OF THE EXECUTIVE'S EMPLOYMENT.
B.
REFORMATION OF SCOPE.
IF ANY OF THE PROVISIONS OF THIS SECTION 9
IS FOUND TO BE UNREASONABLY BROAD, OPPRESSIVE OR UNENFORCEABLE IN AN ACTION,
SUIT OR PROCEEDING BEFORE ANY FEDERAL OR STATE COURT, SUCH COURT (I) SHALL
NARROW THE NONCOMPETITION PERIOD OR THE NONCOMPETITION AREA OR SHALL OTHERWISE
ENDEAVOR TO REFORM THE SCOPE OF SUCH AGREEMENTS IN ORDER TO ENSURE THAT THE
APPLICATION THEREOF IS NOT UNREASONABLY BROAD, OPPRESSIVE OR UNENFORCEABLE AND
(II) TO THE FULLEST EXTENT PERMITTED BY LAW, SHALL ENFORCE SUCH AGREEMENTS AS