BEFORE TERMINATION OF
THE EXECUTIVE'S EMPLOYMENT, ARE MANUFACTURED, SOLD, LEASED, OR USED BY THE
COMPANY, PSI OR THEIR 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