EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of
the
9th
day of
May 2006, by and between The WAAT Corp., a stock corporation with offices
at 14242 Ventura Blvd, 3rd
Floor,
Sherman Oaks, CA 91423 USA (“WAAT”), Charismatix,
a German limited liability company with offices
at
Lohbachstraße
12, 58239 Schwerte
(the “Company”), and Mr. Eugen Barteska, residing at Senningsweg 8a,
58239
Schwerte,
(the “Executive”; WAAT, the Company and Executive collectively the “Parties”
and
each
a “Party”).
WHEREAS,
the
Company has offered and desires to employ Executive upon the terms
and
conditions set forth herein; and
WHEREAS,
Executive desires to accept such employment by the Company upon the terms
and
conditions set forth herein.
NOW, THEREFORE,
in
consideration of the premises and the mutual covenants and
obligations
undertaken herein, the Parties hereto agree as follows:
1. Employment
The
Company hereby employs Executive and Executive
hereby accepts such employment,
subject to the terms and conditions herein set forth. Executive
shall hold the office
of
Vice President of the Company reporting to the Chief Executive Officer
of the Company.
2. Term
and Termination
(a)
This
Agreement shall commence on May 9, 2006 (the “Employment Date”)
and
is
entered into for an initial period of four (4) years.
(b)
The
Executive is entitled to terminate this Agreement after the expiry of
the
first year under this Agreement by giving three months notice per the end
of a
calendar month.
(c)
Unless
one Party terminates the Agreement three months prior to the expiration of
the
initial period or the subsequent periods as
per
this
subsection, the term of this
Agreement shall be automatically extended for further one-year periods, subject
however to
subsection (b) above.
(d)
Either
Party may terminate the employment for Cause (aus
wichtigem Grund)
without
a
notice period. Notwithstanding German law, for the purposes hereof, the
term
“Cause” shall in particular, but not limited thereto, mean: (i)
Executive's repeated failure
or refusal to perform his duties or Executive's material breach of. this
Agreement where
such conduct or breach shall not have ceased within fifteen (15) days following
written warning
from the Company; (ii) Executive's performance of any act or his failure
to act,
for
which
if
Executive were prosecuted and convicted, would constitute a
crime
or offense involving
money or other property of the Company or its subsidiaries or other affiliates,
or
a
felony
in
the jurisdiction involved; (iii) any attempt by Executive to secure any personal
profit
in
connection with the business of the Company or any of its subsidiaries
or
other
affiliates, except where Executive can demonstrate that there is no
misappropriation of
any
corporate
opportunity; (iv) Executive's engagement in a fraudulent act which could
cause
damage
or
prejudice to the Company or its subsidiaries or other affiliates or in conduct
or
activities
which could be materially damaging to the property, business
or reputation of Company
or its subsidiaries or other affiliates, all as reasonably determined by
the
Board of
Directors;
(v) any act or omission by Executive involving willful
misconduct
or gross negligence
in the performance of Executive's duties to the material detriment of the
Company or
its
subsidiaries or other affiliates; (vi) the entry of an order of a court that
remains in effect and is not discharged for a period of at least sixty (60)
days, which enjoins or otherwise limits or
restricts the performance by Executive under this Agreement, relating to
any
contract, agreement
or
commitment
made by or applicable to Executive in favor of any former
employer
or any other person; (vii) the engaging by Executive in any business other
than
the business
of the Company and its subsidiaries or other affiliates which interferes
with
the. performance
of his material duties hereunder; (viii) any breach by Executive of
his
non-compete,
non-disclosure and/or non-solicitation obligations pursuant to this Agreement;
or (ix)
any
false representation made by Executive in connection
with the employment contemplated
hereunder. Upon termination of Executive's employment for cause, Executive
shall
not
be entitled to any amounts or benefits hereunder other than such
portion of Executive's
annual salary pursuant to Section 3(a) hereof, and reimbursement of expenses
pursuant
to Section 4 hereof as has been accrued through the effective date of his
termination of
employment.
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Employment
Agreement Eugen
Barteska
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Execution
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(e) Notice
of
termination must be given in writing.
3.
Compensation
(a)
Salary As
compensation for the employment services to be rendered by
Executive hereunder, including all services as
an
officer of the Company and any of its subsidiaries
or other affiliates, the Company agrees to pay, or cause to be paid, to
Executive, and
Executive agrees to accept, an annual gross salary of EUR 125,000 (the “Base
Salary”), payable
in arrears in twelve (12) monthly instalments at the end of each calendar
month.
Executive's
compensation hereunder shall be increased annually at a rate of three (3)
per
cent. For
the
period from February 1, 2006 until the date of this Agreement, the Executive
shall
receive
an amount of EUR 33,940, less the amount of any withdrawal during such
period.
(b)
Bonus At
the
sole discretion.
of the
Company, Executive shall further be
entitled to receive an annual bonus of up to 25% of his Base Salary (the
“Bonus”). The
actual
amount
of
the Bonus, if any, shall be determined by the board of directors of
WAAT.
(c)
Stock
Options On
the
Effective Date, Executive will receive two hundred
thirty seven thousand nine hundred and fourty-six (237,946), options (the
“Options”) in
accordance with The WAAT Corporation 2006. Stock
Incentive Plan (the “Plan”). The Options
can be exercised for shares of voting common stock in
WAAT
at
an exercise price equal
to
US$0.35 per share. These Options vest on a linear basis during a four year
period starting
from the Employment Date as
follows:
(i) upon completion of the first year of employment,
59,486 shares shall
vest;
(ii) thereafter, 14,871 shares shall vest at the completion
of each quarter with an additional 8 shares vesting at the completion
of
the
last quarter
of the fourth year of employment. All Options will vest upon the occurrence
of
a
Change
of
Control in WAAT as defined in Section 10.2 of the Plan, in case of an Initial
Public
Offering of WAAT and upon termination of this Agreement by the Company other
than for Cause. “Initial Public Offering”
shall
mean the closing of a firm commitment underwritten
public offering of WAAT's Common Stock resulting in gross proceeds (before
underwriting
discounts and commissions, if any) to WAAT of at least US$15.0
million.
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Agreement Eugen
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(d) Benefit
Plans Executive
shall be entitled to participate in all benefit plans
for
which Executive qualifies that are generally available to other employees
of
WAAT under
WAAT’s
general employee policies. WAAT reserves the right to amend the general
employee
policies from time to time.
(e)
No
extra overtime work compensation By
payment of the above-mentioned total remuneration all activities which
Executive must perform under this Agreement
shall be deemed compensated. In particular, Executive shall not be entitled
to
any additional
compensation for overtime work.
4. Expenses
The Company shall pay or
reimburse
Executive, upon presentment of suitable receipts and
within the applicable German tax regulations, for all reasonable business
and
travel expenses
which are incurred or paid by Executive in connection with
his
employment,hereunder,
provided that such expenses are approved in advance by the Company, Executive
shall keep
such
records as the Company may deem necessary to meet the requirements of the
German
tax law.
5. Vacation,
Direct Insurance and Other Benefits
(a)
Executive
shall be entitled to thirty (30) days of paid vacation per year. Saturdays
are not considered working days. The
time
of vacation shall duly be agreed between
the Company and the Executive, taking into consideration
both the business requirements
of the Company and the personal wishes of the Executive. The
total
vacation has
to be
taken in the given calendar year. In case the vacation cannot be taken due
to
special personal
or business-related reasons, the vacation may be carried over until 31
March
of
the following
calendar year. If the vacation is not taken by that date the vacation
entitlement
lapses.
(b)
The
Company shall provide Executive social benefits, including payment
of medical health insurance contributions, in
accordance with German social security law.
6. Duties
and Services
(a)
Executive
shall perform such reasonable duties and functions as the Chief
Executive Officer shall from time to time determine and Executive shall comply
in the performance
of his duties with the policies of, and be subject to the direction of, the
Chief
Executive
Officer of the Company.
(b)
Executive
shall be obliged to procure business for the Company in Germany,
cooperate in the conclusion and completion of contracts and use
his
best
efforts to support
the Company in all its business activities.
(c)
During
the term of this Agreement, Executive shall devote all of his working time
and
attention, the specified vacation time and absences for sickness excepted,
to
the
business of the Company, as necessary to properly fulfill his duties.
Executive
shall perform
the duties assigned to him with fidelity and to the best of his ability.
All other activities
for remuneration as well as
activities,
which normally entitle him to remuneration, including
any part-time work or self-employed work, are prohibited unless the Company
has
explicitly
given its prior written consent. The Company will grant such consent if business
requirements are not affected by the activities. Notwithstanding anything
herein to the contrary,
Executive may engage in other non-employment activities so long as such
activities do
not
unreasonably interfere with Executive's performance of his duties hereunder
and
do
not
violate Section 9 hereof.
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Employment
Agreement Eugen
Barteska
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(d)
Nothing
in this Agreement shall be construed to prevent Executive from
investing or trading in non-conflicting investments as he sees fit for his
own
account,
including
real estate, stocks, bonds, securities, commodities or other forms of
investments.
(e)
The
principal location at which Executive shall perform his duties hereunder
shall be the location of the Company, or at such other location as may be
mutually agreed
upon between the Parties.
7. Inability
to Perform Duties
(a) Executive
is obliged to inform the Company without delay of any inability to perform
his
duties and the expected duration. Upon request, he shall inform
the Company
of the reasons for such absence.
(b)
In
case
of sickness lasting longer than three (3) calendar days, Executive is obliged
to
submit a medical certificate on
his
incapacity to work and its prospective
duration not later than on the following working day. The
Company is entitled to demand
an
earlier submission of
the
medical certificate. If his absence continues longer than indicated
in the medical certificate, Executive is obliged to submit a new
medical certificate
within three (3) days after the end of the period certified. Also
in
this
case, Executive is obliged
to inform the Company immediately of the continuation of the indicted absence.
The
notification may be given by telephone call.
(c)
In
the
event of sickness or accident, the Company shall continue to pay the
monthly base salary pursuant to Section 3(a) for a period of six
weeks.
(d)
If
Executive has compensation claims against third parties due to the loss of
his
earnings, caused by the inability to work, he shall assign such claims to
the
Company
in the amount of the continued payment of salary. This shall
not
include any payments
pursuant to insurance agreements concluded by the Executive.
8. Representations
and Agreements of Executive
(a)
Executive represents and warrants that he is free to enter into. this
Agreement
and to perform the duties required hereunder, and that there are no
employmentcontracts
or understandings, restrictive covenants or other restrictions, whether
written or oral,
relating to or preventing the performance of his duties hereunder.
(b)
Executive
agrees to cooperate and supply such
information and documents
as may be reasonably required by any insurance company in connection with
any
type
of
insurance or fringe benefit as
the
Company shall determine from time to time to obtain.
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Agreement Eugen
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WAAT Corp. |
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9. Non
-
Competition
(a)
In
view
of the unique and valuable services expected to be rendered by Executive
to the Company, Executive's knowledge of the Company's trade secrets and
other
proprietary
information made available to Executive relating to the business and in
consideration
of the compensation to be received hereunder, Executive agrees that during
his
employment
(the “Contractual Non-Competition Period”) by the Company, and following the
termination of Executive's employment hereunder for a further period of twelve
(12) months
(the
“Post-Contractual Non-Competition Period”, together with the Contractual
Non-Competition
Period the “Non-Competition Period”). Executive
shall not, directly or indirectly, whether
as owner, partner, joint venturer, stockholder, employee, agent, principal,
corporate
officer,
director, licensor, or in any capacity whatsoever engage in, become financially
interested
in, be employed by, or render any consultation or business advice with respect
to
any
person, firm, corporation, business or
other
organization engaged in fields of development
and marketing of software, media design, multimedia entertainment as
well
as
services,
and in the business of an advertising agency in Germany, where, at the time
of
the termination
of his employment hereunder, the business of
the
Company or any of its subsidiaries
or other affiliates is being conducted, or is proposed to be conducted as
set
forth
in
the
Company's then current annual plan for operation within the Non-Competition
Period, in
any
manner whatsoever, provided, however, that Executive may passively own any
securities
of any corporation which is engaged in such business and is publicly owned
and
traded
on
a recognized national securities exchange but in an amount not to exceed
at any
one time
five
percent (5%) of any
class
of
stock or securities of such corporation.
(b)
In
addition, Executive shall not, directly or indirectly, during the
Non-Competition
Period, request or cause any suppliers or customers with whom the Company
or
any
of
its subsidiaries or other affiliates has a
business relationship to cancel, terminate or diminish
any such business relationship with the Company or any of its subsidiaries
or
other affiliates
or solicit, interfere with or entice from the Company any employee of the
Company or
any of
its subsidiaries or other affiliates.
(c)
The
obligations pursuant to Section 9(a) and (b)
shall
apply for Germany.
If the area in which the Company engaged in its business activities changes,
or
if the
area
in which Executive performed his work duties changes within the term
of
this
Agreement,
the obligations pursuant to Section 9(a) and (b) shall apply for the area
in
which the
Company engaged in its business activities at the time of
the
termination of this Agreement
and for the area in which Executive performed his work duties within the
past
two (2)
years.
(d)
During
the Post-Contractual Non-Competition Period the Company
shall
pay
Executive compensation in the amount of US$ 83,237.35 (the “Compensation”).
The
Compensation is
to
be. paid
as a
one-time lump-sum at the beginning of the Post-Contractual
Non-Competition Period. Executive will be entitled to the Compensation even
if
the
Company waives its rights under this non-competition covenant with respect
to
the Post-Contractual
Non-Competition Period. Any amounts, be it in
cash
or
in kind (including any benefits
received
from unemployment insurance) Executive will receive, earn in the course of
any
other
employment or engagement or would have earned had he not maliciously failed
to
pursue
other opportunities during the Post-Contractual Non-Competition Period shall
be
set-off
from
any further compensation which has to be paid pursuant to mandatory German
law,
if
any,
to the extent legally permissible. Executive shall, upon request by the
Company, provide
information with respect to the amount of his earnings and details of the
respective employer.
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Employment
Agreement Eugen
Barteska
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| The
WAAT Corp. |
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Execution
Copy -
May
9, 2006
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(e)
Executive
undertakes to pay a contractual penalty in the amount of EUR
10,000 for each case of breach of his obligation pursuant to Section 9(a)
and
(b). The
aforementioned
penalty shall be due for each additional month or portion thereof during
which
such violation persists. As long as Executive is in breach of his obligations
pursuant to Section
9(a) and (b),
the
Company shall not be obliged to pay to Executive the compensation set
forth
in Section 9(c).
The
Company reserves the right to claim further damages.
(f) Sections
74
et
seq.
of
the
German
Commercial
Code
(Handelsgesetzbuch)
shall apply
accordingly.
(g)
If
any
portion of the restrictions set forth in this Section 9 should, for any
reason whatsoever, be declared invalid by a court of competent jurisdiction,
the
validity or
enforceability of the remainder of such restrictions shall not thereby be
adversely affected.
10. Copyrights
Executive
hereby irrevocably assigns to the Company all exclusive rights
to
all
copyrightable
work products originating from or in connection with Executive's performance
of
duties
and tasks within and during his employment relationship with the Company.
The
Company. may
assign such rights and may publish the work products. The
assignment of rights and
exploitation of work products by the Company shall be deemed compensated
by
the
remuneration paid to Executive. Executive
hereby waives his right to be named as an author
of
the work products and his right to publish the work products.
11. Inventions
and Discoveries
Irrespective
of
the
German
Act
on
Employee's
Inventions
(Arbeitnehmererfindungsgesetz)
which shall remain
applicable,
Executive (i) shall fully
disclose
to the Company, and with all necessary detail for a complete understanding
of
the same,
all
developments, know-how, discoveries, inventions, improvements, concepts,
ideas,
writings, formulae, processes and methods (whether copyrightable, patentable
or
otherwise) made,
received, conceived, acquired or written during-working hours, or
otherwise, by Executive
during the period of his employment with, or rendering of advisory or consulting
services
to, the Company or any of its subsidiaries or other affiliates,
solely
or
jointly with others
in
or relating to any activities of the Company or its subsidiaries or other
affiliates known
to
him
as a
consequence of his employment or the rendering of advisory and
consulting
services hereunder (collectively, the “Subject Matter”), and (ii)
shall assign
and transfer,
and agrees to assign and transfer, to the Company, at the Company's expense,
all
his rights,
title and interest in and to the Subject Matter, and Executive further agrees
to
deliver
to
the
Company any and all drawings, notes, specifications and data relating to
the
Subject Matter,
and to execute, acknowledge and deliver
all such further papers, including applications
for copyrights or patents, as may
be
necessary to obtain copyrights and patents for
any
thereof in any and all
countries
and to vest title thereto to the Company. Executive
shall assist the Company in
obtaining such
copyrights or patents during the term of this Agreement,
and
any
time
thereafter on reasonable notice and at mutually convenient times, and
Executive agrees to testify in any prosecution or litigation involving any
of
the Subject
Matter;
provided, however, that Executive shall be reasonably compensated for his
time
and reimbursed
for any out-of-pocket expenses incurred in rendering such assistance or giving
or
preparing
to give such testimony.
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Employment
Agreement Eugen
Barteska
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| The
WAAT Corp. |
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Execution
Copy -
May
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12.
Non
-
Disclosure of
Confidential
Information, Return
of
Working Material
(a)
Executive
shall not, during the term of this Agreement, or at
any
time
following
termination of this Agreement, directly or indirectly, disclose or permit
to be
known
(other than as is required in the
regular course of his duties (including without limitation
disclosures to the Company's advisors and consultants) or is required
by
law
(in which
case Executive shall give the Company prior written notice of
such
required disclosure)
or with the prior written consent of the Company), to
any
person, firm or corporation, any confidential information acquired by him
during
the course of,
or as
an incident
to, his employment or the rendering of his advisory or consulting services
hereunder, relating
to the Company or any of its subsidiaries or
other
affiliates, any client of the Company
or any of its subsidiaries or other affiliates,
or
any
corporation, partnership or other entity
owned or controlled, directly or indirectly, by any of the foregoing, or
in
which any of the foregoing has a beneficial interest, including, but not
limited
to, the business affairs of each of the foregoing. Such confidential information
shall include,
but shall not be limited to, proprietary
technology, trade secrets, patented processes, research and development
data, know-how,
financial statements and data, market studies and forecasts, competitive
analyses, pricing
policies, employee lists, personnel policies,
the substance of agreements with customers, suppliers and others, marketing
or dealership
arrangements, servicing and training programs
and arrangements, customer lists and any other documents
embodying such confidential
information. This confidentiality obligation shall not apply to
any
confidential information
which thereafter becomes publicly available other than pursuant to a
breach
of this
Section 12(a) by Executive.
(b)
All
information and documents
relating to the Company and its subsidiaries
or other affiliates as hereinabove described (or other business affairs)
shall
be
the
exclusive
property of the Company, and Executive shall use best efforts to
prevent any publication
or disclosure thereof. Upon
termination of Executive's employment with the Company,
all documents, records, reports, writings and other similar documents
containing
confidential
information, including copies thereof, then in Executive's possession
or
control shall
be
returned and left with the Company.
13.
Release
from Obligation to Work
(a)
If
one of the Parties has given notice of termination, the Company is entitled
to release Executive from his obligation
to
work at
any time until the
end
of the notice
period. Any open vacation claims
shall be
deemed to be compensated by such period of
release.
(b)
In
case
Executive receives remuneration due to another employment, service
or consultancy contract during the period
of
release, its amount shall be deducted from
the
salary he receives from the Company, except for the part of the period
of
release during
which Executive takes his remaining vacation.
(c)
Executive
has to inform the Company, without being asked, about any remuneration he
obtains apart from the salary he receives from the Company. This
duty
to inform
also includes the amount of the remuneration. If the Company so requires,
Executive has
to
prove this information by presenting auditable records.
(d)
At
any
time upon the request of the Company, and without solicitation after
notice of termination of
the
employment relationship, irrespective of the
Party
giving notice,
Executive shall return all working materials and other items belonging to
the
Company,
in particular business documents and copies thereof. Executive has no right
of
retention
and no damage compensation claims.
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Employment
Agreement Eugen
Barteska
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| The
WAAT Corp. |
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Execution
Copy -
May
9, 2006
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14.
Amendment
or Alteration
No
amendment or alteration of the terms of this Agreement shall be valid unless
made in
writing and signed by all of the Parties hereto.
15.
Governing
Law
This
Agreement shall be governed by, and be construed in accordance with, the
laws
of
the
Federal Republic of Germany.
16. Severability
In
the
case that
one
or more provisions of this Agreement shall be invalid, unenforceable
or impracticable, this shall not affect the validity and enforceability of
the
other
provisions of this Agreement. In such case the Parties agree to recognize
and
give effect to
such
valid, enforceable and practicable provision or provisions which reflect
as
closely as possible
the commercial intention of the Parties associated with the invalid or
unenforceable provision.
The same shall apply in the event that the Agreement contains any
omissions (VertragslÜcken).
17. Notices
Any
notices required or permitted to be given hereunder shall be sufficient if
in
writing,
and if delivered by hand or courier, or sent by certified mail, return receipt
requested, to
the
addresses set forth above or such other address as either Party may from
time to
time designate
in writing to the other, and shall be deemed given as of the date of the
delivery or at the
expiration of three days in the event of a mailing.
18. Data
Protection
(a)
Executive
consents to the collection, processing and use of personal data,
as
far as this is necessary for the performance of this Agreement.The data may
be
used only
for
the purpose of performing this Agreement and may be communicated only within
the
Company or its subsidiaries
or other affiliates. They can only be made accessible to those persons
who
are
competent to work on confident personal matters and who are bound to
secrecy.
(b) Within
the scope of the above- mentioned limits, Executive consents to the
transmission of these data within Germany as well as abroad.
19.
Waiver
or Breach
It
is
agreed that a waiver by either Party
of
a
breach of any provision of this Agreement
shall not operate, or be construed, as a waiver of any subsequent breach
by that
same
Party.
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Agreement Eugen
Barteska
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Execution
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20.
Entire
Agreement and Binding Effect
This
Agreement contains the entire agreement of the Parties with respect to the
subject
matter hereof, supersedes all prior agreements, both written and oral, between
the Parties
with respect to the subject matter hereof and may be modified only by a written
instrument
signed by each of the Parties hereto. This Agreement shall be binding upon
and
inure
to
the benefit of the Parties hereto and their respective legal representatives,
heirs, distributors,
successors and assigns, provided, however, that Executive shall not be entitled
to assign
or
delegate any of his rights or obligations hereunder without the prior written
consent of
the
Company.
21. Survival
Except
as
otherwise expressly provided herein, the termination of Executive's employment
hereunder or the expiration of this Agreement shall not affect the
enforceability of Sections 4, 9, 10, 11, 12 and 13 hereof.
22.
Further
Assurances
The
Parties agree to execute and deliver all such further documents, agreements
and
instrunents and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.
23.
Construction
of Agreement
No
provision of this Agreement or any related
document
shall
be
construed against or interpreted to the disadvantage of any Party hereto
by any
court
or
other
governmental or judicial authority by reason of such Party having or being
deemed to have structured or drafted such provision.
24.
Headings
The
Section headings appearing in this Agreement are for the purposes of easy
reference and shall not be considered a part of this Agreement or in any
way
modify, amend or affect its provisions.
25.
Counterparts
and Facsimile Signatures
This
Agreement may be.
signed
in counterparts with the same effect as if the signatures to each counterpart
were upon a single instrument, and all such counterparts together shall be
deemed an original to this Agreement. For the purposes of this Agreement,
a
facsimile copy of a Party's signature shall be sufficient to bind such
Party.
IN
WITNESS WHEREOF, the
Parties hereto have executed this Agreement as of the
date
and year first above written.
The
WAAT Corp.
By:
/s/ Ian Aaron
Name:
Ian
Aaron
Title:
Chief Executive Officer
Charismatix
Ltd. & Co. KG
By:
/s/ Ian Aaron
Name:
Title:
The
Executive:
By:
/s/Eugen Barteska
Eugen
Barteska