Document:

EMPLOYMENT
      AGREEMENT

     

    THIS
      EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of June 28, 2006 (the
“Effective Date”) between GREGORY A. FRASER (“Executive”), an individual
      residing in the State of Florida, and FARO TECHNOLOGIES, INC. (the “Company”), a
      Florida corporation having its principal place of business at 125 Technology
      Park, Lake Mary, FL 32746. 

     

     

    RECITALS

     

    WHEREAS,
      Executive is a co-founder of the Company and has served as a director and
      officer of the Company in various capacities for 24 years since the Company’s
      inception in 1982, during which time he assisted in building the Company from
      a
      start up to a public company with worldwide operations, and the Company has
      benefited from his many years of service;

     

    WHEREAS,
      Executive currently serves as an Executive Vice President of the Company and
      as
      a member of the Company’s Board of Directors with a term expiring at the
      Company’s 2008 annual shareholders meeting;

     

    WHEREAS,
      Executive has indicated his desire to retire from active management of the
      Company, and the Company wishes to accommodate Executive’s interest in
      retirement;

     

    WHEREAS,
      the
      Company and Executive believe it appropriate that the terms and conditions
      of
      his transition into retirement and are entering into this Agreement for that
      purpose; and

     

    NOW
      THEREFORE,
      in
      consideration of the covenants set forth herein, the parties agree as
      follows:

     

     

    OPERATIVE
      TERMS

     

    1. Transition
      duties; Retirement 

     

    A. Subject
      to the terms and conditions of this Agreement, from the Effective Date until
      December 29, 2006 (the “Term”), Executive will continue to be employed as a
      full-time employee of the Company holding the position of Executive Vice
      President and shall continue to receive his current base salary of $245,000
      per
      year (“Base Salary”),
      plus all
      the employee benefits provided to other Company executives, excluding
      participation in the Company’s bonus program, payable in accordance with the
      Company’s customary payroll practices for its executives; provided, however,
      that Executive’s employment may be terminated before the end of the Term by
      either party pursuant to Section 6 of this Agreement. 

     

    B. Unless
      there is an earlier termination of employment in accordance with this Agreement,
      Executive’s retirement shall be effective at the close of business on December
      29, 2006. Unless the Executive is terminated by the Company prior to December
      29, 2006 for any reason other than for “Cause” (as defined herein), the
      Executive will resign from the Board of Directors on the later to occur of
      (i)
      the termination of his employment with the Company or (ii) the close of business
      on December 29, 2006. Such resignation from the Board of Directors will be
      effective at such time without any further action by the Executive.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    C. In
      his
      capacity as an Executive Vice President, Executive shall report to the Company’s
      Co-Chief Executive Officers (the “Co-CEOs”) and shall have such
      responsibilities, duties, and authority assigned to him by the Co-CEOs, and
      shall have no other responsibilities, duties, or authority, implied or
      otherwise. Executive shall transition his investor relations responsibilities
      as
      directed and to the person or persons designated by the Board of Directors
      or
      the Co-CEOs.

     

    D. Executive
      has indicated his interest in consulting work following his retirement from
      the
      Company. As a courtesy, the Company will provide Executive with time to develop
      his post-retirement consulting opportunities, and expressly acknowledges that
      he
      may devote business time to such pursuit, notwithstanding his present full-time
      employment. Furthermore, as in the past, Executive is expressly authorized
      to
      engage in appropriate civic, charitable, religious and non-profit activities,
      so
      long as they do not interfere with or conflict with Company’s policies regarding
      such matters, and with the understanding that such activities must not preclude
      Executive from performing his transition duties under this
      Agreement.

     

     

    2. Reimbursement
      of Expenses

     

    During
      the Term, the Company shall reimburse Executive for all reasonable expenses
      incurred by him in the course of performing the duties assigned to him under
      this Agreement that are consistent with Company’s policies in effect from time
      to time with respect to travel, entertainment and other expenses, subject to
      the
      Company’s requirements with respect to reporting and documentation of such
      expenses. 

     

     

    3. Stock
      Options and Restricted Share Units (RSUs)

     

    As
      part
      of Executive’s compensation, the Company may issue to Executive stock options
      and/or RSUs, if any, in the sole and absolute discretion of the Company’s
      Compensation Committee and independent of Company policy and past
      practice.

     

     

    4. Benefit
      Programs

     

    Executive
      shall be entitled to participate in any benefit programs which the Company
      provides for its executive employees in accordance with Company policies and
      procedures. Such benefits may include health insurance, disability insurance,
      life insurance, cafeteria plans, pension and profit sharing plans, and other
      employee benefit plans as may be developed and designed from time to
      time.

     

    
      
        
        

      

      
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    5. Cooperation

     

    A. The
      Company is currently defending or involved in, and may in the future become
      involved or be required to defend additional, various claims, including civil
      actions, disputes with third parties, civil and criminal investigations,
      inquiries by federal and state law enforcement officials, inquiries by
      regulatory or self-regulatory organizations, about which Executive may have
      personal knowledge (collectively, “Claims”). It is possible that such Claims
      will concern matters relating to Executive’s employment, or his areas of
      responsibility at the Company. It is also possible that he may be named as
      a
      defendant in connection with Claims.

     

    B. Executive
      has cooperated with the Company in the past regarding the Claims. Executive,
      during and after the Term, shall: 

     

    
      	 	
              i.

            	
              continue
                to cooperate fully with the Company and with federal and state law
                enforcement or regulatory agencies and self-regulatory organizations
                with
                respect to the Claims, whether or not the Employee is named as a
                party
                therein; provided,
                however,
                that the Company shall (to the extent it can reasonably do so) (A)
                provide
                Executive reasonable notice relating to meetings and document requests
                and
                (B) schedule such meetings and document productions at a place which
                is
                mutually convenient.

            

    

     

    
      	
            	ii.	
              provide
                the Company with copies of all documents in his possession or control
                relating to the Claims (to the extent Executive has not already provided
                such documents to the Company).  

            

    

     

    C. Consistent
      with the Company’s Restated Certificate of Incorporation and By-laws (each as
      amended), the Company shall promptly reimburse the Employee for all reasonable
      legal fees (including such legal fees for counsel retained by Executive to
      assist and advise regarding his cooperative efforts if cooperation is requested
      by the Company in connection with Claims) and reasonable expenses incidental
      to
      such cooperation. The Company and Executive agree that he will not be
      compensated for the time that he spends at meetings, in travel to meetings,
      or
      in connection with the production of documents, or in connection with any other
      activities or tasks comprising a form of cooperation; provided, however, that
      in
      the event Executive is subpoenaed to give testimony by the Company, either
      at
      trial or deposition, he shall be paid such witness fees and travel expenses
      by
      the Company as are permitted under applicable law; provided, however, that
      the
      Company shall be relieved of its payment obligations under Section 5 of this
      Agreement in the event of a material breach by Executive of his Section 5
      cooperation obligations, where the Company gives Executive written notice of
      the
      breach and the circumstances of the breach, and Executive does not cure the
      breach within twenty (20) days following the notice. 

     

    D. As
      part
      of his duty of cooperation, Executive agrees to give the Company prompt notice
      if he is served with process as a defendant in a civil action relating in any
      way to his Company employment. Similarly, the Company agrees to give Executive
      prompt notice if it is served with process as a defendant in a civil action
      where Executive is also named as a defendant.

     

    E. Executive
      also agrees to cooperate with the Company in the event his assistance would
      be
      helpful with regard to litigation or disputes where the Company is asserting
      a
      claim itself against third parties. He will provide similar assistance with
      regard to such proceedings as he will offer in regard to Claims.

     

    
      
        
        

      

      
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    F. Generally,
      Executive and the Company agree to cooperate with each other, in good faith,
      with regard to legal proceedings involving Executive brought by or against
      private parties.

     

     

    6. Terminations
      before the end of the term

     

    A. Executive
      may resign his employment or his Board membership at any time prior to the
      end
      of the Term, for any reason at all, by giving written notice of resignation.
      

     

    B. Company
      may terminate Executive’s employment before the end of the Term for any reason
      at all, by giving written notice of termination.

     

    C. If
      the
      Company chooses to exercise its right to terminate Executive’s employment prior
      to the end of the Term, the Company shall continue to pay Executive his Base
      Salary through the end of the Term, and the Company will similarly pay all
      expenses associated with COBRA continuation of Executive’s group insurance
      through the end of the Term, and he shall otherwise receive benefits under
      Sections 1, 2, and 4 of this Agreement as if his employment had continued
      through the end of the Term (collectively, “Post-Termination Compensation”),
      unless his employment is terminated by the Company for Cause, in which case
      the
      Company shall have no obligation to pay Executive for any Post-Termination
      Compensation. The Company shall have “Cause” to terminate Executive’s
      employment, before the end of the Term, only upon the occurrence of the
      following events: (i) the conviction of Executive of a felony, or a misdemeanor
      involving moral turpitude; (ii) gross and willful misconduct by Executive that
      is demonstrably and materially injurious to the Company, whether monetarily
      or
      otherwise; or (iii) a material breach of this Agreement by Executive, which
      is
      not cured within twenty (20) days of written notice to Executive of the fact
      and
      circumstances of breach.

     

    D. If
      Executive chooses to exercise his right to resign his Company employment prior
      to the end of the Term, the Company shall have no obligation to continue to
      pay
      him any Post-Termination Compensation, unless he resigns for Good Reason. If
      Executive resigns his employment before the end of the Term for Good Reason,
      he
      will receive Post-Termination Compensation, just as if his employment was
      terminated by the Company without Cause. Executive shall have “Good Reason” to
      terminate his employment only in the event of a material breach of this
      Agreement by the Company, which is not cured within twenty (20) days of written
      notice to the Company of the fact and circumstances of breach.

     

    E. In
      the
      event of Executive’s death before the end of the Term, any right of Executive to
      compensation under Sections 1, 2, or 4 of this Agreement shall terminate as
      of
      the date of death, except to the extent it was already earned before his death.
      Similarly, in the event of any other termination of employment before the end
      of
      the Term, regardless of the reason for termination, Executive shall be paid
      all
      Base Salary earned prior to the date of termination, and all other benefits
      due
      him under Sections 1, 2, and 4 of this Agreement which were earned prior to
      the
      date of termination.

     

    
      
        
        

      

      
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    7. Return
      of Company Property 

     

    All
      records, designs, patents, business plans, financial statements, manuals,
      memoranda, lists and other property delivered to or compiled by Executive by
      or
      on behalf of the Company or their representatives, vendors or customers which
      pertain to the business of the Company shall be and remain the property of
      the
      Company and be subject at all times to its discretion and control. Likewise,
      all
      correspondence, reports, records, charts, advertising materials and other
      similar data pertaining to the business, activities or future plans of the
      Company which is collected by Executive shall be delivered promptly to the
      Company without request by it upon termination of Executive’s
      employment.

     

     

    8. Inventions
      

     

    All
      right, title, and interest, of every kind whatsoever, in the United States
      and
      throughout the world, in any copyrights, trademarks, and any ideas, designs,
      discoveries, inventions, and improvements with economic value, whether or not
      patentable or capable of copyright or trademark registration, created,
      developed, or conceived by Executive while associated with or employed or
      engaged by the Company that relate in any way to the business of the Company
      shall be the sole property of the Company. All works of authorship, such as
      writings, computer programs, and the like, whether or not copyrightable, that
      are authored or created by Executive while associated with or employed or
      engaged by the Company that relate in any way to the business of the Company
      or
      software generally shall be the sole property of the Company. Executive shall
      (i) execute all documents reasonably necessary as requested by the Company
      to
      create, enforce, or evidence the Company's right in the foregoing property,
      (ii)
      execute any other proper instruments or documents necessary or desirable in
      applying for and obtaining patents on such inventions and discoveries in the
      United States and foreign countries and registration of copyrights on such
      works
      of authorship in Canada and foreign countries, including renewal papers when
      appropriate; and (iii) cooperate in the prosecution or defense of any claims,
      lawsuits, or other proceedings involving such property. Executive hereby waives
      his right to enforce any moral or author’s right which Executive may have in
      such works of authorship. 

     

     

    9. Indemnification
      

     

    A. The
      Company’s Amended and Restated Articles of Incorporation and Bylaws (each as
      amended to date) require that the Company indemnify Executive, to the fullest
      extent permitted or required by the Florida Business Corporation Act (the
“FBCA”), against any and all liabilities, and advance any and all reasonable
      expenses, incurred thereby in any Proceeding (as defined in Section 607.0850
      of
      the FBCA) to which Executive is a party or in which Executive is deposed or
      called to testify as a witness because he is or was a director or executive
      officer of the Company. The Company’s Board of Directors previously adopted
      resolutions whereby the Company agreed to advance certain reasonable expenses
      incurred by Executive (each, an Advance”), including such expenses with respect
      to the purported securities class action complaint filed in United States
      District Court for the Middle District of Florida against the Company and
      certain other defendants (including Executive) (the “Lawsuit”) (including
      additional lawsuits filed with respect to the matters alleged by the Complaint
      and any consolidated class action complaint with respect to the Lawsuit or
      such
      lawsuits), in each instance upon receipt of an undertaking by Executive to
      repay
      such amount if he is ultimately found not to be entitled to indemnification
      by
      the Company pursuant to Section 607.0850 of the FBCA.

     

    
      
        
        

      

      
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    B. Consistent
      with its obligations described above under the Company’s Amended and Restated
      Articles of Incorporation and Bylaws (each as amended to date), the Company
      shall indemnify Executive and make Advances to Executive as set forth above.
      Executive hereby undertakes to repay to the Company all such Advances if
      Executive is ultimately found not to be entitled to indemnification by the
      Company pursuant to Section 607.0850 of the FBCA in connection with any of
      the
      matters described above.

     

     

    10. Arbitration

     

    Any
      controversy or claim arising out of or relating to this Agreement or to the
      breach thereof or Executive’s employment with the Company shall be settled
      exclusively by binding arbitration conducted in Orlando, Florida in accordance
      with the Employment Rules of the American Arbitration Association then in
      effect, by a single independent arbitrator selected mutually by the Company
      and
      Executive. If the parties cannot agree on an arbitrator, within 30 days of
      commencement of an arbitration proceeding hereunder, either party may request
      that the American Arbitration Association select a candidate in accordance
      with
      the rules. The decision of the arbitrator shall be final and binding. Judgment
      upon the award rendered by the arbitrator may be entered in any court having
      jurisdiction thereof. The Company agrees to pay all expenses of the AAA and
      all
      fees, costs and expenses of the arbitrator and of the arbitration. The parties
      further agree that any arbitration shall be conducted in a confidential manner,
      and the arbitrator is hereby authorized to adopt any rules and procedures
      reasonably appropriate to ensure the confidentiality of the arbitration. In
      any
      such arbitration, the arbitrator shall have the authority to award Reasonable
      Attorney’s Fees and Attorney Costs to the prevailing party, pursuant to this
      Agreement. “Reasonable Attorney’s Fees and Attorney Costs” include, but are not
      limited to, the following: all reasonable attorney’s fees, all reasonable
      attorney costs, all reasonable witness fees and other related expenses,
      including reasonable paralegal fees, travel and lodging expenses and costs,
      through trial and appeal, and/or through the finalization of the arbitration
      and
      the entering of the arbitrators award, including but not limited to all
      litigation in any court pursuant to this Agreement. Reimbursement is due within
      30 days of written notice after prevailing.Litigation or Arbitration
      Expenses

     

    
      
        
        

      

      
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    11. CONFIDENTIALITY
      COMMITMENTS

     

    A. Executive
      shall hold in strict confidence and not divulge to others, destroy, nor make
      use
      thereof (either for the benefit of himself or for the benefit of any person
      or
      entity), except for the purposes of the Company, or to enforce his rights under
      this Agreement, both during and after Executive’s employment by the Company, any
      and all Proprietary Information or documents containing Proprietary Information
      that Executive has obtained or will obtain in the course of employment by the
      Company. All Proprietary Information is the exclusive property of the Company.
      All files, letters, memos, reports, sketches, drawings, notebooks or other
      written material containing such information, that are now or in the future
      comes into Executive’s custody or possession, shall be used by Executive only in
      the performance of his Company duties, or in connection with his obligations
      under Section 5 of this Agreement. “Proprietary Information” means the following
      information that is not generally known about the Company: (a) information
      identifying or tending to identify any of the existing or prospective
      acquisition candidates, clients, customers, suppliers, employees, and
      independent contractors of the Company; (b) information regarding any
      intellectual property of the Company, including all patents, trademarks, trade
      names, service marks, and copyrighted materials, and all ideas, designs,
      methods, scripts, concepts, inventions, research and development, and design
      projects, and computer programs, software, and source codes, whether or not
      protected under any law; and (c) information pertaining to the plans, methods,
      services, processes, prospects, potential acquisitions of other businesses
      or
      companies. product costs, price lists, production methods, engineering standards
      and specifications, marketing and development plans, price and cost data, price
      and fee amounts, pricing and billing policies, quoting procedures, marketing
      techniques and methods of obtaining business, forecasts and forecast assumptions
      and volumes, and future plans and potential strategies, contracts and their
      contents, customer or client services, data provided by customers or clients
      and
      the type, quantity and specifications of products and services purchased by
      customers of the Company, and financial information

     

    B. Executive
      agrees, prior to the end of the Term, to make a reasonable effort to identify
      all Company documents or records in his possession which contain Proprietary
      Information. All such documents in hard copy form shall be returned to the
      Company prior to the end of the Term. All such documents in computerized form
      may be deleted by Executive or otherwise destroyed, or returned to the Company.
      The Company acknowledges that Executive has voluminous documents or records
      in
      his possession which refer to the Company in some way, or which were prepared
      by
      Company employees, and do not contain Proprietary Information. It is agreed
      that
      Executive may retain such documents in his possession. In addition, he may
      retain any documents produced for him or his counsel pursuant to agreements
      where the Company is a party to the agreement, even though the documents may
      contain confidential or Proprietary Information. To the extent any prior
      confidentiality agreements between Executive and the Company might have required
      the return of documents at the time of termination of his employment, that
      confidentiality agreement is superseded by this Agreement; however, with this
      exception, all such confidentiality agreements shall remain in full force and
      effect.

     

    C. To
      the
      extent permitted pursuant to Section 12 of this Agreement, Executive may engage
      in consulting work following the end of the Term, or otherwise seek employment,
      and in such circumstances, requests for references may be directed to the
      Company’s Human Resources Department. In that event, the Company agrees to
      provide only the following information to any legal or natural person seeking
      a
      reference on Executive: Executive’s final position with the Company and his
      dates of employment.

     

    D. It
      is
      possible that the Company may issue press releases or make public filings which
      refer to the Executive. During the Term, the Company agrees to provide the
      Executive with a copy of any such press release or public filing with reasonable
      advance notice prior to issuance of any such press release or public
      filing.

     

    
      
        
        

      

      
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    12. Non-Competition
      Agreement

     

    A. Executive
      recognizes that the Company’s willingness to enter into this Agreement is based
      in material part on Executive’s agreement to the provisions of this Section 12
      and that Executive’s breach of the provisions of this Section 12 could
      materially damage the Company. Subject to the further provisions of this
      Agreement and in consideration of the Company’s agreement to provide Executive
      access to Confidential Information as defined below, Executive will not, during
      the term of his employment with the Company, and for a period of three (3)
      years
      (unless a lesser period is specified hereafter) immediately following the
      termination or expiration of Executive’s employment by the Company, directly or
      indirectly, for himself or on behalf of or in conjunction with any other person,
      company, partnership, corporation or business of whatever nature:

     

    
      	 	
              i.

            	
              Engage
                or assist in any way, as an employee, agent, representative, officer,
                member, director, shareholder, owner, partner, joint venturer, or
                in any
                capacity, whether as an employee, independent contractor, consultant
                or
                advisor, or as a sales representative, in (A) the design, development,
                manufacturing, marketing, or support of computerized measurement
                systems
                (including, without limitation, articulated arm measuring devices,
                laser
                trackers, laser scanners, and CAD-based measurement and statistical
                process control software), (B) in the computer-aided manufacturing
                business, or (C) in any business in direct competition with the Company
                or
                any majority-owned subsidiary or affiliate of the Company (collectively,
                the “Companies”);

            

    

     

    
      	 	
              ii.

            	
              for
                a period of two (2) years call upon any person who is, at that time,
                an
                employee of any of the Companies for the purpose or with the intent
                of
                enticing such employee away from or out of the employ of any of the
                Companies;

            

    

     

    
      	 	
              iii.

            	
              call
                upon any person or entity which is, at that time, or which has been,
                within one year prior to that time, a customer of any of the Companies
                for
                the purpose of soliciting or selling products or services in direct
                competition with any of the
                Companies;

            

    

     

    
      	 	
              iv.

            	
              call
                upon any prospective acquisition candidate, on Executive’s own behalf or
                on behalf of any competitor, which candidate was, to Executive’s
                knowledge, within the preceding one year, either called upon by any
                of the
                Companies or for which any of the Companies made an acquisition analysis,
                for the purpose of acquiring such entity;
                or

            

    

     

    
      	 	
              v.

            	
              disclose
                customers, whether in existence or proposed, of any of the Companies
                to
                any person, firm, partnership, corporation or business for any reason
                or
                purpose whatsoever except to the extent that any of the Companies
                has in
                the past disclosed such information to the public for valid business
                reasons. 

            

    

     

    
      
        
        

      

      
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    Notwithstanding
      the above, the foregoing covenant shall not be deemed to prohibit Executive
      from
      acquiring as an investment not more than 1% of the capital stock of a competing
      business, whose stock is traded on a national securities exchange, the Nasdaq
      Stock Market or similar market.

     

    B. Because
      of the difficulty of measuring economic losses to the Company as a result of
      a
      breach of the foregoing covenant, and because of the immediate and irreparable
      damage that could be caused to the Company for which it would have no other
      adequate remedy, Executive agrees that, in the event of breach by him, the
      Company shall be entitled to specific performance, including immediate issuance
      of a temporary restraining order and/or preliminary or permanent injunctive
      relief enforcing this Agreement, and to judgment for damages caused by his
      breach, and to any other remedies provided by applicable law. In the event
      any
      of the terms or conditions of this Agreement are found unreasonable by a court
      of competent jurisdiction, Executive agrees to accept as binding in lieu
      thereof, any such lesser restrictions which said court may deem
      reasonable.

     

    C. It
      is
      agreed by the parties that the foregoing covenants in this Section 12 impose
      a
      reasonable restraint on Executive in light of the activities and business of
      the
      Companies on the date of the execution of this Agreement and the current plans
      of the Companies; but it is also the intent of the Company and Executive that
      such covenants be construed and enforced in accordance with the changing
      activities, business and locations of the Companies throughout the term of
      this
      Agreement. 

     

    D. The
      Company and the Companies have international operations and conduct business
      throughout the world. In his employment with the Company, Executive has
      performed services for the Company throughout the United States and in various
      foreign jurisdictions. The provisions of this Section 12 is intended to apply
      to
      the fullest extent possible in all of the United States and in every foreign
      jurisdiction in which the Company conducts business.

     

    E. The
      covenants in this Section 12 are severable and separate, and the
      unenforceability of any specific covenant shall not affect the provisions of
      any
      other covenant. Moreover, in the event any court of competent jurisdiction
      shall
      determine that the scope, time or territorial restrictions set forth are
      unreasonable, then it is the intention of the parties that such restrictions
      be
      enforced to the fullest extent which the court deems reasonable, and the
      Agreement shall thereby be reformed.

     

    F. The
      Company and Executive hereby agree that this covenant is a material and
      substantial part of this Agreement.

     

    G. The
      parties agree that the covenants in this Section 12 shall apply in the event
      the
      Term expires.

     

     

    13. Miscellaneous

     

    A. Entire
      Agreement.
      This
      Agreement embodies the entire Agreement and understanding between the Company
      and Executive relating to the subject matter hereof, other than the Employment,
      Assignment of Inventions, and Confidentiality Agreement previously executed
      by
      Executive and the Company. To
      the
      extent such Employment, Assignment of Inventions, and Confidentiality Agreement
      contradicts the terms of this Agreement, such agreement is superseded by this
      Agreement; however, with this exception, such Employment, Assignment of
      Inventions, and Confidentiality Agreement shall remain in full force and
      effect.

     

    
      
        
        

      

      
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    B. Survival.
      The
      parties intend that a number of provisions in this Agreement, as is evident
      from
      their terms, will remain in force after the termination of Executive’s
      employment with the Company or the expiration of the Term.

     

    C. Legal
      Matters.
      The
      laws of the State of Florida and the federal laws of the United States of
      America, excluding the laws of those jurisdictions pertaining to resolution
      of
      conflicts with laws of other jurisdictions, govern the validity, enforcement,
      construction, and interpretation of this Agreement. In the event that there
      is
      any litigation under this Agreement, Executive and the Company (a) consent
      to
      the personal jurisdiction of the state and federal courts having jurisdiction
      in
      Orange County, Florida, (b) stipulate that the proper, convenient, and exclusive
      venue for any legal proceeding arising out of this Agreement is Orange County,
      Florida, for a state court proceeding, or the Middle District of Florida,
      Orlando Division, for a federal court proceeding, and (c) waive any defense,
      whether asserted by motion or pleading, that Orange County, Florida, or the
      Middle District of Florida, Orlando Division, is an improper or inconvenient
      venue. 

     

    D. Severability.
      If any
      of the provisions of this Agreement are held invalid for any reason, the
      remainder will not be affected and will remain in full force and effect in
      accordance with its terms.

     

    E. Notice.
      Any
      notice, request, or instruction to be given hereunder shall be in writing and
      shall be deemed given when personally delivered or sent by telecopy transmission
      or three (3) days after being sent by United States mail, postage prepaid to
      the
      parties at their respective address set forth below.

     

    
      
        	 	
                (i)

              	To
                the Company:
	 	 	
                FARO
                  TECHNOLOGIES, INC.

              
	 	 	
                Attention:
                  Chief Financial Officer

              
	 	 	
                125
                  Technology Park

              
	 	 	
                Lake
                  Mary, FL 32746

                 

              
	 	
                (ii)

              	 To
                Executive:
	 	 	
                To
                  Executive’s address contained in the Company’s
                  records.

              

      

    

    
       

    

    F. Amendment
      and Waiver. No
      waiver
      of any provision of this Agreement will be valid unless in writing and signed
      by
      the person against whom it is sought to be enforced. The failure by either
      party
      to insist upon strict performance of any provision will not be construed as
      a
      waiver or relinquishment of the right to insist upon strict performance of
      the
      same provision at any other time, or any other provision of this
      Agreement.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

     

    G. Successors
      and Assigns. This
      Agreement shall be binding upon and inure to the benefit of the heirs and
      representatives of Executive, but neither this Agreement nor any rights or
      obligations hereunder shall be assignable or otherwise subject to hypothecation
      by Executive (except by will or by operation of the laws of intestate
      succession) or by the Company, except in connection with a sale of the Company’s
      business, whether by merger, purchase or other combination where the Company,
      or
      its successors, does not survive such combination (“Sale
      of Business”).
      In
      case of such assignment by the Company and of assumption and agreement by such
      purchaser, as used in this Agreement, “Company”
shall
      thereafter mean that successor entity bound by the assignment and assumption,
      or
      which otherwise becomes bound to all the terms and provisions of this Agreement
      by operation of law (the “Successor”).
      In
      the event of a Sale of Business, all of the Company’s rights, title and
      interests in this Agreement as of the date of such sale shall be assigned to
      the
      Successor. Accordingly, this Agreement shall inure to the benefit of, and be
      enforceable by, any such Successor. In the event of a Sale of Business,
      Executive shall be entitled to enforce any of his rights hereunder against
      any
      Successor. Except as provided in this Section, this Agreement shall not be
      assignable by the Company.  

     

    H. Further
      Assurances. Each
      party hereto shall cooperate and shall take such further action and shall
      execute and deliver such further documents as may be reasonably necessary in
      order to carry out the provisions and purposes of this Agreement.

     

    I. No
      Strict Construction.
      The
      parties have jointly participated in the negotiation and drafting of this
      Agreement. In the event an ambiguity or question of intent or interpretation
      arises, this Agreement shall be construed as if drafted jointly by the parties
      hereto, and no presumption or burden of proof shall arise favoring or
      disfavoring any party by virtue of the authorship of any of the provisions of
      this Agreement.

     

    J. Counterparts.
      This
      Agreement may be executed in multiple counterparts, each of which is an original
      but which shall together constitute one and the same instrument.

     

    K. Costs.
      In any
      mediation, arbitration, or legal proceeding between Executive and the Company
      arising out of this Agreement, the losing party shall reimburse the prevailing
      party, on demand, for all costs incurred by the prevailing party in enforcing,
      defending, or prosecuting this Agreement.

     

    L. Assignment;
      Successors.
      Executive shall not assign its, his, or her rights or delegate any of his
      obligations under this Agreement, and any attempted assignment or delegation
      by
      Executive will be invalid and ineffective against the Company. The
      Company may assign its rights under this Agreement without Executive’s consent
      to any assignee or successor in interest of its business, whether pursuant
      to a
      sale, merger, or sale or exchange of assets or outstanding stock of the Company.
      This Agreement is binding on, and inures to the benefit of, the Company’s
      authorized assignees and successors. Upon assignment of the Company’s rights
      under this Agreement, (a) every reference in this Agreement to the “Company”
will include the assignee, and (b) if the assignee expressly assumes in writing
      or by operation of law all the liabilities of the assignor generally or under
      this Agreement specifically, the assignor will be released from all its
      obligations to Executive under this Agreement.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

     

    M. Notices.
      Every
      notice, demand, consent, or other communication required or permitted under
      this
      Agreement will be valid only if it is in writing (whether or not this Agreement
      expressly states that it must be in writing) and delivered personally or by
      telecopy, commercial courier, or first-class, postage-prepaid, United States
      mail (whether or not certified or registered, and regardless of whether a return
      receipt is requested or received by the sender), and addressed to the addresses
      for the parties listed below. A validly given notice, demand, consent, or other
      communication will be effective on the earlier of its receipt, if delivered
      personally or by telecopy or commercial courier, or the third day after it
      is
      postmarked by the United States Postal Service, if delivered by first-class,
      postage-prepaid, United States mail.

     

    N. EXECUTIVE
      ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT, WAS AFFORDED SUFFICIENT
      OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL OF HIS CHOICE, AND TO ASK QUESTIONS
      AND RECEIVE SATISFACTORY ANSWERS REGARDING THIS AGREEMENT, UNDERSTANDS HIS
      RIGHTS AND OBLIGATIONS UNDER IT, AND SIGNED IT OF ITS, HIS, OR HER OWN FREE
      WILL
      AND VOLITION.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF
      the
      parties have executed this Employment Agreement as of the date set forth
      above.

     

    
      	 	
              FARO
                TECHNOLOGIES, INC.

            
	 	 
	 	
              By:  
                /s/ Jay W. Freeland                       
                

              Name:
                Jay W. Freeland                     

              Title:
                President & Co-CEO                    

            
	 	 
	 	
                   
                /s/ Gregory A. Fraser                     

              GREGORY
                A. FRASER

            

    

    

    
      
        
        

      

      
        13CONSULTING
      AGREEMENT

     

    THIS
      CONSULTING AGREEMENT (this “Agreement”) is entered into as of June 20, 2006 (the
“Effective Date”) between JOANNE KARIMI (“Karimi”), an individual residing in
      the State of Florida, and FARO TECHNOLOGIES, INC. (the “Company”), a Florida
      corporation having its principal place of business at 125 Technology Park,
      Lake
      Mary, FL 32746. 

     

     

    RECITALS

     

    WHEREAS,
      Karimi
      previously was employed full-time by Company as a Senior Vice President;
      and

     

    WHEREAS,
      the
      Company considers it desirable to retain the services of Karimi on the terms
      and
      conditions set forth in this Agreement; and

     

    NOW
      THEREFORE,
      in
      consideration of the covenants set forth herein, the parties agree as
      follows:

     

     

    OPERATIVE
      TERMS

     

     

    1. RESPONSIBILITIES

     

    A. Subject
      to the terms and conditions of this Agreement, including, but not limited to,
      the provisions for termination set forth herein, the Company hereby engages
      Karimi as a consultant to the Company from the Effective Date until March 20,
      2007 (“Term”) for compensation equal to $17,500.00 per month, less any
      applicable withholding taxes (payable in accordance with the Company’s standard
      payroll practice for its employees). 

     

    B. As
      a
      consultant to the Company, Karimi shall report to the Company’s Co-Chief
      Executive Officers (the “Co-CEOs”), shall have only the responsibilities,
      duties, and authority given to her by the Co-CEOs, and shall have no other
      responsibilities, duties, or authority, implied or otherwise. The Company
      anticipates that these responsibilities will include, as and when requested
      by
      the Company, assisting in the hiring of a replacement person and transitioning
      her role to the new individual and other related functions. Karimi agrees to
      devote her best efforts and business time, skill, and attention to the
      performance of such duties, provided that Karimi shall not be obligated to
      provide more than 40 hours per week of service to the Company. Notwithstanding
      the foregoing, nothing shall preclude Karimi from seeking new employment and
      devoting reasonable time during work hours to do so, engaging in appropriate
      civic, charitable, religious and non-profit activities or to accept other
      employment during the Term (provided such employment does not violate any
      provisions of this Agreement or any other agreement between Karimi and the
      Company, including Sections 8 and 9 herein).

     

    C. The
      Company is currently defending or involved in, and may in the future become
      involved or be required to defend additional, various claims, including civil
      actions, disputes with third parties, civil and criminal investigations,
      inquiries by federal and state law enforcement officials, inquiries by
      regulatory or self-regulatory organizations, about which Karimi may have
      personal knowledge (collectively, “Claims”). It is possible that such Claims
      will concern matters relating to Karimi’s employment, or her areas of
      responsibility at the Company. It is also possible that he may be named as
      a
      defendant in connection with Claims.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    D. Karimi
      has cooperated with the Company in the past regarding the Claims. Karimi, during
      and after the Term, shall: 

     

    i. continue
      to cooperate fully with the Company and with federal and state law enforcement
      or regulatory agencies and self-regulatory organizations with respect to the
      Claims, whether or not Karimi is named as a party therein; provided, however,
      that the Company shall (to the extent it can reasonably do so) (A) provide
      Karimi reasonable notice relating to meetings and document requests and (B)
      schedule such meetings and document productions at a place which is mutually
      convenient.

     

    ii. provide
      the Company with copies of all documents in her possession or control relating
      to the Claims (to the extent Karimi has not already provided such documents
      to
      the Company).   

     

    E. Consistent
      with the Company’s Restated Certificate of Incorporation and By-laws (each as
      amended), the Company shall promptly reimburse Karimi for all reasonable legal
      fees (including such legal fees for counsel retained by Karimi to assist and
      advise regarding her cooperative efforts if cooperation is requested by the
      Company in connection with Claims) and reasonable expenses incidental to such
      cooperation. 

     

     

    2. TERMINATION

     

    A. Karimi’s
      employment with the Company has terminated on the Effective Date.

     

    B. If
      Karimi
      accepts other full-time employment during the Term, she is permitted to
      terminate her consulting engagement under this Agreement and she will no longer
      be obligated to perform any consulting services for the Company pursuant to
      Section 1 herein; provided, however, that, notwithstanding any such termination,
      the Company shall continue to pay to Karimi all compensation pursuant to Section
      1 herein through the Term (provided such employment does not violate any
      provisions of this Agreement or any other agreement between Karimi and the
      Company, including Sections 8 and 9 herein).

     

    C. The
      Company may terminate Karimi’s consulting engagement under this Agreement at any
      time with or without cause and with or without notice; provided, however, that,
      notwithstanding any such termination (unless such termination is for Good Cause
      (as defined below)), the Company shall continue to pay to Karimi all
      compensation pursuant to Section 1 herein through the Term.

     

    D. The
      Company shall have “Cause” to terminate Karimi’s engagement under this Agreement
      before the end of the Term only upon the occurrence of the following events:
      (i)
      the conviction of Karimi of a felony, or a misdemeanor involving moral
      turpitude; (ii) gross and willful misconduct by Karimi that is demonstrably
      and
      materially injurious to the Company, whether monetarily or otherwise; or (iii)
      a
      material breach of this Agreement by Karimi, which is not cured within twenty
      (20) days of written notice to Executive of the fact and circumstances of
      breach.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

     

    E. In
      the
      event Karimi is terminated for Cause before the end of the Term,, any right
      of
      Executive to compensation or benefits from the Company, whether under Section
      1
      herein or otherwise, shall terminate as of the date of the for Cause
      termination, except to the extent it was already earned before her for Cause
      termination. 

     

    F. In
      the
      event of Karimi’s death or disability, Karimi’s consulting engagement with the
      Company shall be terminated;
      provided, however, that, notwithstanding any such termination, the Company
      shall
      continue to pay to Karimi (or, in the event of her death, to her estate or
      as
      her representatives direct) all compensation pursuant to Section 1 herein
      through the Term.
      Karimi’s
      disability means, for purposes of this Agreement, such physical or mental
      incapacity of Karimi that renders her completely unable to perform her
      responsibilities hereunder during any consecutive period of 90 days, as
      determined by an independent physician agreed to by the Board and Karimi.

     

     

    3.
      EXPENSES

     

    The
      Company will reimburse Karimi for all out-of-pocket expenses reasonably incurred
      by her in connection with performing her consulting duties under this Agreement,
      provided that such expenses are approved in advance in writing by the Company.
      Such reimbursement also shall be subject to the Company’s requirements with
      respect to reporting and documentation of such expenses. 

     

     

    4. BENEFIT
      PROGRAMS

     

    Karimi's
      benefits with the Company shall cease as of Effective Date; provided, however,
      that, in accordance with applicable law, Karimi shall be entitled to participate
      in the COBRA benefit continuation program at the Company’s sole expense until
      June 15, 2007 at her discretion. 

     

     

    5. RETURN
      OF
      COMPANY PROPERTY

     

    All
      records, designs, patents, business plans, financial statements, manuals,
      memoranda, lists and other property delivered to or compiled by Karimi by or
      on
      behalf of the Company or their representatives, vendors or customers which
      pertain to the business of the Company shall be and remain the property of
      the
      Company and be subject at all times to its discretion and control. Likewise,
      all
      correspondence, reports, records, charts, advertising materials and other
      similar data pertaining to the business, activities or future plans of the
      Company which is collected by Karimi shall be delivered promptly to the Company
      without request by it upon termination of Karimi’s consulting
      engagement.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

     

     

    6. INDEMNIFICATION

     

    A. The
      Company’s Amended and Restated Articles of Incorporation and Bylaws (each as
      amended to date) require that the Company indemnify Karimi to the fullest extent
      permitted or required by the Florida Business Corporation Act (the “FBCA”)
      against any and all liabilities, and advance any and all reasonable expenses,
      incurred thereby in any Proceeding (as defined in Section 607.0850 of the FBCA)
      to which Karimi is a party or in which Karimi is deposed or called to testify
      as
      a witness because she is or was an executive officer of the Company. The
      Company’s Board of Directors previously adopted resolutions whereby the Company
      agreed to advance certain reasonable expenses incurred by Karimi (each, an
      “Advance”), in each instance upon receipt of an undertaking by Karimi to repay
      such amount if she is ultimately found not to be entitled to indemnification
      by
      the Company pursuant to Section 607.0850 of the FBCA.

     

    B. Consistent
      with its obligations described above under the Company’s Amended and Restated
      Articles of Incorporation and Bylaws (each as amended to date), the Company
      shall indemnify Karimi and make Advances to Karimi as set forth above. Karimi
      hereby undertakes to repay to the Company all such Advances if Karimi is
      ultimately found not to be entitled to indemnification by the Company pursuant
      to Section 607.0850 of the FBCA in connection with any of the matters described
      above.

     

    7. ARBITRATION

     

    Any
      controversy or claim arising out of or relating to this Agreement or to the
      breach thereof or Executive’s employment with the Company shall be settled
      exclusively by binding arbitration conducted in Orlando, Florida in accordance
      with the Employment Rules of the American Arbitration Association then in
      effect, by a single independent arbitrator selected mutually by the Company
      and
      Karimi. If the parties cannot agree on an arbitrator, within 30 days of
      commencement of an arbitration proceeding hereunder, either party may request
      that the American Arbitration Association select a candidate in accordance
      with
      the rules. The decision of the arbitrator shall be final and binding. Judgment
      upon the award rendered by the arbitrator may be entered in any court having
      jurisdiction thereof. The Company agrees to pay all expenses of the AAA and
      all
      fees, costs and expenses of the arbitrator and of the arbitration. The parties
      further agree that any arbitration shall be conducted in a confidential manner,
      and the arbitrator is hereby authorized to adopt any rules and procedures
      reasonably appropriate to ensure the confidentiality of the arbitration. In
      any
      such arbitration, the arbitrator shall have the authority to award Reasonable
      Attorney’s Fees and Attorney Costs to the prevailing party, pursuant to this
      Agreement. “Reasonable Attorney’s Fees and Attorney Costs” include, but are not
      limited to, the following: all reasonable attorney’s fees, all reasonable
      attorney costs, all reasonable witness fees and other related expenses,
      including reasonable paralegal fees, travel and lodging expenses and costs,
      through trial and appeal, and/or through the finalization of the arbitration
      and
      the entering of the arbitrators award, including but not limited to all
      litigation in any court pursuant to this Agreement. Reimbursement is due within
      30 days of written notice after prevailing.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

     

     

    8. CONFIDENTIALITY
      COMMITMENTS

     

    A. Executive
      shall hold in strict confidence and not divulge to others, destroy, nor make
      use
      thereof (either for the benefit of herself or for the benefit of any person
      or
      entity), except for the purposes of the Company, or to enforce her rights under
      this Agreement, both during and after Executive’s employment by the Company, any
      and all Proprietary Information or documents containing Proprietary Information
      that Executive has obtained or will obtain in the course of employment by the
      Company. All Proprietary Information is the exclusive property of the Company.
      All files, letters, memos, reports, sketches, drawings, notebooks or other
      written material containing such information, that are now or in the future
      comes into Executive’s custody or possession, shall be used by Executive only in
      the performance of her Company duties, or in connection with her obligations
      under Section 5 of this Agreement. “Proprietary Information” means the following
      information that is not generally known about the Company: (a) information
      identifying or tending to identify any of the existing or prospective
      acquisition candidates, clients, customers, suppliers, employees, and
      independent contractors of the Company; (b) information regarding any
      intellectual property of the Company, including all patents, trademarks, trade
      names, service marks, and copyrighted materials, and all ideas, designs,
      methods, scripts, concepts, inventions, research and development, and design
      projects, and computer programs, software, and source codes, whether or not
      protected under any law; and (c) information pertaining to the plans, methods,
      services, processes, prospects, potential acquisitions of other businesses
      or
      companies. product costs, price lists, production methods, engineering standards
      and specifications, marketing and development plans, price and cost data, price
      and fee amounts, pricing and billing policies, quoting procedures, marketing
      techniques and methods of obtaining business, forecasts and forecast assumptions
      and volumes, and future plans and potential strategies, contracts and their
      contents, customer or client services, data provided by customers or clients
      and
      the type, quantity and specifications of products and services purchased by
      customers of the Company, and financial information

     

    B. Executive
      agrees, prior to the end of the Term, to make a reasonable effort to identify
      all Company documents or records in her possession which contain Proprietary
      Information. All such documents shall be returned to the Company prior to the
      end of the Term. 

     

    C. Nothing
      in this Section 8 shall preclude Karimi from disclosing or using Proprietary
      Information at any time if:

     

    i. such
      Proprietary Information is available to the public or in the public domain
      at
      the time of such disclosure or use, without breach of this Agreement;
      or

     

    ii. disclosure
      of such Proprietary Information is required to be made by any law, regulation,
      governmental body, or authority or by court order or other lawful process;
      provided that before disclosure is made, notice of the requirement is provided
      to the Company (unless such disclosure is prohibited by a governmental agency),
      and to the extent possible in the circumstances, the Company is afforded an
      opportunity to dispute the requirement; or

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

     

    iii. such
      Proprietary Information becomes available to Karimi on a non-confidential basis
      from a source other than the Company or its customers or clients without breach
      of this Agreement. 

     

     

    9. NON-COMPETITION
      AGREEMENT

     

    A. Karimi
      recognizes that the Company’s willingness to enter into this Agreement is based
      in material part on Karimi’s agreement to the provisions of this Section 9 and
      that Karimi’s breach of the provisions of this Section 9 could materially damage
      the Company. Subject to the further provisions of this Agreement and in
      consideration of the Company’s agreement to provide Karimi access to
      Confidential Information as defined below, Karimi will not, for a period of
      two
      (2) years from the expiration or termination of the Term, directly or
      indirectly, for herself or on behalf of or in conjunction with any other person,
      company, partnership, corporation or business of whatever nature:

     

    i. Engage
      or
      assist in any way, as an employee, agent, representative, officer, member,
      director, shareholder, owner, partner, joint venturer, or in any capacity,
      whether as an employee, independent contractor, consultant or advisor, or as
      a
      sales representative, in (A) the design, development, manufacturing, marketing,
      or support of computerized measurement systems (including, without limitation,
      articulated arm measuring devices, laser trackers, laser scanners, and CAD-based
      measurement and statistical process control software), (B) in the computer-aided
      manufacturing business, or (C) in any business in direct competition with the
      Company or any majority-owned subsidiary or affiliate of the Company
      (collectively, the “Companies”);

     

    ii. for
      a
      period of two (2) years from the expiration or termination of the Term call
      upon
      any person who is, at that time, an employee of any of the Companies for the
      purpose or with the intent of enticing such employee away from or out of the
      employ of any of the Companies;

     

    iii. call
      upon
      any person or entity which is, at that time, or which has been, within one
      year
      prior to that time, a customer of any of the Companies for the purpose of
      soliciting or selling products or services in direct competition with any of
      the
      Companies;

     

    iv. call
      upon
      any prospective acquisition candidate, on Karimi’s own behalf or on behalf of
      any competitor, which candidate was, to Karimi’s knowledge, within the preceding
      one year, either called upon by any of the Companies or for which any of the
      Companies made an acquisition analysis, for the purpose of acquiring such
      entity; or

     

    v. disclose
      customers, whether in existence or proposed, of any of the Companies to any
      person, firm, partnership, corporation or business for any reason or purpose
      whatsoever except to the extent that any of the Companies has in the past
      disclosed such information to the public for valid business reasons.

     

    Notwithstanding
      the above, the foregoing covenant shall not be deemed to prohibit Karimi from
      acquiring
      as an
      investment not more than 1% of the capital stock of a competing business, whose
      stock is traded on a national securities exchange, the Nasdaq Stock Market
      or
      similar market.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

     

    B. Because
      of the difficulty of measuring economic losses to the Company as a result of
      a
      breach of the foregoing covenant, and because of the immediate and irreparable
      damage that could be caused to the Company for which it would have no other
      adequate remedy, Karimi agrees that, in the event of breach by her, the Company
      shall be entitled to specific performance, including immediate issuance of
      a
      temporary restraining order and/or preliminary or permanent injunctive relief
      enforcing this Agreement, and to judgment for damages caused by her breach,
      and
      to any other remedies provided by applicable law. In the event any of the terms
      or conditions of this Agreement are found unreasonable by a court of competent
      jurisdiction, Karimi agrees to accept as binding in lieu thereof, any such
      lesser restrictions which said court may deem reasonable.

     

    C. It
      is
      agreed by the parties that the foregoing covenants in this Section 9 impose
      a
      reasonable restraint on Karimi in light of the activities and business of the
      Companies on the date of the execution of this Agreement and the current plans
      of the Companies; but it is also the intent of the Company and Karimi that
      such
      covenants be construed and enforced in accordance with the changing activities,
      business and locations of the Companies throughout the term of this Agreement.
      

     

    D. The
      Company and the Companies have international operations and conduct business
      throughout the world. In her employment with the Company, Karimi has performed
      services for the Company throughout the United States and in various foreign
      jurisdictions. The provisions of this Section 9 is intended to apply to the
      fullest extent possible in all of the United States and in every foreign
      jurisdiction in which the Company conducts business.

     

    E. The
      covenants in this Section 9 are severable and separate, and the unenforceability
      of any specific covenant shall not affect the provisions of any other covenant.
      Moreover, in the event any court of competent jurisdiction shall determine
      that
      the scope, time or territorial restrictions set forth are unreasonable, then
      it
      is the intention of the parties that such restrictions be enforced to the
      fullest extent which the court deems reasonable, and the Agreement shall thereby
      be reformed.

     

    F. The
      Company and Karimi hereby agree that this covenant is a material and substantial
      part of this Agreement.

     

    G. The
      parties agree that the covenants in this Section 9 shall apply in the event
      the
      Term expires.

     

     

    10. MISCELLANEOUS

     

    A. Entire
      Agreement.
      This
      Agreement embodies the entire Agreement and understanding between the Company
      and Karimi relating to the subject matter hereof. This Agreement supersedes
      and
      cancels all prior agreements between the Company and Karimi, whether written
      or
      oral, relating to the engagement of Karimi as a consultant and relating to
      her
      prior employment by the Company, other than the Employment, Assignment of
      Inventions, and Confidentiality Agreement previously executed by Karimi and
      the
      Company. To
      the
      extent such Employment, Assignment of Inventions, and Confidentiality Agreement
      contradicts the terms of this Agreement, such agreement is superseded by this
      Agreement; however, with this exception, such Employment, Assignment of
      Inventions, and Confidentiality Agreement shall remain in full force and effect.
      

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

     

    B. Vesting
      under all stock options, restricted stock, restricted stock units, and other
      rights to purchase shares of common stock of the Company shall terminate on
      the
      Effective Date; provided, however, that neither this Agreement nor Karimi’s
      separation from employment with the Company shall in any way impact the
      exercisability or right to receive the shares of common stock underlying any
      stock options, restricted stock, restricted stock units, and other rights to
      purchase shares of common stock of the Company held by Karimi, all of which
      will
      continue to be controlled by the applicable governing agreements and
      plans.

     

    C. Survival.
      The
      parties intend that a number of provisions in this Agreement, as is evident
      from
      their terms, will remain in force after the termination or expiration of the
      Term.

     

    D. Legal
      Matters.
      The
      laws of the State of Florida and the federal laws of the United States of
      America, excluding the laws of those jurisdictions pertaining to resolution
      of
      conflicts with laws of other jurisdictions, govern the validity, enforcement,
      construction, and interpretation of this Agreement. In the event that there
      is
      any litigation under this Agreement, Karimi and the Company (a) consent to
      the
      personal jurisdiction of the state and federal courts having jurisdiction in
      Orange County, Florida, (b) stipulate that the proper, convenient, and exclusive
      venue for any legal proceeding arising out of this Agreement is Orange County,
      Florida, for a state court proceeding, or the Middle District of Florida,
      Orlando Division, for a federal court proceeding, and (c) waive any defense,
      whether asserted by motion or pleading, that Orange County, Florida, or the
      Middle District of Florida, Orlando Division, is an improper or inconvenient
      venue. 

     

    E. Severability.
      If any
      of the provisions of this Agreement are held invalid for any reason, the
      remainder will not be affected and will remain in full force and effect in
      accordance with its terms.

     

    F. Notice.
      Any
      notice, request, or instruction to be given hereunder shall be in writing and
      shall be deemed given when personally delivered or sent by telecopy transmission
      or three (3) days after being sent by United States mail, postage prepaid to
      the
      parties at their respective address set forth below.

     

    

      
        	 	
                (i)

              	
                To
                  the Company:

              
	 	 	
                FARO
                  TECHNOLOGIES, INC.

              
	 	 	
                Attention:
                  Chief Financial Officer

              
	 	 	
                125
                  Technology Park

              
	 	 	
                Lake
                  Mary, FL 32746

              
	 	
                (ii)

              	
                To
                  Karimi:

              
	 	 	
                To
                  Karimi’s address contained in the Company’s
                  records.

              

      

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

     

    G. Amendment
      and Waiver. No
      waiver
      of any provision of this Agreement will be valid unless in writing and signed
      by
      the person against whom it is sought to be enforced. The failure by either
      party
      to insist upon strict performance of any provision will not be construed as
      a
      waiver or relinquishment of the right to insist upon strict performance of
      the
      same provision at any other time, or any other provision of this
      Agreement.

     

    H. Survival
      of Rights and Obligations. All
      post-termination rights and obligations of Karimi and the Company pursuant
      to
      this Agreement survive the termination of this Agreement. This Agreement shall
      inure to the benefit of successors and assigns.

     

    I. Further
      Assurances. Each
      party hereto shall cooperate and shall take such further action and shall
      execute and deliver such further documents as may be reasonably necessary in
      order to carry out the provisions and purposes of this Agreement.

     

    J. No
      Strict Construction.
      The
      parties have jointly participated in the negotiation and drafting of this
      Agreement. In the event an ambiguity or question of intent or interpretation
      arises, this Agreement shall be construed as if drafted jointly by the parties
      hereto, and no presumption or burden of proof shall arise favoring or
      disfavoring any party by virtue of the authorship of any of the provisions
      of
      this Agreement.

     

    K. Counterparts.
      This
      Agreement may be executed in multiple counterparts, each of which is an original
      but which shall together constitute one and the same instrument.

     

    L. Costs.
      In any
      mediation, arbitration, or legal proceeding between Karimi and the Company
      arising out of this Agreement, the losing party shall reimburse the prevailing
      party, on demand, for all costs incurred by the prevailing party in enforcing,
      defending, or prosecuting this Agreement.

     

    M. Assignment;
      Successors.
      Karimi
      shall not assign her rights or delegate any of her obligations under this
      Agreement, and any attempted assignment or delegation by Karimi will be invalid
      and ineffective against the Company. The
      Company may assign its rights under this Agreement without Karimi’s consent to
      any assignee or successor in interest of its business, whether pursuant to
      a
      sale, merger, or sale or exchange of assets or outstanding stock of the Company.
      This Agreement is binding on, and inures to the benefit of, the Company’s
      authorized assignees and successors. Upon assignment of the Company’s rights
      under this Agreement, (a) every reference in this Agreement to the “Company”
will include the assignee, and (b) if the assignee expressly assumes in writing
      or by operation of law all the liabilities of the assignor generally or under
      this Agreement specifically, the assignor will be released from all its
      obligations to Karimi under this Agreement.

     

    N. Notices.
      Every
      notice, demand, consent, or other communication required or permitted under
      this
      Agreement will be valid only if it is in writing (whether or not this Agreement
      expressly states that it must be in writing) and delivered personally or by
      telecopy, commercial courier, or first-class, postage-prepaid, United States
      mail (whether or not certified or registered, and regardless of whether a return
      receipt is requested or received by the sender), and addressed to the addresses
      for the parties listed below. A validly given notice, demand, consent, or other
      communication will be effective on the earlier of its receipt, if delivered
      personally or by telecopy or commercial courier, or the third day after it
      is
      postmarked by the United States Postal Service, if delivered by first-class,
      postage-prepaid, United States mail.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

     

    O. KARIMI
      ACKNOWLEDGES THAT SHE HAS CAREFULLY READ THIS AGREEMENT, WAS AFFORDED SUFFICIENT
      OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL OF HER CHOICE, AND TO ASK QUESTIONS
      AND RECEIVE SATISFACTORY ANSWERS REGARDING THIS AGREEMENT, UNDERSTANDS HER
      RIGHTS AND OBLIGATIONS UNDER IT, AND SIGNED IT OF HER OWN FREE WILL AND
      VOLITION.

     

    IN
      WITNESS WHEREOF
      the
      parties have executed this Consulting Agreement effective the day and year
      set
      forth above.

     

    
      	 	
              FARO
                TECHNOLOGIES, INC.

            
	 	 
	 	
              By:   
                /s/ Jay W. Freeland                    

              Name: 
                Jay W. Freeland                     

              Title:   
                President & Co-CEO                  

            
	 	 
	 	
                   
                /s/ Joanne Karimi                      

            
	 	JOANNE
              KARIMI

    

    

     

    
      
        
        

      

      
        10

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