Document:

Exhibit 10.2

 

June 7, 2018

 

Kush Bottles, Inc.

1800 Newport Circle

Santa Ana, CA 92705

Attn: Nicholas Kovacevich

Chief Executive Officer

 

Dear Mr. Kovacevich:

 

This letter (the “Agreement”)
constitutes the agreement between A.G.P./Alliance Global Partners (the “Placement Agent”) and Kush Bottles,
Inc., a company incorporated under the laws of the State of Nevada (the “Company”), that the Placement Agent
shall serve as a placement agent for the Company, on a “reasonable best efforts” basis, in connection with the proposed
placement (the “Placement”) of (i) shares (the “Shares”) of the Company’s common stock,
par value $0.001 per share (the “Common Stock”) and (ii) warrants to purchase warrants to purchase shares of
Common Stock of the Company (the “Warrants”, and together with the Shares, the “Securities”). The Securities
actually placed by the Placement Agent are referred to herein as the “Placement Agent Securities.” The terms
of the Placement shall be mutually agreed upon by the Company and the purchasers (each, a “Purchaser” and collectively,
the “Purchasers”), and nothing herein constitutes that the Placement Agent would have the power or authority
to bind the Company or any Purchaser, or an obligation for the Company will issue any Shares or complete the Placement. The Company
expressly acknowledges and agrees that the Placement Agent’s obligations hereunder are on a reasonable best efforts basis
only and that the execution of this Agreement does not constitute a commitment by the Placement Agent to purchase the Securities
and does not ensure the successful placement of the Securities or any portion thereof or the success of the Placement Agent with
respect to securing any other financing on behalf of the Company. The Placement Agent may retain other brokers or dealers to act
as sub-agents or selected-dealers on its behalf in connection with the Placement. Certain affiliates of the Placement Agent may
participate in the Placement by purchasing some of the Placement Agent Securities. The sale of Placement Agent Securities to any
Purchaser will be evidenced by a securities purchase agreement (the “Purchase Agreement”) between the Company
and such Purchaser, in a form reasonably acceptable to the Company and the Purchaser. Capitalized terms that are not otherwise
defined herein have the meanings given to such terms in the Purchase Agreement. Prior to the signing of any Purchase Agreement,
officers of the Company will be available to answer inquiries from prospective Purchasers.

 

SECTION 1.         REPRESENTATIONS
AND WARRANTIES OF THE COMPANY; COVENANTS OF THE COMPANY.

 

A.           Representations
of the Company. With respect to the Placement Agent Securities, each of the representations and warranties (together with any
related disclosure schedules thereto) and covenants made by the Company to the Purchasers in the Purchase Agreement in connection
with the Placement, is hereby incorporated herein by reference into this Agreement (as though fully restated herein) and is, as
of the date of this Agreement and as of the Closing Date, hereby made to, and in favor of, the Placement Agent. In addition to
the foregoing, the Company represents and warrants that there are no affiliations with any FINRA member firm among the Company's
officers, directors or, to the knowledge of the Company, any five percent (5.0%) or greater stockholder of the Company, except
as set forth in the Purchase Agreement and SEC Reports.

 

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B.            Covenants
of the Company. The Company covenants and agrees to continue to retain (i) a firm of independent PCAOB registered public accountants
for a period of at least three (3) years after the Closing Date and (ii) a competent transfer agent with respect to the Placement
Agent Securities for a period of three (3) years after the Closing Date.

 

SECTION 2.         REPRESENTATIONS
OF THE PLACEMENT AGENT. The Placement Agent represents and warrants that it (i) is a member in good standing of FINRA, (ii)
is registered as a broker/dealer under the Exchange Act, (iii) is licensed as a broker/dealer under the laws of the United States
of America, applicable to the offers and sales of the Placement Agent Securities by the Placement Agent, (iv) is and will be a
corporate body validly existing under the laws of its place of incorporation, (v) has full power and authority to enter into and
perform its obligations under this Agreement. The Placement Agent will immediately notify the Company in writing of any change
in its status with respect to subsections (i) through (v) above. The Placement Agent covenants that it will use its reasonable
best efforts to conduct the Placement hereunder in compliance with the provisions of this Agreement and the requirements of applicable
law.  

 

SECTION 3.         COMPENSATION.
In consideration of the services to be provided for hereunder, the Company shall pay to the Placement Agent or their respective
designees a cash fee equal to seven percent (7%) of gross proceeds from the offering if the total amount of Placement Agent Securities
offered is greater than $20,000,000 (the “Cash Fee”). The Cash Fee shall be paid on the Closing Date. The Company
shall not be required to pay the Placement Agent any fees or expenses except for the Cash Fee, reimbursement of $75,000 for legal
expenses, $20,000 for IPREO software related expenses, $5,000 for background check expenses, $3,000 for tombstones and $17,000
in marketing related expenses, including roadshow expenses, in each case with respect to the engagement hereunder; provided, however,
that the reimbursable amount shall not be more than an aggregate of $120,000. The Placement Agent will also be entitled to a non-accountable
expense allowance equal to 1% of gross proceeds from the offering. The Placement Agent reserves the right to reduce any item of
compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect
that the Placement Agent’s aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.

 

SECTION 4.          INDEMNIFICATION.

 

A.           To
the extent permitted by law, with respect to the Placement Agent Securities, the Company will indemnify the Placement Agent and
its affiliates, stockholders, directors, officers, employees,s members and controlling persons (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) against all losses, claims, damages, expenses and liabilities, as the
same are incurred (including the reasonable fees and expenses of counsel), relating to or arising out of its activities hereunder
or pursuant to this Agreement, except to the extent that any losses, claims, damages, expenses or liabilities (or actions in respect
thereof) are found in a final judgment (not subject to appeal) by a court of law to have resulted primarily and directly from the
Placement Agent’s willful misconduct or gross negligence in performing the services described herein.

 

B.           Promptly
after receipt by the Placement Agent of notice of any claim or the commencement of any action or proceeding with respect to which
the Placement Agent is entitled to indemnity hereunder, the Placement Agent will notify the Company in writing of such claim or
of the commencement of such action or proceeding, but failure to so notify the Company shall not relieve the Company from any obligation
it may have hereunder, except and only to the extent such failure results in the forfeiture by the Company of substantial rights
and defenses. If the Company so elects or is requested by the Placement Agent, the Company will assume the defense of such action
or proceeding and will employ counsel reasonably satisfactory to the Placement Agent and will pay the fees and expenses of such
counsel. Notwithstanding the preceding sentence, the Placement Agent will be entitled to employ counsel separate from counsel for
the Company and from any other party in such action if counsel for the Placement Agent reasonably determines that it would be inappropriate
under the applicable rules of professional responsibility for the same counsel to represent both the Company and the Placement
Agent. In such event, the reasonable fees and disbursements of no more than one such separate counsel will be paid by the Company,
in addition to fees of local counsel. The Company will have the right to settle the claim or proceeding provided that the Company
will not settle any such claim, action or proceeding without the prior written consent of the Placement Agent, which will not be
unreasonably withheld.

 

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C.           The
Company agrees to notify the Placement Agent promptly of the assertion against it or any other person of any claim or the commencement
of any action or proceeding relating to a transaction contemplated by this Agreement.

 

D.           If
for any reason the foregoing indemnity is unavailable to the Placement Agent or insufficient to hold the Placement Agent harmless,
then the Company shall contribute to the amount paid or payable by the Placement Agent as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one
hand and the Placement Agent on the other, but also the relative fault of the Company on the one hand and the Placement Agent on
the other that resulted in such losses, claims, damages or liabilities, as well as any relevant equitable considerations. The amounts
paid or payable by a party in respect of losses, claims, damages and liabilities referred to above shall be deemed to include any
legal or other fees and expenses incurred in defending any litigation, proceeding or other action or claim. Notwithstanding the
provisions hereof, the Placement Agent’s share of the liability hereunder shall not be in excess of the amount of fees actually
received, or to be received, by the Placement Agent under this Agreement (excluding any amounts received as reimbursement of expenses
incurred by the Placement Agent).

 

E.           These
indemnification provisions shall remain in full force and effect whether or not the transaction contemplated by this Agreement
is completed and shall survive the termination of this Agreement, and shall be in addition to any liability that the Company might
otherwise have to any indemnified party under this Agreement or otherwise.

 

SECTION 5.           ENGAGEMENT
TERM. The Placement Agent’s engagement hereunder will be until the earlier of (i) June 15, 2018 and (ii) the Closing
Date. The date of termination of this Agreement is referred to herein as the “Termination Date.” In the event,
however, in the course of the Placement Agent’s performance of due diligence it deems, it necessary to terminate the engagement,
the Placement Agent may do so prior to the Termination Date. The Company may elect to terminate the engagement hereunder for any
reason prior to the Termination Date but will remain responsible for fees pursuant to Section 3 hereof with respect to the Placement
Agent Securities if sold in the Placement. Notwithstanding anything to the contrary contained herein, the provisions concerning
the Company’s obligation to pay any fees actually earned pursuant to Section 3 hereof and the provisions concerning confidentiality,
indemnification and contribution contained herein will survive any expiration or termination of this Agreement. If this Agreement
is terminated prior to the completion of the Placement, all fees due to the Placement Agent shall be paid by the Company to the
Placement Agent on or before the Termination Date (in the event such fees are earned or owed as of the Termination Date). The Placement
Agent agrees not to use any confidential information concerning the Company provided to the Placement Agent by the Company for
any purposes other than those contemplated under this Agreement.

 

SECTION 6.         PLACEMENT
AGENT INFORMATION. The Company agrees that any information or advice rendered by the Placement Agent in connection with this
engagement is for the confidential use of the Company only in their evaluation of the Placement and, except as otherwise required
by law, the Company will not disclose or otherwise refer to the advice or information in any manner without the Placement Agent’s
prior written consent.

 

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SECTION 7.         NO
FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall not be construed as creating rights enforceable by any person
or entity not a party hereto, except those entitled hereto by virtue of the indemnification provisions hereof. The Company acknowledges
and agrees that the Placement Agent is not and shall not be construed as a fiduciary of the Company and shall have no duties or
liabilities to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention
of the Placement Agent hereunder, all of which are hereby expressly waived.

 

SECTION 8.         CLOSING.
The obligations of the Placement Agent, and the closing of the sale of the Placement Agent Securities hereunder are subject to
the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company contained herein
and in the Purchase Agreement, to the performance by the Company of its obligations hereunder, and to each of the following additional
terms and conditions, except as otherwise disclosed to and acknowledged and waived by the Placement Agent:

 

A.           All
corporate proceedings and other legal matters incident to the authorization, form, execution, delivery and validity of each of
this Agreement, the Placement Agent Securities, and all other legal matters relating to this Agreement and the transactions contemplated
hereby with respect to the Placement Agent Securities shall be reasonably satisfactory in all material respects to the Placement
Agent.

 

B.           The
Placement Agent shall have received from outside counsel to the Company such counsel’s written opinion with respect to the
Placement Agent Securities, addressed to the Placement Agent and dated as of the Closing Date, in form and substance reasonably
satisfactory to the Placement Agent.

 

C.           The
Common Stock shall be registered under the Exchange Act and, as of the Closing Date, the Placement Agent Securities shall be listed
and admitted and authorized for trading on the Trading Market or other applicable U.S. national exchange and satisfactory evidence
of such action shall have been provided to the Placement Agent. The Company shall have taken no action designed to, or likely to
have the effect of terminating the registration of the Common Stock under the Exchange Act or delisting or suspending from trading
the Common Stock from the Trading Market or other applicable U.S. national exchange, nor has the Company received any information
suggesting that the Commission or the Trading Market or other U.S. applicable national exchange is contemplating terminating such
registration or listing.

 

D.           No
action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance or sale of the Placement Agent Securities or materially
and adversely affect or potentially and adversely affect the business or operations of the Company; and no injunction, restraining
order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing
Date which would prevent the issuance or sale of the Placement Agent Securities or materially and adversely affect or potentially
and adversely affect the business or operations of the Company.

 

E.           The
Company shall have entered into a Purchase Agreement with each of the Purchasers of the Placement Agent Securities and such agreements
shall be in full force and effect and shall contain representations, warranties and covenants of the Company as agreed upon between
the Company and the Purchasers.

 

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F.           FINRA
shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this Agreement. In addition,
the Company shall, if requested by the Placement Agent, make or authorize Placement Agent’s counsel to make on the Company’s
behalf, any filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 2710 with respect to the Placement and
pay all filing fees required in connection therewith.

 

If any of the conditions
specified in this Section 8 shall not have been fulfilled when and as required by this Agreement, all obligations of the Placement
Agent hereunder may be cancelled by the Placement Agent at, or at any time prior to, the Closing Date. Notice of such cancellation
shall be given to the Company in writing or orally. Any such oral notice shall be confirmed promptly thereafter in writing.

 

SECTION 9.          GOVERNING
LAW. This Agreement will be governed by, and construed in accordance with, the laws of the State of New York applicable to
agreements made and to be performed entirely in such State. This Agreement may not be assigned by either party without the prior
written consent of the other party. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their
respective successors and permitted assigns. Any right to trial by jury with respect to any dispute arising under this Agreement
or any transaction or conduct in connection herewith is waived. Any dispute arising under this Agreement may be brought into the
courts of the State of New York or into the Federal Court located in New York, New York and, by execution and delivery of this
Agreement, the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction
of aforesaid courts. Each party hereto hereby irrevocably waives personal service of process and consents to process being served
in any such suit, action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of this Agreement,
then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney's fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

  

SECTION 10.        ENTIRE
AGREEMENT/MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes
all prior agreements and understandings, relating to the subject matter hereof. If any provision of this Agreement is determined
to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other
provision of this Agreement, which will remain in full force and effect. This Agreement may not be amended or otherwise modified
or waived except by an instrument in writing signed by both the Placement Agent and the Company. The representations, warranties,
agreements and covenants contained herein shall survive the Closing Date of the Placement and delivery of the Placement Agent Securities.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or a .pdf format file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or .pdf signature page were an original thereof.

 

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SECTION 12.        NOTICES.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is sent to
the email address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business day, (b)
the next business day after the date of transmission, if such notice or communication is sent to the email address on the signature
pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c)
the third business day following the date of mailing, if sent by U.S. internationally recognized air courier service, or (d) upon
actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall
be as set forth on the signature pages hereto.

 

SECTION 13.        Press
Announcements. The Company agrees that the Placement Agent shall, on and after the Closing Date, have the right to
reference the Placement and the Placement Agent’s role in connection therewith in the Placement Agent’s marketing
materials and on its website and to place advertisements in financial and other newspapers and journals, in each case at its own
expense.

 

[The remainder of
this page has been intentionally left blank.]

 

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Please confirm that
the foregoing correctly sets forth our agreement by signing and returning to the Placement Agent the enclosed copy of this Agreement.

 

	 	Very truly yours,
	 	 
	 	A.G.P./ALLIANCE GLOBAL PARTNERS 
	 	 
	 	By:	/s/ David Bocchi
	 	 	Name: David Bocchi
	 	 	Title:   Head of Investment Banking
	 	 
	 	 	Address for notice:
	 	 	590 Madison Avenue 36th Floor

        New York, New York 10022

        Attn: David Bocchi

        Email: db@allianceg.com

 

Accepted and Agreed
to as of

the date first written
above:

 

	KUSH BOTTLES, INC.
	 	 
	By:	/s/ Nicholas Kovacevich	 
	 	Name: Nicholas Kovacevich	 
	 	Title:   Chief Executive Officer	 
	 	 	 	 
	 	Address for notice:

1800 Newport Circle

Santa Ana, CA 92705

Attn: Chief Executive Officer

	 	 

  

[Signature Page to
Placement Agency Agreement.]

 

    	 	7Exhibit

TRANSITION AND SEPARATION AGREEMENT
This Transition and Separation Agreement (this “Agreement”), dated this 25th day of May, 2018, is entered into by and between FARO Technologies, Inc. (the “Company”), and Joseph Arezone (“Arezone”).
Recitals
WHEREAS, in connection with Arezone’s resignation from the Company, and in order to promote a smooth and amicable transition of duties, the Company has decided to offer the separation compensation and the other consideration described herein, conditioned upon Arezone’s compliance with the terms and conditions described in this Agreement.
NOW THEREFORE, in consideration of the promises and the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:  
Agreement
		
	1)
	Transition.

a)Resignation.  Arezone’s resignation from the position of Senior Vice President, Corporate Strategy & Initiatives and from any other positions or appointments that he may hold by or through the Company and its affiliates, including as an officer or director of any subsidiary of the Company, is effective May 31, 2018 (the “Resignation Date”).  Arezone agrees to execute, promptly upon request by the Company or any of its affiliates, any additional documents necessary to effectuate such resignations.  After the Resignation Date, Arezone will no longer be authorized or permitted to incur any expenses, obligations or liabilities on behalf of the Company or engage in any duties and responsibilities except the Transition Duties outlined below.

b)Transition Duties.  After the Resignation Date and continuing to November 30, 2018 (the “Transition Period”), Arezone shall continue as an at-will employee of the Company to perform the transition duties outlined herein (the “Transition Duties”). In recognition of Arezone’s stated desire to pursue outside interests, it is anticipated that the Transition Duties will not require Arezone’s full time attention, and the Company understands and accepts that Arezone may work remotely as necessary during the Transition Period.  Arezone shall work at the direction of the Company’s Chief Executive Officer towards achieving a smooth transition of authority and operations to the Company’s employees designated by the Company’s Chief Executive Officer, providing assistance and input concerning ongoing work-related matters in order to effectively transition matters to other staff, and performing other duties as reasonably directed by the Chief Executive Officer. Arezone acknowledges and agrees that his employment with the Company will terminate at the conclusion of the Transition Period, and that the Company may shorten the Transition Period in its sole discretion upon notice to Arezone. The Company acknowledges and agrees that if Arezone is discharged without cause during the Transition Period or the Company exercises its right to shorten the Transition Period for any reason, the consideration set forth in Section 2(a) below shall continue to be paid as severance until November 30, 2018 and the COBRA reimbursement set forth in Section 2(d) shall be extended through May 31, 2019. 

2)Consideration.  The Company agrees to pay Arezone the following consideration (the “Separation Compensation”), contingent upon Arezone’s execution of this Agreement, and Arezone’s continued full compliance with the terms of this Agreement:

a)In consideration for valuable consideration provided under this Agreement, the Company will continue to pay Arezone his existing base salary of $263,280, payable in biweekly installments during the Transition Period consistent with the Company’s current payroll practices.  Arezone will not receive a bonus payment under the Company’s short-term cash incentive program in respect of performance for any part of 2018.  During the Transition Period and with respect to fulfilling his obligations under Section 7, Arezone shall be entitled to out of pocket expense reimbursement consistent with the Company’s travel and expense policy.  

b)In consideration for Arezone agreeing to the covenants set forth in Sections 3, 5, 7, 8 and 9 of this Agreement:

		
	i)
	Arezone’s nonqualified stock option award agreements dated March 2, 2016 and March 3, 2017 are each hereby amended to provide that any of the outstanding stock options granted pursuant to such agreements that remain unvested and unexercisable as of the end of the Transition Period shall continue to vest following the conclusion of the Transition Period, in accordance with the vesting schedule set forth in each such agreement, as if Arezone’s employment with the Company continued in effect through and including each applicable vesting date, and such stock options, once vested, shall continue to be exercisable for a period of two years following the conclusion of the Transition Period, but in no event later than the Date of Expiration as defined in such agreements (the “Option Consideration”); and

		
	ii)
	Arezone’s restricted stock unit award agreements dated March 2, 2016 and March 3, 2017 are each hereby amended to provide that any of the outstanding restricted stock units granted pursuant to such agreements that remain unvested as of the end of the Transition Period shall continue to vest following the conclusion of the Transition Period, in accordance with the vesting schedule set forth in each such agreement, as if Arezone’s employment with the Company continued in effect through and including each applicable vesting date (collectively with the Option Consideration, the “Consideration”);

provided, however that in the case of both (i) and (ii) above, if Arezone breaches  any of the covenants set forth in Sections 3, 5, 7, 8 or 9 of this Agreement in any material respect, his outstanding stock options shall terminate immediately and automatically upon such breach and shall not be exercisable following such breach regardless of the vested status of such stock options, and Arezone’s unvested restricted stock units shall be immediately and automatically forfeited upon such breach, in each case without further consideration or any act or action by Arezone.  The stock options and restricted stock units granted to Arezone on March 20, 2018 shall not continue to vest following the conclusion of the Transition Period, and the terms of such awards shall not be modified by this Agreement. 
c)The payments and other consideration described in Sections 2(a) and 2(b) shall be minus the deductions the Company considers appropriate for any local, state and federal income taxes, Social Security, Medicare and other analogous withholdings.  The Company’s agreement to make the payments described in Sections 2(a) and 2(b) is specifically contingent upon Arezone executing this Agreement and not revoking the Agreement, as set forth in Section 11(f) below.  To the extent the Separation Compensation becomes payable pursuant to the terms of this Agreement, the Company will begin to make such payments within five (5) business days (or, if later, on the first payroll date) after this Agreement becomes effective and not subject to revocation pursuant to Section 11(f) below.

d)Arezone’s health insurance benefits with the Company shall continue on the same terms and conditions during the Transition Period, and cease to be effective at the conclusion of the Transition Period. Arezone shall be offered COBRA continuation following the conclusion of the Transition Period to the extent required by law and provided that Arezone timely elects continuation of medical benefits pursuant to COBRA, and does not become eligible for medical benefits under any other employer plan, the Company will reimburse Arezone the monthly COBRA payment which Arezone makes, for a period not to exceed six (6) months. The extent to which Arezone may continue to participate in the Company’s other employee benefit plans during the Transition Period will be determined in accordance with the written terms of the applicable written plan documents and insurance contracts governing those employee benefit plans.

3)General Release and Covenant Not to Sue.  In return for the Consideration described in Section 2(b), Arezone fully and forever discharges and releases the Company, its subsidiaries and affiliates, and each of their respective officers, directors, managers, employees, agents, attorneys and successors and assigns (collectively, the “FARO Companies”) from any and all claims or causes of action, known or unknown, for relief of any nature, arising on or before the date of this Agreement, which Arezone now has or claims to have or which Arezone at any time prior to signing this Agreement had, against the FARO Companies, including, but in no way limited to: any claim arising from or related to Arezone’s employment by FARO or the termination of Arezone’s employment with FARO, including but not limited to any claim under the Age Discrimination in Employment Act (“ADEA”), the Older Workers Benefit Protection Act (“OWBPA”), Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 1981, the Americans With Disabilities Act (“ADA”), the Family and Medical Leave Act (“FMLA”), the Employee Retirement Income Security Act (“ERISA”), the Equal Pay Act (“EPA”), the Occupational Safety and Health Act (“OSHA”), the Florida Civil Rights Act and any and all other local, state, and federal law claims arising under statute or common law. Arezone also agrees not to file a lawsuit against any of the FARO Companies in connection with such released claims. Arezone agrees that if anyone makes a claim or undertakes an investigation involving him in any way, Arezone waives any and all rights and claims to financial recovery resulting from such claim or investigation. Arezone further represents that he has not assigned to any other person any of such claims, and that he has the full right to grant this release. It is agreed that this is a general release and it is to be broadly construed as a release of all claims, except those that cannot be released by law. By signing this Agreement, Arezone acknowledges that he is doing so knowingly and voluntarily, that he understands that he may be releasing claims he may not know about, and that he is waiving all rights he may have had under any law that is intended to protect him from waiving unknown claims.  Notwithstanding the foregoing, nothing in this Section 3 shall affect Arezone’s right to indemnification pursuant to Article 6 of the Company’s Amended and Restated Articles of Incorporation.

4)No Admission of Liability.  The signing of this Agreement, the payment of the Separation Compensation, and the conferring of any other consideration upon Arezone is not an admission by the Company of fault or potential liability on the part of the Company. Rather, this Agreement is entered into in an effort to provide Arezone with a separation package and to end the parties’ employment relationship on an amicable basis. Arezone agrees that neither this Agreement nor any of its terms shall be offered or admitted into evidence or referenced in any judicial or administrative proceedings for the purpose or with the effect of attempting to prove fault or liability on the part of the Company, except as may be necessary to consummate or enforce the express terms of this Agreement.

5)Confidentiality and Non-Disparagement.

a)Arezone agrees not to disclose confidential, sensitive, or proprietary information concerning the Company obtained by him during his employment with the Company. For purposes of this Agreement, “confidential, sensitive, or proprietary” information would include, without limitation, all materials and information (whether written or not) about the Company’s services, products, processes, research, customers, personnel, finances, purchasing, sales, marketing, accounting, costs, pricing, improvements, discoveries, software, business methods and formulas, inventions, and other business aspects of the Company which are not generally known and accessible to the public at large or which provide the Company with a competitive advantage.

b)Arezone agrees that he will not: (1) make any statements to representatives of any press or media, Company employee, government entity, customer or vendor, which is disparaging of the Company, its reputation, or the character, competence or reputation of any officer, director, executive, employee, partner, or agent of the Company or any of its affiliated entities; (2) directly or indirectly provide information, issue statements, or take any action that would be reasonably likely to damage the Company’s reputation, cause the Company embarrassment or humiliation, or otherwise cause or contribute to the Company being held in disrepute; (3) directly or indirectly seek to cause any person or organization to discontinue or limit their current employment or business relationship with the Company; or (4) encourage or assist others to issue such statements or take such actions prohibited in this Section.

c)Notwithstanding anything herein to the contrary, any confidentiality, non-disclosure, non-disparagement or similar provision in this agreement does not prohibit or restrict Arezone (or his attorney) from initiating communications directly with, or responding to any inquiry from, or providing testimony before, the SEC, FINRA, any other self-regulatory organization or any other state or federal regulatory authority, regarding this Agreement or its underlying facts or circumstances.

6)Return of Property. Arezone agrees that no later than the conclusion of the Transition Period he will have returned all Company business records and property, including as applicable all financial files, notes, computer, cell phone, keys, contracts, employee records, files, correspondence, thumb drives, or the like containing information which was provided by the Company or obtained as a result of Arezone’s employment relationship with the Company. 

7)Future Assistance. In partial consideration for receiving the Separation Compensation, Arezone agrees that after the Transition Period, he will reasonably cooperate and make himself reasonably available to the Company in the event his assistance is needed to locate, understand, or clarify work previously performed by him or other work-related issues relating to his employment. Arezone further agrees, upon the Company’s request, to cooperate, assist and make himself reasonably available to the Company or its attorneys, on an as-needed basis, to provide information related to the Company’s financial statements, as well as any lawsuits which are pending or which may arise in the future, related in any way to issues of which Arezone had personal knowledge or involvement during the term of employment with the Company. This may include, but is not limited to, making himself reasonably available to provide  information to the Company’s attorneys, providing truthful and accurate sworn testimony in the form of deposition, affidavit and/or otherwise requested by the Company or providing testimony to government agencies. Given Arezone’s position as an executive employee, if he is contacted by a governmental agency to provide information related to the Company, he agrees to contact the Company’s General Counsel prior to providing any information or response to the governmental agency in order to provide the Company with a meaningful opportunity to respond to such a request. To the extent permitted by applicable law, Arezone also agrees to permit the Company’s attorneys to be present during any interview he may be required to give with any governmental entity.

8)Non-Competition.  In order to protect the Company’s trade secrets and confidential information, third-party goodwill and other legitimate business interests, Arezone acknowledges and agrees that during the Transition Period and for a period of two (2) years after the conclusion of the Transition Period (the “Restricted Period”), Arezone will not, without the Company’s express written permission, directly or indirectly, assist, be employed by, consult with, or provide services to any FARO Competitor.  Arezone understands and agrees that, during the Restricted Period, he is and will be subject to the restrictions set forth in this Section 8 in any geographic territory where the Company conducts business, including without limitation, the continental United States, Europe and Asia. “FARO Competitor” means (i) any business or enterprise that provides goods and/or services similar to or competitive with the Company (each such business or enterprise, a “Competitor”), or (ii) any of such Competitor’s subsidiaries, affiliates, agents or distributors, irrespective of whether the subsidiary, affiliate, agent or distributor itself provides goods and/or services similar to or competitive with the Company.  As used in this definition, “affiliate” includes any entity, business or enterprise that, directly or indirectly, controls a Competitor or is under common control through another person or entity with a Competitor.  The terms “controls,” “controlled by,” and “under common control” mean, when used with respect to any specified legal entity, the power to direct the management and policies of such entity, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.  The term “assist” includes any direct or indirect interest in any enterprise, whether as a stockholder, member, partner, joint venture, franchisor, franchisee, executive, consultant or otherwise (other than by ownership of less than two percent (2%) of the stock of a publicly held corporation) or rendering any direct or indirect service or assistance to any FARO Competitor.  

9)Non-Solicitation.  During the Restricted Period, Arezone shall not, without the prior written permission of the Company, directly or indirectly, for himself or on behalf of any other person or entity, (i) solicit, call upon, encourage or contact, or attempt to solicit, call upon, encourage or contact any customer or prospective customer of the Company or any of its subsidiaries for purposes of providing products or services competitive with those products or services offered by the Company or any of its subsidiaries or causing such person or entity to terminate their business relationship with the Company or any of its subsidiaries, or (ii) solicit or induce, or attempt to solicit or induce, any employee of the Company or any of its subsidiaries to terminate his or her relationship with the Company or any of its subsidiaries and/or to enter into an employment or agency relationship with Arezone or with any other person or entity with whom Arezone is affiliated, provided that the restriction in this Section 9 shall apply only to employees of the Company or any of its subsidiaries with whom Arezone worked by virtue of and during his employment with the Company.

10)Section 409A. The provisions of this Agreement will be administered, interpreted and construed in a manner consistent with Section 409A of the Internal Revenue Code of 1986, as amended, the regulations issued thereunder, or any exception thereto (or disregarded to the extent such provision cannot be so administered, interpreted, or construed). Each payment under this Agreement shall be considered a separate and distinct payment. Arezone shall have no right to designate the date of any payment under this Agreement. Arezone will not be considered to have terminated employment with the Company and its affiliates for purposes of any payments under this Agreement which are subject to Section 409A until Arezone would be considered to have incurred a “separation from service” (within the meaning of Section 409A). To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable pursuant to this Agreement or any other arrangement between Arezone and the Company and its affiliates during the six (6) month period immediately following Arezone’s separation from service will instead be paid on the first business day after the date that is six (6) months following Arezone’s separation from service (or, if earlier, Arezone’s date of death).  Nothing contained in this Agreement shall constitute any representation or warranty by the Company regarding compliance with Section 409A or any other applicable provision of federal, state, local or other tax law. The Company has no obligation to take any action to prevent the assessment of any tax under Section 409A or any other applicable provision of federal, state, local or other tax law, and neither the Company, nor any of the FARO Companies, shall have any liability to Arezone or any other person with respect thereto.

11)Miscellaneous.

a)Arezone shall pay all damages (including, but not limited to, litigation and/or defense costs, expenses, prejudgment interest, and reasonable attorneys’ fees) incurred by the Company as a result of Arezone’s material breach of this Agreement. The Company shall pay all damages (including, but not limited to, litigation and/or defense costs, expenses, prejudgment interest, and reasonable attorneys’ fees) incurred by Arezone as a result of the Company’s material breach of this Agreement.

b)Arezone agrees that the Company shall have no other obligations or liabilities to him except as provided herein. This Agreement shall be construed as a whole in accordance with its fair meaning and the laws of the State of Florida. Any dispute under this Agreement shall be adjudicated by a court of competent jurisdiction in the state or federal courts of Orange County, Florida. Except as otherwise provided for herein, this Agreement constitutes the entire agreement between the Company and Arezone on the matters described herein and it shall not be modified unless in writing and executed by a duly authorized officer of the Company. The provisions of this Agreement are severable and if any provision is held to be invalid or unenforceable, it shall not affect the validity or enforceability of any other provision.

c)Except as otherwise provided in Section 2 of this Agreement, this Agreement shall have no effect on Arezone’s entitlement to stock options or other benefits earned and vested prior to the conclusion of the Transition Period, except to the extent such benefits are affected by the conclusion of the Transition Period under the terms of the respective plans governing such benefits. Except as provided in this subsection (c), such benefits shall be governed by the terms of their respective plans outside the terms of this Agreement.     

d)AREZONE ACKNOWLEDGES THAT HE VOLUNTARILY ENTERS INTO THIS AGREEMENT WITH A FULL AND COMPLETE UNDERSTANDING OF ITS TERMS AND LEGAL EFFECT. AREZONE REPRESENTS THAT HE WAS ADVISED TO CONSULT WITH AN ATTORNEY ABOUT THE PROVISIONS OF THIS AGREEMENT BEFORE SIGNING BELOW.

e)Arezone further represents that by entering into this Agreement, Arezone is not relying on any statements or representations made by the Company, its officers, directors, agents, or employees, which are not specifically incorporated in this Agreement; rather, Arezone is relying upon Arezone’s own judgment and the advice of Arezone’s attorney, if applicable.

f)The offer embodied in this Agreement shall remain open and capable of acceptance by Arezone until June 15, 2018, after which time the offer shall be revoked. Arezone acknowledges that he has been given at least 21 calendar days from the date of this Agreement to accept the terms of this Agreement, although he may accept it at any time within those 21 days. After Arezone executes this Agreement, Arezone will still have an additional 7 days in which to revoke his acceptance. To revoke, Arezone must notify the Company’s General Counsel in writing delivered via hand delivery or certified mail, return receipt requested, and the Company’s General Counsel must receive such written notification before the end of the 7-day revocation period. If Arezone does not execute this Agreement within the 21-day period, or if he timely revokes this Agreement during the 7-day revocation period, this Agreement will not become effective and he will not be entitled to the Separation Compensation provided for in Section 2 above, and he will return to the Company any and all Separation Compensation already received by him under this Agreement. 

g)This Agreement may not be revoked at any time after the expiration of the 7-day revocation period referenced in Section 11(f) above. This Agreement is not intended to and shall not affect the right of Arezone to file a lawsuit, complaint or charge that challenges the validity of this Agreement under the Older Workers Benefit Protection Act, 29 U.S.C. §626(f), with respect to claims under the ADEA. Arezone agrees, however, that, with the exception of an action to challenge his waiver of claims under the ADEA, if he ever attempts to make, assert or prosecute any claim(s) covered by the General Release and Covenant Not to Sue in Section 3, he will, prior to filing or instituting such claim(s), return to the Company any and all the Separation Compensation payments already received by him under this Agreement, plus interest at the highest legal rate, and, with the exception of an action to challenge his waiver of claims under the ADEA, if the Company prevails in defending the enforceability of any portion of the Agreement or in defending itself against any such claim, he will pay the Company’s attorneys’ fees and costs incurred in defending itself against the claim(s) and/or the attempted revocation, recession or annulment of all or any portion of this Agreement.
 
h)The rights and obligations of the Company under this Agreement shall inure to the benefit of, and shall be binding upon the successors and assigns of the Company and by this Section 11(h), Arezone expressly consents to the Company’s right to assign this agreement. This Agreement cannot be assigned by Arezone.

i)Except as provided in Section 11(c), this Agreement sets forth the entire agreement between the parties concerning the termination of Arezone’s employment with the Company and supersedes any other written or oral promises concerning the subject matter of this Agreement.     

j) This Agreement may be signed in counterparts or transmitted by electronic means, but shall be considered duly executed if so signed by the parties.

*****

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year indicated below.

FARO TECHNOLOGIES, INC.

/s/ Katrona Tyrrell
By: Katrona Tyrrell
Its:  Chief People Officer
Date: May 25, 2018

/s/ Joseph Arezone
By: Joseph Arezone
Date: June 5, 2018

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