Item 1.01. Entry into a Material Definitive Agreement

On July 15, 2021, FARO Technologies, Inc. (the "Company") entered into a manufacturing services agreement (the "Agreement") with Sanmina Corporation ("Sanmina"), in connection with the Company's previously announced global restructuring plan. Under the Agreement, Sanmina will provide comprehensive manufacturing services for the Company's measurement device products currently manufactured by the Company at the Company's Lake Mary, Florida; Exton, Pennsylvania; and Stuttgart, Germany manufacturing sites.

Under the Agreement, the Company will provide Sanmina with an initial ninety day firm purchase order ("Order") and a forecast for product requirements for an additional nine months ("Forecast"). The Company will provide an updated forecast on a rolling monthly basis, and the first month of the updated forecast will become part of the Order so that a rolling 90 day firm Order is maintained. The Orders are binding, and the Company is also responsible for Sanmina's delivered cost of all components in support of the then-current forecast based on an inventory turnover model. The Company is obligated to provide a cash deposit to Sanmina to establish an inventory reserve account against future consumption for inventory in excess of the agreed level of inventory turnover. The inventory reserve account will be used by Sanmina to offset future inventory deemed excess or obsolete. The Company and Sanmina will perform a reconciliation of the inventory reserve account on a quarterly basis. Cash payments will be made by the Company as needed to maintain the inventory reserve account based on the inventory turnover model and to pay for Sanmina's delivered cost of any components deemed excess or obsolete that are not covered by the inventory reserve account.

The initial term of the Agreement is three years ("Initial Term") with automatic renewals of one year terms unless either party provides notice to the other at least twelve months prior to the end of the then-current term. The Agreement may be terminated by either party for cause and either party may terminate the Agreement for convenience after the end of the Initial Term with prior notice of twelve months.

The foregoing summary of the Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Agreement, a copy of which will be filed with the Company's Quarterly Report for the quarter ended September 30, 2021.




Item 8.01. Other Events.

On July 16, 2021, the Company issued a press release announcing that it had entered into the Agreement. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

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