Item 1.01 Entry into a Material Definitive Agreement.
On May 13, 2021, Accuray Incorporated (the “Company”) issued $100.0 million aggregate principal amount of its 3.75% convertible senior notes due 2026 (the “new notes”) consisting of (i) approximately $97.1 million aggregate principal amount of new notes issued in exchange for approximately $82.1 million aggregate principal amount of the Company’s outstanding 3.75% Convertible Senior Notes due 2022 (the “2022 notes”) pursuant to privately-negotiated agreements (the “Exchange Agreements”) with a limited number of existing holders of the 2022 notes who are both institutional “accredited investors” (within the meaning of Rule 501(a)(1), (2), (3) or (7) promulgated under the Securities Act of 1933, as amended (the “Securities Act”)) and “qualified institutional buyers” (as defined in Rule 144A under the Securities Act) (such existing holders, the “Exchange Participants” and such exchange transactions, the “Exchange”) and (ii) approximately $2.9 million aggregate principal amount of new notes issued for cash (the “Subscription” and, together with the Exchange, the “Transactions”) pursuant to privately-negotiated agreements (the “Subscription Agreements” and, together with the Exchange Agreements, the “Agreements”) with certain qualified investors who are both institutional accredited investors and qualified institutional buyers (the “Purchasers”).
Separately, the Company purchased an aggregate of approximately 3.1 million shares of its common stock (the “Repurchases”) in privately negotiated transactions with a financial intermediary at a price per share of $4.51, equal to the last reported sale price of Accuray common stock on May 6, 2021, in order to facilitate the Exchange. These Repurchases could increase, or prevent a decrease in, the market price of Accuray common stock or the new notes.
In connection with the issuance of the new notes in the Transactions, the Company entered into an Indenture (the “Indenture”) with The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). Additional information pertaining to the new notes and the Indenture is contained in Item 2.03 and incorporated herein by reference.
New Senior Secured Credit Agreement
As previously reported, on May 6, 2021, the Company entered into a senior secured credit agreement (the “Credit Agreement”) by and among the Company, as borrower, Silicon Valley Bank, individually as a lender and agent, and the other lenders from time to time parties thereto. The Credit Agreement provides for a new five-year $80 million term loan (the “Term Loan Facility”) and a $40 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Facilities”). The initial borrowings under the Credit Agreement, including $25 million under the Revolving Credit Facility, were funded on May 14, 2021.
See the Company’s Current Report on Form 8-K filed on May 12, 2021 for more details on the Credit Agreement and the Facilities. The summaries in that Current Report on Form 8-K and this Current Report on Form 8-K relating to the Credit Agreement and the Facilities do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Credit Agreement, a copy of which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ending June 30, 2021.
Item 1.02 Termination of Material Definitive Agreements
On May 14, 2021, the initial borrowings under the Credit Agreement, plus available cash on hand, were used to repay all outstanding obligations and terminate all commitments under the credit and security agreement, dated as of December 15, 2017 (as amended or otherwise modified, the “Existing Term Loan Facility”), by and among the Company, TomoTherapy Incorporated, MidCap Financial Trust and the other parties thereto and the credit and security agreement, dated as of June 14, 2017 (as amended or otherwise modified, the “Existing Revolving Facility” and, together with the Existing Term Loan Facility, the “Existing Facilities”), by and among the Company, TomoTherapy Incorporated, MidCap Financial Trust and the other parties thereto. The Existing Term Loan Facility and the Existing Revolving Facility were terminated on May 14, 2021.
The material terms of the Existing Facilities have been previously reported on the Company’s Current Reports on Form 8-K filed with the Securities and Exchange Commission.
