Accuray (ARAY) said late Wednesday it has entered into definitive agreements with TCW Asset Management, including a debt exchange deal, to strengthen its financial position and provide additional liquidity.

TCW, Accuray's primary lender and largest shareholder, will exchange $40 million in aggregate principal amount of its term loan for convertible preferred stock, which are convertible into common stock at a conversion price of $0.50 per share, a premium of about 105.4% to Accuray's trading price as of Tuesday and will accrue dividends at a rate of 8% per year, the company said.

TCW will also invest $15 million in Accuray, which will be exchanged for additional convertible preferred stock, and offer a delayed draw term loan of up to $5 million in aggregate principal amount to Accuray, according to a statement.

Accuray's board size will be reduced to 7 from 8, with TCW having the right to appoint two directors, the company said.

Accuray said it has also agreed to implement a reverse stock split of its common shares.

Shares of Accuray were up over 6% in Thursday trading.

Price: 0.25, Change: +0.01, Percent Change: +6.11