Subsequent Events

9 Months Ended

Sep. 30, 2014

Subsequent Event.

Subsequent Event

Note 15. Subsequent Event

On October 3, 2014, the Company and Middleton Beverly Investors LLC (“Middleton”) entered into a Real Estate Sale Agreement (the “Purchase Agreement”) pursuant to which Axcelis will sell, and Middleton will buy, the Company’s headquarters building in Beverly, Massachusetts (the “Property”), in exchange for a purchase price of $50.0 million, payable in cash on the closing. The Company will retain ownership of approximately 23 acres of adjacent property after the closing.  The Company expects that the transaction will be accounted for as a financing arrangement.  As such, at the inception of the arrangement the Company will record a financing obligation in the amount of $50.0 million and the Property will remain on its books.

Middleton’s obligation to purchase the Property is subject to its satisfactory completion of due diligence regarding the Property during a 45 day period from the date of the Purchase Agreement.  The closing under the Purchase Agreement is conditioned on the entry of the parties into a lease agreement pursuant to which the Company will lease the Property for a 22 year term.  Under this lease, the Company will pay an annual rent of $4.5 million for the first three years and $5.0 million in the fourth year, increasing 2.5% annually thereafter.  The closing is also subject to other customary acquisition closing conditions.  The Company is required to post a security deposit of $5.0 million in the form of an irrevocable letter of credit at the time of the closing.  At the closing, the Company expects to pay off the outstanding loan secured by a mortgage on the Property held by Northern Bank & Trust Company, including accrued interest and a 2.0% prepayment penalty.  See Note 10.