ASPEN AEROGELS INC (Form: 10-Q, Received: 05/10/2022 17:09:37)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-36481

ASPEN AEROGELS, INC.

(Exact name of registrant as specified in its charter)

Delaware		04-3559972
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

30 Forbes Road, Building B Northborough, Massachusetts		01532
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (508) 691-1111

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock, par value $0.00001 per share	ASPN	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 9, 2022, the registrant had 36,080,990 shares of common stock outstanding.

ASPEN AEROGELS, INC.

INDEX TO FORM 10-Q

		Page
	PART I FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets (unaudited) as of March 31, 2022 and December 31, 2021	1

	Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2022 and 2021	2

	Consolidated Statements of Stockholders’ Equity (unaudited) for the three months ended March 31, 2022 and 2021	3

	Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2022 and 2021	4

	Notes to Consolidated Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	34

	PART II OTHER INFORMATION

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 3.	Defaults Upon Senior Securities	37

Item 4.	Mine Safety Disclosures	37

Item 5.	Other Information	37

Item 6.	Exhibits	38

SIGNATURES		39

Trademarks, Trade Names and Service Marks

We own or have rights to use “Aspen Aerogels,” “Cryogel,” “Pyrogel,” “Spaceloft,” “PyroThin,” the Aspen Aerogels logo and other trademarks, service marks and trade names of Aspen Aerogels, Inc. appearing in this Quarterly Report on Form 10-Q. Solely for convenience, the trademarks, service marks and trade names referred to in this report are presented without the ® and TM symbols, but such references are not intended to indicate, in any way, that the owner thereof will not assert, to the fullest extent under applicable law, such owner’s rights to these trademarks, service marks and trade names. This report contains additional trademarks, service marks and trade names of other companies, which, to our knowledge, are the property of their respective owners.

PART I — FINANCIAL INFORMATION

Item 1.

Financial Statements.

ASPEN AEROGELS, INC.

Consolidated Balance Sheets

(Unaudited)

	March 31,			December 31,
	2022			2021
	(In thousands, except share and per share data)
Assets
Current assets:
Cash and cash equivalents	$	205,177		$	76,564
Accounts receivable, net of allowances of $139 and $150		24,533			20,426
Inventories		15,505			11,987
Prepaid expenses and other current assets		2,835			3,173
Total current assets		248,050			112,150
Property, plant and equipment, net		77,720			55,778
Operating lease right-of-use assets		12,996			13,531
Other long-term assets		2,240			1,495
Total assets	$	341,006		$	182,954
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	30,069		$	17,440
Accrued expenses		7,737			10,819
Current portion of prepayment liability		5,000			4,728
Deferred revenue		1,201			1,321
Operating lease liabilities		2,194			2,247
Total current liabilities		46,201			36,555
Prepayment liability		—			5,000
Convertible note - related party		100,638			—
Operating lease liabilities long-term		12,556			12,991
Total liabilities		159,395			54,546
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $0.00001 par value; 5,000,000 shares authorized, no shares issued and outstanding at March 31, 2022 and December 31, 2021		—			—
Common stock, $0.00001 par value; 125,000,000 shares authorized, 35,918,281 and 33,218,115 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		—			—
Additional paid-in capital		746,148			673,461
Accumulated deficit		(564,537	)		(545,053	)
Total stockholders’ equity		181,611			128,408
Total liabilities and stockholders’ equity	$	341,006		$	182,954

See accompanying notes to unaudited consolidated financial statements.

ASPEN AEROGELS, INC.

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended
	March 31,
	2022			2021
	(In thousands, except share and per share data)
Revenue:
Product	$	38,330		$	28,056
Research services		77			41
Total revenue		38,407			28,097
Cost of revenue:
Product		40,171			24,129
Research services		24			12
Gross (loss) profit		(1,788	)		3,956
Operating expenses:
Research and development		3,592			2,442
Sales and marketing		6,018			3,301
General and administrative		7,226			4,388
Total operating expenses		16,836			10,131
Loss from operations		(18,624	)		(6,175	)
Other income (expense)
Interest expense, convertible note - related party		(819	)		—
Interest expense, net		(41	)		(75	)
Total other income (expense), net		(860	)		(75	)
Net loss	$	(19,484	)	$	(6,250	)
Net loss per share:
Basic and diluted	$	(0.59	)	$	(0.22	)
Weighted-average common shares outstanding:
Basic and diluted		32,940,040			27,983,470

See accompanying notes to unaudited consolidated financial statements.

ASPEN AEROGELS, INC.

Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands, except share data)

	Preferred Stock $0.00001 Par Value				Common Stock $0.00001 Par Value				Additional Paid-in Capital			Accumulated Deficit			Total Stockholders' Equity
	Shares		Value		Shares		Value
Balance at December 31, 2021		—	$	—		33,218,115	$	—	$	673,461		$	(545,053	)	$	128,408
Net loss		—		—		—		—		—			(19,484	)		(19,484	)
Stock compensation expense		—		—		—		—		1,828			—			1,828
Vesting of restricted stock units		—		—		166,211		—		(2,315	)		—			(2,315	)
Proceeds from employee stock option exercises		—		—		4,681				38			—			38
Proceeds from at-the-market offering, net of commissions of $729 and issuance costs of $318		—		—		737,288		—		23,272			—			23,272
Proceeds from private placement of common stock, net of fees and issuance costs of $136		—		—		1,791,986		—		49,864			—			49,864
Balance at March 31, 2022		—	$	—		35,918,281	$	—	$	746,148		$	(564,537	)	$	181,611

	Preferred Stock $0.00001 Par Value				Common Stock $0.00001 Par Value					Additional Paid-in Capital			Accumulated Deficit			Total Stockholders' Equity
	Shares		Value		Shares			Value
Balance at December 31, 2020		—	$	—		27,821,685		$	—	$	575,811		$	(507,959	)	$	67,852
Net loss		—		—		—			—		—			(6,250	)		(6,250	)
Stock compensation expense		—		—		—			—		976			—			976
Vesting of restricted stock units		—		—		246,737			—		(2,613	)		—			(2,613	)
Proceeds from employee stock option exercises		—		—		48,056					463			—			463
Proceeds from at-the-market offering, net of commissions and fees of $193 and issuance costs of $17		—		—		305,182			—		6,215			—			6,215
Forfeiture of performance-based restricted stock		—		—		(78,125	)		—		—			—			—
Balance at March 31, 2021		—	$	—		28,343,535		$	—	$	580,852		$	(514,209	)	$	66,643

See accompanying notes to unaudited consolidated financial statements.

ASPEN AEROGELS, INC.

Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended
	March 31,
	2022			2021
	(In thousands)
Cash flows from operating activities:
Net loss	$	(19,484	)	$	(6,250	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		2,128			2,638
Accretion of interest on convertible note - related party		819			—
Amortization of convertible note issuance costs		4			3
Provision for bad debt		(5	)		(95	)
Stock-compensation expense		1,828			976
Reduction in the carrying amount of operating lease right-of-use assets		570			257
Changes in operating assets and liabilities:
Accounts receivable		(4,102	)		(4,875	)
Inventories		(3,518	)		2,252
Prepaid expenses and other assets		(374	)		630
Accounts payable		3,063			1,432
Accrued expenses		(3,082	)		1,422
Deferred revenue		(120	)		31
Operating lease liabilities		(556	)		(293	)
Net cash used in operating activities		(22,829	)		(1,872	)
Cash flows from investing activities:
Capital expenditures		(14,504	)		(1,470	)
Net cash used in investing activities		(14,504	)		(1,470	)
Cash flows from financing activities:
Proceeds from issuance of convertible note related party		100,000			—
Issuance costs from convertible note		(185	)		—
Proceeds from employee stock option exercises		38			463
Payments made for employee restricted stock tax withholdings		(2,315	)		(2,613	)
Proceeds from at-the-market offering, net of commissions of $729 and $193		23,590			6,232
Fees and issuance costs from at-the-market offering		(318	)		(17	)
Proceeds from private placement of common stock		50,000			—
Fees and issuance costs from private placement of common stock		(136	)		—
Repayment of prepayment liability		(4,728	)		—
Net cash provided by financing activities		165,946			4,065
Net increase in cash		128,613			723
Cash and cash equivalents at beginning of period		76,564			16,496
Cash and cash equivalents at end of period	$	205,177		$	17,219
Supplemental disclosures of cash flow information:
Interest paid	$	52		$	65
Income taxes paid	$	—		$	—
Supplemental disclosures of non-cash activities:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	68		$	888
Changes in accrued capital expenditures	$	9,566		$	176

See accompanying notes to unaudited consolidated financial statements.

ASPEN AEROGELS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(1) Description of Business and Basis of Presentation

Nature of Business

Aspen Aerogels, Inc. (the Company) is an aerogel technology company that designs, develops and manufactures innovative, high-performance aerogel insulation used primarily in the energy infrastructure and sustainable building materials markets. In addition, the Company has introduced a line of aerogel thermal barriers for use in battery packs in the electric vehicle market. The Company is also developing applications for its aerogel technology in the battery materials and a number of other high-potential markets.

The Company has also conducted research related to aerogel technology supported by funding from several agencies of the U.S. government and other institutions in the form of research contracts. The Company has decided to cease efforts to secure additional funded research contracts and to wind down existing contract research activities.

The Company maintains its corporate offices in Northborough, Massachusetts. The Company has three wholly owned subsidiaries: Aspen Aerogels Rhode Island, LLC, Aspen Aerogels Germany, GmbH and Aspen Aerogels Georgia, LLC.

Liquidity

During the three months ended March 31, 2022, the Company incurred a net loss of $19.5 million, used $22.8 million of cash in operations, used $14.5 million of cash for capital expenditures, received net proceeds of $23.3 million through an at-the-market (ATM) offering of the Company’s common stock from the sale of 737,288 shares of the Company’s common stock, and received net proceeds of $49.9 million through a private placement of the Company’s common stock. On February 15, 2022, the Company entered into a note purchase agreement with an affiliate of Koch Strategic Platforms, relating to the issuance and sale of $100.0 million of the Company’s convertible debt (see note 9). The Company had cash and cash equivalents of $205.2 million, a $5.0 million current prepayment liability (see note 10), and no outstanding borrowings under its revolving line of credit (see note 7). After giving effect to $1.3 million of outstanding letters of credit, the amount available to the Company at March 31, 2022 under the revolving line of credit was $15.8 million. The revolving line of credit matures on June 27, 2022.

The Company is increasing investment in the research and development of next-generation aerogel products and manufacturing process technologies. In addition, the Company has developed a number of promising aerogel products and technologies for the electric vehicle market. The Company believes that the commercial potential for the Company’s products and technology in the electric vehicle market is significant. Accordingly, the Company is hiring additional personnel, incurring additional operating expenses, and incurring significant capital expenditures to expand silica aerogel manufacturing capacity, build an automated thermal barrier fabrication operation, enhance research and development laboratory facilities and equipment, and construct a battery materials facility, among other efforts.

The Company expects its existing cash balance and the amount anticipated to be available under the existing revolving line of credit will be sufficient to support current operating requirements, current research and development activities and the initial capital expenditures required to support the evolving commercial opportunity in the electric vehicle market and other strategic business initiatives. However, the Company plans to supplement its cash balance and available credit with equity financings, debt financings, customer prepayments, or technology licensing fees to provide the additional capital necessary to purchase the capital equipment, construct the new facilities, establish the operations and complete the aerogel capacity expansions required to support these evolving commercial opportunities and strategic business initiatives.

Unaudited Interim Financial Information

The accompanying unaudited interim consolidated financial statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and

regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes in our Annual Report on Form 10-K for the year ended December 31, 2021 (the Annual Report), filed with the U.S. Securities and Exchange Commission on March 1, 2022.

In the opinion of the Company’s management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments that are of a normal recurring nature and necessary for the fair statement of the Company’s financial position as of March 31, 2022 and the results of its operations and stockholders’ equity for the three months ended March 31, 2022 and 2021 and the cash flows for the three-month periods then ended. The Company has evaluated subsequent events through the date of this filing.

The Company’s results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or any other period. In addition, the Company is uncertain of the continued duration and severity of the COVID-19 pandemic and the impact it will have on the Company’s results of operations for the year ending December 31, 2022 or any other period.

(2) Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements, which have been prepared in accordance with U.S. GAAP, include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements requires the Company to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include allowances for doubtful accounts, sales returns and allowances, product warranty costs, inventory valuation, the carrying amount of property and equipment, right-of-use assets, convertible note, lease liabilities, stock-based compensation, and deferred income taxes. The Company evaluates its estimates and assumptions on an on-going basis using historical experience and other factors, including current economic conditions, which are believed to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances warrant. Illiquid credit markets, volatile equity markets and declines in business investment can increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Cash and Cash Equivalents

Cash equivalents include short-term, highly liquid instruments, which consist of money market accounts and high-quality debt securities issued by the U.S. government via cash sweep accounts. All cash and cash equivalents are maintained with major financial institutions in North America. Deposits with these financial institutions may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and, therefore, bear minimal risk.

Concentration of Credit Risk

Financial instruments, which potentially expose the Company to concentrations of credit risk, consist principally of accounts receivable. The Company’s customers are primarily insulation distributors, insulation contractors, insulation fabricators and select energy and automotive end-users located throughout the world. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral to secure accounts receivable. The Company maintains an allowance for doubtful accounts based on its assessment of the collectability of accounts receivable. The Company reviews the allowance for doubtful accounts quarterly. During the three months ended March 31, 2022, the Company recorded a reduction for estimated customer uncollectible accounts receivable of less than $0.1 million. During the three months ended March 31, 2021, the Company recorded a reduction for estimated customer uncollectible accounts receivable of $0.1 million and had collections of $0.1 million of previously reserved customer accounts receivables.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers (ASC 606). See note 3 for further details.

Leases

The Company accounts for its leases in accordance with Accounting Standards Update (ASU) 2016-02 (Topic 842). See note 11 for further details.

Stock-Based Compensation

Stock-based compensation expense is measured at the grant date based on the fair value of the award. Expense is recognized on a straight-line basis over the requisite service period for all awards with service conditions. For performance-based awards, the grant date fair value is recognized as expense when the condition is probable of being achieved and then on a graded basis over the requisite service period. The Company uses the Black-Scholes option-pricing model to determine the fair value of service-based option awards, which requires a number of complex and subjective assumptions including the fair value of the underlying security, the expected volatility of the underlying security, a risk-free interest rate and the expected term of the option. The fair value of restricted stock and restricted stock unit grants is determined using the closing trading price of the Company’s common stock on the date of grant. The fair value of awards containing market conditions is determined using a Monte-Carlo simulation model based upon the nature of the conditions, the expected volatility of the underlying security, and other relevant factors.

During the three months ended March 31, 2022, the Company granted 151,478 restricted common stock units (RSUs) with a grant date fair value of $4.0 million and non-qualified stock options (NSOs) to purchase 396,570 shares of common stock with a grant date fair value of $6.0 million to employees under the 2014 Employee, Director, and Consultant Equity Incentive Plan (the 2014 Equity Plan). The RSUs and NSOs granted to employees will vest over a three-year period.

Stock-based compensation is included in cost of revenue or operating expenses, as applicable, and consists of the following:

	Three Months Ended
	March 31,
	2022		2021
	(In thousands)
Cost of product revenue	$	156	$	112
Research and development expenses		224		189
Sales and marketing expenses		324		168
General and administrative expenses		1,124		507
Total stock-based compensation	$	1,828	$	976

Pursuant to the “evergreen” provisions of the 2014 Equity Plan, the number of shares of common stock authorized for issuance under the plan automatically increased by 664,362 shares to 9,195,775 shares effective January 1, 2022.

As of March 31, 2022, 4,206,286 shares of common stock were reserved for issuance upon the exercise or vesting of outstanding stock-based awards granted under the 2014 Equity Plan and 2001 Equity Incentive Plan, as amended (the 2001 Equity Plan). Any cancellations or forfeitures of the options outstanding under the 2001 Equity Plan will result in the shares reserved for issuance upon exercise of such options becoming available for grant under the 2014 Equity Plan. As of March 31, 2022, the Company has either reserved in connection with statutory tax withholdings or issued a total of 4,164,039 shares under the 2014 Equity Plan. As of March 31, 2022, there were 825,450 shares of common stock available for future grant under the 2014 Equity Plan.

Net Loss per Share

The Company calculates net loss per share of common stock based on the weighted-average number of shares of common stock outstanding during each period. Potential common stock equivalents are determined using the treasury stock method. The weighted-average number of shares of common stock included in the computation of diluted net loss gives effect to all potentially dilutive common equivalent shares, including outstanding stock options and RSUs. Common equivalent shares are excluded from the computation of diluted net loss per share if their effect is antidilutive.

Warranty

The Company provides warranties for its products and records the estimated cost within cost of revenue in the period that the related revenue is recorded.

The Company’s standard warranty period for energy industrial products extends to one year from the date of shipment. This standard warranty provides that the Company’s products will be free from defects in material and workmanship, and will, under normal use, conform to the specifications for the product. The Company’s products may be utilized in systems that involve new technical demands and new configurations. Accordingly, the Company regularly reviews and assesses whether warranty reserves should be recorded in the period the related revenue is recorded.

The Company’s thermal barrier products provide quality and warranty provisions customary in the automotive industry.

The Company recorded warranty expense related to its thermal barrier products of less than $0.1 million during the three months ended March 31, 2022. The Company did not record any warranty expense during the three months ended March 31, 2021.

Recently Issued Accounting Standards

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies. Recently issued standards typically do not require adoption until a future effective date. Prior to their effective date, the Company evaluates the pronouncements to determine the potential effects of adoption to its consolidated financial statements.

Standards Implemented Since December 31, 2021

During the three months ended March 31, 2022, the Company adopted Accounting Standards Update (ASU) 2020-06, Debt-Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Topic 815): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU simplifies the accounting for convertible instruments by eliminating the cash conversion and beneficial conversion feature models used to separately account for embedded conversion features as a component of equity. Instead, the entity will account for the convertible debt or convertible preferred stock securities as a single unit of account, unless the conversion feature requires bifurcation and recognition as derivatives. Additionally, the guidance requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of potential share settlement for instruments that may be settled in cash or shares. The adoption of this standard did not have a material impact on our consolidated financial statements.

Standards to be Implemented

The Company believes that the impact of recently issued accounting standards that are not yet effective will not have a material impact on its consolidated financial statements.

(3) Revenue from Contracts with Customers

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (i) identification of the contract with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the separate performance obligations in the contract; and (v) recognition of the revenue associated with performance obligations as they are satisfied. The Company applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone-selling prices of the promised products or services underlying each performance obligation. The

Company determines standalone-selling prices based on the price at which the performance obligation is sold separately. If the standalone-selling price is not observable through past transactions, the Company estimates the standalone-selling price considering available information such as market conditions and internally approved pricing guidelines related to the performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph ASC 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. The Company did not have any contracts outstanding at December 31, 2021 and did not enter into any contracts during the three months ended March 31, 2022 that contained a significant financing component.

The Company records deferred revenue for product sales when (i) the Company has delivered products, but other revenue recognition criteria have not been satisfied, or (ii) payments have been received in advance of the completion of required performance obligations.

Shipping and Handling Costs

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in the cost of product revenue. The associated amount of revenue recognized includes the consideration to which the Company expects to be entitled to receive in exchange for incurring these shipping and handling costs.

Energy Industrial

The Company generally enters into contracts containing one type of performance obligation. The Company recognizes revenue when the performance obligation is satisfied, which is generally upon delivery according to contractual shipping terms within customer purchase orders.

The Company also enters into rebate agreements with certain customers. These agreements may be considered an additional performance obligation of the Company or variable consideration within a contract. Rebates are recorded as a reduction of revenue in the period the related revenue is recognized. A corresponding liability is recorded as a component of deferred revenue on the consolidated balance sheets. These arrangements are primarily based on the customer attaining contractually specified sales volumes.

The Company estimates the amount of its sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related revenue is recognized. The Company currently estimates return liabilities using historical rates of return, current quarter credit sales, and specific items of exposure on a contract-by-contract basis. Sales return reserves were approximately $0.1 million at both March 31, 2022 and December 31, 2021.

Subsea Projects

The Company manufactures and sells subsea products that are designed for pipe-in-pipe applications in offshore oil production and are typically customized to meet customer specifications. Subsea products typically have no alternative use and contain an enforceable right to payment. Customer invoicing terms for subsea products are typically based on certain milestones within the production and delivery schedule. Under the provisions of ASC 606, the Company recognizes revenue at a point in time when transfer of control of the products is passed to the customer, or over time utilizing the input method. The timing of revenue recognition is assessed on a contract-by-contract basis. During the three months ended March 31, 2022 and 2021, the Company recognized revenue of $0.6 million and $0.4 million, respectively, from subsea projects.

Thermal Barriers

The Company supplies fabricated, multi-part thermal barriers for use in battery packs in the electric vehicle market. These thermal barriers are customized to meet customer specifications. Thermal barrier products typically have no alternative use and may contain an enforceable right to payment. Under the provisions of ASC 606, the Company may recognize revenue at a point in time when transfer of the control of the products is passed to the customer, or over time utilizing the input method. The timing of revenue

recognition is assessed on a contract-by-contract basis. During the three months ended March 31, 2022 and 2021, the Company recognized revenue of $7.6 million and $0.1 million, respectively, from thermal barrier contracts.

Research Services

The Company performs research services under contracts with various government agencies and other institutions. These contracts generally have one type of performance obligation associated with the provision of research services including certain licenses to any resulting intellectual property. The Company records revenue using the percentage-of-completion method in two ways: (1) for firm-fixed-price contracts, the Company accrues that portion of the total contract price that is allocable on the basis of the Company’s estimates of costs incurred to date to total contract costs; and (2) for cost-plus-fixed-fee contracts, the Company records revenue that is equal to total payroll cost incurred times a stated factor plus reimbursable expenses, to a stated upper limit. The primary cost under the Company’s research service contracts is the labor expended in completing the research. Typically, the only deliverable, other than the labor hours expended, is reporting research results to the customer or delivery of research grade aerogel products. Because the input measure of labor hours expended is also reflective of the output measure, it is a reliable means to measure the extent of progress toward completion. Revisions in cost estimates and fees during the course of the contract are reflected in the accounting period in which the facts that require the revisions become known. Contract costs and rates used to allocate overhead to contracts are subject to audit by the respective contracting government agency. Adjustments to revenue as a result of audit are recorded within the period they become known. To date, adjustments to revenue as a result of contracting agency audits have been insignificant.

Disaggregation of Revenue

In the following tables, revenue is disaggregated by primary geographical region and source of revenue:

	Three Months Ended March 31,
	2022						2021
	U.S.		International		Total		U.S.		International		Total
	(In thousands)
Geographical region
Asia	$	—	$	7,324	$	7,324	$	—	$	5,588	$	5,588
Canada		—		860		860		—		964		964
Europe		—		3,911		3,911		—		7,246		7,246
Latin America		—		1,606		1,606		—		1,544		1,544
U.S.		24,706		—		24,706		12,755		—		12,755
Total revenue	$	24,706	$	13,701	$	38,407	$	12,755	$	15,342	$	28,097

Source of revenue
Energy industrial	$	17,650	$	12,489	$	30,139	$	12,662	$	14,887	$	27,549
Subsea projects		548		11		559		—		407		407
Research services		77		—		77		41		—		41
Thermal barrier		6,431		1,201		7,632		52		48		100
Total revenue	$	24,706	$	13,701	$	38,407	$	12,755	$	15,342	$	28,097

Contract Balances

The following table presents changes in the Company’s contract assets and contract liabilities during the three months ended March 31, 2022:

	Balance at December 31, 2021		Additions		Deductions			Balance at March 31, 2022
	(In thousands)
Contract assets
Subsea projects	$	1,448	$	965	$	(1,671	)	$	742
Research services		148		77		(209	)		16
Thermal barrier		235		—		—			235
Total contract assets	$	1,831	$	1,042	$	(1,880	)	$	993
Contract liabilities
Deferred revenue
Energy industrial	$	1,321	$	782	$	(1,308	)	$	795
Subsea projects		—		954		(548	)		406
Prepayment liability		9,728		—		(4,728	)		5,000
Total contract liabilities	$	11,049	$	1,736	$	(6,584	)	$	6,201

During the three months ended March 31, 2022, the Company recognized $1.3 million of revenue that was included in deferred revenue as of December 31, 2021.

A contract asset is recorded when the Company satisfies a performance obligation by transferring a promised good or service and has earned the right to consideration from its customer. These assets may represent a conditional or unconditional right to consideration and are included within accounts receivable and other current assets on the consolidated balance sheets.

A contract liability is recorded when consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services under the terms of the contract. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met.

(4) Inventories

Inventories consist of the following:

	March 31,		December 31,
	2022		2021
	(In thousands)
Raw materials	$	10,150	$	7,312
Finished goods		5,355		4,675
Total	$	15,505	$	11,987

(5) Property, Plant and Equipment, Net

Property, plant and equipment consist of the following:

	March 31,			December 31,			Useful
	2022			2021			life
	(In thousands)
Construction in progress	$	35,568		$	13,456			—
Buildings		24,016			24,016		30 years
Machinery and equipment		132,364			130,529		3-10 years
Computer equipment and software		9,580			9,457		3 years
Total		201,528			177,458
Accumulated depreciation		(123,808	)		(121,680	)
Property, plant and equipment, net	$	77,720		$	55,778

Depreciation expense was $2.1 million and $2.6 million for the three months ended March 31, 2022 and 2021, respectively.

Construction in progress totaled $35.6 million and $13.5 million at March 31, 2022 and December 31, 2021, respectively. The balance at March 31, 2022 and December 31, 2021 included engineering designs and other pre-construction costs totaling $23.1 million and $6.1 million, respectively for a planned aerogel manufacturing facility in Bulloch County, Georgia.

(6) Accrued Expenses

Accrued expenses consist of the following:

	March 31,		December 31,
	2022		2021
	(In thousands)
Employee compensation	$	5,036	$	8,991
Other accrued expenses		2,701		1,828
Total	$	7,737	$	10,819

(7) Revolving Line of Credit

The Company is party to an Amended and Restated Loan and Security Agreement with Silicon Valley Bank (Loan Agreement). On March 12, 2021, the Loan Agreement was amended and restated to extend the maturity date of the revolving credit facility to April 28, 2022 and to establish financial covenants on certain minimum Adjusted EBITDA levels and minimum Adjusted Quick Ratio covenants, each as defined in the Loan Agreement. At various dates in 2021, and subsequently on March 31, 2022, the Company entered into amendments to the Loan Agreement to revise certain financial covenants, among other things. On April 28, 2022, the Loan Agreement was amended to extend the maturity date of the revolving credit facility to June 27, 2022.

Under the revolving credit facility, the Company is permitted to borrow a maximum of $20.0 million, subject to continued covenant compliance and borrowing base requirements. The interest rate applicable to borrowings under the revolving credit facility is based on the prime rate, subject to a minimum rate of 4.00% per annum. The rates applicable to borrowings vary from prime rate plus 0.75% per annum to prime rate plus 2.00% per annum. In addition, the Company is required to pay a monthly unused revolving line facility fee of 0.50% per annum of the average unused portion of the revolving credit facility.

Under the Loan Agreement, the Company is required to comply with both non-financial and financial covenants, including a minimum Adjusted EBITDA covenant and a minimum Adjusted Quick Ratio covenant. As of March 31, 2022, the Company was in compliance with all such covenants. Obligations under the Loan Agreement are secured by a security interest in all assets of the Company, including those at the East Providence facility, except for certain exclusions. The Company intends to extend or replace the facility prior to its maturity.

As of March 31, 2022 and December 31, 2021, the Company had no amounts drawn from the revolving credit facility.

The Company has provided letters of credit to secure obligations under certain commercial contracts and other obligations. The Company had outstanding letters of credit backed by the revolving credit facility of $1.3 million at both March 31, 2022 and December 31, 2021, which reduce the funds otherwise available to the Company under the facility.

As of March 31, 2022, the amount available to the Company under the revolving credit facility was $15.8 million after giving effect to the $1.3 million of outstanding letters of credit.

(8) Related Party Transactions

Convertible Note

During the three months ended March 31, 2022, the Company issued a $100.0 million aggregate principal amount convertible note to Wood River Capital, LLC, an entity affiliated with Koch Strategic Platforms, LLC (the 2022 Convertible Note). Refer to note 9 for more information.

During the three months ended March 31, 2022, the Company incurred $0.8 million of interest expense from the 2022 Convertible Note.

Common Stock Private Placement

During the three months ended March 31, 2022, the Company sold 1,791,986 shares of common stock to Wood River Capital, LLC, an entity affiliated with Koch Strategic Platforms, LLC, at a purchase price equal to $27.902 per share, for aggregate gross proceeds of approximately $50.0 million.

Other

During the three months ended March 31, 2022, the Company recorded costs of $0.3 million as a component of construction in progress in connection with the planned aerogel manufacturing facility in Bulloch County, Georgia in fees from Koch Project Solutions, LLC, an entity affiliated with Koch Strategic Platforms, LLC.

(9) Convertible Note – Related Party

2022 Convertible Note

On February 15, 2022, the Company entered into a note purchase agreement (the Note Purchase Agreement) with Wood River Capital LLC, an entity affiliated with Koch Strategic Platforms, LLC (Koch), relating to the issuance and sale to Koch of the 2022 Convertible Note in the aggregate principal amount of $100.0 million. The transactions contemplated by the Note Purchase Agreement closed on February 18, 2022 (the Issue Date). The maturity date of the 2022 Convertible Note is February 18, 2027, subject to earlier conversion, redemption, or repurchase.

The 2022 Convertible Note is a senior unsecured obligation of the Company and ranks equal in right of payment to all senior unsecured indebtedness of the Company, and will rank senior in right of payment to any indebtedness that is contractually subordinated to the 2022 Convertible Note.

In accordance with ASU 2020-06, the 2022 Convertible Note is accounted for as a single unit of account and consists of the following:

	March 31,
	2022

Convertible note, principal	$	100,000
Accrued interest		819
Debt issuance costs, net of accumulated amortization		(181	)
Convertible note	$	100,638

Contractual Interest Rates

The 2022 Convertible Note was issued at par and bears interest at the Secured Overnight Financing Rate (SOFR) plus 5.50% per annum if interest is paid in cash, or, if interest is paid in-kind as an increase in the principal amount of the outstanding note, at the

SOFR plus 6.50% per annum. Under the terms of the Convertible Note, SOFR has a floor of 1% and a cap of 3%. Interest on the 2022 Convertible Note is payable semi-annually in arrears on June 30 and December 30. The Company, at its option, is permitted to settle each semi-annual interest payment in cash, in-kind, or any combination thereof.

Interest expense was $0.8 million for the three months ended March 31, 2022, of which debt issuance costs comprised less than $0.1 million. The effective interest rate approximated the contract interest rate for the for three months ended March 31, 2022.

Conversion Rights

The 2022 Convertible Note is convertible at the option of the holder at any time prior to the business day immediately preceding the maturity date at an initial conversion rate of 28.623257 shares of the Company’s common stock per $1,000 of capitalized principal. The effective conversion price is approximately $34.936625 per share (the Conversion Price). The Conversion Price is subject to adjustment upon the occurrence of certain dilutive events such as stock splits and combinations, stock dividends, mergers and spin-off. For the three months ended March 31, 2022, there were no adjustments to Conversion Price. As of March 31, 2022, 2,886,426 shares of the Company’s common stock were issuable upon conversion of the 2022 Convertible Note. The Company has the right to settle conversions in shares of common stock, cash, or any combination thereof. If the closing price per share of the Company’s common stock on the New York Stock Exchange is at least 130% of the Conversion Price for 20 consecutive trading days, the Company may elect to convert the principal and accrued interest owing under the Notes, plus a make-whole amount equal to the sum of the present values of the remaining interest payments that would have otherwise been payable from the date of such conversion, redemption or repurchase, as applicable, through maturity (the “Make-Whole Amount”), into the Company’s common stock at the Conversion Price.

Optional Redemption

The 2022 Convertible Note is redeemable at the Company’s option at any time and in the event that the volume weighted average price of the Company’s common stock for the 10 trading days immediately preceding the date on which the Company provides the redemption notice has been at least 130% of the Conversion Price then in effect at a redemption price of 100% of the principal amount, plus accrued and unpaid interest (excluding the redemption date), plus the Make-Whole Amount.

Contingent Redemption

Upon the occurrence of certain fundamental changes described in the Indenture (each, a “Fundamental Change”), the Holder of the Note may require that the Company repurchase all or part of the principal amount of the Note at a purchase price of 100% of the principal amount of such Note, plus accrued and unpaid interest to, but excluding, the Fundamental Change repurchase date, plus the Make-Whole Amount. The Indenture includes customary “events of default,” which may result in the acceleration of the maturity of the Note.

Embedded Derivatives

The Company determined that the Make-Whole feature of the 2022 Convertible Note requires bifurcation in accordance with Accounting Standards Codification 815, Derivatives and Hedging (ASC 815). Accordingly, the Company must separately account for the feature at fair value with changes in fair value reported in current period earnings. The fair value of the Make-Whole was determined to be immaterial as of February 18, 2022 and March 31, 2022.

(10) Commitments and Contingencies

Cloud Computing Agreement

The Company is party to a cloud computing agreement that is a service contract for enterprise resource planning software. During the three months ended March 31, 2022, the Company amended the agreement to a new five-year term. As of March 31, 2022, the Company capitalized $1.6 million of costs related to implementation of the agreement that will begin to amortize during 2022. The capitalized implementation costs are classified on the consolidated balance sheets as follows:

	March 31,		December 31,
	2022		2021
	(In thousands)
Cloud computing costs included in other current assets	$	304	$	390
Cloud computing costs included in other assets		1,314		637
Total capitalized cloud computing costs	$	1,618	$	1,027

Thermal Barrier Contracts

The Company is party to production contracts with a major U.S. automotive original equipment manufacturer (OEM) to supply fabricated, multi-part thermal barriers (Barriers) for use in the battery system of its next-generation electric vehicles (Contracts). Pursuant to the Contracts, the Company is obligated to supply Barriers at fixed annual prices and at volumes to be specified by the OEM up to a daily maximum quantity through the respective terms of the agreements, which expire at various times from 2026 through 2034. While the OEM has agreed to purchase its requirement for Barriers from the Company for locations to be designated from time to time by the OEM, it has no obligation to purchase any minimum quantity of Barriers under the Contracts. In addition, the OEM may terminate the Contracts at any time and for any or no reason. All other terms of the Contracts are generally consistent with the OEM’s standard purchase terms, including quality and warranty provisions customary in automotive industry.

BASF Supply Agreement

The Company was party to a supply agreement, as amended, with BASF Polyurethanes GmbH (BASF) (the Supply Agreement) and a joint development agreement with BASF SE (the JDA). Pursuant to the Supply Agreement, the Company agreed to sell exclusively to BASF certain of the Company’s products at annual volumes specified by BASF, subject to certain volume limits, through December 31, 2027.

Through the year ended December 31, 2019, BASF made two prepayments each in the amount of $5.0 million to the Company. BASF had the right to request that 25.3% of any amount invoiced by the Company to BASF for Spaceloft A2 were to be credited against the outstanding balance of the prepayments. BASF also had the right to request that the Company repay any uncredited amount of the first prepayment to BASF following a six-week notice period on or after January 1, 2022 and the second prepayment on or after January 1, 2023.

As of March 31, 2022, the Company had received $10.0 million in prepayments from BASF and applied approximately $0.3 million of credits against amounts invoiced to BASF for Spaceloft A2.

During 2021, the Company and BASF jointly announced that BASF would discontinue further marketing and sale of Spaceloft A2 as of November 15, 2021. After that date, BASF customers have had the right to purchase Spaceloft A2 directly from the Company.

On December 15, 2021, the Company terminated the supply arrangement and JDA with BASF and BASF SE, respectively. As part of the termination, the Company and BASF agreed that any uncredited prepayment balances would remain outstanding and subject to repayment upon BASF’s request following the requisite six-week notice periods after January 1, 2022 and January 1, 2023, respectively. On January 31, 2022, BASF requested that an outstanding prepayment balance of $4.7 million be repaid and the Company made the requested repayment on February 17, 2022.

The prepayment liability consists of the following:

	March 31,			December 31,
	2022			2021
	(In thousands)
Prepayment liability	$	5,000		$	9,728
Current portion of prepayment liability		(5,000	)		(4,728	)
Prepayment liability, long-term	$	—		$	5,000

Federal, State and Local Environmental Regulations

The Company is subject to federal, state and local laws and regulations relating to the environment. These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation. Penalties may be imposed for noncompliance.

Litigation

The Company is, from time to time, a party to litigation that arises in the normal course of its business operations. See Part II, Item 1 “Legal Proceedings” of this Quarterly Report on Form 10-Q for a description of certain of the Company’s current legal proceedings. The Company is not presently a party to any litigation for which it believes a loss is probable requiring an amount to be accrued or a possible loss contingency requiring disclosure.

(11) Leases

The Company leases office, laboratory, warehouse and fabrication space in Massachusetts and Rhode Island under operating leases. Under these agreements, the Company is obligated to pay annual rent, real estate taxes, and certain other operating expenses. The Company also leases equipment under operating leases. The Company’s operating leases expire at various dates through 2031.

The Company determines if an arrangement is a lease at inception. Right-of-use (ROU) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s payment obligations under the lease. Operating lease ROU assets and liabilities are recognized based on the present value of lease payments over the lease term. To measure its lease liabilities, the Company uses its incremental borrowing rate or the rate implicit in the lease, if available. The Company calculates its incremental borrowing rate using a synthetic credit rating analysis based on Moody’s Building Materials Industry Rating Methodology. ROU assets also include any direct costs and prepaid lease payments but exclude any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company elected the short-term lease recognition exemption for all leases that qualify. For leases that qualify for this exemption, the Company does not recognize ROU assets or lease liabilities. For lease agreements with lease and non-lease components, the Company accounts for each component separately. However, in the case of equipment leases, the Company accounts for lease and non-lease components as a single component.

Maturities of operating lease liabilities as of March 31, 2022 are as follows:

Year	Operating Leases
	(In thousands)
2022 (excluding the three months ended March 31, 2022)	$	2,325
2023		2,654
2024		2,054
2025		1,814
2026		1,635
Thereafter		8,333
Total lease payments		18,815
Less imputed interest		(4,065	)
Total lease liabilities	$	14,750

The Company incurred operating lease costs of $0.8 million and $0.4 million during the three months ended March 31, 2022 and 2021, respectively. Cash payments related to operating lease liabilities were $0.8 million and $0.4 million during the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022, the weighted average remaining lease term for operating leases was 8.3 years. As of March 31, 2022, the weighted average discount rate for operating leases was 5.9%.

As of March 31, 2022, the Company had additional operating equipment leases that will commence during 2022 with total lease payments of less than $0.1 million and a weighted average lease term of 3.1 years.

As of March 31, 2022, the Company had an additional operating real estate lease that will commence during 2022 with total lease payments of $0.1 million and a lease term of 1.5 years.

(12) CARES Act Payroll Tax Deferral

The Company elected to defer approximately $0.9 million of its employer payroll tax obligation for the period from March 27, 2020 to December 31, 2020 pursuant to the provisions of the CARES Act. The Company was required to remit 50 percent of the deferred tax balance on or before December 31, 2021 and the remaining 50 percent on or before December 31, 2022. As of December 31, 2021, the Company had remitted its initial repayment obligation. As of March 31, 2022 and December 31, 2021, a corresponding liability of $0.4 million was recorded as a component of accrued expenses on the consolidated balance sheets.

(13) Net Loss Per Share

The computation of basic and diluted net loss per share consists of the following:

	Three Months Ended
	March 31,
	2022			2021
	(In thousands, except share and per share data)
Numerator:
Net loss	$	(19,484	)	$	(6,250	)
Denominator:
Weighted average shares outstanding, basic and diluted		32,940,040			27,983,470
Net loss per share, basic and diluted	$	(0.59	)	$	(0.22	)

Potentially dilutive common shares that were excluded from the computation of diluted net loss per share because they were anti-dilutive consist of the following:

	Three Months Ended
	March 31,
	2022		2021
Common stock options		3,952,596		3,846,738
Restricted common stock units		253,691		364,828
Restricted common stock awards		476,550		45,066
Convertible note, if converted		2,886,426		—
Total		7,569,263		4,256,632

As the Company incurred a net loss for the three months ended, March 31, 2022 and 2021, the potential dilutive shares from common stock options, restricted common stock units, restricted common stock awards, and the convertible note were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented. The Company excludes the shares issued in connection with restricted stock awards from the calculation of basic weighted average common shares outstanding until the restrictions lapse.

(14) Income Taxes

The Company incurred net operating losses and recorded a full valuation allowance against net deferred tax assets for all periods presented. Accordingly, the Company has not recorded a provision for federal or state income taxes.

(15) Segment Information

Operating segments are identified as components of an enterprise about which separate, discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company’s chief operating decision maker reviews consolidated operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company reports two segments: Energy Industrial, which includes subsea and research services, and Thermal Barrier. We evaluate segment performance based on the segment profit (loss) before corporate expenses.

Summarized below are the Revenue and Segment Operating Profit for each reporting segment:

	Three Months Ended				Three Months Ended
	Revenue				Segment Operating Profit (Loss)
	March 31,				March 31,
	2022		2021		2022			2021
	(In thousands)
Energy industrial	$	30,775	$	27,997	$	2,997		$	4,877
Thermal barrier		7,632		100		(4,785	)		(921	)
Total	$	38,407	$	28,097	$	(1,788	)	$	3,956
Corporate expenses						16,836			10,131
Operating loss						(18,624	)		(6,175	)
Other expense, net						(860	)		(75	)
Net loss					$	(19,484	)	$	(6,250	)

(16) Subsequent Events

The Company has evaluated subsequent events through May 10, 2022, the date of issuance of the consolidated financial statements for the three months ended March 31, 2022.

On April 28, 2022, the Loan Agreement was amended to extend the maturity date of the revolving credit facility to June 27, 2022.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following information should be read in conjunction with the unaudited financial information and the notes thereto included in this Quarterly Report on Form 10-Q and the audited financial information and the notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2021, filed with the U.S. Securities and Exchange Commission (SEC) on March 1, 2022, which we refer to as the Annual Report.

Certain matters discussed in this Quarterly Report on Form 10-Q may be deemed to be forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. In this Quarterly Report on Form 10-Q, words such as “may,” “will,” “anticipate,” “estimate,” “expects,” “projects,” “intends,” “plans,” “believes” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements.

Our actual results and the timing of certain events may differ materially from the results discussed, projected, anticipated, or indicated in any forward-looking statements. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, they may not be predictive of results or developments in future periods.

The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report on Form 10-Q and under “Risk Factors” in Item 1A of the Annual Report.

We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

You should read the following discussion and analysis of financial condition and results of operations together with Part I Item 1 “Financial Statements,” which includes our financial statements and related notes, elsewhere in this Quarterly Report on Form 10-Q.

Investors and others should note that we routinely use the Investors section of our website to announce material information to investors and the marketplace. While not all of the information that we post on the Investors section of our website is of a material nature, some information could be deemed to be material. Accordingly, we encourage investors, the media, and others interested in us to review the information that we share on the Investors section of our website, https://www.aerogel.com.

Products

Our core businesses are organized into two reportable segments: Energy Industrial and Thermal Barrier. The following describes our key product offerings and new product innovations by reportable segment.

Energy Industrial

We design, develop and manufacture innovative, high-performance aerogel insulation used primarily in the energy infrastructure and sustainable building materials markets. We believe our aerogel blankets deliver the best thermal performance of any widely used insulation product available on the market today and provide a combination of performance attributes unmatched by traditional insulation materials. Our end-user customers select our products where thermal performance is critical and to save money, improve resource efficiency, enhance sustainability, preserve operating assets and protect workers. Our insulation is used by oil producers and the owners and operators of refineries, petrochemical plants, liquefied natural gas facilities, power generating assets and other energy infrastructure. Our Pyrogel and Cryogel product lines have undergone rigorous technical validation by industry leading end-users and achieved significant market adoption. Our Spaceloft building materials are increasingly used by building owners to improve the energy efficiency and to enhance fire protection in buildings ranging from historic brownstones to modern high rises.

We also derive revenue from a number of other end markets. Customers in these markets use our products for applications as diverse as military and commercial aircraft, trains, buses, appliances, apparel, footwear and outdoor gear. As we continue to enhance our aerogel technology platform, we believe we will have additional opportunities to address high value applications in the global

insulation market, the electric vehicle market and in a number of new, high-value markets, including hydrogen energy, filtration, water purification, and gas sorption.

We market and sell our products primarily through a sales force based in North America, Europe and Asia. The efforts of our sales force are supported by a small number of sales consultants with extensive knowledge of a particular market or region. Our sales force is responsible for establishing and maintaining customer and partner relationships, delivering highly technical information and ensuring high-quality customer service.

Our salespeople work directly with end-user customers and engineering firms to promote the qualification, specification and acceptance of our aerogel and thermal barrier products. We also rely on an existing and well-established channel of qualified insulation distributors and contractors in more than 50 countries around the world to ensure rapid delivery of our aerogel products and strong end-user support.

We also perform research services under contracts with various agencies of the U.S. government, including the Department of Defense and the Department of Energy, and other institutions. We have decided to cease efforts to secure additional funded research contracts and to wind down our existing contract research activities.

Thermal Barrier

We are actively developing a number of promising aerogel products and technologies for the electric vehicle market. We have developed and are commercializing our proprietary line of PyroThin aerogel thermal barriers for use in battery packs in electric vehicles. Our PyroThin product is an ultra-thin, lightweight and flexible thermal barrier designed with other functional layers to impede the propagation of thermal runaway across multiple lithium-ion battery system architectures. Our thermal barrier technology is designed to offer a unique combination of thermal management, mechanical performance and fire protection properties. These properties enable electric vehicle manufacturers to achieve critical battery performance and safety goals. In addition, we are seeking to leverage our patented carbon aerogel technology to develop industry-leading battery materials for use in lithium-ion battery cells. These battery materials have the potential to increase the energy density of the battery cells, thus enabling an increase in the driving range of electric vehicles.

The commercial potential for our PyroThin thermal barriers and our carbon aerogel battery materials in the electric vehicle market is significant. Accordingly, we are hiring additional personnel, incurring additional operating expenses, incurring significant capital expenditures to expand aerogel manufacturing capacity, establishing an automated thermal barrier fabrication operation, enhancing research and development resources and expanding our battery material research facilities, among other items.

We have entered into production contracts with General Motors LLC to supply fabricated, multi-part thermal barriers for use in the battery system of its next-generation electric vehicles. Pursuant to the contracts, we are obligated to supply the barriers at fixed annual prices and at volumes to be specified by the customer up to a daily maximum quantity through the term of the agreements, which expire at various times from 2026 through 2034. While the customer has agreed to purchase its requirement for the barriers from us at locations to be designated from time to time, it has no obligation to purchase any minimum quantity of barriers under the contracts. In addition, the customer may terminate the contracts any time and for any or no reason. All other terms of the contracts are generally consistent with the customer’s standard purchase terms, including quality and warranty provisions customary in the automotive industry.

Manufacturing Operations

We manufacture our products using our proprietary technology at our facility in East Providence, Rhode Island. We have operated the East Providence facility since 2008 and have increased our capacity in phases to approximately $250.0 million in annual revenue. To meet expected growth in demand for our aerogel products in the electric vehicle market, we are planning to expand our aerogel blanket capacity by constructing a second manufacturing plant in Bulloch County, Georgia.

On February 17, 2022, we entered into an Inducement Agreement with the Development Authority of Bulloch County (the Development Authority), the City of Statesboro, Bulloch County, Georgia (collectively, Statesboro Entities). Pursuant to the Inducement Agreement, the Statesboro Entities will provide various incentives to induce us to invest at least $325.0 million in constructing and equipping our second manufacturing facility in Bulloch County, Georgia and to create at least 250 full-time jobs. Separately, and concurrently, the Company entered into a Memorandum of Understanding (the MOU) with the Georgia Department of Economic Development (the GDEcD). Pursuant to both the Inducement Agreement and the MOU, the Local Governmental Entities and the GDEcD will provide various incentives to induce the Company to invest at least $325.0 million in constructing and equipping a facility to produce aerogel-based products in Bulloch County, Georgia and to create at least 250 full-time jobs (the Project). We will also receive statutory incentives for economic development provided by the State of Georgia. Incentives afforded by the Statesboro

Entities to us include, but are not limited to, property tax reductions and utility and site infrastructure improvements for the Project. Additionally, the Development Authority, with assistance from the GDEcD, will also apply for a grant, the proceeds of which shall be used by us for certain equipment in connection with the Project. The Development Authority will lease to us an approximately 90-acre property along with buildings and equipment to be built therein, for a term of five years, with an option to renew for an additional 5 years, in consideration for the payment of nominal rent, and grant to us an option to purchase the property upon the earlier of the expiration or termination of the lease at a nominal price.

In addition, we entered into a (i) PILOT Agreement with the Statesboro Entities that sets forth our rights and obligations with respect to the incentives received pursuant to the Inducement Agreement and (ii) a Performance and Accountability Agreement with other state authorities, which provides for a grant of $1,000,000. Pursuant to these agreements, in the event that we fail to meet at least 80% of the investment and job creation goals within 36 months following the earlier to occur of (i) the completion and issuance of the certificate of occupancy with respect to the planned second manufacturing facility or (ii) December 31, 2024 (the Commencement Date), we may be required to repay portions of property tax savings, the grant to the Development Authority and other incentives. In addition, we must maintain our achievement of 80% of the investment and job creation goals for a period of 60 months thereafter.

We expect to build the second plant in two phases at an estimated cost of $575.0 million for the first phase and $125.0 million for the second phase. We currently expect the first phase of the plant will increase our annual revenue capacity by approximately $650.0 million and the second phase by approximately $700.0 million. We expect to have the first phase of the second plant operational late in the second-half of 2023. In addition, we are planning to construct a state-of-the-art, automated thermal barrier fabrication operation in Monterrey, Mexico in order to keep pace with the significant potential demand for our PyroThin thermal barriers.

Financial Summary

On February 18, 2022, we sold and issued to an affiliate of Koch $100.0 million in aggregate principal amount of our Convertible Senior PIK Toggle Notes due 2027 (the Notes), pursuant to a note purchase agreement, dated as of February 15, 2022, by and between us and the affiliate of Koch. The Notes bear interest at the Secured Overnight Financing Rate (SOFR) plus 5.50% per annum if interest is paid in cash (the Cash Interest), or, if interest is paid in kind (through an increase in the principal amount of the outstanding Notes or through the issuance of additional Notes), at SOFR plus 6.50% per annum (PIK Interest). Under the terms of the investment, SOFR has a floor of 1% and a cap of 3%. We can elect to make any interest payment through Cash Interest, PIK Interest or any combination thereof. Interest on the Notes is payable semi-annually in arrears on June 30 and December 30, commencing on June 30, 2022. It is expected that the Notes will mature on February 18, 2027, subject to earlier conversion, redemption or repurchase.

On March 28, 2022, we sold to an affiliate of Koch, 1,791,986 shares of our common stock for aggregate gross proceeds of $50.0 million, pursuant to a securities purchase agreement, dated as of February 15, 2022, by and between us and the affiliate of Koch.

On March 16, 2022, we entered into a sales agreement for an at-the-market (ATM) offering program with Cowen and Company, LLC as our sales agent. During the three months ended March 31, 2022, we sold 737,288 shares of our common stock through the ATM offering program and received net proceeds of $23.3 million, after deducting commissions and estimated offering expenses payable by us.

On March 12, 2021, we entered into an Amended and Restated Loan and Security Agreement (Loan Agreement) with Silicon Valley Bank to extend the maturity date of the revolving credit facility to April 28, 2022. Pursuant to the Loan Agreement, we are permitted to borrow a maximum of $20.0 million, subject to continued covenant compliance and borrowing base requirements. The interest rate applicable to borrowings under the revolving credit facility is based on the prime rate, subject to a minimum rate of 4.00% per annum, plus a margin. The rates applicable to borrowings vary from prime rate plus 0.75% per annum to prime rate plus 2.00% per annum. In addition, we are required to pay a monthly unused revolving line facility fee of 0.50% per annum of the average unused portion of the revolving credit facility. The credit facility has also been amended to establish minimum Adjusted EBITDA and minimum Adjusted Quick Ratio covenants, each as defined in the Loan Agreement. At various dates in 2021, and subsequently on March 31, 2022, we entered into amendments to the Loan Agreement to revise certain financial covenants, among other things. On April 28, 2022, the Loan Agreement was amended to extend the maturity date of the revolving credit facility to June 27, 2022.

Our revenue for the three months ended March 31, 2022 was $38.4 million, which represented an increase of $10.3 million, or 37%, from $28.1 million for the three months ended March 31, 2021. Net loss for the three months ended March 31, 2022 was $19.5 million and net loss per share was $0.59. Net loss for the three months ended March 31, 2021 was $6.3 million and net loss per share was $0.22.

In response to the COVID-19 pandemic, we have implemented and are following safe practices recommended by public health authorities and other government entities. We continue to focus on the safety and health of our employees, customers and vendors. In addition, we have implemented various precautionary measures, including remote work arrangements, restricted business travel and procedures for social distancing, face coverings and safe hygiene. We continue to monitor public health guidance as it evolves and plan to adapt our practices as appropriate. Refer to “Risk Factors” in Item 1A of the Annual Report for more information concerning risks to our business associated with COVID-19.

Key Metrics and Non-GAAP Financial Measures

We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.

Square Foot Operating Metric

We price our energy industrial product and measure our shipments in square feet. We believe the square foot operating metric allows us and our investors to measure our manufacturing capacity and energy industrial product shipments on a uniform and consistent basis. The following chart sets forth energy industrial product shipments in square feet associated with recognized revenue, including revenue recognized over time utilizing the input method, for the periods presented:

		Three Months Ended
		March 31,
		2022		2021
	(In thousands)
Product shipments in square feet			8,163		8,614

Adjusted EBITDA

We use Adjusted EBITDA, a non-GAAP financial measure, as a means to assess our operating performance. We define Adjusted EBITDA as net income (loss) before interest expense, taxes, depreciation, amortization, stock-based compensation expense and other items, from time to time, which we do not believe are indicative of our core operating performance. Adjusted EBITDA is a supplemental measure of our performance that is not presented in accordance with U.S. GAAP. Adjusted EBITDA should not be considered as an alternative to net income (loss) or any other measure of financial performance calculated and presented in accordance with U.S. GAAP. In addition, our definition and presentation of Adjusted EBITDA may not be comparable to similarly titled measures presented by other companies.

We use Adjusted EBITDA:

•

as a measure of operating performance because it does not include the impact of items that we do not consider indicative of our core operating performance;

•

for planning purposes, including the preparation of our annual operating budget;

•

to allocate resources to enhance the financial performance of our business; and

•

as a performance measure used under our bonus plan.

We also believe that the presentation of Adjusted EBITDA provides useful information to investors with respect to our results of operations and in assessing the performance and value of our business. Various measures of EBITDA are widely used by investors to measure a company’s operating performance without regard to items that can vary substantially from company to company depending upon financing and accounting methods, book values of assets, capital structures and the methods by which assets were acquired.

Although measures similar to Adjusted EBITDA are frequently used by investors and securities analysts in their evaluation of companies, we understand that Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for net income (loss), income (loss) from operations, net cash provided by (used in) operating activities or an analysis of our results of operations as reported under U.S. GAAP. Some of these limitations are:

•

Adjusted EBITDA does not reflect our historical cash expenditures or future requirements for capital expenditures or other contractual commitments;

•

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

•

Adjusted EBITDA does not reflect stock-based compensation expense;

•

Adjusted EBITDA does not reflect our income tax expense or cash requirements to pay our income taxes;

•

Adjusted EBITDA does not reflect our interest expense, or the cash requirements necessary to service interest or principal payments on our debt;

•

although depreciation, amortization and impairment charges are non-cash charges, the assets being depreciated, amortized or impaired will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for these replacements; and

•

other companies in our industry may calculate EBITDA or Adjusted EBITDA differently than we do, limiting their usefulness as a comparative measure.

Because of these limitations, our Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to reinvest in the growth of our business or as a measure of cash available for us to meet our obligations.

To properly and prudently evaluate our business, we encourage you to review the U.S. GAAP financial statements included elsewhere in this Quarterly Report on Form 10-Q, and not to rely on any single financial measure to evaluate our business.

The following table presents a reconciliation of net loss, the most directly comparable U.S. GAAP measure, to Adjusted EBITDA for the periods presented:

	Three Months Ended
	March 31,
	2022			2021
	(In thousands)
Net loss	$	(19,484	)	$	(6,250	)
Depreciation and amortization		2,129			2,638
Stock-based compensation⁽¹⁾		1,828			976
Interest expense		860			75
Adjusted EBITDA	$	(14,667	)	$	(2,561	)

⁽¹⁾

Represents non-cash stock-based compensation related to vesting and modifications of stock option grants, vesting of restricted stock units and vesting of restricted common stock.

Our financial performance, including such measures as net income (loss), earnings per share and Adjusted EBITDA, are affected by a number of factors including volume and mix of aerogel products sold, average selling prices, our material costs and manufacturing expenses, the costs associated with capacity expansions and start-up of additional production capacity, and the amount and timing of operating expenses. Accordingly, we expect that our net income (loss), earnings per share and Adjusted EBITDA will vary from period to period.

We expect growth in revenue during 2022 driven by a continued post-COVID recovery in the energy infrastructure market, accelerating demand in the electric vehicle market and continued market share gains in the sustainable building materials market. Our expectation to maintain revenue growth is based, in part, on our OEM customers’ production volume forecasts and targets as well as our expectation to successfully scale our manufacturing capabilities and address any potential supply chain issues to meet this expected demand. We are also planning a significant increase in staffing and spending levels in support of our electric vehicle market opportunities during the year, including expenses associated with the start-up and operation of an automated fabrication facility in Monterrey, Mexico and the initial staffing and operational requirements of our planned second aerogel manufacturing facility in Bulloch County, Georgia. As a result, we expect to experience an increase in net loss and a decrease in Adjusted EBITDA during 2022.

We also expect to incur significant capital expenditures and increased expenses during 2022, related to our planned second aerogel manufacturing facility to be located in Bulloch County, Georgia. We are planning to invest approximately $700.0 million in two phases in the construction of the second facility. We expect to have the first phase of the second plant operational late in the second-half of 2023.

Components of Our Results of Operations

Revenue

We recognize revenue from the sale of our energy industrial aerogel products, thermal barriers and research services revenue from the provision of services under contracts with various agencies of the U.S. government and other institutions. Revenue is recognized upon the satisfaction of contractual performance obligations.

We record deferred revenue for sales when (i) we have delivered products, but other revenue recognition criteria have not been satisfied, or (ii) payments have been received in advance of the completion of required performance obligations.

We project revenue growth during 2022 due to a continued post-COVID recovery in the energy infrastructure market, accelerating demand in the electric vehicle market for our thermal barrier product and continued market share gains in the sustainable building materials market. Our projected revenue growth may be constrained by a shortage of unskilled labor associated with the COVID-19 pandemic.

Cost of Revenue

Cost of product revenue consists primarily of materials and manufacturing expense. Cost of product revenue is recorded when the related product revenue is recognized.

Material is our most significant component of cost of energy industrial product revenue and includes fibrous batting, silica materials and additives. Material costs as a percentage of product revenue vary from product to product due to differences in average selling prices, material requirements, product thicknesses, and manufacturing yields. In addition, we provide warranties for our products and record the estimated cost within cost of revenue in the period that the related revenue is recorded or when we become aware that a potential warranty claim is probable and can be reasonably estimated. As a result of these factors, material costs as a percentage of product revenue will vary from period to period due to changes in the mix of aerogel products sold, the costs of our raw materials or the estimated cost of warranties. In addition, global supply chain disturbances, increased reliance on foreign materials procurement, industrial gas supply constraints, increases in the cost of our raw materials, and other factors may significantly impact our material costs and have a material impact on our operations. In May 2022, one of our silanes suppliers, Silbond Corporation, informed us that it needs to curtail supply of one of the silanes we use, such that we may not receive all of our requirements in the near term due to difficulties in arranging transportation of the silanes to us. We are currently working with our supplier to identify and obtain an adequate supply of silanes or otherwise fill the shortage. We are also exploring other potential options for obtaining transportation and supply, including potentially from other third parties including from Asia or by arranging transportation of silanes ourselves. However, there can be no assurance that we will be able to obtain sufficient supplies of silanes in a timely matter, which could result in material adverse impacts on our business and our financial condition. We expect that material costs will increase in absolute dollars during 2022 due to projected growth in product shipments, but decrease as a percentage of revenue due to projected increases in average selling prices, improved manufacturing, and fabrication yields and a favorable mix of products sold.

Manufacturing expense is also a significant component of cost of revenue. Manufacturing expense includes labor, utilities, maintenance expense, and depreciation on manufacturing assets. Manufacturing expense also includes stock-based compensation for manufacturing employees and shipping costs. Manufacturing expense is our most significant component of cost of our thermal barrier product revenue. We expect that manufacturing expense will increase in absolute dollars and as a percentage of revenue during 2022 due to increased manual fabrication staffing and spending levels in support of our thermal barrier business, including the start-up and operation of a fabrication facility in Monterrey, Mexico and the initial staffing and operational requirements of our planned second aerogel manufacturing facility in Bulloch County, Georgia.

In total, we expect that cost of product revenue will increase in absolute dollars during 2022 versus 2021 and as a percentage of revenue versus 2021 driven by the costs to support our expected higher run-rate revenue in future periods.

Cost of research services revenue consists of direct labor costs of research personnel engaged in the contract research, third-party consulting and subcontractor expense, and associated direct material costs. This cost of revenue also includes overhead expenses associated with project resources, development tools and supplies. In 2022, we expect that cost of research services revenue will continue to decline as we wind down our existing contract research activities.

Gross Profit

Our gross profit as a percentage of revenue is affected by a number of factors, including the volume of aerogel products produced and sold, the mix of aerogel products sold, average selling prices, our material and manufacturing costs, realized capacity utilization and the costs associated with expansions and start-up of production capacity. Accordingly, we expect our gross profit to vary significantly in absolute dollars and as a percentage of revenue from period to period.

During 2022, we expect gross profit to increase in both absolute dollars and as a percentage of total revenue due to the combination of a projected increase in total revenue combined with projected reduction in material costs as a percentage of total revenue related to our energy industrial products, offset, in part, by a projected increase in manufacturing expense as a percentage of revenue primarily related to our thermal barrier business.

Operating Expenses

Operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Operating expenses include personnel costs, legal fees, professional fees, service fees, insurance premiums, travel expense, facilities related costs and other costs, expenses and fees. The largest component of our operating expenses is personnel costs, consisting of salaries, benefits, incentive compensation and stock-based compensation. In any particular period, the timing and extent of personnel additions or reductions, legal activities, including patent enforcement actions, marketing programs, research efforts and a range of similar activities or actions could materially affect our operating expenses, both in absolute dollars and as a percentage of revenue.

During 2022, we expect to continue to hire additional technical, operational and commercial personnel and incur additional operating expenses to support the anticipated multi-year growth in our PyroThin thermal barrier business. As a result, we expect that operating expenses will increase in both absolute dollars and as a percentage of revenue during the year. In the longer term, we expect that operating expenses will increase in absolute dollars, but decrease as a percentage of revenue.

Research and Development Expenses

Research and development expenses consist primarily of expenses for personnel engaged in the development of next-generation aerogel compositions, form factors and manufacturing technologies. These expenses also include testing services, prototype expenses, consulting services, trial formulations for new products, equipment depreciation, facilities costs and related overhead. We expense research and development costs as incurred. We expect to continue to devote substantial resources to the development of new aerogel technologies, including our carbon aerogel battery materials. We believe that these investments are necessary to maintain and improve our competitive position. We also expect to continue to invest in research and engineering personnel and the infrastructure required in support of their efforts. While we expect our research and development expenses will increase in absolute dollars but decrease as a percentage of revenue in the longer term, in 2022, we expect these expenses will increase in both absolute dollars and as a percentage of revenue.

Sales and Marketing Expenses

Sales and marketing expenses consist primarily of personnel costs, incentive compensation, marketing programs, travel and related costs, consulting expenses and facilities related costs. We expect that sales and marketing expenses will increase in absolute dollars and as a percentage of revenue during 2022 principally due to an increase in compensation associated with the addition of personnel in support of our PyroThin thermal barrier business. In the longer term, we expect that sales and marketing expenses will increase in absolute dollars but decrease as a percentage of revenue.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs, legal expenses, consulting and professional services, audit fees, compliance with securities, corporate governance and related laws and regulations, investor relations expenses and insurance premiums, including director and officer insurance.

We expect our general and administrative expenses to increase as we add general and administrative personnel to support the anticipated growth of our business. We also expect that the patent enforcement actions, described in more detail under “Legal Proceedings” in Part II, Item 1 of this Quarterly Report on Form 10-Q, if protracted, could result in significant legal expense over the medium to long-term. While we expect that our general and administrative expenses will increase in absolute dollars but decrease as a percentage of revenue in the longer term, in 2022, we expect such expenses will increase in both absolute dollars and as a percentage of revenue.

Interest Expense, Net

Interest expense, net consists of interest expense on our convertible note and fees and interest expense related to our revolving credit facility.

Provision for Income Taxes

We have incurred net losses since inception and have not recorded benefit provisions for U.S. federal income taxes or state income taxes since the tax benefits of our net losses have been offset by valuation allowances due to the uncertainty associated with the utilization of net operating loss carryforwards.

Results of Operations

Three months ended March 31, 2022 compared to the three months ended March 31, 2021

The following tables set forth a comparison of the components of our results of operations for the periods presented:

Revenue

	Three Months Ended March 31,
	2022					2021					Change
			Percentage					Percentage
	Amount		of Revenue			Amount		of Revenue			Amount		Percentage
	($ in thousands)
Revenue:
Energy industrial	$	30,775		80	%	$	27,997		100	%	$	2,778		10	%
Thermal barrier		7,632		20	%		100		0	%		7,532	NM
Total revenue	$	38,407		100	%	$	28,097		100	%	$	10,310		37	%

Total revenue increased $10.3 million, or 37%, to $38.4 million for the three months ended March 31, 2022 from $28.1 million in the comparable period in 2021. The increase in total revenue was the result of increases in both thermal barrier and energy industrial revenue.

The following chart sets forth energy industrial product shipments in square feet associated with recognized revenue, including revenue recognized over time utilizing the input method, for the periods presented:

	Three Months Ended March 31,				Change
	2022		2021		Amount			Percentage
Product shipments in square feet (in thousands)		8,163		8,614		(451	)		(5	)%

Energy industrial revenue increased by $2.8 million, or 10%, to $30.8 million for the three months ended March 31, 2022 from $28.0 million in the comparable period in 2021. This increase was driven by maintenance-based demand in the global petrochemical

and refinery markets, particularly in North America, due to the continued post-COVID recovery, and market share gains in the sustainable building materials market, offset, in part, by a decrease in project-based demand in the LNG market.

Energy industrial revenue for the three months ended March 31, 2022 included $11.0 million to a North American distributor. Energy industrial revenue for the three months ended March 31, 2021 included $7.4 million to a North American distributor, $5.0 million to a European LNG project contractor, and $4.0 million to an Asian LNG project contractor.

The average selling price per square foot of our energy industrial products increased by $0.52, or 16%, to $3.77 per square foot for the three months ended March 31, 2022 from $3.25 per square foot for the three months ended March 31, 2021. The increase in average selling price principally reflected the impact of a change in the mix of products sold. This increase in average selling price had the effect of increasing product revenue by $4.2 million for the three months ended March 31, 2022 from the comparable period in 2021.

In volume terms, energy industrial product shipments decreased by 0.4 million square feet, or 5%, to 8.2 million square feet for the three months ended March 31, 2022, as compared to 8.6 million square feet for the three months ended March 31, 2021. The decrease in volume had the effect of decreasing product revenue by $1.4 million for the three months ended March 31, 2022 from the comparable period in 2021.

Thermal barrier revenue was $7.6 million for the three months ended March 31, 2022 as compared to $0.1 million for the three months ended March 31, 2021. Thermal barrier revenue for the three months ended March 31, 2022 included $6.1 million to a major U.S. automotive original equipment manufacturer.

Cost of Revenue

	Three Months Ended March 31,
	2022								2021								Change
			Percentage of Related			Percentage of Total					Percentage of Related			Percentage of Total
	Amount		Revenue			Revenue			Amount		Revenue			Revenue			Amount		Percentage
	($ in thousands)
Cost of revenue:
Energy industrial	$	27,778		90	%		72	%	$	23,120		83	%		82	%	$	4,658		20	%
Thermal barrier		12,417		163	%		32	%		1,021	NM				4	%		11,396	NM
Total cost of revenue	$	40,195		105	%		105	%	$	24,141		86	%		86	%	$	16,054		67	%

Total cost of revenue increased $16.1 million, or 67%, to $40.2 million for the three months ended March 31, 2022 from $24.1 million in the comparable period in 2021. The increase in total cost of revenue was the result of increases in thermal barrier and energy industrial cost of revenue.

Energy industrial cost of revenue increased $4.7 million, or 20%, to $27.8 for the three months ended March 31, 2022 from $23.1 million in the comparable period in 2021. The $4.7 million increase was the result of a $3.4 million increase in material costs to support the 10% increase in energy industrial revenue from the comparable period in 2021 and a $1.3 million increase in manufacturing costs.

Thermal barrier cost of revenue increased $11.4 million to $12.4 million for the three months ended March 31, 2022 as compared to $1.0 million for the three months ended March 31, 2021. The $11.4 million increase was the result of a $4.8 million increase in material costs and a $6.6 million increase in manufacturing expense. The increase in material costs was the result of the increase in revenue volume from the comparable period in 2021 in which there were minimal thermal barrier sales. The increase in manufacturing expense was driven by increases in compensation and related costs of $5.5 million and other operating and manufacturing costs of $1.1 million.

Gross Profit

	Three Months Ended March 31,
	2022						2021						Change
				Percentage						Percentage
	Amount			of Revenue			Amount			of Revenue			Amount			Percentage
	($ in thousands)
Gross profit:
Energy industrial	$	2,997			10	%	$	4,877			17	%	$	(1,880	)		(39	)%
Thermal barrier		(4,785	)		(63	)%		(921	)	NM				(3,864	)	NM
Total gross profit	$	(1,788	)		(5	)%	$	3,956			14	%	$	(5,744	)		(145	)%

Gross profit decreased by $5.8 million, or 145%, to $(1.8) million for the three months ended March 31, 2022 from $4.0 million in the comparable period in 2021. The decrease in gross profit was the result of the $16.1 million increase in total cost of revenue, offset, in part, by the $10.3 million increase in total revenue. The decrease in gross profit reflects the increase in overhead costs and additional resources to support our expected higher run-rate revenue in future periods for both our energy industrial and thermal barrier products.

Research and Development Expenses

	Three Months Ended March 31,
	2022					2021					Change
			Percentage					Percentage
	Amount		of Revenue			Amount		of Revenue			Amount		Percentage
	($ in thousands)
Research and development expenses	$	3,592		9	%	$	2,442		9	%	$	1,150		47	%

Research and development expenses increased by $1.2 million, or 47%, to $3.6 million for the three months ended March 31, 2022 from $2.4 million in the comparable period in 2021. The $1.2 million increase reflects an increase in compensation and related costs of $0.5 million, equipment and lease expenses of $0.4 million and other research and development expenses of $0.3 million.

Research and development expenses as a percentage of total revenue were 9% for both the three months ended March 31, 2022 and 2021.

Sales and Marketing Expenses

	Three Months Ended March 31,
	2022					2021					Change
			Percentage					Percentage
	Amount		of Revenue			Amount		of Revenue			Amount		Percentage
	($ in thousands)
Sales and marketing expenses	$	6,018		16	%	$	3,301		12	%	$	2,717		82	%

Sales and marketing expenses increased by $2.7 million, or 82%, to $6.0 million for the three months ended March 31, 2022 from $3.3 million in the comparable period in 2021. The $2.7 million increase was principally the result of increases in compensation and related costs of $1.8 million, other operating expenses of $0.6 million, marketing expenses of $0.2 million and travel-related expenditures of $0.2 million, offset, in part, by a decrease in sales consultant expenses of $0.1 million.

Sales and marketing expenses as a percentage of total revenue increased to 16% for the three months ended March 31, 2022 from 12% in the comparable period in 2021, due principally to the increase in compensation and related expenses associated with an increase in sales and business development personnel.

General and Administrative Expenses

	Three Months Ended March 31,
	2022					2021					Change
			Percentage					Percentage
	Amount		of Revenue			Amount		of Revenue			Amount		Percentage
	($ in thousands)
General and administrative expenses	$	7,226		19	%	$	4,388		16	%	$	2,838		65	%

General and administrative expenses increased by $2.8 million, or 65%, to $7.2 million for the three months ended March 31, 2022 from $4.4 million in the comparable period in 2021. The $2.8 million increase was the result of increases in compensation and related costs of $1.4 million, operating and lease expenses of $1.1 million, a decrease in the provision for bad debt of $0.2 million and an increase in professional fees of $0.1 million.

General and administrative expenses as a percentage of total revenue increased to 19% for the three months ended March 31, 2022 from 16% in the comparable period in 2021.

Interest Expense, net

	Three Months Ended March 31,
	2022						2021						Change
				Percentage						Percentage
	Amount			of Revenue			Amount			of Revenue			Amount			Percentage
	($ in thousands)
Interest expense:
Interest expense, related party	$	(819	)		(2	)%	$	—			—		$	(819	)	NM
Interest expense, net		(41	)		—			(75	)		—			34			(45	)%
Total interest expense, net	$	(860	)		(2	)%	$	(75	)		0	%	$	(785	)		1047	%

Interest expense, net increased by $0.8 million to $0.9 million for the three months ended March 31, 2022 from $0.1 million in the comparable period in 2021. The $0.8 million increase was the result of interest relating to our Convertible Note.

Liquidity and Capital Resources

Overview

We have experienced significant losses and invested substantial resources since our inception to develop, commercialize and protect our aerogel technology and to build a manufacturing infrastructure capable of supplying aerogel products at the volumes and costs required by our customers. These investments have included research and development and other operating expenses, capital expenditures and investment in working capital balances.

Our long-term financial projections anticipate revenue growth, increasing levels of gross profit, and improved cash flows from operations. To meet expected growth in demand for our aerogel products in the electric vehicle market, we are planning to expand our aerogel blanket capacity by constructing a second manufacturing plant in Bulloch County, Georgia. We expect to build the second plant in two phases at an estimated cost of $575.0 million for the first phase and $125.0 million for the second phase. We expect to have the first phase of the second plant operational late in the second-half of 2023. In addition, we are planning to construct and commence operation of a state-of-the-art, thermal barrier fabrication operation in Monterrey, Mexico during 2022 in order to keep pace with the significant potential demand for our PyroThin thermal barriers.

We are also increasing our investment in the research and development of next-generation aerogel products and technologies. During 2022, we will continue to develop aerogel products and technologies for the electric vehicle market. We believe the commercial potential for our technology in the electric vehicle market is significant. To meet the anticipated revenue growth and take advantage of this market opportunity, we are adding personnel, incurring additional operating expenses, and planning to construct a carbon aerogel battery materials facility, among other items.

We took several actions during 2021 to increase the financial resources available to support current operating requirements and capital expenditures. In June 2021, we sold 3,462,124 shares to an affiliate of Koch Strategic Platforms in a private placement of our common stock and received net proceeds of $73.5 million after deducting fees and offering expenses of $1.5 million. During 2021, we also sold shares of our common stock through our ATM offering program and received net proceeds of $19.4 million.

In February 2022, we sold 1,791,986 shares to an affiliate of Koch Strategic Platforms in a private placement of our common stock and received net proceeds of $49.9 million after deducting fees and offering expenses of $0.1 million. In addition, in February 2022, we sold and issued to an affiliate of Koch $100.0 million in aggregate principal amount of our Convertible Senior PIK Toggle Notes. During the three months ended March 31, 2022, we sold 737,288 shares of our common stock through our ATM offering program and received net proceeds of $23.3 million, after deducting commissions and estimated offering expenses payable by us.

We believe that our March 31, 2022 cash and cash equivalents balance of $205.2 million and funds available under our revolving credit facility will be sufficient to support current operating requirements, current research and development activities and the initial capital expenditures required to support the evolving commercial opportunities in the electric vehicle market and other strategic business opportunities.

However, we plan to supplement our cash balance and available credit with equity financings, debt financings, customer prepayments or technology licensing fees to provide the additional capital necessary to purchase the capital equipment, construct the new facilities and complete the aerogel capacity expansions required to support our evolving commercial opportunities and strategic business initiatives. We also intend to extend or replace our revolving credit facility with Silicon Valley Bank prior to its maturity.

Primary Sources of Liquidity

Our principal sources of liquidity are currently our cash and cash equivalents and our revolving credit facility with Silicon Valley Bank. Cash and cash equivalents consist primarily of cash and money market accounts on deposit with banks. As of March 31, 2022, we had $205.2 million of cash and cash equivalents.

On June 29, 2021, we sold 3,462,124 shares to an affiliate of Koch Strategic Platforms in a private placement of our common stock and received net proceeds of $73.5 million after deducting fees and offering expenses of $1.5 million.

On March 16, 2022, we entered into a sales agreement for an ATM offering program with Cowen and Company, LLC as our sales agent. During the three months ended March 31, 2022, we sold 737,288 shares of our common stock through the ATM offering program and received net proceeds of $23.3 million, after deducting commissions and estimated offering expenses payable by us.

We have a prepayment balance of $5.0 million associated with prepayments received pursuant to our supply agreement with BASF, which we expect to repay on or after January 1, 2023.

We have maintained our revolving credit facility, as amended from time to time, with Silicon Valley Bank since March 2011. At various dates in 2021, and subsequently on March 31, 2022, the Company entered into amendments to the Loan Agreement to revise certain financial covenants, among other things. On April 28, 2022, the Loan Agreement was amended to extend the maturity date of the revolving credit facility to June 27, 2022. We intend to extend or replace the facility prior to its maturity.

Under our revolving credit facility, we may borrow a maximum of $20.0 million, subject to continued covenant compliance and borrowing base requirements. The interest rate applicable to borrowings under the revolving credit facility is based on the prime rate, as defined, subject to a minimum rate of 4.00% per annum. The rates applicable to borrowings vary from prime rate plus 0.75% per annum to prime rate plus 2.00% per annum. In addition, we are required to pay a monthly unused revolving line facility fee of 0.50% per annum of the average unused portion of the revolving credit facility.

As of March 31, 2022, we had no outstanding borrowings under our revolving credit facility and $1.3 million of outstanding letters of credit secured by the revolving credit facility.

Under the revolving credit facility, we are required to comply with both non-financial and financial covenants, including minimum Adjusted EBITDA and Adjusted Quick Ratio covenants, as defined in the loan agreement. As of March 31, 2022, we were in compliance with all such covenants.

The amount available to us under the revolving credit facility as of March 31, 2022 was $15.8 million after giving effect to the $1.3 million of letters of credit outstanding.

Analysis of Cash Flow

Net Cash Used in Operating Activities

During the three months ended March 31, 2022, we used $22.8 million in net cash in operating activities, as compared to the use of $1.9 million in net cash during the comparable period in 2021, an increase in the use of cash of $20.9 million. This increase in use of cash was the result of increases in net loss adjusted for non-cash items of $11.7 million and in net cash used by changes in operating assets and liabilities of $9.2 million.

Net Cash Used in Investing Activities

Net cash used in investing activities is for capital expenditures for machinery and equipment principally to improve the throughput, efficiency and capacity of our East Providence facility and engineering designs for the planned aerogel manufacturing facility in Bulloch County, Georgia. Net cash used in investing activities for the three months ended March 31, 2022 and 2021 was $14.5 million and $1.5 million, respectively.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2022 totaled $165.9 million and consisted of $99.8 million in net proceeds from the issuance of convertible debt, $49.9 million in net proceeds from the private placement of our common stock, $23.3 million in net proceeds from the ATM offering program, and less than $0.1 million in proceeds from employee stock option exercises, offset, in part, by $4.7 million in cash used for payments made for repayments of a prepayment liability and $2.4 million in cash used for payments made for employee tax withholdings associated with the vesting of restricted stock units.

Net cash provided by financing activities for the three months ended March 31, 2021 totaled $4.1 million and consisted of $6.2 million in net proceeds from our ATM offering program and $0.5 million in proceeds from employee stock option exercises, offset, in part, by $2.6 million in cash used for payments made for employee tax withholdings associated with the vesting of restricted stock units.

Contractual Obligations and Commitments

There have been no material changes to our contractual obligations and commitments as reported in our Annual Report.

Recent Accounting Pronouncements

Information regarding new accounting pronouncements is included in note 2 to our unaudited consolidated financial statements contained in Item 1 of this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with U.S. GAAP. The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses and related disclosures. We believe that the estimates, assumptions and judgments involved in these accounting policies have the greatest potential impact on our financial statements and, therefore, we consider these to be our critical accounting policies. Accordingly, we evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions. See our Annual Report and note 2 to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for information about these critical accounting policies, as well as a description of our other significant accounting policies.

Certain Factors That May Affect Future Results of Operations

The SEC encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Quarterly Report on Form 10-Q contains such “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other important factors, which may cause our actual results, performance or achievements to be

materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about: the expected future growth of the market for our aerogel products and our continued gain in market share, in particular in the electric vehicle market, the energy infrastructure insulation market, the lithium-ion battery thermal barrier markets, and other markets we target; our beliefs in the appropriateness of our assumptions, the accuracy of our estimates regarding expenses, loss contingencies, future revenues, future profits, uses of cash, available credit, capital requirements, and the need for additional financing to operate our business, including to complete the planned construction and development of our second manufacturing facility in Bulloch County, Georgia, or fabrication operations in Monterrey, Mexico, and to fund our planned strategic business initiatives; the performance of our aerogel blankets; our expectation that we will be successful in obtaining, enforcing and defending our patents against competitors and that such patents are valid and enforceable; our belief that our products possess strong competitive advantages over traditional insulation materials, including the superior thermal performance and the thin, easy-to-use and durable blanket form of our products; our expectations regarding the investment to open a second manufacturing facility in Georgia and the anticipated job creation as a result thereof; the anticipated capacity expansion as a result of the planned second manufacturing facility in Georgia and the expected commencement of production; our estimates of annual production capacity; our plans regarding the future capacity expansion, including the selection of a manufacturing site and the construction and operation of the facility; our ability to obtain approvals and terms that are acceptable to move forward with the construction of a facility in the southeastern U.S. on a timely basis, or at all; beliefs about the role of our technology and products in the electric vehicle market; beliefs about the commercial potential for our technology in the electric vehicle market; beliefs about our ability to produce and deliver products to electric vehicle customers; beliefs about Aspen’s contracts with the major U.S. automotive manufacturer; beliefs about the potential for the major U.S. automotive manufacturer to become a significant customer for Aspen’s products; beliefs about revenue, costs, expenses, profitability, investments or cash flow associated with the contracts with the major U.S. automotive manufacturer; our expectations about the size and timing of awarded business in the electric vehicle market, future revenues and profit margins, arising from our supply relationship and contract with automotive OEMs and our ability to win more business and increase revenue in the electric vehicle market; beliefs about the performance of our thermal barrier products in the battery systems of electric vehicles; beliefs about the potential commercial opportunity for Aspen’s thermal barrier products; the current or future trends in the energy, energy infrastructure, chemical and refinery, LNG, sustainable building materials, electric vehicle thermal barrier, electric vehicle battery materials or other markets and the impact of these trends on our business; our investments in the electric vehicle market and aerogel technology platform; our beliefs about the usefulness of the square foot operating metric; our beliefs about the financial metrics that are indicative of our core performance; our beliefs about the usefulness of our presentation of Adjusted EBITDA; our expectations about the effect of manufacturing capacity on financial metrics such as Adjusted EBITDA; our expectations about future revenues, expenses, gross profit, net loss, loss per share and Adjusted EBITDA, sources and uses of cash, capital requirements and the sufficiency of our existing cash balance and available credit; our beliefs about the outcome, effects or estimated costs of current or potential litigation or their respective timing, including expected legal expense in connection with our patent enforcement actions; our plans to devote substantial resources to the development of new aerogel technology; our expectations about product mix; our expectations about future material costs and manufacturing expenses as a percentage of revenue; our expectations of future gross profit and the effect of manufacturing expenses, manufacturing capacity and productivity on gross profit; our expectations about our resources and other investments in new technology and related research and development activities and associated expenses; our expectations about short and long term (a) research and development (b) general and administrative and (c) sales and marketing expenses; our expectations of revenue growth, increased gross profit, and improving cash flows over the long term; our intentions about managing capital expenditures and working capital balances; our expectations about incurring significant capital expenditures in the future; our expectations about the expansion of our workforce and resources and its effect on sales and marketing, general and administrative, and related expenses; our expectations about future product revenue and demand for our products; our expectations about the effect of stock based compensation on various costs and expenses; our expectations about potential sources of future financing; our beliefs about the impact of accounting policies on our financial statements; our beliefs about the effect of interest rates, inflation and foreign currency fluctuations on our results of operations and financial condition; our beliefs about the expansion of our international operations, including in Mexico; our statements about the impact of major public health concerns, including the COVID-19 pandemic or other pandemics arising globally, and the future, and currently unknown extent of, the impact of the COVID-19 pandemic on our business and operations; and our statements about the sufficiency of our current and future actions to address the impact of the COVID-19 pandemic on our business and operations, including our future revenue, Adjusted EBITDA and other financial metrics.

Words such as “may,” “will,” “anticipate,” “estimate,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance, identify forward-looking statements. All forward-looking statements are management’s present expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those described in the forward-looking statements. These risks include, but are not limited to, those set forth in this Quarterly Report on Form 10-Q and under the heading “Risk Factors” contained in Item 1A of our Annual Report.

In light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained in this Quarterly Report on Form 10-Q might not occur. Stockholders and other readers are cautioned not to place undue

reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements attributable to Aspen Aerogels, Inc. or to any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure results primarily from fluctuations in interest rates as well as from inflation. In the normal course of business, we are exposed to market risks, including changes in interest rates which affect our line of credit under our revolving credit facility as well as cash flows. We may also face additional exchange rate risk in the future as we expand our business internationally.

Interest Rate Risk

We are exposed to changes in interest rates in the normal course of our business. As of March 31, 2022, we had unrestricted cash and cash equivalents of $205.2 million. These amounts were held for working capital and capital expansion purposes and were invested primarily in deposit accounts, money market accounts, and high-quality debt securities issued by the U.S. government via cash sweep accounts at a major financial institution in North America. Due to the short-term nature of these investments, we believe that our exposure to changes in the fair value of our cash as a result of changes in interest rates is not material.

As of March 31, 2022, we had a convertible note outstanding with principal balance of $100.0 million. Our convertible note bears interest at the Secured Overnight Financing Rate (SOFR) plus 5.50% per annum if interest is paid in cash, or, if interest is paid in-kind as an increase in the principal amount of the outstanding note, at the SOFR plus 6.50% per annum. Under the terms of the investment, SOFR has a floor of 1% and a cap of 3%. Interest is paid semi-annually in arrears on June 30 and December 30. We, at our option, are permitted to settle each semi-annual interest payment in cash, in-kind, or any combination thereof.

As of March 31, 2022, we had no borrowings outstanding on our revolving credit facility. As of March 31, 2022, we had $1.3 million of outstanding letters of credit supported by the revolving credit facility.

Under our revolving credit facility, we are permitted to borrow a maximum of $20.0 million, subject to continued covenant compliance and borrowing base requirements. The interest rate applicable to borrowings under the revolving credit facility is based on the prime rate, as defined, subject to a minimum rate of 4.00% per annum. The rates applicable to borrowings vary from prime rate plus 0.75% per annum to prime rate plus 2.00% per annum. In addition, we are required to pay a monthly unused revolving line of credit facility fee of 0.5% per annum of the average unused portion of the revolving credit facility. The maturity date of our revolving credit facility is June 27, 2022. We intend to extend or replace the facility prior to its maturity.

As of March 31, 2022, the amount available to us under the revolving credit facility was $15.8 million after giving effect to the $1.3 million of letters of credit outstanding under the facility.

Inflation Risk

Although we expect that our operating results will be influenced by general economic conditions, we do not believe that inflation has had a material effect on our results of operations during the periods presented in this report. However, our business may be affected by inflation in the future.

Foreign Currency Exchange Risk

We are subject to inherent risks attributed to operating in a global economy. Principally all our revenue, receivables, purchases and debts are denominated in U.S. dollars.

Item 4.

Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

As of March 31, 2022, our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of March 31, 2022, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. In addition, our principal executive officer and principal financial officer have concluded that the impact of the COVID-19 pandemic did not impact our ability to maintain our internal controls over financial reporting and disclosure controls and procedures.

(b) Changes in Internal Controls.

During the three months ended March 31, 2022, there were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1.

Legal Proceedings.

Patent Enforcement Actions

In May 2016, we filed a complaint for patent infringement against Nano Tech Co., Ltd. (Nano), and Guangdong Alison Hi Tech., Ltd. (Alison) in the International Trade Commission, or ITC. In February 2018, the ITC issued its final determination that Nano and Alison had infringed asserted Aspen patents and that they have not proven the patents are invalid except with respect to one dependent product claim, which the ITC found was not infringed. The ITC affirmed that Alison and Nano each violated Section 337 of the Tariff Act and issued a limited exclusion order prohibiting importation of infringing aerogel insulation products manufactured by Alison and Nano. Alison’s appeal with respect to a product patent to the United States Court of Appeals for the Federal Circuit (CAFC) was rejected, and resulted in CAFC affirming the validity of our patent. The exclusion order, which is enforced by the United States Customs and Border Protection, is currently in effect.

Additionally, the USPTO denied Alison’s requests to invalidate the claims of four of our patents in Inter-Partes Review. Alison also filed multiple similar requests with the Chinese Patent Office (SIPO), seeking to invalidate our Chinese manufacturing process patents and two of our Chinese product patents. With respect to one of those requests, not withdrawn previously by Alison, the Patent Review Board of SIPO (PRB), issued a decision upholding the validity of Aspen’s issued patent as amended in the proceedings. Alison has appealed the PRB’s decision to the Beijing IP court. On July 25, 2020, the Beijing IP court dismissed Alison’s appeal and upheld the validity of Aspen’s patent and we received this decision on September 15, 2020. Nano has also filed a request seeking invalidation of a product patent at SIPO. After the oral hearing at PRB, Nano withdrew its invalidation request. On September 23, 2019, Alison filed yet another request to invalidate the same patent, whose validity was previously confirmed by PRB. On January 23, 2020 PRB denied Alison’s latest invalidation request.

In April 2016, we also filed a patent infringement suit at the District Court in Mannheim, Germany (Mannheim court), against Nano, Alison and two European resellers asserting their infringement of one of our German patents. We subsequently asserted infringement of another three patents against Nano, Alison and a European reseller of Alison’s products at the Mannheim court. We have since settled with one European reseller in exchange for a commitment not to procure infringing products and cooperation with our case.

•In January 2018, the court issued a series of judgments by acknowledgement (German, “Anerkenntnisurteil”) finding the second reseller, Hiltex, liable for infringement and also issued injunctions against Hiltex. The judgments resulted from a settlement agreement in which Hiltex agreed not to resell the infringing products in Europe where at least one of the asserted patents are active.

•On March 8, 2019, the Mannheim court issued two separate judgments in cases against Nano and Alison, respectively. The Mannheim court determined that both Nano and Alison are infringing on Aspen’s EP1638750 (750 Patent) in connection with their respective products. The court also issued injunctions prohibiting the offer, putting on the market, using, importing or possessing the infringing products. The court found the defendants liable to us for damages since September 22, 2012. The court also ordered the defendants to provide information on the scope of the acts of infringement committed since August 22, 2012, and a recall of infringing products. The court ordered Nano and Alison to bear the costs of the legal proceedings and reimburse statutory attorneys’ costs and expenses to us, that exact amount of which is yet to be determined. Nano and Alison have appealed the judgments of the Mannheim court. Nano subsequently withdrew the appeal while Alison’s appeal is currently pending.

•The Mannheim court issued two decisions on December 23, 2019 finding that Alison infringed the 577 Patent and the 950 Patent and also issued injunctions prohibiting Alison from continuing infringement in connection with any aerogel sheets. The December 2019 decisions against Alison have now become final and binding.

•The Mannheim court issued two decisions on July 31, 2020 finding that Nano infringed each of the 577 Patent and the 950 Patent. In addition to granting other remedies, the court also issued injunctions prohibiting the offer, putting on the market, using, importing or possessing any aerogel sheets. After the passing of the deadlines to file appeals, these decisions have now become final.

•Nano and Alison also initiated nullity actions in German Federal Patent Court in Munich against our asserted German patents. On September 25, 2018, the Federal Patent Court in Munich dismissed the challenge to the validity of 750 Patent which has subsequently become final. Nano and Alison also filed an opposition to one of the asserted patents at the EPO. In December

2018, the opposition division of EPO determined the patent, EP2813338 (338 Patent), was invalid on formality grounds and decided to revoke it, which determination is currently under appeal at the EPO Board of appeals.

•On March 19 and 20, 2019 the German Federal Patent Court in Munich (FPC) conducted oral proceedings and voided four claims in EP2415577 (577 Patent) and confirmed the validity of challenged claims in EP2422950 (950 Patent) within the scope of silica gels. These FPC judgments are now final and binding on the parties. Nano had filed another nullity action seeking to invalidate the remaining claims in the 577 Patent, which action Nano subsequently failed to pursue. On June 17, 2020, Nano also filed an opposition to a recently issued Aspen Patent EP3120983B1, titled “Continuous Sheet of Gel Materials and Continuous sheet of Aerogel”.

• On January 28, 2021, a search order was executed and relevant evidence secured at the principal places of business of AMA S.p.A. and AMA Composites S.r.l. (collectively, AMA) in San Martino in Rio and Campogalliano, respectively, based on an ex-parte search order issued by the Court of Genoa, Italy at our request in connection with alleged infringement of the Italian part of our patents previously asserted successfully against Nano and Alison in Germany. The Court of Genoa subsequently held a hearing and confirmed the validity of the search order and its execution. While the search proceedings do not take a position on the infringement issues, we may use any evidence collected during the search proceedings to prove infringement. As a result, on May 3, 2021, we filed an infringement complaint, a writ of summons, as known in Italy, at the Court of Genoa alleging that AMA has infringed the Italian part of three European patents (same patents asserted in the German litigation) and a patent on composition of aerogel-based composites in connection with AMA’s resale of aerogel products supplied by Chinese companies and sale of any products derived therefrom. We are seeking monetary damages and preliminary injunction of AMA’s alleged infringing activities. We expect the Court of Genoa to assess our claims and AMA’s defense through appointment of an expert after the submission of relevant writs and evidence. We issued a press release on May 6, 2021 describing the patent enforcement action of May 3, 2021 (Press Release). On June 7, 2021, AMA served us a copy of a request it previously filed with the Court of Genoa seeking an ex-parte preliminary injunction (PI) against us alleging the Press Release constituted anti-competitive conduct and that it infringed AMA’s trademark rights. The service of the request followed the court’s prior denial of the ex-parte order and an order requiring AMA to serve the request on us. The court subsequently conducted an oral hearing on June 15, 2021. On June 24, 2021, the court denied AMA’s request for a PI, reasoning that our Press Release was factually accurate, was not misleading, distinguished facts from opinions and that it was neither anti-competitive nor did it infringe trademark rights of AMA. The Court also ordered AMA to pay certain of our legal fees. On July 5, 2021, AMA informed us that it has decided not to appeal the denial of June 24, 2021. We subsequently learned that AMA had also made a criminal complaint against our chief executive officer for defamation in connection with the Press Release. On December 31, 2021, the local prosecutor, after reviewing the underlying facts, rejected AMA’s arguments and requested the judge overseeing the matter to dismiss the complaint against our chief executive officer. The presiding judge dismissed the criminal complaint on April 8, 2022. In response to our infringement complaint, AMA has also added as a counter-claim in connection with its claims regarding the Press Release, those same claims that it previously sought a preliminary injunction which was denied by the court. The patent infringement proceedings are ongoing.

Additionally, a reseller of Nano’s products in Taiwan challenged the validity of one of our patents in Taiwan in 2018. After careful review of our written response, the Taiwanese patent office has determined the patent as valid and dismissed the challenge in December 2018. In 2018, LG Chem Ltd. challenged the validity of one of our patents in Korea at the IPTAB of the Korean Intellectual Property Office. After conducting an oral hearing, the IPTAB issued a decision on November 30, 2019 upholding claims related to aerogel sheets incorporating fibers. On January 14, 2021 the Korean Patent Court confirmed the validity of the claims related to aerogel sheets incorporating fibers.

Due to their nature, it is difficult to predict the outcome or the costs involved in any litigation or administrative proceedings, including any appeals process. Furthermore, the counter parties in these proceedings may have significant resources and interest to litigate and therefore, these litigation matters could be protracted and may ultimately involve significant legal expenses. In addition to the foregoing, we have been and may be from time to time a party to other legal proceedings that arise in the ordinary course of business and to other patent enforcement actions to assert our patent rights.

Item 1A.

Risk Factors.

There have been no material changes to the risk factors included in our Annual Report.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Unregistered Sales of Equity Securities.

None.

(b) Use of Proceeds from Initial Public Offering of Common Stock.

Not applicable.

We did not repurchase any of our equity securities during the quarter ended March 31, 2022.

Item 3.

Defaults Upon Senior Securities.

None.

Item 4.

Mine Safety Disclosures.

Not applicable.

Item 5.

Other Information.

None.

Item 6.

Exhibits.

(a) Exhibits

4.1		Form of Note (including Indenture incorporated by reference therein) (incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed on February 17, 2022).

10.1		Inducement Agreement, dated as of February 17, 2022, by and among Aspen Aerogels Georgia, LLC, the Development Authority of Bulloch County, the City of Statesboro, and Bulloch County, Georgia.

10.2		Memorandum of Understanding, dated as of February 17, 2022, by and between Aspen Aerogels Georgia, LLC, the Development Authority of Bulloch County and the Georgia Department of Economic Development.

10.3		PILOT Agreement, dated as of February 17, 2022, by and among Aspen Aerogels Georgia, LLC and the Development Authority of Bulloch County.

10.4		Performance and Accountability Agreement, dated as of February 17, 2022, by and among Aspen Aerogels Georgia, LLC, the Development Authority of Bulloch County, and the Georgia Department of Community Affairs.

10.5		Sales Agreement, dated March 16, 2022, by and among the Registrant, Cowen and Company, LLC and Piper Sandler & Co. (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K, filed on March 16, 2022).

10.6		Third Amendment to the Second Amended and Restated Loan and Security Agreement, dated as of March 31, 2022, by and between the Registrant and Silicon Valley Bank.

10.7		Fourth Amendment to the Second Amended and Restated Loan and Security Agreement, dated as of April 28, 2022, by and between the Registrant and Silicon Valley Bank.

10.8+		Separation Agreement, dated March 29, 2022, by and between the Registrant and John F. Fairbanks.

10.9+		Consulting Agreement, dated March 29, 2022, by and between the Registrant and John F. Fairbanks.

10.10+		Executive Employment Agreement, dated March 29, 2022, by and between the Registrant and Ricardo C. Rodriguez.

10.11		Note Purchase Agreement, dated February 15, 2022, by and between the Registrant and Wood River Capital, LLC (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed on February 17, 2022).

10.12		Securities Purchase Agreement, dated February 15, 2022, by and between the Registrant and Wood River Capital, LLC (incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed on February 17, 2022).

10.13+		Non-Employee Director Compensation Policy.

31.1		Certification of principal executive officer under Section 302(a) of the Sarbanes-Oxley Act of 2002.

31.2		Certification of principal financial officer under Section 302(a) of the Sarbanes-Oxley Act of 2002.

32		Certifications of the principal executive officer and the principal financial officer under Section 906 of the Sarbanes-Oxley Act of 2002.

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+ Management contract or compensatory plan arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	ASPEN AEROGELS, INC.

Date: May 10, 2022	By:	/s/ Donald R. Young
		Donald R. Young
		President and Chief Executive Officer (principal executive officer)

Date: May 10, 2022	By:	/s/ Ricardo C. Rodriguez
		Ricardo C. Rodriguez
		Senior Vice President, Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer)

Exhibit 10.1

INDUCEMENT AGREEMENT

THIS INDUCEMENT AGREEMENT, dated as of the 17th day of February, 2022, is hereby entered into by and among the DEVELOPMENT AUTHORITY OF BULLOCH COUNTY, a public body corporate and politic created pursuant to the laws of the State of Georgia (the “Authority”), the CITY OF STATESBORO, GEORGIA, a municipal corporation created and existing under the laws of the State of Georgia (the “City”), BULLOCH COUNTY, GEORGIA, a county created and existing under the laws of the State of Georgia (the “County”) and ASPEN AEROGELS GEORGIA, LLC, a Georgia limited liability company (said corporation, together with its successors and assigns, hereinafter called the “Company”).

W I T N E S S E T H:

WHEREAS, the Company currently is considering acquiring, constructing and equipping a new project for the production of aerogel based products on site located in the Southern Gateway Commerce Park (the “Commerce Park”) located in Bulloch County, Georgia (the “Project”); and

WHEREAS, the Company estimates that the total capital investment to be made in connection with the Project will be approximately $325,000,000 and that the Project will create a total of up to 250 jobs; and

WHEREAS, the Authority, the City and the County (collectively, the “Local Governmental Entities”) are desirous of inducing the Company to locate the Project in Bulloch County and believe that in assisting with the acquisition, construction and equipping of the Project they will promote and expand for the public good and welfare industry and trade in Bulloch County and its vicinity and will reduce unemployment to the greatest extent possible; and

WHEREAS, the Company is considering alternative sites for the Project located in other states and the economic incentives described herein are critical component to the Company’s decision whether to locate the Project in Bulloch County (the “County”).

NOW, THEREFORE, in order to induce the Company to undertake and locate the Project within the County, the Local Governmental Entities make the following agreements with the Company:

ARTICLE I

LEASE; PURCHASE OPTIONS

Section 1.01.Project Site; Lease; Purchase Option. The Authority represents and warrants that it holds marketable, fee simple title to the property described on (i) Exhibit A attached hereto containing approximately 84 acres (the “Main Site”), and (ii) Exhibit B attached hereto containing approximately 6 acres (the “Ancillary Site” and together with the Main Site, the “Project Site”), all such property being located in the Commerce Park. The Ancillary Site may be removed from the Project Site upon agreement of the Company and the Authority, and the parties agree to execute such documentation reasonably necessary to effect such removal of the Ancillary Site at the Company’s cost.

The Authority agrees (i) at the request of the Company, to enter into an interim lease of the Project Site pursuant to an Interim Lease Agreement which shall be in form and substance satisfactory to both parties (the “Interim Lease”) between the Authority, as lessor, and the Company, as lessee, and (ii) at the request of the Company, enter into a final lease agreement (the “Lease”) with respect to the Project Site and all improvements located thereon, as well as the machinery, equipment and other personal property installed therein or located thereon (the “Project”) between the Authority, as lessor, and the Company, as lessee. The Lease shall contain the provisions described on Exhibit C attached hereto and such other terms and provisions as may be acceptable to Authority and the Company. The Authority further agrees that the Company shall have the right and option to (i) purchase the Project Site during the period prior to the execution and delivery of the Lease for a purchase price of $30,000 per acre (the “Project Site Purchase Option”) and (ii) to purchase

the Project from the Authority following the expiration or sooner termination of the Lease for a purchase price of $10.00 (the “Purchase Option”). The Purchase Option shall either be incorporated in the Interim Lease and the Lease or set forth in a separate Purchase Option Agreement and the documents required to evidence the Project Site Purchase Option and the Purchase Option shall be recorded in the real estate records of the County.

Section 1.02.Environmental Representation. The Authority has had prepared, at its expense, an environmental assessment of the Project Site and has provided a report of that assessment to the Company. To the best of the Authority’s knowledge, no portion of the Project Site is affected by any hazardous waste or regulated substance.

ARTICLE II

BOND FINANCING

Section 2.01. Issuance of Bonds. At the request of the Company, the Authority will issue its taxable revenue bonds in one or more series in a principal amount not presently anticipated to exceed $650,000,000 (the “Bonds”) with respect to the Project for the purpose of paying all or a portion of the costs of (i) acquiring, constructing and equipping the Project and (ii) issuing the Bonds. The Company is hereby authorized to commence the planning, design, acquisition, construction, equipping and carrying out of the proposed Project in advance of the issuance of the Bonds and the Company shall be reimbursed for all expenditures made for such purposes from the proceeds of the Bonds when the same are issued and delivered. The PILOT Agreement (hereinafter defined) further addresses the impact of any such phasing.

Section 2.02. Terms of Bonds. The terms of the Bonds (maturity schedule, interest rates, denominations, redemption provisions, etc.) will be determined by a bond purchase contract to be entered into among the Authority, the Company and the purchaser or purchasers of the Bonds, subject to the approval of the Company. At the request of the Company, the Bonds may be issued as “draw down” Bonds under which installment payments are to be made by the purchaser or purchasers thereof when and as needed to pay the costs of the Project.

Section 2.03. Trust Indenture; Security Deed. At the request of the Company, the Authority shall enter into a trust indenture with a corporate trustee to be named by the Company or to adopt a bond resolution, which sets forth the terms of the Bonds and the security therefore. If a trust indenture is utilized, the Authority will pledge its interest in the Lease and the rentals, revenues and receipts due thereunder to the corporate trustee for the benefit of the Bondholders, and the terms of such trust indenture shall be agreed upon by the Authority, the Company and said corporate trustee. In addition, at the request of the Company, the Authority shall convey any title which it may hold in and to the Project to said corporate trustee or directly to the holder(s) of the Bonds by a deed to secure debt, security agreement, assignment of leases and rents or any combination thereof for the benefit of the Bondholders.

Section 2.04. Appointment of Bond Counsel and Development Authority Counsel; Preparation of Documents. The parties hereto acknowledge and agree that Alston & Bird LLP shall serve as bond counsel (the “Bond Counsel”) and as counsel to the Company in connection with the issuance of the Bonds. Bond Counsel shall prepare the Lease, Option Agreement, the bond resolution, the trust indenture, if any, and any and all other documents with respect to the security for the bonds and the judicial validation thereof. The Authority has retained Steve Rushing and Gray Pannell & Woodward LLP to represent it in connection with the issuance of the Bonds and the transactions described herein. Counsel to the Authority shall be required to give a standard legal opinion at the closing of the issuance and sale of the Bonds which shall be in form and substance satisfactory to the Company and Bond Counsel. The Company agrees to pay the reasonable fees and expenses of counsel to the Authority at the closing of the issuance of the Bonds and the execution and delivery of the Lease (the “Closing Date”) not to exceed $50,000 and which may be paid, at the option of the Company, from the proceeds from the sale or transfer of the Bonds or separately from other Company funds.

ARTICLE III

TAX RELATED MATTERS

Section 3.01.Ad Valorem Taxation on Project and Inventory. Pursuant to the act under which the Authority was created, the Authority will pay no ad valorem tax on all real and personal property which is included in the Project while under Lease. The Authority hereby represents and warrants that it is exempt from property taxation and agrees to hold title to any and all real and personal property which is included in the Project. The Governmental Entities hereby represent and warrant that there exists a Level One Freeport in Bulloch County which exempts 100% of property taxation on (i) inventory of goods in the process of being manufactured or produced including raw materials and partly finished goods, (ii) inventory of finished goods manufactured or produced in Georgia held by the manufacturer or producer for a period not to exceed 12 months, and (iii) inventory of finished goods that are stored in a warehouse, dock, or wharf that are destined for shipment outside of Georgia for a period not to exceed 12 months.

Section 3.02.Usufruct Treatment and PILOT Payments. The parties hereto understand and agree that the interest of the Company in the Project is intended and shall be treated as a usufruct and that as such the Company shall not be subject to ad valorem property taxation on the property titled in the name of the Authority and leased to the Company pursuant to the Interim Lease and the Lease. However, the Company shall agree to make payments-in-lieu-of property taxes (“PILOT Payments”) and Community Recovery Payments in accordance with the PILOT Agreement attached hereto as Exhibit E. The Local Governmental Entities shall enter into the PILOT Agreement when requested by the Company on or prior to the Closing Date.

Section 3.03.Jobs Tax Credit. Bulloch County has been designated by the State of Georgia as a Tier 1 County, and qualifying business enterprises located within Bulloch County are eligible for a job tax credit equal to $4,000 for each new full-time employee per year for five consecutive years and that the Company may elect to apply up to $3,500 of that amount to reduce the Company’s payroll withholding tax.

Section 3.04.Sales Tax Exemption.

(a)The Authority hereby acknowledges the applicability of the exemption from State of Georgia sales and use tax for manufacturing and production equipment, primary material handling equipment and computer hardware and software which qualifies for such exemption under applicable law and, at the request of the Company, agrees to assist the Company in order to obtain any such exemption.

(b)It is the understanding and intent of the parties that the Authority’s acquisition of title to the Project shall be solely for the purpose of leasing the same to the Company pursuant to the terms of the Lease. It is further the understanding and intent of the parties that, for purposes of the sales and use taxes imposed by Chapter 8 of Title 48 of the Official Code of Georgia Annotated, the conveyance to the Authority of title to the Project, the lease of the Project to the Company and any purchase of the Project or any portion thereof by the Company as contemplated under the Lease shall not be deemed taxable transactions for sales and use tax purposes in accordance with the holding in Footpress Corporation v. Strickland, 242 Ga. 686, S.E.2d 278 (1978). If requested by the Company, the Authority agrees to join with the Company in submitting a ruling request to the Georgia Department of Revenue in order to confirm such sales and use tax treatment.

ARTICLE IV

UTILITIES

Section 4.01.Water, Sewer and Natural Gas Rates. The City agrees to charge the Company for water and sewer services the rates, fees, tolls and charges applied to industrial customers of the City located in the unincorporated areas of the County. The City agrees to charge the Company for natural gas services the rates, fees, tolls and charges applicable to the Company’s natural gas classification for rates, fees, tolls and charges. The City further agrees to waive all water, sewer and gas tap fees and related meter vaults otherwise payable with respect to the connection of water, sewer and gas to the Project.

Section 4.02.Infrastructure Requirements. The following infrastructure improvements shall be provided to the Company in connection with the Project at no cost to the Company.

(a) The City, at its sole cost and expense (subject to Company’s reimbursement obligation outlined in this paragraph) agrees to design, construct and extend all (i) offsite water and sanitary sewer and natural gas utilities and (ii) to construct and extend all water, sanitary sewer and natural gas utilities to the location adjacent to the Project Site which shall be designated by the Company pursuant to a site map provided by the Company to the Authority and the City (the “Utility Extensions”). Said utilities shall have the respective capacities and features described on Exhibit D attached hereto. Upon receipt by the City of the desired location for the extension of the on-site utilities and direction from the Company to proceed with such the extensions, the City shall diligently proceed to commence such utility extensions and to use its best efforts to complete such utility extensions within the period as may be required to accommodate the overall Project construction schedule. The County and City agree to promptly apply for, and use its best efforts to obtain, a federal Employment Incentive Program (“EIP”) grant in the amount of up to $750,000 in order to support the extension of City utilities infrastructure to the Project. The Authority shall pay for application costs of the grant, and the grant shall be used to pay for any additional administrative costs of the grant. If the EIP grant is not awarded, or costs associated with this installation and construction exceed the amount of EIP funds received, the Company shall be responsible for reimbursement to City of all costs related to the installation and construction of the Utilities Extension that exceed sum of (i) the amount of received EIP funds, and (ii) the City’s commitment to spend $500,000 for such Utility Extension.

(b)The site preparation and Utility Extensions described in subparagraph (a) above (collectively, the “Infrastructure Improvements”) shall be designed and constructed in compliance with all applicable federal state and local laws and regulations. The plans and specifications for such Infrastructure Improvements shall be submitted as soon as practicable to the Company for the Company’s review and approval. The Local Governmental Entities agree to use their best efforts to obtain in a timely manner any and all easements, rights-of-way and property, through condemnation or otherwise, which may be necessary or desirable in order to complete the Infrastructure Improvements as and when required under this Section 4.02.

ARTICLE V

STATE GRANT; EMPLOYEE TRAINING

Section 5.01.State Grant. The parties hereto acknowledge that the State of Georgia (the “State”) has agreed to provide a grant to the Authority in the amount of $1,000,000 to be applied against the costs of site and infrastructure improvements to be incurred by the Company in connection with the construction of the Project (the “State Grant”). The Authority agrees to promptly take any and all actions required in order to obtain the State Grant, including, without limitation, preparing and filing an application for the State Grant and all other documents as may be requested by the Department of Economic Development and the Department of Community Affairs in order to be able to obtain and provide to the Company the amount of the State Grant with a target date of December 31, 2022.

Section 5.02.Employee Training. The Authority hereby agrees to assist the Company to obtain from the State of Georgia's “Quick Start Program”, administered by the Technical College System of Georgia (“TCSG”), a written commitment to (i) design a training program or programs specifically suited for the particular jobs to be created at the Project, (iii) advertise for and interview prospective employees and (iv) conduct training programs for the Company’s employees, all at no cost to the Company. In addition, the Authority agrees to provide up to $20,000 of additional private training for Company employees through the Ogeechee Technical College which is specifically suited for employees to be designated by the Company.

ARTICLE VI

LOCAL PERMITS; ONE STOP PERMITTING; TEMPORARY OFFICES

Section 6.01.Permits. Each of the Local Governmental Entities hereby agrees to cooperate with and to use its best efforts to assist the Company in order to obtain in a timely fashion all building permits, licenses, variances, special use permits, site plan and other approvals that the Authority or the Company deem

to be necessary or desirable in connection with the construction and operation of the Project, including, without limitation, any such permits pertaining to buildings or other improvements, occupancy, signage, curb cuts, driveways (including ingress and egress to public thoroughfares), parking and environmental controls (herein collectively referred to as the “Permits”).

Section 6.02.One-Stop Permitting. The Local Governmental Entities hereby agree designate a single point of contact to assist the Company to obtain any and all Permits. In this regard, the Authority acknowledges that the Company or its agents are authorized to purchase equipment and obtain permits and licenses in order to acquire, construct, install and equip the Project.

Section 6.03.Temporary Office Space. Upon request of the Company, the Authority agrees to provide the Company and its employees and agents office space for use in connection with the design, construction and equipping of the Project (the “Temporary Office Space”); provided that the total cost to the Authority to provide such Temporary Office Space shall not exceed $24,000.

ARTICLE VII

JOBS AND INVESTMENT GOALS

Section 7.01Inducement. If the Company agrees to locate the Project at the Project Site, nothing herein contained shall obligate the Company to make any particular level of investment or create any particular level of jobs. Rather, the Company’s responsibilities regarding such matters shall be governed exclusively by a separate PILOT Agreement in the form attached hereto as Exhibit E. The Company’s agreement to locate the Project at the Project Site is based, in part, on the incentives being offered by the Local Government Entities as described herein. Such incentives are being offered to induce the Company to locate the Project at the Project Site, with attendant job creation and investment on the part of the Company, all of which constitutes valuable, non-cash consideration to the Local Government Entities and the citizens of the City, of the County and of the State. The Parties acknowledge that the incentives provided for in this Agreement serve a public purpose through the job creation and investment generation represented by the Project. The Parties further acknowledge that the cost/benefit requirements applicable to the Local Government Entities in the course of providing such incentives dictate that some measure of recovery must be applied in the event that the anticipated jobs and investment do not for any reason fully materialize.

ARTICLE VIII

MISCELLANEOUS

Section 8.01.Performance of Agreements by Company. The Local Governmental Entities hereby acknowledges and agree that, if any of the Local Governmental Entities shall default in any of its covenants hereunder, as reasonably determined by the Company, including without limitation the provision of the Infrastructure Improvements, when and where required hereunder, the Company shall have the right (but not the obligation) to undertake and perform such covenant or work on behalf of the Local Governmental Entity involved and all funds advanced or costs incurred by the Company in connection therewith shall be deemed an obligation of the defaulting Local Governmental Entity and that Local Governmental Entity agrees to pay upon demand; provided however, the Local Government Entities shall not be required to pay more than the amounts committed for the Project under this Agreement and any related agreement.

Section 8.02.Representations and Warranties. The representations and warranties in this Inducement Agreement shall survive the execution and delivery of this Inducement Agreement and the consummation of the transactions contemplated by this Inducement Agreement.

Section 8.03. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall be deemed one and the same instrument.

Section 8.04. No Personal Liability. It is understood and agreed that no present or future member, director, commissioner, officer or employee of any of the Local Governmental Entities shall be liable hereunder or under the Lease or any other agreement executed in connection herewith.

Section 8.05. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Georgia.

Section 8.06. Amendments. This Agreement may only be amended in a writing executed by all of the parties hereto.

Section 8.07. Assignment. All rights and benefits of the Company under this Agreement may be transferred and assigned by the Company, in whole or in part, to any one or more individuals, corporations, partnerships, joint ventures, limited liability companies, or other business entities (the “Assignees”) which propose to acquire all or part of the Project with the same effect as if such Assignees were named as the Company in this Agreement; provided, however, each such Assignee shall execute and deliver to the Authority and County an assignment agreement pursuant to which such Assignee shall assume the obligations of the Company hereunder.

Section 8.08. Binding Effect; Third- Party Beneficiaries. This Agreement shall inure to the exclusive benefit of, and be binding upon, the parties hereto and their respective successors and permitted assigns. Nothing expressed or mentioned herein is intended or shall be construed to give any person other than the parties hereto and their permitted assigns any legal or equitable rights, remedies or claims under or with respect to any covenants, conditions or provisions herein contained.

Section 8.09. Confidentiality. The Local Governmental Entities understand the importance to the Company of keeping matters relating to the Project and this Agreement strictly confidential until such matters are publicized with the consent of the Company. Accordingly, each of the Local Governmental Entities hereto agrees to treat, and cause their respective officers, directors, employees and agents to treat, as strictly confidential to the fullest extent permitted by law, the contents of this Agreement and all information provided with respect to the Project, including, without limitation, the location, size, type and ownership or operation of the Project. If a Local Governmental Entity is requested to provide a copy of this Agreement or other documents with respect to the transactions described herein and such Local Governmental Entity determines that it would be compelled to do so under applicable law, such Local Governmental Entity shall give the Company not less than two days prior notice before releasing any such documentation. The Local Governmental Entities further agree to fully corporate and coordinate with the Company in connection with all press releases and other notices or publications concerning the Project and this Agreement proposed to be made by any Local Governmental Entity which shall in each instance be approved by the Company in advance. The Company acknowledges that the Local Government Entities are subject to Open Records and Open Meetings laws in the State and are required to comply with these laws regardless of the language of this provision.

Section 8.10. Entire Agreement. Other than the Confidential and Proprietary Information Non-Disclosure Agreement dated June 10, 2021, the License and Indemnity Agreement dated September 14, 2021, and the Supplement to the License and Indemnity Agreement dated November 30, 2021 between Company and the Authority, this Agreement constitutes and represents the entire agreement and understanding between the parties hereto in reference to all matters referred to herein and all previous discussions and promises, representations and understandings relative thereto, if any, between the parties hereto, the same being merged.

Section 8.11. Force Majeure. No party hereto shall be liable for any failure or delay in performance if caused, in whole or in part, by any circumstance or events beyond the reasonable control of such party, including, without limitation, fire; flood; earthquake; acts of God; strikes, boycotts, riots or civil disorders; declared or undeclared wars; casualty; delays in obtaining governmental permits; compliance with government orders; acts of civil or military authority; accidents; industrial disturbances; interruptions of transportation facilities or delays in transit; delays, curtailment or shortages of construction, production, manufacturing or other materials, equipment, raw materials or supplies; failure of any party hereunder to perform, or any delays in the performance of, any commitment to such other party relating to the performance of its obligations; or any other cause, whether similar or dissimilar to the foregoing causes (including, without limitation, general, macro or special economic circumstances that adversely affects net revenues or sales volumes), beyond the reasonable control of such party. In the event of any such contingency, the affected

party shall notify the other parties of the contingency within a reasonable period of time and shall make commercially reasonable efforts promptly to remove the contingency such that performance may be resumed; provided, however, no party shall be obligated to settle any labor dispute. If as a result of the occurrence of any such contingency, such party’s performance hereunder cannot be completed within the original period for performance, the period for performance shall be extended for a period of time equal to the duration of such contingency and a reasonable period thereafter to allow for completion of performance without prejudice to any of the other rights of such party under this Agreement.

Section 8.12. Termination. So long as none of the Local Governmental Entities is in default of its obligations hereunder, the Authority may terminate this Agreement by written notice to the Company if the construction of the Project has not been commenced prior to the first anniversary of the date of this Agreement, or construction of the Project has not been completed prior to the fourth anniversary of the commencement of construction of the Project. Construction will be deemed to have commenced with the pouring of the building pad for the project. Construction will be deemed to be completed with the issuance of a Certificate of Occupancy or Temporary Certificate of Occupancy for the building. So long as the Company is not in default of its obligations hereunder, it may terminate this Agreement at any time by written notice to the Authority.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have executed this Inducement Agreement as of the date first above written.


	DEVELOPMENT AUTHORITY OF BULLOCH COUNTY
[SEAL]
	By:	/s/ Billy Allen
			Billy Allen
			Vice Chair, Development Authority of Bulloch County

[Signature Page – Inducement Agreement]


	CITY OF STATESBORO, GEORGIA
[SEAL]
	By:	/s/ Jonathan McCollar
			Jonathan McCollar
			Mayor, City of Stateboro

[Signature Page – Inducement Agreement]


	BULLOCH COUNTY, GEORGIA
[SEAL]
	By:	/s/ Roy Thompson
			Roy Thompson
			Chair, Bulloch County Board of Commissions

[Signature Page – Inducement Agreement]


	ASPEN AEROGELS GEORGIA, LLC
[SEAL]
	By:	/s/ Donald R. Young
			Donald R. Young
			President and CEO

[Signature Page – Inducement Agreement]

EXHIBIT A

DESCRIPTION OF MAIN SITE

The Main Site shall consist of the below description, excluding Ancillary Site described in Exhibit B.

EXHIBIT B

DESCRIPTION OF ANCILLARY SITE

The Ancillary Site shall consist of the space within the dotted lines in the map below marked as “Ancillary Site”.

EXHIBIT C

DESCRIPTION OF LEASE AGREEMENT

The Lease Agreement (the “Lease”) between the Authority and the Company shall include the following general provisions:

1.Term.The basic term of the Lease will commence as of its date of execution and expire day before the fifth (5^th) anniversary of the commencement date, subject to renewals thereafter at the option of the Company; provided, however, in no event shall the basic term of the Lease extend beyond the thirty-first (31^st) day of December of the tenth (10^th) year following the year in which the Project was completed and available for occupancy (the “Lease Term”), or upon earlier termination as provided therein.

2.Rent.The amounts payable under the Lease as rent will be paid directly to the Bondholders or to a corporate trustee to be selected by the Company for the benefit of the Bondholders, as the case may be, at such times and in such amounts as shall be timely and sufficient to pay the principal of, premium, if any, and interest on the Bonds as the same shall become due and payable. The obligation of the Company to make all payments required under the Lease shall be absolute and unconditional after the delivery of the Bonds.

3.Net Lease. The Lease shall be deemed a “net lease” and the Company will pay all customary assessments or utility charges which may be lawfully levied, assessed or charged upon the Company or the Project or the payments derived from the Lease if failure to pay would result in a lien or charge upon the Project or the revenues of the Authority therefrom.

4.Bond Proceeds. The proceeds from the sale of the Bonds shall be used to finance the Project in accordance with the requirements of the Lease. To the extent moneys representing bond proceeds are held in any fund or account pending their disbursement to pay acquisition, construction or equipping costs, such moneys may be invested in obligations which represent legal investments for bond proceeds of the Authority.

5.Maintenance; Repair; Modifications. The Company shall agree to keep the Project in reasonably safe condition as its operations shall permit and to keep the Project in good repair and in good operating condition as is consistent with its normal operating policies. The Company shall be permitted to make additions, modifications and improvements to the Project so long as the Project shall continue to be a project which may be financed by the Authority under applicable law.

6.Equipment. The Company shall be permitted in its sole discretion to replace, substitute, dispose of or transfer obsolete, worn-out, unsuitable or unwanted machinery, equipment and related personal property included in the Project. At the request of the Company, the Authority shall execute and deliver any and all bills of sale, releases or other documents which may be required in connection with any such replacement, substitution, disposition or transfer. All equipment so substituted shall be transferred to the Authority and included under the Lease.

7.Insurance. The Company shall keep the Project insured against loss, damage or perils, and will carry public liability insurance covering personal injury, death or property damage with respect to the Project, consistent with its normal operating policies, but the Company may at any time elect to be self-insured.

8.Compliance with Laws. The Company will agree to endeavor to construct, occupy and maintain the Project in accordance with all applicable federal, state, county and municipal laws, ordinances, rules and regulations, including, without limitation, all environmental laws; provided, however, the Company

shall be permitted to contest in good faith, at its expense and in its name or in the name of the Authority, the validity or application of any such laws, ordinances, rules or regulations.

9.Limited Obligations of the Authority. The Lease shall provide that in the performance of the agreements contained therein on the part of the Authority, any obligation it may incur for the payment of money shall not be a general debt on its part or of the City, the County or the State of Georgia, but shall be payable solely from the payments received under the Lease or from bond proceeds and, under certain circumstances, insurance proceeds and condemnation awards.

10.Indemnification. The Lease shall contain agreements providing for the indemnification of the Authority and the individual directors, officers, agents and employees thereof for all expenses incurred by them and for any claim of loss suffered or damage to property or any injury or death by any person incurred in connection with the planning, design, acquisition, construction, equipping, installation, financing and carrying out of the Project or the operation of the Project, including but not limited to violations of state or federal environmental laws, except any loss resulting from the negligence, willful misconduct or bad faith of such indemnified parties.

11.Termination. The Company shall have the option exercisable at any time to terminate the Lease provided that it shall have paid (or caused the same to have been paid) the outstanding principal amount of the Bonds and all accrued and unpaid interest thereon.

12,Subordination of Fee. Under the Lease, if requested by the Company the Authority shall subordinate its interest in the Project to any loans to the Company that are secured by the Project, so long as the liability of the Authority shall be absolutely limited to its interest in the Project.

EXHIBIT D

UTILITY REQUIREMENTS

Water – The main water line shall be a twelve-inch PVC potable water main with a water meter and reduced pressure zone backflow assembly, together with a double check valve (size and quantity of meters and backflows to be determined following coordination with City Engineer). Said water lines shall be extended to the property line. .

Sewer – The sewer line shall be a twelve-inch pipe and shall be extended to the property line.

Natural Gas – The gas main shall be of a sufficient size and pressure required by the Company and shall be extended to the property line.

Wastewater Discharge Requirements - Discharge to the City of Statesboro's sewer system will require approval by the City of Statesboro including compliance with the City of Statesboro's Industrial Pretreatment Program, and the Sewer Use Ordinance.

The Parties agree to create an updated drawing depicting such requirements, which shall be considered Exhibit D-1 when so finalized.

EXHIBIT E

PILOT AGREEMENT

Exhibit 10.2

Georgia Project Development Financial Assistance

Memorandum of Understanding

This Memorandum of Understanding (“MOU”) is entered into by Aspen Aerogels Georgia, LLC (“Company”), the Development Authority of Bulloch County (“Development Authority”) and the Georgia Department of Economic Development (“GDEcD”), an agency within the executive branch of the State of Georgia (“State”), this date 02/17/2022.

II.

PURPOSE: The purpose of this MOU is to describe, commit and commend the Company’s investment project (“Project”) for the Community and State, and the general economic benefits thereof, and to jointly undertake an efficacious application for an EDGE award in the amount of $1,000,000, administered by the Georgia Department of Community Affairs (“DCA”) within an agreed upon timeframe.

III.	“PROJECT” DESCRIPTION: The economic development investment project opportunity for unincorporated Bulloch County (“Community”) is described as:

Company will build a manufacturing facility, located at 143 Rocky Road, Register, Georgia 30452 (the “Facility”), for the manufacture of aerogel based products. The Company will create or cause to be created 250 net-new full-time jobs¹, with an average wage of $62,000, plus benefits, and will invest or cause to be invested an aggregate of $325,000,000 by the end of the thirty-six month performance period.

IV.

STATE ASSISTANCE: A critical component of the Project described above is a requirement of state assistance, in the form of a grant² (“Project Development Grant”) in order to secure the Project investment for the Community and State. The Project Development Grant required for this Project’s success is described as follows: A $1,000,000 EDGE grant used to offset the cost of machinery and equipment at the Facility.

COMPANY COMMITMENT: As part of the Project described above in Section III, Company commits to invest $325,000,000 in land, construction and/or building, equipment and other real and personal property, as well as create 250 net-new full-time jobs within thirty-six (36) months from the earlier of (i) the date of the issuance of the Certificate of Occupancy for the Facility to, or (ii) the anticipated start-date of December 31, 2024. Company may begin counting jobs and investment on October 8, 2021.

The Company also intends to maintain operations at this specific facility in the Community for a minimum of 10 years. Furthermore, before the Project Development Grant is disbursed, the Company shall participate in a joint press release with the State and Community announcing the Project. Also, the Company agrees to provide the following to DCA within the time specified, or where no time is specified, within 30 days from the date DCA issues the Development Authority an application for the Project Development Grant:

¹	Net new full time job is defined as a new job that did not previously exist within the State of Georgia which has a minimum of 35 hours per week, with the opportunity for access to, but not necessarily paid or subsidized, medical benefits.

Any assets funded or partially funded with the Award Amount (“Grant-funded Assets”) must be publicly titled for the life of this grant. Furthermore, the Company shall not use publicly titled machinery and equipment as collateral for financing and shall not grant a security interest in such machinery and equipment to any entity other than the Development Authority.

At the time of execution of this MOU, a designated official Company contact, including title and all contact information, in order to further clarify Project activities related to the Project Development Grant/Loan and application, as well as facilitating the items listed below.

Description of the anticipated timeline for completion of the Project investment;

Description of the Company and type of business activity that will be conducted at this operation;

Primary NAICS Code for Company, and if different, the NAICS Code specific to the proposed operation or expansion;

Expected average wage rate(s) for the total number of jobs detailed above;

Description of the types and quality of jobs to be created by the operation or expansion and a list of benefits the Company offers to employees;

Copy of two most recent years-worth of Company’s 10k reports, OR if privately owned, two most recent years of federal tax returns or audited company financials; and

At the time of execution of this MOU, a signed version of Georgia’s Performance Accountability Agreement noted in Section VII (to be provided by the Georgia Department of Economic Development).

A Grant Documentation Checklist which identifies documentation required by DCA is attached hereto as Exhibit A.

VI.

DEVELOPMENT AUTHORITY COMMITMENT: The Development Authority, as part of the Project described above (Section III), commits to filing a formal application for an EDGE grant in the amount of $1,000,000 with DCA for the Project Development Grant described above (Section IV), being as the Project is expected to provide public economic development benefits in the form of increased local employment opportunities, the potential for increased local sales and property taxes collected, and an infusion of a new capital investment(s) and ancillary related expenses made to the Community, as described in the Project description and Company commitments detailed above.

The Development Authority additionally commits to submitting a fully completed application to DCA within 30 days from the date DCA issues the application, including but not limited to the following information:

1.	Evidence that the Project property to be financed or improved with State financial assistance funds is currently publicly owned and controlled, or in the process of being acquired;

2.	Details of the Development Authority or Community’s investment in, or contribution to, the Project as a key component to attracting the Project investment; and

3.	Site maps and/or building illustrations and/or equipment descriptions depicting the property to be acquired or improved.

VII.

GDEcD COMMITMENT: GDEcD, as part of the Project described above (Section III), commits to providing DCA with a formal Letter of Recommendation from the GDEcD Commissioner within 14 days of a signed MOU, recommending the Project to receive EDGE funds in the amount of $1,000,000 for the Project Development Financial Assistance purpose and use of funds described above in Section IV.

Along with a Letter of Recommendation, GDEcD will also provide DCA within 20 business days a Summary of Economic Benefits from the Project for the State and Community, including an estimated net present value

and expected payback period to the State specific to the grant or loan amount, and based on the expected local and statewide economic impacts of the Project.

Additionally, GDEcD will provide DCA with a Performance and Accountability Agreement, to be signed by the DCA Commissioner and authorized officials from both the Company and Development Authority hereto. This signed document will also be forwarded to DCA within 30 days.

VIII.

TESTIMONY OF COMPETITION: But for the State assistance described in Section IV of this document, the Company may have decided to locate the Project described in Section III at a site in the competing state of South Carolina.

IX.	ADDITIONAL DOCUMENTS REQUIRED: All parties understand and agree that upon approval of the financial assistance award, the following items may be required by the Development Authority (or associated applicant) before the award will be released:

Independent cost estimates, engineering estimates or appraisals of property to be acquired or improved by Development Authority as part of the Project Development Financial Assistance award;

Copy of the lease between the Development Authority and the Company; and

Copy of Inducement Resolution, including Validation, as applicable.

APPLICATION APPROVAL: While a timeline for application approval cannot be guaranteed and is often dependent upon a financial risk analysis, if all deadlines are met by each of the three parties above: Company, Development Authority and GDEcD, DCA will make every effort to render an official opinion on the Project Development Financial Assistance application within 60 business days of receipt of all items and documents detailed within this MOU.

XI.

ASSIGNMENT: All rights and benefits of the Company under this MOU may be transferred and assigned by the Company, in whole or in part, to any one or more corporations, partnerships, joint ventures, limited liability companies, or other business entities (the “Assignees”), where such Assignee is a wholly owned subsidiary of Company, which propose to acquire all or part of the Project with the same effect as if such Assignees were named as the Company in this MOU; provided, however, each such Assignee shall execute and deliver to the GDEcD and the DCA an assignment agreement pursuant to which such Assignee shall assume the obligations of the Company hereunder.

Disclaimer: This document does not guarantee grant or loan application approval. However, a fully completed and signed MOU, the information contained herein, and the additional disclosure items detailed in this document provide much of the information and commitments necessary to ensure an expedited and successful Project Development application approval.

[SIGNATURES ON FOLLOWING PAGE]

Signature Page

Memorandum of Understanding

Aspen Aerogels Georgia, LLC Project in Bulloch County, Georgia

IN WITNESS WHEREOF, the parties have hereunto set their signatures and affixed their seals the day and year first written above.


Aspen Aerogels Georgia, LLC		DEVELOPMENT AUTHORITY OF BULLOCH COUNTY
By:	/s/ Donald R. Young	By:	/s/ Billy Allen
	Donald R. Young		Billy Allen
Title:	President & Chief Executive Officer	Title:		Vice Chair
Date:	02/17/2022	Date:		02/17/2022
	Seal

Georgia Department of Economic Development
By:	/s/ Padgett Wilson
	Padgett Wilson
Title:	Commissioner
Date:	02/17/2022
	Seal

Exhibit A-Grant Documentation Checklist

Exhibit 10.3

pILOT Agreement

THIS PILOT AGREEMENT (this “Agreement” or “PILOT Agreement”) is dated February 17, 2022, and is entered into by and between the Development Authority of Bulloch County, a public body corporate and politic created and existing under the Constitution and laws of the State of Georgia (the “Authority”) and Aspen Aerogels GEORGIA, LLc, a Georgia limited liability company (the “Company”), in order to evidence their agreements as the respective parties hereto. Bulloch County, GEORGIA (the “County”), the Board of Tax Assessors of Bulloch County (the “Board of Assessors”), and CITY OF STATESBORO, GEORGIA, a municipal corporation created and existing under the laws of the State of Georgia (the “City”), are each executing an Acknowledgment hereof attached to this Agreement in order to acknowledge its agreement to the provisions hereof which are applicable to it.

The Authority has been duly created and is validly existing as an instrumentality of the County, and is a public body corporate and politic, all as more particularly set forth in O.C.G.A. § 36-62-1 et seq. (the “Development Authorities Law”). Pursuant to the Development Authorities Law, the Authority is created for the purpose of developing and promoting trade, commerce, industry, and employment opportunities for the public good and the general welfare and to promote the general welfare of the State of Georgia (the “State”). Pursuant to the public purposes for which it has been created, the Authority agrees to the provision to the Company of the incentives described below in consideration of the Company’s agreement, as set forth below, to locate the Project (as hereinafter defined) within the borders of the County, with attendant job creation and investment on the part of the Company, all of which constitutes valuable, non-cash consideration to the Authority, the County, and their citizens. All capitalized terms defined herein shall have the meanings so provided throughout this Agreement.

1.	THE PROJECT.

1.1The Project. The Company currently is acquiring, constructing and equipping a new project for the production of aerogel based products on site located in the Southern Gateway Commerce Park (the “Commerce Park”) in Bulloch County, Georgia (the “Project”). The Company estimates that the total capital investment to be made in connection with the Project will be approximately $325,000,000 and that the Project will create a total of up to 250 jobs.

2.	BOND FINANCING.

2.1The Bonds. The Authority shall initially issue its economic development revenue bonds (the “Bonds”) in a principal amount not to exceed $650,000,000, to pay or to reimburse the Company or the Authority, or both, for costs of the Project as permitted by the Development Authorities Law. It is acknowledged by the parties hereto that the anticipated amount of the capital investment with respect to the Project exceeds the limits in the Internal Revenue Code of 1986, as amended (the “Code”) applicable to the issuance of tax-exempt bonds and therefore the Bonds will not qualify for tax-exempt status under the applicable provisions of the Code. The Company shall be responsible for the arrangements pertaining to the sale of the Bonds.

2.2Project Site; Lease. The Authority represents and warrants that it holds marketable, fee simple title to (i) Exhibit A attached hereto containing approximately 84 acres (the “Main Site”), and (ii) Exhibit B attached hereto containing approximately six acres (the “Ancillary Site” and together with the Main Site, the “Project Site”), all such property being located in the Commerce Park. As provided in that certain Inducement Agreement, dated as of the date hereof (the “Inducement Agreement”), between the Company and the Authority, in the event that the Ancillary Site is removed from the Project (and only at and from such point), the Main Site alone shall constitute the “Project Site” for all purposes under this Agreement and the transactions contemplated hereby.

3.	AD VALOREM TAX SAVINGS; ORDINARY PILOT PAYMENTS.

3.1Project Exempt from Property Taxation. Pursuant to the act under which the Authority was created, the Authority will pay no Ad Valorem tax on all real and personal property which is included in the Project while under Lease. The parties to this Agreement understand and agree that the Authority is not subject to Ad Valorem taxation on its interest in either the real property or the personal property of the Project. The parties further acknowledge and agree that (i) the interest of the Company in the real property portions of the Project is intended and shall be treated as a usufruct, (ii) the interest of the Company in the personal property portions of the Project is intended and shall be treated as a bailment for hire. As a result, the Project shall not be subject to ad valorem property taxation on the property titled in the name of the Authority and leased to the Company pursuant to the Lease. The Board of Assessors acknowledges and attests to its familiarity with the form of the Lease, and expressly confirms that neither the interest of the Authority nor the interest of the Company in the real and personal property portions of the Project will be subject to ad valorem taxation. This Agreement shall be among the documents that are judicially validated in connection with the validation of the Bonds.

3.2Tax Filings; Determination of Tax Values. During the first calendar year following the completion of the Project and issuance of the certificate of occupancy with respect thereto (the “Tax Commencement Year”) and for each calendar year thereafter, (i) the Company agrees to file with the Board of Tax Assessors a personal property tax return identifying all of the personal property located in the County as of January 1 of that year which is titled in the name of the Authority, and (ii) the Board of Tax Assessors shall determine the fair market value of the real property portions of the Project using its standard assessment policies and procedures applicable to industrial property. Based on the foregoing and the millage rate applicable to the Bulloch County School System (the “School System”) and the County Rural Fire District (the “Fire District”), the County shall prepare or cause to be prepared and submitted to the Company a bill indicating the portion of the property taxes that would have been due and payable with respect to the School System and the Fire District if the Company held full legal title to the Project as of January 1 of that year (the “PILOT Payment Bill”).

3.3Tax Value Contest Rights. Notwithstanding the foregoing, the parties hereto acknowledge and agree that the Company shall have the right, at its own expense and in its own name or in the name and on the behalf of the Authority, to contest the determination of the fair market value of the real and/or personal property portions of the Project or the calculation of such PILOT payments. The Company shall have all of the same rights and remedies as it would have in the case of a dispute over ad valorem property taxes, including, without limitation, the right to dispute the valuation used by the Board of Assessors. Without limitation, the Authority, the Board of Assessors and the Company agree that the Company shall have the right of arbitration provided in O.C.G.A. Sec. 48-5-311(f) and the right of appeal to the Superior Court provided in O.C.G.A. Sec. 48-5-311(g).

3.4PILOT Payments. The Company expressly acknowledges and agrees that commencing with the Tax Commencement Year and for each calendar year thereafter during the term of the Lease it shall be obligated to make annual payments in lieu of taxes in the amount set forth in the PILOT Payment Bill prepared by the County in accordance with Section 3.2 hereof, subject to the right of the Company to contest the same as described in Section 3.3 hereof (the “PILOT Payments”). Such PILOT Payments will be due and payable at the same time as property taxes would ordinarily be payable in each year and late payments will be subject to the same penalties and interest as late property tax payments . Failure to make such PILOT Payments in accordance with this Agreement after the notice and cure rights provided therein) will constitute an event of default under the Lease and will permit the Authority to terminate the Lease.

3.5Reversion to Normal Taxability. If the option to purchase the Project set forth in the Purchase Option Agreement between the Authority and the Company is exercised by the Company or if the Lease is otherwise terminated or expires, the Project will be taxable according to normal ad valorem property taxation rules that are applicable to privately-owned property.

3.6Board of Tax Assessors. The provisions of this Agreement relative to the assessment and taxability of the Project for ad valorem property tax purposes are the obligation and responsibility of the Board of Assessors. By its Acknowledgement, the Board of Tax Assessors is joining in this Agreement to acknowledge that this Agreement is consistent with applicable requirements and that the Board of Tax

Assessors intends and agrees to classify, for taxation purposes, the respective interests of the Authority and the Company in the Project as contemplated in this Agreement. The County also acknowledges and agree to such provisions and agree that the Board of Tax Assessors shall comply with the foregoing.

4.	RECOUPMENT OF INCENTIVES:

4.1Inducement. The Company’s agreement to consider locating the Project at the Project Site is based, in part, on the incentives being provided by the Authority, the State of Georgia and by the other public bodies signing Acknowledgements hereof. Such incentives are being provided to induce the Company to make capital investments of $325,000,000 in connection with the Project (the “Community Investment Goal”) and to create 250 full-time jobs in connection with the Project (the “Community Jobs Goal”). The making of such capital investments in the County and the creation of such local jobs by the Company constitutes valuable, non-cash consideration to the Authority and the citizens of the County and of the State. The parties acknowledge that the incentives provided for in this Agreement serve a public purpose through the estimated job creation and investment generation in connection with the Project. The parties further acknowledge that the cost/benefit requirements applicable to the Authority in the course of providing such incentives dictate that some measure of recovery must be applied in the event that a significant portion of the anticipated jobs and investment do not for any reason fully materialize. It is the intention of the parties hereto that the Company will within 36 months following the earlier to occur of (i) the completion and issuance of the final certificate of occupancy with respect to the Project or (ii) December 31, 2024, achieve 80% of the average of the Community Investment and Jobs Goals actually achieved (such achievement date, the “Commencement Date”). Further, the Company will maintain at least such level for the next 60 months (said 60 month period herein described as the “Performance Period” and said period commencing on the Commencement Date and continuing to the end of the Performance Period is herein called the “Goal Period”). If the Company does not achieve 80% of the average of the Community Investment and Jobs Goals in any Goal Year (as hereinafter described), then the Company may be required to repay all or a portion of the property tax savings and other incentives otherwise offered to the Company in this Agreement for such Goal Year in accordance with the provisions of this Article 4. The following provisions of this Agreement, together with the Schedules attached hereto, are intended to further prescribe and define the foregoing intentions of the parties.

4.2Community Jobs Goal. For purposes of this Agreement, the types of jobs that would qualify to be counted against the Community Jobs Goal shall be defined and determined, from time to time, as provided on Schedule B-1 attached hereto (and by reference made a part hereof). Schedule B-1 also determines how the number of full-time jobs shall be calculated.

4.3Community Jobs Percentage. At the end of each 12-month period during the Goal Period (each a “Goal Year”), the number of full-time jobs at the Project shall be calculated and shall be divided by the applicable Community Jobs Goal and converted to a percentage to determine the “Community Jobs Percentage.”

4.4Community Investment Goal. For purposes of the Community Investment Goal the investment at the Project shall be calculated on a cumulative basis from October 8, 2021 to the end of the Reporting Period. Schedule B-2 attached hereto (and by reference made a part hereof) provides rules that shall apply to satisfying the Community Investment Goal.

4.5Community Investment Shortfall Percentage. At the end of each Goal Year during the Goal Period, the Company shall calculate the cumulative amount of capital investment by the Company with respect to the Project and shall divide such amount by the applicable Community Investment Goal and convert the result to a percentage to determine the “Community Investment Percentage.”

4.6Annual Report. The Company agrees to file with the County and Authority an annual report (the “Annual Report”) within 60 days of the end of each Goal Year during the Performance Period (each such year, an “Annual Report Year”) containing the calculation of the Community Investment Percentage and the Community Jobs Percentage. The average of the Community Jobs Percentage and the Community Investment Percentage shall be the “Project Goals Percentage,” which shall also be calculated

and stated in the Annual Report; provided, however, for purposes of calculating the Project Goals Percentage the Community Jobs Percentage may not exceed 110% and the Community Investment Percentage may not exceed 120% for the first two years of the Performance Period, nor 110% for the last three years of the Performance Period. Each Annual Report shall be in substantially the form of Schedule B-3 attached hereto (and by reference made a part hereof), as revised for the matters being reported.

4.7Community Recovery Payments. If the Annual Report for any Goal Year during the Performance Period shows that, for such Goal Year, the Project Goals Percentage is less than 80% (a “Shortfall Year”), then the Company, in such Annual Report, shall calculate the amount of the “Community Recovery Payments.” If the Project Goals Percentage as shown in the Annual Report for the Goal Year immediately succeeding a Shortfall Year is less than 80%, then the Company shall pay the Community Recovery Payments for the prior Shortfall Year.

4.8Failure to Make Required Payments; Failure to File Report. If the Company fails to pay any Community Recovery Payment when due, interest shall be paid by the Company thereon at the rate of 6% per annum from the thirtieth (30^th) day following the date of the Authority notice to the Company of a failure to make such payment until paid. If there has been a failure to pay any Community Recovery Payment which is not cured within thirty (30) days following a written notice from the Authority, the Authority shall be entitled to enforce its rights under this Article 4, and the Company shall indemnify the Authority for all costs of enforcement, including reasonable and actual attorneys’ fees and court costs.

If the Company fails to provide to the Authority an Annual Report for any year as required pursuant to Section 4.6 and such failure continues for thirty (30) days following a written notice from the Authority, the Authority shall have the right to inspect the books and records of the Company regarding employment and capital investment in connection with the Project (subject to the confidentiality policies of the Company) in order to calculate the Project Goals Percentage and to determine the amount of Community Recovery Payments, if any, due from the Company hereunder.

4.9Extension of Deadlines Not Unreasonably Withheld. Notwithstanding anything herein to the contrary, in the event that an extension of the Performance Period or the due date of any Annual Report is needed in order to permit the Company to satisfy its obligations hereunder, and the Company has shown diligence in attempting to timely meet such obligations, the Authority agrees to not unreasonably withhold its consent to the extension of the period to time required to satisfy such obligations.

5.	DELAY; TERMINATION OF AGREEMENT.

5.1Delay. No party hereto shall be liable for any failure or delay in performance if caused, in whole or in part, by any circumstance or events beyond the reasonable control of such party, whether foreseeable or unforeseeable, including, without limitation, fire; flood; earthquake; acts of God; strikes, boycotts, riots or civil disorders; declared or undeclared wars; casualty; epidemic or pandemic, delays in obtaining governmental permits; compliance with government orders; acts of civil or military authority; accidents; industrial disturbances; interruptions of transportation facilities or delays in transit; delays, curtailment or shortages of construction, production, manufacturing or other materials, equipment, raw materials or supplies; failure of any party hereunder to perform, or any delays in the performance of, any commitment to such other party relating to the performance of its obligations; or any other cause, whether similar or dissimilar to the foregoing causes (including, without limitation, general, macro or special economic circumstances that adversely affects net revenues or sales volumes). In the event of any such contingency, the affected party shall notify the other parties of the contingency within a reasonable period of time and shall make commercially reasonable efforts promptly to remove the contingency such that performance may be resumed; provided, however, no party shall be obligated to settle any labor dispute. If as a result of the occurrence of any such contingency, such party’s performance hereunder cannot be completed within the original period for performance, the period for performance shall be extended for a period of time equal to the duration of such contingency and a reasonable period thereafter to allow for completion of performance without prejudice to any of the other rights of such party under this Agreement.

5.2Termination Rights.

(a)So long as none of the Local Governmental Entities is in default of its obligations hereunder, the Authority may terminate this Agreement by written notice to the Company if the acquisition, construction and equipping of the Project (the “Construction”) has not been commenced prior to the first anniversary of the date of this Agreement, or the Construction has not been completed prior to the fourth anniversary of the commencement of Construction. Construction will be deemed to have commenced with the pouring of the building pad for the project. Construction will be deemed to be completed with the issuance of a Certificate of Occupancy or Temporary Certificate of Occupancy for the building. Any such termination shall be evidenced by a written notice from the terminating party to the other parties hereto.

(b)So long as the Company is not in default under this Agreement, the Company may terminate this Agreement at any time by written notice to the Authority; provided, that upon such termination the Company shall reimburse the Local Governmental Entities for their actual costs in providing the incentives described in the Incentives Table appearing on Schedule B hereto. If the Company has exercised its right to purchase the Project site, it shall also pay to the Authority the cost of such property as described on Schedule B.

5.3Effect of Termination. If any party terminates this Agreement pursuant to a right provided herein or if this Agreement expires, this Agreement shall terminate or expire as to all parties without any further liability on the part of any party, except as may theretofore have accrued, or except as otherwise expressly provided in this Agreement, or shall exist as a result of any prior breach hereof.

6.	MISCELLANEOUS.

6.1Intergovernmental Agreement. By their respective Acknowledgements at the end hereof, the County and the Board of Tax Assessors agree to the provisions applicable to them. The Agreement shall also constitute an intergovernmental agreement under Georgia Constitution Art. IX, Sec. III, Para. I between and among the Authority, the County and the Board of Tax Assessors. Such intergovernmental agreement is subject to the 50-year term limit contained in such provision of the Georgia Constitution, but shall expire earlier upon its complete performance.

6.2Assignment

6.2.1By the Authority. The Authority may not assign its rights and obligations hereunder except to another public body of the State which has the power to perform the Authority’s obligations hereunder and which assumes all the Authority’s obligations hereunder either in writing or by operation of law.

6.2.2By the Company. All rights and benefits of the Company under this Agreement may be transferred and assigned by the Company, in whole or in part, to any one or more individuals, corporations, partnerships, joint ventures, limited liability companies, or other business entities (the “Assignees”) which propose to acquire all or part of the Project with the same effect as if such Assignees were named as the Company in this Agreement; provided, however, each such Assignee shall execute and deliver to the Authority and County an assignment agreement pursuant to which such Assignee shall assume the obligations of the Company hereunder.

6.3Notices. Any notice required to be given by any party pursuant to this Agreement, shall be in writing and shall be deemed to have been properly given, rendered or made only if personally delivered, or if sent by Federal Express or other comparable commercial overnight delivery service, addressed to each other party at the addresses set forth below (or to such other address as the Authority or the Company may designate to each other from time to time by written notice), and shall be deemed to have been given, rendered or made on the day so delivered or on the first business day after having been deposited with the courier service:


If to the Authority:	Development Authority of Bulloch County Post Office Box 303 Statesboro, Georgia 30459 Attention: Chairman
with a copy to:	Stephen T. Rushing, Esq. Taulbee, Rushing, Snipes, Marsh & Hodgin, LLC Post Office Box 327 Statesboro, Georgia 30459
If to the Board of Assessors:	Bulloch County Board of Assessors Statesboro, Georgia Attention: Chief Appraiser
If to the Board of Commissioners:	Bulloch County Board of Commissioners 115 North Main Street Statesboro, Georgia 30459 Attention: Chairman
If to the City:	City of Statesboro Attn: City Manager 50 E Main Street Statesboro, GA 30458

If to the Company:	Aspen Aerogels Georgia, LLC 30 Forbes Road, Building B Northborough, MA 01532 Attention: President
with a copy to:	Carlos A. Encinas, Esq. Alston & Bird LLP 1201 West Peachtree Street Atlanta, Georgia 30309-3424

6.4Confidential Information. All confidential information acquired by the Authority, the County or the Board of Assessors relating to the Company, shall be held in confidence by them, subject to their legal obligations as public bodies, including, without limitation O.C.GA. § 15-18-70, et seq. and § 50-14-1, et seq. The Company and its advisors shall, prior to the execution and delivery hereof, treat the contents of this Agreement as confidential, and, without limitation, shall not disclose such contents to competing communities or States.

6.5No Partnership or Agency. No partnership or agency relationship between or among the parties shall be created as a result of this Agreement.

6.6Survival of Agreement. This Agreement shall survive the issuance of the Bonds and the expiration or termination of the Lease but may be modified or superseded in whole or in part by the Lease or any of the other documents and agreements executed in connection with the issuance of the Bonds (collectively, the “Definitive Documents”) to the extent that the Definitive Documents expressly so provide.

6.7Governing Law; Jurisdiction and Venue. The transactions contemplated hereunder and the validity and effect of this Agreement are exclusively governed by, and shall be exclusively construed and enforced in accordance with, the laws of the State of Georgia, except for the state’s conflict of law rules.

6.8Amendments. Any amendments, deletions, additions, changes or corrections hereto must be in writing executed by the parties hereto.

6.9Entire Agreement. This Agreement, together with the Definitive Documents, constitutes the entire agreement between the parties with respect to the subject matter hereof.

6.10Counterparts. This Agreement may be signed in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.

6.11No Personal Liability of Representatives of Public Bodies. No official, member, director, officer, agent, or employee of the Authority, the County or the Board of Tax Assessors shall have any personal liability under or relating to this Agreement. Rather, the agreements, undertakings, representations, and warranties contained herein are and shall be construed only as corporate agreements, undertakings, representations, and warranties, as appropriate, of such public bodies. Without limitation, and without implication to the contrary, all parties hereto waive and release any and all claims against each such official, member, director, officer, agent, or employee, personally, under or relating to this Agreement, in consideration of the entry of such public bodies into this Agreement.

6.12No Personal Liability of Representatives of Company. No official, member, manager, director, officer, agent, or employee of the Company shall have any personal liability under or relating to this Agreement. Rather, the agreements, undertakings, representations, and warranties contained herein are and shall be construed only as corporate agreements, undertakings, representations, and warranties, as appropriate, of such entity. Without limitation, and without implication to the contrary, all parties hereto waive and release any and all claims against each such official, member, manager, director, officer, agent, or employee, personally, under or relating to this Agreement, in consideration of the entry of such entity into this Agreement.

6.13Captions. The captions and title heading included in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions of this Agreement.

6.14Time is of the Essence. Time is of the essence for this Agreement.

IN WITNESS WHEREOF, the parties have executed this PILOT Agreement and caused it to be delivered as of the date first above written.


AUTHORITY:
DEVELOPMENT AUTHORITY OF BULLOCH COUNTY

By:	/s/ Billy Allen
	Billy Allen
	Vice Chair, Development Authority of Bulloch County

(SEAL)


COMPANY:
ASPEN AEROGELS GEORGIA, LLC
a Georgia limited liability company

By:	/s/ Donald R. Young
	Donald R. Young
	President and CEO

(SEAL)

ACKNOWLEDGED

The undersigned acknowledges this Agreement and agrees to the provisions hereof that are applicable to it.


BULLOCH COUNTY, GEORGIA



By:		/s/ Roy Thompson
		Roy Thompson
		Chairman, Board of Commissioners

Attest:	/s/ Olympia Games
	Olympia Games
	Clerk, Board of Commissioners

(SEAL)

ACKNOWLEDGED

The undersigned acknowledges this Agreement and agrees to the provisions hereof that are applicable to it.


BOARD OF TAX ASSESSORS OF BULLOCH COUNTY

By:		/s/ Marion Hulsey
		Marion Hulsey
		Chair, Board of Assessors

(SEAL)

ACKNOWLEDGED

The undersigned acknowledges this Agreement and agrees to the provisions hereof that are applicable to it.


CITY OF STATESBORO, GEORGIA

By:	/s/ Jonathan McCollar
	Jonathan McCollar
	Mayor, City of Statesboro

Attest:		/s/ Leah Harden
		Leah Harden
		Clerk, City of Statesboro, Georgia

(SEAL)

SCHEDULE A

[Intentionally Deleted]

SCHEDULE B

COMMUNITY INCENTIVES SCHEDULE

1.	The recovery value (“Recovery Value”) of the Community Incentive identified below shall be as specified below (the “Incentives Table”), with any payments to be made as provided in this Community Incentives Schedule to the public bodies indicated as follows:

Incentives Table


Community Incentive	Recovery Value	Recovery Factor	Recovery Paid To
Property Tax Savings on Project	Actual amount of ad valorem property taxes on Project saved, less any payments in lieu of taxes paid pursuant to Section 4.7 of this Agreement	100% for each Goal Year	Appropriate Taxing Authorities, Pro Rata in Proportion to Applicable Millage Rates
Project Site (Approx. 90 acres	The lesser of $30,000 per acre (pro-rated for fractions of an acre) or the fair market value of the property as of the date of this Agreement	12.5% for each Goal Year.	Authority
Workforce Training at Ogeechee Technical College	Actual cost of such training up to $20,000	12.5% for each Goal Year.	Authority
Provision of Temporary Office Space	Actual cost of such office space up to $24,000	12.5% for each Goal Year.	Authority
Infrastructure and Utility extensions	Actual cost of such work presently estimated at no more than $500,000.	12.5% for each Goal Year.	City

If the Annual Report for any Goal Year during the Performance Period shows that, for such Goal Year, the Project Goals Percentage is less than 80% (a “Shortfall Year”), then the Company, in such Annual Report, shall calculate the amount of the “Community Recovery Payments” with respect to the incentive listed in the Incentives Table above. If the Project Goals Percentage as shown in the Annual Report for the Goal Year immediately succeeding a Shortfall Year is less than 80%, then the Company shall pay the Community Recovery Payments for the prior Shortfall Year. The Community Recovery Payment for any Goal Year shall be calculated as follows: the Recovery Values as so determined for such year shall be multiplied by the Recovery Factors which shall produce the Recovery Amounts. The Recovery Amounts shall be multiplied by the difference between eighty percent (80%) minus the Project Goals Percentage actually achieved which shall produce the Community Recovery Payment. The Company shall pay the amount of the Community Recovery Payment to the appropriate public body specified above simultaneously with its delivery of the applicable Annual Report as required by this Agreement. If the Project Goals Percentage for any Goal Year is 80% or more, there shall be no Community Recovery Payment due for that Goal Year or the immediately preceding Goal Year. In not event shall there be a Community Recovery Payment with respect to any Goal Year prior to the Performance Period. However, notwithstanding the foregoing, in calculating the potential Community Recovery Payment for the first Goal Year during the Performance Period, the Recovery Amount with respect to property tax savings shall equal the total actual amount of ad valorem property taxes saved with respect to the Project (less the amount of any payments in lieu of taxes paid pursuant to Section 4.7 of this Agreement) during the first three Goal Years.

SCHEDULE B-1

RULES FOR SATISFYING THE COMMUNITY JOBS GOAL

1.	For purposes of this Agreement and satisfaction of the Community Jobs Goal, the number of new “full-time jobs” shall be defined and determined, from time to time, as follows:

Full-time job – means a new job that did not previously exist in the County with no predetermined end date, with a regular work week of 35 hours or more for the period in question, and an average hourly wage of $18.33 per hour; leased, contract, or third party jobs will be considered full-time employees of the Company if such jobs are created in connection with the Project.

2.	The number of full-time jobs shall be calculated as provided below.

A full-time job shall consist of a full-time employee subject to Georgia income tax withholding employed for more than 180 days during such calendar year with the opportunity for access to, but not necessarily paid or subsidized, medical benefits.

The average number of full-time employees in the Annual Report Year shall be determined by the following method:

(i)

for each month of the Annual Report Year, count the total number of full-time employees of the business enterprise that are subject to Georgia income tax withholding as of the last payroll period of the month or as of the payroll period during each month used for the purpose of reports to the Georgia Department of Labor;

(ii)

add the monthly totals of full-time employees; and

(iii)

divide the result by the number of months the business enterprise was in operation during the Annual Report Year. Transferred jobs and replacement jobs may not be included in the monthly totals.

SCHEDULE B-2

RULES FOR SATISFYING THE COMMUNITY INVESTMENT GOAL

1.	Capital investments in the Project by the Company shall be counted regardless of whether or not the property financed by such capital investment is leased to the Company under the Lease.

2.	Original cost, without regard to depreciation, shall be used in calculating whether the Community Investment Goal is met, except as provided in 3, below.

3.	Transferred equipment relocated by the Company to the Project may be counted at the greater of net book value, or fair market value.

Machinery and equipment leased to the Company under an operating lease (even though such property is not titled to the Authority and is not leased to the Company under the Lease) and other machinery and equipment owned or beneficially owned by the Company but not leased to it under the Lease, shall be counted.

5.	All expenditures in connection with the Project that under any generally accepted accounting principles or applicable federal tax laws and regulations may be capitalized by the Company shall count as capital expenditures.

SCHEDULE B-3
FORM OF ANNUAL REPORT

[DATE]

Development Authority of Bulloch County

Statesboro, Georgia

Re:

PILOT Agreement (the “Agreement”) between the Development Authority of Bulloch County and Aspen Aerogels Georgia, LLC (“Company”) regarding the capital project located in Bulloch County, Georgia (the “Project”) – 20__ Annual Report

Dear ________:

This letter shall serve as the ___ Goal Year Annual Report, as required under the Agreement.

1.Community Jobs Report

As of the end of the Goal Year, the total number of full-time jobs located at the Project was ___.

The Community Jobs Goal is 250 jobs. The Community Jobs as of the end of such Goal Year was ___ jobs. The Community Jobs Percentage is ___%¹ (__ ÷ 250).

2.Community Investment Report

During the period from October 8, 2021 through the end of the Goal Year, the Company has cumulatively invested a total of $________ with respect to the Project.

The Community Investment Goal is $325,000,000. Therefore, the Community Investment Percentage is __%* ($________ ÷ $325,000,000).

3.Community Recovery Payments

The Project Goals Percentage for the Global Year is ___% ((___% + __%) ÷ 2). IF such Project Goals Percentage is less than 80% A COMMUNITY RECOVERY PAYMENT IS DUE, THAT PAYMENT SHOULD BE CALCULATED HERE BASED ON THE RECOVERY SCHEDULE B IN THE AGREEMENT.

¹The Community Jobs Percentage may not exceed 110% and the Community Investment Percentage may not exceed 120% for the first two years of the Performance Period, nor 110% for the last three years of the Performance Period, for purposes of these calculations.

Please do not hesitate to let us know if you require any additional information.

Sincerely,

EXHIBIT A

DESCRIPTION OF MAIN SITE

The Main Site shall consist of the below description, excluding Ancillary Site described in Exhibit B.

EXHIBIT B

DESCRIPTION OF ANCILLARY SITE

The Ancillary Site shall consist of the space within the dotted lines in the map below marked as “Ancillary Site”.

Exhibit 10.4

PERFORMANCE & ACCOUNTABILITY AGREEMENT

Georgia Incentive Programs

EDGE FUND AWARD NO. ______________________

This Performance & Accountability Agreement (this "Agreement") made and entered into as of 2/18/2022 by and among the Development Authority of Bulloch County, a public body corporate and politic created pursuant to the laws of the State of Georgia (the “Development Authority”), the Georgia Department of Community Affairs, an agency within the executive branch of the State of Georgia (“DCA”) and the administering agency for the OneGeorgia Authority, an instrumentality of the state and a public corporation (“OneGeorgia”) (hereinafter referred to as the “Administering Agency”), and Aspen Aerogels Georgia, LLC (the “Company”).

R E C I T A L S

1.	The purpose of the State of Georgia’s incentive programs, administered through DCA, is to provide financial assistance to eligible applicants to assist the applicant to induce and assist companies to relocate, expand or construct projects in Georgia rather than a competing state; and

2.	The incentive programs include, but are not limited to, the Department of Community Affair’s Regional Economic Business Assistance (“REBA”) program and the OneGeorgia Authority’s EDGE Fund program (“EDGE”); and

3.	The Development Authority will be awarded either REBA or EDGE funding (“Financial Assistance”) and, in accordance with the Development Authority’s statutory purposes, will utilize the Financial Assistance to participate in a project to assist the Company; and

In consideration for the benefit of such Financial Assistance the Development Authority and Company must, in addition to other requirements: i) complete a project that creates and/or maintains a defined number of jobs; and ii) invest a defined amount of new private capital into the hereinafter described Project. (The defined job and private capital investment requirements shall hereinafter be collectively referred to as the “Performance Standards”); and

5.	The Development Authority and Company’s relocation or expansion project for which the Financial Assistance will be awarded is more particularly described in the EDGE Fund Award or REBA Fund Award, and that description is incorporated herein by reference, (hereinafter the “Project”); and

Now, therefore, in consideration of the covenants and agreements herein contained, the parties agree as follows:

Award. The Development Authority and the Company’s obligations under this Agreement are contingent upon the Administering Agency awarding Financial Assistance in the form of an EDGE grant in the amount of $1,000,000 (“Award Amount”) to the Development Authority to offset a part of the cost incurred by the Company in connection with machinery and equipment at the Facility, as defined below. Any assets funded or partially funded with the Award Amount (“Grant-funded Assets”) must be publicly titled for the duration of the Performance Period (as defined below) and any Grant-funded Assets shall not be used as collateral for financing during the Performance Period or to grant a security interest in any Grant-funded Assets to any other entity other than the Development Authority during the Performance Period. Furthermore, disbursement of the Award Amount is contingent upon the Company participating in a joint press release with the State and the Development Authority announcing the Project. Should the Award include or consist of a loan, the terms of such loan will be set forth in a separate agreement, promissory note and other appropriate documents.

2.	Project Description. Pursuant to the Award, the Development Authority shall use the Award Amount to assist the Company to implement the Project, which is more particularly described in the application and summarized as:

Company will build a manufacturing facility, located at 143 Rocky Road, Register, Georgia 30452 (the “Facility”), for the manufacture of aerogel products. The Company will create or cause to be created 250 net-new full-time jobs¹, with an average wage of $62,000, plus benefits, and will invest or cause to be invested an aggregate of $325,000,000 by the end of the thirty-six month Performance Period (as defined below).

3.	Performance Standards. In consideration for the Development Authority’s assistance, the Company shall meet the following Performance Standards:

The Company shall create 250 net-new full-time jobs located in Bulloch County (the “Committed Jobs”).

The Company shall make or cause to be made a private capital investment and ancillary related expenses in the Project of at least $325,000,000 in the form of expenditures as noted in the Project Description Section above (“Committed New Investment”);

The start date for the Committed Jobs and Committed New Investment to be counted will be October 8, 2021

The Company shall be in full compliance with the Performance Standards within thirty-six (36) months from the earlier of (i) the date of the issuance of the Certificate of Occupancy for the Facility, or (ii) the date in paragraph 3E of this Agreement (the “Performance Period”), and in the event the Performance Standards are met prior to the expiration of the Performance Period, then the Company must maintain such jobs and investment until the expiration of the Performance Period as outlined in paragraph 3F below. Failure to achieve and maintain the Performance Standards as described herein shall trigger the Company’s obligation to make a Repayment Amount in accordance with the provisions of paragraph 4 hereof and failure to do so shall be an immediate event of default under this Agreement. At the request of the Development Authority and for good cause shown, the expiration of the Performance Period may be extended, at the sole discretion of the Administering Agency; provided, however, that any such request shall be accompanied by supporting documentation from the Development Authority and Company deemed satisfactory to the Administering Agency;

The start-date for the Performance Period shall be no later than December 31, 2024, which is the date that the Company reasonably expects the Facility to be operational; and

The Company shall maintain documentation to evidence the number of full-time permanent jobs created and maintained and the amount of private investment in the Project through the expiration of the Performance Period and until the Administering Agency has certified compliance pursuant to Section 5 of this Agreement.

Compliance Threshold and Repayment Amount. In the event the Company fails to i) meet the Performance Standards within the Performance Period; ii) maintain operations for the entirety of the Performance Period; or iii) locate in Georgia or operate the business forming a part of the Project funded with the Award, the Company shall repay directly to the Administering Agency all (in the case of the occurrence of the event of default identified in Section 4 (ii) or (iii) above) or a portion (in the case of the occurrence of the event described in Section 4(i), and in accordance with Section 4(B)) of the Award Amount in all other cases (in

¹	Net new full time job is defined as a new job that did not previously exist within the State of Georgia which has a minimum of 35 hours per week, with the opportunity for access to, but not necessarily paid or subsidized, medical benefits.

each case, the “Repayment Amount”). For purposes of events of default under Section 4(i) above, the Repayment Amount shall be determined as follows:

Compliance Threshold. The Company will be determined to have complied with the Performance Standards if the results of the threshold calculation conducted in accordance with the formula on Exhibit “A” (“Average Actual Performance”) are equal to or greater than eighty percent (80%) (“Compliance Threshold”). The threshold calculation formula is the average of the percentage of created jobs to Committed Jobs over the Performance Period and the percentage of actual capital investment and ancillary related expenses to Committed New Investment as of the expiration of the Performance Period. In terms of the threshold calculation, the Company may receive up to 110% credit for its Committed Jobs and 100% credit for its Committed New Investment at the end of the Performance Period. In no event shall the Company be entitled to receive more than 100% credit for its investment commitment or 110% credit for its job commitment in the event that the Company exceeds either of these commitments.

Adjusted Award Amount. Should the Company’s Average Actual Performance be less than the Compliance Threshold, the Company’s Award will be adjusted proportionately by multiplying the Award Amount by the Average Actual Performance. The resulting number will then be subtracted from the Award Amount to determine what amount the Award will be adjusted to, after taking into account under performance (“Adjusted Award Amount”). The Company shall repay to the Administering Agency the difference between the Award Amount and the Adjusted Award Amount. See illustrations in Exhibit “B”: Repayment Calculation. The Award Amount will only be adjusted in the event Company does not meet the Compliance Threshold.

Reporting Requirements. The Company and the Development Authority shall provide semi-annual reports to the Administering Agency concerning the progress of the creation of jobs and investment. The Company shall file with the Development Authority, no later than thirty (30) days after the expiration of the Performance Period, documentation to evidence the actual number of full-time jobs created and total amount of private capital invested in the Project. No later than sixty (60) days after the expiration of Performance Period, the Development Authority shall file with the Administering Agency, a report documenting the Company’s performance. Within a reasonable time after receipt of the report from the Development Authority, the Administering Agency will notify the Development Authority of the Company’s compliance or noncompliance with the Compliance Threshold. The Development Authority shall then provide the Company with such notification. The Company and the Development Authority agree to keep an updated point of contact for the person(s) responsible for providing any reports owed to the Administering Agency. If the person(s) responsible for providing reports changes, the Company and/or the Development Authority agree to notify the Administering Agency as soon as possible.

Notification and Repayment. In the event the Company has failed to meet the Compliance Threshold, the Administering Agency will notify the Development Authority and Company of the Adjusted Award Amount and the Repayment Amount. The Company shall submit the Repayment Amount to the Administering Agency no later than forty-five (45) days after the date of the notification letter from the Administering Agency indicating that the Company has failed to meet the Compliance Threshold. Should the Company fail to remit the Repayment Amount to the Administering Agency in a timely matter, the Administering Agency shall have the right, in its sole discretion, to impose any and all remedies available to it through its administrative processes or to seek remedies available at law or equity.

Adjustment in the Performance Standards. In the event a force majeure or other extraordinary circumstance, as will be determined in the reasonable discretion of Administering Agency, prevents the Company from meeting the Compliance Threshold, the Company may request that Administering Agency adjust the Company’s Compliance Threshold. In the sole discretion of Administering Agency, the Compliance Threshold may be adjusted provided that the adjustment will have a direct relationship to the impact that the extraordinary circumstance had on the Company’s ability to meet the Performance Standards.

Sale or Change of Ownership of Project. If, during the Performance Period, the Company’s interest in the Project is sold or transferred (other than to the Development Authority or the grant of a security interest therein or security title thereto), including, without limitation, a de facto transfer of ownership resulting from a corporate merger or consolidation of the Company in which the Company is not the surviving entity, but shall exclude any event in which less than 50% of the combined equity voting power of the Company is transferred to a third party, including an affiliate of the Company (“Change in Ownership”), then the Company must notify the Development Authority and Administering Agency of such a Change in Ownership. Additionally, the new owner of the Project (“the Acquiring Company”) must assume the obligations contained in this Agreement by executing an Assumption Agreement. In such case, the Administering Agency shall approve and be a party to the Assumption Agreement, along with the Company, the Development Authority and the Acquiring Company. In lieu of executing an Assumption Agreement, the Company or Acquiring Company may make the Repayment Amount to the Administering Agency, after which, none of the restrictions from this Agreement imposed on the Company, or the Acquiring Company, or the Project shall be in effect from that time onwards. Any change in control of the Company or any of its affiliates, whether through the sale of ownership interests or otherwise (collectively, a “Change of Control”) that does not directly impact the Project or the Company, or any acquisition of title in any assets of the Project by the Company from the Development Authority during the Performance Period, will not trigger the provisions of this Section. Notwithstanding the foregoing, the Company recognizes and acknowledges that the Grant-funded Assets must remain publicly titled during the Performance Period.

Transfer and Assignment of Repayment. The Development Authority hereby transfers and assigns to Administering Agency all of the Development Authority's rights, title and interest to the Repayment Amount. The Development Authority acknowledges that, pursuant to the terms of the Agreement, the Company shall remit all Repayment Amounts to the Administering Agency. In the event the Development Authority receives such Repayment Amounts, the Development Authority shall hold such payments in trust for the benefit of the Administering Agency provided that no later than five (5) days after receipt thereof, the Development Authority will deliver, by courier or regular U. S. Mail, such Repayment Amounts to the Administering Agency. Provided the Development Authority requires the Company to meet the Performance Standards, uses its best effort to assist the Company in meeting the Performance Standards, and assists the Administering Agency in collecting Repayment Amount when due, the Administering Agency shall have no recourse against the Development Authority for the Company’s failure to meet the Performance Standards unless the Development Authority explicitly accepts such recourse.

10.

Acceptance and Assumption by Administering Agency. The Administering Agency hereby accepts the transfer and assignment of the Development Authority's rights, title and interest in, to the Repayment Amount; provided, however, that Administering Agency has not, and shall not have, accepted or assumed any obligations or liabilities of Development Authority that the Development Authority may have with regards to the Project or the Company.

11.

Exhibits. The exhibits hereto will be construed to be a part of this Agreement by such reference or other mention at each point at which such reference or other mention occurs, in the same manner and with the same effect as if each exhibit were set forth in full and at length every time it is referred to or otherwise mentioned.

12.

Severability. If any one or more of the provisions contained herein will for any reason be held by any court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision hereof, and this Agreement will be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

13.	Authorized Signatures. Each of the individuals executing this Agreement represents that they are authorized to execute this Agreement on behalf of their respective entities.

[SIGNATURES ON FOLLOWING PAGE]

Signature Page

Performance & Accountability Agreement

Aspen Aerogels Georgia, LLC Project in Bulloch County, Georgia

IN WITNESS WHEREOF, the parties have hereunto set their signatures and affixed their seals the day and year first written above.


Development Authority of Bulloch County		Georgia Department of Community Affairs
By:	/s/ Billy Allen	By:	/s/ Christopher Nunn
	Billy Allen		Christopher Nunn
Title:	Vice Chair	Title:		Commissioner
Date:	02/17/2022	Date:		02/18/2022

	Seal

Aspen Aerogels Georgia, LLC
By:	/s/ Donald R. Young
	Donald R. Young
Title:	President & Chief Executive Officer
Date:	02/17/2022

	Seal

PERFORMANCE & ACCOUNTABILITY AGREEMENT

EXHIBIT “A” - Average Actual Performance for Projects

The Average Actual Performance for projects shall be determined by the following formula:

STEP 1

(Total Jobs at end of Perfor. Period – Baseline^) = Percentage of Committed Jobs Created

Committed Jobs

Actual Capital Investment and ancillary expenses= Percentage of Committed New Investment^^

Committed New Investment

STEP 2

Percentage of Committed Jobs Created*

+ Percentage of Committed New Investment^^

=Percentage of Commitments Met

STEP 3

Percentage of Commitment Met = Average Actual Performance

* This percentage shall in no event exceed 110%, even if the Company exceeds 110% of its Job Commitment.

^The baseline applies only to expansion projects. The baseline for new projects is zero.

^^ This percentage shall in no event exceed 100%, even if the Company exceeds 100% of its Committed Investment.

PERFORMANCE & ACCOUNTABILITY AGREEMENT

EXHIBIT “B” - Repayment Amount Calculation

(Required only if Average Actual Performance is less than 80%)

STEP 1

Award Amount

X Average Actual Performance

Adjusted Award Amount

STEP 2

Award Amount

-Adjusted Award Amount

Repayment Amount

Example A – Repayment Required

A $500,000 Award to assist with site development was part of Company A’s consideration to locate in Georgia rather than an out-of-state location. As part of the deal, Company A committed to create 600 jobs and make a $5,000,000 new investment to construct and operate a new production facility in Georgia. At the end of the Performance Period, Company A has actually created 400 jobs and invested $3,500,000 into a smaller facility.

•

Award Amount $500,000

•

Commitment – 600 jobs and $5,000,000 new investment

•

Actual jobs delivered – 400 (66% of Commitment)

•

Actual investment delivered -- $3,500,000 (70% of Commitment)

•

66%+70% = 136/2 = 68% [Average Actual Performance]

•

$340,000 (68%) Adjusted Award Amount

•

$160,000 (32%) Repayment Amount

Example B – No Repayment Necessary

A $500,000 Award to assist with the purchase of production equipment was part of Company B’s consideration to locate in Georgia rather than an out-of-state location. As part of the deal, Company B committed to create 600 jobs and make a $5,000,000 capital investment to construct and operate a new manufacturing facility in Georgia. At the end of the Performance Period, Company B has actually created 600 jobs and invested $4,250,000 into a redesigned facility that saved $750,000 in capital investment.

•

Award Amount $500,000

•

Commitment – 600 jobs & $5,000,000 investment

•

Actual jobs delivered – 600 (100%)

•

Actual investment delivered -- $4,250,000 (85%)

•

100%+85% = 185/2 = 92.5% Benefit

•

No repayment required

Example C – No Repayment Necessary

A $500,000 Award to assist with the purchase of production equipment was part of Company C’s consideration to locate in Georgia rather than an out-of-state location. As part of the deal, Company C committed to create 600 jobs and make a $5,000,000 capital investment to construct and operate a new manufacturing facility in Georgia. At the end of the Performance Period, Company C has actually created 700 jobs and invested $3,500,000 into a redesigned facility that saved $1,500,000 in capital investment.

•

Award Amount $500,000

•

Commitment – 600 jobs & $5,000,000 investment

•

Actual jobs delivered – 700 (117% but limited to 110% credit)

•

Actual investment delivered -- $3,500,000 (70%)

•

110%+70% = 180/2 = 90.0% Benefit

•

No repayment required

Exhibit 10.6

THIRD Amendment

SECOND AMENDED AND RESTATED Loan and security agreement

This Third Amendment to Second Amended and Restated Loan and Security Agreement (this “Amendment”) is entered into this 31st day of March, 2022 by and between SILICON VALLEY BANK (“Bank”) and ASPEN AEROGELS, INC., a Delaware corporation (“Borrower”) whose address is 30 Forbes Road, Building B, Northborough, Massachusetts 01532.

Recitals

A.Bank and Borrower have entered into that certain Second Amended and Restated Loan and Security Agreement dated as of March 12, 2021, as amended by that certain First Amendment to Second Amended and Restated Loan and Security Agreement dated September 29, 2021 and as further amended by that certain Second Amendment to Second Amended and Restated Loan and Security Agreement dated December 27, 2021 (as the same may from time to time be further amended, restated, amended and restated, modified and/or supplemented, the “Loan Agreement”).

B.Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.

C.Borrower has requested that Bank amend the Loan Agreement to make certain revisions to the Loan Agreement as more fully set forth herein.

D.Bank has agreed to so amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below.

Agreement

Now, Therefore, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

1.Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

2.Amendments to Loan Agreement.

2.1Section 6.9 (Financial Covenants). Clause (a) of Section 6.9 is deleted in its entirety and replaced with the following:

“(a)EBITDA. Borrower shall achieve, measured as of the end of each fiscal quarter during the following periods, EBITDA of at least (loss not worse than) the following for the following periods:


Period	Minimum EBITDA (maximum loss)

Trailing three (3) month period ending March 31, 2022	($17,750,000)”

2.2Exhibit B (Compliance Certificate). The Compliance Certificate attached to the Loan Agreement as Exhibit B is amended in its entirety and replaced with the Compliance Certificate in the form of Exhibit B attached hereto.

3.Limitation of Amendments.

3.1The amendments set forth in Section 2 above are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document.

3.2This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.

4.Representations and Warranties. To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:

4.1Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;

4.2Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

4.3The organizational documents of Borrower delivered to Bank on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

4.4The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized;

4.5The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower;

4.6The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and

4.7This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.

5.Ratification of Perfection Certificate. Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate dated as of March 12, 2021,

and acknowledges, confirms and agrees that the disclosures and information Borrower provided to Bank in such Perfection Certificate as updated by Annex 1, have not changed, as of the date hereof.

6.No Defenses of Borrower. Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

7. Integration. This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.

8.Counterparts. This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

9.Fees and Expenses. Borrower agrees to promptly pay Bank, upon receipt of an invoice, Bank’s legal fees and expenses incurred in connection with this Amendment.

10.Effectiveness. As a condition precedent to the effectiveness of this Amendment and the Bank’s obligation to make further Advances under the Revolving Line, the Bank shall have received the following documents prior to or concurrently with this Amendment, each in form and substance reasonably satisfactory to Bank:

10.1this Amendment duly executed on behalf of Borrower;

10.2the Acknowledgment of Amendment and Reaffirmation of Guaranty substantially in the form attached hereto as Schedule 1, duly executed and delivered by Guarantor; and

10.3such other documents as Bank may reasonably request.

[Signature page follows.]

In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.


BANK		BORROWER

SILICON VALLEY BANK		ASPEN AEROGELS, INC.

By:	/s/Krista Alexon	By:	/s/John F. Fairbanks
Name: Krista Alexon		Name: John Fairbanks
Title: Vice President		Title: Chief Financial Officer

Schedule 1

ACKNOWLEDGMENT OF AMENDMENT
AND REAFFIRMATION OF GUARANTY AND SECURITY AGREEMENT

Section 1.Guarantor hereby acknowledges and confirms that it has reviewed and approved the terms and conditions of the First Amendment to Second Amended and Restated Loan and Security Agreement dated as of the date hereof (“the “Amendment”).

Section 2.Guarantor hereby consents to the Amendment and agrees that the Guaranty and Guarantor Security Agreement relating to the Obligations of Borrower under the Loan Agreement shall continue in full force and effect, shall be valid and enforceable and shall not be impaired or otherwise affected by the execution of the Amendment or any other document or instruction delivered in connection herewith.

Section 3.Guarantor represents and warrants that, after giving effect to the Amendment, all representations and warranties contained in the Guaranty are true, accurate and complete as if made the date hereof.

Dated as of March 31, 2022

[Signature Page Follows]


GUARANTOR:	ASPEN AEROGELS RHODE ISLAND, LLC

	By:	/s/ Donald R. Young
	Name: Donald R. Young
	Title: Chief Executive Officer

EXHIBIT B

COMPLIANCE CERTIFICATE

TO:SILICON VALLEY BANKDate:
FROM: ASPEN AEROGELS, INC.

The undersigned authorized officer of Aspen Aerogels, Inc. (“Borrower”) certifies that under the terms and conditions of the Amended and Restated Loan and Security Agreement between Borrower and Bank (as amended and in effect, the “Agreement”), (1) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries, if any, relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents supporting the certification. The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.


Please indicate compliance status by circling Yes/No under “Complies” column.

Reporting Covenant	Required	Complies

Monthly financial statements with Compliance Certificate	Monthly within 30 days	Yes No
Quarterly financial statements with Compliance Certificate	Quarterly within 45 days	Yes No
Annual financial statement (CPA Audited)	FYE within 150 days	Yes No
10‑Q, 10‑K and 8-K	Within 5 days after filing with SEC	Yes No
A/R & A/P Agings, and Deferred Revenue reports	Monthly within 20 days	Yes No
Borrowing Base Reports	15^th and last Business Day of each month (monthly within 20 days when a Streamline Period is in effect) and with each request for a Credit Extension;	Yes No
Projections	FYE within 30 days	Yes No


Financial Covenant	Required	Actual	Complies

Maintain as indicated:
Minimum EBITDA	*	$	Yes No
Minimum Adjusted Quick Ratio	1.20 to 1.00	to 1.00	Yes No

*See Section 6.9


Performance Pricing		Applies

Adjusted Quick Ratio at least 1.50:1.00	Prime + 0.75% (Eligible Accounts) or Prime + 1.25% (Eligible Foreign Accounts);	Yes No
Adjusted Quick Ratio less than 1.50:1.00	Prime + 1.50% (Eligible Accounts); Prime + 2.00% (Eligible Foreign Accounts)	Yes No

The following financial covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.

The following are the exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions to note.”)

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ASPEN AEROGELS, INC.

By:
Name:
Title:

BANK USE ONLY

Received by: _____________________
authorized signer

Date: _________________________

Verified: ________________________
authorized signer

Date: _________________________

Compliance Status:Yes No

Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall govern.

I.EBITDA (Section 6.9(a))

Required:

Borrower shall achieve, measured as of the end of each fiscal quarter during the following periods, EBITDA of at least (loss not worse than) the following for the following periods:


Period	Minimum EBITDA (maximum loss)

Trailing three (3) month period ending March 31, 2022	($17,750,000)

Actual:


A.	Net Income	$
B.	To the extent included in the determination of Net Income
	1.The provision for income taxes	$
	2.Depreciation expense	$
	3.Amortization expense	$
	4.Net Interest Expense	$
	5.Non-cash stock compensation expense	$
	6. One-time non-recurring expenses approved by the Bank in its sole discretion	$
	7.The sum of lines 1 through 6	$
C.	EBITDA (line I.A plus line I.B.7)

Is line I.C equal to or greater than $___________?

No, not in compliance Yes, in compliance

II.Adjusted Quick Ratio (Section 6.9(b))

Required:Borrower shall maintain at all times, to be tested as of the last day of each month,

an Adjusted Quick Ratio of at least 1.20 to 1.00.

Actual:


A.	Unrestricted cash maintained with Bank	$
B.	Accounts receivable net of allowance for doubtful accounts	$
C.	Quick Assets (line II.A. plus line II.B.)	$
D.	All Obligations and liabilities of Borrower owed to Bank	$
E.	Without duplication of line II.D., the aggregate amount of Borrower’s Total Liabilities that mature within one (1) year	$
F.	Current Liabilities (line II.D. plus line II.E.)	$
G.	Current portion of Deferred Revenue	$
H.	Current portion of the PPP Forgivable Amount	$
I.	Current portion of any Pre-Payment Balance or any other prepayment amount under the Supply Agreement	$
J.	Dollar Equivalent amount of all outstanding Letters of Credit	$
K.	Amount of any Pre-Payment Balance or any other prepayment amount due to BASF following a BASF Request	$
L.	Line II.F minus line II.G minus II.H minus line II.I minus line II.J plus line II.K	$
M.	Adjusted Quick Ratio (line II.C divided by line II.L)	:1.00

Is line M equal to or greater than 1.20:1:00?

No, not in compliance Yes, in compliance

Annex 1

Section 2 of the Perfection Certificate is hereby updated to refer to the following filed reports:

Public Disclosures By Borrower Since March 2021


Date	Filing Type

March 15, 2021	S-3
March 23, 2021	Press Release – Water Tower Fireside Chat Series
April 7, 2021	Press Release – Q1 2021 Earnings Release and Conference Call Date
April 19, 2021	DEFA 14A
April 23, 2021	Effectiveness Order
April 29, 2021	8-K - Press Release Q1 2021 Financial Results
April 29, 2021	Press Release – Q1 2021 Financial Results
May 4, 2021	10-Q (Q1 2021)
May 6, 2021	Press Release – Italian Building Materials Lawsuit
May 6, 2021	8-K – Press Release Patent Infringement Action
May 17, 2021	Press Release – Water Tower Fireside Chat Series
May 18, 2021	Press Release – Needham Technology & Media Conference
June 1, 2021	8-K – Annual Meeting Voting Results
June 1, 2021	Press Release – Fireside Chat at Cowen Technology
June 3, 2021	Form 4 – Non-Employee Director Stock Award
June 3, 2021	Form 4 – Non-Employee Director Stock Award
June 3, 2021	Form 4 – Non-Employee Director Stock Award
June 3, 2021	Form 4 – Non-Employee Director Stock Award
June 3, 2021	Form 4 – Non-Employee Director Stock Award
June 3, 2021	Form 4 – Non-Employee Director Stock Award
June 8, 2021	Press Release - Water Tower Fireside Chat Series
June 29, 2021	Press Release $75 Million Private Placement with Koch Strategic Platforms
June 30, 2021	8-K – Securities Purchase Agreement
July 1, 2021	D – Small Company Offereing and Sale of Securities Without Registration
July 1, 2021	Form 4 – Employee Director Stock Award
July 8, 2021	Press Release – Q2 2021 Earnings Release and Conference Call Date
July 29, 2021	8-K – Press Release Q1 2021 Financial Results
July 29, 2021	Press Release – Q2 2021 Financial Results
August 4, 2021	Form 4 – Whitaker exercise/sale
August 4, 2021	Form 4 – Landes sale
August 4, 2021	10-Q (Q2 2021)
August 5, 2021	Fireside Chat at Canaccord Genuity 41^st Annual Growth Conference
August 27, 2021	Form 4 – Conte exercise/sale
September 1, 2021	Fireside Chat at Cowen 14^th Annual Global Transportation & Sustainable Mobility Conference


September 10, 2021	S-3
September 20, 2021	Effectiveness Order
September 24, 2021	424B3 - Prospectus
October 1, 2021	Current report filing
October 28, 2021	Current report filing
November 3, 2021	Form 4 – Young sale
November 4, 2021	8-K - Press Release Q3 2021 Financial Results
November 10, 2021	Form 4 – Whitaker exercise/sale
November 29, 2021	Form 4 – Gervis exercise
December 1, 2021	Form 4 – Conte exercise/sale

Exhibit 10.7

FOURTH Amendment

SECOND AMENDED AND RESTATED Loan and security agreement

This Fourth Amendment to Second Amended and Restated Loan and Security Agreement (this “Amendment”) is entered into this 28th day of April, 2022 by and between SILICON VALLEY BANK (“Bank”) and ASPEN AEROGELS, INC., a Delaware corporation (“Borrower”) whose address is 30 Forbes Road, Building B, Northborough, Massachusetts 01532.

Recitals

A.Bank and Borrower have entered into that certain Second Amended and Restated Loan and Security Agreement dated as of March 12, 2021, as amended by that certain First Amendment to Second Amended and Restated Loan and Security Agreement dated September 29, 2021, as further amended by that certain Second Amendment to Second Amended and Restated Loan and Security Agreement dated December 27, 2021, as further amended by that certain Third Amendment to Second Amended and Restated Loan and Security Agreement dated March 31, 2022 (as the same may from time to time be further amended, restated, amended and restated, modified and/or supplemented, the “Loan Agreement”).

B.Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.

C.Borrower has requested that Bank amend the Loan Agreement to make certain revisions to the Loan Agreement as more fully set forth herein.

Agreement

1.Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

2.Amendments to Loan Agreement.

2.1Section 13 (Definitions). The following term and its definition set forth in Section 13.1 is deleted in their entirety and replaced with the following:

““Revolving Line Maturity Date” is June 27, 2022.”

3.Limitation of Amendments.

except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.

4.Representations and Warranties. To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:

4.2Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

4.4The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized;

5.Ratification of Perfection Certificate. Borrower hereby ratifies, confirms and reaffirms, all and singular, in all material respects, the terms and disclosures contained in a certain Perfection Certificate dated as of March 12, 2021, and acknowledges, confirms and agrees that the disclosures and information Borrower provided to Bank in such Perfection Certificate as updated by Annex 1, have not changed, as of the date hereof.

8.Counterparts. This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

9.Fees and Expenses. Borrower agrees to promptly pay Bank, upon receipt of an invoice, Bank’s legal fees and expenses incurred in connection with this Amendment.

10.1this Amendment duly executed on behalf of Borrower;

10.2the Acknowledgment of Amendment and Reaffirmation of Guaranty substantially in the form attached hereto as Schedule 1, duly executed and delivered by Guarantor; and

10.3such other documents as Bank may reasonably request.

[Signature page follows.]

In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.


BANK		BORROWER

SILICON VALLEY BANK		ASPEN AEROGELS, INC.

By:	/s/ Krista Alexon	By:	/s/ Ricardo C. Rodriguez
Name: Krista Alexon		Name: Ricardo C. Rodriguez
Title: Vice President		Title: Senior Vice President, Chief Financial Officer and Treasurer

Schedule 1

ACKNOWLEDGMENT OF AMENDMENT
AND REAFFIRMATION OF GUARANTY AND SECURITY AGREEMENT

Dated as of April 28, 2022

[Signature Page Follows]


GUARANTOR:	ASPEN AEROGELS RHODE ISLAND, LLC

	By:	/s/ Ricardo C. Rodriguez
	Name: Ricardo C. Rodriguez
	Title: Senior Vice President, Chief Financial Officer and Treasurer

Annex 1

Section 2 of the Perfection Certificate is hereby updated to refer to the following filed reports:

Public Disclosures By Borrower Since March 2021


Date	Filing Type

March 15, 2021	S-3
March 23, 2021	Press Release – Water Tower Fireside Chat Series
April 7, 2021	Press Release – Q1 2021 Earnings Release and Conference Call Date
April 19, 2021	DEFA 14A
April 23, 2021	Effectiveness Order
April 29, 2021	8-K - Press Release Q1 2021 Financial Results
April 29, 2021	Press Release – Q1 2021 Financial Results
May 4, 2021	10-Q (Q1 2021)
May 6, 2021	Press Release – Italian Building Materials Lawsuit
May 6, 2021	8-K – Press Release Patent Infringement Action
May 17, 2021	Press Release – Water Tower Fireside Chat Series
May 18, 2021	Press Release – Needham Technology & Media Conference
June 1, 2021	8-K – Annual Meeting Voting Results
June 1, 2021	Press Release – Fireside Chat at Cowen Technology
June 3, 2021	Form 4 – Non-Employee Director Stock Award
June 3, 2021	Form 4 – Non-Employee Director Stock Award
June 3, 2021	Form 4 – Non-Employee Director Stock Award
June 3, 2021	Form 4 – Non-Employee Director Stock Award
June 3, 2021	Form 4 – Non-Employee Director Stock Award
June 3, 2021	Form 4 – Non-Employee Director Stock Award
June 8, 2021	Press Release - Water Tower Fireside Chat Series
June 29, 2021	Press Release$75 Million Private Placement with Koch Strategic Platforms
June 30, 2021	8-K – Securities Purchase Agreement
July 1, 2021	D – Small Company Offereing and Sale of Securities Without Registration
July 1, 2021	Form 4 – Employee Director Stock Award
July 8, 2021	Press Release – Q2 2021 Earnings Release and Conference Call Date
July 29, 2021	8-K – Press Release Q1 2021 Financial Results
July 29, 2021	Press Release – Q2 2021 Financial Results
August 4, 2021	Form 4 – Whitaker exercise/sale
August 4, 2021	Form 4 – Landes sale
August 4, 2021	10-Q (Q2 2021)
August 5, 2021	Fireside Chat at Canaccord Genuity 41^st Annual Growth Conference
August 27, 2021	Form 4 – Conte exercise/sale
September 1, 2021	Fireside Chat at Cowen 14^th Annual Global Transportation & Sustainable Mobility Conference


September 10, 2021	S-3
September 20, 2021	Effectiveness Order
September 24, 2021	424B3 - Prospectus
October 1, 2021	Current report filing
October 28, 2021	Current report filing
November 3, 2021	Form 4 – Young sale
November 4, 2021	8-K - Press Release Q3 2021 Financial Results
November 10, 2021	Form 4 – Whitaker exercise/sale
November 29, 2021	Form 4 – Gervis exercise
December 1, 2021	Form 4 – Conte exercise/sale
December 20, 2021	Form 4 – Noetzel exercise
December 27, 2021	Current report filing
January 3, 2022	Current report filing
January 4, 2022	Current report filing
January 13, 2022	Current report filing
January 28, 2022	Schedule 13G/A filing
January 31, 2022	Form 3 filing
February 9, 2022	Schedule 13G/A filing
February 11, 2022	Form 5 filing
February 17, 2022	Current report filing
February 17, 2022	Current report filing
February 18, 2022	Current report filing
February 22, 2022	Schedule 13G/A filing
February 23, 2022	Form 4 – Spring Creek Capital LLC
February 25, 2022	Form 4 - Fairbanks
February 25, 2022	Form 4 - Young
February 25, 2022	Form 4 - Conte
February 25, 2022	Form 4 - Schilling
February 25, 2022	Form 4 - Gould
February 25, 2022	Form 4 - Whitaker
February 25, 2022	Form 4 - Landes
March 1, 2022	S-8 registration Statement
March 1, 2022	Form 10-K Annual Report
March 1, 2022	Form 4 - Young
March 1, 2022	Form 4 - Whitaker
March 1, 2022	Form 4 - Fairbanks
March 1, 2022	Form 4 - Conte
March 1, 2022	Form 4 - Landes
March 3, 2022	Form D
March 16, 2022	S-3 Registration Statement
March 16, 2022	Current report filing
March 23, 2022	Form 4 – Gervis
March 29, 2022	Current report filing
March 30, 2022	Form 3 – Wood River Capital LLC
March 30, 2022	Form 4 – Koch Industries, Inc.
April 1, 2022	Current report filing
April 1, 2022	Form 3 - Rodriguez
April 5, 2022	Schedule 13D
April 6, 2022	Form D


April 11, 2022	Form 4 – Noetzel Exercise
April 21, 2022	Proxy Statement (definitive)
April 21, 2022	Additional Proxy Soliciting Materials (definitive)

OFFICERS OF THE Company AND ITS SUBSIDIARIES

The following are the names and titles of the officers of the Company and its subsidiaries.


Name of Officer	Office/Title	Name of Company/Subsidiary
Donald R. Young	President and Chief Executive Officer	Aspen Aerogels, Inc. and Rhode Island, German and Georgia Subsidiaries
Ricardo C. Rodriguez	Senior Vice President, Chief Financial Officer and Treasurer	Aspen Aerogels, Inc. and Rhode Island, German and Georgia Subsidiaries.
Corby Whitaker	Senior Vice President Sales & Marketing	Aspen Aerogels, Inc.
Keith L. Schilling	Senior Vice President, Technology	Aspen Aerogels, Inc.
Kelley Conte	Senior Vice President, Human Resources	Aspen Aerogels, Inc. and Rhode Island and Georgia Subsidiaries.
Gregg Landes	Senior Vice President, Operations and Strategic Development	Aspen Aerogels, Inc. and Rhode Island and Georgia Subsidiaries.
Sahir Surmeli	Secretary	Aspen Aerogels, Inc. and Rhode Island and Georgia Subsidiaries.
Poongunran Muthukumaran	Assistant Secretary	Aspen Aerogels, Inc. and Rhode Island and Georgia Subsidiaries.

Exhibit 10.8

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (“Agreement”) is entered into by and between Aspen Aerogels, Inc., on behalf of itself and all of its predecessors, successors and affiliated entities (collectively, “Aspen”), and John F. Fairbanks, on behalf of himself, his executors, heirs, administrators, agents, attorneys, administrators, beneficiaries and assigns (collectively, “Executive”).

WHEREAS, Executive has been employed by Aspen as its Vice President, Chief Financial Officer, and Treasurer since October 16, 2006, a senior management position that afforded Executive with regular access to and knowledge of highly confidential, proprietary and commercially sensitive information that is the subject of the below-defined Non-Competition Agreement;

WHEREAS, Executive signed an Employment, Confidentiality and Non-Competition Agreement with Aspen dated December 16, 2015, a copy of which is attached as Exhibit A (the “Non-Competition Agreement”), which contains certain restrictive covenants, applicable before and after the term of his employment with Aspen, including a non-competition and non-solicitation covenant and a covenant against the disclosure of confidential information of Aspen;

WHEREAS, Executive signed an Executive Agreement with Aspen dated effective January 1, 2022, a copy of which is attached as Exhibit B (the “Executive Agreement”) which, among other terms, reaffirmed the restrictive covenants contained in the Non-Competition Agreement;

WHEREAS, On January 11, 2022, Executive provided a notice of his intention to retire effective April 1, 2022 (“Notice”);

NOW, THEREFORE, Aspen and Executive, for good and valuable consideration receipt of which is hereby acknowledged, agree as follows:

Resignation. Executive hereby retires and resigns from employment with Aspen, including any officer positions that he holds effective as of the close of business on April 1, 2022 (the “Resignation Date”). As of Aspen’s next regular payroll period following the Resignation Date, Executive will be paid in full for any and all wages earned by him through the Resignation Date, including any accrued but unused vacation time. Executive represents that he has submitted evidence or all business expenses for which he seeks reimbursement from the Company, and the Company agrees to reimburse him for such expenses as provided in the Company’s policies and consistent with Company practice. Unless otherwise provided for expressly in this Agreement, or by applicable law, all benefits provided by Aspen to Executive will cease as of the Resignation Date, including but not limited to the accrual of vacation time.

Equity Rights. Executive has been granted certain stock options to purchase shares of Aspen’s Common Stock (the “Options”) and certain restricted stock units that will subsequently award shares of Aspen’s Common Stock (the “RSUs”), each pursuant to Aspen’s 2001 Equity Incentive Plan (the “2001 Plan”) and/or pursuant to Aspen’s 2014 Employee, Director and Consultant Equity Incentive Stock Plan (the “2014 Plan” and collectively with the 2001 Plan, the “Plans”). A Table summarizing outstanding Options and RSUs granted to the Executive as of the date hereof is attached hereto as Exhibit C. Executive’s rights to the Options and the RSUs set forth on Exhibit C, including, without limitation, the vesting thereof, shall be governed by the Plans, any applicable grant documents and the Executive Agreement and Consulting Agreement described in the Section 5 below; provided, however, that the Executive may exercise any vested Options until the later of (i) one year from the Resignation Date or (ii) one-year from the date on which Executive ceases to provide services under the Consulting Agreement (defined below), but in no event beyond April 1, 2024.

Consulting Arrangement.Aspen and Executive have executed and delivered simultaneously with this Agreement the Consulting Agreement, a copy of which is attached as Exhibit D (the “Consulting

Agreement”), whereby the Executive will provide certain services to Aspen beginning immediately following the Resignation Date, as set forth therein, such that there is no separation in service.

Return of Property. On or before the Resignation Date, Executive shall return all property belonging to Aspen, including but not limited to computers, papers, files, documents, reference guides, equipment, keys, access key tag/card, identification cards, credit cards, software, computer access codes, disks, supplies and institutional manuals. Executive shall not retain any copies, summaries, reproductions or excerpts of any of the foregoing, whether in hardcopy or electronic format. To the extent Executive has stored any Aspen property on any personal home computer(s) or other personal computer or electronic storage device(s), Executive, on or before the Resignation Date, shall irretrievably delete all Aspen property from any personal home computer(s) and any other computer personal electronic storage device(s).

General Release. In consideration of the promises contained herein and in the Consulting Agreement, Executive hereby releases and discharges, except as specifically and expressly excluded below, Aspen and anyone acting by, through or on behalf of Aspen, including but not limited Aspen’s past, present and future directors, officers, employees, representatives and agents (collectively, the “Releasees”), to the fullest extent permitted by law, of and from any and all complaints, charges, lawsuits or claims (collectively, “Claims”) for relief of any kind by Executive that Executive now has, ever had or ever may have against the Releasees, or any of them, whether such Claims are known or unknown, arising out of any matter or thing that has happened through the date Executive signs this Agreement, including but not limited to (i) claims for tort or contract; (ii) claims arising out of, based on, or connected with Executive’s employment, including the terms and conditions of employment and the Executive Agreement, and the termination of that employment; and (iii) claims arising under any federal, state or local labor, employment or discrimination laws, including but not limited to the following (all as amended): Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 (“ADEA”), the Americans with Disabilities Act (“ADA”), the Equal Pay Act of 1963, the Family and Medical Leave Act (“FMLA”), the Genetic Information Non-Discrimination Act, the Massachusetts Fair Employment Practices Act (G.L. c. 151B), the Massachusetts Civil Rights Act, the Massachusetts Equal Rights Act, the Massachusetts Wage Act, and any other local, state or federal law, policy, order, regulation or guideline affecting or relating to claims or rights of employees. The release contained herein is a GENERAL RELEASE, including all common law and statutory claims and includes a waiver and release of any existing Claims that you may have regarding payments or amounts covered by the Massachusetts Wage Act (M.G.L. c. 149 § 148 et. seq.), the Massachusetts Minimum Fair Wages Act (M.G.L. c. 151 § 1 et. seq.), and the Massachusetts Equal Pay Act (M.G.L. c. 149 § 105A). Therefore, by signing this Agreement you waive and release any existing Claims you may have under those statutes, including, for instance, any Claims under those statutes for hourly wages, salary, overtime, minimum wages, commissions, vacation pay, holiday pay, sick leave pay, dismissal pay, bonus pay or severance pay, or retaliation. Nothing in this Agreement shall be construed to preclude Executive from participating or cooperating in any investigation or proceeding conducted by, or prohibit Executive from filing a charge or complaint with, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission, or any other federal, state or local governmental agency or commission (a "Government Agency"); limit Executive’s ability to communicate with a Government Agency, or to report information or alleged violations to a Government Agency and/or receive an award for information provided to a Government Agency, or to participate in any investigation or proceeding conducted by a Government Agency, including providing documents or other information to a Government Agency (which Executive may do, without notice to Aspen); or prohibit Executive from challenging or seeking a determination in good faith of the validity of this waiver or release under applicable state or federal law, or impose any condition precedent, penalty, or costs for doing so unless specifically authorized by state or federal law.

However, Executive acknowledges and agrees that his waiver and release are intended to be a bar to Executive’s financial recovery against Aspen with respect to any Claim, except those which cannot be released as a matter of law. Accordingly, nothing in this Agreement shall be deemed to limit Aspen's right to seek dismissal of a Claim on the basis that the signing of this Agreement constitutes a full release of Executive’s rights, or to seek restitution, to the extent permitted by law, of the economic benefits provided under this Agreement in the event that you successfully challenge of the validity of this release and prevail in any such Claim, but nothing herein should be construed as a disincentive or limitation to Executive’s

financial recovery by and through other third parties through other means, including any applicable whistleblower law or regulation. Excepted from the foregoing release are the following: (i) the obligations of Aspen to Executive under this Agreement, the Consulting Agreement and the Plans; (ii) any rights regarding vested benefits of the Executive, including, without limitation, any Options or RSUs under the Plans; and (iii) any rights to indemnification provided by statute or by the bylaws or charter documents of Aspen with respect to any action or proceeding brought against Executive as a result of having been an officer of Aspen.

No Pending Claims. Executive represents and warrants that he has not filed any complaints, charges, or other Claims for relief against the Releasees, or any of them, with any local, state or federal court or administrative agency, any professional or regulatory board, or any other agency or entity. Executive further warrants that he has not previously assigned or transferred any of the Claims that are the subject of the General Release contained in this Agreement.

Non-admissions. It is understood and agreed that this Agreement does not constitute any admission by any of the Releasees that any action taken with respect to Executive was unlawful or wrongful, or that any action by it constituted a breach of contract or violated any federal, state or local law, policy, rule or regulation.

Nondisclosure of this Agreement. Subject to Aspen determining that this Agreement and the Consulting Agreement shall be publicly disclosed via a filing with the Securities and Exchange Commission, each of Aspen and Executive agrees that the nature and terms of this Agreement are confidential, and further agrees, to the fullest extent allowed by law, not to discuss or disclose them, without the prior written consent of the other party, with or to any person, except to federal and state tax authorities, Aspen’s or Executive’s accountants or tax advisors, and attorneys, Executive’s spouse, or as required by law. Nothing in this Agreement shall prohibit or restrict Aspen or Executive from cooperating with, or disclosing information or this Agreement or the Consulting Agreement to, the Equal Employment Opportunity Commission, or any other Governmental Agency.

Continuation of Existing Noncompetition and Other Restrictive Covenants.

(a)

Executive acknowledges and agrees that he is bound by and will comply with the terms of the Non-Competition Agreement, including but not limited to the terms of Sections 3 through 6 of the Non-Competition Agreement and all related enforcement provisions which by their terms survive any termination of employment. Executive further acknowledges and agrees that he has had access to and gained knowledge of Aspen’s highly confidential, proprietary and commercially sensitive information and that use or disclosure of such information not permitted by the Non-Competition Agreement would be extremely damaging to Aspen and its business.

(b)

In consideration of the Consulting Agreement and other consideration being provided to Employee in connection with his separation from employment, Employee agrees that, during the term of the Consulting Agreement and for a period of one (1) year after the termination of the Consulting Agreement for any reason, Employee will not, directly or indirectly, without the consent of Company: (i) invest or hold a directorship or other position of authority in any company or business that conducts operations or otherwise engages in the Business of the Company; or (ii) be employed by, serve as a consultant to, or otherwise provide services to or participate in the management of, any business that conducts operations or otherwise engages in the Business of the Company.

10.

Non-disparagement. Executive agrees not to disparage or make negative statements about Aspen or any of Aspen’s officers, directors, employees, or programs. Likewise, Aspen shall direct its current officers not to disparage or make negative statements about Executive. Nothing in this Agreement shall bar Executive or Aspen and its officers, employees, agents and representatives from providing truthful testimony in any legal proceeding, or in responding to any request from any governmental agency, or as required by law, or by court order or other legal process.

11.

Non-Solicitation. In addition to Executive’s obligations pursuant to the Non-Competition Agreement and Section 9(b) above, in consideration of the fact that Executive will have a consulting relationship with Aspen

following the termination of his employment, Executive agrees to extend the period of the non-solicitation restriction in his Non-Competition Agreement such that it runs for the period ending the later of (i) three years from the Resignation Date, or (ii) one year from the date Executive’s Consulting Agreement with Aspen is terminated or expires (the “Extended Non-Solicitation Period”). During the Extended Non-Solicitation Period, Executive will not, directly or indirectly, through another person, firm, association, corporation or other entity with which the Executive is now or may hereafter become associated: (a) request, advise, induce or attempt to induce any client, customer, supplier, licensee or other business relation of Aspen (each, a "Customer") to withdraw, curtail, cease, cancel or otherwise reduce such Customer's business with Aspen or in any way interfere with the relationship between any Customer and Aspen; (b) disclose to any other person, firm, corporation or other entity, the name, address, preferences or purchase history of any Customer for the purpose of competing with Aspen; (c) solicit for employment or employ any person who is or was employed by or a consultant to Aspen at any time within the one (1) year period immediately preceding such solicitation or employment, or in any way willfully interfere with the relationship between Aspen and any such person; or (d) provide any services to or accept employment or any consulting arrangement with any Customer in competition with Company’s Business. Notwithstanding the foregoing, the publication of an advertisement that is not directed at any particular person or group shall not be deemed a solicitation in violation of this Section.

12.

Breach. Executive acknowledges that any breach by him of Sections 6, 8-11, or 13 of this Agreement will cause irreparable damage to Aspen and that, in the event of such breach, Aspen shall be entitled, to equitable relief, including injunctive relief, in addition to monetary damages and to any other remedies available to Aspen under this Agreement and at law. In the event that Executive pursues a claim to enforce this Agreement or the Consulting Agreement, he agrees that the sole remedy available to him shall be enforcement of the terms of this Agreement and the Consulting Agreement and/or a claim for damages resulting from the breach of this Agreement or the Consulting Agreement, but that under no circumstances shall Executive be entitled to receive or collect any damages for claims that he has released under this Agreement.

13.

Compliance with Laws. Executive acknowledges and agrees that arising out of his position as an officer of Aspen he is presently subject to and after the termination of his employment will continue to be subject to and will comply with applicable laws and regulations, including, without limitation, applicable provisions of federal and state securities laws, including Section 16 of the Securities Exchange Act of 1934.

14.

Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of Aspen and Executive and their respective successors and assigns, except that Executive may not assign his obligations under this Agreement, the Non-Competition Agreement or the Consulting Agreement.

15.

Severability. If any provision of this Agreement is held to be excessively broad, it shall be reformed and construed by limiting and reducing it so as to be enforceable to the maximum extent permitted by law. Should any part, term or provision of this Agreement be determined by any tribunal, administrative agency or court of competent jurisdiction to be illegal, invalid or unenforceable, even after all attempts at reformation or construction have been exhausted as provided in the prior sentence, the validity of the remaining parts, terms or provisions shall not be affected thereby, and the illegal, invalid or unenforceable part, term or provision shall be deemed not to be part of this Agreement.

16.

Entire Agreement. This Agreement, including its attached exhibits, constitutes the entire agreement between the parties about or relating to the termination of Executive’s employment with Aspen, or Aspen’s obligations to Executive with respect to Executive’s employment with Aspen, and fully supersedes any and all prior and contemporaneous agreements or understanding between the parties concerning Executive’s employment and the subject matter of this Agreement, except that (i) the Non-Competition Agreement and the Consulting Agreement are not superseded and shall remain in effect according to their respective terms and (ii) the Plans, and any applicable equity grant documents shall continue to govern Executive’s rights, if any, to any Options and to any RSUs. The terms of this Agreement and the Consulting Agreement are contractual in nature and not a mere recital, and they shall take effect as a sealed document. This Agreement may be changed or amended only by agreement in writing signed by both parties.

17.

Time to Consider Agreement; Revocation. In accordance with the requirements of the ADEA and the Older Workers Benefit Protection Act,

(a)

Executive acknowledges that he has been advised in writing to, and has been given the opportunity to, consult an attorney of his choice before signing this Agreement.

(b)

Executive acknowledges that he has been given the opportunity to review and consider this Agreement for up to twenty-one (21) days before deciding whether to accept the Agreement. If the Executive decides to accept this Agreement within such 21-day period, he should signify his acceptance by signing and sending the signed agreement to Aspen’s principal office, to the attention of Human Resources. .

(c)

Executive further acknowledges that he may revoke this Agreement within seven (7) days after signing it, and that this Agreement will not become effective until such seven (7) day period has expired without Executive having revoked the Agreement. To be effective, any such revocation must be in writing and delivered to Aspen’s principal office, to the attention of Human Resources, by close of business on the seventh day after signing and must expressly state Executive’s intention to revoke the Agreement. The eighth day following Executive’s execution hereof shall be deemed the “Effective Date” of this Agreement, provided that Executive has not revoked this Agreement prior to that time.

18.

Representations. Executive acknowledges that the benefits afforded him under the terms of this Agreement exceed any legal obligation of Aspen and provide valid consideration for the General Release contained in this Agreement, and the parties attest that no other representations were made regarding this Agreement other than those contained herein.

19.

Counterparts. This Agreement may be executed in two or more counterparts, each of which when executed and delivered constitutes an original of this Agreement, but all the Counterparts shall together constitute one and the same agreement. No counterpart shall be effective until each party has executed at least one counterpart. For the convenience of the parties, facsimile and pdf signatures shall be accepted as originals.

20.

Choice of Law; Dispute Resolution.

(a)

This Agreement shall be governed by, and shall be construed in accordance with, the laws of the Commonwealth of Massachusetts, without regard to its conflict of laws principles.

(b)

For claims referenced in the first sentence of Section 12 (“Injunction Claims”), the parties hereby expressly consent to the exclusive personal jurisdiction of the Worcester County (Massachusetts) Superior Court and the federal court located in Massachusetts, and expressly waive any and all objections to venue in such courts, including, without limitation, the inconvenience of such forum. Other than Injunction Claims, all Claims, disputes or controversies arising out of, relating to, or concerning any interpretation, construction, performance or breach of this Agreement, Executive’s employment, or the termination of Executive’s employment, shall be submitted to arbitration in Worcester County, Massachusetts, in accordance with the employment arbitration rules then in effect of the American Arbitration Association. The decision of the arbitrator shall be final, conclusive, and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The Company and Executive shall each pay one-half of the costs and expenses of such arbitration, including the arbitrator’s fees, and the company and consultant shall each pay their respective counsel fees and expenses.

21.

Waiver of Jury Trial. The parties to this Agreement each hereby waive, to the fullest extent permitted by law, any right to trial by jury of any Claim, demand, action or cause of action that either party may file against the other, whether now existing or hereafter arising and whether in contract, tort, equity or otherwise. The parties to this Agreement each hereby agree and consent that any such Claim, demand, action or cause of action shall, if not subject to arbitration as provided in Section

20(b) above, be decided solely by court trial without a jury and that the parties to this Agreement may file an original counterpart or a copy of this Agreement with any court as written evidence of the consent of the parties hereto to the waiver of their right to trial by jury.

IN WITNESS WHEREOF, Aspen and Executive have duly executed this Agreement as of the dates written below.


Aspen Aerogels, Inc.		Executive – John F. Fairbanks

By:	/s/ Donald R. Young	By:	/s/ John F. Fairbanks
Name: Donald R. Young		Name: John Fairbanks
Title: President & Chief Executive Officer
Date: March 29, 2022		Date: March 29, 2022

Exhibit A

[Non-Competition Agreement]

Exhibit B

[Executive Agreement]

Exhibit C

[Outstanding Options and RSUs and related grant documents]

Exhibit D

[signed Consulting Agreement]

Exhibit 10.9

Exhibit D - Consulting Agreement

This Agreement (hereinafter "Agreement") is made and entered into as of April 2, 2022 ("Effective Date") by and between Aspen Aerogels, Inc., a Delaware corporation, its affiliates, successors or assigns (together the “Company”), and the undersigned, John F. Fairbanks ("Consultant"), with the principal place of residence at 35 Hummingbird Lane, Groton, MA 01450 in consideration of the compensation, now and hereafter paid to Consultant by Company under this Agreement. Company and Consultant have also entered into a Separation Agreement and General Release dated March 29, 2022 (“Separation Agreement”) to which this Agreement is attached as Exhibit D.

For the purposes of this Agreement, the term “Business of the Company” means, any and all of: (i) the development, manufacture, commercial exploitation, marketing, licensing and sales of aerogels and related products and services; or (ii) any primary or substantial work responsibilities carried out by Consultant on behalf of the Company; or (iii) actual or demonstrably anticipated research or development of the Company. The parties agree that the “Business of the Company” is national and international in scope.

1.Statements of Work. Consultant shall provide the services (“Services”) described in the Statement of Work attached as Schedule A (“Statement of Work”). The Services shall be provided for the time period provided in the Statement of Work (“Term”), and Consultant shall receive as compensation for the Services the compensation provided for in the Statement of Work (“Compensation”).

2.Confidential Information.

(a)Company Information. Consultant hereby agrees at all times during the term of this Agreement and for five years following the termination of the Agreement, to hold in strictest confidence and not to use, except for the benefit of the Company, or to disclose to any person, firm or corporation without written authorization of the Company, any Confidential Information of the Company. This obligation is in addition to Consultant’s obligation not to use or disclose Confidential Information obtained by him during his employment by the Company. “Confidential Information” means any Company proprietary information, technical data, including, without limitation, research, product plans, products, services, customer lists and customers (including, without limitation, customers of the Company on whom Consultant called or with whom Consultant became acquainted during the term of this Agreement), markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, customer lists, employee lists, marketing, finances or other business information disclosed to Consultant by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment. “Confidential Information” does not include any of the foregoing items which has become publicly known and made generally available through no wrongful act of the Consultant or of others who were under confidentiality obligations with respect to the item or items involved. If Consultant is required by law to disclose Confidential Information, such as in response to a lawfully issued subpoena or court order, Consultant shall first provide the Company advance notice of his intention to make such disclosure so that the Company can take appropriate steps to protect its Confidential Information from disclosure. Consultant further understands that the trade secrets or know-how of the Company also constitute Confidential Information and must be kept in the strictest confidence and may never be used or disclosed by Consultant other than as provided in this Section 2(a).

(b)Third Party Information. Consultant recognizes that the Company has received, and in the future will receive, from third parties their confidential or proprietary information subject to a duty of the Company to maintain the confidentiality of such information and to use it only for certain limited purposes. Consultant hereby agrees to hold all such confidential or proprietary information of a third party in the strictest confidence and not to disclose it to any person, firm, or corporation or to use it except as necessary in carrying out Consultant’s work for the Company consistent with the Company’s agreements or other arrangements with any such third parties.

3.Inventions.

(a)Inventions Retained and Licensed. Consultant has attached hereto, as Schedule B, a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by Consultant prior to this Agreement including those conceived, developed or reduced to practice prior to execution of this agreement (collectively referred to herein as “Prior Inventions”), which belong to Consultant, which relate to the Business of the Company, and which are not assigned to the Company hereunder; or, if no such list is attached, Consultant represents that there are no such Prior Inventions. If in the course of this Agreement with Company, Consultant incorporates into a Company product, process or machine, including product literature, website or reports a Prior Invention owned by Consultant or in which Consultant has an interest, the Company is hereby granted and shall have a nonexclusive, transferable royalty-free, irrevocable, perpetual, world-wide license to make, have made, modify, use, sell reproduce, prepare derivative works, and distribute copies to public of such Prior Invention as part of or in connection with Company’s business including such product, process machine, product literature, website and reports.

(b)Assignment of Inventions. Consultant hereby agrees that Consultant has made or will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assigns to the Company, or its designee, all of Consultant’s right, title, and interest in and to any and all inventions, original works of authorship, developments, business plans, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which Consultant solely or jointly conceives or develops or reduces to practice, or authors or cause to be conceived or developed or reduced to practice, during the term of this Agreement with the Company (collectively referred to herein as “Inventions”), except as otherwise provided by applicable law. For the purposes of this paragraph, Inventions shall not include inventions that Consultant develops entirely on Consultant’s own time without using the Company’s equipment, supplies, facilities, or trade secret information except for those inventions that either i) relate at the time of conception or reduction to practice of the invention to the Business of the Company, or ii) result from any work performed by Consultant for the Company. Consultant further acknowledges that all original works of authorship which are made by Consultant (solely or jointly with others) within the scope of and during the term of this Agreement with the Company and which are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act. To the extent applicable law treats any such original works of authorship as not a work made for hire, Consultant hereby assigns as described above, to the Company, or its designee, all of Consultant’s right, title, and interest in such works to the Company. Consultant understands and agrees that the decision whether or not to commercialize or market any invention developed by Consultant solely or jointly with others is within the Company’s sole discretion and for the Company’s sole benefit and that no royalty will be due to Consultant as a result of the Company’s efforts to commercialize or market any such invention.

(c)Inventions Assigned to the United States. Consultant hereby agrees to assign to the United States government all of Consultant’s right, title, and interest in and to any and all Inventions whenever such full title is required to be in the United States by a contract between the Company and the United States or any of its agencies.

(d)Maintenance of Records. Consultant hereby agrees to keep and maintain adequate and current written records of all Inventions made by Consultant (solely or jointly with others) during the term of this Agreement with the Company. The records will be in the form of notes, sketches, drawings, whether in electronic or hardcopy form, and any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times.

(e)Patent and Copyright Registrations. Consultant hereby agrees to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto. Consultant further agrees that Consultant’s obligation to execute or cause to be executed, when it is in Consultant’s power to do so, any such instrument or papers shall continue after the termination of this Agreement. If the Company is unable because of Consultant’s mental or physical incapacity or for any other reason to secure Consultant’s signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then Consultant hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as its agent and attorney in fact, to act for and in its behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by Consultant.

4.Returning Company Documents. Consultant hereby agrees that, upon termination of this Agreement, Consultant will promptly deliver to the Company (and will not keep in its possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings blueprints, sketches, materials, equipment, other documents or property, or reproductions in any medium of any aforementioned items developed during the term of this Agreement by, or otherwise belonging to, the Company, or Consultant’s successors or assigns; provided, however, Consultant may retain (without any Aspen information) upon the expiration or termination of this Agreement the laptop and cell phone as provided in Section 6 of the Separation Agreement.

5.Non-competition. ¹Nothing in this Agreement is intended to modify the post-employment obligations applicable to Consultant under the terms of the Non-competition Agreement he entered into with the Company dated December 16, 2015 (“Non-Competition Agreement”) and the Separation Agreement.

6.Solicitation of Employees. Consultant hereby agrees that for a period of twenty-four (24) months immediately following the termination of

this Agreement for any reason, whether with or without cause by the Consultant or by the Company, Consultant shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees to leave their employment, or take away such employees, or attempt to solicit, induce, recruit, encourage or take away employees of the Company, either for itself or for any other person or entity; provided, however, Consultant shall not be prohibited directly or indirectly from making general solicitations of employment to which employees of the Company respond.

7. Export Control Compliance. Consultant shall not export any information furnished by the Company without first complying with all requirements of US Export Administration Regulations including the International Traffic in Arms Regulations and the Export Administration Regulations, including the requirement for obtaining any export license, if applicable. Consultant shall first obtain the written consent of the Company prior to submitting any request for authority to export any such information. Consultant shall defend, indemnify and hold Aspen Aerogels, Inc., its officers and Directors harmless from all claims, demands, damages, costs, fines, penalties, attorney’s fees and all other expenses and costs arising from Consultant’s failure to comply with this paragraph, the Arms Export Control Act, the Export Administration Act and applicable regulations, or other applicable regulations.

8.Compliance with Laws and Code. Consultant agrees (i) to comply with all applicable laws, statutes and regulations, including without limitation the U.S. Foreign Corrupt Practices Act and any similar foreign laws; and (ii) that it, and each of its direct or indirect owners or other financial interest holders (“Owners”), directors, employees, and every other person working for it, or on its behalf (“Representatives”), has not and will not, in connection with any transactions related to this Agreement or any other work in connection with sale of Products, make, offer or promise to make, or transfer any payment or anything of value, directly or indirectly, to any Government Official, or to any third party for payment to any Government Official, to improperly obtain, retain, or direct business or secure an improper advantage (collectively, “Improper Conduct”) or take any other action, directly or indirectly, to violate any applicable laws and regulations prohibiting public or commercial bribery, extortion, kickbacks, or other unlawful or improper means of conducting business (collectively, the “Anti-Corruption Laws”). For purposes of this Agreement, “Government Official” means the following: officer or employee of any government; officer or employee of any public international organization (e.g., the United Nations, World Bank, or International Monetary Fund); officer or employee of any department, agency, or instrumentality of any government or of any public international organization; officer or employee of any government-owned or government-controlled company; political party; political party official; or anyone, whether a private person or otherwise, acting in an official capacity on behalf of any of the above or of any government entity. Consultant acknowledges receipt of the current copy of Aspen’s Code of Business Conduct and Ethics (“Code”) available at http://ir.aerogel.com/investors/governance/default.aspx; understands how the Code applies to the Consultant and agrees to strictly comply with the Code.

9.Representations. Consultant hereby agrees to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. Consultant hereby represents Consultant’s performance of all the terms of this Agreement will not result in a breach of any agreement with a third party, including the breach of any agreement to keep in confidence proprietary information acquired by Consultant in confidence or in trust prior to this Agreement. Consultant has not entered into, and Consultant agrees Consultant will not enter into, any oral or written agreement in material conflict herewith.

10.Assignment. Neither this Agreement nor any obligations hereunder may be assigned or delegated by either party without the prior written consent of the other party.

11.ARBITRATION/JURY TRIAL WAIVER

(a)EXCEPT AS PROVIDED IN SECTION 12 HEREOF, EACH OF THE CONSULTANT AND THE COMPANY AGREES THAT ANY DISPUTE OR CONTROVERSY ARISING OUT OF, RELATING TO, OR CONCERNING CONSULTANT’S CONSULTING RELATIONSHIP WITH THE COMPANY OR ANY INTERPRETATION, CONSTRUCTION, PERFORMANCE OR BREACH OF THIS AGREEMENT SHALL BE RESOLVED BY ARBITRATION TO BE HELD IN WORCESTER COUNTY, MASSACHUSETTS, IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES THEN IN EFFECT OF THE AMERICAN ARBITRATION ASSOCIATION. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION. JUDGMENT MAY BE ENTERED ON THE ARBITRATOR’S DECISION IN ANY COURT HAVING JURISDICTION. THE COMPANY AND CONSULTANT SHALL EACH PAY ONE-HALF OF THE COSTS AND EXPENSES OF SUCH ARBITRATION, INCLUDING THE ARBITRATOR’S FEES, AND THE COMPANY AND CONSULTANT SHALL EACH PAY THEIR RESPECTIVE COUNSEL FEES AND EXPENSES.

(b) THE PARTIES HEREBY WAIVE ANY RIGHT EITHER OF THEM MAY HAVE TO A JURY TRIAL AND AGREE THAT ALL DISPUTES BETWEEN THEM SHALL BE RESOLVED SOLELY BY ARBITRATION, EXCEPT AS PROVIDED IN SECTION 12 HEREOF.

(c)CONSULTANT UNDERSTANDS THAT EACH PARTY’S PROMISE TO RESOLVE CLAIMS BY ARBITRATION IN ACCORDANCE WITH THE

PROVISIONS OF THIS AGREEMENT, RATHER THAN THROUGH THE COURTS, IS CONSIDERATION FOR THE OTHER PARTY'S LIKE PROMISE. CONSULTANT FURTHER UNDERSTANDS THAT CONSULTANT HAS BEEN OFFERED TO PROVIDE THE SERVICES BY THE COMPANY IN CONSIDERATION OF ITS PROMISE TO ARBITRATE CLAIMS.

12.EQUITABLE REMEDIES. CONSULTANT AGREES THAT IT WOULD BE IMPOSSIBLE OR INADEQUATE TO MEASURE AND CALCULATE THE COMPANY’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

13.Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by the laws of the Commonwealth of Massachusetts. Consultant hereby expressly consents to the exclusive personal jurisdiction of the state and federal courts located in Massachusetts for any lawsuit filed against Consultant by the Company as provided in Section 12 of this Agreement.

14. Termination. This Agreement shall continue to apply to any Statement of Work until such Statement of Work is terminated or otherwise expires on its terms. Notwithstanding the foregoing, Company may terminate this Agreement, including the Statement of Work, for Cause (as hereinafter defined) at any time immediately upon written notice to Consultant. Consultant may terminate this Agreement, including any Statement of Work, for any or no reason upon ten (10) days’ written notice to Company. All the terms of this Agreement that by their nature are intended to survive the termination of this Agreement shall survive such termination. For the purposes of this Agreement, "Cause" means: (i) willful misconduct, dishonesty, fraud or breach of fiduciary duty to the Company; (ii) deliberate failure to perform the Services, or breach of an agreement with the Company, which results in direct or indirect material loss, damage or injury to the Company, and the failure of Consultant to cure the same within thirty (30) days after Consultant’s receipt of written notice thereof; (iii) the unauthorized disclosure of any trade secret or confidential information of the Company; (iv) the commission of an act which constitutes unfair competition with the Company or which induces any customer or supplier to breach a contract with the Company; (v) conduct substantially prejudicial to the business of the Company; or (vi) the indictment of Consultant for any felony involving deceit, dishonesty or fraud, or any criminal conduct by the Consultant that would reasonably be expected to result in material injury or reputational harm to the Company. For purposes hereof, whether or not the Consultant has committed an act or omission of the type referred to in subparagraphs (i) through (vi) above will be determined by the Company in its good faith discretion, and its decision shall be final.

15.Entire Agreement. This Agreement sets forth the entire agreement and understanding between the Company and Consultant relating to the subject matter herein and merges all prior discussions between us, but does not affect or supersede the Separation Agreement or the Non-Competition Agreement. No modification of or amendment to the Agreement, nor any waiver of any rights under this agreement, will be effective unless in writing signed by the party to be charged. Any subsequent change or changes in Consultant’s duties, or compensation will not affect the validity or scope of this Agreement.

16.Severability. If one or more of the provisions in this Agreement are deemed void or voidable under applicable law, then the remaining provisions will continue in full force and effect without the inclusion of any such provisions.

17.Survival. The following provisions shall survive any termination of this Agreement: Sections 2 through 8, along with such other provisions hereof as may be necessary to interpret the same.

18.Independent Contractor. Consultant is an independent contractor and shall be solely responsible for (and indemnifies and holds harmless the Company for) any unemployment or disability insurance payments, and any social security, income tax or other withholdings, deductions or payments which may be required by federal, state or local law with respect to any sums paid to Consultant hereunder or for any and all Services or materials provided or rendered by Consultant.


CONSULTANT			ASPEN AEROGELS, INC.


By:	/s/ John F. Fairbanks	By:	/s/ Donald R. Young
Name: John F. Fairbanks		Name: Donald R. Young
		Title: President & CEO
Date: March 29, 2022		Date: March 29, 2022

Schedule A - Statement of Work

This Statement of Work dated April 2, 2022 describes Services to be performed by Consultant for Aspen Aerogels, Inc. (“Company”) and is issued pursuant to the Consulting Agreement dated April 2, 2022 (“Agreement”). This Statement of Work may be extended or modified only by a written agreement of both Company and Consultant.

A.SERVICES

Consultant to provide Services to the Company in connection with Company’s operations as reasonably requested by the Company from time to time during the term of the Statement of Work, including:

(i)

Consultant will provide Company personnel with his historical perspective on, and ideas to improve the Company’s financial management and operations.

(ii)

Consultant will assist with the transition of CFO role and related responsibilities.

Consultant will perform the Services free of the direction and control of the Company, but consistent with the objectives and deadlines it sets.

Consultant agrees to promptly advise the Company in case of any potential conflict between Consultant’s Services to be provided under this Statement of Work and Consultant’s other engagement or employment with third parties.

B.TERM

Subject to the right of Consultant to terminate this Statement of Work earlier for no or any reason under Section 14 hereof and the Company’s right to terminate for Cause, the Services pursuant to the Statement of Work shall begin April 2, 2022 and end no earlier than March 31, 2023 (the “Initial Term”). Thereafter, the Initial Term may be extended upon the mutual written consent of the Company and Consultant (the Initial Term and any such extensions, the “Term”).

C.COMPENSATION

In connection with Consultant’s Services pursuant to this Statement of Work, as Compensation for his Services, Company agrees that:

(i)

any restricted stock units (“RSUs”) that were previously granted to the Consultant in his capacity as an executive of the Company shall remain outstanding in accordance with their terms and continue to vest in accordance with their terms as per the applicable grant documents during the Term;

(ii)

The unvested stock options that were previously granted to the Consultant in his capacity as an executive of the Company shall not lapse upon the termination of his employment with the Company, and shall remain outstanding in accordance with their terms and continue to vest during the Term, provided that the Consulting Agreement and this Statement of Work have not been terminated prior thereto; and

For the avoidance of doubt, all then-unvested options shall be forfeited and not vest in the event that either party terminates this Statement of Work and the Consulting Agreement, in accordance with the terms hereof.


CONSULTANT		ASPEN AEROGELS, INC.

By:	/s/ John F. Fairbanks	By:	/s/ Donald R. Young
Name: John F. Fairbanks		Name: Donald R. Young
		Title: President & CEO
Date: March 29, 2022		Date: March 29, 2022

Exhibit 10.10

EXECUTIVE AGREEMENT

This Executive Agreement (this “Agreement”) is dated as of March 29, 2022 and will be effective as of April 1, 2022 (the “Effective Date”), by and between Aspen Aerogels, Inc., a Delaware corporation (the “Company”), and Ricardo C. Rodriguez (the “Executive”).

Recitals:

A.The Executive is currently employed by the Company as its Chief Strategy Officer and the Company desires to promote Executive to a new position.

B.The Company and the Executive desire to agree on the terms and conditions set forth in this Agreement in connection with Executive’s new position.

C.As an employee of the Company, the Executive has previously received and will continue to be given access to or come into contact with certain proprietary and/or confidential information of the Company.

D.The Company and the Executive are parties to an Employment, Confidentiality and Non-Competition Agreement dated as of Effective Date (the “Confidentiality and Non-Competition Agreement”).

E.The foregoing recitals shall be incorporated into and be a part of this Agreement.

Agreement:

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.Definitions. As used herein, the following terms shall have the following meanings.

“Board” means the Company’s board of directors.

“Cause” means: (i) willful misconduct, dishonesty, fraud or breach of fiduciary duty to the Company; (ii) deliberate disregard of the lawful rules or policies of the Company, failure to perform assigned duties, or breach of an employment or other agreement with the Company, which results in direct or indirect loss, damage or injury to the Company; (iii) the unauthorized disclosure of any trade secret or confidential information of the Company; (iv) the commission of an act which constitutes unfair competition with the Company or which induces any customer or supplier to breach a contract with the Company; (v) conduct substantially prejudicial to the business of the Company; or (vi) the indictment of the Executive for any felony involving deceit, dishonesty or fraud, or any criminal conduct by the Executive that would reasonably be expected to result in material injury or reputational harm to the Company. For purposes hereof, whether or not the Executive has committed an act or omission of the type referred to in subparagraphs (i) through (vi) above will be determined by the Company in its reasonable, good faith discretion, based upon the facts known to the Company at the relevant time.

“Change of Control” shall mean the first to occur of any of the following events: (i) the consummation of a reorganization, merger, consolidation or other similar transaction of the Company with or into any other Person or Group (within the meaning of Section 13(d)(3) of the Securities Act of 1934, as amended) in which holders of the Company’s voting securities immediately prior to such reorganization, merger, consolidation or other similar transaction will not, directly or indirectly, continue to hold at least a majority of the outstanding voting securities of the Company; (ii) a sale, lease, exchange or other transfer (in one transaction or a related series of transactions) of all or substantially all of the Company’s assets; (iii) the acquisition by any Person or any Group of such quantity of the Company’s voting securities as causes such Person or Group (other than a Person or Group who is a shareholder of the Company on the Effective Date) to own beneficially, directly or indirectly, as of the time

immediately after such transaction or series of transactions, more than 50% of the combined voting power of the voting securities of the Company other than as a result of (a) an acquisition of securities directly from the Company or (b) an acquisition of securities by the Company which by reducing the voting securities outstanding increases the proportionate voting power represented by the voting securities owned by any such Person or Group to more than 50% of the combined voting power of such voting securities; or (iv) a change in the composition of the Board within a two (2) year period such that a majority of the members of the Board are not Continuing Directors. As used herein, the term “Continuing Directors” shall mean as of any date of determination, any member of the Board who (a) was a member of the Board immediately after the Effective Date, or (b) was nominated for election or elected to the Board with the approval of, or whose election to the Board was ratified by, at least a majority of the Continuing Directors who were members of the Board at the time of that nomination or election; provided, however, that in no case shall (1) the public offering and sale of the Company’s common stock by its shareholders pursuant to a registered secondary offering or (2) the voluntary or involuntary bankruptcy of the Company constitute a Change of Control.

“Good Reason” means: (i) any material breach by the Company of this Agreement; (ii) a change in the Executive’s reporting relationships such that the Executive no longer directly reports to the President or Chief Executive Officer; (iii) ) only in connection with a CIC Qualifying Termination as defined in Section 5 below, a material reduction or material adverse change in the Executive’s current duties, responsibilities and authority, without his or her consent; (iv) the demand by the Company for the Executive to relocate or commute more than 40 miles from Northborough, Massachusetts without his or her consent; or (v) any reduction by the Company in the Executive’s Base Salary or the Executive’s Performance Bonus Target without his or her consent, except for across-the-board compensation reductions based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company. For purposes hereof, whether or not the Executive has Good Reason to terminate his or her employment by the Company pursuant to subparagraphs (i) through (v) above will be determined by the Company in its reasonable, good faith discretion, based upon the facts known to the Company at the relevant time.

“Permanent Disability” means the Executive is unable to perform, by reason of physical or mental incapacity, his or her then duties or obligations to the Company, for a total period of one hundred eighty (180) days in any three hundred sixty (360) day period.

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or any other entity, including a governmental entity or any department, agency or political subdivision thereof.

“Qualifying Termination” means the date on which the Executive’s employment is terminated by the Company without Cause as provided in Section 3(d), or the Executive terminates employment for Good Reason as provided in Section 3(e).

2.Employment. The Company agrees to employ the Executive, and the Executive hereby accepts employment with the Company consistent with the Executive’s position and duties, upon the terms and conditions set forth in this Agreement.

(a)Term. The term of this Agreement shall commence on the Effective Date and continue until the earlier of (i) December 31, 2022 or (ii) the termination or this Agreement in accordance with the provisions of Section 3 (the “Employment Period”). The Executive’s employment with the Company shall be “at will,” meaning that the Executive’s employment may be terminated by the Company or the Executive at any time and for any reason.

(b)Position and Duties.

(i)During the Employment Period, the Executive shall serve as Senior Vice President, Chief Financial Officer and Treasurer of the Company and shall have the duties, responsibilities and authority consistent with such position that are designated by the Company’s Chief Executive Officer, subject to the direction and supervision of the Board.

(ii)The Executive shall devote his or her best efforts and his or her full business time and attention (except for permitted vacation periods and reasonable periods of illness or other incapacity) to the business and affairs of the Company. The Executive shall perform his or her duties and responsibilities to the best of his or her abilities in a diligent, trustworthy businesslike and efficient manner. Notwithstanding the foregoing, the Executive may, to the extent not otherwise prohibited by this Agreement, devote such amount of time as does not interfere or compete with the performance of the Executive’s duties under this Agreement to any one or more of the following activities: (i) engaging in charitable activities, including serving on the boards of directors of charitable organizations or (ii) serving on the board of directors of any other company with the prior written approval of the Company.

(iii)The Executive agrees to abide by the Company's Code of Business Conduct and Ethics, Anti-Corruption Policy, Complaints Handling Policy, Insider Trading Policy, Disclosure Controls and Procedures Under the Securities Exchange Act of 1934, Form 8-K Disclosure Compliance Policy, Regulation FD Disclosure Policy, the Chief Executive Officer's Delegation of Authority and the Short-Term Investment Policy, each as in effect from time to time and such other policies, rules and regulations as the Company may adopt from time to time.

(c)Salary and Benefits.

During the Employment Period, Executive shall be entitled to the following compensation and benefits:

(i)Base Salary. During the Employment Period, the Executive’s base salary shall be $350,000 (such annual salary, as it may be adjusted upward by the Board in its discretion, being referred to as the “Base Salary”). The Base Salary shall be payable in regular installments in accordance with the Company’s general payroll practices, shall be subject to customary withholding and may be increased (but not decreased) at the discretion of the Board.

(ii)Annual Performance Bonus. The Executive shall be eligible to earn an annual cash incentive bonus (the “Performance Bonus”) of not less than 50% of the Executive’s then effective Base Salary (each, a “Performance Bonus Target”), subject in all respects to the terms and conditions established by the Board.

(iii)Expense Reimbursement. The Company will reimburse the Executive for all reasonable travel and other expenses incurred by the Executive in connection with the performance of his or her duties and obligations under this Agreement. The Executive shall comply with such reasonable limitations and reporting requirements with respect to expenses as may be established by the Company from time to time.

(iv)Benefit Plans and Programs. The Executive shall be entitled to participate in all compensation or employee benefit plans or programs and receive all benefits and perquisites for which salaried employees of the Company generally are eligible under any plan or program now or established later by the Company on the same basis as similarly situated senior executives of the Company. The Executive may participate to the extent permissible under the terms and provisions or such plans or programs, in accordance with program provisions. Nothing in this Agreement will preclude the Company from amending or terminating any of the plans or programs applicable to salaried employees or senior executives of the Company as long as such amendment or termination is applicable to all salaried employees or senior executives, as the case may be, so long as such plans or programs are replaced with plans no less favorable, in the aggregate, than existing plans.

(v)Grants of Long-Term Compensation. The Executive shall also be eligible for grants of long-term incentive compensation, including, options to purchase the Company’s common stock, restricted stock and/or restricted stock units, all on terms and conditions established by the Board.

(vi)Clawback Policy. All compensation shall be subject to any forfeiture or clawback policy established by the Company or the Board generally for senior executives from time to time and any other such policy required by applicable law.

(d)Change of Control: Options and Stock-Based Awards.

In the event of a Change of Control, notwithstanding anything to the contrary in any then outstanding option agreement or stock-based award agreement to the extent any outstanding stock options and other stock-based awards are not assumed by the Company’s successor in a Change of Control, the vesting of all stock options and other stock-based awards outstanding and held by the Executive as of the Change of Control shall immediately accelerate and become fully vested and exercisable, subject to any permitted action by the Board upon a Change of Control under the Company’s applicable equity plan to terminate the stock options or other stock-based awards upon a Change of Control, provided, however, that the foregoing shall not apply to any outstanding equity award to the extent such acceleration of vesting would result in a violation of Section 409A of the Code.

3.Termination. During the Employment Period, the Executive’s employment hereunder may be terminated without any breach of this Agreement under the following circumstances:

(a)Death. The Executive’s employment hereunder shall terminate upon his or her death.

(b)Disability. The Company may terminate the Executive’s employment upon the Executive’s Permanent Disability. If any question shall arise as to whether the Executive has a Permanent Disability so as to be unable to perform the essential functions of the Executive’s then existing position or positions with or without reasonable accommodation, the Executive may, and at the request of the Company shall, submit to the Company a certification in reasonable detail by a physician selected by the Company to whom the Executive or the Executive’s guardian has no reasonable objection as to whether the Executive is so disabled or how long such disability is expected to continue, and such certification shall for the purposes of this Agreement be conclusive of the issue. The Executive shall cooperate with any reasonable request of the physician in connection with such certification. If such question shall arise and the Executive shall fail to submit such certification, the Company’s determination of such issue shall be binding on the Executive. Nothing in this Section 3(b) shall be construed to waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

(c)Termination by Company for Cause. The Company may terminate the Executive’s employment hereunder for Cause.

(d)Termination by Company Without Cause. The Company may terminate the Executive’s employment hereunder at any time without Cause. Any termination by the Company of the Executive’s employment under this Agreement which does not constitute a termination for Cause under Section 3(c) and does not result from the death or Permanent Disability of the Executive under Section 3(a) or (b) shall be deemed a termination without Cause.

(e)Termination by the Executive. The Executive may terminate his or her employment hereunder at any time for any reason, including but not limited to Good Reason. In the event the Executive seeks to terminate his or her employment for Good Reason, the Executive shall comply with the “Good Reason Process” (hereinafter defined) following the occurrence of any purported Good Reason. “Good Reason Process” shall mean that (i) the Executive reasonably determines in good faith that a “Good Reason” condition has occurred; (ii) the Executive notifies the Company in writing of the Good Reason condition within sixty (60) days of the first occurrence of such condition; (iii) the Executive cooperates in good faith with the Company’s efforts, for a period not less than thirty (30) days following receipt of such notice (the “Cure Period”) to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) the Executive terminates his or her employment within sixty (60) days after the end of the Cure Period. If the Company cures the Good Reason or determines in its reasonable good faith discretion that a Good Reason condition has not occurred during the Cure Period, Good Reason shall be deemed not to have occurred.

(f)Notice of Termination. Except for termination as specified in Section 3(a), any termination of the Executive’s employment by the Company or any such termination by the Executive shall be

communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.

(g)Date of Termination. “Date of Termination” shall mean: (i) if the Executive’s employment is terminated by his or her death, the date of his or her death; (ii) if the Executive’s employment is terminated on account of Permanent Disability under Section 3(b) or by the Company for Cause under Section 3(c), the date on which Notice of Termination is given; (iii) if the Executive’s employment is terminated by the Company under Section 3(d), the date on which a Notice of Termination is given; (iv) if the Executive’s employment is terminated by the Executive under Section 3(e) without Good Reason, thirty (30) days after the date on which a Notice of Termination is given, and (v) if the Executive’s employment is terminated by the Executive under Section 3(e) with Good Reason, the date which is specified in the Notice of Termination, provided that such date must occur within the sixty (60) day period after the end of the Cure Period. Notwithstanding the foregoing, in the event that either party gives a Notice of Termination, the Company may unilaterally accelerate the Date of Termination.

4.Compensation on Termination.

(a)Termination Generally. If the Executive’s employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to his or her authorized representative or estate) (i) any Base Salary earned through the Date of Termination, unpaid expense reimbursements (subject to, and in accordance with, Section 2(c) of this Agreement) and, to the extent required by law, unused vacation that accrued through the Date of Termination, such amounts to be paid no more than thirty (30) days after the Executive’s Date of Termination; and (ii) any vested benefits the Executive may have under any employee benefit plan of the Company through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans (collectively, the “Accrued Benefits”).

(b)Qualifying Termination Prior to A Change of Control. If the Executive incurs a Qualifying Termination during the Employment Period and prior to a Change of Control, then in addition to the Accrued Benefits, and subject to the Executive signing a separation agreement containing, among other provisions, a general release of claims in favor of the Company and related persons and entities, confidentiality, non-compete, return of property and non-disparagement, in a form and manner satisfactory to the Company (the “Separation Agreement and Release”) and the Separation Agreement and Release becoming fully effective, all within sixty (60) days of the Date of Termination (the “Release Period”):

(i)the Company shall pay the Executive an amount equal to one hundred percent (100%) of the sum of (A) the Executive’s then effective Base Salary and (B) an amount equal to the Executive’s then effective Performance Bonus Target (the “Severance Amount”).

(ii)the Company shall pay the Executive any accrued but unpaid Performance Bonus for the prior fiscal year then owed or fully earned by the Executive in accordance with Section 2(c)(ii) above (the “Earned Performance Bonus”).

(iii)the Company shall pay the Executive a pro-rata portion of the Performance Bonus based upon actual achievement of the performance metrics for the fiscal year in which the Termination Date occurs (calculated by dividing the number of full months of the applicable fiscal year through the Date of Termination by 12, and multiplying this fraction by the Executive’s then effective Performance Bonus Target) (the “Pro-Rata Bonus”).

(iv)the COBRA eligible health care insurance benefits (e.g., health, dental) being provided by the Company to the Executive on the Date of Termination shall continue in place at the same cost to the Executive as applied to “active” participants on the Date of Termination for a period equal to the lesser of (i) the COBRA Benefit Period or (ii) twelve (12) months (“Health Care Continuation Benefit”). The “COBRA Benefit Period” means the period of time after such termination during which COBRA benefits are available to the Executive as of the Date of Termination as set forth in the Company’s health care plan. The Executive shall be responsible for applying for the COBRA eligible health care insurance benefit, paying for the same and submitting evidence of such

premium costs to the Company for reimbursement during the COBRA Benefit Period. The Company shall reimburse the Executive for the employer’s portion of such premiums (as applicable to the active rate) within 15 days of receipt of evidence of the payment of the premium costs to the Company (“Premium Reimbursement Payments”). Notwithstanding the foregoing, if the Company determines, in its sole discretion, that such reimbursement of the premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Internal Revenue Code of 1986, as amended (the “Code”) or any statute or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of reimbursing the premiums, the Company, in its sole discretion, may elect to instead pay the Executive on the first day of each month of such period, a fully taxable cash payment equal to the premiums for that month, subject to applicable tax withholdings (such amount, the “Special Severance Payment”), for the remainder of such period. The Executive may, but is not obligated to, use such Special Severance Payment toward the cost of premiums.

(v)if the Executive requests, the Company shall pay (“Outplacement Payments”) for an outplacement service (to be selected by the Company) for services rendered in assisting the Executive in locating another job, for a period of six (6) months following the Date of Termination or until the Executive begins working for another employer, whichever occurs first (“Outplacement Services”). These Outplacement Payments, which the Company shall make directly to the vendor providing Outplacement Services, are contingent upon the Executive’s cooperation with the outplacement service and upon active efforts by the Executive to locate another position.

(vi)Notwithstanding anything to the contrary in any then outstanding option agreement or stock-based award agreement, (a) the vesting of such number of stock options and other stock-based awards outstanding and held by the Executive as would have vested in the three (3) months immediately following the Date of Termination had the Executive continued his or her employment for such three (3) month period shall immediately accelerate and become vested and exercisable as of the Date of Termination, and (b) subject to any permitted action by the Board upon a Change of Control or other merger, sale, dissolution or liquidation of the Company under Company’s applicable equity plan to terminate the stock options or other stock-based awards, all vested stock options held by the Executive shall be exercisable for one (1) year from the Date of Termination.

(c)RESERVED.

(d)Timing and Form of Severance Payments.

The benefits provided to Executive under Sections 4(b)(i), (ii), (iii), (iv), and (v) shall be paid in the form and at the time specified below:

(i)Severance Amount shall be paid in substantially equal installments in accordance with the Company’s payroll practice over twelve (12) months commencing within sixty (60) days after the Date of Termination; provided, however, that if the 60-day period begins in one (1) calendar year and ends in a second calendar year, the Severance Amount shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).

(ii)Earned Performance Bonus shall be paid in a lump sum within sixty (60) days after the Date of Termination; provided, however, that if the 60-day period begins in one (1) calendar year and ends in a second calendar year, the Earned Performance Bonus shall be paid in the second calendar year by the last day of such 60-day period.

(iii)The Pro-Rata Bonus shall be paid when the annual performance bonus would have been otherwise paid if Executive had continued his or her employment through the applicable performance period.

(iv)Health Care Continuation Benefit shall commence immediately upon the Executive’s Date of Termination and the Executive shall immediately become eligible for Reimbursement Payments

in accordance with Section 4(b)(iii), provided however if an executed Separation Agreement and Release has not become fully effective within Release Period, the Company shall immediately cease making Premium Reimbursement Payments (or, if applicable, Special Severance Payments) and the Executive shall be obligated to promptly repay to the Company any previously received Premium Reimbursement Payments (or, if applicable, any Special Severance Payments).

(v)Outplacement Services shall commence immediately upon the Executive’s Date of Termination, provided however if an executed Separation Agreement and Release has not become fully effective within the Release Period, Outplacement Services shall immediately cease and the Executive shall be obligated to promptly repay to the Company any previously made Outplacement Payments.

(e)Rights to Severance. The receipt of any severance payments or benefits pursuant to Section 4 shall be subject to (i) the Executive’s submission to the Company of an executed Separation Agreement and Release that becomes fully effective within the Release Period and (ii) the Executive’s continued compliance with the Confidentiality and Non-Competition Agreement. In the event an executed Separation and Release Agreement does not become fully effective within the Release Period, the Executive shall forfeit his or her right to receive any severance payments or benefits under Section 4 and, as specified in paragraph (d) above, the Company shall have the right to recoup from the Executive any previously made severance payments or benefits. In the event the Executive breaches any of the provisions set forth in the Confidentiality and Non-Competition Agreement, in addition to all other legal and equitable remedies, the Company shall have the right to terminate or suspend all continuing payments and benefits to which the Executive may otherwise be entitled pursuant to Section 4 without affecting the effectiveness of the Executive’s release or the Executive’s obligations under the Separation Agreement and Release.

(f)Other Termination Events. The Executive hereby agrees that no severance compensation shall be payable upon termination of the Executive’s employment with the Company (i) by the Company with Cause; (ii) by the Executive without Good Reason; or (iii) as a result of the Executive’s death or Permanent Disability, and the Executive hereby waives any claim for severance compensation except as set forth in Section 4(b).

5.Change of Control. The provisions of this Section 5 shall apply in lieu of, and expressly supersede, other than with respect to the requirement for the execution and delivery of a Separation Agreement and Release, the provisions of Section 4 regarding severance pay and benefits upon a Qualifying Termination, if a Qualifying Termination occurs within twenty-four (24) months after the occurrence of a Change of Control (“CIC Qualifying Termination”). This Section 5 shall terminate and be of no force or effect beginning twenty-four (24) months after the occurrence of a Change of Control.

(a)Qualifying Termination after a Change of Control. During the Employment Period, if the Executive incurs a CIC Qualifying Termination, then in addition to the Accrued Benefits, and subject to the signing of the Separation Agreement and Release by the Executive and the Separation Agreement and Release becoming irrevocable within the Release Period:

(i)the Company shall pay the Executive an amount equal to two hundred percent (200%) of the sum of (A) the Executive’s then effective Base Salary and (B) the Executive’s then effective Performance Bonus Target (“CIC Severance Amount”).

(iii)the Company shall pay the Executive the Pro-Rata Bonus.

Executive shall be responsible for applying for the COBRA eligible health care insurance benefit, paying for the same and submitting evidence of such premium costs to the Company for reimbursement during the COBRA Benefit Period. The Company shall reimburse the Executive for the employer’s portion of such premiums (as applicable to the active rate) within 15 days of receipt of evidence of the payment of the premium costs to the Company (“CIC Premium Reimbursement Payments”). Notwithstanding the foregoing, if the Company determines, in its sole discretion, that such reimbursement of the premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of reimbursing the premiums, the Company, in its sole discretion, may elect to instead pay the Executive on the first day of each month of such period a fully taxable cash payment equal to the premiums for that month, subject to applicable tax withholdings (such amount, the “CIC Special Severance Payment”), for the remainder of such period. The Executive may, but is not obligated to, use such Special Severance Payment toward the cost of premiums.

(v)if the Executive wishes, the Company will pay for an outplacement service (“CIC Outplacement Payments”) (to be selected by the Company) for services rendered in assisting the Executive in locating another job, for a period of six (6) months following the Date of Termination or until the Executive begins working for another employer, whichever occurs first (“CIC Outplacement Services”). These CIC Outplacement Payments, which the Company shall make directly to the vendor providing the CIC Outplacement Services, are contingent upon the Executive’s cooperation with the outplacement service and upon active efforts by the Executive to locate another position.

(vi)CIC Severance Amount shall be payable in a lump sum within sixty (60) days after the Date of Termination; provided, however, that if the 60-day period begins in one (1) calendar year and ends in a second calendar year, such payment shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).

(vii)CIC Earned Performance Bonus shall be paid in a lump sum within sixty (60) days after the Date of Termination; provided, however, that if the 60-day period begins in one (1) calendar year and ends in a second calendar year, the Earned Performance Bonus shall be paid in the second calendar year by the last day of such 60-day period.

(viii)The Pro-Rata Bonus shall be paid when the annual performance would have been paid if Executive had continued his or her employment through the payment date.

(ix)CIC Health Care Continuation Benefit shall commence immediately upon the Executive’s Date of Termination and the Executive shall immediately become eligible for Reimbursement Payments in accordance with Section 5(a)(iv), provided however if an executed Separation Agreement and Release has not become fully effective within the CIC Release Period, the Company shall immediately cease making CIC Premium Reimbursement Payments (or, if applicable, any CIC Special Severance Payments) and the Executive shall be obligated to promptly repay to the Company any previously received CIC Premium Reimbursement Payments (or, if applicable, any CIC Special Severance Payments).

(x)CIC Outplacement Services shall commence immediately upon the Executive’s Date of Termination, provided however if an executed Separation Agreement and Release has not become fully effective within the CIC Release Period, CIC Outplacement Services shall immediately cease and the Executive shall be obligated to promptly repay to the Company any previously made CIC Outplacement Payments.

(xi)Notwithstanding anything to the contrary in any then outstanding option agreement or stock-based award agreement, the vesting of all stock options and other stock-based awards outstanding and held by the Executive shall immediately accelerate and become fully vested and exercisable as of the Date of Termination, and subject to any permitted action by the Board upon a Change of Control under Company’s applicable equity plan to terminate the stock options or other stock-based awards upon a Change of Control, all vested stock options shall be exercisable for one (1) year from the Date of Termination.

(b)RESERVED.

(c)Right to Severance under Section 5. The receipt of any severance payments or benefits pursuant to Section 5 shall be subject (i) the Executive’s submission to the Company of an executed Separation Agreement and Release that becomes fully effective within the CIC Release Period and (ii) to the Executive’s continued compliance with the Confidentiality and Non-Competition Agreement. In the event an executed Separation and Release Agreement does not become fully effective within the Release Period, the Executive shall forfeit his or her right to receive any severance payments or benefits under Section 5 and, as specified in paragraph (c) above, the Company shall have the right to recoup from the Executive any previously made severance payments or benefits. In the event the Executive breaches any of the provisions set forth in the Confidentiality and Non-Competition Agreement, in addition to all other legal and equitable remedies, the Company shall have the right to terminate or suspend all continuing payments and benefits to which the Executive may otherwise be entitled pursuant to Section 5 without affecting the effectiveness of the Executive’s release or the Executive’s obligations under the Separation Agreement and Release.

(d)Continued Compliance. The receipt of any severance payments or benefits pursuant to Section 5 shall be subject to the Executive not violating any of the provisions set forth in the Confidentiality and Non-Competition Agreement. In the event the Executive breaches any of the provisions set forth in the Confidentiality and Non-Competition Agreement, in addition to all other legal and equitable remedies, the Company shall have the right to terminate or suspend all continuing payments and benefits to which the Executive may otherwise be entitled pursuant to Section 5 without affecting the Executive’s release or the Executive’s obligations under the Separation Agreement and Release.

(e)Other Termination Events. The Executive hereby agrees that no severance compensation shall be payable upon termination of the Executive’s employment with the Company (i) by the Company with Cause; (ii) by the Executive without Good Reason; or (iii) as a result of the Executive’s death or Permanent Disability, and the Executive hereby waives any claim for severance compensation except as set forth in Section 5(a).

(f)Parachute Payments. If Independent Tax Counsel (as that term is defined below) determines that the aggregate payments and benefits provided or to be provided to the Executive pursuant to this Agreement, and any other payments and benefits provided or to be provided to the Executive from the Company or any of its subsidiaries or other affiliates or any successors thereto constitute “parachute payments” as defined in Section 280G of the Code (“Parachute Payments”) that would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, except as otherwise provided in the next sentence, such Parachute Payments shall be reduced to the extent the Independent Tax Counsel shall determine is necessary (but not below zero) so that no portion thereof shall be subject to the Excise Tax. If Independent Tax Counsel determines that the Executive would receive in the aggregate greater payments and benefits on an after tax basis if the Parachute Payments were not reduced pursuant to this Section 5(f), then no such reduction shall be made. The determination of which payments or benefits shall be reduced to avoid the Excise Tax shall be made by the Independent Tax Counsel, provided that the Independent Tax Counsel shall reduce or eliminate, as the case may be, payments or benefits in the following order (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits. To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order. The determination of the Independent Tax Counsel under this Section 5(f) shall be final and binding on all parties hereto. For purposes of this Section 5(f), “Independent Tax Counsel” shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm with expertise in the area of executive compensation tax law, who shall be selected by the Board, and whose fees and disbursements shall be paid by the Company.

6.Tax and Insurance.

(a)Insurance. In no event shall the termination of the Executive’s employment by the Company or any such termination by the Executive pursuant to this Agreement release any claim by the Executive for indemnification that he or she is otherwise entitled to under any director or officer’s insurance policy or any

articles, bylaws or other foundation documents of the Company. Without limiting the foregoing, the Company shall provide Executive with reasonable director’s and officer’s insurance coverage that is at least as favorable as the coverage in existence on the date of this Agreement (the “Existing D&O Coverage”); provided, however, that in no event shall the Company be obligated to maintain director’s and officer’s insurance coverage to the extent that premiums thereunder exceed 200% of the premiums payable by the Company under the Existing D&O Coverage on the date hereof (the “Threshold”); provided, further, that to the extent such premiums exceed the foregoing Threshold, the Company shall obtain director’s and officer’s insurance coverage on terms as similar as reasonably practicable to the terms of the Existing D&O Coverage without exceeding the Threshold. Such insurance coverage shall continue in effect during the Employment Period and after the Employment Period ends for a period of six (6) years thereafter. The cost of such coverage shall be paid by the Company. Notwithstanding anything to the contrary in this Agreement, upon the occurrence of a Change of Control, the obligations set forth in this section shall terminate, provided that the Company shall (x) secure “tail insurance” with respect to the Existing D&O Coverage on reasonable terms and conditions of coverage, and (y) require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to honor any indemnification obligations that the Executive is otherwise entitled to under any articles, bylaws or other foundation documents of the Company in the same manner as the Company’s directors and officers immediately prior to such Change of Control.

(b)409A.

(i)Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive’s separation from service within the meaning of Section 409A of the Code, the Company determines that the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation otherwise subject to the twenty percent (20%) additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six (6) months and one (1) day after the Executive’s separation from service, or (B) the Executive’s death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.

(ii)All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the Executive during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one (1) taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses). Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

(iii)To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

(iv)The parties intend that this Agreement shall be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

(v)The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

7.Representations and Warranties of the Executive. Executive hereby represents and warrants to the Company that:

(a)The Executive:

(i)has not been convicted within the last five (5) years of any felony or misdemeanor in connection with the offer, purchase, or sale of any security or any felony involving fraud or deceit, including, but not limited to, forgery, embezzlement, obtaining money under false pretenses, larceny, or conspiracy to defraud.

(ii)is not currently subject to any state administrative enforcement order or judgement entered by a state securities administrator within the last five (5) years and is not subject to any state’s administrative enforcement order or judgement in which fraud or deceit (including, but not limited to, making untrue statements of material facts and omitting to state material facts) was found in which the order or judgement was entered within the last five (5) years.

(iii)is legally authorized to work in the United States of America.

(b)This Agreement constitutes the legal, valid and binding obligations of the Executive, enforceable in accordance with its terms, and execution, delivery and performance of this Agreement by the Executive does not and will not conflict with, violate or cause a breach of any agreement, contract or instrument to which the Executive is a party or any judgement, order or decree to which the Executive is subject.

8.Representations and Warranties of the Company. The Company hereby represents and warrants to the Executive that:

(a)The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority to carry out the transactions contemplated by this Agreement.

(b)The execution, delivery and performance of this Agreement has been duly authorized by the Company. This Agreement constitutes a valid and binding obligation of the Company, enforceable in accordance with its terms. The execution and delivery by the Company of this Agreement, and the fulfillment of and compliance with the respective terms hereof by the Company, do not and shall not (i) conflict with or result in a breach of the terms, (ii) constitute a default under, (iii) result in the creation of any lien, security interest, charge or encumbrance upon the Company’s capital stock or assets pursuant to, (iv) give any third party the right to modify, terminate or accelerate any obligation under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption or other action by or notice to any court or administrative or governmental body pursuant to, the charter or bylaws of the Company, or any law, statute, rule or regulation to which the Company is subject, or any agreement, instrument, order judgement or decree to which the Company is subject.

9.Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally, mailed by certified or registered mail, return receipt requested and postage prepaid, or sent via a nationally recognized overnight courier, or sent via facsimile to the recipient with a confirmation of receipt and accompanied by a certified or registered mailing. Such notices, demands and other communications will be sent to the address indicated below:

To the Company:

Aspen Aerogels, Inc.

30 Forbes Road

Northborough, MA 01532

Telephone:(508) 691-1111

Facsimile:(508) 691-1200

Attention:Board of Directors

with copies (which shall not constitute notice) to:

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

One Financial Center

Boston, MA 02111

Telephone:(617) 348-3013

Facsimile:(617) 542-2241

Attention:Sahir Surmeli

To the Executive:

Address specified on signature page

or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

10.Miscellaneous.

(a)Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

(b)Complete Agreement. This Agreement and the agreements referred to herein (including, without limitation, the Confidentiality and Non-Competition Agreement) embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof. This Agreement supersedes and terminates the Prior Agreement.

(c)Waiver of Jury trial. The parties to this Agreement each hereby waives, to the fullest extent permitted by law, any right to trial by jury of any claim, demand, action, or cause of action (i) arising under this Agreement or (ii) in any way connected with or related or incidental to the dealings of the parties hereto in respect of this Agreement or any of the transactions related hereto, in each case whether now existing or hereafter arising, and whether in contract, tort, equity, or otherwise. The parties to this Agreement each hereby agrees and consents that any such claim, demand, action, or cause of action shall be decided by court trial without a jury and that the parties to this Agreement may file an original counterpart or a copy of this Agreement with any court as written evidence of the consent of the parties hereto to the waiver of their right to trial by jury.

(d)Counterparts; Facsimile Transmission. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party,

but all such counterparts taken together will constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile transmission.

(e)Successors and Assigns. The provisions hereof shall inure to the benefit of, and be binding upon and assignable to, successors of the Company by way of merger, consolidation or sale. The Executive may not assign or delegate to any third person the Executive's obligations under this Agreement. The rights and benefits of the Executive under this Agreement are personal to him and no such right or benefit shall be subject to voluntary or involuntary alienation, assignment or transfer. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place. As used in this Agreement, “the Company” shall mean both the Company as defined above and any such successor that assumes and agrees to perform this Agreement, by operation of law or otherwise.

(f)Governing Law. All issues concerning this Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without giving effect to any choice of law or conflict of law provision or rule (whether of the Commonwealth of Massachusetts or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the Commonwealth of Massachusetts.

(g)Remedies. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of the Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or deposit) for specific performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions of this Agreement.

(h)Amendment and Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and the Executive.

(i)Certain Expenses. The Company agrees to pay, as incurred, to the fullest extent permitted by law, or indemnify the Executive if such payment is not legally permitted, for all legal fees and expenses that the Executive may in good faith incur as a result of any contest by the Company, the Executive or others of the validity or enforceability of or liability under, or otherwise involving, any provision of this Agreement; provided, however, that the Executive shall reimburse the Company for all such payments made by the Company in connection with a contest by the Company if a court of competent jurisdiction or an arbitrator shall find that the Executive did not act in good faith in connection with such contest.

(j)Withholding. All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law.

(k)Litigation and Regulatory Cooperation. During and after the Executive’s employment, the Executive shall cooperate fully with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Executive was employed by the Company. The Executive’s full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after the Executive’s employment, the Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company. The Company shall reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this Section 11(k).

(l)Survival. The provisions of Sections 1, 2, 4, 5, 6, 9 and 10 of this Agreement shall survive any termination of this Agreement in accordance with the terms of such sections.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.


		THE COMPANY:

		ASPEN AEROGELS, INC.

	By:	/s/ Donald R. Young
	Name:	Donald R. Young
	Title:	Chief Executive Officer

		THE EXECUTIVE:

	By:	/s/ Ricardo C. Rodriguez
	Name:	Ricardo C. Rodriguez

[Signature Page to Executive Agreement]

Exhibit 10.13

ASPEN AEROGELS, INC.

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY¹

The Board of Directors of Aspen Aerogels, Inc. (the “Company”) has approved the following Non-Employee Director Compensation Policy (this “Policy”) which establishes compensation to be paid to non-employee directors of the Company to provide an inducement to obtain and retain the services of qualified persons to serve as members of the Company’s Board of Directors.

Applicable Persons

This Policy shall apply to each director of the Company who is not an employee of, or consultant to, the Company or any Affiliate (each, an “Outside Director”). “Affiliate” shall mean a corporation which is a direct or indirect parent or subsidiary of the Company, as determined pursuant to Section 424 of the Internal Revenue Code of 1986, as amended.

Equity Grants

All equity grant amounts set forth herein shall be subject to automatic adjustment in the event of any stock split or other recapitalization affecting the Company’s common stock.

Annual Restricted Stock Grants

Commencing in calendar year 2015, each Outside Director shall be granted (i) restricted shares of the Company’s common stock (the “Annual Stock Grant”) equal in value to $51,000 under the Company’s 2014 Employee, Director and Consultant Equity Incentive Plan or such plan in effect on the date of grant (the “Stock Plan”) and (ii) stock options to purchase shares of the Company’s common stock (the “Annual Option Grant”, and together with the Annual Stock Grant, the “Annual Equity Grant”) equal in value to $34,000 under the Stock Plan each year on or about the time of the annual meeting of the Board of Directors following the Company’s annual meeting of stockholders; provided that if there has been no annual meeting of stockholders held by the first day of the third fiscal quarter, each Outside Director will still receive any Annual Equity Grant provided for under this Policy on the first day of the third fiscal quarter of such year. The number of shares of common stock to be granted to each Outside Director as his or her Annual Stock Grant shall be calculated using the fair market value of the Company’s common stock as of the grant date, which shall be deemed to be the closing price on such date of the Company’s common stock on a national securities exchange. The number of shares of common stock subject to the Annual Option Grant to be granted to each Outside Director as his or her Annual Option Grant shall be calculated using the fair value of the dollar amount of the Annual Option Grant computed in accordance with FASB ASC Topic 718. For any new Outside Director joining the Board of Directors after the date of the Annual Equity Grant, such new Outside Director shall receive equity grants on the first day of his or her service on the Board of Directors equal to the pro rata share of that year’s (i) Annual Stock Grant calculated by multiplying the number of days of such year that the such new director will serve by the quotient of $51,000 divided by 365 and (ii) Annual Option Grant calculated by multiplying the number of days of such year that the such new director will serve by the quotient of $34,000 divided by 365 and in each case calculating the number of shares using the methodology set forth above for Annual Equity Grants but calculated using the closing stock price and other values on such new Outside Director’s first day of service on the Board of Directors.

Terms for All Equity Awards

Unless otherwise specified by the Board of Directors or the Compensation and Leadership Development Committee (the “Compensation Committee”) at the time of grant, all equity awards granted under this Policy shall (i) vest on the earlier of (a) one year from the date of the grant with respect to an Annual Equity Grant or (b) the day prior to the annual meeting for the fiscal year following the date of grant, subject to the Outside Director’s continued service on the Board of Directors, (ii) each stock option shall terminate ten years from the date of grant of such stock option,

¹	This revised Non-Employee Director Compensation Policy replaces and supersedes the Company’s prior Non-Employee Director Compensation Policy, and became effective on February 23, 2022.

and (iii) each equity award shall be granted under the Company’s standard form of agreement unless on or prior to the date of grant the Board of Directors or the Compensation Committee shall determine that other terms or conditions shall be applicable prior to the grant of such equity award.

Such restricted stock and stock options shall become fully vested immediately prior to a Change of Control. “Change of Control” means the occurrence of any of the following events: (i) Any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company or its affiliates or by any employee benefit plan of the Company) pursuant to a transaction or a series of related transactions; or (ii) (a) a merger or consolidation of the Company whether or not approved by the Board of Directors, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) more than 50% of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such corporation, as the case may be, outstanding immediately after such merger or consolidation; or (b) the sale or disposition by the Company of all or substantially all of the Company’s assets in a transaction requiring stockholder approval.

Notwithstanding the foregoing, in the event that an Outside Director departs from the Board of Directors other than as a result of removal from the Board of Directors for cause (as defined in the Stock Plan) (the “Departing Director”), the Departing Director will have two years from the date of departure to exercise all stock options, to the extent vested and exercisable as of the date of departure, subject to the provisions of the Stock Plan, and provided, however, that in no event shall the Departing Director be permitted to exercise such stock options following the expiration of the term of such stock options. The Board of Directors retains the discretion to add additional time to such exercise period when considering each such departure. In addition, if the Departing Director has served on the Board of Directors for at least three years at the time of departure, the Board of Directors retains the discretion to provide for the acceleration of vesting of some or all of the Departing Director’s unvested stock options or restricted stock.

Cash Fees

Annual Cash Payments

The following annual cash fees shall be paid to the Outside Directors serving on the Board of Directors and the Audit Committee, Compensation Committee and Nominating and Governance Committee, as applicable.



Board of Directors or Committee of Board of Directors	Annual Retainer Amount for Chair (in lieu of the annual retainer amount for a member)	Annual Retainer Amount for Member
Board of Directors	$90,000	$45,000
Audit Committee	$15,000	$7,500
Compensation Committee	$15,000	$5,000
Nominating and Governance Committee	$10,000	$4,000

If the Company holds more than 12 board meetings in a calendar year, 12 meetings of the Audit Committee in a calendar year, 8 meetings of the Compensation Committee or 8 meetings of the Nominating and Governance Committee in a calendar year, the Board, at its discretion, may pay to each Outside Director or member of such committee, as applicable, that attends such additional meetings by telephone or other means of communication, an additional one-time cash retainer for their additional service starting at one times the existing retainer for membership of the Board of Directors or relevant committee, as applicable, and which amount may be increased, without exceeding $45,000 for any given calendar year.

Payment Terms for All Cash Fees

Cash payments payable to Outside Directors shall be paid quarterly in arrears as of the last day of each fiscal quarter.

Following an Outside Director’s first election or appointment to the Board of Directors, such Outside Director shall receive his or her cash compensation pro rated beginning on the date he or she was initially appointed or elected. If an Outside Director dies, resigns or is removed during any quarter, he or she shall be entitled to a cash payment on a pro rated basis through his or her last day of service.

Maximum Compensation

In any fiscal year that ends on or after December 31, 2018, the sum of the grant date fair value (determined as of the date of grant in accordance with FASB ASC Topic 718) of all awards made pursuant to the Stock Plan, to an individual as compensation for service as a non-employee director, together with cash compensation earned by the non-employee director during any fiscal year, shall not exceed $500,000.

In a fiscal year in which a non-employee director serves the Company in another capacity (including as an interim officer), the non-employee director compensation limit shall not apply to any compensation arrangements established with respect to such service.

Expenses

Upon presentation of documentation of such expenses reasonably satisfactory to the Company, each Outside Director shall be reimbursed for his or her reasonable out-of-pocket business expenses incurred in connection with attending meetings of the Board of Directors and Committees thereof or in connection with other business related to the Board of Directors.

Amendments

The Nominating and Governance Committee or the Board of Directors shall review this Policy from time to time to assess whether any amendments in the type and amount of compensation provided herein should be adjusted in order to fulfill the objectives of this Policy.

Exhibit 31.1

CERTIFICATIONS UNDER SECTION 302

I, Donald R. Young, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Aspen Aerogels, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2022

/s/ Donald R. Young

Donald R. Young

President and Chief Executive Officer

(principal executive officer)

Exhibit 31.2

CERTIFICATIONS UNDER SECTION 302

I, Ricardo C. Rodriguez, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Aspen Aerogels, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2022				/s/ Ricardo C. Rodriguez
				Ricardo C. Rodriguez
				Senior Vice President, Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer)

Exhibit 32

CERTIFICATIONS UNDER SECTION 906

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Aspen Aerogels, Inc., a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 10, 2022				/s/ Donald R. Young
				Donald R. Young
				President and Chief Executive Officer (principal executive officer)

Dated: May 10, 2022				/s/ Ricardo C. Rodriguez
				Ricardo C. Rodriguez
				Senior Vice President, Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.