| Item 1.01 | Entry into a Material Definitive Agreement. |
Note Purchase and Sale Agreement
On August 19, 2024, Aspen Aerogels, Inc. (the “Company”) entered into a note purchase and sale agreement (the “Note Repurchase Agreement”) with Wood River Capital, LLC (“Wood River”), an entity affiliated with Koch Disruptive Technologies, LLC, pursuant to which the Company agreed to repurchase from Wood River $123,937,608 in aggregate capitalized principal amount (inclusive of PIK interest paid through June 30, 2024) of the Convertible Senior PIK Toggle Notes due 2027, dated February 18, 2022, as amended by Amendment No. 1 to Convertible Senior PIK Toggle Notes due 2027, dated November 28, 2022 (the “Note”), issued by the Company pursuant to that certain Note Purchase Agreement, dated as of February 15, 2022, as amended by that certain Amendment No. 1 to Note Purchase Agreement, dated November 28, 2022 (together, the “Note Purchase Agreement”), such aggregate amount being the entire outstanding amount of the Note, for a total purchase price of $150,028,886 in cash, which amount equals to the Redemption Price (as defined in the Note) (the “Note Repurchase”). Pursuant to the Note Repurchase Agreement, all rights and obligations, covenants and agreements under the Note and the Note Purchase Agreement were satisfied and discharged. Pursuant to the terms of the Note Repurchase Agreement, Wood River has agreed, subject to certain exceptions, not to, and not to cause its affiliates to, offer, sell, assign, transfer, pledge, contract to sell, sell or otherwise dispose of any shares of the Company’s common stock it holds for a period of up to 180 days from the date of the Note Repurchase Agreement, subject to early termination in certain instances. The closing of the Note Repurchase occurred on August 19, 2024.
The Note Repurchase Agreement contains customary representations, registration rights, warranties and agreements by the Company, termination provisions, and other obligations and rights of the parties. The representations, warranties and covenants contained in the Note Repurchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.
The foregoing description of the Note Repurchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Note Repurchase Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
MidCap Loan Facility
On August 19, 2024, the Company and Aspen Aerogels Rhode Island, LLC, a Rhode Island limited liability company (“Aspen RI” and, together with the Company, each, a “Borrower” and collectively, the “Borrowers”) entered into a Credit, Security and Guaranty Agreement (the “Credit Agreement” and the facilities provided thereunder, collectively, the “MidCap Loan Facility”), by and among the Borrowers, MidCap Funding IV Trust, as agent (the “Agent”), MidCap Financial Trust, as term loan servicer, the financial institutions or other entities from time to time party thereto as lenders (the “Lenders”), and the other parties party thereto as additional guarantors and/or borrowers from time to time. The proceeds of the MidCap Loan Facility will be used in connection with the Note Repurchase, the payment of related fees and expenses and for working capital of the Company and its subsidiaries. Loans borrowed under the MidCap Loan Facility mature on August 19, 2029.
The MidCap Loan Facility is comprised of (i) a term loan facility in an aggregate principal amount of $125 million (the “Term Loan Facility”) and (ii) an asset-based revolving credit facility in an aggregate principal amount not to exceed the lesser of (A) a $100 million commitment amount and (B) the value of the borrowing base (defined as the sum of (x) 85% of certain eligible accounts of the Borrowers and (y) the lesser of 85% of the NOLV or 85% of the cost of certain eligible inventory of the Borrowers) (the “Revolving Facility”). Loans borrowed under the Term Loan Facility will bear interest rate equal to Term SOFR (as defined in the Credit Agreement) for a one-month interest period plus 4.50% per year, subject to a Term SOFR floor of 4.50% and a Term SOFR cap of 7.50%. Loans borrowed under the Revolving Facility will bear interest rate equal to Term SOFR plus 4.60% per year, subject to a Term SOFR floor of 2.50%. The Term Loan Facility is subject to amortization of principal, payable quarterly on the last day of each quarter, commencing September 30, 2024, in an amount as set forth in the Credit Agreement with the remaining aggregate principal amount payable on the maturity date. The Revolving Facility has a required minimum balance set at 30% of the average borrowing base during the immediate preceding month. The Borrowers are required to pay the Lenders under the Revolving Facility an unused line fee of 0.30% of the average unused availability under the Revolving Facility, subject to the aforementioned minimum balance.
