Exhibit 10.2

 

Amended and Restated

Supply Agreement

 

 

 

 

between

 

 

BASF Polyurethanes GmbH

 

 

and

 

 

Aspen Aerogels, Inc.

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 1 of 28

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Amended and Restated

Supply Agreement (the “Agreement”)

 

Between

 

BASF Polyurethanes GmbH

Elastogranstraße 60, 49443 Lemförde, Germany

-hereinafter along with its Affiliates referred to as “BASF”-

 

and

 

Aspen Aerogels, Inc.

30 Forbes Road, Building B, Northborough, MA 01532, United States of America

-hereinafter along with its Affiliates  referred to as “ASPEN”-

 

BASF and ASPEN are hereinafter individually referred to as “Party” and
collectively as “Parties”.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 2 of 28

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Preamble

Whereas, based on the Memorandum of Understanding dated July 31, 2015 by and
between the Parties, the Parties wish to expand the long-term global market for
Spaceloft A2 taking into account an increasing demand for Spaceloft A2 from
BASF, and

Whereas, ASPEN wishes to supply and deliver and BASF wishes to purchase and
receive Spaceloft A2 at mutually agreed terms and conditions, and

Whereas, ASPEN has commenced investment in (i) a capacity expansion program to
increase production capacity of Spaceloft A2 and other aerogel products in its
East Providence facility and in a second manufacturing plant, (ii) process
optimization projects to reduce the cost of Spaceloft A2 and other aerogel
products, and (iii) research, development and related activities in furtherance
of the general goals of the JDA (“ASPEN Investment”), and

Whereas BASF is willing to support ASPEN Investment by entering into this
Agreement together with the commitment to render a pre-payment for certain
volumes of Spaceloft A2, and

Whereas, it is the common understanding of the Parties that the terms under
which Spaceloft A2 will be sold and delivered by ASPEN shall also be applicable
to the purchase and receipt of Spaceloft A2 by BASF and,  

Whereas, the Parties wish to achieve and maintain competitiveness by innovation
and productivity improvements in cooperation with each other as set forth
herein,

Whereas, the Parties have previously entered into a supply agreement dated June
21, 2016 and hereby desire to modify said supply agreement as amended and
restated in this Amended and Restated Agreement and

Now, therefore, the Parties hereto agree as follows:

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 3 of 28

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Definitions

 

“Affiliate”

shall mean any entity that directly or indirectly controls, are controlled by,
or are under common control with a Party;

“ASPEN”

shall mean ASPEN and any entity that is directly or indirectly controlled by
ASPEN;

“ASPEN Investment”

shall have the meaning as defined in the Preamble;

"BASF"

shall mean BASF Polyurethanes GmbH, Elastogranstraße 60, 49443 Lemförde,
Germany, and any entity that is directly or indirectly controlled by, or under
common control of BASF SE, Ludwigshafen/Rhine, Germany;

“BASF Markets”

shall have the meaning as defined in §1 and Annex 1 hereto;

“Effective Date”

shall mean the latest date set forth in the signature block below;

“EP20”

shall mean the set of activities contemplated, as of the Effective Date, by
ASPEN to expand the manufacturing capacity of its East Providence, Rhode Island,
United States of America plant by about twenty percent;

“JDA”

shall mean a framework joint development agreement to be entered into
contemporaneously with this Agreement by ASPEN and BASF focusing on the joint
development of new products, technology, intellectual property or know how;

“MoU”

shall mean the Memorandum of Understanding signed by ASPEN and BASF SE on July
31st, 2015;

“Optimization Projects”

shall have the meaning as defined in §12 below;

“Phase-Out Volume”

shall have the meaning as defined in §11 below;

“Plant Two”

shall mean the first production line in a production facility, to be constructed
by ASPEN in Statesboro, Georgia, United States of America as a capacity
expansion for manufacturing aerogel products including Products;

“Pre-Marketing Phase”

shall mean the period from [***] until [***];

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 4 of 28

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“Pre-Payment”

shall mean an amount of up to twenty two million U.S. Dollars ($22,000,000) to
be paid by BASF on its sole discretion to ASPEN in accordance with §5 in
multiple tranches;

“Pre-Payment Tranche”

shall mean an amount agreed by the Parties to be paid by BASF to ASPEN on or
before a specified date as a component of Pre-Payment with an associated Target
Date and, if applicable, a revised Total Volume Range in accordance with §5 and
as set forth in Annex 4;

“Pre-Payment Balance”

shall mean the remaining portion of the Pre-Payment which has not been
previously applied against amounts invoiced for Product purchased by BASF
hereunder, or otherwise repaid by ASPEN.

“Price”

shall mean the price for the Products to be paid by BASF to ASPEN calculated as
set forth in the Side Agreement and further defined in §4 hereto, as amended
pursuant to the Section 1.4 of this Agreement to add Successor Products;

“Product” or “Products”

shall mean individually or collectively Spaceloft A2 and, if added under Section
1.4, Successor Products;

“Recommended Measures”

shall mean non-binding recommendations by BASF to ASPEN for certain process
optimization measures in accordance with §12 below;

“Safety Stock”

shall have the meaning as defined in §3;

“Security Interest”

shall mean collateral provided by ASPEN in favour of BASF SE to secure
settlement of the Pre-Payment in accordance with §5 below and Annex 4 hereto;

“Side Agreement”

shall mean the side agreement between ASPEN and BASF dated June 21, 2016 and as
amended and restated as of______, setting out the manner of calculation of the
Price of Products sold hereunder.

“Spaceloft A2”

shall mean [***] with properties complying with Specifications and marketed as
of the Effective Date as Spaceloft® A2;

“Specifications”

shall mean the specifications for the Products as further defined in §1 and
Annex 1 hereto;

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 5 of 28

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“[***] Cost”

shall mean [***], as further described in the Side Agreement.

“Successor Products”

shall mean any improvements, modifications or enhancements to Spaceloft A2 or
the fabrication of panels or insulation boards incorporating Spaceloft A2, as
agreed to by both Parties from time to time pursuant to §1.4 and §1.5;

“Target Date”

shall mean a date agreed by the Parties with respect to each Pre-Payment Tranche
in accordance with §5;

“Target Volume”

shall mean the volume of Product to be sold and delivered by ASPEN and purchased
and received by BASF in each calendar year as further defined in §2 below;

“Term”

shall mean the term of this Agreement in accordance with §11;

“Total Volume Range”

shall mean the total annual volume range of Products in accordance with Annex 2
hereto;

“Transaction”

shall mean the transfer of all or substantially all of the assets of ASPEN
directly related to the performance under this Agreement or the acquisition of
over 50% (fifty percent) of the voting capital stock of ASPEN, in each case, to
a third party who does not already own in excess of 5% (five percent) of the
voting capital stock of ASPEN on the date of this Agreement.

 

 

§1

Products

1.1ASPEN agrees to sell and deliver exclusively to BASF and BASF agrees to
purchase and receive Products from ASPEN on the terms and conditions of this
Agreement for resale to third parties or for incorporation into value added
products and systems for sale to customers making use of the Products within the
BASF Markets identified in Annex 1. BASF will not sell or otherwise supply
Product to third parties who BASF knows, or reasonably should know, intend to
use the Products in any markets other than the BASF Markets. For the sake of
clarity, BASF acknowledges that nothing in this Agreement restricts ASPEN’s
ability to sell its products other than Products to any third party or within
any market anywhere in the world.

1.2In accordance with the Commission Regulation (EU No 1217/2010 of 14 December
2010 on the application of Article 101 (3) of the Treaty on the Functioning of
the European Union to certain categories of research and development agreements,
the Parties agree that the exclusivity of the supply of each of the respective
Products from ASPEN to BASF as well as the restriction to the

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 6 of 28

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BASF Markets with regard to sales by BASF to customers according to Article 1.1
will end [***] after the date of the first day the respective Product is being
placed on the relevant market. Thereafter, exclusivity of the supply of each of
the respective Products from ASPEN to BASF and the restriction to BASF Markets
with regard to sales by BASF to customers may continue for a further period of
[***] provided however that the joint market share of the Parties on the
relevant market for the respective Product will be below [***]% during these
[***]. If the relevant joint market share of the Parties is initially (i.e. at
the end of the [***] period) not more than [***]% but subsequently rises above
that level without exceeding [***]%, the provisions set forth in § 1.1 may
continue to apply for a period of [***] consecutive calendar years following the
year in which the [***]% market share threshold was first exceeded and shall
thereafter cease to apply. If the relevant joint market shares of the Parties
are initially not more than [***]% but subsequently rises above [***]%, the
provisions set forth in §1.1 may continue to apply for [***] calendar year
following the year in which the level of [***]% was first exceeded. The time
frames set forth in this § 1.2 third sentence and § 1.2 fourth sentence may not
be combined so as to exceed a period of [***] calendar years. Nothing in this
subsection 1.2 shall be construed to extend the Term of this Agreement, unless
such Term is expressly extended or renewed by both Parties in writing.

1.3The Products to be delivered shall be in accordance with the Specifications
set forth in Annex 1 as of the date of delivery. The Specifications may be
modified only upon the mutual written consent of both Parties.

1.4ASPEN shall inform BASF at least [***], or such shorter period as may be
agreed by both Parties in writing, in advance of any changes that recognizably
affect the quality of a Product as set forth in the Specifications. In
particular, ASPEN shall inform BASF of changes to processes involving the
introduction of new technologies, changes to raw materials and transfer of
production to another location. Products that are affected by such changes may
only be shipped after ASPEN has obtained the written consent of BASF.

1.5Through the Term, ASPEN may develop Successor Products that would be supplied
to BASF subject to the Parties reaching agreement as to revised specifications,
pricing, volumes, and related terms.

1.6In case (i) BASF is not able to profitably meet the requirements of its
customers or (ii) alternative product characteristics or specifications are
required for BASF to meet legal requirements, in each case, with respect to
Products, then BASF will immediately inform ASPEN thereof and provide ASPEN with
a description of the specifications and characteristics of new products
necessary to meet the requirements of BASF’s customers. ASPEN will initiate
commercially reasonable development efforts to improve, modify or enhance
Spaceloft A2, but only

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 7 of 28

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to the extent that the efforts could be reasonably expected to achieve the
desired specifications and characteristics of such enhanced products within a
period of [***]. If successfully developed, and on agreement of the Parties as
to revised specifications, pricing, volumes, and related terms for such enhanced
products as provided in Section 1.5, such enhanced products will be deemed
Successor Products. If ASPEN cannot develop such enhanced products within a
period of [***], the Parties will consider development of such enhanced products
for inclusion as a project under the JDA.

 

 

§2

Volumes and Forecasting

2.1During the Term, ASPEN will sell and deliver to BASF volumes of Product
within the Total Volume Range for use in the BASF Markets, pursuant to §2.2 and
§2.3.

2.2During the Pre-Marketing Phase, BASF may elect to purchase Products in its
sole discretion. BASF shall provide purchase orders for Product for delivery
within calendar year [***]. The Parties will within [***] of ASPEN’s receipt of
each order develop a mutually agreeable delivery schedule for delivery of such
Product consistent with ASPEN’s lead times then in effect.

2.3On or before [***] and each [***] thereafter, the Target Volume of Product to
be purchased by BASF for the following calendar year, which shall be within the
applicable Total Volume Range defined in Annex 2, shall be defined and ordered
by BASF from ASPEN. The Parties will, within [***] of BASF’s order, develop a
mutually agreeable delivery schedule for delivery of Product aggregating to the
Target Volume in the following calendar year consistent with ASPEN lead times.
The purchase and sale of the Target Volume thus ordered for each calendar year
shall be binding upon the Parties. BASF orders for Product in volumes in excess
of the Target Volume for each calendar year shall be binding on ASPEN only on
Aspen’s express written acceptance of such orders.

 

 

§3

Safety Stock

3.1ASPEN will build a Safety Stock of Product on or before [***] equivalent to
[***] of the agreed Target Volume (see example in Annex 3) applicable to
calendar year [***]. Such Safety Stock will be adjusted on or before [***] of
each successive calendar year to [***] of the applicable Target Volume for such
calendar year. At BASF’s direction, Safety Stock may be utilized to meet Target
Volume in the event of a Force Majeure as defined in Section 7.

3.2In addition, BASF will be entitled to direct ASPEN to sell and deliver Safety
Stock to BASF once in any calendar year in the event that BASF’s requirements
for Product exceed Target Volume

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 8 of 28

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and ASPEN is unable to meet BASF’s additional requirements. After any delivery
and sale of Products from Safety Stock to BASF, ASPEN will take commercially
reasonable efforts to replenish Safety Stock within a six month period. ASPEN
shall use commercially reasonable efforts to rotate Safety Stock to reduce aging
of such Safety Stock.

 

 

§4

Prices and Conditions

4.1The Price for Product sold hereunder shall be calculated as set forth in the
Side Agreement. The terms of this Agreement and the Side Agreement shall be the
exclusive terms and conditions with respect to purchase and supply of Products
under this Agreement and take precedence over any additional or different terms
and conditions provided by either Party, to which notice of objection by the
other Party is hereby given.  Neither the commencement of performance, delivery
nor receipt of products or payment shall be deemed an acceptance of any
additional or different terms and conditions.  None of the terms and conditions
contained herein may be added to, modified, superseded or otherwise altered
except in writing by duly authorized representatives of the parties.

4.2All Prices are in United States dollars. Prices are exclusive of all charges
or levies of any nature, including all applicable federal, state, provincial,
municipal or other governmental excise, sales, use, value added, occupational,
import duties, or similar taxes or tariffs now in force or enacted in the future
(collectively, the “Additional Charges”) and, therefore, are subject to an
increase in an amount equal to any such Additional Charges that ASPEN may be
required to collect or pay upon sale or delivery of Products purchased.  A
certificate of exemption or similar document in appropriate form for the
jurisdiction of BASF’s place of business and any jurisdiction to which Products
are to be directly shipped hereunder is required in order to exempt the sale
from sales or use tax liability.  BASF shall obtain and furnish evidence of such
exemption at the time of placement of order.  BASF agrees to indemnify and hold
harmless ASPEN and its successors and assigns from and against any liability for
tax in connection with the sale or use, as well as the collection or withholding
thereof, including penalties and interest. ASPEN will provide a certificate of
origin with any shipment of Products. ASPEN and BASF will work together to
ensure (including providing any reasonable declaration) the transactions
pursuant to this Agreement can benefit from the anticipated Transatlantic Trade
and Investment Partnership.

4.3On request of BASF, ASPEN’s books and records as they relate to annual Price
calculations may be audited by an independent third party auditor without a
prior business relationship with either BASF or ASPEN. Such audit will be to
examine whether Price has been calculated by ASPEN in accordance with the
provisions of this Agreement in all material respects. ASPEN will make available
or provide access to all relevant documents to the third party auditor. The

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 9 of 28

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independent auditor will provide a summary report to BASF and ASPEN on whether
ASPEN’s Price calculations are consistent in all material respects with the
provisions of this Agreement. The third party auditor will keep all other
information of ASPEN strictly confidential and will not disclose such
information to BASF or any other third party. ASPEN shall bear the costs of the
third party auditor in the event ASPEN’s Price calculations are not consistent
in all material respects with the provisions of this Agreement. Otherwise BASF
shall bear such audit costs.

4.4All orders must be placed in writing and verbal orders shall be confirmed in
writing.  All orders must include requested delivery dates, quantities, shipment
destination and complete description of Products being ordered.  After receipt
of an order, ASPEN will confirm its acceptance in writing and may also inform
BASF of an estimated ship date simultaneously or at a later date. Orders
accepted or acknowledged by ASPEN cannot be cancelled without the prior written
consent of ASPEN.  No order can be cancelled after the order is shipped.

4.5 All Products will be shipped [***] (Incoterms 2010) from ASPEN’s applicable
facility in the U.S. to [***] (“Delivery Point”) and further to [***]
(“Destination Point” which, if not specified in the relevant order, will be
[***]), unless agreed otherwise in writing.  All shipping, handling,
transportation, and insurance costs incurred following the release of Product
from ASPEN’s applicable facility in the U.S. to the Destination Point shall, to
the extent paid by ASPEN, be either included as a separate item in the invoice
for Products, or separately invoiced and payable by BASF. In no event shall
ASPEN be liable for any delay in delivery caused between Delivery Point and
Destination Point, nor shall the carrier selected by ASPEN for the transport
from Delivery Point to Destination Point be deemed an agent of ASPEN.  ASPEN may
make partial shipments against an order in its sole discretion. Each such
shipment shall constitute a separate sale, and BASF shall pay for the units
shipped whether such shipment is in whole or partial fulfilment of an order.
Title to Products shall pass to BASF upon delivery of Products at the Delivery
Point.

4.6  BASF shall examine the Products as soon as possible after their arrival at
the BASF’s facility, and in any event not more than [***] following the
Product’s arrival at BASF’s designated facility.  BASF shall notify ASPEN in
writing (i) with respect to missing Products, immediately upon receipt by
reference to the accompanying bill of lading, and (ii) with respect to Products
that do not conform to applicable Specifications or are damaged in transit due
to inadequate packaging, within [***].  The Products will be deemed to conform
to the applicable Specifications despite minor discrepancies that are usual in
the trade, and BASF will not be entitled to abatement of the Price for such
minor discrepancies.  Where the Products are materially non-conforming, the
remedies provided in the limited warranty set forth herein shall serve as BASF’s
exclusive remedy.  

 

§5

Pre-Payment and Payment Terms

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 10 of 28

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5.1In order to support ASPEN Investment, BASF (or its Affiliate) will provide
the Pre-Payment to ASPEN in accordance with Annex 4. The Parties agree that a
specified portion of the Pre-Payment will be credited as provided in Annex 4 by
ASPEN against payment due on sales and deliveries of Products by ASPEN to BASF
after January 1, 2019.

5.2 If by the Target Date associated with a specific Pre-Payment Tranche,
credits associated with the sale and delivery of Product by ASPEN to BASF have
not fully covered the value of the Pre-Payment Tranche, BASF shall be entitled
to request from ASPEN the repayment of the remainder of the associated
Pre-Payment Balance to BASF as specified in Annex 4 (“BASF Request”). The BASF
Request may be executed at any time at or after the applicable Target Date with
six weeks prior written notice. If ASPEN does not repay remaining Pre-Payment
Balance by the due date per the BASF Request, BASF may apply a finance charge at
the annual rate of [***], starting from the due date per the BASF Request. ASPEN
shall be liable for any costs or expenses incurred by BASF in collecting any
late payment, including, but not limited to, administrative and personnel costs,
collection agency fees and expenses, court costs, and attorney’s fees and
expenses.

5.3As collateral for the Pre-Payment, ASPEN will provide BASF with a Security
Interest in ASPEN’s assets in accordance with Annex 4.

5.4ASPEN shall invoice all orders for Product on shipment. BASF shall settle all
invoiced amounts due to ASPEN within [***] of the date of the corresponding
invoice.  Unless not otherwise instructed by BASF, ASPEN will apply an amount
(if available) of the Pre-Payment Balance against payment of up to twenty five
and three tenths percent (25.3%) of the invoiced Price of Product. BASF shall
remit the remainder in cash in United States dollars by wire transfer. Cash
payments not received within the prescribed time shall be assessed a finance
charge at the annual rate of [***], starting from the invoice date.  BASF shall
be liable for any costs or expenses incurred by ASPEN in collecting any late
payment, including, but not limited to, administrative and personnel costs,
collection agency fees and expenses, court costs, and attorney’s fees and
expenses. Any credits applied pursuant to this Section 5.3 shall be deducted
from the remaining Pre-Payment Balance associated with the earliest available
Pre-Payment Tranche(s).

5.5To the extent a BASF Affiliate orders and purchases Products pursuant to this
Agreement, ASPEN shall send the respective invoice(s) directly to such Affiliate
and such BASF Affiliate shall be responsible for payment of such invoices,
subject to the partial credit against Pre-Payment Balance as described in § 5.1.

5.6Any Pre-Payment hereunder shall not be construed as compensation for JDA
activities.  Any work contemplated in connection with these Pre-Payments shall
not be construed to be any project under the JDA or within any Project Charters
of the JDA. Mutually agreed Project Charters under the JDA shall exclusively
govern the scope and terms of activities pursuant to the JDA.

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 11 of 28

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§6

Warranty

6.1ASPEN warrants to BASF that the Products supplied pursuant to this Agreement
are free from defects in workmanship and materials for a period of one (1) year
from the date of shipment to BASF.  This limited warranty does not apply to
fitness for any particular purpose or for use in any application.  Since BASF
may obtain devices which have the capability of testing whether Product meets
the specifications, no claim of any kind with respect to the conformance of
Product to the specifications, whether or not based on negligence, warranty,
strict liability or any other theory of law, will be greater than the Price of
the quantity of nonconforming Product in respect to which such claim is
made.  The foregoing constitutes BASF's exclusive remedy and ASPEN's sole
obligation with respect to any such claim. This limited warranty does not extend
to any Product that has been damaged or rendered defective (a) as a result of
accident, misuse, abuse, negligence, installation, act of God, disaster, or
other external cause, (b) by the use of parts not manufactured or sold by ASPEN,
or (c) by modification or service by anyone other than (i) ASPEN or (ii) anyone
authorized by ASPEN.  ASPEN is not responsible for damage that occurs as a
result of (i) BASF’s failure to follow the instructions that accompany the
Products or otherwise provided by ASPEN or (ii) by operation outside the usage
parameters specified by ASPEN.  No credit shall be allowed for repair work
performed by BASF or unauthorized parties.  BASF shall notify ASPEN of any
non-conformance during the warranty period, obtain from ASPEN a return material
authorization (“RMA”) for the non-conforming Products, and return the
non-conforming Products to ASPEN, freight prepaid, within [***] of receipt of
the RMA, with a statement describing in reasonable specificity the
non-conformity for which the Products are returned.  ASPEN’s exclusive
obligation with respect to the non-conforming Products shall be, at ASPEN’s
option, to repair or replace any Product determined to be defective.  Products
that are repaired or replaced hereunder shall be warranted as set forth above
for the remainder of the original warranty period or for [***] after the
replacement Products are shipped to BASF, whichever is later.

6.2NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY OR ANY APPLICABLE LAW OR
REGULATION, THE FOREGOING IS BASF’S SOLE AND EXCLUSIVE REMEDY FOR BREACH OF
WARRANTY BY ASPEN WITH RESPECT TO THE PRODUCTS.  ASPEN MAKES NO OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ALL OTHER WARRANTIES
ARISING FROM COURSE OF DEALING OR USAGE ARE HEREBY EXCLUDED.  IMPLIED WARRANTIES
THAT MAY BE IMPOSED BY LAW AND CANNOT BE DISCLAIMED ARE LIMITED IN DURATION TO
THE LIMITED WARRANTY PERIOD SET FORTH HEREIN.  BASF PURCHASES AND ACCEPTS THE
PRODUCTS SOLELY ON THE BASIS OF THE LIMITED WARRANTY EXPRESSED HEREIN.  UNDER NO
CIRCUMSTANCES SHALL ASPEN BE LIABLE BY VIRTUE OF THIS LIMITED WARRANTY OR
OTHERWISE FOR ANY SPECIAL,

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 12 of 28

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INDIRECT, SECONDARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING BUT NOT
LIMITED TO LOSS OF PRODUCTION TIME) TO ANY PERSON OR PROPERTY ARISING OUT OF THE
USE OR INABILITY TO USE THE PRODUCTS.  SOME JURISDICTIONS DO NOT ALLOW THE
EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE
LIMITATION OR EXCLUSION MAY NOT APPLY.   THE LIABILITY OF ASPEN HEREUNDER FOR
ALL CLAIMS EXCEPT FOR CLAIMS ACCORDING TO § 5.2 RELATED TO REPAYMENT OF
REMAINING PRE_PAYMENT BALANCE, SHALL NOT EXCEED THE SUM OF BASF’S PAYMENTS FOR
THE PRODUCTS THAT ARE THE SUBJECT OF DISPUTE. EXCEPT IN CONNECTION WITH AN
AUTHORIZED SALE, FOR ANY PRODUCTS THAT ARE DIVERTED FROM ASPEN’S INTENDED
COUNTRY OF DESTINATION TO ANOTHER COUNTRY OR JURISDICTION, THE WARRANTY IS
HEREBY VOIDED. NOTWITHSTANDING ANY ALLOWED MARKETS OR END-APPLICATIONS AS
DESCRIBED IN ANNEX 1, BASF SHALL BE RESPONSIBLE FOR ENSURING FITNESS FOR USE OF
PRODUCTS IN ALLOWED MARKETS OR END-APPLICATIONS INCLUDING CONDUCTING ANY
APPLICABLE TESTS. ACCORDINGLY, ASPEN HEREBY DISCLAIMS ANY LIABILITY, WARRANTY OR
OTHERWISE WITH RESPECT THERETO.

 

 

§7

Force Majeure

7.1Any and all events and circumstances beyond the reasonable control of the
Parties including, but not limited to acts of God, fires, explosions, floods,
earthquakes, civil commotions, riots, declared and undeclared wars, labor
disputes, strikes, lock-outs, boycotts, picketing, other industrial
disturbances, unavoidable break-downs and acts of authorities, military police
actions, blockades, embargoes, insurrections, delays or curtailment of sources
of supply of materials used in the manufacture of the Products, performance
failure or delays of any person other than the Party, all interruptions of
business and casualties (collectively, “Force Majeure”) release the Party hereto
from its respective obligations under or pursuant to this Agreement - in so far
as the circumstances prevent the deliveries of Product by ASPEN or the takings
or further processing of Product by BASF or BASF’s Affiliates - for the duration
of such contingencies and to the extent of the effects resulting therefrom.

7.2If a Force Majeure event occurs, the Party affected shall inform the other
Party as soon as practical indicating the expected duration and extent of such
contingency. Moreover, the affected Party shall promptly take commercially
reasonable efforts to settle such contingencies so that the performance of the
obligations under this Agreement can be resumed as soon as possible.

 

§8

Good Faith

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 13 of 28

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8.1Both Parties recognise that they cannot anticipate all future technical and
economic developments that could affect the rights, obligations and commitments
contemplated herein. Therefore, ASPEN and BASF agree to cooperate and work with
one another in good faith during the Term, taking into account any and all
unanticipated developments and occurrences to minimise any undesired impact on
the intent of this Agreement. If during the Term of this Agreement, there shall
occur any unanticipated hardship affecting one of the Parties, whether economic
or otherwise, [***], the Parties shall work with one another in good faith so as
to minimise, to the extent possible, any adverse impact on the affected Party.

 

§9

Assignment

9.1It is the common understanding of the Parties that the terms of the Agreement
under which Product will be sold and delivered by ASPEN to BASF shall also be
applicable to the sale and delivery of Product to BASF’s Affiliates and also to
the sale and delivery of Product from ASPEN’s Affiliates to BASF and BASF
Affiliates. Therefore, BASF Affiliates shall be entitled to order Product from
ASPEN or ASPEN’s Affiliates in their own name and on their own account at the
terms laid down in this Agreement. In case BASF and BASF Affiliates have placed
orders pursuant to the terms and conditions of this Agreement, the Target
Volumes set out in Section 2 shall be fulfilled to the extent of the quantity
invoiced to BASF and the respective BASF Affiliates.

9.2In addition, each of the Parties is entitled to assign rights and obligations
under this Contract, in whole or in part, to one of its Affiliates.

9.3In addition, no consent shall be required to assign this Agreement as a part
of a Transaction, provided that any Transaction will be subject to Section 11.6.

 

§10

Confidentiality

10.1BASF and ASPEN agree that all non-public and/or proprietary information or
samples (“Confidential Information”) received or learned from the other
Party,  in connection with negotiations, performance and compliance of this
Agreement will be treated as strictly confidential and each Party (i) shall not
disclose Confidential Information of the other Party to third parties, and (ii)
shall not use Confidential Information of the other Party for any purpose other
than as expressly permitted in this Agreement unless otherwise agreed by the
Parties in writing, in each case during the Term and for a period of ten (10)
years after the termination or expiration of this Agreement. However, if a Party
is required to disclose any Confidential Information of the other Party by a
governmental authority pursuant to applicable laws or regulations, including,
without limitation, the U.S. Securities and Exchange Commission, the Party
required to make disclosure will immediately (if and to the extent allowed by
law) (i) inform  the other Party of such required disclosure, and (ii) may make
such disclosure to the extent required by law, and, to the extent requested by
the other

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 14 of 28

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Party, shall use commercially reasonable efforts to seek confidential treatment
of such Confidential Information if permitted by such laws or regulations under
such circumstances. The provisions of this Section 10 shall not apply to (i)
disclosures by each Party to its Affiliates and their respective personnel, or
(ii) disclosure to a potential purchaser or financing source of each Party,
including such purchaser's attorneys and consultants, provided that such persons
receiving Confidential Information first agree to maintain the confidentiality
of Confidential Information provided under this Agreement, subject to the terms
and restrictions contained herein. Each Party is responsible for compliance with
this Section 10 by any such persons to whom such Party discloses the other
Party’s Confidential Information.

10.2Confidential Information excludes any information which a receiving Party
can demonstrate by written evidence: (a) to be in the possession of the
receiving Party at the time of disclosure without any restrictions; (b) already
available or becomes available to the public through no fault of the receiving
Party; (c) received by the receiving Party from a third party having a right to
disclose it without restrictions; or (d) developed by the receiving Party
without the knowledge or reference to information disclosed pursuant to this
Agreement or other agreements between the Parties. The Confidential Information
disclosed pursuant to this Agreement shall not be construed to be within the
foregoing exclusions merely because such items are embraced by more general
publically known information or information in Receiving Party’s possession.
Additionally, any combination of features shall not be construed within the
foregoing exclusions, but only if combination itself and its principle of
operation are within the foregoing exclusions.

10.3BASF acknowledges and agrees that it will acquire no rights to use and/or
disclose the Confidential Information of ASPEN by virtue of the utilization of
such Confidential Information in the manufacture of Products sold to BASF
hereunder.

 

 

§11

Term and Termination

11.1This Agreement becomes effective on the Effective Date and shall terminate
on December 31st, 2027 (the “Term”). The Parties agree to meet and discuss the
potential for a successor arrangement to the Agreement at least [***] prior to
the end of the Term.

11.2In the event the Agreement is not renewed beyond December 31, 2027, ASPEN
shall sell and deliver and BASF shall be obliged to purchase and receive under
the same terms and conditions as laid out in the Agreement, the following
Phase-Out Volumes:

(a) During the first calendar year following the expiration of the Agreement,
the Phase-Out Volume shall be equal to [***] of the quantities invoiced by ASPEN
to BASF during the final calendar year of the Agreement.

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 15 of 28

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(b) During the second calendar year following the expiration of the Agreement,
the Phase-Out Volume shall be equal to [***] of the quantities invoiced by ASPEN
to BASF during the last final calendar year of the Agreement.

The terms and conditions of this Agreement shall continue to apply to purchases
of Phase-Out Volumes

11.3If either Party defaults in any of its obligations under this Agreement and,
if it is capable of remedy, such default has not been remedied within thirty
(30) days after the non-defaulting Party gives written notice thereof, the
non-defaulting Party may at its discretion terminate this Agreement by giving
written notice should such default be continuing.

11.4Notwithstanding any other provision of this Agreement, no return or other
refund of the Pre-Payment Balance shall be due before the applicable Target
Date, absent a showing of fraud or willful misconduct on the part of ASPEN.
ASPEN will also grant BASF access to its financial data upon request.

11.5The following provisions will survive any expiration or termination of this
Agreement: Sections 8, 10, 11, 12.3, 13, 14, 15 and 16.

11.6ASPEN shall provide BASF written notice at least [***] prior to a proposed
Transaction (a “Transaction Notice”) identifying the proposed acquirer. BASF
shall have the right to terminate this Agreement by written notice to ASPEN (the
“Transaction Termination Notice”) on or prior to the date that is [***] after
the date of the Transaction Notice if any of the following is the case:

(a) the proposed acquirer is a competitor of BASF;

(b) the proposed acquirer does not provide reasonable assurance to BASF that
this Agreement will in the future be performed in accordance with its terms,
specifically with its §5, or

(c) the proposed acquirer is for other material reasons (e.g. financial,
political reasons) determined by BASF not to be a reasonably reputable supplier
of the Products.

A termination pursuant to a Transaction Termination Notice shall be effective on
the date of the Transaction.

11.7Notwithstanding the foregoing, if specified in the Transaction Termination
Notice, BASF may continue to purchase the remainder of its Target Volume for the
remainder of the calendar year in which the Transaction Termination Notice is
given and the subsequent calendar year, and the terms of this Agreement shall
apply to all such sales.

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 16 of 28

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11.8Upon a termination of this Agreement pursuant to a Transaction Termination
Notice, the remaining Pre-Payment Balance shall be due and payable to BASF
within [***] of the date of the Transaction.

 

§12

Process Optimization

12.1 BASF and ASPEN agree to work together in good faith to identify
optimization projects [***] (“Optimization Projects”) and [***] as set forth in
the Side Agreement. ASPEN may from time to time submit Optimization Project
proposals to BASF. BASF will assess such Optimization Project proposals in good
faith to develop non-binding Recommended Measures, if any, to meet Optimization
Project goals. In addition, BASF, in its sole discretion, may provide further
assistance to ASPEN during implementation of Recommended Measures to help
promote the likelihood of successful cost reductions. ASPEN, in its sole
discretion, may elect to or not elect to implement Recommended Measures. BASF
will not incur any liability with respect to ASPEN’s use of the Recommended
Measures and related assistance.

12.2If the cost of development of any Recommended Measures is expected to be
significant, the Parties will, prior to the undertaking by BASF of any work
related to such Recommended Measures, agree on a scope of work and any
reimbursement of BASF to be paid by ASPEN, on a time and materials basis, for
the work of BASF related to the Recommended Measures. If the implementation of
any Recommended Measures and use thereof would infringe any patent owned or
controlled by BASF, BASF shall inform ASPEN and the Parties shall reasonably
negotiate and agree on the compensation, if any, due to BASF based on ASPEN’s
practice of the patent as a part of the Recommended Measures.  ASPEN shall have
a worldwide, nonexclusive right and license, including the right to grant
sublicenses, to practice such patent to the extent required to implement the
Recommended Measures. Should either Party believe that work related to the
Recommended Measures is likely to lead to patentable developments, the Parties
will refer such work to the joint steering committee established under the JDA,
and undertake the work related to such Recommended Measures and implement such
Recommended Measures only (if at all) as a Project executed under the JDA.

12.3 For such Recommended Measures as ASPEN does implement, ASPEN shall have a
nonexclusive, worldwide, royalty free, perpetual right and license, including
the right to grant sublicenses in connection with a license of rights in ASPEN’s
process to which the Recommended Measures relate, to use any intellectual
property rights of BASF included in such Recommended Measures in implementing
such Recommended Measures in ASPEN’s processes. ASPEN shall continue to solely
own all rights in its manufacturing and other processes, including as modified
by any Recommended Measures.

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 17 of 28

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12.4 Except as provided in Section 12.2, BASF will not include in any
Recommended Measures any patented technology or processes other than through a
Project executed under the JDA.

 

 

§13

Other Terms and Conditions

13.1Any alterations or amendments to any provision of this Agreement, including
amendments to the Annexes hereto, shall only be valid if made in writing by
authorized representatives of the Parties.

13.2In the event that any of the provisions of this Agreement are invalid
because they are inconsistent with the applicable law, this shall in no manner
affect the validity of the other provisions of this Agreement. The Parties
hereto shall be obliged to replace such invalid provisions by new provisions
having similar economic effects.

13.3Neither BASF's nor ASPEN's general or other conditions that may accompany
orders or acknowledgements are applicable to any orders for Products placed
pursuant to this Agreement.

13.4Each Party represents and warrants that it has the authorizations required
to enter into this Agreement and that entering into this Agreement is not
inconsistent with any prior arrangements with or commitments to third parties.

13.5The terms and conditions contained herein, including the Annexes hereto,
constitute the entire agreement between the Parties with respect to the subject
matter of this Agreement and shall supersede all prior and contemporaneous
negotiations, agreements, statements, communications either oral or written
between the Parties hereto with respect to the subject matter hereof.
Notwithstanding the foregoing, the Parties agree that confidentiality agreements
between them remain in effect according to their terms with respect to
obligations of confidentiality and non-use with respect to information exchanged
thereunder, and rights of ownership in intellectual property established under
the terms of a Joint Development Agreement dated March 1, 2010 between ASPEN and
BASF Construction Chemicals GmbH remain in effect. A supply agreement entered
into by and between ASPEN and BASF Construction Chemicals GmbH, Trostberg,
Germany, an affiliate of BASF SE, Ludwigshafen, Germany, on February 17th, 2012,
along with the amendments thereto, is hereby terminated in its entirety by
mutual consent.

 

 

§14

Law and Jurisdiction

14.1This Agreement, including the law and jurisdiction clause and any amendment
hereto shall be governed by, interpreted and enforced in accordance with the
substantive laws of Switzerland

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 18 of 28

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without regard to the principles of conflict of laws and excluding the United
Nations Convention on Contracts for International Sale of Goods of 11 April
1980(CISG). Any dispute, controversy or claim, arising out of or in relation to
this Agreement, including the validity, invalidity, breach or termination
thereof, shall be resolved by binding arbitration in accordance with the Swiss
Rules of International Arbitration of the Swiss Chambers of Commerce in force on
the date when the Notice of Arbitration is submitted in accordance with these
Rules. The number of arbitrators shall be one (1). The seat of arbitration shall
be Basel, Switzerland. The arbitral proceedings shall be conducted in English.
All information involved in the arbitration shall be kept
confidential.  Notwithstanding the foregoing, the Parties recognize that a Party
may suffer immediate, irreparable harm in certain circumstances, including a
breach or threatened or anticipated breach of obligations under Section 10;
accordingly, such Party is entitled, in addition to any other remedy available
at law or in equity, to injunctive relief to specifically enforce the terms of
this Agreement in a court of competent jurisdiction.

 

§ 15 Export Compliance

15.1The Parties shall comply with their respective codes of conduct, all
applicable laws and regulations, including but not limited to export controls,
embargoes, sanctions and similar laws, regulations and requirements.

15.2BASF acknowledges that the Products are subject to regulation by United
States government agencies, which regulate export or diversion of the Products,
information about the Products, and derivatives of the Products to certain
countries and certain persons (collectively, “U.S. Export Control Laws”).  BASF
shall fully comply with all applicable laws and regulations, including trade
control regulations in connection with its resale or use of Products. BASF will
not export, sell, deliver or otherwise transfer any Products to any embargoed or
sanctioned countries without necessary and appropriate licenses or approvals.

 

§ 16 Indemnification; Limitation of Liability

16.1ASPEN shall indemnify BASF, and its directors, officers, employees, agents
and their successors, against any infringement claims brought by a third party
based on such third party’s intellectual property only to the extent such claims
relate to ASPEN’s manufacture of the Products, up to the amount of the Price
paid for the Product. ASPEN shall not be liable for any claims related to the
use of the Products in any application. ASPEN shall have no liability for any
claim of infringement resulting from compliance by ASPEN with BASF’s designs,
specifications or

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 19 of 28

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instructions, or in the event of modification of the Products by BASF. In no
event shall ASPEN have any liability for any infringement in excess of the
purchase Price of the infringing Products.  

16.2 BASF shall indemnify and hold harmless ASPEN, and its directors, officers,
employees, agents and their successors against third party claims resulting from
BASF’s use of Products, whether alone or in combination with other products,
including, but not limited to, infringement of intellectual property rights.

16.3ASPEN’s maximum liability for any losses and damages arising out of any
cause whatsoever in connection with this Agreement shall in any event not exceed
the sum of BASF’s payments for the products that are the subject of dispute.
ASPEN shall provide to BASF a certificate evidencing its insurance coverage on
BASF’s reasonable request. The aforesaid limitation of liability does not apply
in cases of ASPEN’s willful misconduct or gross negligence.

16.4OTHER THAN WITH RESPECT TO REPAYMENT OF THE PREPAYMENT BALANCE AS PROVIDED
HEREUNDER, AND FOR INDEMNIFICATION CLAIMS UNDER THIS SECTION 16, NO PARTY SHALL
BE LIABLE TO THE OTHER PARTY UNDER THIS AGREEMENT FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST PROFITS, OR OTHER
INDIRECT LOSS OR DAMAGE ARISING OUT OF THIS AGREEMENT AND/OR THE PERMITTED USE
OF ANY INTELLECTUAL PROPERTY OR PROPRIETARY INFORMATION CREATED OR RECEIVED
HEREUNDER, OR ARISING OUT OF NEGLIGENCE OR WILLFUL CONDUCT CAUSING PERSONAL
INJURY OR TANGIBLE PROPERTY DAMAGE OF A THIRD PARTY OR ANY RESULTING OBLIGATION,
WHETHER IN AN ACTION FOR OR ARISING OUT OF BREACH OF CONTRACT, TORT, OR ANY
OTHER CAUSE OF ACTION AND WHETHER OR NOT SUCH DAMAGES ARE FORESEEABLE.

16.5Provisions.

(a)When a reference is made in this Agreement to an “Article,” “Section,”
“Exhibit” or “Schedule,” such reference shall be to an Article or Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated.

(b)The table of contents and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

(c)Whenever the words “include,” “includes,” or “including” are used in this
Agreement, such words shall be deemed to be followed by the words “without
limitation.”

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 20 of 28

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(d)The words “hereof,” “herein,” and “hereunder” and words of similar import
when used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement unless otherwise expressly indicated in
the accompanying text.

(e)The use of “or” is not intended to be exclusive unless otherwise expressly
indicated in the accompanying text.

(f)The defined terms contained in this Agreement are applicable to the singular
as well as the plural forms of such terms.  Reference to the masculine gender
shall be deemed to also refer to the feminine gender and vice versa.

(g)A reference to documents, instruments or agreements also refers to all
addenda, exhibits or schedules thereto.

IN WITNESS WHEREOF, the parties have executed this Supply Agreement as of the
dates set forth below.

 

 

ASPEN AEROGELS, INC.BASF POLYURETHANES GmbH

 

 

 

 

/s/ John F. Fairbanks                             [***]_              [***]

Name: John F. Fairbanks  Name:[***]                 Name: [***]

Title: Chief Financial Officer  Title: [***]            Title: [***]

Date: February 16, 2018      Date: 02-16-2018                        Date:
02-16-2018

  

 

 

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 21 of 28

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List of Annexes:

 

Annex 1:BASF Markets and Specifications

Annex 2:Total Volume Range

Annex 3.Safety Stock

Annex 4:Pre-Payment and Security Interest

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 22 of 28

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Annex to the Agreement between BASF and ASPEN

 

Annex 1

– BASF Markets and Specifications

 

BASF Markets

 

Market definitions are aligned to and based on categorization of markets set
forth on [***] as of [***].  

 

BASF Markets will be limited strictly to those markets specifically identified
as approved in the chart below.  Any additions or modifications to BASF Markets
after the date hereof must be agreed to by both Parties in writing.

 

1.

Construction

 

 

a.

Use in [***] is approved.

 

b.

Use in the following [***] is prohibited.

 

2.

Transportation

 

 

a.

Use in [***] is approved.

 

3.

Industrial

 

 

a.

Use in [***] is approved.

 

b.

Use in [***] is prohibited.

 

4.

Consumer

 

 

a.

Use in [***] is approved.

 

b.

Use in [***] is prohibited.

 

For purposes of clarity, any uses in [***] are allowed. Uses in [***] are
prohibited.

 

The fact that a market or end-application is allowed in this Annex shall not be
construed as ASPEN having determined that Products are fit for use in these
markets or end-applications. BASF shall be solely responsible for ensuring
fitness for use, including performing any additional tests, as necessary to
market and sell the Products in these markets and end-applications in compliance
with applicable regulations, industry standards and other product claims.

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 23 of 28

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Specifications

 

[***]

 

 

 

 

 

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 24 of 28

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Annex 2

- Quantities

 

Total Volume Range

Commencing [***], in an amount not to exceed [***] of Products in any calendar
year during the term of the Agreement, subject to revision pursuant to amendment
of Annex 4 with respect to any additional Pre-Payment Tranche(s).

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 25 of 28

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Annex 3

- Safety Stock

 

Safety Stock Example

Calendar Year:   [***]

Total Volume Range (up to):  [***]

Target Volume:  [***]

Safety Stock Factor:    [***]

[***] Safety Stock    [***]

 

 

 

  

 

 

 

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 26 of 28

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Annex 4

– Pre-Payment and Security Interest

 

APre-Payment

 

1.

Remitting of the Pre-Payment and any Pre-Payment Tranches by BASF is conditioned
upon ASPEN granting the security interests as described in this Annex 4. Any
Pre-Payment will be paid by BASF to Aspen to the following bank account Aspen
Aerogels, Inc.; [***].

 

2.

After January 1, 2019, ASPEN will credit up to twenty five and three tenths
percent (25.3%) of any amounts invoiced by ASPEN for Product sold and delivered
to BASF pursuant to this Agreement against the available Pre-Payment Balance, if
any.

 

3.

Pursuant to §5.2, the Pre-Payment Balance associated with a specific Pre-Payment
Tranche, if any, remaining after the applicable Target Date will be repaid by
ASPEN by wire transfer to BASF to the following bank account: [***].

 

4.

The Pre-Payment Balance may be repaid by ASPEN to BASF at any time in whole or
in part and for any reason.

 

BPre-Payment Tranche 1

 

1.

BASF will remit to ASPEN by wire transfer five million U.S. dollars ($5,000,000)
in two installments of two million and five hundred thousand U.S. dollars
($2,500,000) each on or before (i) the later of February 28, 2018 or 5 business
days after the security interests as described in this Annex 4 are made
effective and (ii) July 1, 2018, respectively.

 

2.

Target Date with respect to this Pre-Payment Tranche 1 shall be December 31,
2021.

 

3.

The repayment of Pre-Payment Tranche 1 according to Annex 4, A 2. is limited to
an amount of U.S. dollars $1,670,000 USD (one million six hundred and seventy
thousand US dollars) in any given calendar year.

 

4.

As specified in Annex 2, Total Volume Range in an amount not to exceed [***] of
Products in any calendar year during the term of the Agreement.

 

CAdditional Pre-Payment Tranches

 

1.

Upon ASPEN’s written request, BASF in its sole discretion may offer and Parties
may agree to one or more additional Pre-Payment Tranche(s) to be paid by BASF to
Aspen by amendment to this Annex 4.

 

2.

The terms of each such additional Pre-Payment Tranche, if any, will specify
pre-payment amounts, remittance dates, Target Dates, interest (if any) and
revisions to Total Volume Range, if any. Such terms shall be agreed in writing
and signed by both Parties.

 

DSecurity Interest

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 27 of 28

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ASPEN and BASF will enter into a collateral agreement to secure ASPEN’s
obligation to repay the Pre-Payment Balance associated with a specific
Pre-Payment Tranche, if any, by the applicable Target Date with the following
elements:

 

1.

With respect to ASPEN’s manufacturing facility located at 3 Dexter Road, East
Providence, Rhode Island USA (the “Rhode Island Plant”):

 

a.

A first priority mortgage in all of the real estate owned by ASPEN which
constitutes the Rhode Island Plant; and

 

b.

A first priority security interest in all of the machinery and equipment owned
by ASPEN which is located at the Rhode Island Plant, subject only to a
subordinate security interest in favor of ASPEN’s bank and other lenders.

 

2.

With respect to intellectual property:

ASPEN will grant to its respective Rhode Island subsidiary nonexclusive licenses
under ASPEN’s patents  as necessary in order to operate the machinery and
equipment that is the subject of BASF’s security interest while such machinery
and equipment is located at the Rhode Island Plant.  Such licenses will be
assignable only to a future acquirer of the machinery and equipment at the Rhode
Island Plant, and will terminate on any removal of the machinery and equipment
from the Rhode Island Plant.

 

Following any repayment in full of the Pre-Payment, whether in the form of
credits against the purchase price of Products, lump sum payments or otherwise,
ASPEN’s obligation to maintain the security interest will terminate, and BASF
will execute any and all documents reasonably requested by ASPEN releasing all
or any part of the security from any lien or encumbrance in favor of BASF.

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Page 28 of 28