Document:

exv10w6

Exhibit 10.6

THIS PROMISSORY NOTE (THIS “NOTE”) AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR
RESALE, AND MAY NOT BE MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR, IF REASONABLY REQUESTED, AN OPINION OF COUNSEL SATISFACTORY TO ASPEN AEROGELS, INC. THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT.

THIS NOTE IS ALSO SUBJECT TO FURTHER RESTRICTIONS ON TRANSFER AS PROVIDED IN SECTION 6.4 OF THAT
CERTAIN NOTE PURCHSE AGREEMENT, DATED AS OF JUNE 1, 2011, AMONG ASPEN AEROGELS, INC. AND THE
PURCHASERS PARTY THERETO (AS MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME
TO TIME).

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”). BEGINNING ON JUNE 10,
2011, THE HOLDER OF THIS NOTE MAY, UPON REQUEST, OBTAIN FROM THE CHIEF FINANCIAL OFFICER OF ASPEN
AEROGELS, INC. THIS NOTE’S ISSUE PRICE, ISSUE DATE, AMOUNT OF OID AND YIELD TO MATURITY BY
CONTACTING SUCH PERSON AT (508) 691-1111.

THIS NOTE IS ALSO SUBJECT TO (A) THE SUBORDINATION AGREEMENT, DATED AS OF JUNE 1, 2011 BETWEEN
SILICON VALLEY BANK AND THE PERSONS PARTY THERETO AND (B) THE SUBORDINATION AGREEMENT, DATED AS OF
JUNE 1, 2011, BETWEEN PJC CAPITAL LLC AND THE PERSONS PARTY THERETO (AS EACH AGREEMENT MAY BE
AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME).

ASPEN AEROGELS, INC.

SUBORDINATED CONVERTIBLE PROMISSORY NOTE

			
	 	 	 
	$[__________]
	 	JUNE __, 2011

FOR VALUE RECEIVED, ASPEN AEROGELS, INC., a Delaware corporation (the “Borrower”), hereby
promises to pay to [ ] (the “Lender”), the principal sum of $[_________] (the
“Principal Amount”), together with interest thereon accruing on and from the date hereof
until paid, at an annual rate equal to 8% (which shall be increased to 10% following the occurrence
and during the continuance of any Event of Default in accordance with the terms of the Purchase
Agreement), compounded annually on December 31 of each year. Interest shall be calculated based on
a 360-day year, but in no event shall the rate of interest exceed the maximum rate, if any,
allowable under applicable law. The Principal Amount plus accrued interest under this Note up to
and including the applicable date is referred to herein as the “Outstanding Balance”.

 

 

     This subordinated convertible promissory note (this “Note”) is issued by the Borrower
pursuant to that certain Note Purchase Agreement dated as of June 1, 2011 (the “Purchase
Agreement”), entered into between the Borrower and the persons listed thereto (the
“Purchasers”), and is subject to, and Borrower and Lender shall be bound by, all the terms,
conditions and provisions of the Purchase Agreement. This Note and the other notes issued pursuant
to the Purchase Agreement are hereinafter referred to as the “Notes.” The Lender and the
other lenders with respect to the Notes are hereinafter referred to as the “Lenders.”
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such
terms in the Purchase Agreement.

     1. Payment. Subject to Section 6 hereof, accrued interest shall be (i)
payable in cash at the time Borrower pays the Principal Amount or such other amounts required to be
paid under this Note pursuant to Sections 2, 3 or 7 hereof or (ii)
converted together with the outstanding Principal Amount under this Note in accordance with
Section 6 hereof. No interest shall be payable other than as set forth in the preceding
sentence. Unless the indebtedness outstanding under this Note is converted in accordance with
Section 6 hereof, all payments on account of principal and interest, or such other amounts
required to be paid under this Note, shall be made in lawful money of the United States of America
at the principal office of the Lender, or such other place as the holder hereof may from time to
time designate in writing to the Borrower.

     2. Payment at Maturity; Liquidation Event.

          (a) Unless this Note is converted into capital stock of the Borrower in accordance with
Section 6 hereof or repaid prior to the Maturity Date (as defined below) in accordance
with, and subject to, Section 3 hereof, an amount equal to (i) the then Outstanding
Balance, multiplied by (ii) 1.375 (the product of (i) and (ii), the “Payoff Amount”), shall
be due and payable on the date that is three (3) years after the date hereof (the “Maturity
Date”).

          (b) Unless this Note is otherwise repaid in accordance with Section 7, upon any
voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Borrower, and
unless this Note has been previously converted as provided herein, the Payoff Amount shall be
immediately due and payable to the Lender on the effective date of such liquidation, dissolution or
winding up.

     3. Prepayment. Borrower may not prepay this Note nor any interest hereon without the
consent of Lenders holding at least 66 2/3% of the aggregate principal amount of the Notes then
outstanding.

     4. Transfer and Exchange. The holder of this Note may, subject to any restrictions on
transfers or assignments in Section 6.4 of the Purchase Agreement (the “Transfer
Restrictions”), surrender this Note at the principal office of the Borrower for transfer or
exchange. Within a reasonable time after notice to the Borrower from such holder of its intention
to make such exchange and without expense to such holder, except for any transfer or similar tax
which may be imposed on the transfer or exchange, the Borrower shall issue in exchange therefor, in
such denominations of at least $50,000 as shall be specified by such holder, another note or notes
for the same aggregate principal amount as the unpaid principal amount of the Note so surrendered,
having the same maturity and rate of interest, containing the same

 

 

provisions and subject to the same terms and conditions as the Note so surrendered. Subject
to the Transfer Restrictions, each new Note shall be made payable to such person or persons, or
transferees, as the holder of such surrendered Note may designate, and such transfer or exchange
shall be made in such a manner that no gain or loss of principal or interest shall result
therefrom.

     5. New Note. Upon receipt of evidence reasonably satisfactory to the Borrower of the
loss, theft, destruction or mutilation of this Note, and, in the case of any such loss, theft or
destruction, upon delivery of a customary indemnity agreement to the Borrower, or, in the case of
any such mutilation, upon surrender and cancellation of the Note, as the case may be, the Borrower
will issue a new Note of like tenor, in lieu of such lost, stolen, destroyed or mutilated Note.

     6. Conversion of Note.

          (a) Qualified IPO. In the event of a Qualified IPO (as defined below), but contingent
upon the closing of such Qualified IPO, the Outstanding Balance will automatically convert on the
closing date of such Qualified IPO into an amount of unregistered shares of Common Stock, par value
$0.001 per share, of the Borrower or such other equity securities offered in such public offering
(as applicable, the “Common Stock”) equal to (i) the Outstanding Balance on such closing
date, divided by (ii) the applicable Conversion Price (as defined below).

          (b) Non-Qualified IPO. In the event of an underwritten public offering of Common
Stock other than a Qualified IPO (a “Non-Qualified IPO”), at the election of Lenders
holding at least 66 2/3% of the then outstanding principal amount of the Notes, the Outstanding
Balance will convert on the closing date of such Non-Qualified IPO into an amount of unregistered
shares of Common Stock equal to (i) the Outstanding Balance on such closing date, divided by (ii)
the applicable Conversion Price.

          (c) Definitions.

          (i) A “Qualified IPO” means the first underwritten public offering of Common
Stock, that results in the Common Stock being listed on a United States national securities
exchange and (i) that has a minimum gross offering size of at least $60 million or (ii) in
which the holders of a majority of the outstanding Series A Preferred Stock and Series B
Preferred stock, voting together as a class, elect to convert such preferred stock into
shares of Common Stock.

          (ii) “Conversion Price” means (A) the price per share of Common Stock paid by
purchasers of shares of Common Stock in the applicable underwritten public offering (the
“Offering Price”), multiplied by (B) the applicable Conversion Percentage (as
defined below).

          (iii) “Conversion Percentage” means (A) prior to the first anniversary of the
issuance of the Notes (such issuance date of the Notes, the “Issuance Date”), 87.5%,
(B) on or after the first anniversary and prior to the second anniversary of the Issuance
Date, 75%, and (C) on or after the second anniversary of the Issuance Date, 62.5%.

 

 

          (d) Conversion Procedures; Other Notices. The Borrower shall give notice of a
Qualified IPO, Non-Qualified IPO or Sale of the Borrower (as defined below) (each, a
“Triggering Event”) to the Lender as soon as is reasonably practicable prior to the closing
of such Triggering Event, but in any case at least (10) business days prior to the closing of any
such Triggering Event.

          (e) Cash in Lieu of Fractional Shares. No fractional share or interest of Common
Stock or scrip representing fractional shares or interests shall be issued upon conversion of this
Note. Instead of any fractional shares or interest of Common Stock, which would otherwise be
issuable upon conversion of this Note, the Borrower shall pay to the Lender a cash adjustment in an
amount equal to the product of such fractional interest multiplied by the Offering Price.

          (f) Issuance of Common Stock. Upon the occurrence of any conversion specified in this
Section 6, the Lender shall surrender this Note at the office of the Borrower or of its
transfer agent against delivery of the applicable amount of Common Stock into which this Note
surrendered was convertible on the date on which such conversion occurred. The Borrower shall not
be obligated to issue Common Stock issuable upon such conversion unless the Note being converted is
either delivered to the Borrower or any such transfer agent, or the Lender provides evidence
reasonably satisfactory to the Borrower of the loss, theft, destruction or mutilation of the Note
and the Lender agrees to indemnify and hold harmless the Borrower in respect of any such lost,
stolen, destroyed or mutilated Note.

     7. Sale of the Borrower.

          (a) In the event of a Sale of the Borrower, but, for the avoidance of doubt, contingent upon
the closing of such Sale of the Borrower, the Notes shall become due and payable on the closing
date of such Sale of the Borrower in cash, in preference to all equity securities of the Borrower,
for an amount equal to (i) the Outstanding Balance, divided by (ii) the applicable Conversion
Percentage.

          (b) “Sale of the Borrower” means (i) a merger or consolidation of the Borrower or any
of its Subsidiaries with or into another corporation (with respect to which less than a majority of
the outstanding voting power or equity securities of the surviving or consolidated corporation
immediately following such event is held by persons or entities who were stockholders of the
Borrower immediately prior to such event); (ii) the sale, license, disposition or other transfer of
all or substantially all of the properties and assets of the Borrower or any of its Subsidiaries;
(iii) any acquisition by any person (or group of affiliated or associated persons) of beneficial
ownership of a majority of the equity of the Borrower or of any Subsidiary (whether or not
newly-issued shares) in a single transaction or a series of related transactions; or (iv) any other
similar change of control of fifty percent (50%) or more of the outstanding voting power of the
Borrower or any Subsidiary.

     8. Default. This Note shall be subject to the Event of Default provisions set forth
in Article VII of the Purchase Agreement.

 

 

     9. Governing Law. This Note shall be governed by and construed in accordance with the
domestic laws of the Commonwealth of Massachusetts, without giving effect to any choice of law or
conflicting provision or rule (whether of the Commonwealth of Massachusetts or any other
jurisdiction) that would cause the laws of any jurisdiction other than the Commonwealth of
Massachusetts to be applied. In furtherance of the foregoing, the internal law of the Commonwealth
of Massachusetts will control the interpretation and construction of this Note, even if under such
jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other
jurisdiction would ordinarily apply.

     10. Cancellation of Note. Upon the payment and/or conversion of the Outstanding
Balance, or, if applicable, the Payoff Amount, this Note shall be canceled.

     11. Collection Expenses. The Borrower further agrees, subject only to any limitation
imposed by applicable law, to pay all expenses, including reasonable attorneys’ fees, incurred by
the holder of this Note in endeavoring to collect any amounts payable hereunder which are not paid
when due.

     12. Amendment. Any provision of this Note, except for the principal amount of this
Note and the interest rate in connection therewith, may be amended or waived with the written
consent of Lenders holding at least 66 2/3% of the aggregate principal amount of the Notes then
outstanding.

     13. Waiver. Borrower hereby waives presentment, protest, demand for payment, notice
of dishonor, and any and all other notices or demands in connection with the deliver, acceptance,
performance, default, or enforcement of this Note.

     14. Adjustment. All references to share amounts and prices herein shall be equitably
adjusted to reflect any stock split, combination, stock dividend or similar event affecting the
capital stock of the Borrower.

     15. Notice. All notices shall be delivered pursuant to the terms of Section 9.5 of
the Purchase Agreement.

     16. Lender Actions. Lender may not take any action with respect to this Note, whether
to enforce its rights under this Note or otherwise, without the prior written consent of Lenders
holding at least 66 2/3% of the aggregate principal amount of the Notes then outstanding.

     IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed by its duly
authorized officer as of the date first above written.

	 	 	 	 	 	 	 

	 	 	ASPEN AEROGELS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	Name:	 	 
	 	 	Title:exv10w7

Exhibit 10.7

EXECUTIVE AGREEMENT

     This Amended and Restated Executive Agreement (this “Agreement”) is dated as of August 5,
2011, by and between Aspen Aerogels, Inc., a Delaware corporation (the “Company”) and Donald R.
Young (the “Executive”).

Recitals:

     A. The Company and the Executive previously entered into an employment agreement dated as of
March 17, 2010.

     B. The Company and the Executive desire to amend and restate that agreement in the form of
this Agreement to provide for the terms and conditions of the Executive’s employment with the
Company.

Agreement:

     NOW, THEREFORE, 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, 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; or (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.
For purposes hereof, whether or not the Executive has committed an act or omission of the type
referred to in subparagraphs (i) through (iv) above will be determined by the Board in its
reasonable, good faith discretion, based upon the facts known to the Board at the relevant time.
Any termination by the Company of the Executive’s employment with the Company that does not meet
the criteria set forth in this definition (determined as set forth in the immediately preceding
sentence) shall be deemed to be without Cause for purposes of this Agreement.

          “Change of Control” means any of the following: (i) any Person or Group (within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934) (other than a Person or Group which was
a shareholder of the Company on March 17, 2010) is or becomes the beneficial owner, directly or
indirectly, through a purchase, merger or other acquisition transaction or series of transactions,
of capital stock of the Company entitling such Person or Group to control 50% or more of the total
voting power of the capital stock of the Company entitled to vote generally in the election of
directors, where any voting capital stock of which such Person or Group is the beneficial owner
that are not then outstanding are deemed outstanding for purposes of calculating such percentage;
other than in connection with the Company’s issuance of its capital stock in a bona-fide financing
transaction the proceeds of

 

 

which are to be utilized by the Company for its general corporate purposes or (ii) any sale or
transfer of all or substantially all of the assets of the Company to another Person.

          “Employment, Confidentiality and Non-Competition Agreement” means that certain Employment,
Confidentiality and Non-Competition Agreement dated November 12, 2001 by and between the Executive
and the Company.

          “Good Reason” means: (i) any material breach by the Company of this Agreement that is not
cured by the Company within thirty (30) days after written notice specifying in reasonable detail
the nature of such material breach is provided to the Company by the Executive; (ii) the demotion
of the Executive such that the Executive no longer serves as the CEO of the Company or a material
reduction in the Executive’s current duties and authority as the CEO of the Company, in each case,
without his consent; (iii) the written demand by the Company for the Executive to relocate or
commute more than 40 miles from Brookline, Massachusetts without his consent; or (iv) any reduction
by the Company in the Executive’s Base Salary without his consent. For purposes hereof, whether or
not the Executive has Good Reason to terminate his employment by the Company pursuant to
subparagraphs (i) through (iv) above will be determined by the Board in its reasonable, good faith
discretion, based upon the facts known to the Board at the relevant time. Any termination by the
Executive of his employment with the Company that does not meet the criteria set forth in this
definition (determined as set forth in the immediately preceding sentence) shall be deemed to be
without Good Reason for purposes of this Agreement.

          “Permanent Disability” means the Executive is unable to perform, by reason of physical or
mental incapacity, his 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.

     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 for the period beginning on the date hereof and
ending as provided in Section 2(c) (the “Employment Period”).

          (a) Position and Duties.

               (i) During the Employment Period, the Executive shall serve as Chief Executive Officer of the
Company and shall have the duties, responsibilities and authority consistent with such position
that are designated by the Board, subject to the direction and supervision of the Board. With the
help and under the guidance of the Board, the Executive will direct the formulation, refinement and
implementation of the strategic plan for the growth and operation of the Company and recruit the
necessary senior management team to execute the plan. The Executive’s goal is to create
shareholder value by establishing the Company as the leading global supplier of Aerogel products.

2

 

               (ii) The Executive shall devote his best efforts and his 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 duties and
responsibilities to the best of his 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 Board.

               (iii) In addition, so long as the Executive is employed by the Company as its Chief Executive
Officer, the Executive shall be entitled to serve as a director of the Company.

          (b) Salary and Benefits.

               (i) During the Employment Period, the Executive’s base salary shall be $329,400 per year (such
annual salary, as it may be adjusted upward by the Board or a committee thereof 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 or a committee
thereof.

               (ii) In addition to the Base Salary, Executive shall be eligible to receive an annual cash
incentive bonus payment (each, a “Performance Bonus”) in an amount, if any, to be determined by the
Company’s Board or a committee thereof.

               (iii) The Company will reimburse the Executive for all reasonable travel and other expenses
incurred by the Executive in connection with the performance of his 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) In addition, the Executive will 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 will participate to the extent permissible under the terms and provisions of 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.

3

 

          (c) Employment at Will. The Executive and the Company understand and agree that the
Executive is an employee at will, and that the Executive may resign, or the Company may terminate
the Executive’s employment, at any time and for any or for no reason. Nothing in this Agreement
shall be construed to alter the at-will nature of the Executive’s employment, nor shall anything in
this Agreement be construed as providing the Executive with a definite term of employment.

          (d) Severance. If the Executive’s employment with the Company is terminated (i) by
the Company without Cause; or (ii) by the Executive for Good Reason within thirty (30) days after
the occurrence of an event constituting Good Reason (including the expiration of any applicable
cure periods), the Executive shall be entitled to receive an amount equal to the Executive’s Base
Salary (prior to any reduction) for six (6) months following the date of such termination, be
entitled to continued participation on substantially similar terms in all employee benefit plans
and programs to which he was entitled to participate in as of the date of such termination for six
(6) months following the date of such termination, and shall be entitled to receive any accrued but
unpaid bonuses or commissions then owed or fully earned by the Executive in accordance with
Section 2(b)(ii) above (collectively, the “Severance Amount”). All amounts payable to the
Executive pursuant to this provision shall be payable in regular installments in accordance with
the Company’s regular payroll practices and subject to customary withholding. 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 this Section
2(d).

          (e) Termination or Reduction of Severance. If at any time after termination of
employment hereunder the Executive breaches any of the provisions set forth in the Employment,
Confidentiality and Non-Competition Agreement, and if the Executive fails to cure each such breach,
in all material respects, within thirty (30) days after the Company has given to the Executive
written notice of such breach, the Company shall no longer be obligated to make any payments of the
Severance Amount pursuant to Section 2(d) above.

          (f) Change of Control. In addition to the provisions of Section 2(d), if a
“Change of Control” occurs and the Executive does not receive an offer to remain employed by the
Company as its chief executive officer (or equivalent position) at a comparable rate of
compensation, bonus, benefits and other material terms (including severance and termination
provisions) as contained herein for at least two years, and the Executive is terminated without
Cause or resigns for any reason within the two year period following the Change of Control event,
the Executive shall be entitled upon his termination of employment to receive the Severance Amount
payable in accordance with the provisions of Section 2(d).

          (g) Options. Reference is hereby made to that certain Incentive Stock Option
Agreement dated November 11, 2009 by and between the Company and the Executive (the “Option
Agreement”) pursuant to which the Executive was granted an option to purchase certain shares of the
Company’s common stock (the “Option Shares”). This paragraph shall be deemed by each of the
Company and the Executive to be a corrective amendment to the Option Agreement to reflect the
approved terms as of the date of grant and shall supplement and

4

 

supercede any contrary terms therein. In addition, in the event that the Executive should
after March 17, 2010 receive any additional grants of stock options or restricted stock awards,
this paragraph shall be deemed by each of the Company and the Executive to be an amendment to the
agreement or agreements pursuant to which any such stock options or restricted stock awards may be
granted and shall supplement and supercede any contrary terms therein (and any reference to “Option
Agreement” or “Option Shares” below shall be deemed to include any such later granted stock options
or restricted stock awards). Upon the (i) consummation of a Change of Control transaction, unless
the Executive receives an offer to remain employed by the Company as its chief executive officer
(or equivalent position) at a comparable rate of compensation, bonus, benefits and other material
terms as contained herein for at least two years following the Change of Control event; or (ii)
termination of the Executive’s employment with the Company without Cause or by the Executive for
Good Reason at any time during the two (2) year period following the consummation of a Change of
Control transaction, any and all then unvested Option Shares shall thereupon immediately vest and
become immediately exercisable. In addition, if upon a merger, consolidation or sale of all or
substantially all of the Company’s assets (a “Corporate Transaction”) the Option Shares do not
continue in the form of equity in the successor or acquiring entity such that vesting may continue
to accrue after the Corporate Transaction then immediately prior to such Corporate Transaction all
then unvested Option Shares shall thereupon immediately vest and become immediately exercisable.
Upon a termination of the Executive’s employment with the Company without Cause or by the Executive
for Good Reason at any time after March 17, 2011, a number of unvested Option Shares as would have
vested in the three (3) months following such termination of employment (and assuming for this
purpose only) had Executive continued to be employed by the Company, shall thereupon immediately
vest and become immediately exercisable. Notwithstanding anything to the contrary contained in any
Option Agreement, Executive’s option to purchase vested Option Shares shall be exercisable for the
entire ten (10) year term of the option in accordance with Section 4 of the Option Agreement. For
the avoidance of doubt, the 90 day post-termination of employment exercise period shall not be
applicable to the exercise of the Option Shares as provided above.

          (h) 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 Internal Revenue Code of 1986, as
amended (the “Code”) (or any successor provision thereto) (“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 2(h), 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 order that it determines will
produce the required deduction in total Parachute Payments with the least reduction in economic
value to the Executive of such

5

 

payments. The determination of the Independent Tax Counsel under this Section 2(h)
shall be final and binding on all parties hereto. For purposes of this Section 2(h),
 “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.

          (i) Severance and Release. The Executive’s right to receive payment of the Severance
Amount shall be contingent upon the Executive’s execution and non-revocation (other than in the
case of Executive’s death) within forty-five (45) days of his date of termination of a general
release reasonably satisfactory to the Company releasing the Company, its officers, agents,
stockholders, and affiliates from any liability for any matter other than for payments under this
Agreement and contractual obligations under other written agreements which form shall be provided
to the Executive on or prior to his date of termination (the “Release”). The Company hereby agrees
that upon the lapse of the period for revocation, if the Executive has not exercised his revocation
right, the Company will execute a counterpart of the Release and deliver it to Executive forthwith.
The payment of the Severance Amount shall commence within the sixty (60) day period following the
Executive’s date of termination; provided that if a new calendar year commences during this period,
the payments shall commence no earlier than January 2 of such new calendar year. The first payment
after execution of the Release shall include all amounts that would have been paid following the
date of termination had the Release been effective immediately following the date of termination
but which were not yet paid.

     3. 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 judgment
entered by a state securities administrator within the last five (5) years and is not subject to
any state’s administrative enforcement order or judgment 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 judgment was entered within the last five (5) years; and

               (iii) is a citizen of the United States of America and resident of the Commonwealth of
Massachusetts.

          (b) This Agreement constitutes the legal, valid and binding obligations of the Executive,
enforceable in accordance with its terms, and the execution, delivery and performance of this
Agreement by the Executive does not and will not conflict with, violate or cause a breach

6

 

of any agreement, contract or instrument to which the Executive is a party or any judgment,
order or decree to which the Executive is subject.

     4. 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, conditions or provisions of, (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,
judgment or decree to which the Company is subject.

     5. Confidentiality, Non-Competition and Non-Solicitation. The Executive hereby
reaffirms, confirms and approves the Employment, Confidentiality and Non-Competition Agreement as a
binding obligation of the Executive, enforceable in accordance with its terms. The Executive
acknowledges and agrees that any Base Salary and/or Performance Bonus paid to the Executive
pursuant to this Agreement shall serve as additional consideration for the Executive’s obligations
under the Employment, Confidentiality and Non-Competition Agreement.

     6. 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

7

 

with copies (which shall not constitute notice) to:

Edwards Angell Palmer & Dodge LLP

111 Huntington Avenue

Boston, MA 02199

Telephone:           (617) 239-0100

Facsimile:              (617) 227-4420

Attention: Christopher W. Nelson

To the Executive:

7 Dana Street

Brookline, MA 02445

Telephone:           (617) 734-3056

Facsimile:              (617) 730-8181

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.

     7. 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 Employment, 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 supercedes and terminates that
certain Executive Agreement dated as of November 16, 2001 by and between the Executive and the
Company.

          (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

8

 

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 this 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.

9

 

          (j) Compliance with Code Section 409A. To the extent that any payment under this
Agreement constitutes “nonqualified deferred compensation” for purposes of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), (i) a termination of employment shall not
be deemed to have occurred for purposes of any provision of this Agreement providing for the
payment of any amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code Section 409A and, for
purposes of any such provision of this Agreement, references to a “termination ,” “termination of
employment” or like terms shall mean “separation from service,” (ii) the Executive’s right to
receive any installment payments pursuant to this Agreement shall be treated as a right to receive
a series of separate and distinct payments, and (iii) if the Executive is deemed on the date of
termination to be a “specified employee” within the meaning of that term under Code Section
409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered
deferred compensation under Code Section 409A payable on account of a “separation from service,”
such payment or benefit shall be made or provided at the date which is the earlier of (A) the
expiration of the six (6)-month period measured from the date of such “separation from service” of
Executive, and (B) the date of Executive’s death, to the extent required under Code Section 409A.
Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to
this Section 7(j) (whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid in a lump sum, and any remaining payments
and benefits due under this Agreement shall be paid or provided in accordance with the normal
payment dates specified for them herein.

          (k) Survival. The provisions of Sections 1, 2 and 5 through 7
of this Agreement shall survive any termination of this Agreement in accordance with the terms of
such sections.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

10

 

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

	 	 	 	 	 
	 	THE COMPANY:

ASPEN AEROGELS, INC.

 	 
	 	By:  	/s/ John Fairbanks 	 
	 	 	Name:  	John Fairbanks 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	
THE EXECUTIVE:

 	 
	 	By:  	/s/ Donald R. Young 	 
	 	 	Donald R. Young 	 
	 	 	 	 
	 

[Signature Page to Young Executive Agreement]

 

EXHIBIT A:

EMPLOYMENT, CONFIDENTIALITY

AND NON-COMPETITION AGREEMENT

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