Document:

Exhibit

FIRST AMENDMENT AGREEMENT
This FIRST AMENDMENT AGREEMENT (this “Amendment”) is made as of the 16th day of February, 2017 among:
(a)    SIFCO INDUSTRIES, INC., an Ohio corporation (the “Borrower”);

(b)    the Lenders, as defined in the Credit Agreement, as hereinafter defined; and

(c)    KEYBANK NATIONAL ASSOCIATION, as the administrative agent for the Lenders under the Credit Agreement (the “Administrative Agent”).

WHEREAS, the Borrower, the Administrative Agent and the Lenders are parties to that certain Amended and Restated Credit and Security Agreement, dated as of November 9, 2016 (as the same may from time to time be amended, restated or otherwise modified, the “Credit Agreement”);

WHEREAS, the Borrower, the Administrative Agent and the Lenders desire to amend the Credit Agreement to modify certain provisions thereof and add certain provisions thereto;

WHEREAS, each capitalized term used herein and defined in the Credit Agreement, but not otherwise defined herein, shall have the meaning given such term in the Credit Agreement; and

WHEREAS, unless otherwise specifically provided herein, the provisions of the Credit Agreement revised herein are amended effective as of the date of this Amendment;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Borrower, the Administrative Agent and the Lenders agree as follows:

1.    Amendment to Definitions in the Credit Agreement.  Section 1.1 of the Credit Agreement is hereby amended to delete the definitions of “Bank Product Obligations”, “Borrowing Base”, “Required Lenders” and “Reserve” or “Reserves” therefrom and to insert in place thereof, respectively, the following:

“Bank Product Obligations” means all obligations, liabilities, contingent reimbursement obligations, fees and expenses owing by a Company to the Administrative Agent or any Lender (or an affiliate of a Lender) pursuant to or evidenced by the Bank Product Agreements, with respect to which such Lender (or an affiliate of a Lender) has delivered written notice to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, by the later of the Closing Date or ten days following creation of a Bank Product, (i) describing such Bank Product and setting forth the applicable Bank Product Amount and the methodology to be used in calculating such amount, and (ii) agreeing to be bound by Section 9.8 hereof.

“Borrowing Base” means an amount equal to the total of the following:

(a)    up to eighty-five percent (85%) of the aggregate amount due and owing on Eligible Accounts Receivable of the Borrowing Base Companies; plus 

(b)    eighty-five percent (85%) of the aggregate Eligible Foreign Account Receivable Covered Amount; plus

(c)    the lesser of:

(i)    the lesser of (A) up to seventy percent (70%) of the aggregate of the cost or market value (whichever is lower), as determined on a first in first out basis in accordance with GAAP, of the Eligible Inventory of the Borrowing Base Companies consisting of raw material, work-in-process and finished goods, and (B) up to eighty-five percent (85%) of the Appraised Inventory NOLV of the Eligible Inventory of the Borrowing Base Companies consisting of raw material, work-in-process and finished goods; or, in the case of subparts (A) and (B) above, such lower percentages as determined based on Inventory appraisals); or

(ii)    Twenty-Two Million Dollars ($22,000,000); minus 

(d)    during the Availability Block Period, the Availability Block; minus

(e)    other Reserves, if any;

provided that, anything herein to the contrary notwithstanding, the Administrative Agent shall at all times have the right to reduce such percentages, dollar amount caps or other components of the Borrowing Base from time to time, in its Permitted Discretion; provided further that the Administrative Agent shall use its best efforts to provide notice to the Borrower of any changes to the Reserves or advance rates at least three days prior to any such change becoming effective.

“Required Lenders” means the holders, based upon each Lender’s Applicable Commitment Percentages, of at least fifty-one percent (51%) of an amount (the “Total Amount”) equal to the sum of:

(a)    (i) during the Commitment Period, the Maximum Revolving Amount, or (ii) after the Commitment Period, the Revolving Credit Exposure; and
 
(b)    the principal outstanding on the Term Loan; 

provided that (A) the portion of the Total Amount held or deemed to be held by any Defaulting Lender or Insolvent Lender shall be excluded for purposes of making a determination of Required Lenders, and (B) if there shall be two or more unaffiliated Lenders (that are not 

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Defaulting Lenders or Insolvent Lenders), Required Lenders shall constitute at least two unaffiliated Lenders. 

“Reserve” or “Reserves” means Bank Product Reserves, Hedge Agreement Reserves and any other amount that the Administrative Agent reserves, without duplication, pursuant to Section 2.13 hereof, against the Borrowing Base

2.    Additions to Definitions in the Credit Agreement.  Section 1.1 of the Credit Agreement is hereby amended to add the following new definitions thereto:

“Bank Product Amount” means the maximum amount to be included as a Bank Product Reserve, which amount may be established or increased (by further written notice to the Administrative Agent from time to time) as long as no Default or Event of Default exists.

“Bank Product Reserves” means the aggregate amount of reserves against the Borrowing Base established by the Administrative Agent from time to time in its sole discretion with respect to Bank Product Obligations.

“Hedge Agreement Amount” means the maximum amount to be included as a Hedge Agreement Reserve, which amount may be established or increased (by further written notice to the Administrative Agent from time to time) as long as no Default or Event of Default exists.

“Hedge Agreement Obligations” all obligations and liabilities of a Company to the Administrative Agent or any Lender (or an affiliate of a Lender) pursuant to or evidenced by Hedge Agreements, with respect to which such Lender (or an affiliate of a Lender) has delivered written notice to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, by the later of the Closing Date or ten days following the execution of a Hedge Agreement, (i) describing such Hedge Agreement and setting forth the applicable Hedge Agreement Amount and the methodology to be used in calculating such amount, and (ii) agreeing to be bound by Section 9.8 hereof.

“Hedge Agreement Reserves” means the aggregate amount of reserves against the Borrowing Base established by the Administrative Agent from time to time in its sole discretion with respect to Hedge Agreement Obligations.

3.    Amendment to Financial Statements, Collateral Reporting and Information.  Section 5.3 of the Credit Agreement is hereby amended to delete subsection (a) therefrom and insert in place thereof the following:

(a)    Borrowing Base.  The Borrower shall deliver to the Administrative Agent and the Lenders, as frequently as the Administrative Agent may request, but no less frequently than by 5:00 P.M. (Eastern time) on each Wednesday of each calendar week (or the next Business Day if such Wednesday is not a Business Day), a Borrowing Base 

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Certificate (for the period ending on the Friday of the week prior to the date such Borrowing Base Certificate is submitted) prepared and certified by a Financial Officer.  Each such Borrowing Base Certificate shall be updated for all activity (sales, billings, collections, credits and similar information) impacting the accounts receivable of the Borrowing Base Companies from the date of the immediately preceding Borrowing Base Certificate to the date of such Borrowing Base Certificate.  The amount of Eligible Inventory and the determination as to which accounts receivable constitute Eligible Accounts Receivable to be included on each Borrowing Base Certificate shall, absent a request from the Administrative Agent that such amounts be calculated more frequently, be the amount that is calculated and updated monthly pursuant to subsections (f) and (g) below.

4.    Amendment to Other Covenants Default Provisions.  Section 8.3 of the Credit Agreement is hereby amended to delete subsection (a) therefrom and insert in place thereof the following:

(a)    If any Company shall fail or omit to perform and observe Section 5.4 hereof, and that Default shall not have been fully corrected within five days after the earlier of (i) any Financial Officer of such Company becomes aware of the occurrence thereof, or (ii) the giving of written notice thereof to the Borrower by the Administrative Agent that the specified Default is to be remedied.

5.    Amendment to Application of Proceeds Provisions.  Section 9.8 of the Credit Agreement is hereby amended to delete subsection (b) therefrom and to insert in place thereof the following:

(b)    Payments Subsequent to Exercise of Remedies.  After the exercise by the Administrative Agent or the Required Lenders of remedies under this Agreement or the other Loan Documents, all monies received by the Administrative Agent shall be applied, unless otherwise required by the terms of the other Loan Documents or by applicable law, as follows:

(i)    first, to the payment of all obligations (to the extent not paid by the Borrower) incurred by the Administrative Agent pursuant to Sections 11.6 and 11.7 hereof and to the payment of Related Expenses to the Administrative Agent;

(ii)    second, to the payment pro rata of (A) interest then accrued and payable on the outstanding Loans, (B) any fees then accrued and payable to the Administrative Agent, (C) any fees then accrued and payable to the Issuing Lender or the holders of the Letter of Credit Commitment in respect of the Letter of Credit Exposure, (D) any commitment fees, amendment fees and similar fees shared pro rata among the Lenders under this Agreement that are then accrued and payable, and (E) to the extent not paid by the Borrower, to the obligations incurred by the Lenders (other than the Administrative Agent) pursuant to Sections 11.6 and 11.7 hereof;

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(iii)    third, for payment of (A) principal outstanding on the Loans and the Letter of Credit Exposure, on a pro rata basis to the Lenders, based upon each such Lender’s Overall Commitment Percentage, provided that the amounts payable in respect of the Letter of Credit Exposure shall be held and applied by the Administrative Agent as security for the reimbursement obligations in respect thereof, and, if any Letter of Credit shall expire without being drawn, then the amount with respect to such Letter of Credit shall be distributed to the Lenders, on a pro rata basis in accordance with this subpart (iii), (B) the Hedge Agreement Obligations in the amount of the Hedge Agreement Reserves, and (C) the Bank Product Obligations in the amount of the Bank Product Reserves; with such payment to be pro rata among (A), (B) and (C) of this subpart (iii); 

(iv)    fourth, to any remaining Secured Obligations (including such amount of Hedge Agreement Obligations and Bank Product Obligations that exceeds the amount of the Hedge Agreement Reserves and Bank Product Reserves, respectively); and

(v)    finally, any remaining surplus after all of the Secured Obligations have been paid in full, to the Borrower or to whomsoever shall be lawfully entitled thereto.

Each Lender hereby agrees to promptly provide all information reasonably requested by the Administrative Agent regarding any Bank Product Obligations owing to such Lender (or affiliate of such Lender) or any Hedge Agreement entered into by a Company with such Lender (or affiliate of such Lender), and each such Lender, on behalf of itself and any of its affiliates, hereby agrees to promptly provide notice to the Administrative Agent upon such Lender (or any of its affiliates) entering into any such Hedge Agreement or cash management services agreement.  Amounts shall be applied to each category of Obligations set forth above until Full Payment thereof and then to the next category.  If amounts are insufficient to satisfy a category, they shall be applied on a pro rata basis among the Obligations in the category.  Amounts distributed with respect to any Hedge Agreement Obligations or Bank Product Obligations shall be the lesser of the applicable Hedge Agreement Amount or Bank Product Amount, as applicable, last reported to the Administrative Agent or the actual Hedge Agreement Obligations or Bank Product Obligations as calculated by the methodology reported to the Administrative Agent for determining the amount due.  The Administrative Agent shall have no obligation to calculate the amount to be distributed with respect to any Hedge Agreement Obligations or Bank Product Obligations, and may request a reasonably detailed calculation of such amount from the applicable Lender (or affiliate of such Lender).  If a Lender (or affiliate of such Lender) fails to deliver such calculation within five days following request by the Administrative Agent, the Administrative Agent may assume the amount to be distributed is the Hedge Agreement Amount or Bank Product Amount last reported to the Administrative Agent

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6.    Amendment to Schedule 1.  The Credit Agreement is hereby amended to delete Schedule 1 (Commitments of Lenders) therefrom and to insert in place thereof a new Schedule 1 in the form of Schedule 1 hereto.

7.    Reallocation of Outstanding Amounts.  On the date hereof, the Lenders shall make adjustments among themselves with respect to the Loans then outstanding and amounts of principal with respect thereto as shall be necessary, in the opinion of the Administrative Agent, in order to reallocate among such Lenders such outstanding amounts, based on the revised Commitments as set forth in the revised Schedule 1 hereto.

8.    Closing Deliveries.  Concurrently with the execution of this Amendment, the Borrower shall:

(a)    deliver to the Administrative Agent, for delivery to Presidential Financial Corporation, a Revolving Credit Note and a Term Note, each in the amount specified in Schedule 1 to the Credit Agreement;

(b)    deliver to the Administrative Agent a fully-executed Assignment and Acceptance Agreement, among the Borrower, the Administrative Agent and Presidential Financial Corporation, in form and substance satisfactory to the Administrative Agent;

(c)    execute and deliver to Presidential Financial Corporation, the Fee Letter, and pay to Presidential Financial Corporation the fees stated therein;

(d)    cause each Guarantor of Payment to execute the attached Guarantor Acknowledgment and Agreement; and

(e)    pay all legal fees and expenses of the Administrative Agent in connection with this Amendment and any other Loan Documents.

9.    Representations and Warranties.  The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (a) the Borrower has the legal power and authority to execute and deliver this Amendment; (b) the officers executing this Amendment have been duly authorized to execute and deliver the same and bind the Borrower with respect to the provisions hereof; (c) the execution and delivery hereof by the Borrower and the performance and observance by the Borrower of the provisions hereof do not violate or conflict with the Organizational Documents of the Borrower or any material law applicable to the Borrower or result in a breach of any provision of or constitute a default under any other material agreement, instrument or document binding upon or enforceable against the Borrower; (d) no Default or Event of Default exists, nor will any occur immediately after the execution and delivery of this Amendment or by the performance or observance of any provision hereof; (e) each of the representations and warranties contained in the Loan Documents is true and correct in all material respects as of the date hereof as if made on the date hereof, except to the extent that any such representation or warranty expressly states that it relates to an earlier date (in which case such representation or warranty is true and correct in all material respects as of such earlier date); (f) the Borrower is not aware of any claim 

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or offset against, or defense or counterclaim to, the Borrower’s obligations or liabilities under the Credit Agreement or any other Related Writing; and (g) this Amendment constitutes a valid and binding obligation of the Borrower in every respect, enforceable in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, moratorium and similar laws and by equitable principles, whether considered at law or in equity.

10.    References to Credit Agreement and Ratification.  Each reference to the Credit Agreement that is made in the Credit Agreement or any other Related Writing shall hereafter be construed as a reference to the Credit Agreement as amended hereby.  Except as otherwise specifically provided herein, all terms and provisions of the Credit Agreement are confirmed and ratified and shall remain in full force and effect and be unaffected hereby. This Amendment is a Loan Document.

11.    Counterparts.  This Amendment may be executed in any number of counterparts, by different parties hereto in separate counterparts and by facsimile or other electronic signature, each of which, when so executed and delivered, shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

12.    Headings.  The headings, captions and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

13.    Severability.  Any provision of this Amendment that shall be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

14.    Governing Law.  The rights and obligations of all parties hereto shall be governed by the laws of the State of Ohio, without regard to principles of conflicts of laws.

[Remainder of page intentionally left blank.]

12049378.2

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JURY TRIAL WAIVER.  THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS, TO THE EXTENT PERMITTED BY LAW, EACH HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.  THIS WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY THE ABILITY OF THE ADMINISTRATIVE AGENT OR THE LENDERS TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION CONTAINED IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT AMONG THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS.

IN WITNESS WHEREOF, the parties have executed and delivered this Amendment in Cleveland, Ohio as of the date first set forth above.

	
		
	 
	SIFCO INDUSTRIES, INC.

By: /s/ Salvatore Incanno   
Salvatore Incanno
Vice President and Chief Financial Officer

	 
	 

	 
	KEYBANK NATIONAL ASSOCIATION
   as the Administrative Agent and as a Lender

By: /s/ Michael P. Gutia   
Michael P. Gutia
Vice President

Signature Page to
First Amendment Agreement

	
		
	 
	PRESIDENTIAL FINANCIAL CORPORATION

By: /s/ Dennis Schlesner   
Dennis Schlesner
President

Signature Page to
First Amendment Agreement

GUARANTOR ACKNOWLEDGMENT AND AGREEMENT

The undersigned consent and agree to and acknowledge the terms of the foregoing First Amendment Agreement dated as of February 16, 2017.  The undersigned further agree that the obligations of the undersigned pursuant to the Guaranty of Payment executed by the undersigned are hereby ratified and shall remain in full force and effect and be unaffected hereby.

The undersigned hereby waive and release the Administrative Agent and the Lenders and their respective directors, officers, employees, attorneys, affiliates and subsidiaries from any and all claims, offsets, defenses and counterclaims of any kind or nature, absolute and contingent, of which the undersigned are aware or should be aware, such waiver and release being with full knowledge and understanding of the circumstances and effect thereof and after having consulted legal counsel with respect thereto.

JURY TRIAL WAIVER.  THE UNDERSIGNED, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWER, THE ADMINISTRATIVE AGENT, THE LENDERS AND THE UNDERSIGNED, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS GUARANTOR ACKNOWLEDGMENT AND AGREEMENT, THE AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.  THIS WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY THE ABILITY OF THE ADMINISTRATIVE AGENT AND LENDERS TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION CONTAINED IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT AMONG THE BORROWER, THE ADMINISTRATIVE AGENT, LENDERS AND THE UNDERSIGNED.

	
		
	 
	GENERAL ALUMINUM FORGINGS, LLC
T & W FORGE, LLC
QUALITY ALUMINUM FORGE, LLC

By: /s/ Salvatore Incanno         
Salvatore Incanno
Treasurer

Signature Page to
Guarantor Acknowledgment and Agreement

SCHEDULE 1

COMMITMENTS OF LENDERS

	
						
	LENDERS
	REVOLVING CREDIT
COMMITMENT
PERCENTAGE
	REVOLVING
CREDIT
COMMITMENT
AMOUNT
	TERM LOAN
COMMITMENT
PERCENTAGE
	TERM LOAN
COMMITMENT
AMOUNT
	MAXIMUM AMOUNT

	KeyBank National Association
	62.1474508300000%
	$21,751,607.79
	62.1474508300000%
	$2,875,842.22
	$24,627,450.01

	Presidential Financial Corporation
	37.8525491700000%
	$13,248,392.21
	37.8525491700000%
	$1,751,607.79
	$15,000,000.00

	

Total Commitment Amount
	100%
	$35,000,000
	100%
	$4,627,450.01
	

$39,627,450.01

S-1aspn-ex101_302.htm

Exhibit 10.1

 

FOURTH Amendment

to 

AMENDED AND RESTATED Loan and security agreement

 

This Fourth Amendment to Amended and Restated Loan and Security Agreement (this “Amendment”) is entered into this 27th day of January, 2017 by and between SILICON VALLEY BANK (“Bank”) and ASPEN AEROGELS, INC., a Delaware corporation (“Borrower”) whose address is 30 Forbes Road, Building B, Northborough, Massachusetts 01532.

Recitals

A.Bank and Borrower have entered into that certain Amended and Restated Loan and Security Agreement dated as of September 3, 2014, as amended by that certain Consent and First Amendment to Amended and Restated Loan and Security Agreement dated as of August 19, 2016, as further amended by that certain Second Amendment to Amended and Restated Loan and Security Agreement dated as of November 23, 2016, and as further amended by that certain Third Amendment to Amended and Restated Loan and Security Agreement dated as of December 29, 2016 (as amended, and as the same may from time to time be further amended, restated, amended and restated, modified and/or supplemented, the “Loan Agreement”).  

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

C.Borrower has requested that Bank amend the Loan Agreement to (i) extend the maturity date, and (ii) make certain other revisions to the Loan Agreement as more fully set forth herein.

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

Agreement

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

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

2.Amendment to Loan Agreement.

2.1Section 2.3 (Overadvances).  Section 2.3 is amended by deleting the reference to “the Default Rate” therein and inserting in lieu thereof “a per annum rate equal to the rate that is otherwise applicable to Advances plus five percent (5.00%)”.  

2.2Section 3.2(a) and (b) (Conditions Precedent to all Credit Extensions).  Subsections (a) and (b) of Section 3.2 are amended in their entirety and replaced with the following:

“(a)receipt of the Notice of Borrowing and any materials and documents required by and in accordance with Section 3.4(a); 

 

(b)the representations and warranties in this Agreement shall be true, accurate, and complete in all material respects on the date of the proposed Credit Extension and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Event of Default shall have occurred and be continuing or immediately result from the Credit Extension.  Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in this Agreement remain true, accurate, and complete in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and”

 

2.3Section 3.4(a) (Procedures for Borrowing).  Section 3.4(a) is amended in its entirety and replaced with the following:

“(a)Subject to the prior satisfaction of all other applicable conditions to the making of an Advance set forth in this Agreement, an Advance shall be made upon Borrower’s irrevocable written notice delivered to Bank in the form of a Notice of Borrowing or without instructions if any Advances is necessary to meet Obligations which have become due, and such Notice of Borrowing shall indicate whether Borrower is requesting an Advance with respect to Eligible Accounts, Eligible Foreign Accounts, or Eligible Inventory, as applicable.  The Notice of Borrowing shall be made by Borrower through Bank’s online banking program, provided, however, if Borrower is not utilizing Bank’s online banking program, then such Notice of Borrowing shall be in the form attached hereto as Exhibit C and shall be executed by an Authorized Signer.  The Notice of Borrowing must be received by Bank prior to 12:00 p.m. Eastern time, (i) at least three (3) Business Days prior to the requested Funding Date, in the case of any LIBOR Advance, and (ii) on the requested Funding Date, in the case of a Prime Rate Advance, specifying: (1) the amount of the Advance; (2) the Currency in which such Advance shall be denominated; (3) the requested Funding Date; (4) whether the Advance is to be comprised of LIBOR Advances or Prime Rate Advances; and (5) the duration of the Interest Period applicable to any such LIBOR Advances included in such notice; provided that if the Notice of Borrowing shall fail to specify the duration of the Interest Period for any Advance comprised of LIBOR Advances, such Interest Period shall be one (1) month.  In addition to such Notice of Borrowing, when a Streamline Period is not in effect, Borrower must promptly deliver to Bank by electronic mail or through Bank’s online banking program such reports and information, including without limitation, sales journals, cash receipts journals, accounts receivable aging reports, as Bank may request in its sole discretion.”

 

2.4Section 6.2 (a) and (b) (Financial Statements, Reports, Certificates).  Subsections (a) and (b) of Section 6.2 are amended in their entirety and replaced with the following:

“(a)a Borrowing Base Report (and any schedules related thereto (i) with each request for an Advance, (ii) on the fifteenth (15th) day (if the 15th is not a Business Day, on the preceding Business Day) and last day of each month when a Streamline Period is not in effect, and (iii) within twenty (20) days after the end of each month when a Streamline Period is in effect;

 

(b)(1) within twenty (20) days after the end of each month, (A) monthly accounts receivable agings, aged by invoice date, (B) monthly accounts payable agings, aged by invoice date, and outstanding or held check registers, if any, and (C) monthly reconciliations of accounts receivable agings (aged by invoice date), transaction reports, Deferred Revenue report, and general ledger; and (2) perpetual inventory reports for Inventory valued on a first-in, first-out basis at the lower of cost or market (in accordance with GAAP) or such other inventory reports as are requested by Bank in its good faith business judgment (i) on the fifteenth (15th) day (if the 15th is not a Business Day, on the preceding Business Day) and last day of each month when a Streamline Period is not in effect, and (ii) within twenty (20) days after the end of each month when a Streamline Period is in effect;”

 

2.5Section 6.3(c) (Accounts Receivable; Collection of Accounts).  Subsection (c) of Section 6.3 is amended in its entirety and replaced with the following:

“(c)Collection of Accounts.  Borrower shall direct Account Debtors to deliver or transmit all proceeds of Accounts into a lockbox account, or such other “blocked account” as specified by Bank (either such account, the “Cash Collateral Account”).  Whether or not an Event of Default has occurred and is continuing, Borrower shall immediately deliver all payments on and proceeds of Accounts to the Cash Collateral Account.  All amounts received in the Cash Collateral Account shall be (i) subject to the Bank’s right to maintain a reserve pursuant to Section 6.3(g), applied to immediately reduce the Obligations when a Streamline Period is not in effect (unless Bank, in its sole discretion, elects not to so apply such amounts), or (ii) transferred on a daily basis to Borrower’s operating account with Bank when a Streamline Period is in effect.  Borrower hereby authorizes Bank to transfer to the Cash Collateral Account any amounts that Bank reasonably determines are proceeds of the Accounts (provided that Bank is under no obligation to do so and this allowance shall in no event relieve Borrower of its obligations hereunder).”

 

2.6Section 6.3(e) (Accounts Receivable; Verification).  Subsection (e) of Section 6.3 is amended in its entirety and replaced with the following:

“(e)Verifications; Confirmations; Credit Quality; Notifications.  Bank may, from time to time, after consultation with the Borrower, verify and confirm directly with the respective Account Debtors the validity, amount and other matters relating to the Accounts, either in the name of Borrower or Bank or such other name as Bank may choose, and notify any Account Debtor of Bank’s security interest in such Account.”

 

2.7Section 6.3(g) (Accounts Receivable).  Section 6.3 is hereby amended by inserting the following new subsection (g) immediately following subsection (f) thereof:

“(g)Reserves.  Notwithstanding any terms in this Agreement to the contrary, at times when an Event of Default exists, Bank may hold any proceeds of the Accounts and any amounts in the Cash Collateral Account that are not applied to the Obligations pursuant to Section 6.3(c) above (including amounts otherwise required to be transferred to Borrower’s operating account with Bank when a Streamline Period is in effect) as a reserve to be applied to any Obligations regardless of whether such Obligations are then due and payable.”

 

2.8Section 6.6 (Access to Collateral; Books and Records).  Section 6.6 is amended in its entirety and replaced with the following:

“6.6Access to Collateral; Books and Records.  At reasonable times, on one (1) Business Day’s notice (provided no notice is required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right to inspect the Collateral and the right to audit and copy Borrower’s Books.  The foregoing inspections and audits shall be conducted no more often than once every twelve (12) months unless an Event of Default has occurred and is continuing in which case such inspections and audits shall occur as often as Bank shall determine is necessary.  The foregoing inspections and audits shall be conducted at Borrower’s expense and the charge therefor shall be One Thousand Dollars ($1,000) per person per day (or such higher amount as shall represent Bank’s then-current standard charge for the same), plus reasonable out-of-pocket expenses.  In the event Borrower and Bank schedule an audit more than five (5) days in advance, and Borrower cancels or seeks to or reschedules the audit with less than five (5) days written notice to Bank, then (without limiting any of Bank’s rights or remedies) Borrower shall reimburse Bank for any costs incurred by Bank, plus any out-of-pocket expenses directly relating to the cancellation or rescheduling.”

 

2.9Section 6.9 (Financial Covenants).  Section 6.9 is amended in its entirety and replaced with the following:

“6.9Financial Covenants.

 

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

		
	
Period
	
Minimum EBITDA (maximum loss)

	
Trailing three (3) month period ending December 31, 2016
	
($3,000,000)

	
Trailing six (6) month period ending March 31, 2017
	
($7,950,000)

	
Trailing nine (9) month period ending June 30, 2017
	
($9,400,000)

	
Trailing twelve (12) month period ending September 30, 2017
	
($8,800,000)

	
Trailing twelve (12) month period ending December 31, 2017
	
($4,250,000)

 

(b)Adjusted Quick Ratio.  Maintain at all times, to be certified to Bank monthly as of the last day of each month, an Adjusted Quick Ratio of at least 1.25 to 1.00.”

2.10Section 6.14 (Online Banking).  The following new Section 6.14 is hereby inserted immediately following Section 6.13:

“6.14Online Banking.  Utilize Bank’s online banking platform for all matters reasonably requested by Bank which shall include, without limitation (and without request by Bank for the following matters), uploading information pertaining to Accounts and Account Debtors, requesting approval for exceptions, requesting Credit Extensions, and uploading financial statements and other reports required to be delivered pursuant to the terms of this Agreement.”

 

2.11Section 8.2(a) (Covenant Default).  Section 8.2(a) is amended in its entirety and replaced with the following:

“(a)Borrower fails or neglects to perform any obligation in Sections 6.2 (provided, however, Borrower shall have ten (10) Business Days from the scheduled due date to cure any default under clauses 6.2(b)-(d) and 6.2(i)), 6.5, 6.7(a), 6.8(a), 6.9, 6.10(b), 6.12, 6.13, or violates any covenant in Section 7; or”

 

2.12Section 9.2 (Power of Attorney).  Section 9.2 is amended in its entirety and replaced with the following:

“9.2Power of Attorney.  Borrower hereby irrevocably appoints Bank as its lawful attorney-in-fact, exercisable following the occurrence of an Event of Default, to:  (a) endorse Borrower’s name on any checks, payment instruments, or other forms of payment or security; (b) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) demand, collect, sue, and give releases to any Account Debtor for monies due, settle and adjust disputes and claims about the Accounts directly with Account Debtors, and compromise, prosecute, or defend any action, claim, case, or proceeding about any Collateral (including filing a claim or voting a claim in any bankruptcy case in Bank’s or Borrower’s name, as Bank chooses); (d) make, settle, and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, or other claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Bank or a third party as the Code permits.  Borrower hereby appoints Bank as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations have been satisfied in full and Bank has no further obligation to make Credit Extensions hereunder.  Bank’s foregoing appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled with an interest, are irrevocable until all Obligations have been fully repaid and performed and Bank has no further obligation to make Credit Extensions hereunder.”

 

2.13Section 13 (Definitions).  The following terms and their respective definitions set forth in Section 13.1 is amended in their entirety and replaced with the following:

“Borrowing Base” is (a) eighty percent (80%) of Eligible Accounts, plus (b) eighty percent (80%) of Eligible Foreign Accounts (provided, however, Eligible Foreign Accounts that are billed in a Foreign Currency shall have an advance rate of seventy percent (70%)), provided, that, the availability under this subsection (b) plus the availability under subsection (c) below shall not exceed seventy-five percent (75%) of the Borrowing Base, plus (c) (i) when a Streamline Period is not in effect, the lesser of eighty percent (80%) of Eligible Specified Accounts or One Million Dollars ($1,000,000) and (ii) during a Streamline Period, eighty percent (80%) of Eligible Specified Accounts (and with respect to subsections (c)(i) and (c)(ii) hereof, when added to the availability under subsection (b) above, in each case subject to the overall cap set forth in subsection (b) above), plus (d) the lesser of thirty-five percent (35%) of the value of Borrower’s Eligible Inventory (valued at the lower of cost or wholesale fair market value) or Three Million Dollars ($3,000,000), as determined by Bank from Borrower’s most recent Borrowing Base Report (and as may subsequently be updated by Bank in Bank’s sole discretion based upon information received by Bank including, without limitation, Accounts that are paid and/or billed following the date of the Borrowing Base Report); provided, however, that Bank may decrease the foregoing amounts and percentages in its good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect the Collateral.

 

“LIBOR” means, for any Interest Rate Determination Date with respect to an Interest Period for any Advance to be made, continued as or converted into a LIBOR Advance, the rate of interest per annum determined by Bank to be the per annum rate of interest at which deposits in Dollars are offered to Bank in the London interbank market (rounded upward, if necessary, to the nearest 0.0001%) in which Bank customarily participates at 11:00 a.m. (local time in such interbank market) two (2) Business Days prior to the first day of such Interest Period for a period approximately equal to such Interest Period and in an amount approximately equal to the amount of such Advance; provided that, in the event such rate of interest is less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Prime Rate” is the rate of interest per annum from time to time published in the money rates section of The Wall Street Journal or any successor publication thereto as the “prime rate” then in effect; provided that, in the event such rate of interest is less than zero, such rate shall be deemed to be zero for purposes of this Agreement; and provided further that if such rate of interest, as set forth from time to time in the money rates section of The Wall Street Journal, becomes unavailable for any reason as determined by Bank, the “Prime Rate” shall mean the rate of interest per annum announced by Bank as its prime rate in effect at its principal office in the State of California (such Bank announced Prime Rate not being intended to be the lowest rate of interest charged by Bank in connection with extensions of credit to debtors); provided that, in the event such rate of interest is less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Revolving Line Maturity Date” is January 28, 2018.

 

2.14Section 13 (Definitions).  The preamble in the definition of Eligible Accounts set forth in Section 13.1 is deleted in its entirety and replaced with the following:

“Eligible Accounts” means Accounts which arise in the ordinary course of Borrower’s business that meet all Borrower’s representations and warranties in Section 5.3 and are due and owing from Account Debtors deemed creditworthy by Bank in its good faith business judgment.  Bank reserves the right upon prior written notice to 

Borrower at any time after the Effective Date to adjust any of the criteria set forth below and to establish new criteria in its good faith business judgment.  Unless Bank otherwise agrees in writing, Eligible Accounts shall not include:”

 

2.15Section 13 (Definitions).  The following new defined term is hereby inserted in Section 13.1 in the appropriate alphabetical order:

“Borrowing Base Report” is that certain report of the value of certain Collateral in the form attached hereto as Exhibit E.

 

2.16Section 13 (Definitions).  The following defined terms set forth in Section 13.1 are deleted in their entirety:

“Transaction Report” is the Bank’s standard reporting package provided by Bank to Borrower.

 

“Unfinanced Capital Expenditures” means, with respect to any Person for any period, the aggregate of all Capital Expenditures by such Person and its Subsidiaries during such period that are not financed or funded using proceeds from (a) the issuance of additional equity interests of Borrower, (b) Subordinated Debt, (c) specific equipment financing, (d) other capital permitted by Bank, and in all instances that are Capital Expenditures as determined in accordance with GAAP, or (e) government grants or other incentives.

 

2.17Exhibit B (Compliance Certificate).  The Compliance Certificate attached to the Loan Agreement as Exhibit B is amended in its entirety and replaced with the Compliance Certificate in the form of Exhibit B attached hereto.

2.18Exhibit E (Borrowing Base Report).  The Borrowing Base Report attached hereto as Exhibit E is hereby inserted immediately following Exhibit D of the Loan Agreement. 

3.Limitation of Amendments.

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

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

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

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

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

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

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

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

4.6The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, 

or subdivision thereof, binding on Borrower, except as already has been obtained or made; and

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

5.Updated Perfection Certificate.  Borrower has delivered an updated Perfection Certificate dated on or about the date of this Amendment (the “Updated Perfection Certificate”), which Updated Perfection Certificate shall supersede in all respects that certain Perfection Certificate dated as of August 31, 2014.  Borrower and Bank acknowledge and agree that all references in the Loan Agreement to the “Perfection Certificate” shall hereinafter be deemed to be a reference to the Updated Perfection Certificate.

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

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

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

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

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

10.1this Amendment duly executed on behalf of Borrower;

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

10.3a duly executed officer’s certificate or secretary’s certificate, attaching copies of each of (i) the organizational documents of Borrower as in effect on the date hereof, (ii) the resolutions of Borrower authorizing the execution and delivery of this Amendment, the other documents executed in connection herewith and Borrower’s performance of all of the transactions contemplated hereby, and (iii) an incumbency certificate giving the name and bearing a specimen signature of each individual who shall be so authorized on behalf of Borrower;

10.4a good standing certificate of Borrower, certified by the Secretary of State of the jurisdiction of formation and each jurisdiction in which Borrower is qualified to do business, dated as of a date no earlier than thirty (30) days prior to the date hereof;

10.5certified copies, dated as of a recent date, of financing statement and other lien searches of Borrower and Guarantor, as Bank may request and which shall be obtained by Bank, accompanied by written evidence (including any UCC termination statements) that the Liens revealed in any such searched either (i) will be terminated prior to or in connection with the execution of this Amendment, or (ii) in the sole discretion of Bank, will constitute Permitted Liens;

10.6evidence satisfactory to Bank that the insurance policies required for Borrower are in full force and effect, together with appropriate evidence showing lender loss payable and/or additional insured clauses or endorsements in favor of Bank;

10.7the Updated Perfection Certificate executed by Borrower, together with the duly executed original signature thereto; and

10.8Borrower’s payment of a fully earned, non-refundable amendment fee in an amount equal to Fifty Thousand Dollars ($50,000), payable on the date of this Amendment.

[Signature page follows.]

 

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

 

 

		
	
BANK
	
BORROWER

	
 

SILICON VALLEY BANK

 

 

By:  _/s/ Christopher Leary________

Name: __ Christopher Leary ______

Title:  Director_________________
	
 

ASPEN AEROGELS, INC.

 

 

By:  /s/ John F. Fairbanks_________

Name: _ John F. Fairbanks _______

Title:   Chief Financial Officer ____

 

Schedule 1

 

ACKNOWELDGMENT OF AMENDMENT
AND REAFFIRMATION OF GUARANTY

 

 

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

 

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

 

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

 

Dated as of January 27, 2017.

 

	
GUARANTOR:
	
ASPEN AEROGELS RHODE ISLAND LLC

 

 

By: /s/ John F. Fairbanks ________

 

Name: _ John F. Fairbanks ______

 

Title: __ Chief Financial Officer _

 

EXHIBIT B

 

COMPLIANCE CERTIFICATE

 

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

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

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

	
 

	
Reporting Covenant
	
Required
	
Complies

	
 
	
 
	
 

	
Monthly financial statements with 
Compliance Certificate
	
Monthly within 30 days
	
Yes   No

	
Quarterly financial statements
	
Quarterly within 45 days
	
Yes   No

	
Annual financial statement (CPA Audited) + CC
	
FYE within 150 days
	
Yes   No

	
10‐Q, 10‐K and 8-K
	
Within 5 days after filing with SEC
	
Yes   No

	
A/R & A/P Agings, and Deferred Revenue reports
	
Monthly within 20 days
	
Yes   No

	
Borrowing Base Reports and Inventory reports
	
15th and last Business Day of each month (monthly within 20 days when a Streamline Period 

is in effect) and with each request for a Credit Extension;

 
	
Yes   No

	
Projections
	
FYE within 30 days
	
Yes   No

	
 

	
The following Intellectual Property was registered after the Effective Date (if no registrations, state “None”)____________________________________________________________________________

 

				
	
Financial Covenant
	
Required
	
Actual
	
Complies

	
 
	
 
	
 
	
 

	
Maintain as indicated:
	
 
	
 
	
 

	
Minimum EBITDA
	
*
	
$
	
Yes   No

	
Minimum Adjusted Quick Ratio
	
1.25:1.00
	
           :1.00
	
Yes   No

             *See Section 6.9(a)

 

			
	
Performance Pricing
	
Applies

	
 
	
 
	
 

	
Adjusted Quick Ratio at least 1.50:1.00
	
Prime + 0.75% (Eligible Accounts) or Prime + 1.25% (Eligible Foreign Accounts and Eligible Inventory); LIBOR + 3.75% (Eligible Accounts) or LIBOR +4.25% (Eligible Foreign Accounts  and Eligible Inventory)
	
Yes   No

	
Adjusted Quick Ratio less than 1.50:1.00
	
Prime + 1.25% (Eligible Accounts); Prime + 1.75% (Eligible Foreign Accounts and Eligible Inventory)
	
Yes   No

1

 

 

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

 

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

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

		
	
ASPEN AEROGELS, INC.

 

By: 
Name: 
Title: 

	
BANK USE ONLY

 

Received by: _____________________
authorized signer

Date: _________________________

Verified: ________________________
authorized signer

Date: _________________________

Compliance Status:Yes     No

 

2

 

Schedule 1 to Compliance Certificate

 

Financial Covenants of Borrower

 

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

I.EBITDA (Section 6.9(a))

 

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

 

		
	
Period
	
Minimum EBITDA (maximum loss)

	
Trailing three (3) month period ending December 31, 2016
	
($3,000,000)

	
Trailing six (6) month period ending March 31, 2017
	
($7,950,000)

	
Trailing nine (9) month period ending June 30, 2017
	
($9,400,000)

	
Trailing twelve (12) month period ending September 30, 2017
	
($8,800,000)

	
Trailing twelve (12) month period ending December 31, 2017
	
($4,250,000)

 

 

Actual:

			
	
A.

 
	
Net Income
	
$

	
B.

 
	
To the extent included in the determination of Net Income
	
 

	
 
	
1.The provision for income taxes

 
	
$

	
 
	
2.Depreciation expense

 
	
$

	
 
	
3.Amortization expense

 
	
$

	
 
	
4.Net Interest Expense

 
	
$

	
 
	
5.Non-cash stock compensation expense

 
	
$

	
 
	
6.The sum of lines 1 through 5

 
	
$

	
C.
	
EBITDA (line A plus line B.6)

 
	
 

Is line C equal to or greater than $___________?

 

  No, not in compliance  Yes, in compliance

3

 

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

 

	
Required:
	
Maintain at all times, to be certified to Bank monthly as of the last day of each month, an Adjusted Quick Ratio of at least 1.25 to 1.00.

 

Actual:

 

			
	
A.
	
Aggregate value of the unrestricted cash of Borrower maintained with Bank

 
	
$

	
B.
	
Aggregate value of accounts receivable of Borrower, net of allowances for bad debt

 
	
$

	
C.
	
Quick Assets (the sum of lines A and B)
	
$

 

	
D.
	
Aggregate value of Obligations to Bank
	
$

 

	
E.
	
Without duplication of line D, the aggregate value of liabilities of Borrower (including all Indebtedness) that matures within one (1) year, but excluding all Subordinated Debt

 
	
$

	
F.
	
Current Liabilities (the sum of lines D and E)
	
$

 

	
G.
	
Aggregate value of all amounts received or invoiced by Borrower in advance of performance under contracts and not yet recognized as revenue

 
	
$

	
H.
	
Line F minus line G
	
$

 

	
I.
	
Adjusted Quick Ratio (line C divided by line H)
	
:1.00

 

 

Is line I equal to or greater than 1.25 to 1.00?

 

  No, not in compliance  Yes, in compliance

 

4

 

EXHIBIT E

 

BORROWING BASE REPORT

 

[To be provided by Bank]

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