Item 1.01 Entry into a Material Definitive Agreement.
General Motors Loan Agreement
On November 28, 2022, Aspen Aerogels Georgia, LLC, a Georgia limited liability
company (the "Borrower"), a wholly-owned subsidiary of Aspen Aerogels, Inc., a
Delaware corporation (the "Company"), entered into a Loan Agreement (the "Loan
Agreement"), by and between (i) the Borrower, (ii) the Company and (iii) Aspen
Aerogels Rhode Island, LLC, a Rhode Island limited liability company ("Aspen RI"
and, together with the Borrower and the Company, each, a "Loan Party" and
collectively, the "Loan Parties"), as guarantors, and (iv) General Motors
Holdings LLC ("GM"), as lender. The Borrower is required to use the proceeds of
the Loan (as defined below) in connection with the construction and operation of
an aerogel manufacturing facility in Bulloch County, Georgia (the "Plant"), in
the manner prescribed in a pre-determined budget (subject to a permitted
variance) to fund the construction of and equipment for the first phase of the
Plant (the "Budget"). The Loan Agreement provides for a multi-draw senior
secured term loan in an aggregate principal amount of up to $100.0 million (the
"Loan"), available to the Borrower to draw on a delayed draw basis after
January 1, 2023 to September 30, 2023, subject to certain conditions precedent
to funding. The interest rate on the Loan is equal to the term Secured Overnight
Financing Rate published by CME Group Benchmark Administration Limited for a
six-month interest period ("Term SOFR") plus 8.0% per year, subject to a term
SOFR floor of 1.0% (the "Floor"), with a maturity date of the earlier of
(i) March 31, 2025 and (ii) 90 days prior to the maturity date of any other debt
facility to which the Loan Parties may be a party (other than any revolving loan
agreement) (the "Maturity Date"). At the Borrower's election and prior to the
issuance of a certificate of occupancy for the Plant, interest may be
paid-in-kind ("PIK") at a rate equal to Term SOFR (subject to the Floor) plus
9.0% per year.
The Loan Agreement includes representations and warranties, affirmative
covenants (including reporting obligations and an affirmative covenant requiring
that proceeds of the Loan are used solely in accordance with the Budget), and
negative covenants that are customary in credit agreements and construction
financing documents and, in each case, subject to certain permitted exceptions
and baskets. There are no financial covenants. The Loan is prepayable at any
time without premium or penalty and must be paid in full on the Maturity Date.
Mandatory prepayment of the Loan is required upon the occurrence of certain
events as specified in the Loan Agreement, including the receipt of proceeds
(i) upon certain dispositions of assets and (ii) upon incurrence of certain
indebtedness and in connection with specified equity offerings (other than
proceeds used exclusively for the Plant) in excess of $300.0 million. The Loan
is guaranteed by the Company and Aspen RI, and is secured by a first-priority
lien in favor of GM on substantially all assets of the Loan Parties, including
the Rhode Island real estate and the Georgia leasehold interest, with the
exception of the Company's intellectual property assets and certain pumps
pledged to secure an EDGE grant from the Georgia Department of Community
Affairs. The existing convertible notes issued to Wood River Capital, LLC (the
"Purchaser"), an entity associated with Koch Strategic Platforms, LLC
(collectively, including their affiliates "KSP") on February 18, 2022 are
subordinated to the Loan pursuant to a customary subordination agreement.
The first $33.0 million of the Loan will be available upon meeting various
conditions, including, among other conditions, the receipt of an equity
investment of not less than $100.0 million in gross proceeds by KSP, which shall
be contributed to the Borrower and disbursed in full in accordance with the
Budget prior to any advance under the Loan Agreement. The remainder of the Loan
will be available upon meeting various conditions (including, among other
conditions, the concurrent contribution to the Borrower and disbursement of
proceeds received from any equity or debt financings that is permitted under the
Loan Agreement in an amount equal to three times the amount of such borrowing)
and meeting certain milestones (with a cap of (i) $50.0 million in the aggregate
of the Loan that may be funded prior to achieving the first site work and
foundations milestone and (ii) $80.0 million in the aggregate of the Loan that
may be funded prior to achieving the second key framing and structural steel
milestone).
The Loan Agreement also contains events of default that are customary in credit
agreements and construction financing documents, pursuant to which GM would be
permitted, under certain circumstances, to accelerate the Loan and terminate any
unused commitments thereunder and to exercise other remedies, subject in certain
circumstances to specified grace periods, thresholds, and exceptions. These
events of default include, among others, payment defaults, cross-defaults to
certain material indebtedness, material contracts and project documents related
to the Plant, covenant defaults, material inaccuracy of representations and
warranties, bankruptcy events, governmental attachment or levy
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of assets, material judgments, invalidity of Loan Documents and material defects
with respect to guarantees and collateral, change of control, certain criminal
or civil proceedings, certain defaults under performance bonds issued with
respect to the Plant, lapse of certain permits required for the Plant, cessation
of construction and failure to achieve certain milestones.
The foregoing description of the Loan Agreement does not purport to be complete
and is qualified in its entirety by reference to the full text of the Loan
Agreement, which is filed as Exhibit 10.1 attached hereto.
Amendment to Note Purchase Agreement
On November 28, 2022, the Company entered into an Amendment to Note Purchase
Agreement (the "Amendment") with Wood River Capital, LLC to modify the Note
Purchase Agreement (the "Note Purchase Agreement"), dated as of February 15,
2022, by and among the Company and the Purchaser. The Amendment revises the Note
Purchase Agreement to remove certain transfer restrictions on Convertible Senior
PIK Toggle Notes dated February 18, 2022, due 2027 (the "Convertible Note") and
the shares underlying the Convertible Note.
The foregoing description of the Amendment does not purport to be complete and
is qualified in its entirety by reference to the full text of the Amendment,
which is filed as Exhibit 10.2 attached hereto.
Amendment to the Convertible Note
On November 28, 2022, the Company entered into an amendment to the Convertible
Note (the "Convertible Note Amendment") with Wood River Capital, LLC to reduce
the initial Conversion Price (as defined in the Convertible Note) by $5.00 per
share from $34.936625 per share to $29.936625 per share, by increasing the
initial Conversion Rate (as defined in the Convertible Note) from 28.623257
shares per $1,000 of Capitalized Principal Amount (as defined in the Convertible
Note) to 33.400100 shares per $1,000 of Capitalized Principal Amount under the
. . .
Item 1.02 Termination of a Material Definitive Agreement.
On November 28, 2022, the Company and Silicon Valley Bank ("SVB") terminated the
Second Amended and Restated Loan and Security Agreement, dated as of March 12,
2021 and amended on September 29, 2021, December 27, 2021, March 31, 2022,
April 28, 2022, June 23, 2022, August 26, 2022 and October 14, 2022 (as amended,
the "SVB Loan Agreement"), by and between the Company, as borrower, and SVB, as
lender, pursuant to a pay-off letter (the "Termination Letter"), in accordance
with the terms of the SVB Loan Agreement. Pursuant to the Termination Letter and
the SVB Loan Agreement, the Company continues to be bound by certain terms under
the SVB Loan Agreement that customarily survive the termination of similar
agreements, including, without limitation, certain indemnification obligations.
The SVB Loan Agreement provided for an asset-based revolving credit facility in
an amount of up to $20.0 million. As disclosed in the Company's Quarterly Report
on Form 10-Q for the quarter ended September 30, 2022 and filed with the U.S.
Securities and Exchange Commission on November 7, 2022, the Company had no
amounts drawn under the SVB Loan Agreement as of September 30, 2022. As of the
date of the Termination Letter, the Company had no amounts due or owed to SVB
under the SVB Loan Agreement for any principal, interest, or other amounts,
other than approximately $1.2 million in letters of credit that were issued
under the SVB Loan Agreement and will be cash collateralized in connection with
the termination of the SVB Loan Agreement. As the Company is required to pay
unused line fees with respect to the SVB Loan Agreement, but does not plan to
request any further advancements under the SVB Loan Agreement, the Company and
SVB have decided to terminate the SVB Loan Agreement. The Company is permitted
pursuant to the terms of the Loan Agreement with GM to replace the SVB Loan
Agreement with a future working capital line of up to $50.0 million, subject to
entry into an intercreditor agreement on the terms set forth in the Loan
Agreement with GM.
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of the Registrant.
The information related to the Loan Agreement and the Amendment to the
Convertible Note contained in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1 Loan Agreement, dated November 28, 2022, by and between the Company,
Aspen Aerogels Georgia, LLC, Aspen Aerogels Rhode Island, LLC and
General Motors Holdings LLC.
10.2 Amendment to Note Purchase Agreement, dated November 28, 2022, by
and between the Company and Wood River Capital, LLC.
10.3 Amendment to Convertible Senior PIK Toggle Notes due 2027, dated
November 28, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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