ENVIVA MANAGEMENT COMPANY, LLC
EXHIBIT 10.4
Execution Version
ENVIVA MANAGEMENT COMPANY, LLC
July 1, 2020
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attn: General Counsel
Facsimile No.: (000) 000-0000
email: xxxxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx
Re: Waiver of Payment Amount
Ladies and Gentlemen:
Reference is made to the Management Services Agreement dated April 9, 2015 (the “Agreement”) by and among Enviva Partners, LP, a Delaware limited partnership, Enviva Partners GP, LLC, a Delaware limited liability company, Enviva, LP, a Delaware limited partnership, Enviva GP, LLC, a Delaware limited liability company, Enviva Pellets Ahoskie, LLC, a Delaware limited liability company, Enviva Pellets Amory, LLC, a Delaware limited liability company, Enviva Pellets Northampton, LLC, a Delaware limited liability company, Enviva Pellets Cottondale, LLC, a Delaware limited liability company, Enviva Port of Chesapeake, LLC, a Delaware limited liability company, Enviva Energy Services, LLC, a Delaware limited liability company, Enviva Pellets Xxxxxxx, LLC, a Delaware limited liability company, Enviva Pellets Southampton, LLC, a Delaware limited liability company, Enviva Port of Panama City, LLC, a Delaware limited liability company, Enviva Port of Wilmington, LLC, a Delaware limited liability company, and Enviva Management Company, LLC, a Delaware limited liability company (collectively, the “Parties”). Capitalized terms used and not defined herein shall have the meaning assigned thereto in the Agreement.
The Parties agree to waive the obligation of Enviva Partners GP, LLC to pay, or cause to be paid, a portion of the Payment Amount in the amount of $9,000,000.00 payable with respect to the calendar quarter beginning July 1, 2020.
The Parties agree to waive the obligation of Enviva Partners GP, LLC to pay, or cause to be paid, a portion of the Payment Amount in the amount of $9,000,000.00 payable with respect to the calendar quarter beginning October 1, 2020.
The Parties agree to waive the obligation of Enviva Partners GP, LLC to pay, or cause to be paid, a portion of the Payment Amount in the amount of $8,000,000.00 payable with respect to the calendar quarter beginning January 1, 2021.
US 7108557
The Parties agree to waive the obligation of Enviva Partners GP, LLC to pay, or cause to be paid, a portion of the Payment Amount in the amount of $5,000,000.00 payable with respect to the calendar quarter beginning April 1, 2021.
The Parties agree to waive the obligation of Enviva Partners GP, LLC to pay, or cause to be paid, a portion of the Payment Amount in the amount of $3,000,000.00 payable with respect to the calendar quarter beginning July 1, 2021.
The Parties agree to waive the obligation of Enviva Partners GP, LLC to pay, or cause to be paid, a portion of the Payment Amount in the amount of $3,000,000.00 payable with respect to the calendar quarter beginning October 1, 2021.
The Parties agree, with respect to each calendar month beginning with (and including) the calendar month beginning January 1, 2022 through (but excluding) the first calendar month in 2022 in which the Greenwood Plant produces at least 50,000 MT of wood pellets (the “Support Period”), to waive the obligation of Enviva Partners GP, LLC to pay, or cause to be paid, a portion of the Payment Amount in an amount equal to the Support Payment for each calendar month during the Support Period in which the Support Threshold is not met. The waiver of obligations under this paragraph shall terminate and be of no further force or effect following the earlier of (i) the first calendar month in 2021 or 2022 in which the Greenwood Plant produces at least 50,000 MT of wood pellets and (ii) December 31, 2022. Enviva Management Company, LLC will include in the invoices provided to Enviva Partners GP, LLC in accordance with Section 4.02 of the Agreement, the Production Shortfall, if any, and corresponding Support Payment, if any, for the calendar month(s) to which such invoice relates.
The following terms used in this letter agreement have the following meanings:
(i)“Actual Production” means, with respect to a calendar month, the amount (in MT) of wood pellets produced by the Greenwood Plant during such calendar month.
(ii)“Greenwood Plant” means the wood pellet production plant in Greenwood, South Carolina.
(iii)“MT” means metric tons.
(iv)“Production Shortfall” means the lesser of (a) the Support Threshold minus Actual Production or (b) the Shortfall Cap; provided, however, that the Production Shortfall cannot be less than zero.
(v)“Production Shortfall Percentage” means the Production Shortfall divided by the Shortfall Cap.
(vi)“Shortfall Cap” means 11,667 MT.
(vii)“Sponsor Support Monthly Basis” means $1,500,000.
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(viii)“Support Payment” means the Production Shortfall Percentage multiplied by the Sponsor Support Monthly Basis.
(ix)“Support Threshold” means the lesser of (a) the forecasted production MT set forth on Exhibit A or (b) 50,000 MT.
For the avoidance of doubt, the waiver of Enviva Partners GP, LLC’s obligation to pay the applicable portion of the Payment Amount is not a deferral of such payment obligation and such amounts will never become due and payable.
[The remainder of this page has been left blank intentionally. The signature page follows.]
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This letter agreement shall be effective as of the date first written above.
Sincerely yours,
ENVIVA MANAGEMENT COMPANY, LLC
By: /s/ XXXXXXX X. XXXXXXX, XX.
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Executive Vice President, Corporate
Development and General Counsel
Acknowledged and agreed:
By: Enviva Partners GP, LLC, as its sole general partner
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
ENVIVA PARTNERS GP, LLC
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
Signature Page to Letter Agreement
ENVIVA, LP
By: Enviva GP, LLC, as its sole general partner
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
ENVIVA GP, LLC
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
ENVIVA PELLETS AHOSKIE, LLC
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
ENVIVA PELLETS AMORY, LLC
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
ENVIVA PELLETS NORTHAMPTON, LLC
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
Signature Page to Letter Agreement
ENVIVA PELLETS COTTONDALE, LLC
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
ENVIVA PORT OF CHESAPEAKE, LLC
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
ENVIVA ENERGY SERVICES, LLC
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
ENVIVA PELLETS XXXXXXX, LLC
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
ENVIVA PELLETS SOUTHAMPTON, LLC
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
Signature Page to Letter Agreement
ENVIVA PORT OF PANAMA CITY, LLC
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
ENVIVA PORT OF WILMINGTON, LLC
By: /s/ SHAI EVEN
Name: Shai Even
Title: Executive Vice President and Chief
Financial Officer
Signature Page to Letter Agreement
Exhibit A
Forecasted Production
[Certain information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.]
