Exhibit
10.8


 


EXECUTION
COPY


 


MANAGEMENT AGREEMENT


               
This Management Agreement (this “Agreement”)
is entered into as of the 30th day of June, 2006, by and between
Hawkeye Renewables, LLC, a Delaware limited liability company (the “Company”), and THL Managers VI, LLC, a
Delaware limited liability company (the “Sponsor”).


WHEREAS, certain affiliates of the Sponsor (the
“Investors”) have acquired
membership interests of the Company’s parent, Hawkeye Intermediate, LLC (the “Investment”) pursuant to that certain
Membership Interest Purchase Agreement dated as of May 11, 2006, by and among
the Company, the Investors, Hawkeye Holdings, L.L.C. and the persons listed on
the signatures pages thereto (as amended to date, the “Purchase Agreement”);


WHEREAS, in connection with the Investment and
related transactions, the Sponsor provided advice and analysis including advice
with respect to debt facilities and arrangements, and related arrangements and
other matters (collectively, “Advisory
Services”);


WHEREAS, the Company will require the Sponsor’s
management advisory services in connection with its business operations and
execution of its strategic plan; and


WHEREAS, the Sponsor is willing to provide such
services to the Company.


NOW, THEREFORE, in consideration of the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:


1.            
Services.  The Sponsor hereby agrees that if, during the term of
this Agreement (the “Term”), the
Company reasonably and specifically requests that the Sponsor provide the
services set forth below and, in the case of the services described in
subsections (a) and (b), the Sponsor agrees to provide such services, the
Sponsor or one of its affiliates will provide the following services to the
Company and its subsidiaries:


 


(a)          
advice in connection with the negotiation and consummation of agreements,
contracts, documents and instruments related to the Company’s finances or
relationships with banks or other financial institutions;


(b)          
advice with respect to the development and implementation of strategies for
improving the operating, marketing and financial performance of the Company,
and other senior management matters related to the business, administration and
policies of the Company; and


(c)          
review and comment on the descriptive memorandums of potential acquisition
opportunities for the Company.


The Sponsor shall have no obligation to the Company as
to the method or timing of services rendered hereunder (provided that services
shall be rendered in a reasonably timely manner), and the Company shall not
have any right to dictate or direct the details of the performance of services
by the Sponsor rendered hereunder.

















The parties hereto expressly acknowledge that the
services to be performed hereunder by the Sponsor shall not include investment
banking or other financial advisory services rendered by Sponsor or its
affiliates to the Company in connection with any specific acquisition,
divestiture, refinancing or recapitalization by the Company or any of its
subsidiaries for which the Sponsor may be entitled to receive additional
compensation by mutual agreement of the Company or its subsidiary and the
Sponsor.  This Agreement shall in no way prohibit the Sponsor or any of
its affiliates or any of their respective partners (both general and limited),
members (both managing and otherwise), officers, directors, employees, agents
or representatives from engaging in other activities, whether or not
competitive with any business of the Company of any of its affiliates.


2.            
Payment of Fees.  In exchange for the Advisory Services and the Sponsor’s
agreement to provide the services described in clauses (a), (b) or (c) of
Section 1, the Company hereby agrees to pay to the Sponsor (or its
designee(s)) the following fees:


                               
(a)           a transaction
fee in connection with the transactions contemplated in the Purchase Agreement
payable at the Closing (as defined in the Purchase Agreement) of $20,000,000;
and


                               
(b)           an annual
management fee (the “Fee”) equal
to the greater of (i) $2,000,000 or (ii) 1.0% of Adjusted EBITDA, payable
semi-annually in advance (with respect to subsection (ii), based on the prior
year’s Adjusted EBITDA) beginning at the Closing and thereafter on January 2nd
and July 2nd of each year, provided, however, that if either of such
dates falls on a Saturday, Sunday, or a federal holiday, then such payment
shall be on the first business day thereafter.  With respect to subsection
(ii), such Fee payable shall be adjusted promptly following the determination
of Adjusted EBITDA for such fiscal year or on termination of this
Agreement.  For purposes of this Agreement, the term “Adjusted EBITDA” shall have the same
meaning set forth in the Company’s principal credit agreement then in effect
before deducting (A) the Fee payable pursuant to this Section 2(b) and all
other fees payable under any other management agreements between affiliates of
interest holders of the Company and the Company and (B) any expenses relating
to options or other equity compensation recognized under Statement of Financial
Accounting Standards 123.


               
Each payment made pursuant to this Section 2 shall be paid by wire transfer of
immediately available funds to the accounts specified on Exhibit A
attached hereto, or to such other account(s) as the Sponsor may specify in
writing to the Company.  The first installment of the Fee shall be payable
at the Closing and shall be prorated to reflect the portion of the current
fiscal year which elapses from the Closing to July 2, 2006.  All references
to “per annum” or “annual” herein refer to the fiscal year of the Company.


3.            
Term.  This Agreement shall be effective as of the date hereof and
shall continue in full force and effect until the earlier of (i) seven (7)
years from the date hereof, or (ii) the consummation of a public offering of
equity securities of the Company (or a successor corporation to the Company)
(the “IPO”); provided, however,
that if an IPO has not occurred within 24 months from the date hereof, then
upon termination of this Agreement upon such IPO, the Company shall pay to the
Sponsor a lump-sum termination fee equal to the net present value of the Fee
for a seven (7) year period (based upon the Fee for the immediately preceding
year) calculated using a discount rate equal to the ten-year treasury rate on
the date of such termination, provided, however, that such payment shall not
exceed $10,000,000.  Upon any termination of this Agreement, each of (a)
the 


 


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obligations
of the Company under Section 4 below, (b) any and all owed and unpaid
obligations of the Company under Section 2 above, and (c) the provisions of
Section 8, shall survive any termination of this Agreement to the maximum
extent permitted under applicable law.


4.            
Expenses; Indemnification.


(a)          
Expenses.  In addition to the fees set forth in Section 2
hereof, the Company agrees to pay on demand all reasonable costs and expenses
incurred by the Sponsor and its affiliates or any of them in connection with
this Agreement and in connection with performing services hereunder including
but not limited to air travel charged at charter equivalent rates, reasonable
legal, consulting, out-of-pocket and other expenses, including reasonable legal
fees and expenses of outside counsel to Sponsor, and any other consultants or
advisors retained by the Sponsor or its counsel arising in connection
therewith, and the performance of services hereunder (including, without
limitation, reasonable fees and expenses of independent professionals,
research, transportation and per diem costs).


 


(b)          
Indemnity and Liability. The Company will indemnify and hold
harmless each of the Sponsor, its affiliates and their respective partners
(both general and limited), members (both managing and otherwise), officers,
directors, employees, agents and representatives (each such Person being an “Indemnified Party”) from and against any
and all losses, claims, damages and liabilities, whether joint or several, expenses
of any nature (including reasonable attorneys’ fees and disbursements),
judgments, fines, settlements and other amounts arising from any and all
claims, demands, actions, suits or proceedings, whether civil, criminal,
administrative, arbitral or investigative, in which an Indemnified Party was
involved or may be involved, or threatened to be involved, as a party or
otherwise (the “Liabilities”),
related to, arising out of or in connection with the advisory and consulting
services contemplated by this Agreement or the engagement of the Sponsors
pursuant to, and the performance by the Sponsors of the services contemplated
by, this Agreement, and any other action taken by an Indemnified Party on
behalf of the Company, whether or not pending or threatened, and any other
action taken by an Indemnified Party on behalf of the Company, whether or not
resulting in any liability and whether or not such action, claim, suit,
investigation or proceeding is initiated or brought by the Company.  The
Company will reimburse any Indemnified Party for all reasonable costs and
expenses (including reasonable attorneys’ fees and expenses) as they are
incurred in connection with investigating, preparing, pursuing, defending or
assisting in the defense of any action, claim, suit, investigation or
proceeding for which the Indemnified Party would be entitled to indemnification
under the terms of the previous sentence, or any action or proceeding arising
therefrom, whether or not such Indemnified Party is a party thereto, provided
that, subject to the following sentence, the Company shall be entitled to
assume the defense thereof at its own expense, with counsel satisfactory to
such Indemnified Party in its reasonable judgment.  Any Indemnified Party
may, at its own expense, retain separate counsel to participate in such
defense, and in any action, claim, suit, investigation or proceeding in which
both the Company and/or one or more of its subsidiaries, on the one hand, and
an Indemnified Party, on the other hand, is, or is reasonably likely to become,
a party, such Indemnified Party shall have the right to employ one separate
counsel at the expense of the Company and to control its own defense of such
action, claim, suit, investigation or proceeding if, in the reasonable opinion
of counsel to such Indemnified Party, a conflict or potential conflict exists
between the Company, on the one hand, and such Indemnified Party, on the other
hand, that would make such separate representation advisable.  The Company
agrees that it will not, without the prior written consent of the applicable 


 


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Indemnified
Party, settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, suit, investigation, action or proceeding relating
to the matters contemplated hereby (if any Indemnified Party is a party thereto
or has been threatened to be made a party thereto) unless such settlement,
compromise or consent includes an unconditional release of the applicable
Indemnified Party and each other Indemnified Party from all liability arising
or that may arise out of such claim, suit, investigation, action or
proceeding.  Provided the Company is not in breach of its indemnification
obligations hereunder, no Indemnified Party shall settle or compromise any
claim subject to indemnification hereunder without the consent of the
Company.  The Company will not be liable under the foregoing
indemnification provision with respect to any Indemnified Party, to the extent
that any loss, claim, damage, liability, cost or expense is determined by a
court, in a final judgment from which no further appeal may be taken, to have
resulted primarily from the gross negligence or willful misconduct by an
Indemnified Party.  If an Indemnified Party is reimbursed hereunder for
any expenses, such reimbursement of expenses shall be refunded to the extent it
is finally judicially determined that the Liabilities in question resulted
primarily from the gross negligence or willful misconduct of such Indemnified Party. 
As used herein, the term “Person”
shall be construed in the broadest sense and means and includes a natural
person, a partnership, a corporation, an association, a joint stock company, a
limited liability company, a trust, a joint venture, an unincorporated
organization and any other entity and any federal, state, municipal, foreign or
other government, governmental department, commission, board, bureau, agency or
instrumentality, or any private or public court or tribunal.


The Company agrees that if any indemnification sought
by any Indemnified Party pursuant to this Section 4 is unavailable for any
reason or is insufficient to hold the Indemnified Party harmless against any
Liabilities referred to herein, then the Company shall contribute to the Liabilities
for which such indemnification is held unavailable or insufficient in such
proportion as is appropriate to reflect the relative benefits received (or
anticipated to be received) by the Company, on the one hand, and the
Indemnified Party, on the other hand, in connection with the transactions that
gave rise to such Liabilities or, if such allocation is not permitted by
applicable law, not only such relative benefits but also the relative faults of
the Company, on the one hand, and the Indemnified Party, on the other hand, as
well as any other equitable considerations, subject to the limitation that in
any event the aggregate contribution by the Indemnified Parties to all
Liabilities with respect to which contribution is available hereunder shall not
exceed the fees actually received by the Sponsor in connection with the
transaction which gave rise to such Liabilities (excluding any amounts paid as
reimbursement of expenses).


For the avoidance of doubt, any director designated by
the Sponsor or any of its affiliates and serving on the Company’s board of
directors shall not be entitled to seek indemnification under this Agreement in
their capacity as a director of the Company, such directors instead will be
entitled to indemnification provided under applicable law, pursuant to the
Company’s organizational documents, and any other contractual arrangements
applicable to such director.


5.            
Assignment.  Except as provided below, no party hereto shall have
the right to assign this Agreement.  The Sponsor acknowledges that its
services under this Agreement are unique.  Accordingly, any purported
assignment by the Sponsor (other than as specifically permitted below) shall be
void.  Notwithstanding the foregoing, the Sponsor may assign all or part
of its rights and obligations hereunder to any affiliate of the Sponsor that
provides services similar to those called for by this Agreement.


 


4

















6.            
Amendments and Waivers.  No amendment or waiver of any term,
provision or condition of this Agreement shall be effective, unless in writing
and executed by the Sponsor and the Company.  No waiver on any one
occasion shall extend to or effect or be construed as a waiver of any right or
remedy on any future occasion.  No course of dealing of any Person nor any
delay or omission in exercising any right or remedy shall constitute an
amendment of this Agreement or a waiver of any right or remedy of any party
hereto.


7.            
Opportunities.


(a)         
Freedom to Pursue Opportunities.  In recognition that the Sponsor
(to include, for purposes of this Section 7, affiliates, associated investment
funds or portfolio companies) currently has, and will in the future have or
will consider acquiring, investments in numerous companies with respect to
which the Sponsor may serve as an advisor, a director or in some other
capacity, and in recognition that the Sponsor have myriad duties to various
investors and partners, and in anticipation that the Company, on the one hand
and the Sponsor on the other hand, may engage in the same or similar activities
or lines of business and have an interest in
the same areas of corporate opportunities, and in recognition of the benefits
to be derived by the Company hereunder and in recognition of the difficulties
which may confront any advisor who desires and endeavors fully to satisfy such
advisor’s duties in any particular situation, the provisions of this Section
7(a) are set forth to regulate, define and guide the conduct of certain affairs
of the Company as they may involve the Sponsor.  Except as the Sponsor may
otherwise agree in writing after the date hereof:


(i)        
The Sponsor shall have the right (A) to directly or indirectly engage in any
business (including, without limitation, any business activities or lines of
business that are the same as or similar to those pursued by, or competitive with, the Company and its subsidiaries), (B)
to directly or indirectly do business with any client or customer of the
Company and its subsidiaries, (C) to take any other action that the Sponsor
believes in good faith is necessary to or appropriate to fulfill its
obligations as described in the first sentence of this Section 7(a), and (D)
not to present potential transactions, matters or business opportunities to the
Company or any of its subsidiaries, and to pursue, directly or indirectly, any
such opportunity for itself, and to direct any such opportunity to another
person.


(ii)       
The Sponsor shall have no duty (contractual or otherwise) to communicate or
present any corporate opportunities to the Company or any of its subsidiaries
or to refrain from any actions specified in Section 7(a)(i), and the Company,
on its own behalf and on behalf of its subsidiaries, hereby renounce and waive
any right to require the Sponsor to act in a manner inconsistent with the
provisions of this Section 7(a).


(iii)      
The Sponsor shall not be liable to the Company or any of its subsidiaries for
breach of any duty (contractual or otherwise) by reason of any activities or
omissions of the types referred to in this Section 7(a) or of any such person’s
participation therein.


(b)          
Limitation of Liability.  In no event will the Sponsor be liable to
the Company or any of its subsidiaries for any indirect, special, incidental or
consequential damages, including, 


 


5

















without
limitation, lost profits or savings, whether or not such damages are
foreseeable, or for any third-party claims (whether based in contract, tort or
otherwise), relating to the services to be provided by the Sponsor hereunder.


8.            
Miscellaneous.


(a)          
Choice of Law.  This Agreement shall be governed by and
construed in accordance with the domestic substantive laws of the State of New
York without giving effect to any choice or conflict of law provision or rule
that would cause the application of the domestic substantive laws of any other
jurisdiction.


(b)          
Consent to Jurisdiction.  Each of the parties agrees that all
actions, suits or proceedings arising out of or based upon this Agreement or
the subject matter hereof shall be brought and maintained exclusively in the
federal and state courts of the State of New York.  Each of the parties
hereto by execution hereof (i) hereby irrevocably submits to the jurisdiction
of the federal and state courts in the State of New York for the purpose of any
action, suit or proceeding arising out of or based upon this Agreement or the
subject matter hereof and (ii) hereby waives to the extent not prohibited by
applicable law, and agrees not to assert, by way of motion, as a defense or
otherwise, in any such action, suit or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that it is
immune from extraterritorial injunctive relief or other injunctive relief, that
its property is exempt or immune from attachment or execution, that any such
action, suit or proceeding may not be brought or maintained in one of the
above-named courts, that any such action, suit or proceeding brought or
maintained in one of the above-named courts should be dismissed on grounds of forum
non  conveniens, should be transferred to any court other than one
of the above-named courts, should be stayed by virtue of the pendency of any
other action, suit or proceeding in any court other than one of the above-named
courts, or that this Agreement or the subject matter hereof may not be enforced
in or by any of the above-named courts.  Each of the parties hereto hereby
consents to service of process in any such suit, action or proceeding in any
manner permitted by the laws of the State of New York, agrees that service of
process by registered or certified mail, return receipt requested, at the
address specified in or pursuant to Section 11 is reasonably calculated to give
actual notice and waives and agrees not to assert by way of motion, as a
defense or otherwise, in any such action, suit or proceeding any claim that
service of process made in accordance with Section 11 does not constitute good
and sufficient service of process.  The provisions of this Section 8(b)
shall not restrict the ability of any party to enforce in any court any
judgment obtained in a federal or state court of the State of New York.


(c)          
Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY WAIVES, AND COVENANTS
THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT, OR OTHERWISE), ANY
RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND,
CAUSE OF ACTION, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR THE SUBJECT HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER IN CONTRACT OR TORT OR OTHERWISE.  Each of the parties
hereto acknowledges that it has been informed by each other party that the
provisions of this Section 8(c) constitute a material inducement upon which
such party is relying and will rely in entering into this Agreement and the
transactions contemplated hereby.  Any of the parties hereto may file an
original 


 


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counterpart
or a copy of this Agreement with any court as written evidence of the consent
of each of the parties hereto to the waiver of its right to trial by jury.


               
9.             Independent
Contractor.  The parties agree and understand that the Sponsor is and
shall act as an independent contractor of the Company in the performance of its
duties hereunder.  The Sponsor is not, and in the performance of its
duties hereunder will not hold itself out as, an employee, agent or partner of
the Company.


               
10.           Merger/Entire
Agreement.  This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
communication or agreement with respect thereto.


               
11.           Notice. 
All notices, demands, and communications of any kind which any party may
require or desire to serve upon any other party under this Agreement shall be
in writing and shall be served upon such other party and such other party’s
copied persons as specified below by facsimile or by personal delivery to the
address set forth for it below or to such other address as such party shall
have specified by notice to each other party or by mailing a copy thereof by
certified or registered mail, or by Federal Express or any other reputable
overnight courier service, postage prepaid, with return receipt requested, addressed
to such party and copied persons at such addresses.  In the case of
service by facsimile or personal delivery, it shall be deemed complete on the
first business day after the date of actual delivery to such address.  In
case of service by mail or by overnight courier, it shall be deemed complete,
whether or not received, on the third day after the date of mailing as shown by
the registered or certified mail receipt or courier service receipt. 
Notwithstanding the foregoing, notice to any party or copied Person of change
of address shall be deemed complete only upon actual receipt by an officer or
agent of such party or copied person.


If to the Company:


Hawkeye Renewables, LLC


21050 140th Street


Iowa Falls, IA  50126


Attention:  Chief Executive Officer


Facsimile:  (641) 648-8925


 


If to the Sponsor:


THL
Managers VI, LLC


c/o
Thomas H. Lee Partners, L.P.


100
Federal Street


Boston,
MA 02110


Attention:
Scott Sperling


               
   Thomas Hagerty


               
   Soren Oberg


Facsimile: 
(617) 227-3514


 


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with a copy to:


Weil, Gotshal &
Manges LLP


100 Federal Street


Boston, Massachusetts
02110


Attention: James Westra


               
   Marilyn French


Facsimile:  (617)
772-8333


 


 


12.          
Severability.  If in any judicial or arbitral proceedings a court
or arbitrator shall refuse to enforce any provision of this Agreement, then
such unenforceable provision shall be deemed eliminated from this Agreement for
the purpose of such proceedings to the extent necessary to permit the remaining
provisions to be enforced.  To the full extent, however, that the
provisions of any applicable law may be waived, they are hereby waived to the
end that this Agreement be deemed to be a valid and binding agreement enforceable
in accordance with its terms, and in the event that any provision hereof shall
be found to be invalid or unenforceable, such provision shall be construed by
limiting it so as to be valid and enforceable to the maximum extent consistent
with and possible under applicable law.


13.          
Counterparts.  This Agreement may be executed in any number of
counterparts and by each of the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
together shall constitute one and the same agreement.


14.          
Headings.  All descriptive headings in this Agreement are inserted
for convenience only and shall be disregarded in construing or applying any
provision of this Agreement.


15.          
Prevailing Party.  If any legal action or other proceedings is
brought for a breach of this Agreement or any of the warranties herein, the
prevailing party shall be entitled to recover its reasonable attorneys’ fees
and other costs incurred in bringing such action or proceeding, in addition to
any other relief to which such party may be entitled.


* * * * *


 


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IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf as an instrument under seal as of the
date first above written by its officer or representative thereunto duly
authorized.


 


 


	
   

  	
  HAWKEYE
  RENEWABLES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J.D. Schlieman

  
	
   

  	
   

  	
  Name: J.D. Schlieman

  
	
   

  	
   

  	
  Title: President

  



 


	
   

  	
  THL
  MANAGERS VI, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Thomas H. Lee Partners,
  L.P., its Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  THL Equity Advisors VI,
  L.P., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott Sperling

  
	
   

  	
   

  	
  Name: Scott Sperling

  
	
   

  	
   

  	
  Title: Managing
  Director

  



 


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Exhibit A


Wire Instructions


THL Managers VI, LLC


ABA#

Account#

Account name: THL Managers VI, LLC


 


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