Exhibit 10.3








Exhibit 10.3




VARIABLE RATE NOTE




	 	 	 	 	 
	Note Date: April 8, 2009
	 	 	 	 
	Maturity Date: April 8, 2014

	 	$	31,500,000.00	 






FOR VALUE RECEIVED, CARDINAL ETHANOL, LLC, an Indiana limited liability company (“BORROWER”),
promises to pay to the order of FIRST NATIONAL BANK OF OMAHA (“BANK”), at its principal office or
such other address as BANK or holder may designate from time to time the principal sum of
Thirty-One Million Five Hundred Thousand and 00/100 Dollars ($31,500,000.00), or the amount shown
on BANK’s records to be outstanding, plus interest (calculated on the basis of actual days elapsed
in a 360-day year) accruing each day on the unpaid principal balance at the annual interest rates
defined below. Absent manifest error,
BANK’s records shall be conclusive evidence of the principal and accrued interest owing hereunder.



This VARIABLE RATE NOTE is executed pursuant to a Construction Loan Agreement between BORROWER and
BANK dated as of December 19th, 2006, (the Construction Loan Agreement, together with
all amendments, modifications and supplements thereto and all restatements and replacements thereof
is called the “AGREEMENT”). All capitalized terms not otherwise defined in this note shall have the
meanings provided in the AGREEMENT.



INTEREST ACCRUAL. Interest on the principal amount outstanding shall accrue until maturity based on
greater of (i) the three month LIBOR RATE plus 300 basis points or (ii) five percent (5%) as
provided for in the AGREEMENT, and at a rate equal to the three month LIBOR RATE plus 900 basis
points from time to time after maturity, whether by acceleration or otherwise. Interest shall be
calculated on the basis of a 360-day year, counting the actual number of days elapsed.



INCENTIVE PRICING. The interest rate applicable to this VARIABLE RATE NOTE is subject to reduction
after a date six months subsequent to the COMPLETION DATE, as provided for in Section 2.15 of the
AGREEMENT.



REPAYMENT TERMS. Interest and principal shall be due and payable at the times, in the amounts and
applied in the manner provided for in Section 2.5 of the AGREEMENT. Any remaining principal
balance, plus any accrued but unpaid interest, shall be fully due and payable on the Maturity Date,
if not sooner paid.



PREPAYMENT. BORROWER may prepay this VARIABLE RATE NOTE in full or part at any time; provided,
however, that any prepayment fees provided for in the AGREEMENT shall be due at the time of any
such prepayment. Any prepayment may be applied in inverse order of maturity or as BANK in its sole
discretion may deem appropriate. Such prepayment shall not excuse BORROWER from making subsequent
payments each quarter until the indebtedness is paid in full.



ADDITIONAL TERMS AND CONDITIONS. This VARIABLE RATE NOTE is executed pursuant to the AGREEMENT. The
AGREEMENT, and any amendments or substitutions thereof or thereto, contains additional terms and
conditions, including default and acceleration provisions, which are incorporated into this
VARIABLE RATE NOTE by reference.


 


 









 





The aggregate unpaid principal amount hereof plus interest shall become immediately due and payable
without demand or further action on the part of BANK upon the occurrence of an EVENT OF DEFAULT as
set forth under the AGREEMENT or any other LOAN DOCUMENT. If the maturity date of this VARIABLE
RATE NOTE is accelerated as a consequence of an EVENT OF DEFAULT, then BANK shall have all the
rights and remedies provided for in the AGREEMENT, the other LOAN DOCUMENTS or otherwise available
at law or in equity. The rights, powers, privileges, options and remedies of BANK provided in the
AGREEMENT, the other LOAN DOCUMENTS or otherwise available at law or in equity shall be cumulative
and concurrent, and may be pursued singly, successively or together at the sole discretion of BANK,
and may be exercised as often as occasion therefor shall occur. No delay or discontinuance in the
exercise of any right, power, privilege, option or remedy shall be deemed a waiver of such right,
power, privilege, option or remedy, nor shall the exercise of any right, power, privilege, option
or remedy be deemed an election of remedies or a waiver of any other right, power, privilege,
option or remedy. Without limiting the generality of the foregoing, BANK’s waiver of an EVENT OF
DEFAULT shall not constitute a waiver of acceleration in connection with any future EVENT OF
DEFAULT. BANK may rescind any acceleration of this VARIABLE RATE NOTE without in any way waiving or
affecting any acceleration of this VARIABLE RATE NOTE in the future as a consequence of an EVENT OF
DEFAULT. BANK’s acceptance of partial payment or partial performance shall not in any way affect or
rescind any acceleration of this VARIABLE RATE NOTE made by BANK.



Unless prohibited by law, BORROWER will pay on demand all reasonable costs of collection,
reasonable legal expenses and reasonable attorneys’ fees and costs incurred or paid by BANK in
collecting and/or enforcing this VARIABLE RATE NOTE. Furthermore, BANK reserves the right to offset
without notice all funds held by BANK against debts owing to BANK by BORROWER.



WAIVER OF PRESENTMENT AND NOTICE OF DISHONOR. BORROWER and any other person who signs, guarantees
or endorses this VARIABLE RATE NOTE, to the extent allowed by law, hereby waives presentment,
demand for payment, notice of dishonor, protest, and any notice relating to the acceleration of the
maturity of this VARIABLE RATE NOTE.



[SIGNATURE PAGE FOLLOWS]




 


 









 







Executed as of the Note Date first above written.



	 	 	 	 	 	 	 
	 	 	CARDINAL ETHANOL, LLC, an

Indiana limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Troy Prescott	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Its Chairman
	 	 






	 	 	 	 	 	 	 
	STATE OF Indiana

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	COUNTY OF Grant

	 	 	)	 	 	 






Before me, a Notary Public in and for said County and State, personally appeared Troy
Prescott, known to me to be the Chairman of Cardinal Ethanol, LLC, an Indiana limited
liability company, and acknowledged the execution of the foregoing for and on behalf of such
limited liability company.



	 	 	 	 	 
	 

	 	/s/ Techia K. Brewer	 	 
	 

	 	 	 	 
	 

	 	Notary Public — Signature	 	 
	 
	 	 	 	 
	 

	 	Techia K. Brewer	 	 
	 

	 	 	 	 
	 

	 	Notary Public — Printed Name	 	 
	 
	 	 	 	 
	 

	 	Date: 4-8-2009
	 	 






My commission expires:



12-27-2009



My County of Residence: Grant County, Indiana