**Exhibit 10.18**     **PROJECT DEVELOPMENT FEE AGREEMENT**THIS PROJECT DEVELOPMENT FEE AGREEMENT (“Agreement”) is entered into as of this13th day of December, 2006 (“Effective Date”), by and between SpicelandWood Products, Inc., a corporation (“SWP”), and Cardinal Ethanol, LLC (“Company”), an Indianalimited liability company.     WHEREAS, the Company was organized for the purpose of developing, owning and operating a 100million gallon dry mill ethanol plant in east central Indiana (the “Project” or “Ethanol Plant”);     WHEREAS, SWP through its principal, Rob Davis, has provided project development services tothe Company in the past and intends to provide such services in the future;     WHEREAS, the Company has agreed to pay a development fee to SWP in exchange for its effortsto organize the Company and assist in development of the Ethanol Plant; and     WHEREAS, the Company’s Board of Directors (the “Board”) desires to memorialize that agreementand set forth the manner in which the development fee shall be distributed.     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, andfor other good and valuable consideration, the receipt of which is hereby acknowledged, theparties hereby agree as follows:1.      DEVELOPMENT SERVICES. Company hereby retains SWP for the purpose of providingorganizational and developmental services with respect to the Project (“Development Services”).Development Services shall include all services performed on behalf of the Company by SWP to dateand all services performed on behalf of and at the reasonable request of the Company through thetermination of this Agreement. SWP’s duties shall include, but not be limited to, supervision ofsite planning and preparation for construction of the Project. SWP shall apprise the Board of thestatus of the Project and of any material events, and shall perform its duties at the direction ofthe Board. However, SWP shall retain the sole right to control and direct the manner in which theDevelopmental Services are to be performed. Development Services shall not include effecting orattempting to effect purchases or sales of the Company’s securities.2.      DEVELOPMENT FEE AND PAYMENT TERMS. In consideration for the Development Services to beprovided to Company, Company shall pay SWP a development fee equal to $26,000 (“Development Fee”).One-half ($13,000) of the Development Fee shall be payable to SWP on December 20, 2006 and theremaining half ($13,000) shall be payable to SWP on March 1, 2007.3.      EXPENSES. Company shall reimburse SWP for all reasonable, ordinary and necessaryexpenses incurred by SWP in performance of its duties hereunder, including without limitation,reimbursement for hotel expenses, business meals, travel expenses, educational expenses, andautomobile mileage at a rate per mile as periodically set by the Internal Revenue Service.4.      TERM AND TERMINATION OF AGREEMENT. The term of this Agreement shall commence as of theEffective Date and shall terminate upon the earlier of any of the events
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enumerated below (“Termination Event”).     (a) Payment in full of the Development Fee;(b) Dissolution, bankruptcy or insolvency of the Company, or the inability or failure of theCompany generally to pay debts as they become due, or an assignment by the Company for thebenefit of creditors, or the commencement of any case or proceeding in respect of theCompany under any bankruptcy, insolvency or similar laws;(c) Rob Davis’ voluntary relinquishment of his Board seat; and(d) Mutual written agreement of the parties.For purposes of this Agreement, death or disability shall not terminate this Agreement.5.      INDEMNIFICATION. Company shall indemnify, defend against and advance to SWP allexpenses actually and reasonably incurred in connection with the defense of any threatened,pending or completed action, suit or proceeding, whether civil, criminal, administrative,arbitrative or investigative (a “Proceeding”), in which SWP is made a party by reason ofperforming services for Company or acting in any manner pursuant to this Agreement, except thatCompany shall have no obligation to indemnify and defend SWP or its agents for its act or omissionthat involves gross negligence, intentional misconduct or a known violation of the law. SWP shallindemnify and defend Company and its employees, members, directors, officers and agents againstexpenses actually and reasonably incurred in connection with the defense of any Proceeding inwhich Company and/or its employees, members, directors, officers or agents are made a party byreason of SWP committing an act or omission that involves gross negligence, intentional misconductor a known violation of the law.6.      DEFAULT. In the event of the failure of either of the parties to comply with any of theterms and provisions of this Agreement, or in the event either party has violated any of thewarranties and representations made herein by that party, then such party shall be deemed to be indefault hereunder and the other party shall be given written notice of such noncompliance andshall give the defaulting party thirty (30) days from the date of such notice within which tocorrect such noncompliance. If such default has not been corrected, or an arrangement satisfactoryto the complaining party has not been made by the end of the notice period, then the complainingparty may take whatever action is necessary, and exercise all remedies available in order toprotect the complaining party’s rights under the terms and conditions of this Agreement. Theparties agree that the remedies set forth in this Section 6 shall not be exclusive, but they shallbe cumulative with all other rights and remedies available, at law or in equity, to the parties.In the event of any dispute between the parties resulting from this Agreement or any provisionshereunder, the prevailing party in any such dispute shall be entitled to recover reasonableattorneys’ fees and related costs and such other costs incurred therewith.7.      SUCCESSORS AND ASSIGNS BOUND. This Agreement shall be binding upon the Company, SWP,their respective heirs, executors, administrators, successors in interest or permitted assigns,including without limitation, any partnership, corporation or other entity into which the Companymay be merged or by which it may be acquired (whether directly, indirectly or by operation oflaw), or to which it may assign its rights under this Agreement.
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8.        RELATIONSHIP OF THE PARTIES. The parties understand that SWP is an independentcontractor with respect to the Company, and this Agreement shall not be construed or interpretedas creating any other relationship, including, without limitation, that of principal-agent,employer- employee, partnership or joint venture. Consequently, neither party shall have theright or authority, express or implied, to assume or create any responsibility, obligation, orliability on behalf of or in the name of the other party, or bind the other party is any respect.The Company will not provide fringe benefits, including health insurance benefits, paid vacation,or any other employee benefits for the benefit of SWP. SWP shall be responsible for all insuranceincluding, but not limited to, medical disability, workers compensation and unemploymentinsurance. Notwithstanding the above, should the Company’s Board establish a board of directors’compensation policy, Rob Davis, as a director of the Company, may receive reasonable compensationfor his services as a director and may be reimbursed for his expenses in attending Board meetings.However, in no event shall SWP or Rob Davis receive compensation for services it performs as amember on any committee established by the Board.9.         TAXES. SWP shall be solely liable for, and shall indemnify and hold the Companyharmless from and against, all takes on any compensation earned as an independent contractorhereunder, including federal and state income taxes, self-employment taxes, FICA and FUTA taxes,etc.10.      AUTHORITY. Each of the signatories hereto certifies that such party has all necessaryauthority to execute this Agreement.11.      AMENDMENTS. This Agreement sets forth the entire understanding of the parties andsupersedes any prior agreements, oral or written, as to the subject matter hereof. This Agreementmay be amended or modified by, and only by, a written instrument executed by the parties hereto.12.      ASSIGNMENT. This Agreement shall not be assigned by any party hereto except aspermitted by its express terms or upon the written consent of the other party. Nothing in thisAgreement, express or implied, is intended to confer upon any other person any rights or remediesunder or by reason of this Agreement.13.      SEVERABILITY. Any term or provision of this Agreement which is invalid orunenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent ofsuch invalidity or unenforceability without rendering invalid or unenforceable the remaining termsand provisions of this Agreement, or affecting the validity or enforceability of any of the termsor provisions of this Agreement in any other jurisdiction.14.      WAIVER. The failure of any party hereto to insist in any one of more instances uponperformance of any term or condition of this Agreement shall not be construed as a waiver offuture performance of any such term, covenant or condition, but the obligation of such party withrespect thereto shall continue in full force and effect.15.      CAPTIONS. The captions herein are inserted for convenience of reference only and shallbe ignored in the construction or interpretation hereof.16.      NOTICES. Any notice required to be given hereunder shall be in writing and shall be
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deemed to be sufficiently served by either party on the other party if such notice is deliveredpersonally or is sent by certified or first class mail addressed as follows:      To SWP: Spiceland Wood Products, Inc.    609 S. Pearl St.    P.O. Box 406    Spiceland, IN 47385       To Company: Cardinal Ethanol, LLC    Attention: Troy Prescott    2 OMCO Square, Suite 201