Document:

10.39 - Termination Agreement with FNBO

First National Bank
Omaha

TERMINATION AGREEMENT
BETWEEN FIRST NATIONAL BANK OF OMAHA
AND CARDINAL ETHANOL, LLC
dated as of October 8,2013

The parties hereby terminate the interest rate swap transaction ("Swap Transaction"), evidenced by the Confirmation dated as of December 19, 2006, Reference Number 21265, with an initial Notional Amount of $41,500,000.00, executed by the parties, together with their obligations with respect to such Swap Transaction under the ISDA Master Agreement dated as of December 19, 2006 (the "Master Agreement") between them. In consideration of such termination, the following Termination Fee shall be payable.

Termination Fee:        $662,597.00
Payable by:        Cardinal Ethanol, LLC
Due Date:        October 10, 2013
Payable to:        First National Bank of Omaha

Any other Transactions currently outstanding under the Master Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties have executed this Termination Agreement effective as of the date hereof.

	
		
	 
	First National Bank of Omaha

	 
	 

	 
	By: /s/ Jeremy Reineke

	 
	Name: Jeremy Reineke

	 
	Title: Vice President

	 
	 

	 
	Cardinal Ethanol, LLC

	 
	 

	 
	By: /s/ William Dartt

	 
	Name: William Dartt

	 
	Title: CFO10.40 - First Amendment to 1st A & R Construction Loan Agmt

FIRST AMENDMENT OF
FIRST AMENDED AND ESTATED CONSTRUCTION LOAN AGREEMENT

THIS FIRST AMENDMENT OF FIRST AMENDED AND RESTATED CONSTRUCTION LOAN AGREEMENT ("Amendment") is made this 8th day of October, 2013 among FIRST NATIONAL BANK OF OMAHA, a national banking association ("Lender") and CARDINAL ETHANOL, LLC, an Indiana limited liability company ("Borrower"). This Amendment amends that certain First Amended and Restated Construction Loan Agreement dated June 10, 2013 between Lender and Borrower (as amended, the "Loan Agreement").

WHEREAS, pursuant to the Loan Agreement and the other Loan Documents, Lender extended the Loans described in the Loan Agreement to Borrower including the Declining Revolving Credit Loan, all as more fully described in the Loan Agreement;

WHEREAS, the Loan Agreement provides that the Declining Revolving Credit Loan will begin to revolve on April 8, 2014 and Borrower has requested, and Lender has agreed, to amend such date to October 8, 2013 as provided for in this Amendment; and

WHEREAS, the parties hereto agree to amend the Loan Agreement as provided for in this Amendment.

NOW, THEREFORE, in consideration of the amendments of the Loan Agreement set forth below, the mutual covenants herein and other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties agree to amend the Loan Agreement as follows:

1.Capitalized terms used in this Amendment which are defined in the Loan Agreement shall have the meanings given to them in the Loan Agreement, as such definitions may be amended by this Amendment.

2.The second, second to last and last sentences of the first paragraph of Section 2.01(a)(ii) of the Loan Agreement are hereby amended by deleting the reference to April 8, 2014 as the date the Declining Revolving Credit Loan begins to revolve and inserting in lieu thereof October 8, 2013. In addition, the references in the second paragraph of Section 2.01(a)(ii) of the Loan Agreement are hereby amended by deleting the reference to April 8, 2014 as the date the Declining Revolving Credit Loan begins to revolve and inserting in lieu thereof October 8, 2013. Anywhere else in the Loan Agreement or any other Loan Document which refers to April 8, 2014 as the date the Declining Revolving Credit Loan begins to revolve is hereby amended consistent with the foregoing.

3.    The first sentence of the second paragraph of Section 2.01(a)(ii) of the Loan Agreement is hereby amended by deleting the reference to $25,083,737.04 as the maximum amount available to be borrowed on the Declining Revolving Credit Loan when it begins to revolve and inserting in lieu thereof $26,985,332.34. In addition, the scheduled principal payment of $972,567.37 under Section 2.04(b)(ii)(3) of the Loan Agreement will be deemed a reduction in the Maximum Availability of the Declining Revolving Credit Loan and the amount which may be borrowed between January 8, 2014 and the next Reduction Date of April 8, 2014 will be $26,012,764.97.

4.    In consideration of the modifications provided for in this Amendment, Borrower will pay Lender an amendment fee equal to $10,000.00 contemporaneously with the execution and delivery of this Amendment.

5.    Except as modified in this Amendment, all other terms, provisions, conditions and obligations imposed under the terms of the Loan Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified, affirmed and certified by Borrower and Lender. Borrower hereby ratifies and affirms the accuracy and completeness of all representations and warranties contained in the Loan Documents. Borrower represents and warrants to the Lender that the representations and warranties set forth in the Loan Agreement, and each of the other Loan Documents, are true and complete on the date hereof as if made on and as of the date hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, such representation or warranty shall be true and correct as of such specific date), and as if each reference in the Loan Agreement to "this Agreement" included references to this Amendment. Borrower represents, warrants and confirms to the Lender that no Default or Events of 

Default is now existing under the Loan Documents and that no event or condition exists which would constitute a Default or an Event of Default under the Loan Agreement or any other Loan Document. Nothing contained in this Amendment either before or after giving effect thereto, will cause or trigger a Default or an Event of Default under any Loan Document. To the extent necessary, the Loan Documents are hereby amended consistent with the amendments provided for in this Amendment.

6.    This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. This Amendment shall be governed by and construed in accordance with the laws of the State of Nebraska, exclusive of its choice of laws rules.

7.    The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided in this Amendment, operate as a waiver of any right, power or remedy of the Lender under any of the Loan Documents, nor, except as expressly provided in this Amendment, constitute a waiver or amendment of any provision of any of the Loan Documents. Upon and after the execution of this Amendment by each of the parties hereto, each reference in the Loan Agreement to "this Agreement", "hereunder", "hereof' or words or phrases of like import referring to the Loan Agreement, and each reference in the other Loan Documents to the "Loan Agreement", "thereunder", "thereof' or words or phrases of like import referring to the Loan Agreement, shall mean and be a reference to the Loan Agreement as modified by this Amendment. This Amendment and the rights evidenced by this Amendment shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto, and shall be enforceable by any such successors and assigns.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties have executed and delivered this Amendment on the date first written above.

	
		
	 
	FIRST NATIONAL BANK OF OMAHA,

	 
	a national banking association

	 
	 

	 
	By: /s/ Blake Suing

	 
	Title: Loan Officer

	 
	 

	 
	CARDINAL ETHANOL, LLC, an

	 
	Indiana limited liability company

	 
	 

	 
	By: /s/ William Dartt

	 
	Title: CFO10.41 - Employee Bonus Plan

Cardinal Ethanol, LLC
Employee Bonus Plan
Fiscal Year 2013-2014
(Issued 10-1-13)

The purpose in developing and continuing an Employee Bonus Plan is to reward the employees for their contributions that directly impact the financial results of the Company, reflect a positive safety culture, and to promote teamwork needed to complete desired goals.  This year's Plan is again made up of financial and team goals relating to the Company's financial success, safety, and production efficiency.   

For the purpose of the Plan, wages are defined as the amount paid during the defined period and limited to regular pay, overtime, holiday, and paid time off (PTO). 

Rules of the Plan:
		
	a)
	All plan payouts must be approved by the Board of Directors.

		
	b)
	Employee must be employed on the day that the Board approves the payout to be eligible for any bonus payout.

		
	c)
	Employee must be working from October 1, 2013 to September 30, 2014 to be eligible for the full bonus. 

Financial Goal:
		
	a)
	Eligibility for the Financial Goal payout portion of the plan begins at $7,500,000 net income. There will be NO payout under the financial goal section if the Company does not meet this minimum income threshold. 

		
	b)
	The Financial Goal section is eligible to all employees that meet the eligibility requirements.

		
	c)
	Payout for the Financial Goal will be made prior to December 31, 2014 once the fiscal year end results are calculated and approved.

Team Goals:
		
	a)
	Team Goals are not subject to a minimum net income requirement.

		
	b)
	Payout for the Team Goals will be made quarterly and based on company “Operational Statistics”, Christianson Benchmarking Results and Individual Safety Participation.

		
	c)
	Employee must be employed on the last day of the quarter and on the day the Board approves the payout to receive any payout from the Team Goals. 

		
	d)
	Employee does not need to have worked the full quarter to be eligible. Payout will be made once final results are known and have been approved by the Board of Directors.

		
	e)
	Team Goal payout is applicable to all employees that meet the eligibility requirements.

FY 2013-14 Employee Incentive Plan

Financial Goal - Max Payout 10% of eligible wage.
	
		
	Minimum required net profit needed for payout $7.5M (Annual Payout)

	- Payout Level 1............................................................................
	$7,500,000 - $11,999,999   = 5% payout

	- Payout Level 2............................................................................
	$12,000,000 - $19,999,999 = 7.5% payout

	- Payout Level 3............................................................................
	$20,000,000 and above       = 10% payout

Team Goals - Max Payout 10% of eligible wage.

Team Goal #1 - Improved efficiency and production through increased ethanol yield per bushel ground as compared to industry; based on rankings through Benchmarking surveys (Quarterly Payout)

Team Goal #2 - Optimize natural gas usage by reducing BTU/gallon. Achieved Natural Gas Usage number will be based on "Operation Statistics" work papers.  (Quarterly Payout)

Team Goal #3 - Improve Safety performance.  Increase awareness and maintain safety performance. Near misses will be based on individual reports submitted on time to the EHS Manager.  Other Safety criteria are based on individual participation. (Quarterly Payout)

	
		
	Goal #1  Lead Rankings for Ethanol Yield (Christianson Benchmarking; All Plants, undenatured, moisture adjusted gallons per bushel ground based on corn at 15%) (3% max payout)

	1) Ranking outside of the top 40%........................................................
	0% payout

	2) Ranking in the top 40% - 35%..........................................................
	1% payout

	3) Ranking in the top 35% - 25%..........................................................
	2% payout

	4) Ranking in the top 25% (Leader) .....................................................
	3% payout

	 
	 

	Goal #2 Optimize Natural Gas Usage (BTU per Anhydrous Ethanol gallon) (2% max payout)

	1) 28,216 or more ............................................................
	0% payout

	2) 28,215 - 28,001.............................................................
	1% payout

	3) 28,000 - 27,501.............................................................
	1.5% payout

	4) 27,500 or less................................................................
	2% payout

	 
	 

	Goal #3 Improve Corn Oil Yield (Pounds of Oil per Bushels Ground)(2% max payout)
	 

	1) Less than 0.600 pounds .............................................
	0% payout

	2) 0.601 - 0.654 pounds ..............................................
	1% payout

	3) 0.655 - 0.700 pounds ..............................................
	1.5% payout

	4) Greater than 0.700 pounds ......................................
	2% payout

	 
	 

	Goal #4 Improve Safety Record - Individual Safety Participation; subject to verification and approval by management. (3% max payout)

	Safety Committee Meeting PArticipation (complete 1) (1%)
	 

	1) One Safety Committee meeting attended and participation
	 

	 
	 

	Employee Participation Menu (complete 2) (1%)
	 

	1) Safety Program Area Audit Complete
	 

	2) Non-Routine Task Pre-work Audit Completed
	 

	3) Lead a Toolbox Talk
	 

	4) LOTO/Confined Space Program Review
	 

	5) Contractor Observation, Review and Evaluation
	 

	6) Participate and complete an optional Safety Webinar.
	 

	 
	 

	Near Miss Reporting (complete 3) (1%)
	 

	1) Three Near Miss Reports completed
	 

Personal Incentive (10% additional opportunity available)

Available to the following positions: Production Manager, ESH Manager, Maintenance Manager, and Controller.

These positions will be eligible for an additional 10% payout if they meet certain personal goals.  These individual goals will be ones the positioned employee will have a direct impact in achieving the best return to the business.

Personal Incentive (10% additional opportunity available)

	
		
	Production Manager: Personal Goals (annual payout)

	Safety - Improve ERI Safety Audit Score (based on last audit score prior to yearend) (2%)
	 

	Ÿ Final Results "Improvement Required" 
	0% payout

	Ÿ Final Results "Acceptable Area"
	1% payout

	Ÿ Final Results "Exceptional" 
	2% payout

	Production - Improve  Ranking of Ethanol Yield (Christianson Benchmarking; All Plants, undenatured, moisture adjusted gallons per bushel ground based on corn at 15% (3% max payout)

	Ÿ Ranking below the top 40%
	0% payout

	Ÿ Ranking in the top 40% - 35%
	1% payout

	Ÿ Ranking in the top 35% - 25%
	2% payout

	Ÿ Ranking in the top 25% (Leader)
	3% payout

	Production - Maximize Corn Oil Production (3%)
	 

	Ÿ Less than 0.60 pounds per bushel ground
	0% payout

	Ÿ 0.601 - 0.654 pounds per bushel ground
	1% payout

	Ÿ 0.655 - 0.700 pounds per bushel ground
	2% payout

	Ÿ Greater than 0.700 pounds per bushel ground.
	3% payout

	Production - Ethanol Throughput, anhydrous gallons (2%)
	 

	Ÿ Less than 111.5 M gallons
	0% payout

	Ÿ 111.5 M to 113.4 M gallons
	1% payout

	Ÿ 113.5 M to 115.4 M gallons
	1.5%payout

	Ÿ Greater than 115.5 M gallons
	2% payout

	 
	 

	EHS Manager: Personal Goals (annual payout)
	 

	Safety - Improve ERI Safety Audit Scores (based on last audit score prior to yearend) (6%)
	 

	Ÿ Final Results "Improvement Required"
	0% payout

	Ÿ Final Results "Acceptable Area"
	3% payout

	Ÿ Final Results "Exceptional"
	6% payout

	Environmental Compliance - Maintain Permit Parameters (4%)
	 

	Ÿ 100% Completion of EHS Compliance Calendar
	1% payout

	 - Including additions and updates.
	 

	Ÿ No ESH violations resulting in fines
	1% payout

	 - EPA, IDEM, OSHA, etc.
	 

	Ÿ Training and PSM in Compliance
	1% payout

	Ÿ Written Monthly EHS Review
	1% payout

	 - To include Company policy violations, observation summary, recommended actions, etc.

	
		
	Maintenance Manager: Personal Goals (annual payout)
	 

	Safety - Improve ERI Safety Audit Score (based on last audit score prior to yearend) (2%)
	 

	Ÿ Final Results "Improvement Required"
	0% payout

	Ÿ Final Results "Acceptable Area"
	1% payout

	Ÿ Final Results "Exceptional"
	2% payout

	Maintenance - Reduction of supply cost (Based on Christianson Benchmarking for "All Plants - Plant Supplies/Repair/Maintenance") (3%)

	Ÿ Ranking outside of the top 20 plants
	0% payout

	Ÿ Top 20 Benchmarking rank for all plants
	1% payout

	Ÿ Leader (top 25% ranking for all plants)
	3% payout

	Maintenance - Uptime (Includes all downtime) (3%)
	 

	Ÿ Greater than 336 hours downtime
	0% payout

	Ÿ 336 to 313 hours downtime
	1% payout

	Ÿ 312 to 288 hours downtime
	2% payout

	Ÿ Less than 288 hours downtime
	3% payout

	Maintenance - Inventory Accuracy and Count Frequency, Spare Parts (Accuracy based on adjustments per count/inventory units per count with total inventory counted quarterly) (2%)

	Ÿ Greater than a 2% accuracy error
	0% payout

	Ÿ 1% to 2% accuracy error (min. of 6 counts/quarter)
	1% payout

	Ÿ Less than 1% accuracy error (min. of 9 counts/quarter)
	2% payout

	 
	 

	Controller: Personal Goals (annual payout)
	 

	Accounting - Close out monthly financials.  Close EOM, including CFO's review and correction of any notes made by CFO, within 5 business days after the last day of the month (3%)

	Ÿ Less than 7 successful closes
	0% payout

	Ÿ 7 - 8 successful closes
	1% payout

	Ÿ 9 - 10 successful closes
	2% payout

	Ÿ Over 10 successful closes
	3% payout

	Tax/K-1 - Completed K-1s in a timely manner before the date of the annual meeting (2%)
	 

	Ÿ Completion after February 1, 2014
	0% payout

	Ÿ Completion by February 1, 2014
	1% payout

	Ÿ Completion by January 27, 2014
	2% payout

	FY 10-K close for timely SEC filing and bank/Investor Obligations (2%)
	 

	Ÿ Completion after December 9, 2013
	0% payout

	Ÿ Completion on or before December 9, 2013
	1% payout

	Ÿ Completion on or before November 30, 2013
	2% payout

	Develop and Implement Risk Assessments/Mitigation Opportunities (3%)

	Ÿ Initial Ris Assessments not complete
	0% payout

	Ÿ Identify Risk Assessment with scales and draft of results completed by March31, 2014
	1% payout

	Ÿ Develop plans for mitigating 'most serious risk' areas (min. 5)
	1% payout

	Ÿ Write flow charts, procedures and/or policies to mitigate the 'most serious risk' identified above
	1% payout

Personal Incentive (10% additional opportunity available)

Available to the following positions: CEO, CFO, Commodity Manager, and Plant Manager.

These positions will be eligible for an additional 10% payout.  60% of this payout will be tied to the Managers mentioned under item #1 meeting their goals.  40% of this payout will be based on COGS as a percentage of Sales.  

"Senior Management" : Goals (annual payout) (CEO, CFO, Commodity Manager, Plant Manager)
Leadership/Management/Coaching - Develop and Support Mid-management (6%)
•Average completion score of mid management incentive award times 60% award value.
Financial - Target COGS as a % of Sales (COGS + unrealized losses - unrealized gains/Revenues) (4%)
	
		
	ž > 96.3%
	0% payout

	ž 96.29% - 95.0%
	1% payout

	ž 94.99% - 93.00%
	2% payout

	ž < 92.99%
	4% payout

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