Value-added Agricultural Product Market Development Grant Agreement

Exhibit 10.4 United States Department of AgricultureRural Business-Cooperative ServiceValue-Added Agricultural Product Market Development Grant Agreement (VADG)This Grant Agreement (Agreement) dated March 14, 2005 between Agassiz Energy, LLC (Grantee), and the United States of America, acting through the Rural Business-Cooperative Service of the Department of Agriculture (Grantor), for $170,000 in grant funds under the VADG program, delineates the agreement of the parties.NOW, THEREFORE, in consideration of the grant;The parties agree that:1. All the terms and provisions of the VADG NOSA and application submitted by the Grantee for this VADG grant, including any attachments or amendments, are incorporated and included as part of this Agreement. Any changes to these documents, or this agreement must be approved in writing by the Grantor.2. As a condition of the Agreement, the Grantee certifies that it is in compliance with and will comply in the course of the Agreement with all applicable laws, regulations, Executive Orders, and other generally applicable requirements, including those contained in 7 CFR 3015.205 (b), which are incorporated into this agreement by reference, and such other statutory provisions as are specifically contained herein. The Grantee will comply with title VI of the Civil Rights Act

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of 1964, section 504 of the Rehabilitation Act of 1973, and Executive Order 12250.3. The provisions of 7 CFR part 3015, " Uniform Federal Assistance Regulations" and part 3019, " Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations," as applicable are incorporated herein and made a part hereof by reference.FURTHER, the Grantee agrees that it will: 1. Not use grant funds or matching funds to plan, repair, rehabilitate, acquire, or construct a building or facility (including a processing facility); or to purchase, rent, or install fixed equipment.2 . Use Grant Funds and matching funds only for the purposes and activities specified in the proposal approved by the Agency including the approved budget. Any uses not provided for in the approved budget must be approved in writing by the Agency in advance of obligation by the Grantor.3. Submit a feasibility study, business operations plans, and other studies and plans required by the Grantor if any part of the grant will be used to establish a working capital account.4. Deliver the results of a study or activity to the Grantor upon completion of each task outlined in the proposal. These include, but are not limited to, feasibility studies, marketing plans, business operations plans, articles of incorporation and bylaws, and accounting

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of how working capital funds were spent. All itmes delivered to the Grantor will be held in confidence to the extent provided by law.5. Request any cash advances in the minimum amount needed and timed to the actual, immediate cash requirements for carrying out the grant purpose. Standard Form 270, " Request for Advance of Reimbursement," will be used for this purpose.6. Submit a Standard Form 269, " Financial Status Report" and list expenditures according to agreed upon budget categories on a semi-annual basis, for the time periods of October 1 through March 31 (due April 30) and April 1 through September 30 (due October 31). The Financial Status Report must show how grant funds and matching funds have been used to date and project the funds needed and their purposes for the next reporting period. A final report is also due within 90 days of the end of the grant period. A final report may serve as the last semi-annual report.7. Provide project performance reports on a semi-annual basis (due April 30 and October 31 for the time periods of October 1 through March 31 and April 1 through September 30). A final report is also due within 90 days of the end of the grant period. A final report may serve as the last semi-annual report. Grantees shall constantly monitor performance to ensure that time schedules are being met and projected goals by time periods are being accomplished. The project performance reports shall include the following:a. A comparison of actual accomplishments to the objectives for that period.

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b. Reasons why established objectives were not met, if applicable.c. Reasons for any problems, delays, or adverse conditions which will affect attainment of overall program objectives, prevent meeting time schedules or objectives, or preclude the attainment of particular objectives during established time periods. This disclosure shall be accomplished by a statement of the action taken or planned to resolve the situation.d. Objectives and timetables established for the next reporting period.The final report will also address the following:a. What have been the most challenging or unexpected aspects of this program?b. What advice you would give to other organizations planning a similar program. These should include strengths and limitations of the program. If you had the opportunity, what would you have done differently?c. If an innovative approach was used successfully, the grantee should describe their program in detail so that other organizations might consider replication in their areas.8. Collect and maintain data on race, sex, and national origin of Grantee' s membership/ownership.9. Provide Financial Management Systems which will include:4


a. Records that identify adequately the source and application of funds for gr ...