Common use of Acceptance or Rejection of Purchase Orders Clause in Contracts

Acceptance or Rejection of Purchase Orders. Producer shall, in its sole discretion (based on Producer’s commercially reasonable judgment), accept or reject each Purchase Order, in whole, but not in part. Producer shall notify Gold of whether Producer accepts or rejects each particular Purchase Order within the time period specified in the Purchase Order, or if no time period is specified in the Purchase Order, by 5:00 p.m. (Ames, Iowa local time) on the date on which such Purchase Order is submitted (in either case, the “Acceptance Period”), and if Producer fails to notify Gold within the Acceptance Period, Producer shall be deemed to have rejected the Purchase Order. Gold reserves the right to require Producer to accept or reject any particular Purchase Order in writing. Producer hereby acknowledges that Gold will rely on Accepted Purchase Orders in its decisions to enter into third-party agreements for the sale of Ethanol to Gold’s end customers. In the event that Producer is unable to deliver Ethanol (due to unforeseen production shortfalls or otherwise) pursuant to the terms of a given Accepted Purchase Order, Gold will use its commercially reasonable efforts to restructure the corresponding third-party agreement or otherwise procure replacement ethanol for delivery to its end customer. If, as a result of Producer’s failure to deliver, Gold incurs costs in replacing such Ethanol or terminating such third-party agreement, Producer shall pay to Gold all such replacement or other costs incurred by Gold in fulfilling or terminating its obligations to the respective end customer (collectively “Replacement Costs”).