Common use of Direct Index Price Purchase Orders Clause in Contracts

Direct Index Price Purchase Orders. Gold may place a Purchase Order with Producer for a fixed quantity of Ethanol to be sold for based on a formula agreed upon between Gold and an end customer which formula takes into account standard benchmark daily prices for a given period (for example: the average Xxxxx’x New York ethanol price-per-gallon for a given month), as specified in such Purchase Order (each a “Direct Index Price Purchase Order”). Gold and Gold’s end customer will agree on a pro forma initial purchase price-per-gallon for Ethanol delivered pursuant to a Direct Index Price Purchase Order (with respect to such Purchase Order, the “Pro Forma Price”). Delivery Payments of the applicable Pro Forma Price for Direct Index Price Purchase Orders will be paid by check of Gold or by wire transfer (according to Producer’s preference) on or before the earliest to occur of the date that is two Business Days after Gold receives payment for the relevant Ethanol from Gold’s customer and the first Business Day that is at least 20 days after the date on which the relevant Ethanol was loaded at the Plant (as evidenced by the date on which all Payment Documents for such shipment have been delivered); provided, however, that Delivery Payments for the sale of Terminal Storage Ethanol (as defined below) shall be paid in accordance with Section 1(b)(iii). For each delivery of Ethanol made pursuant to a Direct Index Price Purchase Order, Gold shall, no later than seven days after the end of the applicable calendar month during which a Delivery Payment was paid for such Ethanol, inform Producer of the Final Purchase Price. If the Final Purchase Price is lower than the Pro Forma Price of such Ethanol, Producer shall be liable for such difference (each, a “Producer True-Up Amount”) and Gold may, at its option, either (i) invoice Producer for such Producer True-Up Amount, in which event Producer shall pay such Producer True-Up Amount to Gold within five days of the date on which such invoice is delivered to Producer; or (ii) include such Producer True-Up Amount in the Set-Off Amount deductible from a future Delivery Payment or set off against and withhold such Producer True-Up Amount from any Gold True-Up Amounts then due and payable. If, however, the Final Purchase Price is greater than the Pro Forma Price, then Gold shall, at its option, (i) pay such difference (each, a “Gold True-Up Amount”) to Producer within five days of Gold’s determination thereof, or (ii) set off such Gold True-Up Amount against any Set-Off Amount then due and owing to Gold.