Marketplace by ProducePay Membership Agreement
1. Member Agreement. By electronically accepting this Membership Agreement (the “Agreement”), the entity or individual identified as a member in the Marketplace by ProducePay Membership Application (the “Member”) agrees that this Agreement shall be legally binding on the Member. A Member may participate in the Marketplace as a Seller that offers perishable fruits or vegetables (“Produce”) for sale in the Marketplace (a “Seller”), or as a Buyer who purchases Produce for sale in the Marketplace (a “Buyer”). The Marketplace is a network for Sellers and Buyers to sell, purchase and/or consign Produce through the utilization of the ProducePay platform. A Buyer can also participate in the Marketplace as a Seller, but any Member who seeks to act as a Seller must pay the annual membership fee described in Section 4 and meet all of the requirements placed on a Seller as set forth in this Agreement. The term “Buyer” is inclusive of a Member who acquires Produce from a Seller on a consignment basis for sale to third parties in exchange for a sales commission.
2. Membership Period: The membership period for the Marketplace Membership shall be one year from Member’s electronic acceptance of this Agreement. This Agreement shall renew automatically at the end of the initial membership period unless Produce Pay Inc. (“Company”) or Member provides notice that the agreement is terminated.
3. Membership Benefits: The Marketplace Membership encompasses the following:
- Assignment of a Company account representative
- ProducePay Marketplace profile setup
- Member search and performance vetting
- 12 months access to Insights Pro and Daily Market Report
- Advisory on market performance throughout the service period term.
- Accounting and reporting features on the Produce Pay platform
- Complementary dispute resolution service
4. Diligence and Membership Fee. Member’s participation in the Marketplace is subject to it passing the Company’s diligence requirements, in the sole discretion of the Company. Any Member participating as a Seller in the Marketplace must pay the Company a $1,000 (USD) annual membership fee (“Membership Fee”) upon the execution of this Agreement. If Member does not pass the initial diligence requirements, Member’s membership in the Marketplace and this Agreement shall automatically terminate and Company shall refund any membership fee that has been advanced by the Member. If a Member passes the initial diligence requirements but later fails to maintain those requirements, the Member shall not be entitled to a refund of any annual membership fee advanced to Company. A Member participating only as a Buyer shall not be charged an annual Membership Fee.
5. Information furnished by Member. Member is required to furnish the Company with information or material about its entity, business or products/services as part of the registration process for the Marketplace and to establish a Member account. Member represents, warrants and agrees that (a) such information and material whether submitted during the registration process or thereafter throughout the continuation of its use of the ProducePay platform is true, accurate, current and complete, and (b) it will maintain and promptly amend all information and material to keep it true, accurate, current and complete.
6. Fulfillment Fee: As consideration for membership in the ProducePay Marketplace, a Member functioning as a Seller hereby agrees to pay the Company a fulfillment fee of 1% of the final gross sales value of each shipment, net of documented adjustments allowed to the Buyer, sold to any Buyer on the Marketplace. A “Marketplace Buyer” is a grower matched with Member by the Company.
Similarly, as consideration for membership in the ProducePay Marketplace, a Member functioning as a Buyer hereby agrees to pay the Company a fulfillment fee of 0.25% of the final gross sales value of each shipment, net of documented price adjustments made in accordance with Section 8, sourced from any Seller in the Marketplace.
7. Transaction Term Sheets: Each Member agrees that for each sale of Produce conducted with a Member of the Marketplace, that the Seller and the Buyer shall jointly execute and submit a transaction term sheet in the form currently provided by the Company that includes, among other things, the type of Produce, estimated volume, estimated start terms, nature of transaction, pricing, commission and other material terms. Member shall immediately notify the Company in writing if there are any changes in any transaction from the terms previously provided to the Company in the transaction term sheet, and Member shall provide a signed writing to Company executed by all parties to amended term sheet.
8. Produce Inspection: The Company shall have the right at any time and at its own discretion to inspect the shipped Produce that is offered for sale on the Marketplace upon its arrival into the possession of the Buyer, at the location where the Buyer possesses the Produce or at a subsequent destination of the Produce. The Company shall pay for the cost of such inspection, provided that if the inspection determines that less than 95% of the produce in any one truckload is not according to the grade agreed to in the term sheet, the Seller hereby agrees that it shall pay for such inspection. If the permissible percentage for acceptable grade for the commodity at issue is less than 95% under the applicable standards set forth in the Fruits and Vegetables Import Requirements (“FAVIR”) applied by the USDA’s Animal and Plant Health Inspections Services (“APHIS”), then the FAVIR standard shall apply for determining whether Seller must pay for the inspection. The inspection described herein is at the sole discretion of Company and utilized solely for the purposes of the Company’s administration of the Marketplace, and is a not a replacement for any inspection or regulatory obligation required by any other government agency.
9. Produce Acceptance: A Member acting as a Buyer hereby agrees that, within one (1) business day of receiving a shipment of produce from a Marketplace Seller, it shall indicate its acceptance and the quantity and quality of the produce on the ProducePay platform. The Buyer agrees that it shall only make quality deductions from a shipment from a Marketplace Seller in accordance with the following rules:
- The Buyer must provide a timely USDA inspection (within 8 hours of receipt for truck shipments and 24 hours of receipt for rail shipments as set forth under the Perishable Agricultural Commodities Act (“PACA”)) to justify all rejections, dumps, repacks, or sales below relevant or applicable market prices unless previously agreed upon with the Seller in a fully-executed writing provided to Company.
- Quality deductions are only permitted if justified by a third party audit where the auditor is trained to grade to USDA standards, unless Buyer and Seller waive this requirement in a fully-executed writing provided to Company.
- If the Buyer accepts anything less than shipped volume or adjusts prices below market rates, it must provide written reasoning as to why on the ProducePay platform.
10. Liquidations: When a Buyer acts as a consignment agent (hereafter a “Consignee Member”), the Consignee Member agrees that, for each sale of Produce sourced from a Marketplace Seller, upon such sale Consignee Member shall pay to the Company an amount equal to: (a) all payments due from Consignee Member to the Marketplace Seller for that shipment (the “Liquidation Payment”), plus (b) the fulfillment fee owed by Buyer to be calculated in accordance with Section 6 (“Fulfillment Fee”). When a Seller sells Produce to a Buyer rather than consigning the Produce, the Buyer shall pay to the Company an amount equal to: (a) the amount invoiced for the Produce which shall constitute the “Liquidation Payment” for non-consignment sales, plus (b) the Fulfillment Fee. The Company will pay the Marketplace Seller the applicable Liquidation Payment less all amounts owed by the Marketplace Seller to the Company. Payment and accounting remittance (liquidation files) will be due to the Company as per PACA’s regulations within thirty (30) days of receipt from the date the goods are received and accepted by the ultimate receiver of the Produce from the Consignee Member for consignment sales.
For each shipment, the Consignee Member shall provide the Company with an itemized liquidation report showing itemized sales prices and all commission fees and other deductions, which shall be provided via the Company’s liquidation email address, uploaded into the ProducePay platform via CSV or PDF files, or sent via ERP integration. This report shall be provided at the same time as the Consignee Member remits the Liquidation Payment on the ProducePay platform.
11. Restrictions on Advances from Buyer. A Buyer agrees that in any transaction with a Marketplace Seller, including but not limited to when a Buyer acts as a Consignee Member, Buyer will not offer to or provide a Marketplace Seller with any loans or advances (including preseason and/or pick & pack advances) without the prior written approval of the Company. The Company shall have the primary right to provide Pick and Pack funding for each Marketplace Seller shipment to the Buyer or Marketplace Seller for a separate fee, and/or provide a Marketplace Seller with pre-season funding for a separate fee.
12. Site Inspections. A Member shall permit the Company to visit and inspect its ranches, properties and other facilities involved in the growing, harvesting, packaging, receiving or storing of Produce, whether such ranches, properties and other facilities are owned or controlled by the Member or the Member’s third party vendors, as long as the membership is active, and at any time and at the sole discretion of Company. A Member shall provide written instruction to any third party which owns or controls the facilities and properties referenced herein to provide access to Company for inspection.
13. Resolution of Trade Disputes through Mandatory Mediation. When any dispute arises between a Buyer and a Seller involving a transaction of Produce on the Marketplace, the following provisions apply
- Submission to Company as Mediator: In a disputed transaction between a Seller and a Buyer (including but not limited to transactions involving a Consignee Member), the dispute must first be submitted to Company for the purposes of mediation. No Member may bring a legal action for breach of a Produce transaction involving the Marketplace without fully-participating in mediation, and Company shall act as the Mediator. A Member shall initiate mediation by contacting Company in writing via email at firstname.lastname@example.org, wherein the Member shall describe the substance of the dispute and the other Member(s) involved. Each Member expressly consents to Company’s role as Mediator. Company shall designate a member of its in-house legal department to act as the presiding mediator. The presiding mediator will contact each Member who is a party to the dispute, and set forth an expedited calendar for resolving the dispute. The presiding mediator may request briefing, documentary support, and may hold at least one online hearing to hear arguments and negotiate a resolution of the dispute. In resolving the terms of any deal, the presiding mediator may only consider communications and agreements between Buyer and Seller that were contemporaneously provided and/or exchanged through the Company’s platform. All communications provided in conjunction with the mediation shall be treated as confidential settlement communications. All disputes shall be resolved by the presiding mediator within thirty (30) days of submission of the dispute to Company, provided that there is no substantial delay in locating and notifying each and every party to the dispute. Company may, in its sole discretion, choose to waive its role to act as Mediator, at which time each Member shall have the right to file a legal action to resolve the claim.
- Decision of Company: If the parties privately resolve their dispute after submission to Company for mediation, they shall mutually contact Company to advise that the matter is concluded and Company shall issue no opinion or take any further action. If the parties do not reach their own amicable resolution, the Company shall issue a written decision concerning Company’s view of the merits of the dispute (the “Decision”). The Decision is not binding and shall not prevent a Member from bringing litigation concerning the dispute after issuance of the Decision. However, the Company may, in its sole discretion, suspend or terminate a Member’s membership in the Marketplace if Company determines that a Member breached its obligations to another Member in conjunction with a transaction on the Marketplace. Company may condition further participation in the Marketplace to a Member’s compliance with the Decision, including any payments that the Company determines in the Decision are owed to another Member. Company may publish within the Marketplace that a Member has had one or more unresolved claims against it if a Member does not comply with a Decision.
- Limited Release of Member Claims Against Company: Member agrees that it has voluntarily contracted to designate Company as Mediator, that participation in the Mediation is mandatory but that the Decision is not legally binding, and that Member hereby releases Company and Company’s officers, directors, principals and of any claims relating to Company’s provision of services as Mediator.
14. Data. Member hereby grants the Company a non-exclusive, worldwide, perpetual, transferable, royalty-free license to use, copy, transmit, sub-license, index, store, aggregate, and display Transaction Data in connection with the operation and maintenance of the Marketplace, for technical support of the ProducePay platform, to perform the payment liquidations, to otherwise perform obligations to the Member, to monitor Member’s suitability for continued inclusion in the Marketplace, to perform account management services, and to publish, display, and distribute de-identified, aggregated information derived from Transaction Data and other information from Member’s use of the ProducePay platform and participation in the Marketplace, for marketing, research or compliance purposes, for purposes of improving the Company’s products and services or the ProducePay platform, and for developing, displaying, and distributing benchmarks and similar reports, provided that any such data is not publicly identified or identifiable as originating with or associated with Member. The foregoing shall not limit the ability of the Company: (a) to publish or otherwise share or distribute information regarding the Member that is obtained from publicly available or nonconfidential sources, such as Blue Book, or (b) to share data with another Member regarding transactions with that particular Member. “Transaction Data” means any data of any type regarding transactions between Seller and a Buyer (including a Consignee Member), including without limitation Produce type, pricing and quality, sale price, fees and deductions, quality, grading and time periods for sale or liquidation of Produce.
16. Right to Terminate Membership: Member may terminate its membership in the Marketplace at any time upon written notice to the Company. The Company may terminate Member’s participation in the Marketplace upon written notice to Member if (a) the Company, in its sole discretion, determines that Member no longer satisfies the Company’s diligence standards or that it is not in the best interests of the Company or the Marketplace for Member’s participation to continue, or (b) the Company discontinues or modifies the participation requirements for the Marketplace and Member no longer meets and/or agrees to the modified participation requirements.
17. Survival: The fulfillment fee under Section 6 and the requirements regarding transaction term sheets, product inspection and acceptance, and liquidations under Sections 7, 8, 9 and 10 apply to all shipments sourced from a Marketplace Seller even after Member’s membership in the Marketplace expires or terminates, regardless of the reason (including for non-renewal or termination under Section 16). In addition to Sections 6-10 surviving, the restriction on advances under Section 11, the obligate to mediate under Section 13, and the provisions of Sections 5, 11, 12 and 18-25 and this Section 17 shall survive the expiration or termination of this Agreement and the Member’s participation in the Marketplace, regardless of the reason.
18. Assignment: This Agreement shall not be assigned or delegated by the Member in whole or in part without the prior written consent of Company, which may be withheld by Company in its sole discretion.
19. Waiver; Severability: Failure by the Company to enforce a provision of this Agreement shall not constitute a waiver of that or any other provision of the Agreement. If one or more provisions of this Agreement are held to be unenforceable under applicable statute, regulation or other law, Company and the Member shall renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. If Company and the Member cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of this Agreement shall be interpreted as if such provision were so excluded, and (c) the balance of the Agreement shall be enforceable in accordance with its terms.
20. Governing Law; Consent to Jurisdiction: This Agreement and all documents, agreements, contracts and instruments executed in connection herewith shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without regard to its conflict of laws provisions that would require the application of the laws of another jurisdiction. Member hereby irrevocably submits to the non-exclusive jurisdiction of any United States federal court or California state court located in Los Angeles County, California, in any action or proceeding in which Company is a named party arising out of or relating to this Agreement or any documents executed in connection herewith and Member hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in any such United States Federal Court or California state court. Member irrevocably consents to the service of any and all process in any such action or proceeding brought in any court in or of the State of California by the delivery of copies of such process to it at its address set forth in this Agreement by certified mail directed to such address or such other address as may be designated by Member in a notice to the Company.
21. Entire Agreement: This Agreement, together with the other agreements referenced herein or in the Marketplace by ProducePay Membership Application, sets forth the sole understanding and agreement of the Member and the Company with respect to the Member’s participation in the Marketplace and supersedes all other prior and contemporaneous discussions, negotiations agreements and understandings, whether written or oral, between them.
22. Amendments: No modification of this Agreement or of any covenant, condition or limitation contained herein shall be valid or effective unless it is (a) in writing and duly executed by the parties hereto, or (b) electronically accepted by Member on the ProducePay platform. Member’s continued use of the ProducePay platform after notification of modifications of this Agreement by Company via the ProducePay platform will be deemed electronic acceptance by Member hereunder.
23. Attorneys’ Fees: In any action between Member and Company arising out of or relating to this Agreement, the non-prevailing party will pay the substantially prevailing party’s reasonable attorneys’ fees, costs, and necessary disbursements, whether or not the action is prosecuted to award or judgment.
24. Relocation or Name Change: The Member shall provide Company with written notice at least thirty (30) calendar days prior to the Member’s change of name or location.
25. Company Disclaimer: The Member acknowledges and agrees that the Company is providing no representations, warranties, guaranties or assurances of any type to the Member regarding any other Member, the performance by a Member of its obligations to another Member, or the Produce provided by a Seller to a Buyer.
26. Controlling Translation: While a translation of this Agreement may be provided for the convenience of Member, the English version shall govern in the event of any conflicts with any other translation of this Agreement.