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APPLICATION PURCHASE AND SALE AGREEMENT

This Application Purchase and Sales Agreement (the “Agreement”) is made and entered into by and among (1) LotusF Corporation and/or its affiliate(s) including LotusF, Inc., (individually and collectively, “LotusF”), (2) the buyer of a software application (the “Buyer”) and (3) the seller of a software application (the “Seller”), as of the date of the acceptance by the Seller of the offer to purchase a software application made by the Buyer through the Site (as defined below) (the “Effective Date”). The Buyer and Seller are identified on the relevant pages of the Site (as defined below) in the course of the transaction of a software application. LotusF, Buyer and Seller are collectively referred to as the “Parties” and individually as a “Party.”

RECITALS

LotusF operates an online application market place called “AppTrader,” which provides opportunities and information with respect to sale and purchase of applications (the “Site”);
Seller desires to sell through the Site all of Seller’s right, title and interest in and to the software application, and any associated intellectual property or assets, posted on the Site for sale by the Seller (the “Application”); and
Buyer desires to purchase the Application from Seller through the Site, all as more fully provided for in this Agreement.
NOW, THEREFORE, the Parties hereby agree as follows:

1. Agreement to Terms of Service

1.1   Seller and Buyer each hereby acknowledge and confirm that they are bound by the Terms of Service for the Site or, to the extent not already bound, hereby irrevocably agree to the Terms of Service for the Site. With respect to any matters not covered in this Agreement, the Terms of Service shall apply. If there is any inconsistency between provisions of this Agreement and those in the Terms of Service, provisions of this Agreement shall prevail.

2. Sale and Assignment of the Application.

2.1    Seller hereby sells, transfers, assigns and delivers to Buyer, and Buyer hereby purchases from Seller, all of Seller’s right, title and interest in and to the Application free and clear of any and all liens and encumbrances. The foregoing includes all claims for damages by reason of past infringement along with the right to sue for and collect damages for any infringement. To the extent any of the rights, title and interest to the Application cannot be assigned by Seller to Buyer (such as moral rights), Seller hereby irrevocably waives and agrees never to assert such non-assignable rights against anyone, including, without limitation, Buyer and its successors in interest.
2.2   Seller will, at the reasonable request of Buyer and/or LotusF, execute and deliver such further instruments of sale, transfer, assignment and delivery and take such other action as may reasonably be required or desirable to effectuate the purchase transaction contemplated by this Agreement and vest in Buyer, its successors and assigns title to and possession of the Application hereby sold, transferred, assigned and delivered.

3. Payment of Purchase Price.

3.1   Seller hereby grants LotusF a power and authority to receive the full amount of Purchase Price (as defined in the Terms of Service) from Buyer on behalf of Seller, and, when LotusF receives the Purchase Price from Buyer, it is deemed to be paid by Buyer to Seller. The act of LotusF to receive the Purchase Price is Dairi Juryou under Section 643 of the Civil Code. The Parties acknowledge that LotusF is not and does not act as an escrow agent or any other financial institution.
3.2   Within five (5) business days from the date of the Transaction, Buyer shall pay the full amount of the Purchase Price to LotusF as agent for Seller and the full amount of the Buyer’s Service Fee to LotusF.
3.3   Subject to the completion of the Account Transfer provided in Clause [8] below, LotusF transmits the Purchase Price to Seller after deducting the Seller’s Service Fee to be paid to LotusF and within five (5) business days from the date on which LotusF is notified the completion of the Account Transfer from Seller or Buyer, whichever is later.
3.4   All payments shall be made in United States dollars or any other currency designated by LotusF. Seller and Buyer shall be responsible for all taxes and fees in connection with the Transaction.

4. Account Transfer.

4.1   Seller hereby transfers to Buyer, and Buyer hereby accepts from Seller, any transferable rights Seller has in the accounts in the application marketplaces (including account ID and password), trademarks or trade names, copyrights, domains, contracts with end users and others, information and documentation, in each case solely as related to the Application (referred to collectively herein as “Accounts”), including any related sales, rating and review data (the “Account Transfers”).
4.2   Seller transfers to Buyer, and Buyer hereby accepts from Seller, the complete, fully commented and functional source code to the Application and all data, files, information and documentation related thereto (collectively, the “Source Code”) (the “Code Transfer”). (The Account Transfer and the Code Transfer shall collectively be referred to as the “Transfer”).
4.3   The Transfers shall be executed within thirty (30) days from the date of the Transaction. If all Transfer are completed, both Buyer and Seller must inform LotusF of the closing.
4.4   LotusF does not warrant that such any such Account Transfers and/or Code Transfer will be successful or completed in a timely manner.

5. Deliver and Return of the Purchase Price.

5.1   If both Buyer and Seller inform LotusF of the completion of the Transfer, LotusF will deliver to Seller the Purchase Price after deducting the Seller’s Service Fee and will retain the Service Fees. Upon such delivery of the Purchase Price, all of LotusF’s obligations hereunder shall be deemed to be satisfied in full.
5.2   In the event that either or both Buyer and Seller do not inform LotusF of the closing of the Transfers within thirty (30) days from the date of the Transaction, unless otherwise expressly indicated by Buyer or Seller, LotusF will treat the Transfers as failed and will return the Purchase Price to Buyer and if LotusF retains any of the Source Code, return the Source Code to Seller, and thereafter all of LotusF’s obligations hereunder shall be deemed to be satisfied in full. LotusF will not return the Posting Fee to Seller in any case regardless of the reason but may allow Seller to post the same Application again on the Site under the terms and conditions designated by LotusF in its sole discretion. LotusF will return the Buyer’s Service Fee to Buyer if LotusF reasonably considers that Buyer was not in any way responsible for the failure of the Transfer.
5.3   If all or any part of the Accounts and/or the Source Code was transferred to Buyer but the Transfer was failed, Buyer must return all the Accounts and/or the Source Code that Buyer received from Seller. LotusF has a right, but no obligation, to refrain from returning the Purchase Price and/or the Buyer’s Service Fee to Buyer upon LotusF’s sole discretion.

6. Seller Representations, Warranties and Covenants.

Seller hereby represents and warrants, as of the date hereof and as of the Effective Date, and covenants, as follows:

i.   Seller is the sole and exclusive owner (or an authorized agent of the owner) of the Application and all associated intellectual property rights.
ii.   Seller has all requisite right, power and authority to effectively transfer the Application (including, without limitation, the Source Code and software of the Application, contracts with end users, personal information of end users) and Accounts to a third party;
iii.   The Application is an original work of authorship and neither violates any applicable laws and regulations (including any Source Code civil and/or criminal statutes) nor infringe, misappropriates or violates any copyrights, patents, trademarks, patent, designs, trade secrets or other intellectual property or proprietary rights of a third party, including any rights of privacy or publicity. There are no claims, pending or threatened, with respect to Seller’s rights in the Application and Accounts and Seller is not aware of any facts or circumstances which, if true, may be expected to lead to claims of infringement or misappropriation.
iv.   The execution and delivery of this Agreement will transfer to and vest in Buyer good, valid and marketable title to the Application. The Application is free and clear of any liens, encumbrances, pledges, security interests, restrictions, rights or any other rights or interest of any third party. Seller has maintained the Source Code in confidence and, other than employees and contractors who accessed and used the Source Code under confidentiality terms in the course of the development of the Application for Seller, has not made it available or otherwise provided it to any third party (including, without limitation, any escrow provider).
v.   The Source Code is fully commented, readable and useable in its current form, and no portion thereof is encrypted. The documentation is and will be sufficient to enable a third party programmer skilled in the art to be able to modify, maintain or enhance the Source Code without further assistance from Seller or reference to other items or materials.
vi.   Seller agrees to make reasonable efforts to provide LotusF with any necessary use rights or permissions.
vii.   Seller is liable for the completeness and functionality of the Source Code and the Application at the time of sale.
viii.   The Source Code and Application was created solely by Seller or by independent contractors who have signed a written agreement transferring all rights, including all intellectual property rights, in the independent contractor’s contribution to Seller and waived in writing any moral rights that the contractor may have.
ix.    The Application does not contain and is not subject to any open source, “free software,” “copyleft” or similar license agreement. No license keys, passwords or other similar codes are required to make full use of the Source Code or Application.
x.    Neither the Source Code nor the Application are in the public domain.
xi.    Neither the Source Code nor the Application will contain, at the time of delivery, any “back door,” “time bomb,” “Trojan horse,” “worm,” “drop dead device” or other computer software routines or hardware components designed to (i) permit unauthorized access to, or use of, the Source Code or Application or computer systems or device on which the Source Code or Application is loaded, (ii) disable, damage or erase any software or data or (iii) perform any other similar actions that would preclude full use of the Source Code and Application by Buyer or any end users.

7.Non-Competition Agreement.

Seller hereby further covenants and agrees as follows:

i.   Seller acknowledges and agrees that, for two years after the date hereof, Seller shall not (directly or indirectly) create, develop, make or engineer, or assist others to create, develop, make or engineer, anywhere in the world, any software application that is substantially similar in functionality to the Application, directly competitive to the Application or that solicits or encourages customers to purchase said software application in lieu of the Application.
ii.   Seller acknowledges and agrees that, following the execution of this Agreement, Seller shall not, as a company, consultant or agent for any other entity or person, seek to solicit or carry out any work of the same or similar nature, or offer, develop, license any similar product or service to the assets sold herein, for any client or customer of Buyer or any of its affiliates, nor solicit or cause any customer of Buyer to end or leave their relationship with Buyer for the services of Seller or any other party. As used herein "similar product or service" shall mean any product or service similar to that offered, licensed, contemplated or developed in a similar business to Buyer.
iii.   Seller hereby acknowledges and affirms that all information regarding the Application and all assets purchased by Buyer, are and must be kept confidential. This information includes, but is not limited to, trade secrets, existing and/or contemplated products and services, research and development, production, costs, profit and margin information, finances and financial projections, customers, clients, customer lists, marketing, and current or future business plans and models, except for information that is public knowledge or may become public knowledge not as a result of Seller breaching this Agreement.
iv.   Seller expressly acknowledges and agrees that the importance Buyer places on the scope and duration of the covenant contained in this section is reasonable, and Seller fully and voluntarily agrees to these restrictions. Seller also expressly acknowledges and agrees that the law concerning restrictive covenants is based on facts and circumstances. Therefore, Seller specifically agrees that, if any arbitrator or court of competent jurisdiction finds any of these restrictions to be unenforceable as overly broad, as unreasonable, or for any other reason, then these restrictions will be enforced to the greatest extent deemed enforceable.

8. Buyer Representations, Warranties and Covenants.

Buyer hereby represents and warrants, as of the date hereof and as of the Effective Date, and covenants, as follows:

i.   Buyer acknowledges that Seller, and not the LotusF, assumes all responsibility for the completeness and functionality of the Source Code and the Application.
ii.   Buyer has full power and authority to execute this Agreement and carry out the transactions contemplated by it, and no further action is necessary by the Buyer to make this Agreement valid and binding upon Buyer and enforceable against it in accordance with the terms hereof or to carry out the actions contemplated hereby

9. Indemnification.

Sellers and Buyer agree to defend LotusF, its affiliates, and their respective officers, directors, employees, agents, licensors and representatives (the “LotusF Indemnified Parties”) from and against any and all claims, causes of action, suits or proceedings, and indemnify and hold harmless the LotusF Indemnified Parties from any resulting liability, loss, damage, judgment, settlement, cost or expense, including reasonable attorneys’ fees, arising from or in connection with this Agreement, except to the extent caused by LotusF. LotusF reserve the right to assume, at its sole expense, the exclusive defense and control of any matter subject to indemnification by Sellers and Buyer, in which event Sellers and Buyer will fully cooperate with LotusF in asserting any available defenses.

10. Limitations of Liability.

10.1   TO THE MAXIMUM EXTENT PERMITTED BY LAW, UNDER NO CIRCUMSTANCES WILL LOTUSF BE LIABLE FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL, PUNITIVE OR EXEMPLARY LOSS OR DAMAGE (INCLDUING LOST PROFITS, DATA OR INFORMATION AND ANY COST OR EXPENSE OF PROCUREMENT OF A SUBSTITUTE GOOD), WHETHER SOUNDING IN TORT (INCLUDING NEGLIGENCE AND STRICT PRODUCT LIABILITY), CONTRACT, DEFAMATION, INTELLECTUAL PROPERTY LAW, OR OTHERWISE, EVEN IF A REPRESENTATIVE OF LOTUSF HAS BEEN ADVISED OF THE POSSIBLILITY OF THE DAMAGES, AND NOTWITHSTANDING ANY FAILURE OF THE ESSENTIAL PURPOSE OF THIS AGREEMENT OR ANY LIMITED REMEDY UNDER THIS AGREEMENT.
10.2   IN NO EVENT SHALL LOTUSF’S AGGREGATE LIABILITY UNDER THIS AGREEMENT EXCEED THE GREATER OF: THE AMOUNT OF THE SERVICE FEE ACTUALLY PAID TO LOTUSF UNDER THIS AGREEMENT; OR THE SUM OF ONE HUNDRED DOLLARS (USD $100). THE PARTIES AGREE THAT THIS LIMITATION SHALL APPLY EVEN IF THIS AGREEMENT OR ANY LIMITED REMEDY SPECIFIED HEREIN IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE.

11. Termination.

Buyer may terminate this Agreement if the Application transferred is substantially different in a material way from that which was described by Seller to Buyer prior to the execution of this Agreement. In the event that Buyer terminates this Agreement subsequent to the Purchase Price being released to Seller, then Buyer acknowledges and agrees that Buyer shall be entitled to a refund of the Purchase Price from Seller directly and waives any and all claims against the LotusF for such refund. In the event of a refund from Seller to Buyer, Seller hereby agrees and acknowledges that Seller is not entitled to a refund of the Service Fee, which amount shall be retained by LotusF.

12. Compliance with Laws.

Buyer and Seller covenant to comply with all applicable laws, rules, regulations and governmental orders, now or hereafter in effect, relating to its performance of this Agreement, including all import and export control laws.

13. Force Majeure.

A party shall not be liable to any other party for any delay or omission in the performance of any obligation under this Agreement, other than the obligation to pay monies, where the delay or omission is due to any cause or condition beyond the reasonable control of the party obliged to perform, including but not limited to, strikes or other labor difficulties, acts of God, acts of government (in particular with respect to the refusal to issue necessary import or export licenses), war, riots, embargoes, or inability to obtain supplies (“Force Majeure”). If Force Majeure prevents or delays the performance by a party of any obligation under this Agreement, then the party claiming Force Majeure shall promptly notify the other parties thereof in writing.

14. Successors and Assigns.

All the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective parties hereto and their successors and assigns.

15. Entire Agreement.

This Agreement constitutes the entire agreement among the Parties regarding the subject hereof and supersedes all prior and all contemporaneous agreements, whether written or oral. Any modification or amendment of any provision of this Agreement must be in writing, identify itself as an amendment to this Agreement, and bear the signature of the duly authorized representatives of all parties.

16. Governing Law.

This Agreement and all claims or issues regarding this Agreement shall be governed according to the laws of the State of California in the US if Seller is a US citizen or a US entity, otherwise according to the laws of Japan, except for the conflict or choice-of-law principles thereof.

17. Assignment.

This Agreement, or any of the rights and obligations created herein, shall not be assigned, sublicensed or transferred, in whole or in part, by Parties hereto without the prior written consent of the other parties; however LotusF may assign its rights under this Agreement to an affiliate or in connection with a reorganization, merger, acquisition or sale of all or substantially all of its assets to which this Agreement relates or other corporate or business combination transaction.

18. Survival.

The clauses that by their nature continue and survive, including the following clauses, shall survive the termination of this Agreement:
Clauses 6, 7, 8, 9, 10, 16 and 17.

19. Counterparts.

This Agreement may be executed in any number of counterparts or by facsimile or electronic PDF, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Any of such counterparts may be delivered by facsimile or electronic PDF transmission.

20. Severability.

If any term or provision of this Agreement is found to be invalid, illegal or unenforceable, the remainder of the provision will be amended to achieve as closely as possible the economic effect of the original term and the validity, legality, or enforceability of the remaining terms and provisions will not in any way be affected or impaired thereby.

21. Right to Rely on Instructions.

LotusF may assume that any employee of a Party to this Agreement who gives any written notice, request, or instruction has the authority to do so. LotusF will not be required to inquire into the truth or evaluate the merit of any statement or representation contained in any notice or document. LotusF is not be responsible for failure to act as a result of causes beyond the reasonable control of LotusF.

22. Right to Make Copies.

LotusF shall have the right to make copies of the Application, Source Code and other materials as reasonably necessary to perform this Agreement. LotusF shall copy all copyright, and other proprietary notices and titles contained on the originals onto any copies made by LotusF.

23. Cooperation

LotusF may request Buyer or Seller’s cooperation in the completion of the transaction contemplated by this Agreement. Each of Buyer and Seller agree to fully and timely cooperate as requested by LotusF.


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