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As you probably know, Night Shade Books has had a difficult time after the demise of Borders. We have reached a point where our current liabilities exceed our asset s, and it is clear that, with our current contracts, sales, and financial position, we cannot continue to operate as an independent publisher. If we filed for Chapter 7 ba nkruptcy, or liquidation, the rights to your books could be entangled in the court s for years as could past or current unpaid royalties or advances. However, we have found an alternative, which will result in authors getting paid everything they ar e due as well as finding a future home for their books, subject to the terms and con ditions stated in this letter. Provided that a sufficient number of Night Shade authors agree to certain changes to their contracts with Night Shade, Skyhorse Publishing, Inc. and Start Publishin g, LLC have agreed to acquire all Night Shade Books assets. To be clear, this is an acquisition of assets, not a purchase of the company as a whole. The revenue recei ved from the sale would go towards paying off the debts of the company. If you sig n below, and a sufficient number of other Night Shade authors and other creditors also agree to these terms, you will receive full payment to bring all royalties and ov erdue advances current. Your payment would be in the amount of xxxxx By signing this letter, you agree that: 1. Under the new owners, the first royalty periods will be March through Jul mmencing on the closing date of the sale of Night Shade) and August through Decemb er, 2013. In 2014 royalty periods will revert back to January-June and July-December. Royalties will be calculated based on when the monies are actually received by the Publisher, not by the date of sale or invoice. 2. With respect to all of your agreement(s) with Night Shade, you agree, sol extent Night Shade currently holds such rights under your contract with Night Shad e, to assign to Skyhorse Publishing, Inc. all rights, except for eBook rights. You f urther agree to accept from Skyhorse Publishing, Inc. a revised royalty rate of te n percent (10%) of net receipts, regardless of format or customer, except for eBoo k sales. Net receipts are defined as the money received for the sale of a book to a bookseller and does not include any additional expenses. As an example, if a book has a $20 cover price, Skyhorse would sell it to the bookseller for $10. The autho r would receive 10% of that $10, for a total of $1.00. This change shall be reflecte d on all future royalty statements but will not affect back royalties due. 3. You agree that, Skyhorse Publishing, Inc. shall have the right to sell au and second serial rights to your work to third parties, and any proceeds from such sale will be split between you and Skyhorse Publishing, Inc. on a fifty/fifty (50/5 0) basis. This agreement does not supercede audio or second serial rights that hav e been already licensed to another company or rights that are in active negotiatio n. Skyhorse Publishing will consult the author on these sales however such approval sh all not be unreasonably denied, delayed or withheld. 4. With respect to all of your agreement(s) with Night Shade, you agree to a art Publishing LLC any eBook rights currently held by Night Shade. You further agr ee to accept from Start Publishing, LLC a royalty rate of twenty five percent (25%)
of net receipts actually received by Start Publishing, LLC. This change shall be re flected on all future royalty statements but will not affect back royalties due. 5. You agree that your agreement(s) with Night Shade shall be assigned, for copyright, as follows: (a) with respect to eBook rights (to the extent currently held by Night Shade), to Start Publishing, LLC; and (b) with respect to all other ri ghts set forth in the agreement(s) (to the extent currently held by Night Shade) ( with the exception of Paragraph 3 above), to Skyhorse Publishing Inc. 6. You agree that your agreement(s) with Night Shade concerning reversion out of print works shall continue in accordance with your existing contract. In th e event that a contract does not have a clause concerning reversion, you agree to th e following language: Electronic and print Works are to be considered separately and may revert independently of each other. In addition to royalty statements, every two years, an author may request a report of total copies sold. If at any time after two years following the Publisher's first publication of the Work it goes out of print, and if the Publisher fails to reprint or to cause a licensee to reprint an ed ition within six (6) months after receipt of a written demand from the Author, the Author may revert the rights by written notice, subject to the Publisher's obliga tion to pay the Author any sums then due or becoming due. Publisher shall notify A uthor within three (3) months of such demand of its intention to reprint the Work or revert its rights in the Work. The Work will be deemed out of print if it sells less than 100 copies of a print edition in a twelve-month period, or it sells less than 100 copies of an e-book edition in a twelve-month period. 7. You agree that Skyhorse Publishing, Inc. and/or Start Publishing, LLC r respective rights to any third party without the author’s consent on the same term s and conditions as agreed to herein.
8. You agree and understand that your agreements as set forth herein are con n your receipt of the amount set forth above, which amount you agree to accept in full and final satisfaction of any and all claims to past due royalties and/or adv ances or any other sums owed to you through and including March 5, 2013. The next royalty payments will be made on September 1st, 2013 and shall cover money receive d between March 6th and July 31st, 2013. That payment shall be made as follows: (a) St art Publishing, Inc. shall pay royalties on all money received during the period t hat relates to eBooks and (b) Skyhorse Publishing, Inc. shall pay royalties on all money received during the period that relates to physical books or related rights sales.
9. You agree that as of the date of closing of the sale and thereafter, a hat you may have with Night Shade, Skyhorse Publishing, Inc. and/or Start Publishi ng, LLC shall be governed by and construed in accordance with the laws of the State of New York without regard to the conflicts of law rules thereof. You further agre e that any disputes of whatever kind shall be litigated in the courts of the City, County and State of New York having appropriate jurisdiction. If the sale goes through, Jeremy Lassen and Jason Williams will stay on with Skyh e/Start in an acquisition/editor capacity as consultants but the day to day operat ions, including contracts, royalties, publicity, etc, will be handled by Skyhorse/St art's staff. We need a response within two weeks, by April 16th, 2013, at which ti me we will determine whether the sale can, indeed, take place.
AGREED:______________________ _____ Author
AGREED:________________________ _______ Night Shade Books