I haven't heard of splitting up royalties between domestic and
international sales. I'd really like to hear their explanation of why the
agreement has been set up that way. On ownership of the artwork I'd do
everything I could to retain ownership. Even if they are going to produce
electronic versions of the book there seems no reason why they should own
the artwork. If you do sell the arwork and all rights make sure you
establish a reasonable price. Remember that once it's out of your control
they can do anything they want with it.

Good Luck

John Megahan
University of Michigan
Museum of Zoology