Amendment to Publisher Content License Agreement
Added June 1, 2013; last modified August 12, 2013

CEL has developed a subsidiary channel branded "desLibris" for the distribution of ebooks to libraries under alternative licensing models.

Publisher Compensation

In the desLibris business model, there are two revenue streams, both "subscription" in nature.

Fulltext Online: Authenticated Libraries pay annual subscription fees to give their users online access to the fulltext of Electronic Titles.

Universal Loan:
Authenticated Libraries pay additional (and optional) annual subscription fees to give their users the right to download DRM-controlled copies for personal use under the terms of the Universal Loan plan.

By accepting this amendment, Publisher permits all Titles authorized for distribution through CEL to be included in desLibris. However, as is the case with CEL, Publisher may alter rights settings for all Titles to allow or disallow fulltext online viewing and/or Universal Loan (limited-term download) for any or all titles. CEL will provide Publisher with an online utility to set these defaults and make individual Title settings.

Calculation of Publisher Compensation

In consideration of this permission, CEL will pay royalties by Title based on these revenue-sharing formulas:

Fulltext Online:

Seventy percent (70%) of all revenues from sales of the Books Online membership option (net of any refunds) are deposited into a Pool, which will be the Publisher share of Books Online revenue.

Each Title licensed for Books Online will receive a share of this Pool which will be calculated as a ratio of the List Price of each Title to the Sum of the List Prices of all Titles so licensed. Details of this calculation are provided below.

Universal Loan:

Seventy percent (70%) of all revenues from sales of the Universal Loan option (net of any refunds) are deposited into a Pool, which will be the Publisher share of Universal Loan revenue.

Each title licensed for Universal Loan and borrowed during the period will receive a share of this Pool, which will be calculated as a ratio of the List Price of each Title times the number of Loans granted for that Title in proportion to the sum of the same calculation for all TItles Loaned in the same period. Details of this calculation are provided below.

Royalties are calculated on a semi-annual basis, as of June 30 and December 31. Payments are made within 60 days of the end of the period.

Books Online - Royalty Calculation Example

A

Revenue from Memberships in period

$ 200,000

B

Pool Percentage to Publishers

70%

C

Pool Amount for Period

 $ 140,000

A x B

D

List price of total collection available for licensing

     $ 500,0000

E

Value of one share

$0.28

C / D

F

List Price of Title A

$50.00

G

Payment for Title A

 $14.00

E x F

Universal Loan - Royalty Calculation Example

A

Revenue from Loan Option in period

$2,900

B

Pool Percentage to Publishers

70%

C

Pool Amount for Period

$ 2,030

A x B

D

Total points allocated for period 

                   330

sum over all titles
of (List price x loans)  

E

Royalty rate

$  6.1515/point

C / D

F

List Price of Title A

$10.00

G

Loans of Title A

5

H

Points for Title A

                      50

F x G

I

Royalty payment for Title A

$307.58

E x H