2. terms of payment
（1）rate licensee agrees to pay to licensor as royalty a sum equal to _________percent of all net sales by licensee or any of its affiliated， ssociated or subsidiary companies of the articles covered by this greement. the term "net sales" shall mean gross sales less quantity iscounts and returns， but no deduction shall be made for cash or other iscounts or uncollectible accounts. no costs incurred in the manufacture， ale， distribution or exploitation of the articles shall be deducted from ny royalty payable by licensee. licensee agrees that in the event it hould pay any other licensor a higher royalty or licensing rate or ommission than that provided herein for the use of the name， than said igher rate shall automatically and immediately apply to this contract.
（2）minimum royalties licensee agrees to pay to licensor a minimum royalty of _________dollars (_________$) as a minimum guarantee against royalties to e paid to licensor during the first contract term， said minimum royalty o be paid on or before the last day of the initial term hereof. the dvance sum of_________ dollars ($ _________) paid on the signing ereof shall be applied against such guarantee. no part of such minimum oyalty shall in any event be repayable to licensee.
（3）periodic statements within _________ days after the initial shipment of the articles overed by this agreement， and promptly on the _________ of each alendar _________ thereafter， licensee shall furnish to licensor omplete and accurate statements certified to be accurate by licensee howing the number， description and gross sales price， itemized deductions rom gross sales price and net sales price of the articles covered by this greement distributed and/or sold by licensee during the preceding alendar _________， together with any returns made during the preceding alendar _________ for this purpose， licensee shall use the statement orm attached hereto， copies of which form may be obtained by licensee rom licensor. such statements shall be furnished to licensor whether or ot any of the articles have been sold during the preceding calendar _________.
（4）royalty payments royalties in excess of the aforementioned minimum royalty shall be due n the _________ day of the _________ following the calendar _________ in which earned， and payment shall accompany the statements urnished as required above. the receipt or acceptance by licensor of any f the statements furnished pursuant to this agreement or of any royalties aid hereunder (or the cashing of any royalty checks paid hereunder) shall ot preclude licensor from questioning the correctness thereof at any ime， and in the event that any inconsistencies or mistakes are discovered n such statements or payments， they shall immediately be rectified and he appropriate payment made by licensee. payment shall be in _________. domestic taxes payable in the licensed territory shall be ayable by licensee.
3. exclusivity
（1）nothing in this agreement shall be construed to prevent licensor rom granting any other licenses for the use of the name or from utilizing he name in any manner whatsoever， except that licensor agrees that except s provided herein it will grant no other licenses for the territory to hich this license extends effective during the term of this agreement， or the use of the name in connection with the sale of the articles escribed in paragraph 1.
（2）it is agreed that if licensor should convey an offer to licensee o purchase any of the articles listed in paragraph 1， in connection with premium， giveaway or other promotional arrangement， licensee shall have _________ days within which to accept or reject such an offer. in the event hat licensee fails to accept such offer within the specified _________ ays， licensor shall have the right to enter into the proposed premium， iveaway or promotional arrangement using the services of another anufacturer， provided， however， that in such event licensee shall have a hree (3) day period within which to meet the best offer of such anufacturer for the production of such articles if the price of such anufacturer is higher than the price offered to licensee by licensor. icensee agrees that it shall not， without the prior written consent of icensor， (i) offer the articles as a premium in connection with any other roduct or service， or (ii) sell or distribute the articles in connection ith another product or service which product or service is a premium.