definiens: means Gross Sales of Product less applicable Reserve for Sales Returns and Allowances . This definition ofNet Sales shall be used in calculating applicable royalties due pursuant to Article 2 of this Financial Exhibit, and shall also beused for purposes of calculating Distributable Profits in the event that [COMPANY] exercises its Co - Promotion Option for anapplicable Product in the Joint Commercialization Territory pursuant to Section 5.2 of the Agreement 5.16 means the following internal and external costs incurred ( or amounts received, as applicable),by [COMPANY] and [COMPANY] and their Affiliates, during the applicable period : Manufacturing Costs, Marketing Costs, SalesCosts, Other Operating Income / Expenses, Third Party Payments under a Third Party License entered into in accordance withSection 10.4 of the Agreement and/or Distribution Costs, in each case to the extent directly attributable and fairly allocable tothe Pre - Clinical Development, Development, Manufacture, and/or Commercialization of Products for Co - DevelopmentIndications for the Joint Development Territory, or for Co - Promotion Products in the Co - Promotion Countries, for the relevantperiod and the categories of Costs being shared by the Parties in accordance with the Agreement during such period