definiens: shall mean gross sales of the LICENSED PRODUCTS to thirdparties invoiced by LICENSEE less sales, use, ad valorem and similar taxes, lessduties and less commissions or fees paid by LICENSEE to unaffiliated parties inconnection with such sales, less delivery or shipping costs and less credits orallowances, if any, on account of rejections or returns of LICENSED PRODUCTSpreviously sold . LICENSED PRODUCTS shall be deemed -2-<PAGE > to have been sold when paid for . In the event that LICENSEE shall transferLICENSED PRODUCTS to a company owned or controlled by or affiliated withLICENSEE and such company retransfers the LICENSED PRODUCTS to a third partywithin one year of their receipt, then the price charged by the affiliatedcompany to third parties shall be included in LICENSEE 's gross sales . If suchaffiliated company does not retransfer the LICENSED PRODUCTS within one year, then the higher of : i ) the price charged by LICENSEE to such affiliate companyor ii ) the average price charged by LICENSEE to third party customers duringsuch year or, in the absence of sales to third party customers, the fair marketprice for the LICENSED PRODUCTS, shall be included in LICENSEE 's gross sales