definiens: means the amount invoiced ( or in the absence of an invoice, received ) by COMPANY, its AFFILIATESor SUBLICENSEES for the sale to THIRD PARTIES in bona fide arms length transactions of SELECTED PRODUCTless the following, to the extent included in the amount invoiced : ( i ) discounts, credits, rebates, allowances, chargebacks, uncollectable accounts, adjustments, rejections, recalls, returns, billing errors ; ( ii ) price reductions, rebates andsimilar payments imposed by government authorities ; ( iii ) transportation, importation, freight, postage, shipping, insurance and other handling costs, if separately identified on the invoice ; ( iv ) administrative and other fees andreimbursements and similar payments directly related to the sale or delivery of SELECTED PRODUCT paid towholesalers and other distributors, buying groups, pharmacy benefit management organizations, health care insurancecarriers and other institutions ; ( v ) the cost of the DELIVERY SYSTEM, but only if such DELIVERY SYSTEM isinvoiced separately, where for purposes of this NET SALES definition, a shall mean anydelivery system comprising equipment, instrumentation, one or more devices or other components designed to assistin the administration of SELECTED PRODUCT ; CONFIDENTIAL Page 7 of 89 and ( vi ) any taxes, other governmental charges or import and excise duties levied on the production, sale, transportation, delivery or use of SELECTED PRODUCT which is paid by or on behalf of COMPANY ( includingwithout limitation sales, use, excise, turnover, inventory, and value - added taxes ) . For purposes of determining NETSALES, SELECTED PRODUCT shall be deemed to be sold when SELECTED PRODUCT is shipped and invoiced, anda shall not include transfers or dispositions for charitable, promotional, pre - clinical, clinical, regulatory orgovernmental purposes ( excluding however the sales of SELECTED PRODUCT that are intended for administration topatients and paid for in whole or in part by governmental agencies or authorities including, by way of example but notlimitation, pursuant to governmental programs such as Medicare or Medicaid ) . In addition, NET SALES by COMPANYhereunder are subject to the following : ( a ) In the case of pharmacy incentive programs, hospital performance incentive program charge backs, diseasemanagement programs, similar programs or discounts on of products, all discounts and the like shallbe allocated among products on the basis on which such discounts and the like were accrued, or if such basiscannot be determined, proportionately to the list prices of such products ; ( b ) Sales or other disposals of SELECTED PRODUCT between and among COMPANY, its AFFILIATES and itsSUBLICENSEES shall be excluded from the computation of NET SALES ; ( c ) In the event of a sublicense as to the SELECTED PRODUCT, NET SALES will be calculated with respect tosales of the SELECTED PRODUCT by the SUBLICENSEE to a THIRD PARTY ; and ( d ) In the event that SELECTED PRODUCT is sold in any country in the form of a combination product containingone or more therapeutically active ingredients in addition to SELECTED PRODUCT, with respect thereto, thePARTIES shall negotiate in CONFIDENTIAL Page 8 of 89 good faith to determine what portion of the net sales of such combination product in such country shall betreated as NET SALES under this AGREEMENT, which determination shall be based on the value added bySELECTED PRODUCT, compared to the value added by such other therapeutically active ingredients, to theinvoice price of such combination product . If the PARTIES are unable to agree upon such aggregate economicvalue, then the PARTIES shall refer the matter to the senior management representatives of each PARTY and, ifthe senior management representatives of the PARTIES can not resolve such disagreement within fifteen(15 ) days after the matter is referred to them, the PARTIES shall refer the matter to final and binding arbitrationas provided for in Section 17.9