definiens: means the gross amounts invoiced and received by Naia, its Aﬃliates, or Sublicensees for allsales or transfers of any Licensed Product to Third Parties during the applicable Royalty Term for such Licensed Product, less the following amounts to the extent actually incurred or paid by Naia, its Aﬃliates, or Sublicensees with respect to suchsales or transfers:(a)trade, cash and quantity discounts, charge backs or rebates actually allowed or taken, includingdiscounts or rebates to governmental ; wholesalers and other distributors ; pharmacies and other retailers ; buying groups;health care insurance carriers ; pharmacy beneﬁt management companies ; regulatory authorities ; Third Parties associatedwith patient assistance programs ; or managed care organizations;(b)credits or allowances actually given or made for rejection of, or return of previously sold LicensedProducts;(c)any charges for insurance, freight, and other transportation costs directly related to the delivery ofLicensed Product to the extent included in the gross invoiced price;(d)any tax, tariﬀ, duty or governmental charge levied on the sales, transfer, transportation or delivery ofthe Licensed Product ( including any tax such as a value added or similar tax or government charge ) borne by the sellerthereof, other than franchise or income tax of any kind whatsoever;(e)any import or export duties or their equivalent borne by the seller ; and(f)wholesaler, distributor, and inventory management fees . All aforementioned deductions shall only be allowable to the extent they are commercially reasonable anddetermined in the ordinary course of business based on its accounting standards and practices consistently applied acrossits product lines and verifiable based on conventional industry practices . All such discounts, allowances, credits, rebates, andother deductions shall, for purposes of calculating Net Sales hereunder, when oﬀered in conjunction with discounts, allowances, credits, or rebates on other products sold for separately stated prices, not be deducted hereunder to the extentoﬀered as an enticement or in exchange for purchasing such other products such that the Licensed Product bears adisproportionate portion of such deductions as related to such other products . Notwithstanding anything in this Agreement tothe contrary, the transfer of the Licensed Product between or among Naia, its Aﬃliates, and Sublicensees will not beconsidered a sale, provided, that in the event an Aﬃliate or Sublicensee is the end - user of Licensed Product, the transfer ofLicensed Product to such Aﬃliate or Sublicensee shall be included in the calculation of Net Sales at the average sellingprice charged in the applicable country in an arm ’s length sale to a Third Party who is not an Aﬃliate or Sublicensee in therelevant period . Net Sales will include the cash consideration received on a sale and the fair market value of all non - cashconsideration . Disposition of Licensed Product for, or use of the Licensed Product in, clinical trials or other scientiﬁc testing, as samples, or under compassionate use, named patient sales, patient assistance, or test marketing programs or othersimilar programs or studies where the Licensed Product is supplied at or below cost shall not result in any Net Saleshowever if Naia or any of its Aﬃliates or Sublicensees charges an amount for such Licensed Product in excess of Naia ’s, itsAﬃliates ’, or its Sublicensees ’ cost therefor, the amount billed will be included in the calculation of Net Sales, but for thesake of clarity such disposition or use of the Licensed Product shall never constitute a First Commercial Sale