definiens: shall mean gross service revenues and fees billed by COMP ANY, AFFILIATED COMPANY, SUBLICENSEE(S ) and/or DEVELOPED PRODUCT LICENSEE(S ) for or in connection with the performance of LICENSED SERVICE(S ) andlor DEVELOPED PRODUCT(S ) less reasonable and appropriate ( and, in each every case, actually paid or applied ) trade discounts allowed, refunds, returns and recalls, duties and sales andlor use taxes imposed upon and directly related to the sale of or fee the LICENSED SERVICE{S ) andlor DEVELOPED PRODUCT(S ) . In the event that COMPANY, AFFILIATED COMPANY, SUBLICENSEE(S ) andlor DEVELOPED PRODUCT LICENSEE(S ) sells a LICENSED SERVICE(S ) andlor DEVELOPED PRODUCT(S ) in combination with Other Items or as part of a kit that contains Other Items, the NET SERVICE REVENUES for purposes of royalty payments shall mean the amount billed by COMPANY, AFFILIATED COMPANY, SUBLICENSEE(S ) and/or DEVELOPED PRODUCT LICENSEE(S ) on sales of the combination process, service or product less the deductions set forth above, multiplied by a proration factor detennined as follows : ( a ) If all LICENSED SERVICE(S ) andlor DEVELOPED PRODUCT(S ) and Other Items were sold separately during the same or immediately preceding year, the proration factor shall be determined by the formula [ A I ( A+B ) ], where A is the aggregate gross sales price of all LICENSED SERVICE(S ) andlor DEVELOPED PRODUCT(S ) components during such period when sold separately from the Other Items, and B is the aggregate gross sales price of the Other Items during such period when sold separately from the LICENSED SERVlCE(S ) andior DEVELOPED PRODUCT(S ) components ; or ( b ) If the combination includes Other Items which are not sold separately ( but all LICENSED SERVICE(S ) andlor DEVELOPED PRODUCT(S ) in the combination are available separately ), the NET SERVICE REVENUES for purposes of royalty payments will be calculated by mUltiplying the NET SERVICE REVENUE of the combination by Ale, where A is defined above and C is the invoiced price of the com bination, or SMV / JHU .. 4664 Page 5 of23 8/1712005 ( c ) If all components of the combination process, service or product were not sold separately during the same or immediately preceding year, the proration factor shall be determined by the fonnula [ C / ( C+D ) ], where C is the value of the LICENSED SERVICE(S ) andlor DEVELOPED PRODUCT(S ) components and D is the value of the Other Items, with such value being determined in good faith by the parties