definiens: for the purpose of computing royalties means the price received by Licensee, its Affiliate or its sublicensee for the sale of the Licensed Product in an arms­length transaction, less the following : ( a ) allowances and adjustments actually credited or allowed to customers ; ( b ) trade, quantity, cash and prompt payment discounts actually allowed and taken ; ( c ) taxes levied on andlor other governmental charges imposed as to production, sales, transportation, delivery or use and paid or collected by or on behalf of Licensee ; ( d ) costs of insurance ; packing, and transportation from the place of manufacture to the customer 's premises or point of installation ; provided, however, that the costs described in clauses ( c ) and ( d ) may only be deducted from the Selling Price if, and to the extent that, they are separately identified in invoices . When a Licensed Product is not sold, but is otherwise disposed of, the Selling Price of that Licensed Product for the purposes of computing royalties is the selling price at which products of similar kind and quality, sold in similar quantities, are currently being offered for sale in arms - length transactions by Licensee . When such products are not currently being offered for sale by Licensee, the Selling Price of a Licensed Product otherwise disposed of, for the purpose of computing royalties, is the average selling price at which products of similar kind and quality, sold in similar quantities, are then currently being offered for sale by other manufacturers . When such products are not currently sold or offered for sale by Licensee or others, then the Selling Price, for the purpose of computing royalties, shall be negotiated by the parties in good faith based on the fair market value of the Licensed Product . Sales or other dispositions of Licensed Products between or among Licensee and any of its Affiliates or sublicensees for the purpose of subsequent resale to third parties ( ) shall not be included in the calculation of the Selling Price