definiens: means, with respect to a Product, the g ross amount invoiced by a Party, its Affiliates or Licensees thereof to unrelated Third Parties, excluding any Licensee, for the Product, less : ( a ) Trade, quantity and cash discoun ts allowed ; ( b ) Commissions, discounts, refunds, rebates, chargebacks, retroactive price ad justments, and any other allowances which effectively reduce the net selling price ; ( c ) Produ ct returns and allowances ; ( d ) That portion of the value associated with the cost of the drug deli very systems ; ( e ) Any tax imposed on the production, sale, delivery or use of the Product, i ncluding, without limitation, sales, use, excise or value added taxes ; ( f ) Allowance for dist ribution expenses ; and ( g ) Any other similar and customary deductions . Net Sales will be calculated in U.S. Dollars . Such amounts will be determined from the books and records of a Party, its Affiliate or Licensee, maintained in accordance with U.S. Generally Accepted Accounti ng Principles or, in the case of Licensees, such similar accounting principles, cons istently applied . Each Party further agrees in determining such amounts, it will use its then c urrent standard procedures and methodology, including its then current standard 1.1 - 3 CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. § § 200.80(b)4, AND 240.24b-2 exchange rate methodology for the translation of fo reign currency sales into U.S. Dollars or, in the case of Licensees, such similar methodology, consistently applied . Net Sales excludes : ( i ) The transfer of reasonable and customary quanti ties of free samples of Product(s ) and the transfer of Product(s ) as clinical trial materials, other than for subsequent resale ; ( ii ) Sales or transfers of Product(s ) among a Party and its Affil iates unless the receiving Party is the consumer or user of the Product(s ) ; and ( ii ) Use by a Party or its Affiliates or Licensees of Product for any use connected with the securing of regulatory approval or validating of a manufacturing process or the obtaining of other nec essary marketing approvals for Product ( unless such Product is subsequently sold ) . In the event that the Product(s ) is sold as part of a Combination Product ( where me ans any pharmaceutical product which comprises the Product(s ) and at least one oth er active compound(s ) and/or ingredients ), the Net Sales of the Product(s ), for the purposes o f determining royalty payments, will be determined by multiplying the Net Sales of Combinat ion Product ( as defined in the standard Net Sales definition ) by the fraction, A / ( A+B ) wh ere A is the weighted average sale price of the Product(s ) when sold separately in finished for m, and B is the weighted average sale price of the other product(s ) sold separately in finished form . In the event that the weighted average sale price of the Product(s ) can be determined but the weighted average sale price of the other product(s ) can not be determined, Net Sales for purp oses of determining royalty payments will be calculated by multiplying the Net Sales of the C ombination Product by the fraction A / C where A is the weighted average sale price of the P roduct(s ) when sold separately in finished form and C is the weighted average selling price of the Combination Product . In the event that the weighted average sale price of the other produc t(s ) can be determined but the weighted average sale price of the Product can not be determi ned, Net Sales for purposes of determining royalty payments will be calculated by multiplying the Net Sales of the Combination Product by the following formula : one ( 1 ) minus B / C where B is the weighted average sale price of the other product(s ) when sold separately in finish ed form and C is the weighted average selling price of the Combination Product . In the ev ent that the weighted average sale price of both the Product(s ) and the other product(s ) in the Combination Product can not be determined, the Parties will attempt to agree on an appropriate weighted average sale price of both the Product(s ) and the other product(s ) in the Combination Product, and lacking such agreement the Net Sales of the Product(s ) will be d eemed to be equal to fifty percent ( 50 % ) of the Net Sales of the Combination Product . The weigh ted average sale price for a Product, other product(s ), or Combination Product will be ca lculated once each Calendar Year and such price will be used during all applicable royal ty reporting periods for the entire Calendar Year . When determining the weighted average sale pr ice of a Product, other product(s ), or Combination Product, the weighted average sale pric e will be calculated by dividing the sales dollars ( translated into U.S. Dollars ) by the units of active ingredient sold during the twelve ( 12 ) months ( or the number of months sold in a part ial 1.1 - 4 CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. § § 200.80(b)4, AND 240.24b-2 Calendar Year ) for the respective Product(s ), other product(s ), or Combination Product . In the initial Calendar Year, a forecasted weighted averag e sale price will be used for Product(s ), other product(s ), or Combination Product . Any over or under payment due to a difference between forecasted and actual weighted average sale prices will be paid or credited in the first royalty payment of the following Calendar Year