definiens: shall mean, with respect to any Royalty - Bearing Product, gross amounts invoiced on sales to Third Parties in bona fide, arm's - length transactions, less the following types of deductions : ( a ) Normal and customary trade and quantity discounts with respect to sales of such Royalty .. Bearing Product ; ( b ) Amounts repaid or credited by reason of defects, rejection, recalls, returns, rebates and allowances of goods, or because of retroactive price reductions specifically identifiable to such Royalty - Bearing Product ; ( c ) Governmental rebates, such as Medicaid chargebacks or rebates, and retroactive price reductions or allowances actually allowed or granted from the invoiced amount ; ( d ) Tariffs, duties, excise, sales, value - added, and other taxes ( other than taxes based on income ) included in the invoiced amount ; ( e ) Cash discounts for timely payment actually allowed and properly taken directly with respect to sales of such Royalty - Bearing Product ; ( f ) Delayed ship order credits actually allowed and properly taken directly with respect to sales of such Royalty - Bearing Product ; ( g ) Discounts pursuant to indigent patient programs and patient discount programs, including coupon discounts specifically identifiable to such Royalty - Bearing Product ; ( h ) All freight, postage and insurance included in the invoiced amounts ; ( i ) Amounts repaid or credited for uncollectible amounts on previously sold units of such Royalty - Bearing Product ; 0 ) Commercially reasonable and customary fees paid to wholesalers, resellers and similar Persons in the distribution chain other than sales representatives ; and ( k ) Warehousing costs specifically identifiable to such Royalty - Bearing Product, all as determined in accordance with generally accepted accounting principles, consistently applied . Sales of Royalty Bearing Products for post - approval clinical studies and disposition of samples in customary quantities shall not be included in the calculation of Net Sales ; provided such Royalty Bearing Products are sold at or below cost . In the case of any sale or other disposal of a Royalty - Bearing Product between or among a Party and its Affiliates and Sublicensees for resale, Net Sales shall be calculated as above only on the value charged or invoiced on the transfer thereafter to a Third Party