definiens: shall mean the aggregate United States Dollar equivalent of gross revenues derived by or payable to [COMPANY] or its Affiliates for the transfer ; sale, license, lease or other disposition of Databases, or the right to access or use Databases, to third parties less a ) credits or allowances, if any, actually granted on account of price adjustments, recalls, rejections, or return of items previously sold, prompt payment discounts, installation and train!!l-.S costs actually incurred ; * ­b ) actual trade or quantity discounts actually allowed and taken ; c ) excises, . sales CONFIDENTIAL March 29, 2000 ( 7 : 42PM ) X : WORKDEL TAGEN30295 . DOC -6 - taxes, value added taxes, consumption taxes, duties, foreign withholding tax actually withheld, or other taxes imposed upon and paid with respect to such sales ( excluding income or franchise taxes of any kind ) ; d ) insurance, delivery, costs actually incurred and e ) any royalties or license fees or other payments paid to _ ' 1./ _ third parties on account of claims of infringement by, and/or for rights and/or ~ licenses relating to, Probe Arrays or Systems or Software provided hereunder andlor their use as contemplated hereby or in their respective manuals or other documentation . No deduction shall be made for any item of cost incurred by [COMPANY] or its Affiliates in preparing, manufacturing, shipping, or selling Databases except as permitted pursuant to a ), b ), c ), and d ) above and the aggregate deductions to Net Sales pursuant to a ) above shall not exceed 12 % . Net Sales shall not include ( A ) any royalties or license fees or other payments for ( i ) licenses under [COMPANY] 's patents or other proprietary rights, even if the need for or desirability of such license arises out of the use of a Database, ( ii ) any knockout mice, conditional knockout mice, knock - in mice or any other animal(s ) or any associated sperm, cells, materials or tissues, or ( iii ) licenses or other rights to access or use, or to be provided, information or data not directly derived from use of a Probe Array, even if such information is also contained within . or derivable from a Probe Array ; ( B ) any internal use by [COMPANY] or its Affiliates ; or ( C ) any transfer between or among [COMPANY] and any of its Affiliates including if for re - license or resale . If [COMPANY] or an Affiliate licenses or sells to or through a distributor ( which is not an Affiliate of [COMPANY] ), Net Sales shall be the gross revenues ( including but not limited to royalties and agency fees ) received by [COMPANY] andl or the applicable Affiliate from the license or other transfer of the Databa·se to such distributor . In the event that [COMPANY] or any of its Affiliates licenses a Database to third parties for other than monetary value in whole or in part, such transfer shall be considered a license hereunder for accounting and royalty purposes . In the event cash and non - cash consideration or solely non - cash consideration is received by [COMPANY], Net Sales shall be the cash consideration, if any, plus the value of non - cash consideration . Non cash consideration shall be determined on a country - by - country basis and shall be the average price of comparable arms length licenses solely for cash by [COMPANY] or its Affiliates in such country during the royalty reporting period in which such transfer occurs less the amount of cash consideration received, if any, or if no such comparable arms length licensing occurred in such country during such period, during the last period in which such arms length sales occurred . If no arms length licenses solely for cash have occurred in a particular country, non cash consideration for such transfer shall be the average price of comparable arms length licenses solely for cash in all countries less the amount of cash consideration received, if any . If no CONFIDENTIAL March 29, 2000 ( 7 : 42PM ) X : WORKDELTAGEN30295 : DOC -7 - comparable arms length licenses solely for cash occurred, then the value of non cash consideration shall be valued on an equitable basis to be agreed upon by the parties . If a Database is sold or licensed as part of a database that includes both Datapoints and other information or data and/or as part of a system, package, or combination with other product(s ), licensees ) andlor service(s ) ( collectively, a ), then the Net Sales attributable to the Database for purposes of this Agreement shall be calculated by multiplying the Net Sales of the Product Bundle during that financial reporting period in question by the fraction AI B where is the average unit price during that period of the Database when licensed separately and is the sum of all the average unit prices during that period of all of the component products and services comprising the Product Bundle when licensed or sold separately . If the Database or any other component product or service of a Product Bundle is not licensed or sold separately from the combination comprising the Product Bundle, then the percentage of the Net Sales of the Product Bundle that is attributable to the Database shall be an equitable allocation as reasonably determined by the Parties ( or, if the Parties can not agree, by arbitration in accordance with Section 12.6 )