definiens: . Net Sales shall mean, with respect to a Royalty - Bearing Product, the gross amount invoiced by BSC, its Affiliates and/or its sublicensees on sales or other dispositions of the Royalty - Bearing Product to unrelated third parties, less the following items : ( a ) Trade, cash and quantity discounts actually allowed and taken directly with respect to such sales ; ( b ) Tariffs, duties, excises, sales taxes or other taxes imposed upon and paid directly with respect to the production, sale, delivery or use of the Royalty - Bearing Product ( excluding national, state or local taxes based on income ) ; ( c ) Amounts repaid or credited by reason of rejections, defects, recalls or returns or because of chargebacks, refunds, rebates or retroactive price reductions ; and ( d ) Separately invoiced distribution expenses ( such as freight, transportation and insurance expenses )