definiens: means the total received by LICENSEE from sale of LICENSED PRODUCTS less transportation charges and insurance, sales taxes, use taxes, excise taxes, value added taxes, customs du ties or other imports, to the extent itemized on invoice, normal and customary quantity and cash discounts ( to the extent allowed ), allowances and credits on account of rejection or return of LICENSED PRODUCTS . In the event that a LICENSED PRODUCT in.cludes, a component which has therapeutic _ and/or prophylactic activity ( ) covered by a PATENT RIGHT ( Patented Component(s ) and Active Components not covered by a PATENT RIGHT ( Unpatented Component(s » ( such PRODUCT being a Combined Product ), then NET SALES shall be the amount which is normally received by LICENSEE from a sale of the Patented Component(s ) when sold separately in an arm 's length transaction with an unaffiliated third party . If the Patented Component(s ) are not sold separately, then NET SALES upon which royalty is paid shall be the NET SALES of the Combined Product multiplied by a fraction, the numerator of which is the cost for producing the Patented Components and the denominator of which is the cost for producing the Combined Product .