definiens: shall mean the amounts invoiced or otherwise charged on the sales of Licensed Products by [COMPANY] or its Affiliates to Unaffiliated Third Parties in bona fide arms ' length transactions : less ( a ) trade, cash and quantity discounts, including charge backs, rebates, premiums, allowances and any other deduction actually granted to the Unaffiliated Third Parties ; ( b ) sales and excise taxes and duties and any other governmental charges imposed upon the importation, use or sale of the Licensed Products actually charged to the Unaffiliated Third Parties ; ( c ) freight, insurance and other transportation charges actually charged to the Unaffiliated Third Parties ; ( d ) amounts repaid or credited by reason of rejections, defects, outdating, price differences, recalls or returns, or because of retroactive price reductions, or due to governmental laws or regulations requiring rebates actually granted to the Unaffiliated Third Parties ; and ( e ) a three percent ( 3 % ) flat deduction to cover other expenses and deductions not otherwise accounted for . Except pursuant to 1 . 3 ( e ), any and all deductions used in the calculations of [COMPANY] Net Sales are allowable only to the extent that they have already been included in the amounts invoiced or otherwise charged or granted on the sales of Licensed Products by [COMPANY] or its Affiliates to Unaffiliated Third Parties in bona fide arms ' length transactions . Calculations of [COMPANY] Net Sales shall be in accordance with generally accepted accounting standards of the countries in which the Licensed Products are sold . No deductions of any kind whatsoever shall be made in respect of sales of Licensed Products made prior to January 1, 2001, as the royalties in respect of such sales have been determined solely in accordance with Section 2.4(a ) hereof 1.4 shall mean EPIX identified as a Party above and any EPIX Affiliate