definiens: means the amounts actually received forsales of Licensed Products by or on behalf ofLicensee or its sublicensees, and from leasing, renting, or otherwise making Licensed Productsavailable to others without sale or otherdispositions, whether invoiced or not, less ( i)returns and allowances actually granted, ( ii)packing costs, insurance costs and freight out,(iii ) taxes or excise duties imposed on thetransaction ( if separately invoiced ), ( iv)wholesaler and cash discounts in amounts customaryin the trade . No deductions shall be made forcommissions paid to individuals, whether they bewith independent sales agencies or regularlyemployed by Licensee or sublicensees, and on itspayroll, or for the cost of collections . Sales ofLicensed Products intended for resale to thirdparties, made internally amongst Licensee and itssublicensees, shall not be deemed sales forpurposes of calculating Net Sales . On sales ofLicensed Products byLicensee to sublicensees oraffiliated parties or on sales made in other thanan arm's - length transaction, which LicensedProducts are not intended for resale to thirdparties, the value of the Net Sales attributedunder this Paragraph 2.05 to such a transactionshall be ~ hat which would have been received in anarm's - length transaction, based on sales of likequantity and qualitY - froducts on or about the timeQf - such transaction ~ With respect to Combination Products ( defined belowin Paragraph 2.06 ), Net Sales shall mean theamounts actually received for sales of CombinationProducts, and from leasing, renting, or otherwisemaking Combination Products available to otherswithout sale or other dispositions, whetherinvoiced or not, less the deductions set forthabove, multiplied by a fraction having ( i ) aNIH Office ofTechnology Trons1er ( l-058 - 96)PHS BIOLOGICAL MATERIALS LICENSE AGREEMENT - EXClUSMPoge3- ( ANAL)- Avi'on · May 29.1996 CONFIDENTIAL2.062.072.082.092.10CONFIDENTIALTREATMENT£ ~~OUER ~ nnumerator of the list sales price or - t~~ LicensedProduct(s ) inclu d in such Combination Products asif sold separately or, if such list sales price isnot available the fair market value of suchLicensed Product(s ), and ( iil a denominator of the.list sales price of such Combination product~ The ~ fair market value, ry ~ orany Licensed Product shall ~ e determined for~ auantity comparable to thatincluded in the ComD ~ nation Product and ofsubstantially comparable class, purity and potency, and shall be mutually agreed to by PHS andLicensee"1When mo fair market valu~ for theLicensed ~ roduc~ is T : reasonablyascertainablj, thefraction set forth a ~ ove shall be changed to afraction having ( xl r;numerator of the number ofLicensed Products c ~ prising the Combinationproduct;]and ( y ) Ii"denominator of the sum of thenumber of Licensed Products referred to in ( xl plusthe number of Other Agents contained in suchCombination Product, provided that the fraction hasa minimum value of one fourth ( 1/4l~ means any product that iscomprised in part of a Licensed Product and in partof one or more biologically active agents which arenot themselves Licensed Products Jthe l. Other Agents excludes 19i1uents andexcipients, and adjuvants . ~0First COIlIIDerciaJ. SaJ.e"means the initial transferby or on behalf of Licensee or its sublicensees of'Licensed Products ~ n exchange for cash or someequivalent to whiCh value can be assigned for thepurpose of determining Net Sales