definiens: means, with respect to any Licensed Product, the gross amount actually received by or on behalf of a Licensee or Sublicensee for sales of su ch Licensed Product to third parties ( ), less the following accrued deductions if and to the extent they are included in the Gross Sales of suc h Licensed Product and are reported on the relevant R oyalty Report : ( a ) rebates, quantity and cash discounts, chargebacks and other usual and customar y discounts CU _ [COMPANY] Exclusive License Agreement Page 3 of 29 CU Case Number [ ] * * to customers, ( b ) taxes and duties paid, absorbed o r allowed that are directly related to the sale of the Licensed Product, ( c ) credits or allowances for spo iled, damaged, out - dated, rejected or returned Licensed Product, ( d ) discounts or rebates or other payments required by applicable law, including any governmental special medical assistance programs, a nd ( e ) freight, insurance and other transportation expenses to the extent added to the sales prices an d set forth separately as such in the total amount invoiced . ( For the avoidance of doubt, the transfer of any Licensed Product by Licensee or one of its Affiliates to another Affiliate of Licensee for sal e by such transferee Affiliate to a third party is not considered a part of Gross Sales ; in such cases, Ne t Sales is determined based on the Gross Sales amount made by such Affiliate to such third party, less the adjustments allowed under this Article . Sa les to an Affiliate of Licensed Products that are not i ntended for downstream sales to a third party are included under Gross Sales . ) The supply of Licensed Products as samples, for use in non - clinical or clinical trials, or for use in any test or studies reasonably necessary to comply with any applicable laws, rules or regulations is not included in the computa tion of Net Sales . Net Sales is determined from boo ks and records maintained in accordance with United St ates generally accepted accounting principles as consistently applied with respect to sales of the Licensed Products