definiens: means the aggregate gross revenues whether in cash or in kind, payable from or on account of the sale or other disposition of Licensed Products by HGS, Affiliates of HGS, HGS ' sublicensees, or Affiliates of HGS ' sublicensees to an independent third party not an Affiliate of HGS, a sublicensee ofHGS, or an Affiliate of a sublicensee of HGS, .less an allowance of five percent ( 5 % ) to cover factors such as ( a ) credits or allowances, if any, actually granted on account of price adjustments, recalls, rejection or return of items previously sold, ( b ) excise and sales taxes, duties or other taxes imposed on and paid with respect to such sales ( excluding income or franchise taxes of any kind ) and ( c ) outer packing, freight and freight insurance costs . If HGS or any of its Affiliates or sublicensees receive non - cash consideration for any Licensed Product sold or otherwise transferred to an independent third party not an Affiliate of the seller or transferor, the fair market value of such non - cash consideration on the date of such transfer as known to HGS, or as reasonably estimated by HGS if unknown, shall be included in the definition of Net Sales .