definiens: shall mean the gross amount invoiced by [COMPANY], an Affiliate or a Sublicensee ( for purposes of this Article 1.101, [COMPANY], its Affiliates and Sublicensees are each and each is a ) on sales of Products to a Third Party less deductions for ( i ) trade, cash and quantity discounts ( including early payment cash discounts ), ( ii ) returns, rejections and recalled Product, ( iii ) rebates and allowances, chargebacks, retroactive price reductions actually allowed or granted to any purchaser including managed care organizations, ( iv ) invoiced amounts that are deemed uncollectible or written - off by the Payor in accordance with the Payor 's customary policies and IFRS ( to the extent applicable ) due to the Third Party 's inability or refusal to pay amounts owed, provided that if such amounts are subsequently paid to or recovered by a Payor, such paid or recovered amount shall be included within Net Sales ( subject to the other offsets or deductions provided herein as applicable ) for the then - current period, ( v ) amounts actually paid by a Payor to Third Party distributors for distribution services performed solely in connection with the sale of Product to Third Parties ( provided that for purposes of clarity, such amounts deducted fTom Net Sales shall not include any amounts paid to such Third Party distributors in connection with promotional activities ), all as and to the extent such arrangements with Third Party distributors are consistent with [COMPANY] 's practices in the same markets for products that are owned by [COMPANY] ( rather than in - licensed ) ; and further provided that the maximum of the deductions provided in each of clauses and, taken separately, for any calendar year during the Term shall not exceed one percent ( I % ) each of the total Net Sales for such calendar year, and any such amounts in excess of such limits shall be included as Net Sales for such calendar year, ( vi ) excise, sales or use taxes, value added taxes and other tariffs or duties levied on the sale, transportation or delivery of Products to the extent reflected in the gross amount invoiced, ( vii ) freight, insurance and other transportation charges and ( viii ) Cost of Goods for such Products ( provided, however that any Cost of Goods incurred by [COMPANY] or its Affiliates for packaging and packaging materials for the Product is hereby deemed to be USD 0.10 per DOD, which amount shall be included in determining the Cost of Goods for purposes of this clause . All of such foregoing deduction s shall be calculated in accordance with International Financial Reporting Standards ( IFRS ) or other similar accounting methods as mutually agreed upon by the Parties, and on an accrual basis of accounting . Net Sales shall not include the distribution of a Product for promotional samples, clinical studies, compassionate use, named patient programs, test marketing, or any similar instance . In the case of any sale or other disposal of a Product between or among [COMPANY] and its Affiliates or its Sublicensees, for resale, Net Sales shall be calculated only on the value charged or invoiced on the first arm's - length sale thereafter to a Third Party . In the event the Product is sold as a Combination Product, the Net Sales of the Product shall be determined by mUltiplying the Net Sales of the Combination Product by the fraction, A/(A+B ) where A is the weighted ( by sales volume ) average sale price in a particular country of the Product when sold separately ( as a non - Combination Product ) in finished fornl and B is the weighted average sale price in that country of product(s ) containing the other active ingredient(s ) in such Combination Product sold separately in finished form . In the event that such average sale price can not be determined for both the Product ( as a non - Combination Product ) and the 12 I - PRlI374875.IS CONFLDENTIAL TREATMENT REQUESTED other product(s ) ( as a non - Combination Product ) in such combination, Net Sales shall be agreed by the Parties based on the relative value contributed by each component, such agreement not to be unreasonably withheld