US Net Sales

Example Definitions of "US Net Sales"
US Net Sales. Means the amount invoiced by CTI, its Affiliates or its sublicensees on account of sales of the Product to Third Parties in the United States , less reasonable and customary deductions applicable to the Product for (i) transportation charges and charges such as insurance relating thereto paid by the selling party; (ii) sales and excise taxes or customs duties paid by the selling party and any other governmental charges imposed upon the sale of the Product and paid by the selling party; (iii)... distributors fees or rebates or allowances actually granted, allowed or incurred in the ordinary course of business in connection with the sale of the Product in an arms length transaction; (iv) quantity discounts, cash discounts or chargebacks actually granted, allowed or incurred in the ordinary course of business in connection with the sale of the Product, not in excess of the selling price of the Product, on account of governmental requirements, rejection, outdating, recalls or return of the Product. For the purpose of calculating US Net Sales, the Parties recognize that (a) a Party's customers may include persons in the chain of commerce who enter into agreements with a Party as to price even though title to the Product does not pass directly from a Party to such customers, and even though payment for such Product is not made by such customers directly to a Party, and (b) in such cases, chargebacks paid by a Party to or through a Third Party (such as a wholesaler) can be deducted by a Party from gross revenue in order to calculate US Net Sales. For example, CTI may distribute a product to a hospital through a network of pharmacies managed by a contractor. Neither the contractor nor the distributing pharmacies take title to the product. Instead, they perform their role (order, processing, receipt of product, etc.) for a fixed fee. The contractor adds the fee to the CTI sales price, then collects the total amount from the hospital. The contractor then remits the amount collected, net of the fee, to CTI. As CTI never receives the fee, it is excluded from the calculation of US Net Sales. Any deductions listed above which involve a payment by a Party shall be taken as a deduction against aggregate sales for the period in which the payment or deduction is made. Sales of the Product between CTI and its Affiliates or sublicensees shall be excluded from the computation of US Net Sales except where any such Affiliate or sublicense is an end user of the Product. US Net Sales shall be accounted for in accordance with International Accounting Standards consistently applied. View More
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