Wholesale Net Sales. Gross amounts of shipments, as invoiced , directly or indirectly, by or under authority from Licensee, of Products, in any transaction in commerce, through the Distribution Channels, less, without double counting, (a) all customary trade discounts and allowances to the extent actually taken, (b) quantity discounts, separately shown on invoices and properly taken by customers (provided, however, that such discounts will not exceed ****of net invoice sales (sales to distributors at distributor
... pricing shall not be considered a quantity discount)); and (c) all returns of Products for credit (returns shall be allocated as discounted or full-price in the ratio of actual discount s given). All of the allowable discounts and deductions listed in (a) through (c) above shall only be permitted to the extent they are supported by credit memoranda and/or invoices issued to customers, (ii) represent actual discounts, allowances and credits (and not reserves therefor) and (iii) are not the result of or in connection with the purchase or return of any product or service other than Products. In computing Net Sales, no direct or indirect expenses or costs incurred in connection with paying royalties due under this Agreement (including transferring funds for royalties or converting currency into United States Dollars if applicable) or manufacturing, selling, distributing, importing or advertising the Products shall be deducted, nor shall any deduction be made for uncollectible accounts. If sales are made to any party controlled by, controlling, under common control or otherwise affiliated with or related to Licensee, (x) the Net Sales shall be computed based upon the regular wholesale price for such Products charged to unrelated third parties if such regular wholesale price is higher than what is actually charged and (y) discounts, deductions and credits shall be no greater than those allowed to unrelated third parties. No costs incurred, including but not limited to those incurred by Licensee, customers or other third parties, in the manufacturing, selling, marketing , advertising or distributing of the Products shall be deducted. All transactions shall be at arm's length for fair market value.
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