“Gross Wholesale Sales” means, before any deductions for returns, allowances, discounts, taxes, insurance or freight, the invoiced amount of Licensed Products sold by Licensee on a wholesale basis, including sales to Licensee’s Affiliates (other than for sale in ARROW Stores, ARROW Outlets, Shop In Shops in which Licensee or its Affiliates sell Licensed Products directly to consumers, via an ARROW Site or via televised home shopping shows). Gross Wholesale Sales shall include sales by Licensee to Distributors at the same prices at which Licensee sells Licensed Products to its wholesale customers; in the event Licensee sells Licensee Products to Distributors at prices lower than the lowest price to which Licensee sells such Licensed Products to its wholesale customers, Gross Wholesale Sales shall include sales of such Licensed Product by Distributors to retailers. “Net Wholesale Sales” means the Gross Wholesale Sales, less returns actually allowed and actually received by Licensee, price allowances, customary and usual trade discounts granted and itemized taxes, insurance and freight. The combined deductions from the Gross Wholesale Sales for returns, allowances and trade discounts with respect to Licensed Products sold on a wholesale basis shall not exceed 5.0% of the Gross Wholesale Sales of the Licensed Products in any Annual Period. No other deductions shall be taken. “Net Sales” shall mean the total of Net Wholesale Sales plus Net Factored Retail Sales. It is the intention of the parties that Percentage Royalties with respect to Licensed Products sold on a wholesale basis will be based on the bona