definiens: in respect of each Product, shall mean gross amount s invoiced in respect of sales of such Product in the Territory b y [COMPANY], its Affiliates or Sublicensees, as appropriate, to Third Parties, less the following items : ( a ) trade, quantity and cash discounts or rebates actua lly allowed and taken and any other adjustments, provided that such discounts or rebates are not applied disproportionately to the P roduct as compared with other similar products of the selling entity, inc luding, without limitation, 4 those granted on account of price adjustments, bill ing errors, rejected goods, damaged goods and recall returns ; ( b ) credits, rebates, charge - back and prime vendor reba tes, fees, reimbursements or similar payments granted or given to wholesalers and other distributors, buying groups, health care insurance carriers, pharmacy benefit management com panies, health maintenance organizations or other instituti ons or health care organizations ; ( c ) any tax, tariff, customs duties, excise or other du ties or other governmental charge ( other than an income tax ) levi ed on the sale, transportation or delivery of the Product ; ( d ) payments or rebates reasonably and customarily paid in connection with sales of Product to any governmenta l or regulatory authority in respect of any state or fed eral Medicare, Medicaid or similar programs ; ( e ) any write offs for bad debt provided that in each Y ear the maximum sum which may be deducted in respect of bad debts shall not exceed [ * ] % ( [ * ] per cent ) of Net Sales i n such Year and further provided that in the event that any bad debt is written off and subsequently recovered by [COMPANY], upon such recovery such debt shall be included in Net Sales for such Q uarter in any statement under Clause 5.1 ; provided always that : ( i ) sales of a Product by and between [COMPANY] and its Aff iliates and Sublicensees are not sales to Third Parties ( except where such Affiliate or Sublicensee purchasers are end users ) and shall be excluded from Net Sales calculations for all purposes ; ( ii ) where a Product is sold otherwise than on arm ’s len gth terms the price that would have been charged on an arm ’s length sal e ( calculated as above ) shall be the invoice price for such Product and where a Product is disposed of for consideration other than cash, s uch consideration shall be valued at the fair market value thereof ; ( iii ) where a Product is not sold on arm ’s length terms b ut is used or otherwise disposed of on a commercial basis by a Th ird Party, the price that would have been charged ( after the deduc tions in Sub - Clauses ( a ) through ( f ) above ) on [ * ] Confidential treatment requested ; certain infor mation omitted and filed separately with the SEC