definiens: means an amount equal to the total Gross Sales of the Products sold hereunder by Vertical or any Affiliate of Vertical to Customers, after deduction of the following items : ( a ) transportation and insurance charges related to the delivery of the Products to Customers ; ( b ) payment term discounts actually allowed and taken b y Customers to the extent customary in the trade ; ( c ) any service fees actually paid to Customers as a re quirement for the stocking and subsequent re - distribution of the Products ; ( d ) credits or allowances given or made to Customers fo r rejection or return of the Products to Vertical by Customers ; ( e ) any tax or other governmental charge levied directl y on the sale, transportation or delivery of the Products to Customers and borne by Vertical ; and ( f ) chargebacks and rebates actually allowed and taken to the extent customary in the trade to managed care health organizations, federal and state government agencies, and/or other purchasers and/or reimbursers of the P roducts, including, for example, without limitation, group purchasing organization a dministration fees ; all such deductions being supported by written docu mentation provided by Vertical in the royalty reports to be submitted to [COMPANY] pursuant to Section 8.4 below . For the avoidance of doubt, the deductions provided for in this Section 1.12 must consist of actual allowances, fees, payments, credits, rebates, chargebacks and/or disc ounts directly taken and attributable to a Customer during the reportable royalty period as sp ecified in Section 8.6 hereof . Accounting accruals or payments, rebates, reimbursements or ot her consideration of any type whatsoever to non - Customers, without regard for Vertical ’s nor mal financial reporting procedures, are not considered allowable deductions under this Section 1.12