definiens: shall mean the GROSS REVENUES ( as defined in clause ( b ) andfurther described in clauses ( c ), ( d ) and ( e ) of this Paragraph 1.5 below ) received by PALOMAR or any of itsAFFILIATES for the sale or distribution of any PRODUCT or for the performance of any SERVICE, less ( tothe extent appropriately documented ) the following amounts actually paid out by PALOMAR or itsAFFILIATE or credited against the GROSS REVENUES received by them:2 ( a ) ( i ) credits and allowances for the price adjustment, rejection, or return of PRODUCTSpreviously sold or SERVICES previously performed, including reductions imposed by Medicare, Medicaid or an HMO ; ( ii ) rebates and cash discounts to customers allowed and taken ; ( iii ) amounts for transportation, insurance, handling or shipping charges to customers ; ( iv ) taxes, duties and other governmental charges levied on or measured by the sale ofPRODUCTS or SERVICES, whether absorbed by PALOMAR or its AFFILIATE or paid by thepurchaser so long as PALOMAR ’s or its AFFILIATE ’s price is reduced thereby, but not franchise orincome taxes of any kind whatsoever ; and ( v ) for any revenues in which the United States government on the basis of its royalty - free license pursuant to 35 USC Sec . 202(c ) to any PATENT RIGHT requires that the GROSSREVENUES of any PRODUCT or SERVICE subject to such PATENT RIGHT, be reduced by theamount of such royalty owed GENERAL pursuant to Paragraph 4.1, the amount of such royalty