definiens: shall mean the recorded gross sales of Licensed Products in the Territory to Third Parties in accordance with GAAP less the following deductions : ( i ) sales and excise taxes, duties, and any other governmental charges imposed upon the production, importation, use or sale of a Product ; 4 WASHINGTON 706642 v3 ( 2 K ) ( ii ) trade, quantity, cash and other discounts allowed on a Licensed Product to wholesalers or other Third Parties to whom the Licensed Products are sold and shipped directly ; ( iii ) provisions for actual or expected allowances or credits to customers on account of rejection or return of a Licensed Product or on account of price reductions for a Licensed Product ; ( iv ) Licensed Product rebates and Licensed Product charge - backs and other price reduction programs granted to managed care entities and pharmaceutical benefit management service entities ( if [COMPANY] or any of its Affiliates chooses to contract one or more of the Licensed Products together with another [COMPANY] product with composite rebates or chargebacks, then rebates and or chargebacks for the affected Licensed Product will be recalculated based on the then average rebate or chargeback of the Licensed Product to the applicable customer category as if such Licensed Product is contracted independently of any other [COMPANY] product ) ; and ( v ) provisions for actual or expected write - offs of uncollectible customer accounts for previously recorded sales ; in each case determined and applied consistently in accordance with [COMPANY] 's commercial and accounting policies and practices consistently applied in a manner consistent with GAAP . In the event that Net Sales as calculated for any period under this Agreement are lower than the Licensed Product net sales utilized by [COMPANY] in reporting [COMPANY] 's revenue for financial reporting purposes in [COMPANY] 's SEC filings for the same period, including [COMPANY] 's quarterly SEC Fonn 10 - Q and annual SEC Fonn 10 - K ( ), then Net Sales under this Agreement shall be increased by such amount as is necessary to make them equal to the Reported Licensed Product Net Sales . For the avoidance of doubt, shall not include any sales by [COMPANY] or its Affiliates to Kos or its Affiliates pursuant to the License and Manufacturing Agreement between Kos Life Sciences, Inc. and [COMPANY] dated as of the Effective Date