definiens: means an amount equal to ( a ) Net Sales of such generic Drug Product, minus ( b ) Cost of Goods ( as defined in Section 6.2.8 ) and distribution, selling and marketing costs of REPLIDYNE or its sublicensees for such generic Drug Product in such country of the Territory . Inspection of Records6.2.7 Inspection of Records . REPLIDYNE shall keep and maintain accurate and complete records with respect to Net Sales, Cost of Goods, royalties and the calculation thereof with respect to Drug Products manufactured, distributed and sold by REPLIDYNE in sufficient detail to enable the determination of the royalties payable to DAP . At DAP 's request, REPLIDYNE shall make such records for the preceding three ( 3 ) year period available for inspection and audit at a mutually convenient time within normal business hours by an independent auditor appointed by DAP subject to the reasonable approval o(REPLIDYNE, and who shall enter into a confidentiality agreement in favor of REPLIDYNE, for the purpose of verifying the reports and payments submitted to DAP . Said inspection and audit shall be limited to no more than one ( I ) ti me during each twelve ( 12 ) month period . DAP shall bear the cost of any such inspection and audit, provided that if the inspection and audit shows an underpayment of royalties of more than five percent ( 5 % ) of the amount paid for the audited period, then REPLIDYNE shall promptly reimburse DAP for all costs incurred in connection with such inspection and audit and shall promptly pay the amount of the underpayment.6.2.8 Cost of Goods Sharing . If Cost of Goods for all Drug Product in the Territory exceeds on a calendar quarter basis ( i ) [ twelve1 percent ( [ 121 % ) of Net Sales at any time prior to the [ third ( 3rd)1 anniversary of the Launch or ( ii ) [ ten ] percent ( [ 10]% ) of Net Sales during any calendar quarter thereafter ( the ), the royalty payable by REPLIDYNE to DAP under Section 6.2.1 for such calendar quarter shall be reduced by an amount equal to [ twenty two point two two ] percent ( [ 22.221 % ) of the amount by which the Cost of Goods for such calendar quarter exceeds the COGS Threshold, but in no event by more than [ zero point six seven ] percent ( [ 0.67]% ) of Net Sales for such 5 [ I = CERTAIN CONFIllENTIAl INFORMATION CONTAINEn IN TillS ! JOCliMENT, MARKEn IlY IlItACKETS, IS .. ILEII \\1 nr TilE SECURITIES ANIl EXCHANCE COMMISSION PliltSlIANT TO Rtll . E 406 OF THE SEClIltlTiES EXCIIANGE ACT OF 1933, AS · UU : NIJEIJ