definiens: means the gross invoice price for Royalty Bearing Products sold by the Pursuing Party or its Affiliates to non - Affiliate Third Parties during the applicable reporting period less the reasonable and customary accrual - basis deductions from such gross amounts for ( 0 normal and customary trade . cash, quantity and other discounts, allowances and credits actually allowed and taken directly with respect to sales of Royalty Bearing Products ; ( ii ) amounts repaid or credited for damaged or defective goods . returns, recalls or rejections of Royalty Bearing Product ; ( iii ) excise . sales taxes or similar taxes ( including customs, surcharges, duties or other governmental charges levied on, absorbed or otherwise imposed directly on the sales of Royalty Bearing Product, including . without limitation, value added taxes imposed upon a Party or its Afflliates . ) and paid directly with respect to such sales, but excluding any taxes imposed on or measured by the net income or profits of the selling party ; ( iv ) charge back payments and rebates granted to trade customers, including but not Iintited to, distributors and wholesalers . or granted to govemment agencies or managed healthcare organizations ; ( v ) packaging, handling fees, freight, insurance and the like ; provided that amounts deducted under this subsection ( v ) shall not exceed 3 % of Net Sales and ( vi ) a reasonable allowance for uncollectible accounts computed in a manner consistent with the Party 's or Affiliate 's normal practices, which amount shall not exceed 3 % of Net Sales in any reporting period . Such amounts shall be determined from the books and records of the Pursuing Party and its Affiliates maintained in accordance with GAAP consistently applied, and such amounts shall be calculated using the same accounting principles used for other products of the Pursuing Party . Sales between or among the Pursuing Party and its Affiliates shall be excluded from the computation of Net Sales if such Affiliates are not eod - users, but Net Sales shall include the subsequent final sales to non - Affiliate Third Parties by any such Affiliates . Where ( a ) Royalty Bearing Products are sold by the A-12 836116 ' { 21S0 Pursuing Party or its Affiliates other than in an anns - Iength sale or as one of a number of items without a separate invoiced price ; or ( b ) consideration for Royalty Bearing Products shall include any non - cash element, the Net Sales applicable to any such transaction shall be deemed to be the Pursuing Party 's average Net Sales for the applicable quantity of the Royalty Bearing Product at that time