definiens: shall mean the total amount invoice d to third parties ( or, in the absence of an invoic e, received by Sponsor ) on sales of Royalty Products b y Sponsor, its Affiliates, or Sublicensees, for whi ch royalties are due under Article 3 below, less the following r easonable and customary deductions actually given : ( i ) all trade, cash and quantity credits, discounts, refund s or government rebates ; ( ii ) amounts for claims, a llowances or credits for returns, retroactive price reductions, or chargebacks ; ( iii ) packaging, handling fees and prepaid freight, sales taxes, duties and other governmental charges ( including value added tax ), shown on the face of the invoice ; and ( iv ) provisions for uncollectible acco unts determined in accordance with GAAP, consistent ly applied to all products of the selling party, provi ded that in no event shall deductions for uncollect ible accounts in any annual period exceed [ * * * ] percent ( [ * * * ] % ) of the cumulative Net Sales in such annual period . In the event that Sponsor and a third party enter into a b arter transaction pursuant to which Sponsor transfe rs Royalty Products to such third party in exchange for non - ca sh consideration provided in lieu of cash, then Net Sales shall be calculated based on the fair market value of the non - cash consideration received, provided that in no event shall the transferred Royalty Products be valued at more than the then - current customary sales price f or such Royalty Products invoiced to third parties or fair market value if there are no current invoices to th ird parties . For the removal of doubt, Net Sales shall not include s ales by Sponsor to its Affiliates for resale, provi ded that if Sponsor transfers a Royalty Product to an Affiliate, and the Affiliate retransfers such Royalty Produc t to a third - party purchaser, then Net Sales shall be the price charged by the Affiliate to the third - party purchas er, less documented allowable deductions