definiens: shall mean LICENSEE 's and its Affiliates and sublicensees ' gross invoiced sales of Licensed Products or Licensed Processes in the country of, and at the time of, sale less the sum of the following : ( a ) DiscOWltS actually allowed and granted ( including cash discounts and quantity discounts ), retroactive price reductions, charge - back payments and rebates granted to managed health care organizations or to federal, state and local governments, their agencies, and purchasers and reimbursers or to trade customers ( a ) ; provided, however, that, where any such Discotu1 t is based on sales of a Combination Product ( as defined below ), the Discount shall be allocated to such Licensed Product in the same manner as the purchase price is allocated for Combination Products, as described below ; ( b ) Credits or allowances actually granted upon claims . damaged goods, rejections or returns of such Licensed Product, including such Licensed Product returned in connection with recalls or withdrawals ; 4 CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIAL TREATMENT REQUESTED ( c ) Freight out, postage, shipping and insurance charges for delivery of such Licensed Product ; ( d ) Taxes, tariffs, excise, sales, duties, or other taxes levied on, absorbed or otherwise imposed on the sale of such Licensed Product or Licensed Process, including value - added taxes, or other governmental charges otherwise imposed upon the billed amount, as adjusted for rebates and refunds, to the extent not paid by a third party ; and ( e ) Bad debts and uncollectible receivables ; provided that, in any calendar year, such deduction for bad debts and uncollectible receivables will not exceed 4 % of the total billings for sales of Licensed Products and Licensed Processes sold in that year