definiens: means all amounts invoiced on sales of Royalty Products by a Party, its Affiliates or permitted sublicensees to Third Parties, less the following deductions actually allowed or taken by such Third Parties and not otherwise recovered by or reimbursed to the seller whose sales are being measured : ( ll ) trade, quantity or volume, and cash discounts, including amounts paid or credited to customers under distribution and channel services agreements ; ( b ) credits, rebates and chargebacks ( including those to managed - care entities [ * J and government agencies ), allowances for bad debt not to exceed [ two percent ( 2%)J and allowances to customer s on account of rejection or returns or retroactive price reductions ; ( c ) freight, postage and transportati on charges, including handling and insurance to the extent added to the sales price and set forth separately as such in the total amount invoiced ; and ( d ) sales ( such as VAT or its equivalent ) and excise taxes, other consumption taxes and customs duties to the extent added to the sales price and set forth separately as such in the total amount invoiced