definiens: shall mean Company 's and its Affiliates and sublicensees ' gross invoiced sales of Licensed Products or Licensed Processes less the sum of the following : ( a ) Discounts actually allowed and granted ( including, without limitation, 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 Discount is based on sales of a bundled set of products in which such Licensed Product is included, the Discount shall be allocated to such Licensed Product on a pro rata basis based on the sales value ( i.e., the unit average selling price multiplied by the unit volume ) of the Licensed Product relative to the sales value contributed by the other constituent products in the bundled set, with respect to such sale ; 3 CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIAL TREAMENT REQUESTED ( 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 ; ( c ) Licensed Product ; Freight out, postage, shipping and insurance charges for delivery of such ( 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, without limitation, value - added taxes, or other governmental charges otherwise imposed upon the billed amoWlt, 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 four percent ( 4 % ) of the total billings for sales of Licensed Products and Licensed Processes sold in that year