definiens: means the invoice amounts actually received for sales of each Product and/or Improved Product by [COMPANY] or its Affiliates to a Third Party in a bona fide arm 's length transaction, less the following items ( a ) cash discounts and trade allowances actually granted, ( b ) rebates and chargebacks required by Applicable Laws or made pursuant to agreements with customers, ( c ) credits or allowances actually granted upon claims, damaged goods, outdated goods, rejections or returns of such Product and/or Improved Product, including recalls, ( d ) taxes, tariffs and similar obligations, duties or other governmental charges ( other than income taxes ) levied on, absorbed or otherwise imposed on sales of such Product and/or Improved Product in the Territory . Components of Net Sales shall be determined in the ordinary course of 3 business in accordance with historical practice and using the accrual method of accounting in accordance with GAAP