definiens: shall mean the amount invoiced for sales and other dispositions of Licensed Products sold during the Term of this Agreement and the Post - Termination Period, in any arm's­length transactions to any unrelated third - party transferee in any channels of distribution less the following deductions ( i ) all trade, quantity, cash or prompt payment discounts or rebates actually allowed, ( ii ) all credits and allowances actually granted due to rejections, returns, defective Licensed Product, replacements, warranty, outdating, billing errors, and retroactive price reductions, ( iii ) customs duties and tariffs, ( iv ) excise, sale, use, turnover, inventory, value­added, foreign withholding, and equivalent taxes or other government charges, but not net income or net profit taxes ( v ) outbound transportation, insurance charges separately billed to buyer or prepaid, and advertising allowances, ( vi ) special outbound packing separately billed to buyer or prepaid, ( vii ) any sales, agents, or brokers commissions paid to non - Affiliates, and ( viii ) all charges in connection with converting, transmitting, or remitting currency . Sales, credits, refunds, and uncollectable accounts shall be accounted for when recognized by the Company according to generally accepted accounting principles . Shipments between the Company and its Affiliates will not be considered to be sold or otherwise disposed of until they are sold to a third party customer of the Company or of its Affiliates . If a Licensed Product is sold in combination with another component, Net Sales, for purposes of determining royalties on the combination, will be calculated by multiplying Net Sales of the combination by the fraction A/(A+B ), where A is the invoice price of the Licensed Product if sold separately and B is the invoice price of any other component(s ) in the combination if sold separately . If the Licensed Product and the other component(s ) in the combination are not sold separately, Net Sales, for purposes of determining royalties on the combination, will be calculated by multiplying Net Sales of the combination by the fraction C/(C+D ), where C is the direct cost of manufacturing the Licensed Product and D is 2 the direct cost of manufacturing any other component(s ) in the combination . Cost of manufacturing will be determined in accordance with generally accepted accounting principles