definiens: means, with respect to any fiscal year ( or twelve - month periodending on the last day of a calendar month, as applicable ) during the Earn OutPeriod, net sales of Earn Out Products to unaffiliated third parties by Parentand its affiliates ( including the Surviving Corporation ), calculated inaccordance with GAAP consistently applied by Parent across all similar productlines, which calculation shall generally consist of gross revenues includingrecurring royalty revenues received in respect of the Company 's IntellectualProperty, and 16.67 % of any non - recurring payments received in respect of theCompany 's Intellectual Property, less ( i ) fees payable in connection with thesale of Earn Out Products to non - affiliated third parties at the request ofcustomers ( including group purchasing organization administration fees, warehousing and distribution fees, and electronic exchange fees or charges),(ii ) cash or product discounts, refunds, replacements, or credits granted topurchasers for the return of Earn Out Products or as reimbursement for damagedEarn Out Products, ( iii ) freight, postage, insurance and other shipping chargespaid in connection with Earn Out Products, and ( iv ) sales and use taxes, customs, duties, and other governmental taxes or charges ( except taxes orcharges 8 < PAGE > based on income ), including any value added taxes incurred in connection withthe sale of Earn Out Products ; provided, that ( i ) for the fiscal year ending onDecember 31, 2004, Net Sales of Auditory Products shall be deemed to be$68,700,000 ; ( ii ) for all fiscal years ending on or before December 31, 2004,Net Sales of IPG Products shall be deemed to be $ 0 ; and ( iii ) for all fiscalyears ending on or before December 31, 2007, Net Sales of each of DP Productsand BION Products shall be deemed to be $ 0 . For purposes of this definition, ifan Earn Out Product is sold by Parent or its affiliates as a component in anykit or in combination with any other product ( ), the Net Salesfor such Earn Out Product from the sales of the Bundled Product shall equal ( i)the net sales of the Bundled Product ( calculated in accordance with GAAPconsistently applied across all similar product lines and otherwise inaccordance with this definition ) multiplied by ( ii ) the quotient obtained bydividing the average selling price for the Earn Out Product by the sum of thestand - alone average selling price for all products in the Bundled Product;provided, that in the event one or more products in the Bundled Product was notsold on a stand - alone basis in the relevant quarter, then fair market value ofthe relevant product shall be determined in good faith by Parent