definiens: means during any particular period of time the total revenues or receipts from the sale or dispos ition of Products by the Licensee subject to the following inclusions or exclusions ( the intent of the parties in connec tion with this 1.01(i ) is described in the attached Exhibit which Exhibit is to be employed as an aid to interpretat ion of this provision ): ( I ) Net Sales revenues or receipts include revenue s of the Licensee from invoiced sales of Product to distributors, wholesalers or other persons, but specifically not including Value Added Receipts ( Herein the foregoing referred to as ) ; Net Sales revenues or receipts include revenues of the Licensee which are calculated on the basis of value added benefits realized in connection with third party commercialization including that by animal producers, breeders and processors, includi ng those subject of a sublicense, provided that the Licensee 's revenues from such sublicense are calculated and periodically payable on the basis o f Licensee 's share of the value - added benefits ( the ) . During the application of the applicable Threshold and subject to 1.01(w ), Value Added Receipts include payments and amounts that are paid to the Licensee in connection with t he arrangements giving rise to the Value Added Receip ts but which are not directly calculated on the basis of value added benefits . Other than during the application of the applicable Threshold, Value Add ed Receipts do not include payments and amounts that are paid to the Licensee in connection with the arrangements giving rise to the Value Added Receip ts but are not directly calculated on the basis of va lue added benefits, which payments and amounts are to be included in Other Consideration . To the extent tha t revenues and receipts are included by virtue of th em comprising Value Added Receipts, such revenues and receipts and such value added benefits on which th ey were calculated are not otherwise included in the calculation of Net Sales or Other Consideration hereunder ; ( III ) Other than during the application of the app licable Threshold, in respect of Majority Joint Ventures t hat percentage of the net sales of the Majority Joint Venture ( calculated as if it were the Licensee hereunder ) that the Licensee has in the profits of such Majority Joint Venture, shall be included in Net Sales hereunder and the remainder of such net sale s of the Majority Joint Venture shall be excluded in the calculation of Net Sales or otherwise hereunde r ; ( IV ) During the application of the applicable Thre shold, in respect of Majority Joint Ventures, that percentage of the net sales of a Majority Joint Venture that the Licensee has in the profits of su ch applicable joint venture, shall be excluded from t he calculation of Net Sales or otherwise hereunder ; Page 4 of 31 ( V ) Net Sales do not include any net sales made by or royalties paid by Minor Species Sublicensees, whet her or not part of a joint venture arrangement, ( which royalties for greater particularity shall constitu te Other Consideration for the purposes of clause 4.06(iii ) herein ) ; ( VI ) Other than during the application of the appl icable Threshold, Net Sales include the net sales ( calculated as if it were the Licensee hereunder ) of Minority Joint Ventures and Major Species Sublicensees ( other than those constituting Majori ty Joint Ventures ), but not including sales revenues that were included for purposes of calculation of Value Added Receipts which Value Added Receipts we re included in Net Sales ; ( VII ) During the application of the applicable Thr eshold, Net Sales exclude the net sales of Minority Joint Ventures and Major Species Sublicensees ; ( VIII ) If Licensee shall have received separate an d identifiable reimbursement or payment for delivery of Product, including delivery of Product for purpose s of being given away for promotional or similar purposes, from a Majority or Minority Joint Ventur e or a sublicensee or, during the application of the applicable Threshold, paid to the Licensee in connection with the arrangements giving rise to th e Value Added Receipts but which are not directly calculated on the basis of value added benefits, t hen to the extent that such reimbursement or payment h as been included in the calculation of Net Sales the Licensee shall be entitled to deduct from Net Sale s the cost to the Licensee for such Product calculat ed on the basis of the aggregate of : third party cost s of manufacture incurred by the Licensee, plus the Licensee 's direct labor cost, plus the Licensee 's direct materials cost plus 40 % percent of the dire ct labor and materials cost excluding third party cos ts