definiens: is defined as the Net Sales of such Licensed Product less the Manufacturing Cost ( as defined below ) of such Licensed Product for the units of Licensed Product whose sale generated the Net Sales for the period in question, provided, however, that for purposes of calculating [COMPANY] 's Gross Margin under this Section 7.3.3, [COMPANY] 's Manufacturing Cost shall be deemed not to exceed Amicus ' Manufacturing Cost · for the same Licensed Product during the same period ; and ( ii ) " Manufacturing Cosf ' is defined as, with respect to a Licensed Product sold by a Party : ( A)(1 ) the amount paid by such Party for such Licensed Product manufactured by a Third Party or ( 2 ) the cost of direct materials and direct labor for such Licensed Product manufactured by such Party or its Affiliate, plus a reasonable allocation of direct manufacturing overhead, not to exceed { fifteen peroent ( l5%)}<[***J > of such materials and labor, costs ; ( B ) the net cost or credit to such Party of any value - added taxes or duties actually paid or utilized on account of such materials ; ( C ) out - of - pocket transportation costs, including clearance and storage of such materials ( if necessary ), and transit insurance on account of such materials ; ( D ) the costs of reasonable quantities of material destroyed in quality control testing on account of such Licensed Product ( as such costs are calculated under clauses ( A ) through ( C ) above ) ; and ( E ) in the case of a Licensed Product manufactured by a Third Party, the internal costs of such Party pertaining to the procurement of such materials ( e.g., for quality assurance and quality control activities ), not to exceed { five peroent ( 5%)}<[***J > of the Manufacturing Cost of such Licensed Product