definiens: means, with respect to the Licensed Compound or a ny Licensed Product, the aggregate of fully burdened ( excluding accounting e xpenses ) internal costs ( including actual direct la bor based on internal FTE Costs ) and Third Party Expenses ( witho ut mark - up ) incurred by a Party and its Affiliates to Manufacture such Licensed Compound or Licensed Prod uct, calculated as follows, in each case determined in accordance with GAAP, as consistently applied by su ch Party and its Affiliates : ( a ) to the extent that such Party or its Affiliates performs all or any part of the M anufacturing of the Licensed Compound or Licensed P roduct, ( i ) the direct material costs ( including media and puri fication reagents ) and direct FTE Costs for such Ma nufacturing of the Licensed Compound or Licensed Product, which may include, to the extent actually incurred in su ch Manufacture, cleaning costs of productions, Manufac turing administrative ( including overhead costs all ocable to the Manufacturing, but excluding all corporate gene ral and administrative overhead costs ), the costs o f audits, and all directly incurred Manufacturing variances ; ( ii ) a [ * * ] of the costs of [ * * ] of Licensed Compound ( calculated by [ * * ] ) ( e.g., [ * * ] ) ; and ( iii ) Manufacturing facilities costs ( including depreciation, repairs and maintenance cos ts ), scale - up directly allocable to the Manufacture of t he Licensed Compound or Licensed Product ( including API and drug product production ), quality assurance and qua lity control and technical support, provided that, for commercial supply, each of ( i ) and ( iii ) may be inc luded in Manufacturing Expenses only to the extent such costs and expenses are inventoriable under GAAP as consis tently applied by such Party or its Affiliates ; pro vided that, all costs of direct labor shall be calculated based on the FTE Rate ; and ( b ) to the extent that a Thir d Party performs all or any part of the Manufacturing of the License d Compound or Licensed Product, the reasonable out- of - pocket costs paid to such Third Party for such activities determined in accordance with GAAP . All invoices fo r Manufacturing Expenses submitted under this Agreeme nt will include a detailed calculation and descript ion of the relevant overhead allocations . For clarity, Manufac turing Expenses shall not include : ( A ) any [ * * ] ; ( B ) any costs, expenses or overhead associated [ * * ] ( e.g., if Manu facturing activities [ * * ] Licensed Compound Bulk Dr ug Substance produced [ * * ] ( [ * * ] ) of the [ * * ] of the p lant if the plant were [ * * ] ) ; ( C ) any amounts [ * * ] ; and ( D ) any costs or expenses [ * * ]