definiens: means, with respect to a Product, the costs calculated inaccordance with [COMPANY] ’s internal accounting policies and principles as described below thatrelate to such Product that is either ( a ) supplied by a Third Party or, if [COMPANY] engagesCOLLABORATOR to manufacture or supply all or a portion of a Product pursuant toSection 6.1(d ), by COLLABORATOR to [COMPANY] or ( b ) manufactured directly by [COMPANY] or an Affiliateof [COMPANY], determined as follows : In the case of clause ( a ) above, Manufacturing Costs means subject toSection 6.1(f ) ( i ) those amounts that are payable to a Third Party or COLLABORATOR andincurred by [COMPANY] in connection with the manufacture of a Product, including expensesrelated to manufacturing site qualification, manufacturing scale up or processdevelopment, manufacturing process improvements, storage, QA and QC ( includingtesting ), capital improvements in the form of depreciation, other equipment costs ( wheresuch costs are expensed by the Third Party or COLLABORATOR and billed directly toBMS ) customs duties or excise taxes, plus ( ii ) [COMPANY] ’s FTE Costs and direct out - of - pocketcosts recorded as an expense by [COMPANY] in accordance with its customary accountingpractices in connection with the manufacture, including Supply Chain Management andmanagement of agreements with Third Party manufacturers or with COLLABORATOR, ofsuch Product