definiens: shall mean, with respect to eachLicensed Product, One Hundred Percent ( 100 % ) of the consolidated fully burdened cost ofManufacturing such Licensed Product, which shall consist of ( a ) the process development, engineering and scale - up costs tor supply of such Licensed Product, which shall be allocatedbased on the relative market potential for the markets to which such process development andscale - up costs relate, and ( b ) ( i ) direct labor and material costs, ( ii ) all manufacturing overheadcosts incurred by [COMPANY] attributable to the costs of goods under the foregoing clause ( i),including supervisory services, quality assurance, quality control, occupancy costs, purchasing, human resources, payroll, information system and accounting that are allocable to companydepartments based on space occupied or headcount or another activity - based method ; ( iii)process and packaging engineering ; ( iv ) costs of losses or wastage ; ( v ) expenses with respect tothe foregoing ; ( vi ) all of [COMPANY] 's allocable intellectual property and technology acquisitionand license costs and expenses ( including royalties, license fees, milestone payments and otherpayment obligations other than those due to HZL under the term~ of this Agreement ) paid toThird Parties with respect to a Licensed Product ; ( vii ) any other costs borne by [COMPANY] forthe transport, customs clearance, duty, insurance and/or storage of such Licensed Product ; and(viii ) general and administrative costs that are allocable to company departments based on spaceoccupied or headcount or another activity - based method . All allocations pursuant clause ( b)above shall be made in a commercially reasonable manner consistent with generally acceptedaccounting practices consistently applied and assuming the relevant facility is operating at atleastsi&Y~ percent ~% ) of capacity