definiens: means the direct and indirect costs and expenses incurred by a Party to manufacture a Product consisting solely of : ( i ) direct labor costs ( salaries, wages, employee b enefits, overtime costs and shift premiums ) ( and, for clarity, such labor costs shall be actual costs, and not the FTE Rate ) ; ( ii ) direct materials ( including raw materials and intermediates and interim packaging ) costs ; ( iii ) a fair and reasonable allocation of operating costs of facilities and equipment ; ( iv ) quality, release and in - process control costs ; ( v ) charges for reasonable spoilage, scrap or rewor k costs ; ( vi ) amounts ( without mark - up ) that are paid to a T hird Party, in connection with the manufacture of the Product or any component thereof ; ( vii ) the reasonable allocation of facility overhea d, both fixed and variable, to such manufacturing operation ( including the allocable costs of adminis trators and managers overseeing manufacturing and production ) maintenance, engineering, safety, finan ce, capital equipment depreciation to the extent su ch capital equipment is utilized with respect to Produ ct, supply chain management, management of agreements with Third Party contract manufacturers ( excluding costs of any external counsel retained t o negotiate or enforce any such agreement ), and inven tory write off ; and ( viii ) any non - refundable or non - creditable indirec t taxes, customs and excise duties, or similar taxes ; provided, however that in each case of items ( i ) through ( viii ) above, in clusive, to the extent specifically identifiable to the manufacture of a Product . The t erm excludes costs related to the operation of any facility incurred while using such facility to manufacture products other than Produc ts