definiens: means, with respect to the Licensed Products, the reasonable FTE Costs and Out - of - Pocket Costs of a Party or any of its Affiliates or sublicensees incurred in Manufacturing the Licensed Products, excluding Manufacturing Scale - Up Costs, but including:(a ) to the extent that the Licensed Products are manufactured by a Party or any of its Affiliates orsublicensees, direct material and direct labor costs, plus manufacturing F-3overhead attributable to the Compound and any Products ( including facility start - up costs, all directly incurredmanufacturing variances, and a reasonable allocation of related manufacturing administrative and facilities costs(including depreciation ) and a reasonable allocation of the costs of failed batches to be further described in theapplicable supply agreement, to be provided for the Licensed Products, but excluding costs associated with excesscapacity ), all determined in accordance with the books and records of the applicable Party or its Affiliates orsublicensees maintained in accordance with the Accounting Standards, consistently applied ; and(b ) to the extent that the Licensed Products are manufactured by a Third Party manufacturer, the Out - of - Pocket Costs paid by a Party or any of its Affiliates or sublicensees to the Third Party for the manufacture, supply, packaging and labeling of the Licensed Products, and any reasonable Out - of - Pocket Costs and direct labor costsactually incurred by such Party or any of its Affiliates or sublicensees in managing or overseeing the Third Partyrelationship, determined in accordance with the books and records of the applicable Party or its Affiliates orsublicensees maintained in accordance with the Accounting Standards, consistently applied