definiens: means, with respect to a Product, the reasonable FTE Costs and Out - of - Pocket Costs of a Party or any of its Affiliates or sublicensees incurred in Manufacturing a Produc t, excluding Manufacturing Scale - Up Costs, but including : ( a ) to the extent that a Product is manufactured by a Party or any of its Affiliates or sublicensees, direct material and direct labor cost s, plus manufacturing overhead attributable to the Product ( including facility start - up costs, all directly in curred manufacturing variances, and a reasonable al location -7- of related manufacturing administrative and facilit ies costs ( including depreciation ) and a reasonable allocation of the costs of failed batches to be fur ther described in the applicable supply agreement, to be provided for a Product, but excluding costs associa ted with excess capacity ), all determined in accord ance with the books and records of the applicable Party or its Affiliates or sublicensees maintained in accordance with Accounting Standards ; and ( b ) to the extent that a Product is Manufactured by a Third Party manufacturer, the Out - of - Pocket Costs paid by a Party or any of its Affil iates or sublicensees to the Third Party for the manufacture, supply, packaging, and labeling of a P roduct, and any reasonable Out - of - Pocket Costs and direct labor costs actually incurred by such Party or any of its Affiliates or sublicensees in managin g or overseeing the Third Party relationship, determined in accordance with the books and records of the applicable Party or its Affiliates or sublicensees maintained in accordance with Accounting Standards