definiens: means, with respect to Existing Products or Improved Products, as the case may be, the full - time equivalent costs ( under a reasonable accounting mechanism to be agreed upon by the Parties ) and out - of - pocket costs ofa Party or any of its Affiliates incurred in manufacturing such products, including costs and expenses incurred in connectionwith ( 1 ) the development or validation of any manufacturing process, formulations or delivery systems, or improvements tothe foregoing ; ( 2 ) manufacturing scale - up ; ( 3 ) in - process testing, stability testing and release testing ; ( 4 ) qualityassurance / quality control development ; ( 5 ) internal and Third Party costs and expenses incurred in connection withqualification and validation of Third Party contract manufacturers, including scale up, process and equipment validation, andinitial manufacturing licenses, approvals and inspections ; ( 6 ) packaging development and final packaging and labeling;(7 ) shipping configurations and shipping studies ; and ( 8) overseeing the conduct of any of the foregoing . shall further include : ( a ) to the extent that any such Existing Product or Improved Product is manufactured by a ThirdParty manufacturer, the out - of - pocket costs incurred by such Party or any of its Affiliates to the Third Party for themanufacture and supply ( including packaging and labeling ) thereof, and any reasonable out - of - pocket costs and direct laborcosts incurred by such Party or any of its Affiliates in managing or overseeing the Third Party relationship determined inaccordance with the books and records of such Party or its Affiliates maintained in accordance with US GAAP ; and ( b ) to theextent that any such Existing Product or Improved Product is manufactured by such Party or any of its Affiliates, directmaterial and direct labor costs attributable to such product, as well as reasonably allocable overhead expenses, determined inaccordance with the books and records of such Party or its Affiliates maintained in accordance with US GAAP