definiens: means, with respect to Program Compounds included in a givenProgram, the reasonable FTE costs and Out - of - Pocket Costs of a Party or any of its Affiliates orsublicensees incurred in Manufacturing such Program Compounds, and including : C-1(a ) to the extent that any such Program Compound is Manufactured by a Party orany of its Affiliates or sublicensees, direct material and direct labor costs, plus manufacturingoverhead attributable to such Program Compound ( including facility start - up costs, all directlyincurred manufacturing variances, and a reasonable allocation of related manufacturingadministrative and facilities costs ( including depreciation ) and a reasonable allocation of thecosts of failed batches to be further described in the applicable supply agreement, to be providedfor such Program Compound, but excluding costs associated with excess capacity ), alldetermined 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 any such Program Compound is Manufactured by a ThirdParty manufacturer, the Out - of - Pocket Costs paid by a Party or any of its Affiliates orsublicensees to the Third Party for the manufacture, supply, packaging and labeling of suchProgram Compound, and any reasonable Out - of - Pocket Costs and direct labor costs actuallyincurred by such Party or any of its Affiliates or sublicensees in managing or overseeing the ThirdParty relationship, determined in accordance with the books and records of the applicable Partyor its Affiliates or sublicensees maintained in accordance with the Accounting Standards, consistently applied