definiens: means : ( a ) With respect to Licensed Product manufactured b y AEVI, its fully - burdened costs ( including the costs associated with product testing and relea se activities ) of producing ( including startup and validation but excluding what will be covered under Section 4.3.2 ) and packaging Licensed Product for sale in a given country, determined in accordance with the applicable Accoun ting Standard, based on the sum of the following components : ( i ) direct costs, including manufacturi ng labor and materials directly incurred in produci ng and packaging such Licensed Product ; ( ii ) manufacturing and accounting personnel costs incurred by AEVI an d attributable and reasonably allocable to the manufa cture of Licensed Product, including quality labor and manufacturing and quality supervisory services, dep reciation, and other operating and administrative c osts which of the manufacturing, quality and accounting depart ments and 9 associated occupancy costs which are allocable to s uch company departments based on space occupied or headcount, or other activity based method of alloca tion ; ( iii ) any other reasonable and customary Out- of - Pocket Costs incurred by AEVI for the testing, transport, customs clearance, duty, insurance and/or storage o f such Licensed Products, including payments made by AEVI to Third Parties for filing, finishing, packaging, labeling, testing, storage and shipment of such Licensed Prod uct and AEVI ’s handling cost with respect thereto, as applicable ; and ( iv ) AEVI ’s reasonably allocated sh are of cost of Licensed Product process improvement s developed by AEVI or a Third Party on behalf of AEV I. For Licensed Products manufactured by AEVI, Manufacturing Cost will not include any general cor porate overhead, any excess capacity cost or charge s or cost for process development ( except to the extent expre ssly provided above )