After First Commercial Launch Clause Samples
The "After First Commercial Launch" clause defines the period or conditions that apply once a product has been made available for sale to the public for the first time. Typically, this clause triggers certain rights or obligations, such as payment of royalties, reporting requirements, or performance milestones, that only become effective after the initial commercial sale. Its core practical function is to clearly delineate when post-launch contractual terms begin, ensuring both parties understand when specific responsibilities or benefits are activated, thereby reducing ambiguity and potential disputes.
After First Commercial Launch. In the event that the Parties agree, or a Laboratory determines, pursuant to Section 6.5, that a Batch of Product that is ordered on a dose basis and is manufactured for or after commercial launch materially fails to conform to the Product Warranties other than as a result of Force Majeure or as a direct result of instructions from CLIENT Personnel, LONZA will at CLIENT’s election promptly produce a Production Rerun (the “Production Rerun”), in accordance with the provisions of this Agreement and at no additional cost to CLIENT (i.e., if CLIENT has first paid for the original Batch of Product, such replacement with conforming quantities shall be without charge, and LONZA will pay for shipment, duties and the like with respect to the replacement Products or if CLIENT has not yet paid for the original Batch of Product, CLIENT shall be obligated to pay for the replacement with conforming quantities in accordance with the terms of this Agreement); provided, however, that to the extent that the Parties agree, or a Laboratory determines, pursuant to Section 6.5, that a Batch of Product conformed to the Product Warranties at delivery, but materially failed to conform to the Product Warranties because of causes arising after delivery, then LONZA shall have no liability to CLIENT with respect to such Batch and LONZA will, at CLIENT’s request, produce for CLIENT a Production Rerun at CLIENT’s expense. For the avoidance of doubt, any failure to conform that prevents the release of any one or more lots of Product, or that prevents the use of Product in clinical trials or the sale of Products for use in humans shall be deemed to constitute a circumstance in which such Product “materially fails to conform” to the Product Warranties.
After First Commercial Launch. Subject to the terms and conditions of this Agreement, following First Commercial Launch of the first Product, CLIENT shall order [***] of CLIENT’s aggregate production needs for Products (subject to applicable adjustment, if any, pursuant to Section 8.3(e)(iv)) from LONZA in accordance with the terms and conditions of this Agreement (“Continuing Purchase Requirement”), determined as set forth in the following sentence. For purposes of determining compliance with this Section 4.4.2, the measurement shall be based on the average (arithmetic mean) of (1) the percentage of MPCs (cells) in finished Products ordered from LONZA compared to the MPCs (cells) in finished Products from all sources and (2) the percentage of Product units (vials, bags, syringes, etc.) ordered from LONZA compared to Product units (vials, bags, syringes, etc.) from all sources, which average (i.e., the arithmetic mean of the percentages described in clauses (1) and (2)) must equal or exceed the applicable required percentage. For example, if the percentage of cells in finished Products sourced from LONZA is [***] of the total number of cells in finished Products from all sources, and the number of Product units sourced from LONZA is [***] of the total number of Product units from all sources, then the average of [***] and [***] is [***], which would satisfy a requirement of [***] under this Section 4.4.2. Similarly, if the percentage of cells in finished Products sourced from LONZA is [***] of the total number of cells in finished Products from all sources, and the number of Product units sourced from LONZA is [***] of the total number of Product units from all sources, then the average is [***], which would satisfy a requirement of [***] under this Section 4.4.2. On the other hand, if the percentage of cells in finished Products sourced from LONZA is [***] of the total number of cells in finished Products from all sources, and the number of Product units sourced from LONZA is [***] of the total number of Product units from all sources, then the average would only be [***], which would not satisfy a requirement of [***] under this Section 4.4.2.