Any amendment to a loan agreement will almost certainly contain a provision along the following lines (emphasis added; otherwise untouched):
Except as otherwise provided herein, the execution of this Second Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent or the Lenders, constitute a waiver of any provision of any of the Credit Documents or serve to effect a novation of the Obligations.
I’m not crazy about novation. Whether you call it jargon or a term of art, you can be sure that many readers don’t know what it means, and that many of the rest rely on seat-of-the-pants etymology to understand it.
As to what it actually means, here’s a definition provided by Black’s Law Dictionary:
The act of substituting for an old obligation a new one that either replaces an existing obligation with a new obligation or replaces an original party with a new party.
So I vote that instead of “does not serve to effect a novation of the Obligations” you say “will not result in any of the Obligations being replaced.” Or you could combine the two: “does not serve to effect a novation of the Obligations, in that it will not result in any of the Obligations being replaced.”
