Novation is a contract clause involving the replacement of one party in an agreement with a new party or the replacement of the original contract with a new one, with the consent of all parties involved. This process effectively discharges the original obligations and creates new obligations under the terms agreed upon with the new party.
NOVATION AGREEMENT THIS NOVATION AGREEMENT (this “Novation Agreement”) is made and entered into as of October 11, 2020 (the “Novation Effective Date”) by and among LianBio, a corporation organized and existing under the laws of the Cayman Islands (“LianBio”), LianBio Licensing LLC, a limited liability company organized and existing under the laws of Delaware and a wholly-owned subsidiary of LianBio (“LBL”), and QED Therapeutics, Inc. a Delaware corporation (“QED”). Each of LianBio, LBL and QED is referred to herein as a “Party” and, collectively, as the “Parties”.
Novation and Assumption. 1. LianBio irrevocably novates and transfers to LBL all rights, title, interest, liabilities, duties, and obligations of LianBio under the License Agreement (the “Novation”). 2. LBL hereby irrevocably accepts the Novation, agrees to be bound by the License Agreement in accordance with its terms as if LBL had at all times been a party to the License Agreement in place of LianBio, and assumes all liabilities, duties, and obligations, and acquires all rights, title, and interest, of LianBio under the License Agreement as if LBL had at all times been a party to the License Agreement in place of LianBio.
Acceptance of Novation. QED hereby irrevocably consents and agrees to the Novation, assumption, and release described in Section 1 and Section 2 above, and accepts the performance and liability of LBL under the License Agreement in place of the performance and liability of LianBio arising out of or related to the License Agreement and grants to LBL the same rights, title and interest under or arising out of or related to the License Agreement as were granted to LianBio in all respects as if LBL had at all times been a party to the License Agreement in place of LianBio.
Interpretation; successors. It is the clear intent of all Parties that the Novation will be interpreted as a novation and not an assignment. This Novation Agreement shall be binding upon and inure solely to the benefit of the Parties and their respective successors and permitted assigns, and shall not be construed as conferring any rights on any other person.
The “Novation Effective Date” is 1 January 2018.
Novation of the Contracts 1 For each Contract listed in Schedule 1 (Contracts), the applicable Continuing Party, Outgoing Party, and Incoming Party agree that: (a) In consideration of the agreements, assumptions and releases hereinafter contained, and subject to the terms of this Novation Framework Agreement and in accordance with the process set out in clause 2, it is agreed that from the applicable Novation Effective Date, all the rights, title and interests of the Outgoing Party under the relevant Contract will be novated to the Incoming Party, and all the obligations, liabilities and duties of the Outgoing Party under or arising in connection with a Contract will be assumed by the Incoming Party to the extent the same relate to periods on or after the applicable Novation Effective Date, and accordingly: (i) the applicable Continuing Party shall release and discharge the Outgoing Party from: (A) further performance of the relevant Contract and all obligations, liabilities and duties of the Outgoing Party thereunder from and after the Novation Effective Date, and (B) all claims and demands against the Outgoing Party thereunder or arising in connection therewith from and after the Novation Effective Date; (ii) the Outgoing Party shall release and discharge the Continuing Party from: (A) further performance of the relevant Contract and all obligations, liabilities and duties of the Continuing Party thereunder from and after the Novation Effective Date, and (B) all claims and demands against the Continuing Party thereunder or arising in connection therewith from and after the Novation Effective Date; (iii) the Incoming Party shall, from the applicable Novation Effective Date, acquire equivalent rights against and assume equivalent obligations under the Novated Contract as towards the Continuing Party under the applicable Contract, as if the Incoming Party had been named as a party to the relevant Contract in place of the Outgoing Party; and (iv) each of the Continuing Parties shall, from the Novation Effective Date, acquire equivalent rights against and assume equivalent obligations under the Novated Contract as towards the Incoming Party under the applicable Contract, as if the Incoming Party had been named as a party to the relevant Contract in place of the Outgoing Party. (b) In respect of each Contract, novation does not affect any rights or obligations arising from or relating to any period prior to the applicable Novation Effective Date or accrued by any party prior to the Novation Effective Date. (c) Notwithstanding anything to the contrary contained in any Novated Contract, the Incoming Party shall, at its expense, contract with the Outgoing Party to fulfil the Incoming Party’s obligations under each Novated Contract.
Novation Accession Process 1 In order to facilitate the novation of each of the Contracts pursuant to this Novation Framework Agreement, the Participants agree that: (a) the Outgoing Party and the Incoming Party shall each execute this Novation Framework Agreement, as indicated in the signature pages, in respect of the novation of all of the Contracts as anticipated by this Novation Framework Agreement, and such execution will provide the approval to novate each of the Contracts according to the terms of this Novation Framework Agreement; (b) each Phase 1 Continuing Party shall each execute this Novation Framework Agreement, as indicated in the signature pages, and such execution will provide the approval of such applicable Phase 1 Continuing Party to novate each of the Phase 1 Contracts according to the terms of this Novation Framework Agreement; and (c) the Phase 2 Continuing Party shall enter into a Novation Accession Agreement (in the form set out in Schedule 2 (Form of Novation Accession Agreement), and such execution will provide for the acknowledgement of the ascendance by the Phase 2 Continuing Party to this Novation Framework Agreement, and will provide the approval of the Phase 2 Continuing Party to novate the applicable Phase 2 Contracts according to the terms of this Novation Framework Agreement. The Phase 2 Continuing Party may enter into a single Novation Accession Agreement for both Phase 2 Contracts or one in respect of each. 2 A particular Novated Contract shall be first effective, in respect of the Phase 1 Contracts, on the Novation Effective Date, and in respect of a Phase 2 Contract, on the date the Phase 2 Continuing Party has executed a Novation Accession Agreement in respect of the relevant Phase 2 Contract.
Novation 1.The novation contemplated by this Deed of Lease Novation shall not be effected in accordance with the provisions of Section 2 below until Existing Lessor, New Lessor and Lessee confirm that all of the conditions precedent contained in paragraphs 1, 2 and 3 of Schedule 2, respectively, have been satisfied (or waived, deferred or extended in accordance with paragraph 4 of Schedule 2) in form and substance reasonably satisfactory to Existing Lessor, New Lessor and Lessee, as applicable. Upon the occurrence of the Effective Time (as defined below), New Lessor and Existing Lessor shall execute an Effective Time Notice (in the form attached as Schedule 4 (Form of Effective Time Notice)) (the “Effective Time Notice”) confirming the Effective Time for the purposes of this Deed of Lease Novation and the Novated Lease Documents and shall deliver to Lessee a copy of such Effective Time Notice, which shall be acknowledged by Lessee. 2.With effect on and from the date and time specified in the Effective Time Notice (the “Effective Time”), the following will happen simultaneously without the need for physical delivery of the Aircraft: 2.1.New Lessor agrees to assume the undertakings, rights, obligations and liabilities of Existing Lessor as lessor and owner under the Lease Documents (as amended and novated by this Deed of Lease Novation) and Lessee agrees to perform its undertakings, obligations, duties and liabilities under the Novated Lease Documents to New Lessor, in each case, to the extent attributable to the period, and which arise, after the Effective Time; 2.2.Lessee consents to and accepts the assumption by New Lessor set forth in Section 2.1 above; 2.3.the Lease Documents are novated and constitute an agreement between New Lessor as lessor and Lessee as lessee on the terms of the Novated Lease Documents; 2.4.Existing Lessor and Lessee are each released by the other from their respective obligations and liabilities under the Lease Documents and shall have no rights against or obligations to the other under the Lease Documents, except that each of Existing Lessor and Lessee shall retain as against the other all pre-existing rights set out in the Lease Documents in respect of claims, liabilities or losses suffered, incurred, arising or attributable to the period prior to the Effective Time (and New Lessor shall not be responsible to Lessee in respect of any such claims, liabilities or losses suffered, incurred, arising or attributable to the period prior to the Effective Time) and Lessee shall not exercise any set-off or counterclaim in respect of any such losses, liabilities or claims against New Lessor. Notwithstanding the foregoing, and in respect of matters arising or attributable to the period prior to the Effective Time, Lessee will continue to indemnify and insure each Indemnitee (as defined in the Lease Documents prior to the amendment and novation under this Deed of Lease Novation) on the terms set out in this Deed of Lease Novation and in the Lease Documents prior to the amendment and novation under this Deed of Lease Novation; 2.5.Lessee acknowledges that, except as provided in Section 2.4 of this Deed of Lease Novation with respect to periods prior to the Effective Time, its undertakings, duties, obligations and liabilities to the “Lessor” under the Novated Lease Documents are owed to, and to be performed in favour of, New Lessor and agrees with New Lessor to perform the undertakings, duties, obligations and liabilities of Lessee to New Lessor as “Lessor” under the Novated Lease Documents;
Transfer and Assumption. As of September 1, 2023: a) Assignor transfers by novation all of its rights, liabilities and obligations under the Sub- Advisory Agreement to Assignee. b) Assignee accepts such transfer by novation of, and assumes, all of the rights, liabilities and obligations of Assignor under the Sub-Advisory Agreement. c) The Remaining Party agrees to such transfer by novation and accepts Assignee as a counterpart with respect to the Sub-Advisory Agreement. d) The Remaining Party and Assignor are released and discharged from further obligations to each other under the Sub-Advisory Agreement; provided, however, that any payments or other obligations of the Remaining Party or Assignor due and payable or due to be performed under the Sub-Advisory Agreement prior to the date of this Novation Agreement shall be paid or performed by the Remaining Party or Assignor, respectively. e) The parties agree that the Novation Agreement shall not constitute an “assignment” of the Sub-Advisory Agreement for purposes of the Investment Company Act or Section 19 of the Sub-Advisory Agreement, and that the Sub-Advisory Agreement, as so novated, shall remain in full force and effect after the novation. f) The Remaining Party and Assignee agree that the Sub-Advisory Agreement attached hereto shall be the agreement governing the relationship between the parties and that each reference in the Sub-Advisory Agreement to Assignor as a party shall be deemed a reference to Assignee as a party. g) No other change, modification or amendment to the Sub-Advisory Agreement is made pursuant to this Novation Agreement.
Novation and Transfer. With effect from and including the Novation Date: a. Transferor transfers by novation to Transferee, and Transferee accepts the transfer by novation of, all the rights, duties, liabilities and obligations of Transferor, regardless of whether such rights, duties, liabilities or obligations occurred or existed prior to, or occur or exist after, the Novation Date, and the Remaining Party accepts Transferee as its sole counterparty with respect to the Guarantee as if Transferee was named as the Guarantor therein on the date the Guarantee was entered into. b.Transferee hereby agrees to be bound by the Guarantee in accordance with its terms and conditions as if Transferee had at all times been a party to the Guarantee in place of Transferor.
Conditions to Effective Date and Novation Date; Effectiveness Under Guarantee. a. The Effective Date of this Agreement is subject to the receipt by the parties hereto of counterparts of this Agreement executed by Transferor, Transferee and the Remaining Party. b. The Novation Date of this Agreement is subject to the occurrence of the Effective Date, the consummation of the Merger Agreement, and the satisfaction (or waiver) of the following conditions precedent: i. Receipt by the Remaining Party of a certificate signed by the officer of Transferee certifying as to the consummation and effectiveness of the Merger Agreement and the satisfaction of the conditions to the occurrence of the Novation Date, and certifying that all approvals, consents, orders, or authorizations of, or filings or registrations with, any Governmental Authority or any third party necessary for the effectiveness of the transactions contemplated hereby, or the legality, validity, binding effect or enforceability of the Transferee’s obligations hereunder (except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity), have been obtained or made; ii. The absence of any action or proceeding or governmental action having been instituted or threatened in writing before any court or governmental authority, or any order, judgment, or decree having been issued or proposed in writing to be issued by any court or governmental authority on the Novation Date to set aside, restrain, enjoin or prevent the transactions contemplated hereby; and iii. Receipt by the Remaining Party of an incumbency certificate or equivalent corporate authority of the Transferee naming the persons authorized to execute this Agreement and certifying as to such authority, and an opinion of Transferee’s counsel confirming that the Guarantee is the legal, valid and binding obligation of Transferee, enforceable against Transferee, in accordance with its terms and otherwise in form and substance reasonably acceptable to the Remaining Party (with reasonable and customary assumptions and qualifications).
Novation is a legal concept in contract law where an existing contract or agreement is replaced with a new one, effectively transferring the rights and obligations from one party in the original contract to another party. This process requires the consent of all parties involved, including the newly added one. Novation is different from assignment, as it extinguishes the original contract and replaces it entirely.
Novation is typically used when there is a need to transfer all rights and obligations of a party in a contract to another party. This might be necessary in various situations, such as:
To write a novation, a formal Novation Agreement is required. This agreement should include:
A Novation Agreement might look like this:
Novation Agreement
This agreement is made on [Date] between [Original Party A], [Original Party B], and [New Party].
Background
- [Original Contract Details]
Agreement
- [Original Party B] agrees to transfer all rights and obligations to [New Party].
- [New Party] agrees to be bound by the terms of the original contract.
- [Original Party A] releases [Original Party B] from said obligations.
Novation is commonly found in contracts that require the delegation of responsibilities or transfer of interests to third parties. These can include:
In such contracts, a novation clause or agreement is included to facilitate the transfer of rights and obligations without breaching the terms of the original contract.
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