U.S. Xpress – Knight-Swift Merger Agreement
Contract of the Week
In this post we CrossCheck the U.S. XPress – Knight-Swift Merger Agreement dated March 20, 2023. This contract is relatively clean, with a Verified Score of 96 (out of 100). However, there are 15 erroneous cross-references, mostly in the table of defined terms (a common culprit), as well as a couple of outlining errors.
Section 1.2 (Additional Definitions) is a common type of provision: a list of defined terms found in the document. Each term is followed by the label of the section or subsection in which the definition is ostensibly found. This type of listing is useful if correct, but confusing and time-wasting if the sections are incorrect.
These are all incorrect:
| Term | Table Says… | Definition Found In… |
|---|---|---|
| Anti-Bribery Laws | 3.22(c) | 3.22(d)(i) |
| Certificates | 2.9(c)(i) (does not exist) | 2.11(c)(i) |
| Company Option | 2.8(c)(i) (does not exist) | 1.1(y) |
| Company SEC Reports | 3.8(d) | 3.9 |
| Exchange Fund | 2.9(d) | 2.11(b)(iii) |
| Maximum Premium | 6.9(b) | 6.9(c) |
| Merger Sub Stockholder Approval | 6.16 | 6.18 |
| New Plans | 6.9(a) | 6.10(b)(i) |
| Old Plans | 6.9(a) | 6.10(b)(i) |
| Payment Agent | 2.9(a) | 2.11(a)(i) |
| Required Permits | 3.20(c) | 3.21(a) |
| Restraint | 7.1(b) | 7.1(c)(iii) |
| Tail Policy | 6.9(b) | 6.9(c) |
| Termination Date | 8.1(b) | 8.1(c) |
| Uncertificated Shares | 2.9(c)(ii) (does not exist) | 2.11(c)(ii) |
There are also a couple of (probably) minor outline issues:
- In Section 3.17(g), subsection (iii) is followed by subsection (v). There is no (iv).
- In Section 9.11, there is a subsection (a) but no subsection (b). It’s what CrossCheck 365 calls a “single-item sublist”. Probably harmless, but it looks funny, and it makes you wonder if there was supposed to be a “(b)”. Subsection (a) is captioned “General Jurisdiction”. Should there have been a “Limited Jurisdiction” clause?
Under Defined Terms, there is one minor issue. In Section 3.4(a), “Statutory Charter Amendment Stockholder Approvals” is defined, but the term is never mentioned again in the document. As with the single-item sublist, this kind of issue is probably harmless, but it does raise the question of whether some provision related to “Statutory Charter Amendment Stockholder Approvals” is missing.
And a final comment that is not an issue flagged by CrossCheck 365 and is just my personal opinion. In Section 1.1 (Certain Definitions), the individual definitions start off in a normal a-b-c sequence. After (z), the sequence picks up with aa-bb-cc and so on. That’s pretty common and not much to complain about. But this continues until “Willful Breach” is saddled with the label “(ddddd)“. I have seen lists of this style that extend to “(wwwwwww)“. Really? Is this necessary or wise? Imagine that two lawyers are having a conversation about the document:
Lawyer 1: “In Section 1.1 dubya-dubya-dubya-dubya-dubya-dubya-dubya, …”
Lawyer 2: “Wait, how many dubyas?”
Lawyer 1: “Hang on, let me count again… uh, seven. The one about Willful Breach.”
Lawyer 2: “Willful Breach? Do you mean ‘1.1 vee-vee-vee-vee-vee-vee-vee-vee-vee-vee-vee-vee-vee-vee’?”
And so on.
Wouldn’t it make more sense to just number the silly things?
Law Firms and Lawyers Listed in the Contract:
Scudder Law Firm, P.C., L.L.O. (Mark A. Scudder)
Fried, Frank, Harris, Shriver & Jacobson LLP (Attn: Philip Richter)
King & Spalding LLP (Attn: Erik Belenky, Keith Townsend)
Nathan Harwell, Chief Legal Officer of U.S. Xpress
Todd F. Carlson, General Counsel of Knight-Swift