From: Jared Isaacman
Sent: Friday, August 14, 2015 7:08 AM
To: Agostino James
Cc: 'Jeffrey Shanahan'; Taylor Laurer
Subject: RE: [EXTERNAL] RE: Card Connect - Draft Term Sheet

If we can't be total scum bags with our interpretation of the renewal clause.

From: Agostino James
Sent: Friday, August 14, 2015 9:54 AM
To: Jared Isaacman
Cc: 'Jeffrey Shanahan'; Taylor Laurer
Subject: RE: [EXTERNAL] RE: Card Connect - Draft Term Sheet

Jared,

    We were never going to get that.  I was just setting up a negotation point

-----Original Message-----
From: Jeffrey Shanahan
Sent: Friday, August 14, 2015 7:31 AM
To: Agostino James; Jared Isaacman
Cc: Taylor Laurer
Subject: RE: [EXTERNAL] RE: Card Connect - Draft Term Sheet

I would just say yes to the terms below and see how it plays out.  I believe that as long as we put 300 deals to them per month, they would never have a leg to stand on to try to terminate in year 3.

From: Agostino James
Sent: Friday, August 14, 2015 7:17 AM
To: Taylor Laurer
Cc: Jeffrey Shanahan; Jared Isaacman
Subject: RE: [EXTERNAL] RE: Card Connect - Draft Term Sheet

Taylor,

    See below

-----Original Message-----
From: Taylor Laurer
Sent: Friday, August 14, 2015 7:00 AM
To: Agostino James
Cc: Jeffrey Shanahan; Jared Isaacman
Subject: FW: [EXTERNAL] RE: Card Connect - Draft Term Sheet

fyi

From: Angelo Grecco [mailto:agrecco@cardconnect.com]
Sent: Thursday, August 13, 2015 7:54 PM
To: Taylor Laurer
Cc: Jeffrey Shanahan; Jared Isaacman
Subject: [EXTERNAL] RE: Card Connect - Draft Term Sheet

Taylor,

When you get a chance please take a look at the attached and let me know your thoughts.

Thanks,

Angelo

13 Q. Okay. And did you participate in meetings at
14 Shift4 that discussed this phantom sale issue?
15 A. Yes.
16 Q. And when did those meetings occur?
17 A. I'm sure at several QBRs.
18 Q. What's a QBR?
19 A. Quarterly business review.
20 Q. Who participated in those meetings?
21 A. Myself, my sales team, and Mr. Isaacman.
22 Q. Okay. And can you describe for me the
23 substance of the discussion about what was going on
24 with phantom sales at CardConnect?
25 A. We were getting reports that there may be some

1 phantom sales to try and accelerate the amount of
2 gateways that were in -- in CardConnect's possession.
3 Q. And was there a concern at Shift4 about the
4 phantom sales?
5 A. Sure.
6 Q. Who expressed that concern?
7 A. Jared, myself.
8 Q. Okay. And what were the concerns specifically?
9 A. It didn't represent a real customer coming in
10 the door.

20 Q. Did you ever have any discussions with Jared
21 Isaacman about phantom sales being used to hit
22 particular thresholds?
23 A. Yes.
24 Q. Tell me about those conversations.
25 A. It was discovered there was an increasing

1 number, and to be -- I think, you know, the premise of
2 that was just to -- to move the gateway out.
3 Basically the gateway was sent to a dummy account
4 until the time was ready to go to a merchant.
5 Q. And when you say to move the gateway out, what
6 do you mean?
7 A. Get them -- get -- get those gateways deployed
8 to hit a certain threshold.

13 Q. Okay. The revenue that you would receive from
14 CardConnect?
15 A. Right.
16 Q. Did you also do that for phantom sales?
17 A. I don't recall.
18 Q. Okay. Do you -- did you ever have a
19 discussion with anyone at Shift4 where it was
20 discussed that Shift4 would report revenue for phantom
21 sales?
22 A. I don't recall.
23 Q. When you say you don't recall, is it possible
24 that happened or you just have no recollection of it?
25 A. I mean, it's certainly possible that there was a

1 conversation centered around phantom sales, but I
2 don't recall the specifics, nor the parties involved.

14 Q. Okay. Do you recall any conversation at any
15 point with anyone from CardConnect raising concerns
16 about Shift4 utilizing phantom sales?
17 A. Yes.
18 Q. Okay. Do you remember who that concern was
19 raised with?
20 A. I don't recall.
21 Q. Okay. Do you remember generally when that
22 concern was raised; was it in 2015, 2016, 2017?
23 A. I don't recall. I just remember it coming up
24 at a point in our relationship.
25 Q. And was it at a QBR?

1 A. Very well could have been.
2 Q. Okay.
3 A. I do recall it came -- it came up at some
4 point.
5 Q. And was it raised by someone from CardConnect
6 with you?
7 A. I believe so.
8 Q. And did you -- what was your response when that
9 was raised?
10 A. Sure, I'd have to look into it.
11 Q. And did you look into it?
12 A. Yes.
13 Q. And what did your investigation reveal?
14 A. That we were routing sales through a test
15 account prior to them being deployed with a customer.
16 Q. And when you say "we" --
17 A. Shift4.
18 Q. -- who at Shift4 was doing that?
19 A. The sales team.
20 Q. And was that a concern for you?
21 A. Yes.
22 Q. And why was that a concern for you?
23 A. It wasn't necessarily a proper way to sign up
24 a customer, was my understanding.
25 Q. And did you learn why that was being done?

1 A. I think it was being done so we could take
2 advantage of certain incentives associated with our
3 contract at the time.
4 Q. And did you learn who at Shift4 was involved in
5 those efforts?
6 A. No.
7 Q. Did you take any steps to determine that?
8 A. No.
9 Q. Did you take any steps to stop that practice
10 from going forward?
11 A. Yes.
12 Q. What steps did you take?
13 A. Communicated with Jeff that that was not to
14 occur.
15 Q. You communicated directly with Jeff or did you
16 communicate to others to communicate with Jeff?
17 A. My recollection is that I would have gone
18 directly to Jeff.
19 Q. And do you know what efforts Jeff Shanahan took
20 to address this?
21 A. I don't.
22 Q. Did you ever have a conversation with Jeff
23 Shanahan about phantom sales after this topic was
24 raised by CardConnect?
25 A. I'm sure I did.

1 Q. And what did you discuss with him?
2 A. That's -- I don't recall specifics, just, you
3 know, don't do this.
4 Q. And after you had that conversation with Jeff
5 Shanahan, did you learn whether that conduct had
6 stopped?
7 A. No.
8 Q. Did you do anything to follow up with Jeff
9 Shanahan after you said "don't do this" and asked him
10 if he had, in fact, stopped it?
11 A. No.
12 Q. Did you ever receive any reports that the use
13 of phantom sales had continued after you instructed
14 Jeff Shanahan to stop?
15 A. I don't recall.