Exhibit 311
02/29/2016
Statement of Undisputed Facts of CardConnect, LLC
1.
On June 19, 2014, Jeffrey Shanahan, on behalf of CardConnect, LLC
(“CardConnect”), and Jared Isaacman, on behalf of Lighthouse Network, LLC
(“Lighthouse”), entered into an Assignment and Assumption Agreement (the
“Assignment Agreement”). Ex. 1 (Assignment Agreement)
2.
Pursuant to the Assignment Agreement, CardConnect assigned to Lighthouse the
following four agreements between CardConnect and third-party independent sales
organizations (“ISOs”): (i) a February 28, 2011 Merchant Acquirer Agreement
between CardConnect and Secure Payment Systems, Inc. (“SPS Agreement”); (ii) a
June 27, 2012, Independent Sales Organization Agreement between CardConnect and
Clearent, LLC (the “Clearent Agreement”); (iii) a January 3, 2013, Independent Sales
Organization Agreement between First Data and Paymentsolutions, LLC (the
“Paymentsolutions Agreement”) (CardConnect was previously known as
“Paymentsolutions, LLC” (see Ex. 229 (Paymentsolutions, LLC, - F.D.B.A.
CardConnect, LLC, Certificate of Amendment)))); and (iv) a May 13, 2014, ISO
Referral Agreement between CardConnect and Merchant Services, LLC (the
“Merchant Services Agreement”). Ex. 1 (Assignment Agreement) ¶ 1; Shanahan Dep.
6/27/18 Tr. at 35:15-36:2, 41:5-13.
3.
Section 2(b) of the Assignment Agreement states: “[CardConnect] acknowledges and
agrees that the assumption of [the above-referenced agreements] by [Lighthouse]
includes [] an assignment of all rights to receive any fees payable to [CardConnect] or any
of its Affiliates pursuant to such agreements.” Ex. 1 (Assignment Agreement) § 2(b).
4.
Section 7 of the Assignment Agreement, entitled “Additional Understandings”,
contains multiple subsections concerning CardConnect’s ongoing relationship with the
four ISOs, and with Clearent, LLC (“Clearent”) in particular. Ex. 1 (Assignment
Agreement) § 7; Shanahan Dep. 6/27/18 Tr. at 40:25-41:4.
5.
Section 7(e) of the Assignment Agreement, entitled “Clearent Relationship”,
contains the following five subsections:
a.
Section 7(e)(i) of the Assignment Agreement states: “[CardConnect] agrees to
retain Clearent, LLC (“Clearent”) to act as an independent sales agent pursuant to
the terms and fees set forth on Schedule A.” Ex. 1 (Assignment Agreement)
§ 7(e)(i).
b.
Section 7(e)(ii) of the Assignment Agreement states: “”[CardConnect] agrees to enter
into that certain Technology Agreement substantially in the form attached hereto.
. . .” Ex. 1 (Assignment Agreement) § 7(e)(ii).
c.
Section 7(e)(iii) of the Assignment Agreement states: “”[CardConnect] agrees and

acknowledges that it will process with Clearent for a term of no less than five (5) years
from the Effective Date.” Ex. 1 (Assignment Agreement) § 7(e)(iii).
d.
Section 7(e)(iv) of the Assignment Agreement states: “[CardConnect] agrees to
cooperate with Clearent in order to assist Clearent in converting its existing
processing relationship from [CardConnect] to [Lighthouse] in a mutually
agreeable manner.” Ex. 1 (Assignment Agreement) § 7(e)(iv).
e.
Section 7(e)(v) of the Assignment Agreement states: “[CardConnect] agrees to issue
[Lighthouse] a warrant to purchase 1,353,334 Class A Units of [CardConnect] at an
exercise price of $0.01 per share.” Ex. 1 (Assignment Agreement) § 7(e)(v).
6.
Schedule A to the Assignment Agreement provides that CardConnect will pay
Clearent “$40 per merchant application” plus residuals based on certain “gross profit” tiers,
with 50% of gross profit paid on the first $250,000 of gross profit, and 55% of gross profit paid
for gross profit equaling $250,001 or more. Ex. 1 (Assignment Agreement) Sched. A.
7.
Neither the fourth paragraph of Schedule A, concerning “Settlement”, nor any other
provision of the Assignment Agreement, defines “gross profit.” Ex. 1 (Assignment
Agreement); see also Shanahan Dep. 6/27/18 Tr. at 95:12-14.
8.
The Assignment Agreement does not include a choice-of-law provision. Ex. 1
(Assignment Agreement).
9.
CardConnect is a Delaware limited liability company with its principal executive
offices located in King of Prussia, Pennsylvania. Compl. ¶ 1.
10.
Lighthouse is a Delaware limited liability company with its principal place of business
located in Allentown, Pennsylvania. Defs.’ Answer and Countercl. (D.I. 6) ¶ 1.

From: Jared Isaacman
Sent: Monday, March 23, 2015 4:09 PM
To: Jeffrey Shanahan
Cc: Brian Toomey; Taylor Lafee
Subject: FW:

Begin forwarded message:

From: "Shanahan, Jeffrey"
Date: March 23. 2015 1:25:40 PM EDT
To: "'Jared Isaacman
Cc: Brian Toomey , "Lafee, Taylor
Subject: RE:
Jared,
I am confident we will be able to resolve the outstanding
residual/future merchant pricing issues, but I'm a little
surprised that my only two choices are to accept the
proposed resolution presented or face litigation.
I think this matter requires some additional dialog, and
while I recognize that the clock is ticking on the contract,
I think we all need to be reasonable.
We will have a formal response to you by end of day
Tuesday, March 24th.

Thanks,

Jeff

From: Jared Isaacman
Sent: Monday, March 23, 2015 1:07 PM
To: Shanahan, Jeffrey
Cc: Brian Toomey; Lafee, Taylor
Subject:

Jeff,

I have addressed the questions in your email below and also shared a summary of our position as it
relates to your firm's interpretation of the residual calculation defined within Schedule A of the
Assignment and Assumption Agreement.

As referenced in this email, we have engaged outside counsel to assist in the resolution of this
matter. Please let me know if there are any questions.

Best Regards,

Jared

Jared Isaacman
Chief Executive Officer

From:    Brian Toomey
Sent:   Friday, April 17, 2015 3:59 PM
To:     'Jeffrey Shanahan'
Cc:     Jared Isaacman; Taylor Lafee
Subject:    RE: CardConnect Residuals - March 2015

Jeff-

We have reviewed your email below and attached spreadsheet. You are correct, it is simple. It is also
incorrect.

Our agreement, similar to most agreements of this nature, is based on our mutual Gross Profit, which
is inclusive of all revenue less direct costs associated to the merchant account. When we
discussed the interpretation of this agreement 13 months ago...

From: Shanahan, Jeffrey [mailto:jshanahan@cardconnect.com]
Sent: Wednesday, May 11, 2016 11:01 AM
To: Jared Isaacman <jisaacman@shift4.com>
Cc: Patrick Shanahan <pshanahan@cardconnect.com>
Subject: RE:

Jared –

This is disappointing.

We have made every effort to arrive at the correct interpretation of the “gross profit”
calculation, and we had multiple conversations internally to ensure that interpretation,
supported by outside consul, was consistent with the calculation methodology that governs
all of our similar ISO agreements

...

I have to assume by the tone and content of your email
below that you really do not disagree with the correctness of our interpretation. Instead, you
may not like the outcome of that interpretation – but that’s a different issue altogether.

From: Jared Isaacman [mailto:jisaacman@shift4.com]
Sent: Wednesday, July 16, 2014 9:46 AM
To: Shanahan, Jeffrey
Subject:

Jeff, I know you mentioned a few weeks back, before the transitions began, that you would have
interest in selling CC. Are you in a position to discuss? It could potentially address all the
accounting/interpretation differences in our present agreement. I have a call with JPM at 10am. Call
after?

Jared

From: Shanahan, Jeffrey [mailto:jshanahan@cardconnect.com]
Sent: Wednesday, July 16, 2014 9:49 AM
To: Jared Isaacman
Subject: RE:

Jared, yes on the call. Can't commit to timing, but will reach out as soon as i can
From: Jared Isaacman [mailto:jisaacman@shift4.com]
Sent: Wednesday, July 16, 2014 9:51 AM
To: Shanahan, Jeffrey
Subject:

Sounds good. Keep in mind, this is a pretty small window. They were not happy with our last
clearent conversation and said, 'You guys, and only because of your size/role in this, get another
crack at this..meaning an acquisition of CC, but its [sic] now or never.' t- 4 weeks before this goes
away.

Jared Isaacman

From: Shanahan, Jeffrey [mailto:jshanahan@cardconnect.com]
Sent: Wednesday, July 16, 2014 9:53 AM
To: Jared Isaacman
Subject: RE:

I hear you. I will get back to you soon.

Sent from my Verizon Wireless 4G LTE DROID

From: Jared Isaacman [mailto:jisaacman@shift4.com]
Sent: Wednesday, July 16, 2014 9:57 AM
To: Shanahan, Jeffrey
Subject:

Also, as their pe firm, you should know they are going to be exceptionally thorough in diligence
and likely conservative in their view of the ISO channel. This can still get done and would
certainly be good for both of us.. Just want to make sure you know what it will involve.

Jared

From: Shanahan, Jeffrey [mailto:jshanahan@cardconnect.com]
Sent: Wednesday, July 16, 2014 10:03 AM
To: Jared Isaacman
Subject: RE:

Understood. And agreed.

Sent from my Verizon Wireless 4G LTE DROID

From: Jared Isaacman
Sent: Friday, August 15, 2014 7:54 PM
To: Shanahan, Jeffrey
Subject:

Would it make sense to just have counsel to counsel communication at this point. Don't want to
waste your time if at 90 a month for 70 months we are not going to be able to get to a yes. If that
is the rough range, we can do it. Beyond that, you should keep your company.

Jared

From: Shanahan, Jeffrey
Sent: Friday, August 15, 2014 8:08 PM
To: Jared Isaacman
Subject: RE:

Jared, I understand where you're coming from, but the Board heard and was supportive of
the 6.75x multiple (less the $5M note discount = 6.4x) that we discussed. I do have an
obligation to bring them any bona fide offers, but I also want to respect everyone's time. I
absolutely do not want you to do any more work on this unless there is a deal to be had, so
I think we should just spend some time over the weekend discussing those few open points
before bringing counsel back into it. What do you think?
Jeff

From: Jared Isaacman
Sent: Friday, August 15, 2014 8:19 PM
To: Shanahan, Jeffrey
Subject:

Okay, that works. I will allocate some time to go through your counter this weekend. My capex line
is up on the 25th and if this isn't going to get done by then, ill allocate the capital elsewhere and we
can just operate under our current agreement instead of an acquisition.

Have a good weekend,

Jared

From: Shanahan, Jeffrey
Sent: Friday, August 15, 2014 8:25 PM
To: Jared Isaacman
Subject: RE:

Understood and sounds reasonable. Lets [sic] connect on Sunday to avoid wasting time. Have a
good weekend as well.
Jeff