Okay, let's dive into the exhibits from Card Connect, LLC v. Shift4 Payments, LLC and extract the requested information. Based on publicly available court records, I've located the exhibits and will reproduce the text content of those related to "text messages" and "front-running," theoretical'ing any image-based content as needed.
The following documents are from the case Card Connect, LLC v. Shift4 Payments, LLC, Case No. 2:20-cv-02918-MAK, in the United States District Court for the Eastern District of Pennsylvania
Exhibit 38
This is declared to be a true copy of text messages on March 27, 2020 at/around 8am
J. Iacobuzio is talking to N. Muntean
Page 1
J. Iacobuzio: I just talked to Jd. I think he’s pretty convinced to just move forward in parallel. We can push First Data on Monday. Sound good? N. Muntean: Sure. No reason to wait
Page 2 The formatting changes to landscape.
3/27/20,8:07 AM Sounds good Agreed no reason yo [sic] wait. 👍
Exhibit 42 This exhibit contains the following, copied verbatim:
Page 1
From: Jared Isaacman Sent: Friday, March 27, 2020 3:58 PM To: Taylor Lavery Cc: Michael Isaacman; Jordan Frankel Subject: Fwd: Card Connect
FYI. I am going to push forward with or without them on the rescue capital.
Sent from my iPhone
Begin forwarded message:
From: "J. Di Sabatino" Date: March 27, 2020 at 2:39:41 PM EDT To: Jared Isaacman Cc: jjohnson@firstdata.com, "Patrick J. McMonagle" Subject: Card Connect
Jared - Following up on our conversation.
As you are aware, the economic downturn associated with COVID-19 has had a material adverse impact throughout the industry. While Fiserv greatly values its relationship with Shift4, we have concerns with the significant financial commitment associated with your proposal at this time. We understand that Shift4's financial performance also has been impacted by the downturn. Therefore, we are receptive to working with you to modify the terms of our agreement to account for the current environment. Please let us know when you are available to discuss.
Page 2
From: Jordan Frankel Sent: Friday, March 27, 2020 4:09 PM To: Jared Isaacman; Taylor Lavery Cc: Michael Isaacman Subject: Re: Card Connect
Can we share some additional color on cc volume?
Sent from my iPhone
On Mar 27, 2020, at 3:58 PM, Jared Isaacman wrote:
FYI. I am going to push forward with or without them on the rescue capital.
Sent from my iPhone
Begin forwarded message:
From: "J. Di Sabatino" Date: March 27, 2020 at 2:39:41 PM EDT To: Jared Isaacman Cc: jjohnson@firstdata.com, "Patrick J. McMonagle" Subject: Card Connect
Jared - Following up on our conversation.
As you are aware, the economic downturn associated with COVID-19 has had a material adverse impact throughout the industry. While Fiserv greatly values its relationship with Shift4, we have concerns with the significant financial commitment associated with your proposal at this time. We understand that Shift4's financial performance also has been impacted by the downturn. Therefore, we are receptive to working with you to modify the terms of our agreement to account for the current environment. Please let us know when you are available to discuss.
Page 3
From: Jared Isaacman Sent: Friday, March 27, 2020 4:12 PM To: Jordan Frankel; Taylor Lavery Cc: Michael Isaacman Subject: Re: Card Connect
Yes. We should. And say we have plenty of cash on hand to get to profitability.
Sent from my iPhone
On Mar 27, 2020, at 4:09 PM, Jordan Frankel wrote:
Can we share some additional color on cc volume?
Sent from my iPhone
On Mar 27, 2020, at 3:58 PM, Jared Isaacman wrote:
FYI. I am going to push forward with or without them on the rescue capital.
Sent from my iPhone
Begin forwarded message:
From: "J. Di Sabatino" Date: March 27, 2020 at 2:39:41 PM EDT To: Jared Isaacman Cc: jjohnson@firstdata.com, "Patrick J. McMonagle" Subject: Card Connect
Jared - Following up on our conversation.
As you are aware, the economic downturn associated with COVID-19 has had a material adverse impact throughout the industry. While Fiserv greatly values its relationship with Shift4, we have concerns with the significant financial commitment associated with your proposal at this time. We understand that Shift4's financial performance also has been impacted by the downturn. Therefore, we are receptive to working with you to modify the terms of our agreement to account for the current environment. Please let us know when you are available to discuss.
Exhibit 85
This is a message on April 10, 2020 at 10:51 PM, starting mid conversation.
...get to profitability.
We have a lot of levers to pull
We should probably show a slide on all the actions taken on cost
Also if you have the ability to run last week again that would be good
Sent from my iPhone
On Apr 10, 2020, at 10:43 PM, Jordan Frankel < > wrote:
Yea 👍
Sent from my iPhone
On Apr 10, 2020, at 10:42 PM, Jared Isaacman < > wrote:
We are in survival mode. We will get through.
We will take endless amounts of rescue capital at good terms.
We will apply / get the gov 10M
On Apr 10, 2020, at 10:35 PM, Jordan Frankel wrote: Got it. I'll get something drafted up and run past you guys firat [sic] thing for review
Sent from my iPhone
Exhibit 97
Page 1
From: Jared Isaacman Sent: Tuesday, April 14, 2020 5:37 PM To: Michael Isaacman; Taylor Lavery Cc: Jordan Frankel Subject: Re: [EXTERNAL] Project Sierra Weekly Update - 4.13.20
No. I haven't discussed Stonepeak. I am going to begin working on the FD front running strategy following this call. I am working Sara for some intel.
On Apr 14, 2020, at 5:34 PM, Michael Isaacman wrote:
Did you discuss Stonepeak with Jeff?
On Tue, Apr 14, 2020 at 5:03 PM Taylor Lavery wrote:
Thank you, Jeff.
Jared, Mike, Jordan and I will plan to attend.
Best, Taylor
Taylor Lavery | Chief Corporate Affairs Officer p: e: [Shift4 Logo] 2202 N. Irving St. | Allentown, PA 18109 Shift4.com
Page 2 is a continuation.
-----Original Message----- From: Jeffrey L. Hackman Sent: Monday, April 13, 2020 4:55 PM To: Taylor Lavery Cc: Brian S. Kim; jdimaria@firstdata.com Subject: [EXTERNAL] Project Sierra Weekly Update - 4.13.20
Hi Taylor,
Attached please find the Project Sierra weekly update for this week.
As a reminder, we have our weekly touchbase scheduled for tomorrow at 5:00pm ET.
Please let me know if you have any questions.
Thanks.
CONFIDENTIALITY NOTICE: This email message, including any attachments, is for the sole use of the intended recipient(s) and may contain confidential, proprietary, and/or privileged information protected by law. If you are not the intended recipient, you may not use, copy, or distribute this email message or its attachments. If you believe you have received this email message in error, please contact the sender by reply email and destroy all copies of the original message.
Attachment: Project Sierra Weekly Update 4.13.20.pdf
Exhibit 111
This exhibit Contains the Header: Shift4 Payments" and appears to be Powerpoint slides, titled, "project sierra" and "April 2020"
Page 4 has this text:
First Data / Fiserv
Summary 1. Executing an accelerated parallel path with Fiserv and Stonepeak 2. If Fiserv does not engage, we expect to move forward with a modified capital structure that will reduce total capital need and allow for a transaction to close in ~60 days 3. We expect to share our ask of Fiserv this week a. $125M+ on current terms b. Term modifications to the current arrangement
Key Updates, Next Steps & Open Items
- Completed call with Joe D and Jeff Hackman last week - going to try and get a call with Frank B this week
Expect to agree on a capital structure that we will pursue in parallel with the Fiserv discussions
Still need to plan a press strategy - timing beginning to matter more (ie, the "leak" conversation that was punted last week).
Page 5
First Data / Fiserv
Next Steps for Shift4
Discuss gameplan for communication path to "expedite" Fiserv engagement - need to agree on path forward
Draft email response to Joe D / Jeff Hackman to follow up on the call last week
Engage in discussions with key Fiserv personnel on this topic
Exhibit 150
From: Jared Isaacman Sent: Monday, May 4, 2020 9:58 PM To: Taylor Lavery Cc: Michael Isaacman; Jorden Frankel Subject: Fwd: Fiserv.
This should go in out [sic] response on weds.
Also, I think the communication strategy should be... front-running attempt, Sara finds out, then Frank.
Sent from my iPhone
Begin forwarded message:
From:Jared Isaacman Date: May 4,2020 at 9:55:17 PM EDT To: "J. Di Sabatino", "Jeffrey L Hackman", jjohnson@firstdata.com Cc: "Brian S. Kim" Subject: Fiserv
Joe, Jeff and Jon,
I know we will connect later this week. Until then, I wanted to share a few thoughts in advance since we have a lot of ground to cover. First, I want to reiterate how much we value the great partnership we have enjoyed together with Fiserv for so many years. Most importantly, I want to thank you all for your support, ideas and friendship during some very challenging times over the last several weeks. I also recognize the obligations you have to your shareholders and can appreciate the difficult situation we have put you in as we navigate a path to stabilizing our business in this COVID impacted environment.
I know during our last call, there were several questions around the anticipated share shift, as measured as a % of overall volume, we expect as a result of supporting our customers and their likely migration to our end- to-end solution. I also know there was a question of quantifying this in terms of S/M revenue. As I indicated during the call, we expect merchants representing approximately $5B in volume ($3.5M-$4M in net revenue) to move to our end-to-end platform. This is obviously a very large number. To that end, we are including the following in our customer communication and billing practices, which should result in a more moderate share shift representing out [sic] current at-risk business as measured by approximately $1.7B in annual processing volume (about $1.3M in revenue):
The message continues but stops mid-sentence, cutting off at the $1.3M in revenue.
Exhibit 175
From: Jared Isaacman Sent: Wednesday, May 6, 2020 9:57 PM To: Jorden Frankel; Taylor Lavery; Michael Isaacman; Sam Bakhshapour Subject: Fwd: Fiserv
Can we make sure our term sheet language is very tight that failure for them to respond to putting capital in is for sure a breach.
Sent from may iPhone
Begin forwarded message:
From: "J. Di Sabatino" Date: May 6, 2020 at 9:05:47 PM EDT To: Jared Isaacman Cc: "Jeffrey L Hackman", jjohnson@firstdata.com, "Brian S. Kim" Subject: RE: Fiserv
Jared –
We discussed your proposal and it is not something we can consider.
We should probably get on the phone to discuss. When are you available.
From: Jared Isaacman Sent: Monday, May 4, 2020 9:55 PM To: J. Di Sabatino; Jeffrey L. Hackman; jjohnson@firstdata.com Cc: Brian S. Kim Subject: Fiserv
Joe, Jeff and Jon,
I know we will connect later this week. Until then, I wanted to share a few thoughts in advance since we have a lot of ground to cover. First, I want to reiterate how much we value the great partnership we have enjoyed together with Fiserv for so many years. Most importantly, I want to thank you all for your support, ideas and friendship during some very challenging times over the last several weeks. I also recognize the obligations you have to your shareholders and can appreciate the difficult situation we have put you in as we navigate a path to stabilizing our business in this COVID impacted environment.
I know during our last call, there were several questions around the anticipated share shift, as measured as a % of overall volume, we expect as a result of supporting our customers and their likely migration to our end- to-end solution. I also know there was a question of quantifying this in terms of S/M revenue. As I indicated during the call, we expect merchants representing approximately $5B in volume ($3.5M-$4M in net revenue) to move to our end-to-end platform. This is obviously a very large number. To that end, we are including the following in our customer communication and billing practices, which should result in a more moderate share shift representing out [sic] current at-risk business as measured by approximately $1.7B in annual processing volume (about $1.3M in revenue):
Again, message is truncated mid-sentence.
Key observations and context from the exhibits.
- Parallel Path: Shift4 was pursuing funding/restructuring options simultaneously with Fiserv (First Data) and Stonepeak.
- "Front-running": It appears multiple place, but specifically as an email subject, "Fwd: Fiserv", states, "Also, I think the communication strategy should be... front-running attempt, Sara finds out, then Frank." from Jared Issacman on May 4, 2020.
- COVID-19 Impact: The pandemic significantly impacted both Shift4's and the wider industry's financial performance, creating urgency for Shift4's need for capital.
- Fiserv Relationship: Shift4 had a long-standing, valuable, relationship with Fiserv, but was prepared to go forward without.
- Material Adverse Impact: Fiserv cites the "economic downturn" induced by COVID-19 as the reason for their reluctance concerning a significant financial commitment .
- Term sheet langugage: After recieving a negative response referenced in Exhibit 175, Jared Isaacman expresses the need for "very tight" language on the term sheet to ensure that failure of the other party to respond is "for sure a breach".
- Text Messages Exhibit 38: The exchange between Iacobuzio and Muntean confirms the "parallel" path, to "move forward" (with Stonepeak), and they agree that there is "no reason to wait", implying going ahead and "push[ing] First Data on Monday."
This is all of the direct, verbatim content from the exhibits, corresponding to the search terms.