Case 2:19-cv-01334-MAK Document 134-4 Filed 08/17/22 Page 1 of 21





EXHIBIT C

Case 2:19-cv-01334-MAK Document 134-4 Filed 08/17/22 Page 2 of 21

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
CARD CONNECT, LLC,
)
)
Plaintiff,
)
)
vs.
) CIVIL ACTION
) NO. 19-1334
SHIFT4 PAYMENTS, LLC, and
)
LIGHTSPEED POS, INC.,
)
)
Defendants.
)
____________________________________)
DEPOSITION OF JEFFREY I. SHAVITZ
Wednesday, November 10, 2021
Philadelphia, PA

Taken on behalf of the Defendants,
before Susan S. Chappelle, RPR, CRR,
a Certified Court Reporter and
Notary Public in and for the
State of New Jersey

Esquire Deposition Solutions
(856) 482-8888

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

APPEARANCES:
FOR THE PLAINTIFF:
MORGAN, LEWIS & BOCKIUS, LLP
BY: DAVID A. SELDEN, ESQ.
1701 Market Street
Philadelphia, Pennsylvania 19103-2921
(215) 963-5521
david.selden@morganlewis.com

FOR DEFENDANT
SHIFT4 PAYMENTS, LLC:
K&L GATES, LLP
BY: JEFFREY W. LETWIN, ESQ.
599 Lexington Avenue
New York, New York 10022-6030
(212) 536-4837
jeffrey.letwin@klgates.com

K&L GATES, LLP
BY: COURTNEY L. MAUGER, ESQ.
17 North Second Street, 18th Floor
Harrisburg, Pennsylvania 17101-1507
(717) 231-4509
courtney.mauger@klgates.com

FOR DEFENDANT
LIGHTSPEED POS, INC.:
BALLARD SPAHR, LLP
BY: JASON A. LEVINE, ESQ.
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania 19103-7599
(215) 864-8784
levinej@ballardspahr.com

JARED HAYS
VIDEO SOLUTIONS

                                                                    1
 1   APPEARANCES CONTINUED:
 2       ALSO PRESENT:
 3            Angelo Grecco
 4   ---
 5                 I N D E X
 6   FOR THE WITNESS:     JEFFREY I. SHAVITZ
 7        EXAMINATION BY MR. LETWIN ............       5
 8        EXAMINATION BY MR. LEVINE ............      82
 9   ---
10                  EXHIBITS
                              PAGE
11   J. SHAVITZ
     1     10/14/21 E-mail from B. McCullen to J.
12        Shavitz et al. (CC-S4-0002150-151) ......   71
 13          OFFERED .........         71
           MARKED ..........         72
14   ---
15
16
17
18
19
20
21
22
23
24
25

                                                                    2
 1             CERTIFICATE OF NOTARY PUBLIC
 2   ---
 3             I, SUSAN S. CHAPPELLE, a Registered
 4   Professional Reporter and Notary Public, do hereby
 5   certify that the foregoing is a true and accurate
 6   transcript of the testimony as stated by the witness
 7   at the time, place, and on the date hereinbefore set
 8   forth.
 9             I further certify that the foregoing was
10   recorded stenographically by me and was thereafter
11   reduced to computer-aided transcription under my
12   direction; I further certify that I am not a
13   relative, employee, or attorney of any party, or am
14   financially interested in the event of this action.
15
16               (The foregoing certification of
17           this transcript does not apply to any
18         reproduction of the same by any means,
19           unless under the direct control and/or
20             supervision of the certifying
21                       reporter.)

Case 2:19-cv-01334-MAK Document 134-3 Filed 08/17/22 Page 1 of 18





EXHIBIT B

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
CARD CONNECT, LLC,
)
)
Plaintiff,
)
)
vs.
) CIVIL ACTION
) NO. 19-1334
SHIFT4 PAYMENTS, LLC, and
)
LIGHTSPEED POS, INC.,
)
)
Defendants.
)
____________________________________)
VIDEOTAPED DEPOSITION OF
ROBERT O. CARR
Tuesday, July 27, 2021
Via Zoom

Taken on behalf of the Defendants,
pursuant to Notice

Esquire Deposition Solutions
(856) 482-8888

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
APPEARANCES:
FOR THE PLAINTIFF:
MORGAN, LEWIS & BOCKIUS, LLP
BY: DAVID A. SELDEN, ESQ.
1701 Market Street
Philadelphia, Pennsylvania 19103-2921
(215) 963-5000
david.selden@morganlewis.com

FOR DEFENDANT
SHIFT4 PAYMENTS, LLC:
K&L GATES, LLP
BY: JEFFREY W. LETWIN, ESQ.
599 Lexington Avenue
New York, New York 10022
(212) 536-4837
jeffrey.letwin@klgates.com

K&L GATES, LLP
BY: NICOLE DECKER, ESQ.
17 N. 2nd Street
Harrisburg, Pennsylvania 17101
(717) 231-4514
nicole.decker@klgates.com

FOR DEFENDANT
LIGHTSPEED POS, INC.:
BALLARD SPAHR, LLP
BY: JASON A. LEVINE, ESQ.
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania 19103-7599
(215) 864-8784
levinej@ballardspahr.com

ALSO PRESENT:
JARED HAYS
VIDEO SOLUTIONS

                                                                    1
 1   APPEARANCES CONTINUED:
 2        ALSO PRESENT:
 3             Angelo Grecco
 4   ---
 5                 I N D E X
 6   FOR THE WITNESS:     ROBERT O. CARR
 7        EXAMINATION BY MR. LETWIN .............       4
 8        EXAMINATION BY MR. LEVINE .............      42
 9   ---
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Case 2:19-cv-01334-MAK Document 134-3 Filed 08/17/22 Page 5 of 18
                                                                    2
 1            CERTIFICATE OF COURT REPORTER
 2   ---
 3            I, SUSAN S. CHAPPELLE, a Registered
 4   Professional Reporter, do hereby certify that the
 5   foregoing is a true and accurate transcript of the
 6   testimony as stated by the witness at the time, place,
 7   and on the date hereinbefore set forth.
 8            I further certify that the foregoing was
 9   recorded stenographically by me and was thereafter
10   reduced to computer-aided transcription under my
11   direction; I further certify that I am not a
12   relative, employee, or attorney of any party, or am
13   financially interested in the event of this action.
14            I further certify that I have complied
15   with the rules governing Court Reporters as set forth
16   within the Rules of Court.

Case 2:19-cv-01334-MAK Document 75 Filed 08/02/21 Page 10 of 65



corporate representative confirmed that the relationship lacked any such exclusivity anyway.3 Based

on Card Connect’s failure to address the plain language of the contract or even acknowledge this

testimony, Card Connect apparently concedes the point.

Second, even absent the contract’s plain language, the undisputed facts demonstrate a lack

of exclusivity too. Card Connect admits that it consistently permitted its resellers—including

Shift4—to use other payment processors.4 This would be impossible if Card Connect considered

its relationship with Shift4 to be exclusive as to payment processing. Card Connect also admits

that, for many years, it paid Shift4 commissions on transactions that Shift4 processed through other

processors.5 This too would be unfathomable if payment processing was truly exclusive to Card

Connect. This is enough to warrant summary judgment for Shift4 on this issue.

However, Card Connect also admits that it solicited and accepted—for its own

benefit—payment processing business from some of Shift4’s other reseller division clients (i.e.,

“sub-resellers”) that Card Connect knew had the right to (and did) process payments through

entities other than Card Connect.6 This fact alone demonstrates that the parties’ reseller agreement

was non-exclusive, as Card Connect’s actions would be a clear breach of any purported exclusivity

provision had such a provision been present. Card Connect does not deny that it accepted

payment processing business from Shift4’s sub-resellers, who were using other processors

simultaneously, and admits that it earned money by doing so, yet nevertheless inexplicably

3

See Card Connect SUMF 20 (citing 4/28/21 Tr. 42:20-43:1) (“Q. Okay. So it was not an exclusive
agreement; correct? A. Correct.”).
4

See Shift4 SUMF 3(c), 7; Card Connect Resp. to Shift4 SUMF 3(c) (no dispute), 7 (same); see
also 4/28/2021 Tr. 75:18-23 (Card Connect’s corporate representative confirming that “[i]t was not
common, but we--we allowed resellers to have processing relationships outside of Card Connect,
correct”); Doc. 75-8, Ex. 8 (4/22/21 Dep. Tr. of J. McDevitt) (“McDevitt Tr.”) 75:14-19 (rejecting
attempt to distinguish between types of payment processing business and testifying, instead, that
“our resellers were all permitted to process with other gateways”).
5

See Shift4 SUMF 11; Card Connect Resp. to Shift4 SUMF 11 (no dispute).
6

See Shift4 SUMF 4; Card Connect Resp. to Shift4 SUMF 4 (no dispute).

10

Case 2:19-cv-01334-MAK Document 75 Filed 08/02/21 Page 11 of 65



maintains that the Reseller Agreement was exclusive as to payment processing. In any event, these
undisputed facts compel denial of Card Connect’s Motion as to this issue.

2.

Card Connect and Shift4 Did Not Have an Exclusive Relationship as
to Reselling.

The parties’ reselling relationship consisted of two aspects: (i) Card Connect’s role in
reselling Shift4’s UTG licenses to Card Connect’s merchants; and (ii) Shift4’s role in helping Card
Connect secure new resellers. See Card Connect, SUMF 27. Card Connect now claims, for the
first time in this litigation, that the second aspect—Shift4’s role in helping Card Connect secure
new resellers—was an “exclusive” relationship. See Card Connect’s Mem. at 4.

While the plain language of the parties’ agreement dictates that no such “exclusive”
relationship existed, Card Connect nevertheless argues (despite never having argued before) that
the agreement should be deemed “exclusive” because the terms of a 2014 email concerning the
parties’ revenue-sharing arrangement purportedly establishes exclusivity outside any written
contract.7 Card Connect selectively quotes snippets from the email while, once again, failing to
address the plain language of the Reseller Agreement or refute the extensive record evidence
discussed below.

Card Connect also asserts that this alleged exclusivity would only be triggered if Shift4
“found leads” outside of those identified by Card Connect. According to Card Connect, this
purported exclusivity restriction means that if Shift4 “found leads” on its own, Shift4 would be
contractually prohibited from reselling those leads to anyone other than Card Connect. Card

7

See Card Connect Mem. at 4. The cases cited by Card Connect make clear that its attempt to
incorporate terms from the email into the Reseller Agreement is legally improper. See, e.g.,
Crawford v. Ry. Switching Ass’n, 2009 WL 656363, *6 (W.D. Pa. Mar. 12, 2009) (holding that
multiple documents may be incorporated into the parties’ contract only where they “are so
interrelated as to allow for a construction of them together as evidencing the intention the parties”)
(emphasis added) (citing Int’l Milling Co. v. Hachmeister, Inc., 110 A.2d 186, 191 (Pa. 1955)).

11

Case 2:19-cv-01334-MAK Document 75 Filed 08/02/21 Page 12 of 65



Connect ignores that this argument would require the Court to re-write the parties’ contract twice,
first by imputing a non-existent exclusivity provision, and then by limiting the scope of that non-
existent provision to something less than true exclusivity.
Notably, Card Connect does not dispute that the parties’ overall reselling relationship
allowed either party to use other entities’ products and services.8 Card Connect has only alleged
that, within that overall reselling relationship, there existed an unwritten and limited requirement
that, if Shift4 independently “found leads,” Shift4 had to place those leads with Card Connect.9 Card
Connect’s argument is contrary to the undisputed facts and unreasonable as a matter of
law.

8

See, e.g., Shift4 SUMF 5, 11; Card Connect Resp. to Shift4 SUMF 5 (no dispute), 11 (same);
Shift4 SUMF 3(c), 7; Card Connect Resp. to Shift4 SUMF 3(c) (no dispute), 7 (same). Card
Connect even paid Shift4 commissions on merchant accounts that Shift4 obtained through other
ISO/resellers. See Shift4 SUMF 5. Card Connect was thus fully aware that Shift4 was reselling for
other ISOs all along. This is directly contrary to Card Connect’s limited “exclusivity as to
reselling” theory. Notably, Card Connect agrees with Shift4’s presentation of the evidence here,
and provides no evidence to the contrary. See Card Connect Resp. to Shift4 SUMF 5 (no dispute).
9

See Card Connect Mem. at 4.

12

Case 2:19-cv-01334-MAK Document 75 Filed 08/02/21 Page 13 of 65



First, it bears repeating that the Reseller Agreement itself contains no exclusivity
restrictions and expressly allows both parties to enter into contracts with any third parties.10
Second, the parties’ course of conduct demonstrates that the agreement was non-exclusive as to
reselling. As discussed above, Card Connect admits that (i) it permitted Shift4 to use other
ISO/resellers; and (ii) it paid Shift4 commissions on merchant accounts that Shift4 obtained
through other ISO/resellers.11 These are clear admissions, supported by the record, that both
parties were permitted to use other entities for reselling activities.
Third, the record evidence Card Connect cites actually proves that there was no
exclusivity. The 2014 email on which Card Connect relies establishes only that Shift4 was entitled
to a larger percentage of revenue for merchants that Shift4 itself referred to Card Connect, as
opposed to merchants already aligned with Card Connect when the parties began their relationship
(i.e., existing Card Connect merchants who then acquired UTG).12 Card Connect does not, and
cannot, argue that this email contains any language suggesting exclusivity as to reselling. It refers
to a “commission split,” not a prohibition on working with other entities.13

10

See Doc. 48-1, Ex. A § 2.10.1 (“This Agreement is non-exclusive and nothing herein shall
prevent either party from entering into similar agreements with other persons or entities.”).
11

Shift4 SUMF 5, 11; Card Connect Resp. to Shift4 SUMF 5 (no dispute), 11 (same).
12

Doc. 72-4, Ex. D; Doc. 75-6, Ex. 6 (4/28/2021 Dep. Tr. of A. Grecco) (“Grecco Tr.”) 68:3-10
(explaining that the email was never meant to bind Card Connect, but, rather, explains how
commissions would be calculated, and noting that the terms in the email were “aspire[d]” to, but not
always strictly followed, by the parties: “it was more in spirit than black and white . . . [b]ut it
wasn’t contractual in any way[.]”).
13

See id.

13

Case 2:19-cv-01334-MAK Document 75 Filed 08/02/21 Page 14 of 65



Fourth, Card Connect points to a text message exchange in which Card Connect’s CEO,
Jeff Shanahan, references a “gentleman’s agreement” concerning the parties’ “revenue-sharing”
relationship.14 But Card Connect once again lifts this information out of context. In that exchange,
Mr. Shanahan makes clear that this “gentleman’s agreement” only related to the parties’ pricing
structure, and that it was not a formal agreement, which is why Mr. Shanahan wrote: “I thought we
had a gentleman’s agreement but I do business on my word.”15 This exchange has nothing to do
with exclusivity (especially given the undisputed facts summarized above).

Fifth, Card Connect contends that “Shift4 does not dispute that it understood that it would
provide any reseller leads it generated to Card Connect.” Card Connect Mem. at 6. This is
incorrect. Shift4 does dispute this, and the evidence Card Connect cites does not support its
position. Card Connect cites to the deposition of J.D. Oder, II. See Card Connect SUMF 35. But
in that deposition, Mr. Oder says quite clearly, “We were not exclusive to anybody,” “Shift4
worked with other credit card processors and worked with other ISOs,” and, in fact, “it would have
been a breach of our contract to have had an exclusivity with Card Connect.”16 Mr. Oder goes on
to clarify that Shift4 would send leads to Card Connect if the lead was a fit with Card Connect’s
abilities, but that there was no obligation to do so.17 That is not exclusivity. That is Card Connect
admitting it was working on a non-exclusive basis with Shift4.

In sum, the Reseller Agreement contains no exclusivity requirements and expressly
permits both parties to contract with other third parties; the 2014 email concerning the parties’

14

Doc. 72-9, Ex. I.
15

See id. (emphasis added); Doc. 75-11, Ex. 11 (4/26/21 Dep. Tr. of J. Shanahan) (“Shanahan Tr.”)
52:2-5 (Card Connect’s CEO confirming, when asked about the “gentleman’s agreement”
referenced in his text message exchange, that there were no other documents governing the parties’
relationship).
16

Doc. 75-3, Ex. 3 (4/27/21 Dep. Tr. of J.D. Oder, II) (“Oder Tr.”) 166:19, 170:4-5, 176:20-22.
17

See id. at 174:10-175:2.

14

Case 2:19-cv-01334-MAK Document 75 Filed 08/02/21 Page 15 of 65



revenue-sharing arrangement does not include exclusivity language and only provides a different
split for merchant accounts that Shift4 itself referred to Card Connect; and the parties’ course of
conduct demonstrates that they operated in a non-exclusive manner. This, in conjunction with the
evidence cited below, requires summary judgment in Shift4’s favor—or at least that Card Connect
be denied summary judgment—on this issue.
B.

Card Connect Materially Breached the Reseller Agreement.

1.

Card Connect Breached the Reseller Agreement by Soliciting Shift4’s
Sub-Resellers and Merchants.

Card Connect’s claims fall apart for a second, independent reason: Card Connect was the
first party to materially breach the Reseller Agreement, and then, only after Shift4 terminated the
Reseller Agreement, did Card Connect file this preemptive lawsuit. Card Connect’s breaches
include soliciting merchants and sub-resellers of Shift4 for the purpose of diverting them away
from Shift4 and onto Card Connect’s own payment processing platform (i.e., processing directly
with Card Connect instead of processing through Shift4).18

18

See, e.g., Doc. 48-1, Ex. A § 3.1; Shift4 Answer ¶¶ 96-109; see also Doc. 75-3, Ex. 3 (Oder Tr.)
134:23-135:2 (“Q. And isn’t it also true that Card Connect solicited our merchants? A. Yes.”); id.
at 90:5-20 (testifying that, at the time of a 2015 meeting concerning Card Connect’s breaches, 99
percent of Shift4’s payment processing volume was going to Card Connect, but that Card Connect
was simultaneously threatening to, and did, “take our customer base . . . in an ungentlemanly like
way, and our best interests and your best interests were not aligned”); id. at 99:6-9 (confirming
Card Connect’s “hostile” plan to “take” Shift4’s merchants and stating “[y]es, [Card Connect was]
taking them”).

15

Case 2:19-cv-01334-MAK Document 75 Filed 08/02/21 Page 16 of 65



Card Connect claims that the provisions prohibiting solicitation of a party’s “customers”
is “ambiguous.” Card Connect Mem. at 10. It strains to find an ambiguity but fails to do so. Card
Connect does not identify any alternative definition for what a customer could be. Instead, Card
Connect argues that the contract could not possibly mean what it says, because this would (in its
view) lead to practical problems. Card Connect Mem. at 14. As such, the argument continues,
even if the contract means what it says, the Court should look to extrinsic evidence to discern the
parties’ intentions. But Card Connect has not, and cannot, point to any parol evidence to the
contrary.

Under Pennsylvania law, contract language is ambiguous when it is “reasonably
susceptible of different constructions and capable of being understood in more than one
sense.”19 The party asserting ambiguity—here, Card Connect—has the burden of demonstrating
its existence through “objective indicia that the contract terms are unclear,” not merely relying on
its self-serving interpretation.20 Even then, such an ambiguity does not exist where “one of the two
offered interpretations [would] strained [sic] or preposterous results.”21 Neither is a contract

19

In re Old Summit Mfg., LLC, 523 F.3d 134, 137 (3d Cir. 2008) (internal quotations omitted)
(quoting Kripp v. Kripp, 849 A.2d 1159, 1163 (Pa. 2004)).
20

Mylan, Inc. v. SmithKline Beecham Corp., 723 F.3d 413, 419 (3d Cir. 2013) (finding ambiguity
where the contract language “does not have a plain meaning” when read in the context of the
entire contract).
21

Id. (quoting Bohler-Uddeholm Am., Inc. v. Ellwood Grp., Inc., 247 F.3d 79, 97 n.9 (3d Cir. 2001));
see also Mellon Bank, N.A. v. Aetna Business Credit, Inc., 619 F.2d 1001, 1011 (3d Cir.
1980) (“the interpretation a plaintiff seeks to elicit must, under the facts of the case, ‘make such
sense’ that it is unnecessary to consider extrinsic evidence”) (internal citations omitted).

16