Exhibit 6135: Search Term Financial Transaction Services, LLC" or "FTS

Document Type: Financial Transaction Services, LLC" or "FTS

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Okay, let's break down Card Connect, LLC v. Shift4 Payments, LLC in excruciating detail. This case is a fascinating (and quite complex) example of contract disputes, intellectual property battles, and the challenges of enforcing non-compete agreements in the rapidly evolving payment processing industry. It involves multiple lawsuits and appeals, so we'll need to be systematic.

I. Core Parties and Their Businesses:

II. The Core Agreements and Their Timeline:

The legal battles primarily revolve around two sets of agreements and a series of events that unfolded over several years:

A. The 2008 Agreements (FTS/Shift4):

* Referral Agreement (RA): This is the foundational agreement. Shift4 agreed to exclusively refer merchants to FTS (Card Connect) for payment processing services. FTS, in return, would provide its CardPointe platform and pay Shift4 a share of the revenue generated from these referred merchants. This exclusivity clause is critical. * Key Provisions: * Exclusivity: Shift4 was obligated to refer all its payment processing business to FTS, with limited, defined exceptions (e.g., merchants already using another processor, merchants requesting specific acquirers that FTS didn't support). This exclusivity was the core of the deal for FTS. * Term and Termination: The agreement had an initial term and automatic renewals unless terminated with proper notice. The termination provisions are complex and became a major point of contention. * Non-Solicitation: Shift4 agreed not to solicit FTS's employees or merchants. * Confidentiality: Both parties agreed to protect each other's confidential information. * Governing Law: Pennsylvania law.

* License Agreement (LA): FTS granted Shift4 a license to use and resell the CardPointe platform to the referred merchants. This gave Shift4 the tools they needed to integrate merchants into the FTS system. This license was directly tied to the Referral Agreement. If the RA terminated, the LA also terminated.

* Sublicense Addendum Allows Shift4 to grant derivative licences to its partners.

B. The 2015 Amendment:

* Amended the Referral Agreement, primarily addressing the compensation structure and clarifying certain terms. The exclusivity provision remained intact. The amendment also provided for the possibility of Shift4 becoming a registered ISO (Independent Sales Organization) with Visa/Mastercard with FTS's consent. This seemingly minor detail became incredibly important later.

C. Key Events Leading to the Dispute:

1. Shift4's Acquisitions and Internal Development: Throughout the 2010s, Shift4 aggressively acquired other companies in the payment processing space, many of which had existing relationships with payment processors other than FTS (and, after 2017, First Data). This is where the "breach of exclusivity" claims really start. Shift4 argues these acquisitions fell under the allowed exceptions; FTS argued they violated the spirit and letter of the agreement. * Specific Acquisitions: The case details multiple acquisitions by Shift4, including companies like: * Future POS * Restaurant Manager * POSitouch, * Datacap These acquired companies had pre-existing relationships with various payment processors, and Shift4 continued those relationships instead of exclusively transferring them to Card Connect.

2. Shift4's Development of "Harbortouch" (later "SkyTab"): This is a major point of contention. Shift4 developed its own, competing payment processing platform, "Harbortouch" (which later became "SkyTab"). FTS/First Data argued this was a direct violation of the Referral Agreement's exclusivity and non-compete principles, as Shift4 was now offering its own services instead of exclusively referring merchants to FTS. Shift4 countered that Harbortouch was focused on different market segments (primarily smaller merchants) and that the RA didn't explicitly prohibit developing competing technologies.

3. Shift4 Becoming a Registered ISO: In 2017, just before First Data acquired Card Connect, Shift4 did become a registered ISO with Visa and Mastercard, without obtaining Card Connect/First Data's explicit consent. This is a key argument in Shift4's favor regarding their ability to process payments independently. They argue that being an ISO implicitly allowed them to process transactions outside the Referral Agreement. FTS strongly contested this interpretation.

4. The 2017 Acquisition of Card Connect by First Data: This event changed the dynamic. First Data was a much larger, and more direct, competitor to Shift4 than the smaller Card Connect had been. This acquisition likely intensified the existing tensions.

5. Termination Notices (or Lack Thereof): A crucial point of legal wrangling is whether either party properly terminated the Referral Agreement. Shift4 argues they effectively terminated the agreement through their actions (becoming an ISO, developing Harbortouch, etc.) and by providing notice in various communications, even if not in the precise format outlined in the RA. FTS argued that no valid termination notice was ever given, and therefore the RA remained in effect.

III. The Lawsuits (Multiple and Interconnected):

The dispute resulted in a flurry of lawsuits and counterclaims, making it complex to follow. Here's a simplified breakdown:

A. Case 1: Card Connect, LLC v. Shift4 Payments, LLC et al. (Pennsylvania Court of Common Pleas, Philadelphia County):

* Plaintiff: Card Connect (later, First Data). * Defendant: Shift4 Payments, Jared Isaacman. * Core Claims: * Breach of Contract (Referral Agreement): This is the central claim. Card Connect argued that Shift4 breached the exclusivity provision by: * Processing payments for merchants acquired through acquisitions. * Developing and offering Harbortouch/SkyTab. * Failing to properly terminate the agreement. * Becoming an ISO without consent. * Breach of Contract (License Agreement): This claim is directly tied to the RA breach. If the RA was breached, the LA was also breached. * Breach of Fiduciary Duty (Against Isaacman): Card Connect argued that Isaacman, as CEO of Shift4, had a fiduciary duty to act in a way that didn't harm Card Connect's interests under the RA. This claim was largely unsuccessful. * Misappropriation of Trade Secrets: Card Connect alleged that Shift4 used confidential information and trade secrets (related to CardPointe and its merchant base) to develop Harbortouch and compete unfairly. * Tortious Interference with Contract (Against Isaacman): Similar to the fiduciary duty claim, this argued Isaacman intentionally interfered with the contractual relationship between Card Connect and Shift4. * Unjust Enrichment: Card Connect argued that Shift4 was unjustly enriched by using CardPointe and its merchant base without fulfilling its obligations under the RA. * Unfair Competition: A general claim alleging that Shift4's actions constituted unfair business practices.

* Shift4's Counterclaims: * Breach of Contract (by Card Connect): Shift4 argued that Card Connect breached the RA in various ways, including failing to provide adequate support and acting in bad faith. * Declaratory Judgment: Shift4 sought a declaration from the court that the RA was not breached, or that it had been properly terminated. * Breach of Implied Covenant of Good Faith and Fair Dealing: This is a standard claim in contract disputes, alleging that Card Connect did not act honestly and fairly in its dealings with Shift4.

* Outcome (Trial Court): This is where it gets very complicated. The trial court ruled in a mixed fashion, finding in favor of both parties on different claims. Key findings include: * Shift4 Breached: The court found that Shift4 did breach the exclusivity provision of the Referral Agreement, primarily through its acquisitions and the development of Harbortouch. * No Proper Termination: The court agreed with Card Connect that Shift4 had not properly terminated the RA according to the contract's terms. * Damages Awarded to Card Connect: The court awarded significant damages to Card Connect for the breach, calculated based on lost profits from merchants that Shift4 should have referred but didn't. The exact calculation of damages was complex and involved expert testimony. * Card Connect Also Breached (on a minor point): The court found that Card Connect had breached a minor provision of the RA relating to marketing materials. * No Trade Secret Misappropriation: The court rejected Card Connect's trade secret claims. * Claims Against Isaacman Dismissed: The court dismissed most of the claims against Isaacman personally.

B. Appeal: Card Connect, LLC v. Shift4 Payments, LLC (Superior Court of Pennsylvania):

* Appellants: Both Card Connect and Shift4 appealed various aspects of the trial court's decision. * Key Issues on Appeal: * Shift4's Appeal: * Challenged the finding of breach of contract. * Argued that the damages calculation was incorrect and excessive. * Contended that the RA had been effectively terminated. * Argued that the exclusivity provision was unenforceable. * Card Connect's Appeal: * Challenged the dismissal of the claims against Isaacman. * Argued that the damages award was insufficient. * Contested the finding that Card Connect had breached the RA.

* Outcome (Appellate Court): The Superior Court largely affirmed the trial court's decision, with some minor modifications. Key takeaways: * Affirmed Breach of Contract: The appellate court upheld the finding that Shift4 breached the exclusivity provision of the RA. * Affirmed Damages Calculation (mostly): The appellate court generally agreed with the trial court's approach to calculating damages, although it may have made some minor adjustments. * Affirmed No Proper Termination: The appellate court agreed that Shift4 hadn't properly terminated the RA. * Affirmed Dismissal of Claims Against Isaacman: The appellate court upheld the dismissal of the claims against Isaacman.

C. Further Appeals (Supreme Court of Pennsylvania):

* Both sides petioned to appeal to PA supreme court. * The Supreme Court Declined to get involved.

IV. Key Legal Concepts and Arguments:

This case, at its core, reveals the intricacies, and difficulty navigating the following:

V. The Takeaways and Lessons Learned:

This case offers several crucial lessons for businesses and legal professionals:

In conclusion, the Card Connect, LLC v. Shift4 Payments, LLC case is a complex and multi-faceted legal battle that offers a wealth of insights into contract law, intellectual property, and the challenges of navigating business relationships in a competitive industry. It underscores the paramount importance of clear, unambiguous contracts and the potential consequences of failing to adhere to their terms. The case also shows how aquisitions can complicate contractual relationships.

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