Block (SQ) 8-KSquare, Inc. Announces Plans to Acquire Afterpay, Strengthening and Enabling Further

Definitions and interpretation

Definitions

the requirements of the Corporations Act relevant to the preparation and contents of financial reports; and

the accounting standards approved under the Corporations Act, being the Australian Accounting Standards and any authoritative interpretation issued by the Australian Accounting Standards Board.

the Afterpay Shareholders immediately prior to such transaction do not own more than 80% of the voting power of securities of the resulting entity or its ultimate parent;

a person (other than Square or its Related Bodies Corporate), whether alone or together with its Associates, would:

directly or indirectly acquire a Relevant Interest in or become the holder of 20% or more of the Afterpay Shares (other than as custodian, nominee or bare trustee);

acquire control of Afterpay, within the meaning of section 50AA of the Corporations Act; or

directly or indirectly acquire, obtain a right to acquire, or otherwise obtain an interest in (including through any license arrangement) 20% or more of the consolidated assets of the Afterpay Group; or

Square would be required to abandon, or otherwise fail to proceed with, the Scheme.

is or becomes available to Square or any of its Representatives on a non-confidential basis from a source (other than Afterpay or any of its Representatives) which, to Square’s knowledge, is not prohibited from disclosing such information to Square;

is known to Square or any of its Representatives prior to disclosure by Afterpay or any of its Representatives;

is or has been independently developed by Square without use of any information furnished to it by Afterpay (where Square can prove the same in writing); or

is transmitted by Afterpay after delivery of notice by Square that it no longer wishes to receive Afterpay Confidential Information.

the information disclosed in Afterpay’s virtual data room hosted at Intralinks as of 11.59pm on Wednesday, 28 July 2021 (Pacific time) (except as set forth in the Afterpay Disclosure Letter), or on behalf of the Afterpay Group in written responses (including by email) to requests for information to Square or any of its Representatives prior to the date of this document, in each case except any information redacted; and

the Afterpay Disclosure Letter.

all information contained in the Scheme Booklet other than the Square Information, the Independent Expert’s Report and the Investigating Accountant’s Report, and

all information relating to Afterpay contained in the Square Registration/Proxy Statement and specifically provided by Afterpay to Square in writing for inclusion in the Square Registration/Proxy Statement.

any matter Disclosed to Square;

changes in general economic, industry, regulatory or political conditions, the securities or other capital markets in general or law;

any epidemic, pandemic (including COVID-19 or COVID-19 Measures), hurricane, earthquake, flood, weather conditions, calamity or other natural disaster, act of God or other force majeure event (or any worsening of or recovery from any of the foregoing);

geopolitical conditions, hostilities, civil or political unrest, any acts of war, sabotage, cyberattack or terrorism (including any outbreak, escalation or worsening of any of the foregoing);

any change in taxation rates, interest rates or exchange rates;

any change in generally accepted accounting principles or the authoritative interpretation of them;

the taking of any action required under this document, the Scheme or the transactions contemplated by them (other than, to the extent not excluded by another clause of this definition, Afterpay’s compliance with its obligations pursuant to clause 8);

any change in the market price or trading volume of Afterpay Shares (but this exception will not prevent the underlying cause or contributing factor of any such change, if not falling within any other exception in this definition, from being taken into account in determining whether there has been an Afterpay Material Adverse Effect);

any failure, in and of itself, by Afterpay or a member of the Afterpay Group to meet any internal or published projections, forecasts, estimates or predictions of revenues, earnings or other financial or operating metrics for any period (but this exception will not prevent the underlying cause or contributing factor of any such failure, if not falling within any other exception in this definition, from being taken into account in determining whether there has been an Afterpay Material Adverse Effect);

the execution, delivery or performance of this document, the announcement or pendency of the Scheme or the other transactions contemplated by this document (including the impact of any of the foregoing on the relationship of Afterpay or a member of the Afterpay Group with their respective employees, customers, creditors, suppliers or contractual counterparties), provided that this clause (j) shall not apply with respect to any representation or warranty that addresses the consequences of the execution, delivery or performance of this document or the announcement or pendency of the Scheme or the other transactions contemplated by this document or with respect to the Conditions Precedent that relate to such representations or warranties;

the identity of, or any facts or circumstances relating to, Square or any member of the Square Group;

any actions, suits or claims arising from allegations of a breach of fiduciary duty or violation of securities laws, in each case relating to this document, the Scheme or the transactions contemplated by this document; or

any action (or the failure to take any action) with the written consent or at the written request of Square;

(conversion) Afterpay converts all or any of its shares into a larger or smaller number of shares;

(reduction of share capital) Afterpay or another member of the Afterpay Group (other than a wholly owned Subsidiary of Afterpay) resolves to reduce its share capital in any way or resolves to reclassify, combine, split or redeem or repurchase directly or indirectly any of its shares, other than (i) any actions taken to comply with clause 4.8(a) or as required pursuant to an Afterpay Employee Plan, (ii) as a

(buy-back) Afterpay or another member of the Afterpay Group (other than a wholly owned Subsidiary of Afterpay):

enters into a buy-back agreement; or

resolves to approve the terms of a buy-back agreement under the Corporations Act;

(distribution) Afterpay makes or declares, or announces an intention to make or declare, any distribution (whether by way of dividend, capital reduction or otherwise and whether in cash or in specie);

(issuing or granting shares or options) any member of the Afterpay Group:

issues shares;

grants an option over its shares; or

agrees to make an issue of or grant an option over shares,

(securities or other instruments) any member of the Afterpay Group issues or agrees to issue securities or other instruments convertible into shares in each case to a person that is not Afterpay or a wholly owned Subsidiary of Afterpay other than (i) actions taken to comply with clause 4.8(a), required pursuant to an Afterpay Employee Plan or in accordance with clause 7.9, (ii) the issuance of securities in connection with employee incentives that are not in breach of clause 8.3(h), or (iii) to the extent required by a Minority Interest in accordance with its terms or actions taken in compliance with clause 5.10;

(constitution) Afterpay or any non-wholly owned Subsidiary of Afterpay adopts a new constitution or modifies or repeals its constitution or a provision of it;

(acquisitions, disposals or tenders) any member of the Afterpay Group:

acquires or disposes of;

agrees to acquire or dispose of; or

offers, proposes, announces a bid or tenders for,

(encumbrances) any member of the Afterpay Group creates, or agrees to create, any Encumbrance over or declares itself the trustee of all or a material part of the Afterpay Group’s business or property;

(merger) (i) Afterpay or (ii) any material member of the Afterpay Group merges or consolidates with any other person (other than, in the case of clause (ii) Afterpay or a wholly owned Subsidiary of Afterpay) or restructures, reorganises or completely or partially liquidates or dissolves;

[reserved];

(Insolvency) Afterpay or any of its material Related Bodies Corporate becomes Insolvent,

Disclosed to Square;

required by law, regulation, changes in generally accepted accounting principles or by an order of a court or Governmental Authority;

made at the written request of Square; or

the undertaking of which Square has approved in writing (which approval will not be unreasonably withheld, delayed or conditioned, and will not be withheld if to do so would contravene competition laws).

reasonably likely of being completed on a reasonable timeline; and

of a higher financial value and more favourable to Afterpay Shareholders than the Scheme (as may be revised in accordance with clause 9.8, if applicable),

a day on which the banks in Sydney, New South Wales, Australia, are authorised or required to close, nor

a day on which the banks in San Francisco, California, United States of America, are authorised or required to close.

a Scheme Participant whose registered address on the Register as at the Record Date is in Australia or New Zealand who has not made a Share Election; and

a Scheme Participant whose registered address on the Register as at the Record Date is not in Australia or New Zealand (other than an Ineligible Foreign Shareholder) who has made a valid CDI Election.

in the case of Afterpay:

in the Afterpay Disclosure Materials; or

in any announcement made by Afterpay on ASX prior to the date of this document (other than any forward looking, projected or hypothetical information); and

in the case of Square:

in the Square Disclosure Materials; or

in any statement, prospectus, report, schedule or another form filed with or furnished to the SEC by Square pursuant to the Securities Act or the Exchange Act prior to the date of this document (other than any forward looking, projected or hypothetical information).

any supranational, national, federal, state, county, municipal, local, provincial or foreign government or any entity exercising executive, legislative, judicial, arbitral, regulatory, taxing, or administrative functions of or pertaining to government;

any public international governmental organisation;

any agency, division, bureau, department, committee, or other political subdivision of any government, entity or organisation described in the foregoing clauses (a) or (b) of this definition (including patent and trademark offices); or

quasi-governmental, self-regulatory agency, commission or authority, including any national securities exchange or national quotation system,

the outstanding principal amount of, accrued and unpaid interest on, and other payment obligations or liabilities (including any prepayment premiums, penalties, make-whole payments, termination fees, reimbursement obligations, breakage costs and other fees and expenses that are payable upon repayment of such obligations) of such person arising under, consisting of, pursuant to, or in respect of:

indebtedness for borrowed money or indebtedness evidenced by notes, bonds, debentures or other debt securities;

the deferred purchase price of property or services (including any earn out obligations whether or not contingent and regardless of when due) (but excluding trade payables, accrued expenses and current accounts, in each case, incurred and paid in the ordinary course of business);

any letter of credit, bank guarantee, bankers’ acceptance or other similar instrument, in each case, to the extent drawn, issued for the account of such person;

any hedging agreement, derivative instrument or similar arrangement, including any interest rate swap, currency swap, forward currency or interest rate contracts or other interest rate or currency hedging arrangements (in each case valued at their termination value as of immediately prior to the date of determination);

any transaction related to the securitization of assets (including inventory or receivables) for financing purposes to any third party, including all factoring and inventory agreements and similar agreements executed for the purpose of obtaining financing;

any obligations in respect of dividends declared but not paid; and

any obligations in respect of a capital or finance lease (in which case only the capitalized portion thereof shall constitute Indebtedness); and

any obligation of another person of the kind described in clause (a) for which such person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise or in respect of which such person has pledged any of its assets as collateral therefor.

who is (or is acting on behalf of) a citizen or resident of a jurisdiction other than residents of Australia and its external territories, Canada, Hong Kong, New Zealand, Singapore, Switzerland, United Kingdom and the United States; or

whose address shown in the Register is a place outside Australia and its external territories, Canada, Hong Kong, New Zealand, Singapore, Switzerland, United Kingdom and the United States or who is acting on behalf of such a person,

it is lawful and not unduly onerous or unduly impracticable to issue that Afterpay Shareholder with the New Square Shares or New Square CDIs on implementation of the Scheme; and

it is lawful for that Afterpay Shareholder to participate in the Scheme by the law of the relevant place outside Australia and its external territories, Canada, Hong Kong, New Zealand, Singapore, Switzerland, United Kingdom and the United States.

it is (or states that it is) an insolvent under administration or insolvent (each as defined in the Corporations Act);

it is in liquidation, in provisional liquidation, under administration or wound up or has had a Controller appointed to any part of its property;

it is subject to any arrangement (including a deed of company arrangement or scheme of arrangement), assignment, moratorium, compromise or composition, protected from creditors under any statute or dissolved (in each case, other than to carry out a reconstruction or amalgamation while solvent on terms approved by the other parties to this document);

an application or order has been made (and in the case of an application which is disputed by the person, it is not stayed, withdrawn or dismissed within 14 days), resolution passed, proposal put forward, or any other action taken, in each case in connection with that person, which is preparatory to or could result in any of the things described in any of the above paragraphs;

it is taken (under section 459F(1) of the Corporations Act) to have failed to comply with a statutory demand;

it is the subject of an event described in section 459C(2)(b) or section 585 of the Corporations Act (or it makes a statement from which another party to this document reasonably deduces it is so subject);

it is otherwise unable to pay its debts when they fall due; or

something having a substantially similar effect to any of the things described in the above paragraphs happens in connection with that person under the law of any jurisdiction.

trademarks, service marks, brand names, internet domain names, internet and social media usernames, logos, symbols, certification marks, trade dress and other indications of origin, the goodwill associated with the foregoing and registrations in any jurisdiction of, and applications in any jurisdiction to register, the foregoing, including any extension, modification or renewal of any such registration or application;

inventions, discoveries and ideas, whether patentable or not, in any jurisdiction;

patents, applications for patents (including divisions, continuations, continuations in part and renewal applications), all improvements thereto, and any renewals, extensions or reissues thereof, in any jurisdiction;

non-public information, trade secrets and know-how, including processes, technologies, protocols, formulae, prototypes and confidential information and rights in any jurisdiction to limit the use or disclosure thereof by any person;

writings and other works, whether copyrightable or not and whether in published or unpublished works, in any jurisdiction;

rights of publicity, likeness rights, or other similar personality rights;

registrations or applications for registration of copyrights in any jurisdiction, and any renewals or extensions thereof; and

any similar intellectual property or proprietary rights.

in respect of Afterpay, the Listing Rules of ASX and any other applicable rules of ASX modified to the extent of any express written waiver by ASX; or

in respect of Square, the applicable rules contained in the NYSE Listed Company Manual,

in relation to the Minority Interests;

that is a material agreement with a Key Merchant;

which is, in the opinion of Afterpay management, critical to the business of the Afterpay Group;

which has a material strategic significance to the business of the Afterpay Group; including material agreements with a Key Payments Partner;

containing continuing material “earn out” milestones;

granting any right of first refusal, right of first offer or similar right with respect to any material assets, rights or properties of the Afterpay Group;

that obligates in any material respect any member of the Afterpay Group or that will obligate in any material respect any member of the Merged Group to conduct business with any third party on an exclusive basis or contains “most favoured nation” or similar provisions that are material in relation to the conduct of business with the relevant third party;

that is a settlement or similar agreement containing any material continuing obligations of the Afterpay Group;

pursuant to which any member of the Afterpay Group:

has granted or grants any license, covenant not to assert, release, agreement not to enforce or prosecute or other immunity to any third party under or to any material Intellectual Property; or

is granted a license, covenant not to assert, release, agreement not to enforce or prosecute or immunity to or under any material Intellectual Property from any third party,

that is a material joint venture or a material profit sharing; or

containing a covenant not to compete or a covenant not to solicit clients or customers that is granted by any member of the Afterpay Group in favour of a third party, in each case that restricts the Afterpay Group in any material respect,

the SGX Notes; and

the Employee Share Rights.

a Related Body Corporate;

a director, officer or employee of the party or any of the party’s Related Bodies Corporate; or

an adviser or consultant to the party or any of the party’s Related Bodies Corporate.

where that Scheme Participant is a Share Elected Shareholder, 0.375 (the “Exchange Ratio”) New Square Shares; or

where that Scheme Participant is a CDI Elected Shareholder, 0.375 New Square CDIs.

a Scheme Participant whose registered address on the Register as at the Record Date is in Australia or New Zealand who has made a valid Share Election; and

a Scheme Participant whose registered address on the Register as at the Record Date is not in Australia or New Zealand (other than an Ineligible Foreign Shareholder) who has not made a valid CDI Election.

such target is material to the Merged Group (provided that, for this purpose, the Merged Group, taken as a whole, shall be deemed a consolidated group of entities the same size as the Afterpay Group) and derives a material portion of its revenues from “buy now pay later” products and/or services; or

the target operates in the “buy now pay later” space in North America, the United Kingdom, New Zealand, Europe or Australia and such acquisition or other transaction would likely materially delay or create substantial risk of any Regulatory Approval not being obtained.

the Square Shareholders immediately prior to such transaction do not own more than 80% of the voting power of securities of the resulting entity or its ultimate parent; or

a person (other than Square, its Related Bodies Corporate, or holders of Square B Shares as of the date of this document), whether alone or together with its Associates, would:

directly or indirectly acquire a Relevant Interest in or become the holder of securities representing 20% or more of the total outstanding voting power of Square (other than as a custodian, nominee or bare trustee); or

directly or indirectly acquire, obtain a right to acquire, or otherwise obtain an interest in (including through any license arrangement) 20% or more of the consolidated assets of the Square Group.

is or becomes available to Afterpay or any of its Representatives on a non-confidential basis from a source (other than Square or any of its Representatives) which, to Afterpay’s knowledge, is not prohibited from disclosing such information to Afterpay;

is known to Afterpay or any of its Representatives prior to disclosure by Square or any of its Representatives;

is or has been independently developed by Afterpay without use of any information furnished to it by Square (where Afterpay can prove the same in writing); or

is transmitted by Square after delivery of notice by Afterpay that it no longer wishes to receive Square Confidential Information.

the information disclosed on behalf of the Square Group in written responses (including by email) to requests for information to Afterpay or any of its Representatives prior to the date of this document, except any information redacted; and

the Square Disclosure Letter.

any matter Disclosed to Afterpay;

changes in general economic, industry, regulatory or political conditions, the securities or other capital markets in general or law;

any epidemic, pandemic (including COVID-19 or COVID-19 Measures), hurricane, earthquake, flood, weather conditions, calamity or other natural disaster, act of God or other force majeure event (or any worsening of or recovery from any of the foregoing);

geopolitical conditions, hostilities, civil or political unrest, any acts of war, sabotage, cyberattack or terrorism (including any outbreak, escalation or worsening of any of the foregoing);

any change in taxation rates, interest rates or exchange rates;

any change in generally accepted accounting principles or the authoritative interpretation of them;

the taking of any action required under this document, the Scheme or the transactions contemplated by them (other than, to the extent not excluded by another clause of this definition, Square’s compliance with its obligations pursuant to clause 8);

any change in the market price or trading volume of Square Shares (but this exception will not prevent the underlying cause or contributing factor of any such change, if not falling within any other exception in this definition, from being taken into account in determining whether there has been a Square Material Adverse Effect);

any failure, in and of itself, by Square or a member of the Square Group to meet any internal or published projections, forecasts, estimates or predictions of revenues, earnings or other financial or operating metrics for any period (but this exception will not prevent the underlying cause or contributing factor of any such failure, if not falling within any other exception in this definition, from being taken into account in determining whether there has been a Square Material Adverse Effect);

the execution, delivery or performance of this document, the announcement or pendency of the Scheme or the other transactions contemplated by this document (including in the impact of any of the foregoing on the relationship of Square or a member of the Square Group with their respective employees, customers, creditors, suppliers or contractual counterparties), provided that this clause (j) shall not apply with respect to any representation or warranty that addresses the consequences of the execution, delivery or performance of this document or the announcement or pendency of the Scheme or the other transactions contemplated by this document or with respect to the Conditions Precedent that relate to such representations or warranties;

the identity of, or any facts or circumstances relating to, Afterpay or any member of the Afterpay Group;

any actions, suits or claims arising from allegations of a breach of fiduciary duty or violation of securities laws, in each case relating to this document, the Scheme or the transactions contemplated by this document; or

any action (or the failure to take any action) with the written consent or at the written request of Afterpay;

(conversion) Square converts all or any of its shares into a larger or smaller number of shares, other than a conversion of Square B Shares to Square A Shares pursuant to the terms of Square’s Certificate of Incorporation;

(reduction of share capital) Square or another member of the Square Group (other than a wholly owned Subsidiary of Square) resolves to reduce its share capital in any way or resolves to reclassify, combine or split directly or indirectly any of its shares, other than any actions under Square executive or employee share plans in the ordinary course of business;

(buy-back) Square or another member of the Square Group (other than a wholly owned Subsidiary of Square) repurchases, redeems or otherwise acquires any shares of capital stock of Square, or agrees to do any of the foregoing, except (i) for acquisitions of Square A shares tendered by holders of equity awards under Square executive or employee share plans in the ordinary course of business as such awards are in effect on the date of this document in order to satisfy obligations to pay the exercise price or Tax withholding obligations with respect thereto or (ii) transactions solely between Square and a wholly owned Subsidiary of Square or wholly owned Subsidiaries of Square;

(issuing of securities) any member of the Square Group issues or agrees to issue Square Shares or other instruments convertible into Square Shares to a person outside the Square Group other than (i) under Square executive or employee share plans in the ordinary course of business, (ii) under Square’s convertible notes outstanding as of the date of this document or (iii) issuance of Square Shares or other instruments convertible into Square Shares in an amount of up to 15% of outstanding Square Shares as of the date of this document;

(distribution) Square makes or declares, or announces an intention to make or declare, any distribution (whether by way of dividend, capital reduction or otherwise and whether in cash or in specie);

(charter) Square adopts a new charter or modifies or repeals its charter or a provision of it, in each case in a manner that would materially and adversely impact the rights of the Afterpay Shareholders or would prevent, materially delay or materially impair the ability of the parties to perform their obligations under this document or to consummate the Scheme;

(encumbrances) any member of the Square Group creates, or agrees to create, any Encumbrance over or declares itself the trustee of all or a material part of the Square Group’s business or property;

(Square Competing Acquisition) any member of the Square Group undertakes or agrees to undertake a Square Competing Acquisition;

(merger) Square merges or consolidates with any other person, or restructures, reorganises or completely or partially liquidates or dissolves itself; or

(Insolvency) Square or any of its material Related Bodies Corporate becomes Insolvent,

Disclosed to Afterpay;

required by law, regulation, changes in generally accepted accounting principles or by an order of a court or Governmental Authority;

made at the written request of Afterpay; or

the undertaking of which Afterpay has approved in writing (which approval must not be unreasonably withheld, delayed or conditioned).

reasonably likely of being completed on a reasonable timeline; and

of a higher financial value and more favourable to Square Shareholders than the Scheme,

is a subsidiary of the first entity within the meaning of the Corporations Act; and

is part of a consolidated entity constituted by the first entity and the entities it is required to include in the consolidated financial statements it prepares, or would be if the first entity was required to prepare consolidated financial statements.

General interpretation

the singular includes the plural and vice versa;

the meaning of general words is not limited by specific examples introduced by “including”, “for example”, “such as” or similar expressions;

a reference to “person” includes an individual, a body corporate, a partnership, a joint venture, an unincorporated association and an authority or any other entity or organisation;

a reference to a particular person includes the person’s executors, administrators, successors, substitutes (including persons taking by novation) and assigns;

a reference to a time of day is a reference to the time in Melbourne, Victoria;

a reference to dollars, $ or A$ is a reference to the currency of Australia, and US$ is a reference to the currency of the United States of America;

a reference to “law” includes common law, principles of equity and legislation (including regulations);

a reference to any “legislation” includes regulations under it and any consolidations, amendments, re-enactments or replacements of the law or any of them;

a reference to “regulations” includes instruments of a legislative character under legislation (such as regulations, rules, by-laws, ordinances and proclamations); and

a reference to a group of persons is a reference to any 2 or more of them jointly and to each of them individually.

Agreement to propose and implement Scheme

Afterpay to propose Scheme

Acquirer Subsidiary

Agreement to implement Scheme

Conditions Precedent

Conditions Precedent

Reasonable endeavours

each of the Conditions Precedent for which it is a party responsible (as noted in clause 3.1):

is satisfied as soon as practicable after the date of this document; and

continues to be satisfied at all times until the last time it is to be satisfied (as the case may require); and

there is no occurrence that would prevent the Condition Precedent for which it is a party responsible being satisfied.

Regulatory matters

Without limiting clause 3.2, each party:

(applying for Regulatory Approvals) must promptly apply for or file all relevant Regulatory Approvals for which it is the party responsible (and with respect to notifications under the HSR Act, no later than 10 Business Days after the date of this document) and provide the other parties with a copy of those applications or notifications (provided that any commercially sensitive information may be redacted from the copy provided);

(assistance) agrees to provide reasonable assistance to the other parties in order to enable the other parties to obtain any Regulatory Approvals for which the other party is the party responsible;

(Regulatory Approvals process) must take all steps it is responsible for as part of the Regulatory Approval process, including responding to requests for information and documentary material at the earliest practicable time;

(representation) has the right to be represented and make submissions at any meeting with any Governmental Authority relating to a Regulatory Approval; and

(consultation) must consult with the other parties in advance in relation to all applications and other communications (whether written or oral, and whether direct or via a Representative) with any Governmental Authority relating to any Regulatory Approval and keep the other parties fully informed of progress in relation to the obtaining of the Regulatory Approval and:

provide the other parties with drafts of any applications and other written communications to be sent to a Governmental Authority and make any amendments as the other party reasonably requires; and

provide copies of any written communications sent to or received from a Governmental Authority to the other parties promptly upon despatch or receipt (as the case may be),

Subject to clause 3.3(c), before providing any document or other information to the other parties (in this clause 3.3(b), the “Recipient”) pursuant to clause 3.3(a) or 8.6, a party (in this clause 3.3(b), the “Discloser”) may redact any part of that document, or not disclose any part of that information, which contains or is confidential, non-public information (“Sensitive Commercial Information”) if the Discloser reasonably believes that:

the Sensitive Commercial Information is of a commercially sensitive nature; or

the disclosure of the Sensitive Commercial Information to the Recipient would be damaging to the commercial or legal interests of the Discloser or any of its related bodies corporate,

Clause 3.3(b) will not apply to the extent the Recipient is a member of the “clean team” and bound by the obligations set out in the Information Exchange Protocol.

Conditions on Regulatory Approvals

Acquirer in relation to the Condition Precedent in clause 3.1(a):

must offer and agree or accept, the standard tax conditions published at the date of this document in section D of Guidance Note 12 issued by FIRB from time to time; and

must consider in good faith and in consultation with Afterpay agreeing or accepting any other conditions required or requested in connection with a Regulatory Approval (including as to data or reporting), unless such conditions or undertakings:

are not conditional on the Scheme becoming Effective; or

would be reasonably likely to have a material adverse effect on the Merged Group (provided that, for this purpose, the Merged Group, taken as a whole, shall be deemed a consolidated group of entities the same size as the Afterpay Group).

Square Shareholder Approval

limiting clause 3.2:

as soon as reasonably practicable after the date of this document, Square shall prepare and file the preliminary Square Registration/Proxy Statement with the SEC and must use reasonable endeavours to complete this filing within 25 Business Days of the date of this document (provided Afterpay has complied with its obligations under clause 5.2(e));

subject to clause 6.2, Square shall include in the Square Registration/Proxy Statement a statement by the Square Board recommending that Square Shareholders vote in favour of the issuance of the New Square Shares and Square A Shares underlying New Square CDIs to the Afterpay Shareholders in the Scheme;

Square and Afterpay shall furnish all information concerning itself and its affiliates that is required to be included in the Square Registration/Proxy Statement or that is requested by the other party and customarily included in proxy statements and/or registration statements prepared in connection with transactions of the type contemplated by this document, and each of Square and Afterpay will use all reasonable endeavours to ensure that none of the information supplied or to be supplied by it for inclusion in or incorporation by reference into the Square Registration/Proxy Statement will, at the date the Square Registration/Proxy Statement or any amendment or supplement thereto is filed with the SEC, declared effective by the SEC or mailed to the Square Shareholders or at the time of the Square Shareholder Meeting, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading;

Square shall consult with Afterpay as to the content and presentation of the Square Registration/Proxy Statement, including:

providing to Afterpay drafts of the Square Registration/Proxy Statement within a reasonable time prior to the initial filing thereof with the SEC for the purpose of enabling Afterpay to review and comment on the draft document and considering in good faith any timely and reasonable comments; and

providing to Afterpay drafts of each subsequent filing of or amendment or supplement to Square Registration/Proxy Statement within a reasonable time before filing any such revised document with the SEC or disseminating it to Square Shareholders for the purpose of enabling Afterpay to review and comment on the draft document and considering in good faith any timely and reasonable comments;

Square shall promptly respond to, and use all reasonable endeavours to cause to be resolved, any requests for information or comments from the SEC (including by filing amendments or supplements to the Square Registration/Proxy Statement) in relation to the Square Registration/Proxy Statement at the earliest practicable time;

Square shall keep Afterpay reasonably informed of any matters raised or comments provided by the SEC in relation to the Square Registration/Proxy Statement, and use all reasonable endeavours to take into consideration in resolving such matters any issues raised by Afterpay;

if, at any time prior to the Square Shareholder Meeting, any information relating to Square or Afterpay or any of their respective affiliates, officers or directors should be discovered by Square or Afterpay that should be set forth in an amendment or supplement to the Square Registration/Proxy Statement, so that the Square Registration/Proxy Statement would not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they are or were made, not misleading, the party that discovers such information shall promptly notify the other party and an appropriate amendment or supplement describing (or correcting) such information shall be prepared and, following a reasonable opportunity for the other party (and its counsel) to review and comment on such amendment or supplement, promptly filed with the SEC and, to the extent required by applicable law, disseminated to Square Shareholders;

Square shall file the Square Proxy Statement with the SEC in definitive form and begin mailing the Square Proxy Statement to holders of Square Shares as soon as practicable (and shall use all reasonable endeavours to do so within three (3) Business Days) after the later of (1) the expiration of the ten (10) day waiting period provided in Rule 14a-6(a) promulgated under the Exchange Act without comment from the SEC, (2) the date on which Square learns that the SEC has no further comments on, or does not intend to review, the Square Registration/Proxy Statement, and (3) if registration of the Scheme Consideration is required under the Securities Act, the date of effectiveness of the Square Registration Statement under the Securities Act (such later date, the “Clearance Date”);

If registration of the Scheme Consideration is required under the Securities Act, Square shall use reasonable endeavours to have the Square Registration Statement declared effective by the staff of the SEC under the Securities Act as promptly as practicable after its initial filing with the SEC and to keep the Square Registration Statement effective as long as necessary to implement and consummate the Scheme;

Square must convene and hold the Square Shareholder Meeting to obtain the Square Shareholder Approval within 30 Business Days after the Clearance Date (unless prohibited by the SEC, in which case Square shall convene and hold the Square Shareholder Meeting at the earliest possible date permitted by the SEC);

Square shall not propose any matters to be voted on at the Square Shareholder Meeting other than the matters contemplated by this document in connection with the Square Shareholder Approval (and any matters of procedure to be voted on by the Square Shareholders in connection therewith);

except as required by law or a Governmental Authority, Square may not adjourn or postpone the Square Shareholder Meeting without the prior consent of Afterpay, provided, however, that Square may, without the consent of Afterpay and in accordance with Square’s charter, law and, if relevant, the consent of any Governmental Authority, adjourn or postpone the Square Shareholder Meeting to the extent necessary to ensure that any required (or, as determined by the Square Board acting reasonably and in good faith after consulting with outside counsel and having first consulted with Afterpay, advisable) supplement or amendment to the Square Registration/Proxy Statement is provided to the Square Shareholders, with such postponement or adjournment to extend for no longer than the period that the Square Board determines in good faith (after consulting with outside counsel)

unless this document shall have been terminated in accordance with clause 13, Square must hold the Square Shareholder Meeting pursuant to this clause 3.5 and submit the issue of the New Square Shares and the Square A Shares underlying the New Square CDIs for the approval of the Square Shareholders.

Waiver of Conditions Precedent

A Condition Precedent may only be waived in writing by the party or parties entitled to the benefit of that Condition Precedent as and to the extent noted in clause 3.1 and will be effective only to the extent specifically set out in that waiver.

A party entitled to waive the breach or non-fulfilment of a Condition Precedent under this clause 3.6 may do so in its absolute discretion.

If either Afterpay or Square waives the breach or non-fulfilment of all or any portion of a Condition Precedent in accordance with this clause 3.6, then:

subject to clause 3.6(c)(ii), that waiver precludes that party from suing the other party for any breach of this document arising as a result of the breach or non-fulfilment of that portion of such Condition Precedent or arising from the same event which gave rise to the breach or non-fulfilment of that portion of such Condition Precedent; but

if the waiver of all or any portion of the Condition Precedent is itself conditional and the other party:

accepts the condition, the terms of that condition apply notwithstanding any inconsistency with clause 3.6(c)(i); or

does not accept the condition, the Condition Precedent or a portion thereof has not been waived.

A waiver of a breach or non-fulfilment in respect of a Condition Precedent does not constitute:

a waiver of a breach or non-fulfilment of any other Condition Precedent arising from the same event; or

a waiver of a breach or non-fulfilment of that Condition Precedent resulting from any other event.

Notices in relation to Conditions Precedent

(notice of satisfaction) promptly notify the other party of satisfaction of a Condition Precedent and must keep the other parties informed of any material development of which it becomes aware that may lead to the breach or non-fulfilment of a Condition Precedent which it is responsible for satisfying; and

(notice of failure) promptly notify the other parties of a breach or non-fulfilment of a Condition Precedent which it is responsible for satisfying, or of any event which will prevent the Condition Precedent being satisfied.

Consultation on failure of Condition Precedent

there is a breach or non-fulfilment of a Condition Precedent set out in clauses 3.1(a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (r), (s) or (v) which is not waived in accordance with this document by the time or date specified in this document for the satisfaction of the Condition Precedent; or

there is an act, failure to act or occurrence which will prevent a Condition Precedent set out in clause 3.1(a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (r), (s) or (v) from being satisfied by the time or date specified in this document for the satisfaction of the Condition Precedent (and the breach or non-fulfilment which would otherwise occur has not already been waived in accordance with this document),

whether the Scheme may proceed by way of alternative means or methods;

to extend the relevant time for satisfaction of the Condition Precedent or to adjourn or change the date of an application to the Court; or

to extend the End Date.

Failure to agree

subject to clause 3.9(b), either party may terminate this document (and that termination will be in accordance with clause 13.1(g)); or

if a Condition Precedent may be waived and exists for the benefit of one party only, that party only may waive that Condition Precedent or terminate this document (and that termination will be in accordance with clause 13.1(g)),

Scheme voted down because of the Headcount Test

apply for an order of the Court contemplated by section 411(4)(a)(ii)(A) of the Corporations Act to disregard the Headcount Test and seek Court approval of the Scheme under section 411(4)(b) of the Corporations Act, notwithstanding that the Headcount Test has not been satisfied; and

make such submissions to the Court and file such evidence as counsel engaged by Afterpay to represent it in Court proceedings related to the Scheme, in consultation with Square, considers is reasonably required to seek to persuade the Court to exercise its discretion under section 411(4)(a)(ii)(A) of the Act by making an order to disregard the Headcount Test.

Outline of Scheme

Scheme

all of the Afterpay Shares held by Scheme Participants at the Record Date will be transferred to Square Acquirer; and

each Scheme Participant will be entitled to receive the Scheme Consideration.

Scheme Consideration

Subject to and in accordance with this document and the Scheme, each Scheme Participant is entitled to receive the Scheme Consideration in respect of each Afterpay Share held by that Scheme Participant.

At any time prior to the lodgement of the Regulator’s Draft with ASIC, Square Acquirer may elect (Cash Election) to change the Scheme Consideration to the Cash Election Payment for each Afterpay Share; plus either:

where that Scheme Participant is a Share Elected Shareholder, 0.37125 New Square Shares; or

where that Scheme Participant is a CDI Elected Shareholder, 0.37125 New Square CDIs.

If Square Acquirer makes a Cash Election, the parties will work together in good faith to agree the necessary amendments to the Scheme, the Scheme Booklet, and Square Registration/Proxy Statement to reflect the revised Scheme Consideration, including for the purposes of clause 4.8.

Provision of Scheme Consideration

Square Acquirer will accept that transfer; and

Square Acquirer will provide or procure as set forth in clause 4.3(c) the provision to each Scheme Participant the Scheme Consideration in accordance with the Scheme; and

Square Acquirer agrees to cause Square to, and Square will at the direction of and on behalf of Square Acquirer (in satisfaction of Square Acquirer’s obligation to provide such Scheme Consideration to the Scheme Participants under clause 4.3(b)), issue the Scheme Consideration in accordance with the Scheme. If Square Acquirer fails to provide direction to Square as contemplated by this clause 4.3(c) (or to have otherwise procured the provision of the Scheme Consideration) within 1 Business Day following the Effective Date, Square Acquirer will be deemed to have provided such direction to Square and Square agrees that it will take the actions required by this clause 4.3(c).

Scheme Consideration Discretion

Fractional elements

If the number of Afterpay Shares held by a Scheme Participant at the Record Date is such that the aggregate entitlement of the Scheme Participant to Scheme Consideration comprising New Square Shares or New Square CDIs includes a fractional entitlement to a New Square Share or New Square CDI, the entitlement will be rounded as follows:

if the fractional entitlement is less than 0.5, it will be rounded down to zero New Square Shares or New Square CDIs; and

if the fractional entitlement is equal to or more than 0.5, it will be rounded up to one New Square Share or New Square CDI.

If Square and Afterpay are of the opinion (acting reasonably) that two or more Scheme Participants (each of whom holds a number of Afterpay Shares which results in rounding in accordance with clause 4.5(a)) have, before the Record Date for the Scheme, been party to Share Splitting in an attempt to obtain unfair advantage by reference to such rounding, if requested by Square, Afterpay must give notice to those Scheme Participants:

setting out their names and registered addresses as shown in the Register;

stating that opinion; and

attributing to one of them specifically identified in the notice the Afterpay Shares held by all of them,

Ineligible Foreign Shareholders

Where an Ineligible Foreign Shareholder would otherwise be entitled to receive New Square Shares or New Square CDIs as Scheme Consideration pursuant to clause 4.3, Square Acquirer has no obligation to issue any New Square Shares or New Square CDIs to the Ineligible Foreign Shareholder, and instead (on behalf of and at the direction of Square Acquirer):

Square will issue to a nominee appointed by Square any New Square Shares to which an Ineligible Foreign Shareholder would otherwise be entitled;

Square will procure that, as soon as reasonably practicable and in any event not more than 15 Business Days after the Implementation Date, the nominee:

sells or procures the sale of all of the New Square Shares issued to the nominee pursuant to clause 4.6(a)(i), in the ordinary course of trading on NYSE; and

remits to Square the proceeds of sale (after deducting any applicable brokerage, stamp duty and other selling costs, taxes and charges); and

promptly after the last sale of New Square Shares in accordance with clause 4.6(a)(ii)(A), Square will pay to each Ineligible Foreign Shareholder an amount equal to the proportion of the net proceeds of sale received by Square under clause 4.6(a)(ii)(B) to which that Ineligible Foreign Shareholder is entitled in full satisfaction of the Ineligible Foreign Shareholder entitlement to the relevant New Square Shares.

None of Afterpay, Square or the relevant nominee gives any assurance as to the price that will be achieved for the sale of New Square Shares in accordance with this clause 4.6 and the sale of New Square Shares will be at the risk of the Ineligible Foreign Shareholder.

New Square Shares to rank equally

all New Square Shares issued as Scheme Consideration pursuant to clause 4.3 (including those issued to CDN in connection with the New Square CDIs) will, upon their issue:

rank equally with all other Square A Shares then on issue;

be fully paid and free from any Encumbrance; and

it will use all reasonable endeavours to ensure that trading in the New Square Shares and New Square CDIs commences on a normal settlement basis no later than the first trading day (as defined in the Listing Rules) following the Implementation Date.

Employee incentives

Afterpay must use all reasonable endeavours (subject to clause 5.10 to the extent applicable) to ensure that (i) the treatment of Employee Share Rights set forth below can be effectuated and (ii) there is a “blackout” such that no Afterpay Employee Options (as defined below) shall be exercised following the 5th Business Day prior to the Record Date.

Subject to, and immediately following, the Effective Date, each equity award corresponding to Afterpay Shares issued under an employee incentive plan operated by the Afterpay Group that is held by a non-employee director of Afterpay (each an “Afterpay Director Award”) shall vest in full.

Afterpay Employee Options:

Subject to, and immediately following, the Effective Date, each option to purchase Afterpay Shares issued under an employee incentive plan operated by the Afterpay Group (each, an “Afterpay Employee Option”) that is outstanding as of the Effective Date shall vest with respect to a number of Afterpay Shares (rounded up to the nearest whole share) such that the vested portion of such Afterpay Employee Option, after giving effect to the vesting contemplated by this clause, shall equal a fraction, the numerator of which is the number of full months from the grant date of such option through the Effective Date and the denominator of which is the total number of months from the grant date of such option through the last vesting date of such option (e.g. 48 in the case of an

Subject to, and upon, the implementation of the Scheme, the unvested portion of each Afterpay Employee Option that is outstanding as of the Effective Date and that does not vest pursuant to the immediately preceding clause shall be cancelled (such portion, the “Cancelled Option”) and converted into an option (each, a “Replacement Option Award”) covering a number of Square A Shares (rounded down to the nearest whole share) determined by multiplying the number of Afterpay Shares covered by the Cancelled Option by the Exchange Ratio, and with a per share exercise price, rounded up to the nearest whole cent, determined by dividing the per share exercise price of such Cancelled Option by the Exchange Ratio, with such award vesting in equal quarterly instalments over the period of time from the Effective Date through the latest vesting date applicable to such Cancelled Option, subject to the holder’s continued employment by Afterpay or an affiliate through the applicable vesting dates.

The Afterpay Board (A) may provide that all vested Afterpay Employee Options (and any other vested options to purchase Afterpay Shares) shall be automatically exercised prior to the fifth Business Day prior to the Record Date, including on a net settlement basis, and (B) shall cause each vested Afterpay Employee Option (and any other vested option to purchase Afterpay Shares) that is outstanding immediately following the Effective Date, including the portion of any Afterpay Employee Option that vests pursuant to clause 4.8(c)(i), that is unexercised as of the Record Date, to expire, lapse and be cancelled for no consideration on such date.

Afterpay RSU Awards and Afterpay Restricted Stock Awards

Subject to, and immediately following the Effective Date, each restricted stock unit or performance right (each an “Afterpay RSU Award”) or restricted stock award (each an “Afterpay Restricted Stock Award”), in each case, corresponding to Afterpay Shares issued under an employee incentive plan operated by the Afterpay Group, that is outstanding as of the Effective Date, shall vest with respect to a number of Afterpay Shares (rounded up to the nearest whole share) such that the vested portion of such Afterpay RSU Award or Afterpay Restricted Stock Award, as applicable, after giving effect to the vesting contemplated by this clause shall equal a fraction, the numerator of which is the number of full months from the grant date of such Afterpay RSU Award or Afterpay Restricted Stock Award, as applicable, through the Effective Date, and the denominator of which is the total number of months from the grant date of such Afterpay RSU Award or Afterpay Restricted Stock Award, as applicable, through the last vesting date of such Afterpay RSU Award or Afterpay Restricted Stock Award, as applicable, (e.g., 48 in the case of an option that vests in full on the fourth anniversary of the grant date); provided, that such accelerated vesting shall not apply to any Afterpay RSU Award or Afterpay Restricted Stock Award, as applicable, granted after the date of this document, other than the awards set forth on Schedule 4.8(g) of the Afterpay Disclosure Letter, and the unvested portion of such Afterpay RSU Award or Afterpay Restricted Stock Award, as applicable, that does not vest pursuant to this clause shall be forfeited (such portion, the “Forfeited Full Value Award”).

Subject to, and upon, the implementation of the Scheme, Square shall grant to the holder of a Forfeited Full Value Award who remains employed by Afterpay or an affiliate as of the Implementation Date, an award (each, a “Replacement Full Value Award”) of restricted stock units covering a number of Square A Shares or a grant of restricted Square A Shares (in each case rounded up to the nearest whole share) equal to the number of Afterpay Shares covered by the Forfeited Full Value Award multiplied by the Exchange Ratio, with such award vesting in equal quarterly instalments over the period of time from the Effective Date through the latest vesting date applicable to such Forfeited Full Value Award, subject to the holder’s continued employment by Afterpay or an affiliate through the applicable vesting dates.

Afterpay US Equity Plan

Pro- Rata Vesting. Subject to, and upon, the Implementation Date, the unvested portion of any award with respect to shares of Afterpay US, Inc. (“Afterpay US Shares”) issued under an employee incentive plan operated by the Afterpay Group that is outstanding immediately prior to the Implementation Date shall vest with respect to a number of Afterpay Shares (rounded up to the nearest whole share) such that the vested portion of such award, after giving effect to the vesting contemplated by this clause shall equal a fraction, the numerator of which is the number of full months from the grant date of such award through the Effective Date and the denominator of which is the total number of months from the grant date of such award through the last vesting date of such award (e.g., 48 in the case of an award that vests in full on the fourth anniversary of the grant date). For purposes of the foregoing, an option award and any restricted stock award resulting from the early exercise of such option award shall be considered one award.

Afterpay US Employee Options. Subject to, and upon, the Implementation Date:

the vested portion of each option to purchase Afterpay US Shares issued under an employee incentive plan operated by the Afterpay Group (each, an “Afterpay US Employee Option”) that is outstanding immediately prior to the Implementation Date, including any portion that vests pursuant to clause 4.8(e)(i), shall be cancelled and converted into the right to receive a number of Square A Shares equal to the quotient obtained by dividing the applicable Aggregate Spread by the Square Stock Value; and

the unvested portion of each Afterpay US Employee Option that is outstanding immediately prior to the Implementation Date, after taking into account the vesting provided under clause 4.8(e)(i), shall be cancelled (such portion, the “Cancelled US Option”) and converted into an award of stock options (each a “Replacement US Option Award”) covering a number of Square A Shares (rounded down to the nearest whole share) determined by multiplying the number of Afterpay US Shares covered by such Cancelled US Option by the Afterpay US Exchange Ratio, with a per share exercise price, rounded up to the nearest whole cent, determined by dividing the per share exercise price of such Cancelled US Option by the Afterpay US Exchange Ratio, with such award vesting in equal quarterly installments over the period of time from the Effective Date through the latest vesting date applicable to such Cancelled US Option, subject to the holder’s continued employment by Afterpay or an affiliate through the applicable vesting dates.

For purposes of this document, (I) “Aggregate Spread” means, with respect to an Afterpay US Employee Option, the product obtained by multiplying (x) the number of Afterpay US Shares covered by the vested portion of such Afterpay US Employee Option immediately prior to implementation of the Scheme by (y) the excess, if any, of the Afterpay US Value over the per share exercise price of such Afterpay US Employee Option (II) “Afterpay US Exchange Ratio” means the Afterpay US Value divided by the Square Stock Value, (III) “Afterpay US Value” means the fair market value of an Afterpay US Share (as jointly determined by Square and Afterpay pursuant to the terms of the Afterpay US Options acting reasonably and taking into account applicable tax law and the actions taken pursuant to Attachment 2 to the Afterpay Disclosure Letter) and (IV) “Square Stock Value” means the closing price of Square A Shares on the NYSE on the trading day immediately prior to the Implementation Date.

Afterpay US RSAs

On the Implementation Date, each award of restricted Afterpay US Shares issued under an employee incentive plan operated by the Afterpay Group (each an “Afterpay US RSA”) that is outstanding and unvested as of immediately prior to the Implementation Date, after

“Accelerated Shares” means:

for an Afterpay US RSA, with respect to which the holder has made a valid election under Section 83(b) of the Code, a number of restricted Square A Shares, rounded up to the nearest whole share, equal to the quotient obtained by dividing the Applicable Tax by the Square Stock Value, and

for any other holder, zero.

“Applicable Tax” means, with respect to an Afterpay US RSA, the Tax on such Afterpay US RSA that becomes due upon the consummation of the transactions contemplated by this document.

UK Options. Subject to, and upon, the implementation of the Scheme, Square shall grant to the holder of each Forfeited U.K. Option (as defined on Attachment 2 to the Afterpay Disclosure Letter) who remains employed by Afterpay or an affiliate as of the Implementation Date, an award of stock options (a “Replacement UK Option Award”) covering a number of Square A Shares determined by multiplying the number of Clearpay Finance Limited shares that were covered by such Forfeited U.K. Option by the Afterpay UK Exchange Ratio and rounding down to the nearest whole number of shares, and with a per share exercise price determined by dividing the per share exercise price of such Forfeited U.K. Option by the Afterpay UK Exchange Ratio and rounding up to the nearest whole cent, with such award vesting in equal quarterly installments over the period of time from the Effective Date through the latest vesting date applicable to such Forfeited U.K. Option, subject to the holder’s continued employment by Afterpay or an affiliate through the applicable vesting dates. For purposes of this clause 4.8(f), (i) “Afterpay UK Exchange Ratio” means the Afterpay UK Value divided by the Square Stock Value and (ii) “Afterpay UK Value” means the fair market value of Clearpay Finance Limited shares underlying the Forfeited U.K. Options (as jointly determined by Afterpay in its reasonable discretion pursuant to the terms of the Forfeited U.K. Options acting reasonably and taking into account applicable tax law and the actions taken pursuant to Attachment 2 to the Afterpay Disclosure Letter).

Notwithstanding anything to the contrary contained in this clause 4.8, the provisions of Schedule 4.8(g) of the Afterpay Disclosure Letter shall apply to the Replacement Option Awards, the Replacement Full Value Awards, the Replacement US Option Awards, the Replacement US RSAs and the Replacement UK Option Awards (collectively, “Replacement Awards”).

No later than the Implementation Date, Square shall file one or more appropriate registration statements (on Form S-8, or any successor or other appropriate forms), or utilize a pre-existing registration statement, with respect to the Square A Shares underlying the Replacement Awards, and Square shall maintain the effectiveness of each such registration statement for so long as such awards remain outstanding.

All payments contemplated by this clause 4.8 shall be made less any applicable withholdings.

United States Tax Treatment

Each of Afterpay, Square and their respective Subsidiaries shall cooperate and use best endeavours to (i) cause the acquisition of the Afterpay Shares pursuant to the Scheme to qualify as a “qualified stock purchase” within the meaning of Section 338(d) of the Code and (ii) eliminate or mitigate the extent to which payment of the Scheme Consideration is subject to withholding Tax as a result of the application of Section 304 of the Code (including, if necessary, by making a Cash Election pursuant to clause 4.2 and certain Tax elections). For the avoidance of doubt, the parties acknowledge and agree that, after the Implementation Date, Square shall be permitted, in its sole discretion and to the extent permitted by law, to make elections under (A) Section 338 of the Code with respect to Afterpay and its Subsidiaries and (B) Treasury Regulations Section 301.7701-3 with respect to any Subsidiary of Afterpay, which election may be retroactively effective to a date prior to the Implementation Date. None of Square, Afterpay or any of their respective Subsidiaries will take (or fail to take) any action, or allow any affiliate to take (or fail to take) any action, that could reasonably be expected to preclude the elections described in subclauses (A) and (B) of this clause 4.9(a). In the event that Square determines in its sole and absolute discretion to make an election under Section 338(g) of the Code, Afterpay will cooperate with Square in (x) determining if notice under Treasury Regulations Section 1.338-2(e)(4) is required and (y) in completing and delivering the notice under Treasury Regulations Section 1.338-2(e)(4).

After the date of this document and prior to the Implementation Date, Afterpay shall deliver, or cause to be delivered, upon the reasonable request of Square and to the extent permitted under applicable law, one or more certificates under Treasury Regulations Sections 1.897-2(h) and 1.1445-2(c)(3), certifying that each Afterpay U.S. Subsidiary (other than any Afterpay U.S. Subsidiary treated as disregarded from its owner for U.S. federal income Tax purposes) identified in Square’s request is not a “United States real property holding corporation” within the meaning of Section 897(c)(3) of the Code, together with any notifications to the U.S. Internal Revenue Service related thereto.

No amendment to the Scheme without consent

Implementation

General obligations

use all reasonable endeavours and commit necessary resources (including management and corporate relations resources and the resources of external advisers); and

procure that its officers and advisers work in good faith and in a timely and co-operative fashion with the other party (including by attending meetings and by providing information),

Afterpay’s obligations

(announce directors’ recommendation) following execution of this document, announce, in the form contained in Annexure A (on the basis of statements made to Afterpay by each member of the Afterpay Board) that:

the Afterpay Board intends to unanimously recommend to Scheme Participants that the Scheme be approved; and

each Afterpay Board member who holds Afterpay Shares intends to vote his or her Afterpay Shares in favour of the Scheme,

the Independent Expert concluding, and continuing to conclude, that the Scheme is in the best interests of Afterpay Shareholders; and

there being no Afterpay Superior Proposal;

(preparation of Scheme Booklet) subject to clause 5.2(h)(i), as soon as practicable after the date of this document, prepare and despatch the Scheme Booklet:

in accordance with all applicable laws, including the Corporations Act, Corporations Regulations, ASIC Regulatory Guide 60 and the Listing Rules; and

which includes a statement by the Afterpay Directors, subject to any withdrawal or change of recommendation by the Afterpay Board that is permitted by clause 6.3:

unanimously recommending that Afterpay Shareholders vote in favour of the Scheme subject to the Independent Expert continuing to conclude that the Scheme is in the best interests of Afterpay Shareholders and there being no Afterpay Superior Proposal; and

that each Afterpay Director who holds Afterpay Shares intends to vote his or her Afterpay Shares in favour of the Scheme subject to the Independent Expert continuing to conclude that the Scheme is in the best interests of Afterpay Shareholders and there being no Afterpay Superior Proposal;

(Independent Expert) promptly appoint the Independent Expert and provide any assistance and information reasonably requested by the Independent Expert to enable the Independent Expert to prepare its report for the Scheme Booklet as soon as practicable;

(Investigating Accountant) jointly with Square, appoint the Investigating Accountant and provide assistance and information reasonably required by the Investigating Accountant to enable it to prepare the Investigating Accountant’s Report;

(Afterpay information) prepare and promptly provide to Square any information that Square reasonably requires regarding Afterpay or the Afterpay Group for inclusion in the Square Registration/Proxy Statement, and must use all reasonable endeavours to ensure the Afterpay Information complies, in all material respects, with all applicable laws, including the Securities Act;

(consent) provide a consent and use all reasonable endeavours to obtain consents from third parties in such form as Square reasonably requires in relation to the form and context in which the Afterpay Information appears in the Square Registration/Proxy Statement;

(section 411(17)(b) statement) apply to ASIC for a statement pursuant to section 411(17)(b) of the Corporations Act stating that ASIC has no objection to the Scheme;

(consultation with Square) consult with Square as to the content and presentation of:

the Scheme Booklet, which includes:

allowing Square a reasonable opportunity to review and make comments on successive drafts of the Scheme Booklet (accepting that any review of the Independent Expert’s Report is limited to review for factual accuracy of those parts that include information relating to Square and that Afterpay makes no representation as to the extent to which the Independent Expert will receive or consider those comments);

taking any timely and reasonable comments made by Square into account in good faith when producing a revised draft of the Scheme Booklet;

providing to Square a revised draft of the Scheme Booklet within a reasonable time before the draft of the Scheme Booklet which is provided to ASIC for approval pursuant to section 411(2) of the Corporations Act is finalised; and

obtaining Square’s consent to the inclusion of the Square Information (including in respect of the form and context in which the Square Information appears in the Scheme Booklet (such consent must not be unreasonably withheld, delayed or conditioned)); and

documents required for the purposes of the Court hearings held for the purposes of sections 411(1) and 411(4)(b) of the Corporations Act in relation to the Scheme (including originating processes, affidavits, submissions and draft minutes of Court orders), and consider in good faith, for the purpose of amending drafts of those documents, any comments on, or suggested amendments to, those documents from Square prior to filing those documents with the Court;

(lodgement of Regulator’s Draft)

no later than 14 days before the First Court Date, provide an advanced draft of the Scheme Booklet to ASIC for its review for the purposes of section 411(2) of the Corporations Act, and provide a copy of the Regulator’s Draft to Square as promptly as practicable thereafter; and

keep Square reasonably informed of any issues raised by ASIC in relation to the Regulator’s Draft and, where practical to do so, consult with Square in good faith prior to taking any steps or actions to address those issues (provided that, where those issues relate to Square or any Square Information, Afterpay must not take any steps to address them without Square’s prior written consent, not to be unreasonably withheld, delayed or conditioned);

(supplementary disclosure) if, after despatch of the Scheme Booklet, Afterpay becomes aware:

that information included in the Scheme Booklet is or has become misleading or deceptive in any material respect (whether by omission or otherwise); or

of information that is required to be disclosed to Afterpay Shareholders under any applicable law but was not included in the Scheme Booklet,

(Court application) apply to the Court for an order under section 411(1) of the Corporations Act directing Afterpay to convene the Scheme Meeting;

(send Scheme Booklet) send the Scheme Booklet to Afterpay Shareholders as soon as practicable after the Court orders Afterpay to convene the Scheme Meeting;

(Scheme Meeting) convene the Scheme Meeting to agree to the Scheme in accordance with any orders made by the Court pursuant to section 411(1) of the Corporations Act;

(director’s voting) use its reasonable endeavours to procure that each member of the Afterpay Board votes any Afterpay Shares in which they have a Relevant Interest in favour of the Scheme subject to the Independent Expert continuing to conclude that the Scheme is in the best interests of Shareholders and there being no Afterpay Superior Proposal;

(Court approval) subject to all Conditions Precedent, other than paragraph (h) in clause 3.1 being satisfied or waived in accordance with this document, apply to the Court for an order approving the Scheme in accordance with sections 411(4)(b) and 411(6) of the Corporations Act;

(Conditions Precedent certificate) at the hearing on the Second Court Date, provide to the Court (through its counsel):

a certificate signed by one of its directors and made in accordance with a resolution of its board confirming (in respect of matters within Afterpay’s knowledge) whether or not the Conditions Precedent for which it is responsible, as noted in clause 3.1 (other than paragraph (h)), have been satisfied or waived in accordance with clause 3, a draft of which must be provided to Square by 5.00pm on the Business Day prior to the Second Court Date; and

any certificate provided to it by Square under clause 5.3(h);

(lodge copy of Court order) lodge with ASIC an office copy of the Court order approving the Scheme as approved by the Afterpay Shareholders at the Scheme Meeting in accordance with section 411(10) of the Corporations Act on the first Business Day after that office copy is received (or any later date agreed in writing by Square);

(Register) close the Register as at the Record Date to determine the identity of Scheme Participants and their entitlements to Scheme Consideration;

(instruments of transfer) subject to Square Acquirer satisfying its obligations under clause 4.3, on the Implementation Date:

execute proper instruments of transfer and effect the transfer of Afterpay Shares to Square Acquirer in accordance with the Scheme; and

register all transfers of Afterpay Shares held by Scheme Participants to Square Acquirer;

(suspension of trading) apply to ASX to suspend trading in Afterpay Shares with effect from the close of trading on the Effective Date;

(listing) take all reasonable steps to maintain Afterpay’s listing on ASX, notwithstanding any suspension of the quotation of Afterpay Shares, up to and including one Business Day after the Implementation Date, including making appropriate applications to ASX and ASIC and take all steps reasonably requested by Square to obtain the approval of ASX to the de-listing of Afterpay following implementation of the Scheme;

(Australian Admission) assist Square to prepare all documents required by ASX to apply for Australian Admission;

(Registry details) subject to the terms of the Scheme, provide all necessary directions to the Registry promptly to provide any information that Square requires in relation to the Register, including any sub-register, and where requested by Square, Afterpay must procure whatever information to be provided in the electronic form as is reasonably requested by Square;

(proxy solicitation) if requested by Square, retain a proxy solicitation services firm to assist Afterpay with the solicitation of votes at the Scheme Meeting and provide Square with copies of or access to information regarding the Scheme Meeting generated by that firm, including promptly advising Square, at times that Square may reasonably request and at least on a daily basis on each of the last 5 Business Days prior to the date of the Scheme Meeting, as to the aggregate tally of the votes received by Afterpay in respect of the Scheme;

(compliance with laws) do everything reasonably within its power to ensure that the Scheme is effected in accordance with all applicable laws and regulations; and

(other steps) do all other things necessary to give effect to the Scheme and the orders of the Court approving the Scheme in accordance with all applicable laws and regulations.

Square’s obligations

(Investigating Accountant) jointly with Afterpay, appoint the Investigating Accountant and provide assistance and information reasonably required by the Investigating Accountant to enable it to prepare the Investigating Accountant’s Report;

(Australian Admission) prepare all documents required by ASX to apply for Australian Admission, apply to ASX for Australian Admission and use all reasonable endeavours to ensure that the ASX grants approval for Australian Admission on or before the Business Day after the Effective Date and that trading in New Square CDIs commences on ASX on a normal trading basis as soon as possible on or after the Implementation Date;

(assistance with Scheme Booklet and Court documents) promptly provide any assistance or information reasonably requested by Afterpay or its Representatives in connection with the preparation of the Scheme Booklet (including any supplementary disclosure to Afterpay Shareholders) and any documents required to be filed with the Court in respect of the Scheme, promptly review the drafts of the Scheme Booklet (including any updated or supplementary Scheme Booklet) prepared by Afterpay and provide comments on those drafts in a timely manner and in good faith;

(Square Information) prepare and promptly provide to Afterpay for inclusion in the Scheme Booklet the Square Information (in accordance in all material respects with all applicable laws, including the Corporations Act, Corporations Regulations, ASIC Regulatory Guide 60 and the Listing Rules) and consent to the inclusion of that information in the Scheme Booklet;

(further Square Information) promptly provide to Afterpay any further or new Square Information as may arise after the Scheme Booklet has been sent to Afterpay Shareholders and until the date of the Scheme Meeting as may be necessary to ensure that the Square Information contained in the Scheme Booklet is not, having regard to applicable disclosure requirements, false, misleading or deceptive in any material respect (including because of any material omission) and to ensure that there would be no breach of clause 12.3(h) if it applied as at the date on which the further or new Square Information arose;

(verification) undertake appropriate verification processes for the information supplied by Square in the Scheme Booklet and if requested by Afterpay in writing, provide a certificate to Afterpay attesting to the fact appropriate verification processes have been undertaken in respect of such information prior to lodgement of the Scheme Booklet (or any supplementary Scheme Booklet) with ASIC and prior to filing of the Scheme Booklet (or any supplementary Scheme Booklet) with the Court;

(Independent Expert information) provide any assistance or information reasonably requested by the Independent Expert in connection with the preparation of the Independent Expert’s Report;

(Consent) provide a consent and use all reasonable endeavours to obtain consents from third parties in such form as Afterpay reasonably requires in relation to the form and content in which the Square Information appears in the Scheme Booklet;

(Deed Poll) no later than the Business Day prior to the First Court Date, sign and deliver the Deed Poll;

(representation) procure that, if requested by Afterpay or if Square so elects, Square is represented by counsel at the Court hearings convened for the purposes of section 411(4)(b) of the Corporations Act, at which, through its counsel, Square will undertake (if requested by the Court) to do all such things and take all such steps within its power as are necessary in order to ensure fulfilment of its obligations under this document and the Scheme;

(Conditions Precedent certificate) before 8.00am on the Second Court Date, provide to Afterpay for provision to the Court at the hearing on that date a certificate signed by one of its officers and made in accordance with a resolution of its board confirming (in respect of matters within Square’s knowledge) whether or not the Conditions Precedent for which Square is responsible, as noted in clause 3.1 (other than paragraph (h)), have been satisfied of waived in accordance with clause 3, a draft of which must be provided to Afterpay by 5.00pm on the Business Day prior to the Second Court Date; and

(Scheme Consideration) if the Scheme becomes Effective, at the direction of and on behalf of Square Acquirer, issue the New Square Shares and New Square CDIs comprising the Scheme Consideration in the manner and amount contemplated by clause 4.3(c) and the terms of the Scheme.

Square Acquirer’s obligations

(Deed Poll) no later than the Business Day prior to the First Court Date, sign and deliver the Deed Poll;

(Scheme Consideration) if the Scheme becomes Effective, provide or procure the provision of the Scheme Consideration in the manner and amount contemplated by clause 4.3(b) and the terms of the Scheme; and

(Share transfer) if the Scheme becomes Effective, accept a transfer of the Afterpay Shares as contemplated by clause 4.3(a) and execute instruments of transfer in respect of the Afterpay Shares.

Scheme Booklet responsibility statement

Afterpay has prepared, and is responsible for, the content of the Scheme Booklet other than, to the maximum extent permitted by law, the Square Information, the Independent Expert’s Report, the Investigating Accountant’s report or any other report or letter issued to Afterpay by a third party and that Square and its directors and officers do not assume any responsibility for the accuracy or completeness of the sections of the Scheme Booklet that Afterpay has prepared and has responsibility for; and

Square has prepared, and is responsible for, the Square Information in the Scheme Booklet (and no other part of the Scheme Booklet) and that Afterpay and its directors and officers do not assume any responsibility for the accuracy or completeness of the sections of the Scheme Booklet that Square has prepared and has responsibility for.

Disagreement on content of Scheme Booklet

if the disagreement relates to the form or content of the Square Information or information related to the Merged Group contained in the Scheme Booklet, Afterpay will make any amendments as Square reasonably requires; and

if the disagreement relates to the form or content of any other part of the Scheme Booklet, the Afterpay Board will, acting in good faith, decide the final form or content of the disputed part of the Scheme Booklet.

Verification

Conduct of Court proceeding

Appeal process

the parties agree otherwise; or

an independent senior counsel advises that, in their opinion, an appeal would have no reasonable prospect of success before the End Date,

Minority Interests

As promptly as practicable after the date of this document, Afterpay must use all reasonable endeavours to ensure that, by the Record Date, there are no outstanding Minority Interests that are not owned, directly or indirectly, by Afterpay.

Without limitation to clause 5.10(a), Afterpay shall:

use all reasonable endeavours to take, or cause to be taken, all actions and steps reasonably determined by Square to acquire or cancel the Minority Interests that are not owned, directly or indirectly, by Afterpay by the Record Date;

other than with Square’s prior approval, not do, or cause to be done, any thing (including making any payment or providing any consideration) set out in Attachment 2 of the Afterpay Disclosure Letter with respect to the Minority Interests;

keep Square reasonably informed of its progress towards the close out of the Minority Interests; and

use all reasonable endeavours to do, or cause to be done, all things necessary, proper or advisable to consummate the transactions set out in Attachment 2 of the Afterpay Disclosure Letter.

Notwithstanding the foregoing, at Afterpay’s option any of the actions contemplated by clause 5.10(a) or 5.10(b) may be subject to, and conditioned upon, the Scheme becoming Effective.

For the avoidance of doubt, and subject at all times to Afterpay’s compliance with the provisions of clause 5.10(a) and clause 5.10(b), failure by Afterpay to ensure that, by the Record Date, there are no

Integration Planning

The parties agree that:

they will establish an Executive Steering Committee as soon as reasonably practicable after the date of this document, which shall be comprised of (i) Cash App Lead and Seller Lead of Square and (ii) Co-CEOs of Afterpay; and

subject to applicable law, the Executive Steering Committee shall, as promptly as practicable following the date of this document, meet to discuss and plan for the implementation of the Scheme and the integration of the business and affairs of the Afterpay Group with the Square Group following the implementation of the Scheme and shall meet from time to time at least once every month, with weekly contacts, and such other times as reasonably requested by either Square or Afterpay and reasonably agreed to by the other party.

Subject to applicable law, the parties shall cooperate and use all reasonable endeavours to take all actions as may be necessary or advisable to implement the plan for integration of the business and affairs of the Afterpay Group with the Square Group following the implementation of the Scheme.

No partnership or joint venture

Board recommendation

Afterpay Board recommendation

there is an Afterpay Superior Proposal and the Afterpay Board determines in good faith and acting reasonably, having received legal advice from its external legal advisers (who must be reputable advisers experienced in transactions of this nature) that failing to do so would constitute a breach of their fiduciary or statutory duties to Afterpay Shareholders; or

the Independent Expert concludes that the Scheme is not in the best interests of Afterpay Shareholders, or adversely changes its previously given opinion that the Scheme is in the best interests of Afterpay Shareholders.

Square Board recommendation

there is (i) an Intervening Event or (ii) a Square Superior Proposal; and

the Square Board determines in good faith and acting reasonably, having received legal advice from its external legal advisers (who must be reputable advisers experienced in transactions of this nature)

Withdrawal or change of recommendation

the relevant party must notify the other party in writing as promptly as reasonably practicable; and

the parties must consult in good faith for 5 Business Days after the date on which the notification in clause 6.3(a) is given to consider and determine whether the recommendation in place at the time can be maintained. That recommendation cannot be withdrawn or changed in accordance with clause 6.1 or with clause 6.2 until the end of the consultation period (provided that, in the case of an actual, proposed or potential Afterpay Competing Transaction, Afterpay must comply with clause 9.8 in lieu of this clause 6.3).

Directors and employees

Appointment/retirement of Afterpay directors

cause the appointment of each Incoming Director to the Afterpay Board as of such Implementation Date; and

procure that each of the Outgoing Directors retire from the Afterpay Board and provide written notice to the effect that they have no claim outstanding for loss of office, remuneration or otherwise against Afterpay or Square,

Directors’ and officers’ insurance

Subject to the Scheme becoming Effective and subject to the Corporations Act, Square undertakes in favour of Afterpay and each other person who is an Afterpay Indemnified Party that it will, for a period of 7 years from the Implementation Date:

ensure that the constitutions of Afterpay and each other member of the Afterpay Group (including any successor entities thereto) continue to contain the rules that are contained in those constitutions at the date of this document that provide for each company to indemnify each of its directors and officers against any liability incurred by that person in his or her capacity as a director or officer of the company to any person other than a member of the Square Group; and

procure that Afterpay and each other member of the Afterpay Group comply with any deeds of indemnity, access and insurance entered into by them in favour of their respective directors and officers from time to time.

At or prior to the Implementation Date, Afterpay must purchase a 7-year prepaid “run-off” directors’ and officers’ liability insurance policy (“D&O Run-Off Policy”) on terms and conditions providing coverage retentions, limits and other material terms (including in relation to deductibles) substantially equivalent to the current policies of directors’ and officers’ liability insurance maintained by members of the Afterpay Group with respect to matters arising at or prior to the Implementation Date. In

Period of undertaking

Release of Afterpay Indemnified Parties

any breach of any representations and warranties of Afterpay or any other Afterpay Group entity in this document; or

any disclosures containing any statement which is false or misleading whether in content or by omissions,

Benefit of undertaking for Afterpay Group

Release of Square Indemnified Parties

any breach of any representations and warranties of Square or any other Square Group entity in this document; or

any disclosures containing any statement which is false or misleading whether in content or by omissions,

Benefit of undertaking for Square Group

Post-Implementation Square Board

Square shall appoint one Afterpay director as a member of the Square Board (who shall serve as a Class III director of Square), with such appointment to be effective as of immediately following the implementation of the Scheme.

The director shall be selected by Square in consultation with Afterpay, and Square will consider in good faith the recommendation of Afterpay with respect thereto. Subject to Square’s board nomination process, Square shall use reasonable endeavours to select such director as soon as practicable after the date of this document.

Employee and Benefit Matters

Subject to the requirements of applicable law or regulation, each Continuing Employee, for the period from the Implementation Date and ending on the first anniversary of the Implementation Date (or, if earlier, the date of such Continuing Employee’s termination of employment with Afterpay and its affiliates, including the Square Group), the Square Group will provide to each Continuing Employee:

an annual total target compensation opportunity that is no less favourable than the annual total target compensation opportunity in effect for such Continuing Employee immediately prior to the Implementation Date (for the avoidance of doubt, including equity or equity-based compensation opportunities); and

other benefits that are, in the aggregate, substantially comparable to the aggregate other benefits provided to such Continuing Employee immediately prior to the Implementation Date (excluding any defined benefit pension benefits or any one-time or non-recurring compensation or benefits).

For all purposes (including for purposes of determining eligibility to participate, level of benefits, vesting, and benefit accruals) under any plan, program, policy or arrangement maintained by the Square Group, including any vacation, paid time off and severance plans, each Continuing Employee’s service with or otherwise credited by the Afterpay Group shall be treated as service with the Square Group; provided that such service shall not be recognized to the extent that such recognition would result in any duplication of benefits or for purposes of benefit accruals under any defined benefit pension plan.

The Square Group will use reasonable efforts to waive, or cause to be waived, any pre-existing condition limitations, exclusions, actively at work requirements and waiting periods under any welfare benefit plan maintained by the Square Group in which Continuing Employees (and their eligible dependents) will be eligible to participate from and after the Implementation Date, except to the extent that such pre-existing condition limitations, exclusions, actively-at-work requirements and waiting periods would not have been satisfied or waived under the comparable Afterpay Employee Plan immediately prior to the Implementation Date. The Square Group will use reasonable efforts to recognize, or cause to be recognized, the dollar amount of all co-payments, deductibles and similar expenses incurred by each Continuing Employee (and his or her eligible dependents) during the calendar year in which the Implementation Date occurs for purposes of satisfying such year’s deductible, co-payment and out-of-pocket maximum limitations under the relevant welfare benefit plans in which such Continuing Employee (and dependents) will be eligible to participate from and after the Implementation Date.

This clause 7.9 shall be binding upon and shall inure solely to the benefit of each of the parties to this document, and nothing in this clause 7.9, express or implied, is intended to confer upon any other person (including, for the avoidance of doubt, any current or former directors, officers, employees, contractors or consultants of any of the Afterpay Group or the Square Group) any rights or remedies of any nature whatsoever under or by reason of this clause 7.9.

Nothing contained in this clause 7.9 shall:

be treated as an amendment of any Afterpay Employee Plan or any compensation or benefit plan, program, policy, contract or arrangement maintained by the Square Group or

obligate either the Afterpay Group or the Square Group to (A) maintain any particular compensation or benefit plan, program, policy, contract or arrangement, except in accordance