/Docs/G/500Startups-KISS-CmA/Sec/Def/0.md
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(Sec = (Ti = Definitions)

(sec = (0.sec = )
(xlist = (Olist =
  1. (Secs = (secs = (1.sec = (1.0.sec = "{Conversion_Shares}" shall mean:)
    (1.xlist = (1.Olist =
    1. (1.Secs = (1.secs = (1.1.sec = with respect to a conversion pursuant to {Conversion.Equity.Xref}, shares of {Preferred_Stock} issued in the {Next_Equity_Financing}; provided, however, that, at {the_Company}'s election, "{Conversion_Shares}" with respect to a conversion pursuant to {Conversion.Equity.Xref} shall mean shares of a {Shadow_Series};)
    2. (1.2.sec = with respect to a conversion pursuant to {Conversion.Corporate.Xref}, shares of {Common_Stock}; and)
    3. (1.3.sec = with respect to a conversion pursuant to {Conversion.Maturity.Xref}, shares of a newly created series of {the_Company}'s {Series_Seed_Preferred_Stock}, upon the terms and provisions set forth in the most recent version of the Series Seed documents posted at www.seriesseed.com (or if not so posted, as reasonably agreed by {the_Company} and a {Majority_in_Interest}); provided that, for the avoidance of doubt, the {Conversion_Price} shall be determined pursuant to (Conversion_Price.Maturity.Xref = (Conversion_Price.Xref = {Def.Xref}.2)
      .3)
      ).)
      )
      )
    )
    )
    (1.00.sec = )
    )
  2. (2.sec = (2.0.sec = "{Conversion_Price}" shall equal:)
    (2.xlist = (2.Olist =
    1. (2.Secs = (2.secs = (2.1.sec = with respect to a conversion pursuant to {Conversion.Equity.Xref}, the lower of (A) the product of (1) one (1) minus the {Discount} and (2) the price paid per share for {Preferred_Stock} by the investors in the {Next_Equity_Financing} or (B) the quotient resulting from dividing (1) the Valuation Cap by (2) the {Fully-Diluted_Capitalization} immediately prior to the closing of the {Next_Equity_Financing};)
    2. (2.2.sec = with respect to a conversion pursuant to {Conversion.Corporate.Xref}, the quotient resulting from dividing (A) the Valuation Cap by (B) the {Fully-Diluted_Capitalization} immediately prior to the closing of the {Corporate_Transaction}; and)
    3. (2.3.sec = with respect to a conversion pursuant to {Conversion.Maturity.Xref}, the quotient resulting from dividing (A) the Valuation Cap by (B) the {Fully-Diluted_Capitalization} immediately prior to the conversion.)
      )
      )
    )
    )
    (2.00.sec = )
    )
  3. (3.sec = (3.0.sec = "{Corporate_Transaction}" shall mean:)
    (3.xlist = (3.Olist =
    1. (3.Secs = (3.secs = (3.1.sec = the closing of the sale, transfer or other disposition of all or substantially all of {the_Company}'s assets,)
    2. (3.2.sec = the consummation of the merger or consolidation of {the_Company} with or into another entity (except a merger or consolidation in which the holders of capital stock of {the_Company} immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of {the_Company} or the surviving or acquiring entity),)
    3. (3.3.sec = the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated persons (other than an underwriter of {the_Company}'s securities), of {the_Company}'s securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of {the_Company} (or the surviving or acquiring entity), or)
    4. (3.4.sec = the liquidation, dissolution or winding up of {the_Company};)
      )
      )
    )
    )
    (3.00.sec = provided, however, that a transaction shall not constitute a {Corporate_Transaction} if its sole purpose is to change the state of {the_Company}'s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held {the_Company}'s securities immediately prior to such transaction. Notwithstanding the prior sentence, the sale of shares of {Preferred_Stock} in a bona fide financing transaction shall not be deemed a "{Corporate_Transaction}.")
    )
  4. (4.sec = "{Corporate_Transaction_Payment}" shall mean an amount equal to all accrued and unpaid interest due on this {KISS} plus two times (2X) the {Purchase_Price}.)
  5. (5.sec = "{Discount}" shall mean {Discount.%}.)
  6. (6.sec = "{Equity_Securities}" shall mean {the_Company}'s Common Stock ("{Common_Stock}") or {the_Company}'s Preferred Stock ("{Preferred_Stock}") or any securities conferring the right to purchase {the_Common_Stock_or_Preferred_Stock} or securities convertible into, or exchangeable for (with or without additional consideration), {the_Common_Stock_or_Preferred_Stock}, except any security granted, issued and/or sold by {the_Company} to any director, officer, employee or consultant of {the_Company} in such capacity for the primary purpose of soliciting or retaining their services.)
  7. (7.sec = "{Financial_Statements}" shall mean an income statement, balance sheet, statement of stockholder's equity, and/or a statement of cash flows, in each case as of the end of (i) each of the first three (3) fiscal quarters and (ii) each fiscal year of {the_Company}.)
  8. (8.sec = "{Fully-Diluted_Capitalization}" shall mean the number of shares of outstanding {Common_Stock} on a fully-diluted basis, including (i) conversion or exercise of all securities convertible into or exercisable for {Common_Stock}, (ii) exercise of all outstanding options and warrants to purchase {Common_Stock} and, in the case of (Conversion_Price.Xref = {Def.Xref}.2)
    .1 and (Conversion_Price.Xref = {Def.Xref}.2)
    .3 only, (iii) the shares reserved or authorized for issuance under {the_Company}'s existing stock option plan or any stock option plan created or increased in connection with such transaction; but excluding, for this purpose, the conversion contemplated by the applicable provision of {Conversion.Xref}.)
  9. (9.sec = "{Holder}" shall mean a member of the {KISS_Group} that holds a {KISS} (including, without limitation, {the_Investor}, for so long as {the_Investor} holds this {KISS}).)
  10. (10.sec = "{Interest_Rate}" shall mean a rate of four percent (4%) per annum, compounded annually.)
  11. (11.sec = "{KISS}" or "{KISSes}" shall mean the {KISS} instruments issued by {the_Company} to {Holders} in the form hereof.)
  12. (12.sec = "{KISS_Group}" shall mean the holders of all {KISSes} in the {Series}, collectively.)
  13. (13.sec = "{Majority_in_Interest}" shall mean members of the {KISS_Group} holding a majority in interest of the aggregate {Purchase_Prices} of all {KISSes} in the {Series}.)
  14. (14.sec = "{Maturity_Date}" shall mean the date that is eighteen (18) months following the {Date_of_Issuance}.)
  15. (15.sec = "{Next_Equity_Financing}" shall mean the next sale (or series of related sales) by {the_Company} of its {Preferred_Stock} following the {Date_of_Issuance} from which {the_Company} receives gross proceeds of not less than $1,000,000 (excluding the aggregate amount of securities converted into {Preferred_Stock} in connection with such sale (or series of related sales)).)
  16. (16.sec = "{Participation_Amount}" shall mean an amount in US dollars equal to one times (1X) the {Purchase_Price}. )
  17. (17.sec = "{Shadow_Series}" shall mean shares of a series of {Preferred_Stock} that is identical in all respects to the shares of {Preferred_Stock} issued in the {Next_Equity_Financing} (e.g., if {the_Company} sells {Series_A_Preferred_Stock} in the {Next_Equity_Financing}, the {Shadow_Series} would be Series A-1 Preferred Stock), except that the liquidation preference per share of the {Shadow_Series} shall equal the {Conversion_Price} (as determined pursuant to (Conversion_Price.Xref = {Def.Xref}.2)
    .1), with corresponding adjustments to any price-based antidilution and dividend rights provisions.)
  18. (18.sec = "{Valuation_Cap}" shall mean {ValuationCap.$})
    )
    )
)
)
(00.sec = )
)
)