The Michigan Term Sheet — Royalty Payment Convertible Note is a legal document that outlines the terms and conditions of a financial agreement between a company and an investor. This type of note provides a unique mechanism for payments by combining both royalty payments and the option for conversion into equity at a later stage. The Michigan Term Sheet — Royalty Payment Convertible Note is designed to provide flexibility for both the investor and the company. It allows the investor to receive regular royalty payments based on a percentage of the company's revenue or profit. These payments can help the investor realize a return on their investment without having to wait for a liquidity event, such as an IPO or acquisition. In addition to royalty payments, the Michigan Term Sheet — Royalty Payment Convertible Note also offers the investor the option to convert their investment into equity shares of the company. This conversion can happen at a predetermined conversion price or a formula based on the company's valuation at the time of conversion. By providing this conversion feature, the note offers the potential for additional returns if the company performs well and its value increases over time. There may be different types of Michigan Term Sheet — Royalty Payment Convertible Notes, each with its own specific terms and conditions. For example, some notes may have a fixed royalty payment percentage, while others may have a sliding scale that adjusts based on the company's revenue or profit. The conversion terms may also vary, such as having a fixed conversion price or a formula that takes into account the company's valuation or performance metrics. Overall, the Michigan Term Sheet — Royalty Payment Convertible Note is a unique financial instrument that provides a combination of regular royalty payments and the opportunity for equity participation. This type of note offers flexibility for both the investor and the company, allowing for potential returns and aligning the interests of both parties.