Founder Counter-Term Sheet

Strategic Angel Investment Round

Polakis Technologies Ltd

Version 2 — Revised in Response to Investor Review

This Term Sheet outlines the proposed principal terms for a strategic angel investment into Polakis Technologies Ltd. This document is non-binding except for the confidentiality provisions in Section 17. Both parties commit to negotiating definitive agreements in good faith.

Validity: This Term Sheet shall lapse and be of no further effect if not countersigned and returned within 14 days of issue. Either party may withdraw prior to execution of definitive agreements without liability.

Equity shall be issued as ordinary shares with standard minority protections as outlined herein. Founders' dilution in this financing shall not exceed 20% of the Company's fully diluted share capital.

Investment shall be disbursed in 4 tranches tied to defined milestones, structured as follows:

Equity Issuance: Shares shall be issued pro-rata per tranche based on funds actually disbursed. If the full investment is not disbursed, equity shall reflect only the capital received to date.

No shares shall be issued in anticipation of future tranches. The Investor's total shareholding at any point in time shall reflect only the capital actually disbursed to date.

CR12 Update: The CR12 shall be updated to reflect the Investor's shareholding within 30 days of Tranche 1 disbursement, not as a precondition to it.

Milestone Definitions: All milestone definitions shall be objective, measurable, and mutually agreed in writing prior to signing. Milestones may be reviewed and adjusted by mutual written consent if material circumstances change.

• The Investor's shareholding shall be reflected on the CR12 within 30 days of Tranche 1 disbursement, as specified in Section 2.
• Shares may be held via a nominee company or SPV of the Investor's choosing, provided the beneficial owner is disclosed to the Company in writing prior to execution.
• No undisclosed beneficial interests shall exist. The Company confirms a clean capitalization table at signing.

This investment is structured as a Strategic Angel Partnership, recognizing the Investor's standing, reputation, and professional network within the healthcare ecosystem.

In addition to capital, the Investor shall provide reasonable strategic support, including:

• Facilitating warm introductions to key decision-makers within hospitals, insurers, medical institutions, and relevant healthcare stakeholders.
• Providing advisory guidance on market positioning, regulatory navigation, and commercial strategy.
• Participating, where appropriate, in high-level commercial meetings to enhance institutional credibility.
• Offering periodic strategic guidance through quarterly board engagements.

Both parties shall agree on a practical engagement plan within 30 days of closing, outlining priority institutions, partnership targets, and introduction pathways.

The Investor agrees to make reasonable good-faith efforts to facilitate introductions to healthcare institutions, insurers, and relevant industry stakeholders within his professional network where commercially appropriate and beneficial to the Company.

Both parties acknowledge that while commercial outcomes cannot be guaranteed, active strategic engagement is a material component of the partnership rationale and expected value creation.

• The Investor shall be granted one (1) permanent Board Seat from the date of closing.
• Board decisions shall require a simple majority, except for Reserved Matters defined below.
• The Founder shall retain the casting vote in the event of a deadlock on operational matters.

• Quarterly board meetings (virtual acceptable), with the option for additional meetings by mutual agreement.
• Monthly summary updates via email and system dashboard covering: client pipeline status, key operational developments, and material risks or opportunities.
• Quarterly management accounts to include:
  • Profit & Loss Statement
  • Cash Flow Statement
  • Balance Sheet
  • Budget vs. Actual Analysis
  • Commercial pipeline and contract status update
  • Regulatory and compliance update

• The Company shall produce annual audited financial statements prepared by an independent auditor mutually agreed by both parties.
• Audited accounts to be delivered within 120 days of each financial year-end.

Investor consent shall be required only for the following fundamental matters:

1. Issuance of new shares or convertible instruments
2. Sale, merger, or acquisition of the Company or its material assets
3. Borrowing above KES 1,500,000 in a single transaction or series of related transactions
4. Related-party transactions above KES 500,000
5. Alteration of share capital structure
6. Entry into new jurisdictions involving committed expenditure exceeding KES 500,000

The following matters remain under Founder and management control, and shall NOT require investor consent:

• Product development, features, and release decisions
• Technology stack, tools, and infrastructure choices
• AI integration strategy and implementation
• Staffing and team structure decisions
• Day-to-day operational and commercial decisions
• Management remuneration (subject to board-level transparency and disclosure)

The Investor shall have the following information and audit rights:

• Monthly management accounts within 20 days of month-end (summary format acceptable)
• Annual audited financial statements as specified in Section 5
• Access to material client contracts and regulatory correspondence upon reasonable written request, subject to confidentiality obligations
• The right to appoint an independent accountant, at the Investor's own cost, to review Company financials no more than once per year, with a minimum of 21 days' written notice to the Founder

The Investor acknowledges that the Company operates in a competitive market and that disclosure of sensitive commercial information shall be subject to reasonable confidentiality protections.

The Company commits to a technology-forward growth strategy, including deliberate evaluation and integration of:

• Artificial Intelligence (AI) and machine learning capabilities relevant to health insurance and clinical workflow
• Automation and data-driven systems to enhance operational efficiency
• Scalable and secure digital infrastructure suitable for multi-market deployment

• A documented Technology and AI Roadmap shall be presented to the board within 90 days of closing, covering a 12–24 month horizon.
• The roadmap shall be reviewed and updated at least annually at board level.
• Material technology partnerships or proprietary system development shall be disclosed to the board as part of quarterly reporting.

The Investor shall have standard pro-rata pre-emptive rights to participate in future equity financings on the same terms offered to new investors. These rights shall apply for as long as the Investor holds at least 10% equity in the Company.

Weighted-average anti-dilution protection shall apply in the event of a qualifying down-round (i.e., a future equity issuance at a pre-money valuation below the valuation established in this round).

The weighted-average formula shall use the broad-based weighted average methodology, which accounts for all outstanding shares, options, and convertible instruments. This protection shall not apply to:

• Employee share option pools (up to 10% of fully diluted capital)
• Strategic partnership equity grants approved by the board
• Future rounds at a valuation equal to or above the valuation in this round

Funds shall be primarily allocated toward:

• Product and technology development
• Regulatory compliance and licensing
• Business development and market expansion
• Operational and team scaling

A ring-fenced use-of-funds schedule aligned to the tranche milestones in Section 2 shall be documented and agreed prior to signing. Reallocation of up to 25% within budget categories shall be permitted without additional approval. Reallocation beyond this threshold shall require board notification (not consent), except where it involves borrowing or related-party transactions covered under Reserved Matters.

The Company commits to maintaining all required regulatory approvals and compliance standards, including but not limited to:

• Data Protection: Registration and ongoing compliance with the Office of the Data Protection Commissioner (ODPC) under the Data Protection Act, 2019.
• Communications Regulation: Assessment and, where applicable, licensing with the Communications Authority of Kenya (CAK) as may be required for the Company's technology services.
• Insurance Technology Compliance: Adherence to applicable IRA Kenya guidelines for technology systems interfacing with licensed insurers.

Regulatory Roadmap: A documented regulatory and licensing roadmap, including timelines, responsible parties, and cost estimates, shall be presented to the board within 60 days of closing and updated as part of quarterly reporting. Regulatory compliance shall be a standing agenda item at all board meetings.

• Target exit horizon: 5–7 years from closing.
• Permitted exit routes: Strategic acquisition, institutional investment round, or mutually agreed liquidity event.
• Drag-along rights may only be exercised where the majority shareholder holds at least 75% of issued shares and the proposed exit price meets or exceeds the valuation established in this round. Tag-along rights shall apply on standard balanced minority terms.

Secondary Sale: Secondary sale of shares shall be permitted after 24 months from closing, subject to the Founder's Right of First Refusal (ROFR) at a price determined by a mutually agreed independent valuation mechanism.

Founders / Company Buyback: The Founders or Company shall have the right to buy back the Investor's shares at any time after 36 months from closing, subject to:

• Valuation using the higher of: (a) a revenue multiple of 3x trailing 12-month revenue, or (b) a mutually agreed independent valuation.
• Written notice of at least 60 days prior to exercise.
• The Investor's consent shall not be unreasonably withheld where the buyback price meets the agreed valuation mechanism.

• The Founders shall retain majority ownership and full operational control of the Company.
• No forced removal of the Founders except for clearly defined "cause" events (fraud, gross misconduct, or material breach of the shareholders' agreement).
• No retroactive reset of Founders equity or imposition of vesting on existing shares.
• Management remuneration shall be disclosed at board level but shall not be subject to unilateral Investor veto, except where it constitutes a related-party transaction under Reserved Matters.

• All agreements governed by the laws of Kenya.
• The courts of Nairobi, Kenya shall have non-exclusive jurisdiction over any disputes arising from this Term Sheet or any definitive agreements.
• Dispute Resolution: Any disputes shall first be referred to mediation between the parties. If unresolved within 30 days of referral, disputes shall be submitted to binding arbitration under the rules of the Nairobi Centre for International Arbitration (NCIA), with the seat of arbitration being Nairobi, Kenya. Notwithstanding the foregoing, nothing in this clause shall restrict either party from seeking urgent injunctive or declaratory relief from the courts of Kenya where necessary to preserve rights or prevent irreparable harm pending the resolution of a dispute.
• Company to confirm a clean capitalization table at signing, with no undisclosed shareholders, encumbrances, or third-party claims.
• All intellectual property — including software, databases, AI systems, clinical workflows, and proprietary technology — to be properly assigned to the Company prior to or at closing.
• Definitive agreements to include a Shareholders' Agreement and Subscription Agreement, to be drafted by mutually agreed legal counsel.
• Legal costs for preparation of definitive agreements to be borne by each party for their own counsel.

Both parties acknowledge that the objective of this investment is to:

• Strengthen the Company's capital base and operational capacity;
• Leverage the Investor's healthcare network and industry credibility;
• Build a scalable, compliant, and technology-forward enterprise serving East African markets; and
• Create sustainable long-term value for both Founders and Investor.

This Term Sheet reflects a balanced partnership structure, grounded in mutual respect, transparent governance, and a shared commitment to the Company's mission.

Each party agrees to keep the existence, terms, and content of this Term Sheet strictly confidential and shall not disclose the same to any third party without the prior written consent of the other party, except:

• To each party's respective legal or financial advisors on a confidential basis;
• As required by applicable law or regulation; or
• As necessary for the preparation and execution of definitive agreements.

This confidentiality obligation shall survive the lapse or withdrawal of this Term Sheet for a period of 24 months.

Agreed in principle by:

Founders:

Name: Sam Nujoma       Name: Hellen Wachira    

Date:  

Witness:      Date:  

Investor:

Name: Dr. Benson Wahome

Signature:  

Date:  

Witness:      Date: