Contract analysis

I. Executive Summary The purpose of this memorandum is to evaluate alternative capital structures for the proposed $500,000,000 asset-backed securities issuance by Quorum Receivables Funding 2022-1 LLC (the "Issuer" or "QRF 2022-1"), a special purpose vehicle formed under the laws of the State of Delaware to acquire insurance premium finance receivables originated by Quorum Premium Finance LLC ("QPF"), a wholly owned

II. Background A. Transaction Overview Quorum Insurance Holdings Corp. ("QIH") is a publicly traded insurance and financial technology company incorporated in the State of Delaware, with common stock listed on the New York Stock Exchange under the ticker symbol QIHC. QIH's principal offices are located at 400 Atlantic Street, Suite 2200, Stamford, Connecticut 06901. For the fiscal year ended December 31, 2021, QIH re

III. Alternative A: Two-Tranche Structure (Senior / Subordinated) A. Proposed Capital Stack Under Alternative A, the Issuer would issue a single class of rated senior Notes, with the remaining capital structure consisting of overcollateralization and retained interest held by the Sponsor. Under this structure, total credit enhancement for the Class A Notes is 12.0%, provided entirely by overcollateralization and the

IV. Alternative B: Three-Tranche Structure (Recommended) A. Proposed Capital Stack Under Alternative B, the Issuer would issue three classes of rated Notes, with the remaining capital structure consisting of overcollateralization and retained interest held by the Sponsor. The credit enhancement architecture under this structure is as follows: • Total credit enhancement for Class A Notes: 25.0%, comprising Class B sub

1. Payment of fees, expenses, and indemnities of the Indenture Trustee (Calvoneth Trust Company, N.A.);

2. Payment of the servicing fee to QPF as Servicer (or to the back-up servicer, Northvane Bank, N.A., if acting as successor servicer);

3. Payment of accrued and unpaid interest on the Class A Notes;

4. Payment of accrued and unpaid interest on the Class B Notes;

5. Payment of accrued and unpaid interest on the Class C Notes;

6. Payment of principal on the Class A Notes, until the outstanding principal balance of the Class A Notes has been reduced to zero;

7. Payment of principal on the Class B Notes, until the outstanding principal balance of the Class B Notes has been reduced to zero;

8. Payment of principal on the Class C Notes, until the outstanding principal balance of the Class C Notes has been reduced to zero;

9. Deposits to the overcollateralization account to replenish the overcollateralization amount to the target level ($15,000,000);

10. Distribution of any remaining amounts to the Issuer as residual interest (retained by the Sponsor). During the revolving period, collections allocated to principal (after satisfaction of items (1) through (5) above) will be used to acquire additional eligible receivables from QPF through QRH, rather than to pay down the Notes. Upon the occurrence of an early amortization event or the scheduled end of the revolvin

V. Alternative C: Four-Tranche Structure (Senior / Senior Mezzanine / Junior Mezzanine / Subordinated) A. Proposed Capital Stack Under Alternative C, the Issuer would issue four classes of rated Notes, with the remaining capital structure consisting of overcollateralization and retained interest. Under this structure, the Class A-1 Notes benefit from 40.0% total credit enhancement, comprising the Class A-2 subordinat

VI. Comparative Analysis Summary A. Side-by-Side Comparison Table The following table provides a comprehensive comparison of the three alternatives across all key evaluation criteria: B. Key Takeaways The comparative analysis above supports the following key conclusions: Alternative A maximizes the cost-of-funds cushion relative to the 175 basis point hurdle, providing approximately 69.4 basis points of headroom. How

VII. Additional Structural Considerations (Applicable to All Alternatives) Certain structural elements of the proposed transaction are common to all three capital structure alternatives and do not vary based on the number or configuration of rated tranches. These elements are addressed below for completeness and to provide context for the overall transaction structure. A. Liquidity Facility A $25,000,000 committed li

VIII. Recommendation Based on the analysis set forth in this memorandum, Calderwood & Harkness recommends Alternative B — the Three-Tranche Structure — as the capital structure for the Quorum Receivables Funding 2022-1 LLC securitization. This recommendation is grounded in the following considerations:

1. Economics. The all-in WAC of approximately SOFR + 151.50 basis points at current guidance is comfortably within QIH's Board-approved 175 basis point hurdle, with approximately 23.5 basis points of cushion. While Alternative A provides a wider cushion (~69.4 bps) and Alternative C offers a marginally better WAC (~146.25 bps), Alternative B achieves an economically attractive result without the structural trade-offs

2. Proceeds Maximization. Alternative B places $485,000,000 with third-party investors ($375,000,000 in Class A Notes, $75,000,000 in Class B Notes, and $35,000,000 in Class C Notes), leaving only $15,000,000 in retained overcollateralization and residual interest. This achieves QIH's primary objective of maximizing off-balance-sheet financing and represents a substantial improvement over Alternative A's $440,000,000

3. Market Precedent. Three-tranche AAA/A/BBB structures are the most commonly used format for insurance premium finance asset-backed securities. As demonstrated in the comparable transaction survey in Appendix B, this tranche configuration dominates the market and benefits from well-established investor expectations, pricing benchmarks, and rating agency criteria. Conforming to market convention reduces execution ris

4. Rating Agency Alignment. Preliminary indications from Brindoval Ratings Inc. (Andrew Petrosian, Senior Director) and Pinnacle Rating Services LLC (Monica Sung, Vice President) suggest that the proposed credit enhancement levels — 25.0% for the Class A Notes, 10.0% for the Class B Notes, and 3.0% for the Class C Notes — are consistent with their respective analytical criteria for the target ratings of AAA(cr)/Aaa(p

5. Execution Certainty. Ridgeline Capital Markets LLC (Julian Weatherstone, Head of ABS Origination, and Rebecca Tran, Managing Director, Insurance Finance ABS) has expressed confidence in placing all three tranches within guidance levels in the current market environment. Comparable AAA-rated insurance premium finance ABS were trading at SOFR + 95 to 110 basis points as of June 2022, providing substantial room withi

6. Risk Retention. The $15,000,000 retained interest, together with the Sponsor's retained residual interest and trapped excess spread, satisfies the Dodd-Frank Section 941 horizontal interest requirements without the need for additional structuring. This stands in contrast to Alternative C, where the $10,000,000 OC alone would be insufficient to meet the 5% threshold and would require supplemental retention mechanis

7. Documentation Efficiency. The three-tranche structure is manageable within the current documentation timeline. The target of near-final documentation by mid-October 2022 is achievable, and the estimated legal budget of $2,800,000 for Calderwood & Harkness's engagement is consistent with the scope of work required for this structure. Alternative A would be completed more quickly but sacrifices too much in economic

1. Present Memorandum for Partner Review. Circulate this memorandum to Douglas Carmichael and Francesca Morano and schedule a meeting to discuss the analysis and recommendation. Target: week of July 18, 2022.

2. Confirm Alignment with QIH. Schedule a discussion with QIH treasury (Sandra Ling-Hwang, Senior Vice President, Treasury) and QIH General Counsel (Nolan Whitford) to present the recommendation and confirm alignment on Alternative B as the selected capital structure. Target: week of July 18–22, 2022.

3. Initial Term Sheet. Coordinate with Ridgeline (Julian Weatherstone and Rebecca Tran) on preparation and circulation of the initi