Contract analysis

I. Introduction and Purpose This memorandum sets forth the results of my review of the "Certain U.S. Federal Income Tax Considerations" section, together with the related state and local tax considerations, FATCA withholding, and ERISA considerations subsections, of the Preliminary Offering Memorandum (v3) for the Quorum Receivables Funding 2022-1 LLC transaction (the "OM"). The OM is dated October 12, 2022. This rev

II. Overall Assessment General Conclusion. The tax section of the OM (v3), as currently drafted, is substantially accurate and well-organized. The recommended revisions set forth in this memorandum are largely clarifying, conforming, or supplementary in nature. I have not identified any material misstatement of law or any conclusion in the OM tax section that is inconsistent with our internal work product. The revisi

1. Classification of the Issuer (QRF 2022-1)

2. Characterization of the Notes as Debt

3. Tax Consequences to U.S. Holders

4. Tax Consequences to Non-U.S. Holders

6. State and Local Tax Considerations

8. Tax Shelter / Reportable Transaction Disclosure This memorandum organizes comments by subsection, consistent with the structure of the OM tax section. Within each subsection, I identify specific issues, confirm the accuracy of the existing disclosure where appropriate, and provide redline suggestions and explanatory commentary for recommended revisions.

III. Classification of the Issuer (QRF 2022-1) A. Disregarded Entity Status The OM correctly states that QRF 2022-1 is a Delaware limited liability company that will be treated as a disregarded entity for U.S. federal income tax purposes. The OM further states that the sole member of QRF 2022-1 is Quorum Receivables Holding LLC ("QRH"), which is itself a Delaware limited liability company treated as a disregarded ent

IV. Characterization of the Notes as Debt A. Debt vs. Equity Analysis The OM correctly states that the Notes will be treated as indebtedness of QPF (through the disregarded entity chain) for U.S. federal income tax purposes. This conclusion is consistent with the Draft Opinion on Tax Characterization dated October 10, 2022, which I prepared and which concludes that the Notes should be treated as debt for U.S. federal

V. Tax Consequences to U.S. Holders A. Interest Income The OM states that stated interest on the Notes will be includable in gross income as ordinary interest income in accordance with the holder's regular method of accounting (i.e., the accrual method for most institutional investors, or the cash method for individuals and certain other holders). The OM also notes that the Notes bear interest at a floating rate base

VI. Tax Consequences to Non-U.S. Holders A. Portfolio Interest Exemption The OM correctly states that interest paid on the Notes to a non-U.S. holder (as defined in the OM) will qualify for the portfolio interest exemption from U.S. withholding tax under IRC §§ 871(h) and 881(c), provided the following conditions are satisfied: (i) the holder is not a "10-percent shareholder" of the Issuer (or, because the Issuer is

VII. FATCA Withholding The OM includes a subsection addressing the Foreign Account Tax Compliance Act ("FATCA") provisions of IRC §§ 1471–1474. I have reviewed this subsection against the FATCA Compliance Memorandum dated August 18, 2022, and recommend the following updates and confirmations. Issuer Status. The OM should confirm, and I believe the current draft does so accurately, that QRF 2022-1 will be treated eith

VIII. State and Local Tax Considerations The OM includes a brief disclaimer stating that holders should consult their own tax advisors regarding the state and local tax consequences of acquiring, holding, and disposing of the Notes. This disclaimer is appropriate and should be retained. However, I recommend that the state and local tax subsection be modestly expanded to include the following additional disclosures, w

IX. ERISA Considerations A. Plan Asset Issues The OM includes a subsection addressing the acquisition of the Notes by employee benefit plans subject to Title I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), individual retirement accounts ("IRAs") and other plans subject to IRC § 4975, and entities whose underlying assets include "plan assets" by reason of any such plan's or IRA's invest

X. Tax Shelter / Reportable Transaction Disclosure The OM includes a brief disclosure regarding the reportable transaction rules under Treasury Regulation § 1.6011-4. This regulation requires taxpayers to disclose their participation in "reportable transactions" on IRS Form 8886, and requires "material advisors" to disclose their involvement in such transactions on IRS Form 8918. I recommend confirming in the OM that

XI. Conforming and Cross-Reference Issues In the course of my review, I identified several conforming edits and cross-reference issues that should be addressed before the OM is finalized: Section References to Transaction Documents. The OM tax section contains several references to specific sections of the Indenture, the Servicing Agreement, and the Note Purchase Agreement. These section references should be verified

1. Indenture Trustee fees and expenses

2. Servicing fee (to QPF, as servicer)

9. Overcollateralization replenishment (to restore OC to the target level)

10. Residual distributions (to the retained interest holder) The OM tax section should accurately reflect this priority of payments. I recommend verifying that the description in the OM tax section matches this waterfall, including the placement of the OC replenishment step (which occurs after all principal payments but before residual distributions).

XII. Contingent Payment Debt Instrument (CPDI) Rules The OM includes a brief discussion of whether the Notes could be subject to the contingent payment debt instrument ("CPDI") rules under Treasury Regulation §§ 1.1275-4. These rules apply to debt instruments that provide for one or more contingent payments, and they require the holder to accrue interest income at a "comparable yield" (rather than at the stated coupo

XIII. Information Reporting The OM should confirm that Calvoneth Trust Company, N.A., in its capacity as paying agent under the Indenture, will be responsible for filing all applicable information returns with respect to payments on the Notes. Specifically, Calvoneth Trust (or its designee) will be responsible for filing: • IRS Form 1099-INT with respect to interest payments made to U.S. holders; • IRS Form 1099-OID

XIV. Summary of Recommended Revisions The following is a numbered summary of all recommended revisions to the OM tax section, organized by the OM subsection to which each revision pertains:

1. Classification of the Issuer — Form 8832 Disclosure. Add disclosure confirming that QRF 2022-1 (EIN: 88-1247653) and QRH (EIN: 88-1247619) have not filed, and will not file, IRS Form 8832 electing corporate classification.

2. Classification of the Issuer — TMP Inapplicability. Add a clarifying statement that the taxable mortgage pool rules under IRC § 7701(i) do not apply because the receivables are insurance premium finance loans, not real estate mortgages.

3. Classification of the Issuer — Partnership Recharacterization Risk. Expand the "if the Notes were treated as equity" hypothetical to specify the potential consequences, including pass-through treatment, UBTI issues for tax-exempt holders, and ECI issues for non-U.S. holders.

4. Characterization as Debt — Supporting Factors. Add explicit reference to the key factors supporting debt treatment: unconditional obligation to pay principal and interest, fixed legal final maturity (42 months), sequential waterfall priority, absence of management or voting rights, and overcollateralization / subordination equity cushion ($15,000,000 / 3.0%).

5. Characterization as Debt — Reporting. Add a note confirming that the parties intend to report interest on the Notes as indebtedness on applicable tax returns, and that investors will receive IRS Form 1099-INT (or Form 1042-S for non-U.S. holders).

6. OID — Revolving / Amortization Structure. Add a note addressing the interaction of the OID rules with the revolving period (24 months) and amortization period (12 months), and the potential impact on the weighted average life and OID accrual schedule.

7. Non-U.S. Holders — 10% Shareholder Test. Add a clarifying note that the 10% shareholder test for the portfolio interest exemption is applied at the level of QPF / QIH (a publicly traded company, NYSE: QIHC), and that the likelihood of a noteholder being a 10% shareholder of QIH is remote.

8. FATCA — Gross Proceeds Withholding. Update the FATCA subsection to reflect the IRS proposed regulations (REG-132881-17) eliminating FATCA withholding on gross proceeds, and confirm that taxpayers may rely on the proposed regulations pending finalization.

9. FATCA — Paying Agent. Reference Calvoneth Trust Company, N.A., as the party responsible for FATCA withholding compliance on payments made to holders.

10. State and Local Tax. Expand the state and local tax subsection to note (a) Delaware organization and $300 annual LLC tax, (b) nexus avoidance structure, (c) no state withholding tax in the three largest origination states (Texas, California, Florida — 35.6% of pool), and (d) expanded warning regarding economic nexus and pass-through entity income tax obligations.

11. ERISA — Equity Retention. Clarify the plan asset regulation analysis to confirm that the retained interest / OC ($15,000,000) is held entirely by QIH through the SPV chain, and that no Benefit Plan Investor will hold equity.

12. ERISA — Fiduciary Duty Statement. Add a statement that each plan fiduciary must independently determine that the acquisition and holding of the Notes is consistent with the plan's governing documents, ERISA fiduciary duties, and the terms of the applicable prohibited transaction exemption.

13. Reportable Transaction. Add cautionary language that certain aspects of the transaction could theoretically trigger reportable transaction disclosure obligations for some investors.

14. Cross-References — Transaction Documents. Verify all internal section references to the Indenture (v4), Servicing Agreement (v3), and Note Purchase Agreement (v3), all dated October 12, 2022.

15. Servicer Terminology. Confirm that the term "Servicer" consistently refers to Quorum Premium Finance LLC (QPF) throughout the OM tax section, and correct any references to "Quorum" or "QIH" as servicer.

16. Payment Waterfall Consistency. Confirm that the description of the payment waterfall in the OM tax section is consistent with the sequential waterfall described in the Indenture (Trustee fees → Servicing fee → Class A interest → Class B interest → Class C interest → Class A principal → Class B principal → Class C principal → OC replenishment → Residual).

17. CPDI Caveat. Add a caveat noting that if the Notes were treated as contingent payment debt instruments, the tax consequences would differ materially, including accrual at a comparable yield and ordinary income treatment on all gain.

18. Information Reporting — Paying Agent. Add a statement confirming that Calvoneth Trust Company, N.A., as paying agent, will be responsible for filing applicable information returns (Forms 1099-INT, 1099-OID, 1042-S) and that holders should expect to receive tax information reporting.

XV. Open Items and Next Steps The following open items remain and should be addressed before the OM tax section is finalized: Draft Opinion on Tax Characterization. The Draft Opinion on Tax Characterization dated October 10, 2022 has not been finalized. The OM tax section should be updated to conform to the final opinion once delivered, assuming the transaction proceeds to closing. I do not anticipate any material ch