Contract analysis

Section 1.01 — Defined Terms As used in this Agreement, the following terms shall have the following meanings: "Accounts" means any and all deposit accounts maintained by Purchaser or QRF 2022-1 at Calvoneth Trust Company, N.A., including the Collection Account, the Reserve Account, and any other accounts established pursuant to the Indenture or the other Transaction Documents. "Addition Date" means, during the Revol

Section 1.02 — Rules of Construction Unless the context otherwise requires, the following rules of construction shall apply to this Agreement: (a) References in this Agreement to any Article, Section, Exhibit, or Schedule are to the specified Article, Section, Exhibit, or Schedule of or to this Agreement unless otherwise expressly indicated. (b) The headings and captions contained in this Agreement are inserted for c

Section 1.03 — SOFR Benchmark Replacement Notwithstanding anything to the contrary herein or in any other Transaction Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to SOFR, then the applicable Benchmark Replacement will replace SOFR for all purposes hereunder and under the other Transaction Documents in respect of any determination on or after such Ben

ARTICLE II — SALE AND PURCHASE OF RECEIVABLES

Section 2.01 — Sale of Initial Receivables (a) On the Closing Date, Seller hereby sells, transfers, assigns, conveys, and delivers to Purchaser, without recourse except as expressly provided herein, all of Seller's right, title, and interest in and to: (i) each Receivable identified on the Initial Cut-Off Date Schedule attached hereto as Schedule I (each such Receivable, an "Initial Receivable"); (ii) all Related Rig

Section 2.02 — Sale of Subsequent Receivables (a) During the Revolving Period (which shall be the twenty-four (24) month period commencing on the Closing Date, unless earlier terminated upon the occurrence of an Early Amortization Event), Seller shall sell, transfer, assign, convey, and deliver to Purchaser, on each Addition Date, additional Receivables originated by Seller since the immediately preceding Cut-Off Dat

Section 2.03 — Purchase Price (a) The purchase price for each Receivable (the "Purchase Price") shall be the fair market value of such Receivable, determined as the outstanding principal balance of such Receivable as of the applicable Cut-Off Date, multiplied by a purchase price percentage, less a discount reflecting: (i) the credit risk of the Receivable, including the historical default and loss experience of Selle

Section 2.04 — True Sale; Characterization (a) True Sale Intent. It is the express intent of Seller and Purchaser that each sale, transfer, assignment, and conveyance of Receivables by Seller to Purchaser hereunder shall constitute a "true sale" of such Receivables from Seller to Purchaser for all purposes, and shall not constitute a pledge of, or a grant of a security interest in, such Receivables by Seller to Purch

Section 2.05 — No Assumption of Liabilities (a) Purchaser does not assume, and shall not be deemed to have assumed, any liabilities or obligations of Seller in connection with the purchase of Receivables hereunder, except for those obligations expressly assumed by Purchaser under this Agreement and the other Transaction Documents. (b) Seller retains all liabilities and obligations related to the origination of the Re

Section 2.06 — Eligible Receivable Criteria Each Receivable sold or transferred by Seller to Purchaser hereunder must, at the time of sale, satisfy all of the following criteria (each such criterion, an "Eligible Receivable Criterion"): (a) Origination. The Receivable was originated by Seller in the ordinary course of Seller's insurance premium finance business and in accordance with Seller's customary underwriting g

Section 2.07 — Obligations of Seller Regarding Collections (a) Until a Receivable is transferred to Purchaser hereunder, Seller shall hold all Collections received with respect to such Receivable in trust for the benefit of Purchaser and shall segregate and identify such Collections in its books and records. (b) Following the transfer of a Receivable to Purchaser, all Collections received by Seller in respect of such

ARTICLE III — REPRESENTATIONS AND WARRANTIES OF SELLER Seller hereby represents and warrants to Purchaser as of the date hereof, and as of each Addition Date (except where any representation or warranty is stated to be made as of a specific date, in which case such representation or warranty shall be made only as of such specific date), as follows:

Section 3.01 — Organization and Good Standing (a) Seller is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware. (b) Seller has its principal office at 400 Atlantic Street, Suite 2200, Stamford, CT 06901. (c) Seller is duly qualified to do business and is in good standing as a foreign limited liability company in each state of the United States an

Section 3.02 — Authority; Binding Obligation (a) Seller has all necessary limited liability company power and authority to execute, deliver, and perform this Agreement and each other Transaction Document to which it is a party, and to sell, transfer, assign, and convey the Receivables as contemplated hereby. (b) The execution, delivery, and performance of this Agreement and each other Transaction Document to which Se

Section 3.03 — No Conflict The execution, delivery, and performance of this Agreement and the other Transaction Documents by Seller, and the sale, transfer, assignment, and conveyance of the Receivables hereunder, do not and will not: (a) conflict with or violate Seller's Certificate of Formation or Limited Liability Company Agreement, each as currently in effect; (b) conflict with or violate any applicable law, rule

Section 3.04 — Consents and Approvals No consent, approval, authorization, order, registration, filing, or qualification of or with any court, governmental authority, regulatory body, or any other Person is required for Seller's execution, delivery, and performance of this Agreement and the other Transaction Documents, or for the consummation of the transactions contemplated hereby, except for (a) UCC filings require

Section 3.05 — No Litigation No action, suit, proceeding, claim, or investigation is pending or, to Seller's knowledge after due inquiry, threatened against Seller before any court, arbitrator, or governmental authority that would, individually or in the aggregate, reasonably be expected to (a) materially and adversely affect Seller's ability to perform its obligations under this Agreement or any other Transaction Do

Section 3.06 — Compliance with Laws (a) Seller is in compliance in all material respects with all applicable federal, state, and local laws, rules, regulations, orders, and decrees, including without limitation all laws and regulations relating to insurance premium finance lending, usury, licensing, consumer protection, privacy, data security, anti-money laundering, and sanctions. (b) Seller is duly licensed as a pre

Section 3.07 — Financial Condition (a) The audited consolidated financial statements of Seller's ultimate parent, Quorum Insurance Holdings Corp. (QIH), as audited by Meridian Ledger LLP (Robert Falcone, engagement partner), for the fiscal year ended December 31, 2021, which have been furnished to Purchaser, present fairly in all material respects the consolidated financial position, results of operations, and cash f

Section 3.08 — Solvency Seller is solvent and will not be rendered insolvent by the sale of Receivables contemplated hereby. Immediately after giving effect to the transactions contemplated hereby, including the sale of the Initial Receivables on the Closing Date: (a) the fair saleable value of Seller's assets will exceed the sum of Seller's debts, liabilities, and other obligations (whether absolute, accrued, contin

Section 3.09 — Taxes Seller has filed or caused to be filed all material federal, state, and local tax returns required to be filed by it, and has paid or caused to be paid all taxes shown to be due and payable on such returns or on any assessment of which it has received notice. No tax liens have been filed against Seller or any Receivable, and no taxing authority has asserted any claim for unpaid taxes against Sell

Section 3.10 — ERISA (a) Seller is not an "employee benefit plan" as defined in Section 3(3) of ERISA, and Seller's assets do not constitute "plan assets" within the meaning of Section 3(42) of ERISA or the regulations promulgated by the U.S. Department of Labor at 29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA. (b) The transactions contemplated hereby will not constitute or result in a non-exempt "pro

Section 3.11 — Investment Company Act Seller is not, and will not as a result of the transactions contemplated hereby become, required to register as an "investment company" or a company "controlled by" an investment company within the meaning of the Investment Company Act of 1940, as amended. Seller is not, and does not intend to become, an entity primarily engaged in the business of investing, reinvesting, or tradi

Section 3.12 — Bulk Sales No transaction contemplated hereby requires compliance with any applicable bulk sales or bulk transfer law in any jurisdiction.

Section 3.13 — Location of Records All original and copies of records, files, and documents relating to the Receivables (including premium finance agreements, payment histories, Insurance Carrier notices, and collection files) are maintained at Seller's principal office at 400 Atlantic Street, Suite 2200, Stamford, CT 06901, or at such other locations as Seller may from time to time designate upon not less than thirt

Section 3.14 — Credit Ratings Seller's ultimate parent, QIH, has the following unsecured credit ratings: BBB from Brindoval Ratings Inc. and Baa2 from Pinnacle Rating Services LLC. Seller has not received any written notice from either Rating Agency of any pending or threatened downgrade, review for downgrade, or withdrawal of any such rating.

ARTICLE IV — REPRESENTATIONS AND WARRANTIES REGARDING RECEIVABLES

Section 4.01 — Receivables Representations Seller hereby makes the following representations and warranties with respect to each Receivable sold or transferred hereunder, as of the date of sale of such Receivable (or, with respect to Initial Receivables, as of the Initial Cut-Off Date, and with respect to Subsequent Receivables, as of the applicable Cut-Off Date): (a) Existence and Validity. The Receivable is a valid

Section 4.02 — Receivables Pool Characteristics (Initial Pool) As of the Initial Cut-Off Date of June 30, 2022, the characteristics of the Receivables Pool are as follows: The foregoing characteristics are based upon the data tape verified by Veristead Analytics LLC (Katharine Drummond, engagement lead) and are presented for informational purposes. The specific terms and characteristics of each Receivable in the init

Section 4.03 — Repurchase Obligation (a) If any representation or warranty made by Seller in Section 4.01 with respect to any Receivable is untrue or incorrect in any material respect as of the date on which such representation or warranty was made, and such breach has a material adverse effect on the value of such Receivable or the interests of Purchaser, the Indenture Trustee, or the Noteholders in such Receivable,

Section 4.04 — Notice of Breach Seller shall promptly (and in no event later than five (5) Business Days following discovery) notify Purchaser and the Indenture Trustee in writing upon becoming aware of any breach of any representation or warranty set forth in this Article IV. Such notice shall specify the nature and extent of the breach, the affected Receivable or Receivables, and the corrective action that Seller p

ARTICLE V — REPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser hereby represents and warrants to Seller as of the date hereof, and as of each Addition Date, as follows:

Section 5.01 — Organization and Good Standing (a) Purchaser is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware (Delaware Secretary of State File No. 7894228), having been formed on August 3, 2022. (b) Purchaser's sole member is Quorum Premium Finance LLC. (c) Purchaser's Independent Manager is Eleanor M. Vasquez, who was appointed pursuant to

Section 5.02 — Authority; Binding Obligation (a) Purchaser has all necessary limited liability company power and authority to execute, deliver, and perform this Agreement and each other Transaction Document to which it is a party, and to purchase, acquire, and hold the Receivables as contemplated hereby. (b) The execution, delivery, and performance of this Agreement and each other Transaction Document to which Purcha

Section 5.03 — Bankruptcy-Remote Status (a) Purchaser is a bankruptcy-remote special purpose entity formed solely for the purpose of (i) acquiring Receivables from Seller, (ii) holding such Receivables, (iii) transferring such Receivables to QRF 2022-1 pursuant to the Receivables Transfer Agreement, and (iv) performing its obligations under this Agreement, the Receivables Transfer Agreement, and the other Transaction

Section 5.04 — No Conflict; Consents (a) The execution, delivery, and performance of this Agreement and the other Transaction Documents by Purchaser do not and will not (i) conflict with or violate Purchaser's Certificate of Formation or Limited Liability Company Agreement, (ii) conflict with or violate any applicable law, rule, regulation, judgment, order, or decree, or (iii) result in a breach of, or default under,

ARTICLE VI — COVENANTS OF SELLER

Section 6.01 — Affirmative Covenants Seller hereby covenants and agrees that, so long as any Receivables remain outstanding in the Pool or any obligations under the Transaction Documents remain unsatisfied, Seller shall: (a) Maintenance of Existence. Maintain its legal existence, qualifications, and good standing under the laws of the State of Delaware and in each other jurisdiction where the nature of its business o