Contract analysis

I. Executive Summary On August 22, 2023, the Board of Directors of Meridian Credit intelligence, Inc. ("Meridian") adopted a formal resolution (the "Resolution") that (a) categorically rejects granting any most favored nation ("MFN") pricing provision to Quorum Insurance Holdings Corp. ("Quorum") or to any other licensee in connection with the proposed Master Data License Agreement (the "MDLA"), and (b) prohibits Mer

II. Background A. Transaction Overview Quorum Insurance Holdings Corp. (a Delaware corporation; Nasdaq: QIHC; headquartered at 1200 Atlantic Street, Suite 3400, Stamford, CT 06901) is negotiating a five-year enterprise data-licensing arrangement with Meridian Credit intelligence, Inc. (a Georgia corporation; headquartered at 3300 Peachtree Road NE, Suite 2100, Atlanta, GA 30326). Quorum is a multi-line insurance hold

III. Analysis of the August 22, 2023 Board Resolution A. Substance of the Resolution Based on information obtained through counsel-to-counsel communications between Calderwood & Harkness and Kessler Pruitt & Ashe (Graham Whitley, lead partner), the Resolution adopted by the Meridian board of directors on August 22, 2023 provides as follows:

1. MFN Prohibition. Meridian's management is directed not to agree to any most favored nation pricing provision, price-matching mechanism, or comparable price-protection clause in the Quorum MDLA or in any other data-licensing agreement, effective immediately and continuing through the conclusion of any potential public offering of Meridian's securities. The prohibition is framed broadly and is not limited to the Quo

2. Derived-Data Restrictions. Meridian's management is directed to maintain the following positions in the MDLA negotiation, and these positions are characterized as non-negotiable absent a superseding board resolution: (a) A perpetual, royalty-free license-back to Meridian on all Derived Data is a non-negotiable term of the MDLA; (b) No third-party commercialization of Derived Data shall be permitted without Meridia

3. Board Rationale. The Resolution recites that the foregoing restrictions are adopted to protect Meridian's competitive positioning, pricing integrity, and valuation in connection with a potential public offering of Meridian's securities. The Resolution further recites that the board considered and relied upon the recommendations of Whitmore Zanthor & Co., acting as Meridian's investment bank, and Breckenridge Capit

IV. Impact on Quorum's Negotiating Position A. MFN Pricing The Resolution formally closes the door on a full most favored nation clause for the foreseeable future — at minimum through the conclusion of any potential public offering of Meridian's securities, which, based on the current timeline, would not occur until 2025–2026. Quorum should recognize that continuing to demand a comprehensive MFN is no longer a produc

V. Strategic Options for Quorum We have identified four strategic options for Quorum's consideration. For the reasons set forth below, we recommend Option 1 — a recalibrated deal framework — as the preferred approach, with elements of Option 3 available as a further fallback. A. Option 1: Propose a Recalibrated Deal Framework (Recommended) This option involves formally proposing a revised set of terms on both the MFN

1. MFN Substitute — Limited Pricing Audit Right We recommend that Quorum formally propose the "pricing audit right" fallback as a substitute for the comprehensive MFN clause. The pricing audit right would be structured as follows: (a) Annual Audit Right. Quorum would have the right, exercisable no more than once per contract year, to engage an independent third-party auditor — to be mutually agreed upon by both parti

2. Derived-Data Framework — Tiered Approach We recommend that Quorum propose a tiered derived-data framework that replaces the binary dispute (unrestricted commercialization vs. Meridian sole-discretion consent) with a structured, multi-tier system that differentiates among categories of Derived Data use based on the degree of transformation and the nature of the intended exploitation. The framework would be structur

3. IPO Timeline Leverage The Meridian IPO timeline, while the primary driver of the Resolution's restrictive posture, also creates a significant motivator for Meridian to close the MDLA on acceptable terms. Specifically: • Meridian and Breckenridge have a strong interest in completing material commercial agreements before the IPO quiet period. A $60 million five-year license with a Nasdaq-listed, $8.9 billion market-

VI. Standish National Bank Covenant Considerations Regardless of which strategic option Quorum pursues, Quorum must obtain lender consent or a waiver from Standish National Bank, N.A. ("Standish") in connection with the execution of the MDLA. Section 7.12(b) of the Amended and Restated Credit Agreement, dated June 15, 2021, by and among Quorum, Standish (as administrative agent and lead lender), and the syndicate ban

VII. Recommended Next Steps and Timeline Based on the foregoing analysis, we recommend the following timeline for action:

1. Week of September 11, 2023: Quorum's General Counsel office and Calderwood & Harkness finalize the pricing audit right proposal and the recalibrated derived-data tiered framework, including the QuorumScore™ carve-out and the Draft Derived Data Commercialization Protocol. The finalized proposals should be circulated internally for review and sign-off by Rajesh Anand (Chief Data Officer), Diane Lowell (Senior Vice P

2. September 15, 2023: Calderwood & Harkness formally transmits the pricing audit right proposal to Kessler Pruitt & Ashe (Graham Whitley) via letter, accompanied by a cover memorandum framing the proposal as a market-fairness and governance mechanism. The letter should request Meridian's response within three weeks.

3. Late September 2023 (target: September 25–29, 2023): Calderwood & Harkness transmits the tiered derived-data framework proposal, including the QuorumScore™ carve-out and the Draft Derived Data Commercialization Protocol, to KP&A. The sequencing of the two proposals — pricing audit right first, derived-data framework second — is deliberate: we want Meridian to evaluate the pricing audit right on its own merits befo

4. October 2023: Request a fourth negotiation session (virtual or in-person) focused exclusively on the two remaining open issues — pricing protection and derived-data rights — with the objective of reaching a heads-of-terms agreement or, at minimum, substantially narrowing the gap. The negotiation session should include decision-makers from both sides with authority to make commercial commitments (subject to board-l

5. Parallel Track — Lender Consent: Marcus Weill to reengage Philip Yardley at Standish National Bank to restart the lender consent process. Target obtaining the consent or waiver by Q1 2024, well in advance of the anticipated MDLA execution timeline. Nathaniel Bower should coordinate with Calderwood & Harkness to update the consent request package to reflect any changes in the MDLA terms since the initial November 2

6. Parallel Track — Quorum Board Authorization: Prepare an updated Quorum board resolution for review and approval by Harrison Kimble, Chair of the Quorum board of directors, authorizing execution of the MDLA once final terms are agreed. The resolution should be drafted with sufficient flexibility to cover the range of outcomes contemplated by Options 1 and 3, so that Quorum does not need to return to its own board i

7. Coordination with Caldwell & Strauss LLP: Angela Firth, Quorum's outside patent counsel at Caldwell & Strauss LLP, should be briefed on the current derived-data intellectual property posture — including the tiered framework and QuorumScore™ carve-out — to ensure alignment with Quorum's broader IP portfolio strategy and the pending QuorumScore™ patent applicati