Contract analysis

I. Executive Summary This memorandum provides a comprehensive debrief of the first in-person negotiation session between Quorum Insurance Holdings Corp. ("Quorum") and Meridian Credit intelligence, Inc. ("Meridian") held on January 18, 2023, at the offices of Calderwood & Harkness LLP, 425 Park Avenue, New York, NY 10022. The session ran approximately seven hours, commencing at 9:30 a.m. and concluding at approximate

II. Attendees The following individuals participated in the January 18, 2023 negotiation session. Certain individuals participated in specific breakout sessions only, as noted below. A. Quorum Insurance Holdings Corp. B. Calderwood & Harkness LLP (Outside Counsel for Quorum) C. Meridian Credit intelligence, Inc. D. Kessler Pruitt & Ashe LLP (Outside Counsel for Meridian)

III. Session Format and Agenda The session was organized into four segments, designed to allow both plenary-level strategic discussion and targeted breakout work on technical and commercial matters. Morning Plenary Session (9:30 a.m. – approximately 11:00 a.m.). The session opened with a full-group plenary to review the landscape of open issues arising from the December 2, 2022 redline and the October 2022 annotated

IV. Summary of Issues Addressed and Outcomes A. Most Favored Nation Pricing Clause — OPEN / UNRESOLVED The MFN pricing clause remains the most contentious pricing-related issue in the negotiation. The parties dedicated approximately forty-five minutes of the afternoon plenary to this topic, and the discussion was vigorous. The positions are summarized below.

1. Quorum's Position Presented Quorum reiterated its demand for a most favored nation clause to be included in the MDLA. As presented by Carolyn Whitford and Thomas Ng, the proposed clause would provide that if Meridian offers any other insurance-industry licensee more favorable per-record pricing, volume discounts, or fee terms during the term of the MDLA, Quorum's pricing would be automatically adjusted downward to

2. Meridian's Position Stated Arthur Pennington and Graham Whitley stated in unambiguous terms that Meridian will not agree to any MFN pricing clause. Their refusal was categorical and was supported by four distinct rationales, each of which was articulated in some detail during the afternoon plenary: (a) Confidentiality Obligations. Meridian argued that the audit and verification mechanisms necessarily associated wi

3. Assessment and Observations The parties remain far apart on the MFN issue. The gap is not merely a function of commercial disagreement but is driven by Meridian's strategic considerations that extend well beyond this particular transaction. Meridian's negotiating position on MFN appears to be significantly influenced — and perhaps constrained — by the concerns of Breckenridge Capital Partners and Whitmore Zanthor

1. Quorum's Position Presented Quorum asserted that it should own all intellectual property in any data, models, scores, indices, or analytics outputs created by Quorum using the licensed Meridian data as an input (collectively, "Derived Data"), with unrestricted rights to use, sublicense, and commercialize such Derived Data — including to third parties outside Quorum's corporate group — without additional fees, roya

2. Meridian's Position Stated Graham Whitley and Arthur Pennington articulated Meridian's position with equal firmness. Meridian's core legal argument is that any Derived Data incorporating, based on, or traceable to Meridian's raw data constitutes a "derivative work" within the meaning of the U.S. Copyright Act (17 U.S.C. § 101 et seq.) and that, accordingly, Meridian retains underlying intellectual property rights

3. Technical Dispute: ML Model Outputs A significant technical and legal sub-issue emerged during the derived-data discussion, and it has the potential to shape the entire derived-data negotiation. The parties disagree on whether outputs of Quorum's machine-learning models — which are trained on (among other things) Meridian data — constitute "Derived Data" at all. Quorum's Position. Rajesh Anand, with support from O

4. Assessment and Observations Meridian's three-part demand — the perpetual license-back, the "sufficient transformation" veto with Meridian sole discretion, and the fifteen percent revenue share — is commercially unacceptable to Quorum. Based on our preliminary assessment of market practice, these demands are also outside the range of norms for enterprise data licensing transactions of this type. While license-back

1. MCI Consumer Credit File™ • Approximately 310,000,000 consumer records • Daily batch refresh plus real-time API access • Delivered via SFTP batch and REST API

2. MCI CommercialView™ • Approximately 42,000,000 business records • Weekly batch refresh • Delivered via SFTP batch

3. MCI AltSignal™ • Approximately 85,000,000 consumer alternative-data records, encompassing utility payment data, telecommunications payment data, and rental payment data • Daily batch refresh • Delivered via SFTP batch Quorum confirmed its intended uses for the licensed data: automated underwriting models, claims-fraud detection algorithms, and customer propensity scoring across Quorum's property and casualty, life

I. Term and Termination — SUBSTANTIALLY AGREED The five-year initial term of the MDLA was confirmed by both parties. The term will commence upon the effective date of the MDLA and continue for sixty (60) months thereafter. Renewal provisions were discussed at a general level. Both parties expressed interest in a mutual renewal option, and the general framework — likely involving one or more successive renewal terms w

V. Standish National Bank Covenant — Internal Update This section is provided for internal client awareness only. The subject matter addressed herein was not discussed with Meridian or its counsel at the January 18 session and should not be disclosed to any party outside of Quorum and its counsel. The aggregate license value of the proposed MDLA — sixty million dollars ($60,000,000) over a five-year term — exceeds th

VI. Coordination with Caldwell & Strauss LLP Angela Firth, Partner at Caldwell & Strauss LLP, located at 100 Pearl Street, Hartford, CT 06103, serves as Quorum's longstanding outside intellectual property counsel. Ms. Firth and her team have been providing background guidance to Quorum's in-house legal team on the implications of Quorum's existing IP portfolio for the MDLA negotiation, particularly as it relates to t

VII. Recommended Next Steps Based on the outcomes of the January 18 session, Calderwood & Harkness recommends the following next steps. A. Legal Memoranda to Prepare The following legal memoranda should be prepared in advance of the second negotiation session:

1. Memorandum re: Ownership of ML Model Outputs — Copyright & Trade Secret Analysis. This memorandum will analyze the legal treatment of machine-learning model outputs under U.S. copyright and trade-secret law, with particular focus on whether live predictions generated by a model trained in part on third-party data constitute "derivative works" of that training data. The memorandum will address the distinction betwe

2. Memorandum re: License-Back Provisions in Data Licensing — Market Survey. This memorandum will survey the prevalence, structure, and typical terms of license-back provisions in comparable enterprise data-licensing agreements, drawing on publicly available information, industry publications, and C&H's institutional experience. The memorandum will provide an evidentiary basis for Quorum's position that Meridian's li

3. Memorandum re: "Sufficient Transformation" Standard — Critique and Alternative Frameworks. This memorandum will critically analyze Meridian's proposed "sufficient transformation" standard, highlighting the operational, legal, and competitive risks of a standard governed by Meridian's sole discretion. The memorandum will also propose alternative frameworks (e.g., objective technical criteria, independent expert det

1. Minimum Acceptable Outcome on Derived Data. Quorum should determine its minimum acceptable position on the derived-data issue before the second session. Specifically, Quorum's leadership should determine whether Quorum can accept any form of commercialization restriction on QuorumScore outputs, or whether unrestricted ownership and commercialization rights remain a firm requirement. If some degree of restriction i

2. Pricing Audit Right Fallback. Quorum should consider whether to signal the pricing audit right as a fallback to the full MFN at the second session, or whether to reserve this alternative for a later negotiation round. The timing of this signal will depend in part on the Pinnacle Ridge benchmark data and on Quorum's assessment of the likelihood of achieving a full MFN. Premature tabling of the fallback could weaken

3. CEO-to-CEO Engagement. Quorum should assess whether CEO-to-CEO engagement — specifically, a direct conversation between Meg Tierney (Quorum CEO) and Vince Halstead (Meridian CEO) — is warranted if the second session does not produce meaningful movement on either the MFN or derived-data issues. Given that Meridian's positions appear to be driven significantly by board-level and investor-level considerations (Brecke

VIII. Conclusion The January 18, 2023 session was productive with respect to secondary matters and succeeded in narrowing the field of open issues. The parties reached agreement or substantial agreement on pricing and payment terms (excluding MFN), data products and scope, insurance minimums, governing law, and the five-year initial term. Progress was also made on the SLA framework, data security and privacy provisio