Contract analysis

From: Leonard Cross <lcross@calderwoodharkness.com> To: Graham Whitley <gwhitley@kesslerpruitt.com> Cc: Wendy Schultz <wschultz@calderwoodharkness.com> Subject: Quorum / Meridian Data License — Most Favored Nation Pricing; Escalation

I am writing with respect to the proposed Master Data License Agreement between our respective clients, Quorum Insurance Holdings Corp. ("Quorum") and Meridian Credit intelligence, Inc. ("Meridian") (Calderwood & Harkness Matter No. 1025-00008). This letter follows up on the parties' discussions at the second in-person negotiation session held in Atlanta on March 9, 2023, and subsequent correspondence between our off

As you know, since the first negotiation session in New York on January 18, 2023, the most favored nation pricing provision has been identified as one of the two principal unresolved issues in this transaction, the other being the scope of derived-data rights under Article VII of the draft Agreement. Despite sustained engagement on both fronts, I must be candid that we have reached an impasse on MFN that I believe re

To ensure we are working from a common understanding, let me restate the positions as I see them. Quorum has proposed a most favored nation clause providing that if Meridian offers any other insurance-industry licensee more favorable per-record pricing, volume discounts, or fee terms, Quorum's pricing would be automatically adjusted to match those more favorable terms. The scope of the proposed MFN would encompass al

In your April 21 correspondence, Meridian categorically rejected any MFN provision, citing confidentiality obligations to other licensees, the asserted impracticability of cross-licensee price comparisons given what Meridian characterizes as bespoke data packages, and antitrust sensitivities in the credit-data markets. We appreciate Meridian's willingness to articulate its concerns in writing, but Quorum cannot accep

I want to be direct about why this issue carries the weight it does for Quorum. The aggregate deal value under discussion is $60,000,000 over the five-year initial term — $10,800,000 in Year 1 and $12,300,000 per year in Years 2 through 5. This represents a very significant commitment by Quorum to the Meridian platform, and it is a commitment Quorum is prepared to make, but not without reasonable assurance of pricing

Quorum has conducted independent market benchmarking that supports the reasonableness — indeed, the commercial necessity — of MFN protection at this deal scale. Pricing parity assurance is a fundamental commercial protection in a transaction of this magnitude, particularly given the five-year initial term and the limited contractual ability to renegotiate pricing mid-term. Put simply, Quorum will not enter into a lon

The parties have now been negotiating for over eight months since Calderwood & Harkness's engagement in August 2022. The MFN issue has been squarely on the table since the January session without what I would characterize as meaningful movement from Meridian's side. We have offered multiple formulations — including narrowed comparator groups, lagged adjustment mechanisms, and confidentiality-protected verification pr

Given the lack of progress at the working-group and counsel level, Quorum's Chief Executive Officer, Margaret Tierney, intends to engage directly with Meridian's CEO, Vincent Halstead, to attempt to break the deadlock on the MFN issue. I understand and appreciate that this kind of principal-to-principal engagement can sometimes unlock positions that are difficult to resolve through counsel negotiations alone, and Quo

I would suggest that it would be helpful for you to brief Meridian's leadership accordingly — including Arthur Pennington, Meridian's General Counsel, and Keith Marlow, SVP of Data Licensing & Partnerships — so that they are not caught off guard by the CEO-level outreach. Ms. Tierney anticipates reaching out to Mr. Halstead within the next week to ten days.

I should note briefly that the derived-data rights issue under Article VII remains similarly unresolved. Quorum is hopeful that if the MFN impasse can be addressed at the principal level, it may create the momentum necessary to resolve the remaining open items as well. Calderwood & Harkness will continue to refine Quorum's positions on both issues and remains available to engage with Kessler Pruitt & Ashe on all open

To be clear, Quorum remains committed to concluding a transaction with Meridian on fair commercial terms. This escalation is intended to be constructive, and we hope it is received in that spirit. If the business principals can find alignment on the core commercial question, I am confident that our teams can document the resolution efficiently.

Please do not hesitate to call me directly to discuss — you have my cell. I have copied Wendy Schultz and Nina Chastain to maintain continuity at the working-team level.

**Leonard Cross** Partner Calderwood & Harkness LLP 425 Park Avenue, New York, NY 10022 Direct: (212) 506-4218 Email: lcross@calderwoodharkness.com

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