Contract analysis

I. Executive Summary Quorum Insurance Holdings Corp. ("Quorum" or the "Company"), a Delaware corporation listed on the Nasdaq Stock Market (ticker: QIHC), with its principal executive offices located at 1200 Atlantic Street, Suite 3400, Stamford, Connecticut 06901, is currently in active negotiations to enter into a five-year enterprise data-licensing arrangement designated as the Master Data License Agreement (the "

II. Background A. The Standish Credit Facility Quorum is the borrower under the Amended and Restated Credit Agreement, dated as of June 15, 2021 (the "Credit Agreement"), among Quorum Insurance Holdings Corp. (as Borrower), the several financial institutions and other persons from time to time party thereto as Lenders, and Standish National Bank, N.A. (as Administrative Agent). Standish National Bank, N.A. is a natio

III. Analysis of Section 7.12(b) A. Text of the Covenant

Section 7.12(b) of the Credit Agreement provides as follows: "The Borrower shall not enter into any license, sublicense, or similar arrangement with respect to intellectual Property having an aggregate value in excess of $25,000,000 without the prior written consent of the Required Lenders." This provision is located within Article VII of the Credit Agreement, which sets forth the negative covenants applicable to Quo

IV. Structuring Alternatives to Avoid or Mitigate the Covenant Trigger We have considered several potential structuring alternatives that could, in theory, be deployed to avoid triggering Section 7.12(b) or to reduce the aggregate value of the MDLA below the $25,000,000 threshold. Each alternative is analyzed below. For the reasons stated, we do not recommend any of these alternatives as a substitute for obtaining di

V. Lender Consent Process A. Required Steps The process for obtaining the required lender consent under Section 7.12(b) involves the following steps:

1. Prepare and submit a formal consent request letter. Calderwood & Harkness will prepare, and Quorum will submit, a formal consent request letter addressed to Standish National Bank, N.A. (Attention: Philip Yardley, Relationship Manager), requesting the prior written consent of the Required Lenders under Section 7.12(b) of the Credit Agreement for Quorum to enter into the MDLA with Meridian. The consent request lett

2. Include supporting documentation. The consent request letter will be accompanied by a description of the MDLA transaction, including the deal value, term, data products to be licensed, business purpose and strategic rationale, and any additional supporting materials that may be requested by Standish or the Lenders. The level of detail and the specific supporting materials to be provided will be determined in consu

3. Administrative Agent circulates request. Upon receipt of the consent request, Standish, acting in its capacity as Administrative Agent, will circulate the request to the Lenders and solicit their votes on the requested consent. The consent request will specify a deadline for Lender responses and will typically provide that any Lender that does not respond within the specified period will be deemed to have consente

4. Written consent/waiver delivered. Upon receipt of consents from Lenders constituting the Required Lenders (i.e., Lenders holding the requisite percentage of total revolving commitments), Standish will execute and deliver to Quorum a written consent and waiver confirming that the Required Lenders have consented to Quorum's entry into the MDLA and waiving any Event of Default that would otherwise arise under Section

VI. Additional Considerations A. Collateral and Security Interest Implications We recommend that Quorum's legal team review the Credit Agreement and any related security or collateral documents to determine whether Quorum's obligations under the Credit Agreement are secured by a pledge of or security interest in Quorum's intellectual property assets. If the Credit Agreement or related security documents grant Standis

VII. Recommendations and Next Steps Based on our analysis, we recommend the following actions and next steps:

1. Initiate the consent request promptly. Quorum should begin the lender consent process with Standish National Bank, N.A. by submitting the formal consent request letter at the earliest practicable date. There is no need to wait for final or near-final MDLA terms before initiating the consent process, given that the magnitude of the excess over the Section 7.12(b) threshold — $35,000,000, or 240% of the threshold —

2. Pursue direct consent/waiver as the primary path. For the reasons set forth in Part IV above, structuring alternatives (subsidiary splitting, phased commitment, reclassification) are not recommended as the primary strategy for addressing the Section 7.12(b) issue. Direct lender consent is the most prudent, efficient, and legally defensible approach and should be pursued as the primary path.

3. Consider a credit agreement amendment as a secondary objective. If Quorum anticipates entering into additional large-scale intellectual property, data-licensing, or technology-licensing transactions in the near term, the Company should explore raising the Section 7.12(b) threshold as part of a broader credit agreement amendment. This could be pursued on a parallel track with the one-time consent process and should

4. Coordinate with the MDLA negotiation team. Leonard Cross (C&H Corporate lead) and Wendy Schultz (C&H IP lead) should be informed of the lender consent requirement and its implications for MDLA drafting. Specifically, the MDLA should include the lender consent as a condition precedent to the effectiveness of Quorum's obligations, and the closing checklist should include the lender consent as a required deliverable

5. Communicate with Meridian's counsel. At an appropriate time, Quorum should disclose the lender consent requirement to Meridian's counsel, Kessler Pruitt & Ashe LLP (Graham Whitley), so that Meridian can plan accordingly with respect to the MDLA closing timeline and is not surprised by a consent-related delay at or near closing.

6. Review collateral and security interest provisions. Quorum's legal team, with the assistance of Calderwood & Harkness, should review the Credit Agreement and related security documents to confirm the scope of the Lenders' security interest in Quorum's intellectual property and assess the implications for the derived-data ownership negotiations currently underway with Meridian.

7. Confirm financial covenant compliance. Quorum's finance team should confirm that the MDLA payment obligations ($10,800,000 in Year 1, $12,300,000 per year in Years 2–5, plus the $1,500,000 one-time implementation fee) will not cause Quorum to breach any financial maintenance covenants under the Credit Agreement. This confirmation should be coordinated with Felton Thorpe & Co. LLP (external auditor) as appropriate.

8. Timeline target. We recommend aiming to submit the consent request to Standish by late November 2022, with the objective of obtaining the Required Lenders' consent within the first quarter of 2023. This timeline would position the lender consent well in advance of the anticipated MDLA execution date, which remains subject to the resolution of the MFN pricing and derived-data intellectual property ownership issues

VIII. Appendices (Referenced) The following appendices are referenced in this memorandum and are being assembled as companion materials: Appendix A — Relevant Extracts from the Amended and Restated Credit Agreement dated June 15, 2021. This appendix will include the full text of Section 7.12(b), the definitions of "Intellectual Property," "Required Lenders," "Borrower," "Event of Default," and related provisions, as