Contract analysis

I. Purpose and Executive Summary The purpose of this memorandum is to revise the initial staffing budget set forth in the August 10, 2022 Staffing & Budget Memorandum in light of the extended negotiations on the proposed five-year, $60,000,000 enterprise data-licensing arrangement between our client, Quorum Insurance Holdings Corp. ("Quorum"), and Meridian Credit intelligence, Inc. ("Meridian"). As discussed in great

II. Original Budget Recap A. Engagement Parameters The engagement letter between Calderwood & Harkness LLP and Quorum Insurance Holdings Corp. was executed on August 8, 2022, and the matter was opened on the same date under C&H Matter No. 1025-00008. The representation encompasses all legal work associated with the negotiation, drafting, and closing of the proposed five-year enterprise data-licensing arrangement with

1. Negotiation Complexity. The original budget assumed that the MFN pricing provision and the derived-data rights provisions would be resolved within the normal course of Master Data License Agreement ("MDLA") negotiation. While these issues were recognized as potentially contentious, neither was expected to escalate into a protracted, standalone workstream requiring specialized analysis, dedicated drafting resources

2. Drafting Rounds. The budget assumed a single round of MDLA drafting and counter-drafting — that is, Calderwood & Harkness would prepare an initial comprehensive redline of Meridian's form MDLA, Kessler Pruitt & Ashe LLP ("KP&A") would return a counter-redline on behalf of Meridian, and the parties would negotiate the remaining open points to resolution, with at most one additional round of focused markup on contes

3. Negotiation Sessions. The original budget allocated resources for one to two in-person negotiation sessions. As of the date of this memorandum, one session has been conducted (January 18, 2023, in New York), a second session is scheduled (March 9, 2023, in Atlanta), and additional sessions are likely required depending on the trajectory of negotiations.

4. Ancillary Workstreams. The original budget included allocations for the following ancillary workstreams, all of which were anticipated at engagement outset: negotiation and execution of a mutual non-disclosure agreement ("NDA"); preparation of regulatory compliance memoranda addressing the Fair Credit Reporting Act ("FCRA"), the Gramm-Leach-Bliley Act ("GLBA"), the California Consumer Privacy Act / California Priv

5. Total Budget Range. Based on the foregoing assumptions, the original total budget estimate was $1,500,000 to $1,700,000, well within the $1,800,000 soft cap. The soft cap itself was set at a level that provided approximately $100,000 to $300,000 of cushion above the upper end of the working estimate. As discussed in Section IV, several of these assumptions have proven materially inaccurate, necessitating the revis

III. Actual Fee Burn — August 2022 Through February 2023 A. Summary of Fees Incurred by Period The following is a narrative summary of work performed and fees incurred during each billing period from engagement opening through the end of February 2023. Detailed time entries are available in the billing system and have been reviewed for accuracy; the figures presented here are approximations based on that review. Augu

IV. Key Drivers of Extended Timeline and Increased Costs This section identifies the four principal factors that have driven the matter beyond its originally estimated timeline and budget. Understanding these drivers is essential both for preparing accurate revised projections and for framing the fee discussion with the client, as each driver reflects circumstances that were not reasonably foreseeable at the outset o

V. Revised Fee Projections A. Scenario Analysis Based on the current status of the engagement and the factors identified in Section IV, the team has developed three scenarios for the remaining work and associated fees. Each scenario is described below with its underlying assumptions, scope of remaining work, and estimated fee range. Scenario 1: Resolution and Closing by June 2023 (Optimistic) This scenario assumes th

VI. Options for Fee Discussions with Quorum As set forth below, the team has identified four options for structuring the fee discussion with Quorum. Each option is described with its key features, advantages, and risks. A. Option 1: Maintain Current Soft Cap; Absorb Moderate Overages Under this option, Calderwood & Harkness would not proactively approach the client to reset the soft cap. Instead, the firm would conti

VII. Recommendations Based on the analysis set forth in this memorandum, the team recommends the following actions:

1. Immediate Action. Nathaniel Bower should schedule a call with Gregory Stahl, Quorum VP of Legal Affairs, in late March 2023 to discuss the revised budget outlook. This call should take place before cumulative fees approach or exceed the $1,800,000 soft cap. Based on the current rate of fee accrual — approximately $150,000 to $180,000 per month — cumulative fees are likely to reach the soft cap in late April or ear

2. Recommended Approach. The team recommends presenting Option 3 (Hybrid Phase-Based Billing with Adjusted Cap) as the primary proposal for the fee discussion with Quorum. The phase-based structure is the most intuitive framework for the client, as it provides a clear delineation between work already performed and work remaining, and it focuses the fee conversation on the incremental cost of completing the matter rat

3. Talking Points for Client Discussion. The following key messages should be communicated during the budget discussion with Quorum: • The extended timeline and increased costs are driven by Meridian's negotiation positions — specifically, Meridian's categorical refusal of the MFN clause and the depth of the derived-data rights dispute — not by any inefficiency in the Calderwood & Harkness team's work. The MFN impass

4. Staffing Adjustments Going Forward. To optimize cost efficiency for the remaining work, the team recommends the following staffing adjustments: • Wendy Schultz and Omar Siddiqui will continue as the primary drafters and day-to-day negotiators, maintaining continuity and efficiency on the core MDLA negotiation. Their deep familiarity with the transaction and the negotiation history will minimize ramp-up time and re

VIII. Next Steps The following immediate next steps are identified:

1. Leonard Cross to review and approve this memorandum and provide any comments or direction regarding the recommended approach to fee discussions with Quorum.

2. Nathaniel Bower to coordinate with Gregory Stahl at Quorum to schedule a budget discussion call in late March 2023 or, at the latest, the first week of April 2023. The call should be scheduled after the March 9 Atlanta session, so that the team can provide the client with an update on the status of negotiations as part of the budget discussion.

3. Wendy Schultz to prepare a concise summary of estimated remaining work suitable for sharing with the client in connection with the budget discussion call. This summary should describe the remaining workstreams at a high level, identify the key variables that affect the cost estimate, and present the Phase-Based Billing proposal in a client-friendly format.

4. The full deal team to prepare for the March 9, 2023 negotiation session in Atlanta (the second in-person session). The outcome of this session will be a significant indicator of whether Scenario 1 (Optimistic) or Scenario 2/3 (Base Case/Pessimistic) is the more likely trajectory. Pre-session preparation should include: updated issues matrices for MFN and derived-data provisions; presentation of the pricing audit r

5. Ongoing monthly invoicing to continue on the current schedule. The next invoice, covering work performed during February 2023, is to be finalized and transmitted by mid-March 2023. All time entries should be reviewed for accuracy and billing judgment applied as appropriate. Distribution Note: This memorandum is for internal Calderwood & Harkness LLP use only. It is privileged and confidential attorney work product