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PRIVILEGED AND CONFIDENTIAL Calderwood & Harkness LLP — Working Draft

DRAFT — May 25, 2021

UNDERWRITING AGREEMENT

Dated as of [●], 2021

between

QUORUM INSURANCE HOLDINGS CORP.

and

GREYSTONE HARWICK & CO., LLC

C&H Matter No. 1025-00001

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UNDERWRITING AGREEMENT

This UNDERWRITING AGREEMENT (this "Agreement") is dated as of [●], 2021, between Quorum Insurance Holdings Corp., a Delaware corporation (the "Company"), and Greystone Harwick & Co., LLC, a Delaware limited liability company (the "Underwriter").

RECITALS

WHEREAS, the Company proposes to issue and sell to the Underwriter 3,000,000 shares (the "Firm Shares") of the Company's common stock, par value $0.01 per share (the "Common Stock"), in connection with a registered public offering;

WHEREAS, the Company further proposes to grant to the Underwriter an option (the "Over-Allotment Option") to purchase up to an additional 450,000 shares of Common Stock (the "Option Shares"; together with the Firm Shares, the "Shares"), exercisable in whole or in part within 30 days after the date of the Prospectus (as defined below), solely for the purpose of covering over-allotments, if any;

WHEREAS, the Shares are to be offered and sold pursuant to the Registration Statement on Form S-3 (File No. 333-248710) filed by the Company with the Securities and Exchange Commission (the "Commission" or "SEC") under the Securities Act of 1933, as amended (the "Securities Act"), which Registration Statement became effective on September 18, 2020;

WHEREAS, in connection with the offering and sale of the Shares, the Company will prepare and file with the Commission, pursuant to Rule 424(b) under the Securities Act, a prospectus supplement to the base prospectus included in the Registration Statement, describing the terms of the offering of the Shares and the plan of distribution therefor; and

WHEREAS, the Company and the Underwriter wish to set forth the terms and conditions upon which the Underwriter will purchase the Shares from the Company.

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to, and agrees with, the Underwriter as follows:

(a) Registration Statement and Prospectus.

The Company has filed with the Commission a registration statement on Form S-3 (File No. 333-248710), which registration statement became effective under the Securities Act on September 18, 2020 (the "Effective Date"). Such registration statement, as amended as of the date hereof, including the exhibits thereto and the documents incorporated by reference therein pursuant to Item 12 of Form S-3 at the time such registration statement became effective, is herein referred to as the "Registration Statement." The Registration Statement includes a base prospectus (the "Base Prospectus") relating to certain securities, including the Common Stock. The Company will file with the Commission, pursuant to Rule 424(b) under the Securities Act and the rules and regulations of the Commission thereunder (the "Rules and Regulations"), a prospectus supplement relating to the Shares and the plan of distribution thereof (together with the Base Prospectus, the "Prospectus").

As used in this Agreement:

(i) "Pricing Disclosure Package" means the most recent preliminary prospectus supplement, as amended or supplemented, together with the Base Prospectus and any free writing prospectuses (as defined in Rule 405 under the Securities Act) issued by the Company and identified on Schedule I hereto, considered together as of the Applicable Time (as defined below).

(ii) "Applicable Time" means [●] p.m. (New York City time) on the date of this Agreement, or such other time as agreed by the Company and the Underwriter.

(iii) "Registration Statement" means the shelf registration statement on Form S-3 (File No. 333-248710), as amended at the time it became effective and as thereafter amended by any post-effective amendment thereto that shall have become effective prior to the Closing Date, including all information deemed to be a part thereof at the time of effectiveness pursuant to Rule 430B under the Securities Act and including all documents incorporated by reference therein.

(iv) "Prospectus" means the Base Prospectus, as supplemented by the prospectus supplement relating to the Shares to be filed with the Commission pursuant to Rule 424(b) under the Securities Act, together with any further supplements or amendments thereto, in the form in which it is first used or first made available to purchasers of the Shares, or in which it is filed with the Commission, whichever is earlier.

The Registration Statement, at the time it became effective, complied, and as amended or supplemented, at the date hereof and at the Closing Date, will comply, in all material respects with the requirements of the Securities Act and the Rules and Regulations. The Company, at the time the Registration Statement became effective, met, and as of the date hereof and as of the Closing Date will meet, the requirements for use of Form S-3 under the Securities Act. The Company is a "well-known seasoned issuer" as defined in Rule 405 under the Securities Act, or, if not, is eligible to use a shelf registration statement on Form S-3 for the offering contemplated hereby.

(b) Accurate Disclosure.

As of the Effective Date and as of each date on which any post-effective amendment to the Registration Statement became or becomes effective, the Registration Statement did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. As of its date and as of the Closing Date (and, if applicable, each Option Closing Date), the Prospectus will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Pricing Disclosure Package, as of the Applicable Time, does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Each free writing prospectus, if any, that the Company has filed, used, referred to, or distributed in connection with the offering of the Shares, when taken together with the Pricing Disclosure Package, does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

The foregoing representations and warranties in this Section 1(b) do not apply to statements in or omissions from the Registration Statement, the Prospectus, the Pricing Disclosure Package, or any free writing prospectus made in reliance upon and in conformity with written information furnished to the Company by the Underwriter expressly for use therein. The Company acknowledges that the only information that the Underwriter has furnished to the Company expressly for use in the Registration Statement, the Prospectus, and the Pricing Disclosure Package is that described in Section 2 hereof.

The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has full corporate power and authority to own, lease, and operate its properties and to conduct its business as presently conducted and as described in the Registration Statement, the Prospectus, and the Pricing Disclosure Package. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change. The Company is duly qualified to transact business and is in good standing in, among other jurisdictions, the State of Connecticut, where its principal executive offices are located at 200 Constitution Plaza, Suite 3100, Hartford, CT 06103. The Company's registered agent in the State of Delaware is CT Statutory Agent Services LLC, 1209 Orange Street, Wilmington, DE 19801.

(d) Subsidiaries.

Each of the Company's material subsidiaries is duly organized, validly existing, and in good standing under the laws of its respective jurisdiction of organization, and has full corporate or other organizational power and authority to own, lease, and operate its properties and to conduct its business as presently conducted and as described in the Registration Statement, the Prospectus, and the Pricing Disclosure Package. The material subsidiaries of the Company are as follows:

(i) Quorum Specialty Insurance Company, a Connecticut-domiciled stock insurance company (CT DOI entity no. 47832);

(ii) Quorum National Casualty Co., a Delaware-domiciled stock insurance company (DE DOI entity no. 10591); and

(iii) QuorumEdge Technology Solutions, Inc., a Delaware corporation.

All of the outstanding shares of capital stock or other equity interests of each material subsidiary are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities, security interests, claims, and charges of any nature whatsoever, and have been duly authorized and validly issued and are fully paid and non-assessable. There are no outstanding options, warrants, rights (including conversion or preemptive rights), or other agreements for the purchase or acquisition from the Company or any of its subsidiaries of any shares of capital stock or other equity interests of any subsidiary of the Company. Each material subsidiary is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change.

(e) Authorization.

The issuance and sale of the Shares have been duly authorized by all necessary corporate action on the part of the Company, including approval by the Board of Directors of the Company at a meeting duly convened and held on June 2, 2021, at which a quorum was present and acting throughout. The authorized capital stock of the Company consists of (i) 100,000,000 shares of Common Stock, par value $0.01 per share, of which 38,125,000 shares are issued and outstanding as of the date hereof, and (ii) 5,000,000 shares of preferred stock, par value $0.01 per share, of which no shares are issued and outstanding as of the date hereof. All of the outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid and non-assessable, and none of such shares was issued in violation of any preemptive rights, rights of first refusal, or similar rights. The Shares, when issued and delivered to and paid for by the Underwriter in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid, and non-assessable, and no holder of the Shares will be subject to personal liability by reason of being such a holder. No further approval or authorization of any stockholder, the Board of Directors, or others is required for the issuance and sale of the Shares as contemplated hereby. There are no stockholders' agreements, voting agreements, or other similar agreements with respect to the Company's capital stock to which the Company is a party, or, to the knowledge of the Company, between or among any of the Company's stockholders, except as disclosed in the Prospectus.

(f) No Conflicts.

The execution, delivery, and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby, including the issuance and sale of the Shares, will not (i) conflict with or result in a violation of any provision of the certificate of incorporation (as amended and restated) or bylaws of the Company or any subsidiary, (ii) violate or conflict with any applicable law, statute, rule, regulation, judgment, order, writ, injunction, or decree of any court, regulatory body, administrative agency, or governmental body having jurisdiction over the Company or any of its subsidiaries or any of their respective properties or assets, or (iii) result in a breach of, or constitute a default under (or an event that with notice or lapse of time or both would become a default under), or give rise to any right of termination, acceleration, or cancellation under, any bond, debenture, note, indenture, mortgage, deed of trust, lease, license, agreement, contract, or other instrument or obligation to which the Company or any of its subsidiaries is a party or by which any of them or any of their properties may be bound. Without limiting the generality of the foregoing, the execution, delivery, and performance of this Agreement and the issuance and sale of the Shares will not result in a breach of, or constitute a default under, (A) the $75,000,000 Revolving Credit Agreement, dated as of March 15, 2019, among the Company, the lenders party thereto, and Sycamore National Bank, N.A., as administrative agent (as amended, modified, or supplemented from time to time), or (B) the Indenture, dated as of October 1, 2020, between the Company and Brightwater Securities, as trustee, governing the Company's $125,000,000 aggregate principal amount of 4.875% Senior Notes due 2028. No consent, approval, authorization, license, qualification, order, or permit of, or filing or registration with, any court, governmental agency, or body, or the Nasdaq Global Select Market, is required for the valid authorization, issuance, sale, and delivery of the Shares or the execution, delivery, and performance of this Agreement, except such as have been obtained or made and such as may be required under state securities or Blue Sky laws, applicable FINRA rules, or the rules of the Nasdaq Global Select Market.

(g) Insurance Regulatory Matters.

Each of Quorum Specialty Insurance Company and Quorum National Casualty Co. (each, an "Insurance Subsidiary" and collectively, the "Insurance Subsidiaries") holds all licenses, permits, certificates of authority, and authorizations issued by applicable insurance regulatory authorities that are necessary for the lawful conduct of its respective insurance business as presently conducted in each jurisdiction in which such Insurance Subsidiary is required to hold such licenses, permits, certificates of authority, and authorizations, and no such license, permit, certificate of authority, or authorization contains any restriction or limitation that would materially impair the ability of such Insurance Subsidiary to conduct its business as presently conducted, except where the failure to hold, or the existence of any such restriction or limitation on, any such license, permit, certificate of authority, or authorization would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change.

The offering and sale of Common Stock by the Company as contemplated by this Agreement does not require the prior approval of the Connecticut Department of Insurance (the "CT DOI") or the Delaware Department of Insurance (the "DE DOI"), and no notice filing, application, or other submission to any insurance regulatory authority is required to be made or obtained by the Company in connection with the offering and sale of the Shares, except for any filings that are required to be made after the Closing Date and that will be timely made.

Each Insurance Subsidiary maintains risk-based capital ratios in excess of the applicable regulatory minimums established by the National Association of Insurance Commissioners ("NAIC") and the applicable state insurance regulatory authority. As of December 31, 2020, the risk-based capital ratios of the Insurance Subsidiaries were as follows: (i) Quorum Specialty Insurance Company maintained a risk-based capital ratio of 412% of its company action level, and (ii) Quorum National Casualty Co. maintained a risk-based capital ratio of 385% of its company action level.

The Company has made all required filings under the Connecticut Insurance Holding Company System Regulatory Act and the Delaware Insurance Holding Company System Regulatory Act, including Form B filings and all related filings, with the CT DOI and the DE DOI in a timely manner, and all such filings were accurate and complete in all material respects as of the date of filing.

The most recent triennial financial examination of Quorum Specialty Insurance Company by the CT DOI, covering the examination period from January 1, 2016 through December 31, 2018, was completed in 2019, and the examination report, as adopted by the CT DOI, did not contain any material findings, adverse comments, or recommendations for corrective action that remain unresolved.

(h) No Material Adverse Change.

Since December 31, 2020, there has been no Material Adverse Change in the financial condition, results of operations, business, properties, or prospects of the Company and its subsidiaries, taken as a whole, except as set forth in or contemplated by the Registration Statement, the Prospectus, and the Pricing Disclosure Package, and except for changes arising from general economic, market, or industry conditions that do not disproportionately affect the Company relative to other participants in the specialty insurance industry.

(i) Financial Statements.

The consolidated financial statements and the related notes and supporting schedules incorporated by reference in the Registration Statement and the Prospectus present fairly in all material respects the financial condition, results of operations, and cash flows of the Company and its consolidated subsidiaries at the respective dates and for the respective periods indicated. Such financial statements have been prepared in conformity with generally accepted accounting principles in the United States ("GAAP") applied on a consistent basis throughout the periods involved, except as otherwise noted therein, and comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Rules and Regulations.

The audited consolidated financial statements of the Company for the fiscal year ended December 31, 2020, reflecting total revenue of $487.3 million and net income of $31.6 million, and the unaudited condensed consolidated interim financial statements of the Company for the quarter ended March 31, 2021, reflecting total revenue of $131.8 million and net income of $9.4 million, have each been prepared in accordance with GAAP applied on a consistent basis (subject, in the case of the unaudited interim financial statements, to normal year-end audit adjustments and the absence of footnotes required by GAAP).

The audited consolidated financial statements of the Company incorporated by reference in the Registration Statement and the Prospectus have been audited by Carver, Bain & Associates LLP, an independent registered public accounting firm, as stated in their report thereon, which report is incorporated by reference in the Registration Statement and the Prospectus. Such report does not contain any qualification or modification as to the scope of the audit or as to accounting principles applied. Carver, Bain & Associates LLP, during the periods covered by the financial statements incorporated by reference in the Registration Statement and the Prospectus, were and are an independent registered public accounting firm with respect to the Company within the meaning of the Securities Act and the Rules and Regulations and the rules of the Public Company Accounting Oversight Board.

The statutory financial statements of each Insurance Subsidiary, as filed with the applicable state insurance regulatory authority for the most recently completed statutory reporting period, were prepared in conformity with statutory accounting principles prescribed or permitted by the applicable state insurance regulatory authority, applied on a consistent basis, and present fairly the statutory financial condition and results of operations of such Insurance Subsidiary.

(j) Litigation.

There is no pending or, to the Company's knowledge, threatened action, suit, proceeding, inquiry, arbitration, or investigation before or by any court, public board, governmental agency, self-regulatory organization, or body, domestic or foreign, that, if determined adversely, would, individually or in the aggregate, (i) be material to the Company and its subsidiaries, taken as a whole, or (ii) materially impair the ability of the Company to perform its obligations under this Agreement, except as set forth in or contemplated by the Registration Statement, the Prospectus, and the Pricing Disclosure Package.

The Company and its Insurance Subsidiaries are subject to routine insurance coverage disputes arising in the ordinary course of business, none of which, individually or in the aggregate, exceeds $5,000,000 in potential exposure. The Company's aggregate litigation reserve as of March 31, 2021 was $14.2 million, and such reserve is believed by the Company to be adequate in all material respects in accordance with GAAP and applicable statutory accounting principles to cover reasonably anticipated losses and loss adjustment expenses related to pending and incurred but not reported claims and litigation matters.

(k) Tax Matters.

The Company and each of its subsidiaries have filed all required federal, state, local, and foreign tax returns and have paid all taxes shown as due thereon, and no tax deficiency has been determined adversely to the Company or any subsidiary which has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Change. The Company's employer identification number (EIN) is 82-3741956. There are no pending or, to the knowledge of the Company, threatened examinations, investigations, or claims for additional taxes by any taxing authority with respect to the Company or any of its subsidiaries that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Change.

(l) ERISA.

The Company and each of its subsidiaries are in compliance in all material respects with the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the regulations and published interpretations thereunder, with respect to each "employee benefit plan" (as defined in ERISA) established or maintained by the Company or any of its subsidiaries. No "reportable event" (as defined in Section 4043(c) of ERISA) has occurred with respect to any such plan. Neither the Company nor any of its subsidiaries has incurred or reasonably expects to incur any liability under Title IV of ERISA (other than for contributions to, and benefits under, such plans in the ordinary course). Each such plan that is intended to be qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), has received a favorable determination letter or opinion letter from the Internal Revenue Service, and nothing has occurred, whether by action or failure to act, which could reasonably be expected to cause the loss of such qualification.

(m) intellectual Property.

The Company and its subsidiaries own, or have adequate rights to use, all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, domain names, copyrights, licenses, and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems, or procedures) (collectively, "Intellectual Property") used in the conduct of their respective businesses as currently conducted, including all intellectual Property related to the Company's proprietary technology platform known as the "QuorumEdge" platform. The Company has three (3) issued United States patents and fourteen (14) registered trademarks relating to the QuorumEdge platform and related products and services.

There is no pending or, to the knowledge of the Company, threatened action, suit, proceeding, or claim by others challenging the Company's rights in or to any material intellectual Property, and the Company is not aware of any facts that would form a reasonable basis for any such claim. There is no pending or, to the knowledge of the Company, threatened action, suit, proceeding, or claim by others that the Company infringes, misappropriates, or otherwise violates any intellectual Property or other proprietary rights of others.

The Company maintains a third-party data analytics license with Meridian DataWorks, Inc., which license is currently in full force and effect and expires in December 2024. Such license is not subject to any pending or threatened termination, cancellation, or dispute.

(n) Environmental Matters.

The Company and each of its subsidiaries are in compliance in all material respects with all applicable federal, state, local, and foreign environmental laws, regulations, and rules, including those relating to the discharge of hazardous substances, and no event has occurred that, with the passage of time or the giving of notice or both, would constitute a violation of, or give rise to any obligation or liability under, any such environmental law, regulation, or rule, except where such non-compliance, violation, or liability would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change.

(o) Anti-Bribery / FCPA.

Neither the Company nor any subsidiary, nor, to the knowledge of the Company, any director, officer, agent, employee, or other person acting on behalf of the Company or any subsidiary, has (i) used any corporate funds for any unlawful contribution, gift, entertainment, or other unlawful expense relating to political activity, (ii) made or taken any act in furtherance of an offer, promise, or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee from corporate funds, (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010, or any other applicable anti-bribery or anti-corruption law, or (iv) made, offered, agreed, requested, or taken any act in furtherance of any unlawful bribe, rebate, payoff, influence payment, kickback, or other unlawful payment or benefit.

(p) Sanctions.

Neither the Company nor any of its subsidiaries, nor, to the knowledge of the Company, any director, officer, agent, employee, or affiliate of the Company or any of its subsidiaries is currently the subject or target of any sanctions administered or enforced by the U.S. government (including the Office of Foreign Assets Control of the U.S. Department of the Treasury ("OFAC") or the U.S. Department of State, and including the designation as a "specially designated national" or "Blocked person"), the United Nations Security Council, the European Union, Her Majesty's Treasury, or any other relevant sanctions authority (collectively, "Sanctions"). The Company is in compliance in all material respects with all applicable Sanctions laws and regulations. The Company will not, directly or indirectly, use the proceeds of the offering of the Shares, or lend, contribute, or otherwise make available such proceeds to any subsidiary, joint venture partner, or other person or entity, for the purpose of financing the activities of any person currently the subject or target of any Sanctions, or in any other manner that would result in a violation by any person (including any person participating in the transaction, whether as underwriter, adviser, investor, or otherwise) of Sanctions.

(q) Cybersecurity.

The Company and its subsidiaries maintain commercially reasonable information technology systems and data security policies, procedures, and safeguards designed to protect against unauthorized access to, use of, or processing of confidential and personally identifiable information maintained by or on behalf of the Company and its subsidiaries. To the knowledge of the Company, there has been no material security breach, unauthorized access, or other compromise of or relating to the Company's or any subsidiary's information technology systems or data (including any data of the Company's or its subsidiaries' customers, employees, suppliers, vendors, or any other third party maintained by or on behalf of the Company or its subsidiaries), and neither the Company nor any of its subsidiaries has been notified of, or has any knowledge of any event or condition that would reasonably be expected to result in, any material security breach, unauthorized access, or other compromise. The Company and its subsidiaries are in compliance in all material respects with all applicable laws, statutes, judgments, orders, rules, and regulations of any court or arbitrator or governmental or regulatory authority, and all applicable industry standards, internal policies, and contractual obligations relating to the privacy and security of information technology systems and data.

(r) Investment Company Act.

The Company is not, and after giving effect to the offering and sale of the Shares and the application of the net proceeds therefrom as described under the caption "Use of Proceeds" in the Prospectus, will not be required to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules and regulations of the Commission thereunder.

(s) Transfer Agent and Registrar.

Continental Transfer & Trust Co., located at 17 Ashbury Asset Advisors, New York, NY 10004, has been duly appointed as the transfer agent and registrar for the Common Stock and is validly serving in such capacity.

(t) Nasdaq Listing.

The outstanding shares of Common Stock are listed on the Nasdaq Global Select Market under the ticker symbol "QIHC" (CUSIP: 74917R108; CIK: 0001784203). The Company is in compliance in all material respects with the listing requirements of the Nasdaq Global Select Market, and the Company has not received any notification that the Nasdaq Stock Market LLC is contemplating delisting the Common Stock. The Company has applied, or will apply prior to the Closing Date, for listing of the Shares on the Nasdaq Global Select Market and has received, or has no reason to believe it will not receive, approval for such listing, subject only to official notice of issuance.

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITER

The Underwriter represents and warrants to, and agrees with, the Company as follows:

(a) The Underwriter has not made and will not make any offer or sale of the Shares in connection with the offering except by means of the Prospectus, the Pricing Disclosure Package, or a free writing prospectus that has been consented to by the Company in accordance with this Agreement. The Underwriter has not distributed and will not distribute any free writing prospectus that is not listed on Schedule I hereto without the prior written consent of the Company.

(b) The only information furnished by the Underwriter to the Company expressly for inclusion in the Registration Statement, the Prospectus, and the Pricing Disclosure Package consists of the following information in the Prospectus: (i) the name of the Underwriter as set forth on the cover page of the Prospectus; (ii) the concession and reallowance figures appearing in the section of the Prospectus entitled "Underwriting"; and (iii) the paragraphs relating to stabilization, syndicate short sales, and penalty bids appearing in the section of the Prospectus entitled "Underwriting" (collectively, the "Underwriter Information"). The Underwriter confirms that the Underwriter Information, as of the date of the Prospectus and as of the Closing Date, did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(c) The Underwriter is a member in good standing of the Financial Industry Regulatory Authority, Inc. ("FINRA") and is duly registered as a broker-dealer under the Exchange Act and applicable state securities laws. The Underwriter will file, or cause to be filed, all required materials with the FINRA Corporate Financing Department for review of the underwriting compensation and arrangements in connection with the offering of the Shares, and will ensure that such materials are filed on a timely basis and in accordance with applicable FINRA rules.

(d) The Underwriter has the requisite power and authority to enter into this Agreement and to perform its obligations hereunder. The execution, delivery, and performance of this Agreement by the Underwriter have been duly authorized by all necessary action on the part of the Underwriter.

SECTION 3. PURCHASE AND SALE

(a) Firm Shares.

Subject to the terms and conditions and in reliance upon the representations, warranties, and agreements herein set forth, the Company agrees to sell to the Underwriter, and the Underwriter agrees to purchase from the Company, 3,000,000 Firm Shares at a purchase price of $[●] per share (the "Purchase Price"). The Purchase Price reflects the public offering price of $[●] per share (the estimated public offering price being $15.00 per share) less the underwriting discount of $[●] per share. The underwriting discount shall be equal to 5.50% of the public offering price per share (i.e., the underwriting discount is estimated to be $0.825 per share based on the estimated public offering price of $15.00 per share).

Based on the estimated public offering price of $15.00 per share, the aggregate gross proceeds to the Company from the sale of the Firm Shares (the "base deal") are estimated to be $45,000,000. The aggregate underwriting discount for the base deal is estimated to be $2,475,000 (calculated as 5.50% of $45,000,000). The aggregate net proceeds to the Company before expenses for the base deal are estimated to be $42,525,000 (calculated as $45,000,000 less $2,475,000).

(b) Over-Allotment Option.

The Company hereby grants to the Underwriter an option (the "Over-Allotment Option"), exercisable in whole or in part at any time and from time to time within thirty (30) days after the date of the Prospectus, to purchase up to 450,000 Option Shares (representing 15% of the number of Firm Shares) from the Company at the Purchase Price per share (the same purchase price per share as the Firm Shares). The Underwriter may exercise the Over-Allotment Option solely for the purpose of covering over-allotments, if any, in connection with the offering of the Firm Shares. If any Option Shares are to be purchased pursuant to the Over-Allotment Option, the Underwriter shall deliver written notice to the Company setting forth the number of Option Shares to be purchased and the date on which such Option Shares are to be delivered (each, an "Option Closing Date"), which date shall be no earlier than two (2) business days and no later than three (3) business days after the date of such notice (or such other date as the Company and the Underwriter may agree).

Upon full exercise of the Over-Allotment Option, the maximum aggregate number of Shares offered hereunder shall be 3,450,000 shares (3,000,000 Firm Shares plus 450,000 Option Shares), for maximum aggregate gross proceeds of $51,750,000 (calculated as 3,450,000 shares multiplied by the estimated public offering price of $15.00 per share). After giving effect to the issuance and sale of the Firm Shares (without exercise of the Over-Allotment Option), the number of shares of Common Stock outstanding shall be 41,125,000 (38,125,000 shares outstanding as of the date hereof plus 3,000,000 Firm Shares).

Payment for the Firm Shares shall be made by the Underwriter to the Company by wire transfer of immediately available funds in United States dollars to such account or accounts as the Company shall designate in writing to the Underwriter, against delivery of the Firm Shares, on the Closing Date. Payment for any Option Shares shall be made by the Underwriter to the Company by wire transfer of immediately available funds in United States dollars to such account or accounts as the Company shall designate, against delivery of such Option Shares, on the applicable Option Closing Date. Delivery of the Firm Shares and any Option Shares shall be made through the facilities of The Depository Trust Company ("DTC") in book-entry form, unless the Company and the Underwriter agree to an alternative method of delivery.

SECTION 4. CONDITIONS TO CLOSING

The obligations of the Underwriter to purchase the Firm Shares on the Closing Date (and any Option Shares on the applicable Option Closing Date) shall be subject to the accuracy of the representations and warranties of the Company contained herein as of the date hereof and as of the Closing Date (or applicable Option Closing Date), to the performance by the Company of its covenants and obligations hereunder, and to the satisfaction (or waiver by the Underwriter) of each of the following additional conditions:

(a) Officer's Certificate.

The Underwriter shall have received a certificate, dated the Closing Date (or applicable Option Closing Date), signed by Martin R. Calloway, Chief Executive Officer, and Diana L. Prescott, Chief Financial Officer, of the Company (or such other officers as the Underwriter may reasonably designate), to the effect that: (i) the representations and warranties of the Company set forth in Section 1 of this Agreement are true and correct in all material respects as of the Closing Date (or applicable Option Closing Date) with the same force and effect as though expressly made at and as of the Closing Date (or applicable Option Closing Date); (ii) the Company has complied in all material respects with all agreements and covenants and satisfied all conditions on its part to be performed or satisfied under this Agreement at or prior to the Closing Date (or applicable Option Closing Date); (iii) no stop order suspending the effectiveness of the Registration Statement has been issued, and no proceedings for that purpose have been initiated or, to the knowledge of the Company, threatened by the Commission; and (iv) since the date of the most recent financial statements included or incorporated by reference in the Prospectus and the Pricing Disclosure Package, there has been no Material Adverse Change in the financial condition, results of operations, business, properties, or prospects of the Company and its subsidiaries, taken as a whole, except as set forth in or contemplated by the Prospectus and the Pricing Disclosure Package.

(b) Legal Opinions.

(i) The Underwriter shall have received a legal opinion and a negative assurance letter of Calderwood & Harkness LLP, counsel to the Company, located at 1301 Avenue of the Americas, New York, NY 10019, each dated the Closing Date (or applicable Option Closing Date), in form and substance satisfactory to the Underwriter and its counsel. Such legal opinion shall cover, among other things: (A) the due organization, valid existence, and good standing of the Company under the laws of the State of Delaware; (B) the corporate power and authority of the Company to execute, deliver, and perform this Agreement and to issue and sell the Shares; (C) the due authorization, valid issuance, full payment, and non-assessability of the Shares; (D) the absence of preemptive rights with respect to the Shares; (E) no conflicts with the certificate of incorporation, bylaws, or material agreements of the Company; (F) no consents or approvals required (other than those obtained or to be obtained); (G) the effectiveness of the Registration Statement and the absence of any stop order or proceedings therefor; (H) the status of the Company as not being required to register as an investment company under the Investment Company Act; and (I) such other matters as the Underwriter may reasonably request.

(ii) The Underwriter shall have received a negative assurance letter of Calderwood & Harkness LLP, dated as of the Closing Date (or applicable Option Closing Date), to the effect that nothing has come to the attention of such counsel that causes them to believe that (A) the Registration Statement, at the time it became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or (B) the Prospectus or the Pricing Disclosure Package, as of their respective dates and as of the Closing Date (or applicable Option Closing Date), contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no view with respect to the financial statements, financial data, or other financial or statistical information contained or incorporated by reference in the Registration Statement, the Prospectus, or the Pricing Disclosure Package).

The Underwriter shall have received an opinion of Duval & Pressler LLP, located at 1185 Avenue of the Americas, 34th Floor, New York, NY 10036, counsel to the Underwriter, dated the Closing Date (or applicable Option Closing Date), with respect to the Registration Statement, the Prospectus, and the Pricing Disclosure Package, and such other matters as the Underwriter may reasonably request. In rendering such opinion, Duval & Pressler LLP may rely as to matters of fact upon certificates of officers of the Company and of governmental officials and upon such other documents as such counsel may reasonably deem appropriate.

(d) Comfort Letter.

(i) The Underwriter shall have received a comfort letter from Carver, Bain & Associates LLP, the Company's independent registered public accounting firm, located at One Federal Street, Suite 3600, Boston, MA 02110 (engagement partner: Rebecca H. Trask, CPA), dated the date of the Prospectus and addressed to the Underwriter, in form and substance customary for comfort letters delivered in connection with underwritten public offerings of equity securities and in scope satisfactory to the Underwriter and its counsel, covering the financial statements and certain financial information contained in or incorporated by reference into the Registration Statement, the Prospectus, and the Pricing Disclosure Package.

(ii) The Underwriter shall have received a bring-down comfort letter from Carver, Bain & Associates LLP, dated the Closing Date (or applicable Option Closing Date), reaffirming the statements made in the comfort letter delivered pursuant to clause (i) above, with such changes as may be necessary to reflect the passage of time and updated information.

(e) Lock-Up Agreements.

The Underwriter shall have received, on or prior to the date hereof, duly executed lock-up agreements substantially in the form annexed hereto as Exhibit A (each, a "Lock-Up Agreement") from (i) each director and executive officer of the Company, (ii) each holder of 5% or more of the outstanding shares of Common Stock (determined based on the most recent Schedule 13D or Schedule 13G filing with the Commission), including without limitation Birchwood Capital Partners, L.P. (holding approximately 4,270,000 shares, representing approximately 11.2% of the outstanding shares of Common Stock) and Redfield Mutual Fund Group (holding approximately 2,150,000 shares, representing approximately 5.6% of the outstanding shares of Common Stock), and (iii) such other stockholders as the Underwriter may reasonably designate.

Each Lock-Up Agreement shall provide for a lock-up period of ninety (90) days following the date of the Prospectus (the "Lock-Up Period"), during which each person subject thereto shall not, directly or indirectly, without the prior written consent of the Underwriter: (A) offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, or otherwise transfer or dispose of any shares of Common Stock or any securities convertible into, exchangeable for, or that represent the right to receive shares of Common Stock, whether now owned or hereafter acquired, or (B) enter into any swap, hedge, or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (A) or (B) above is to be settled by delivery of Common Stock, in cash, or otherwise. The Lock-Up Agreements shall include customary exceptions for (1) bona fide gifts, (2) transfers to family trusts and other estate planning vehicles, (3) distributions to limited partners, members, or stockholders, (4) transfers pursuant to a domestic relations order, (5) the establishment of a Rule 10b5-1 trading plan (provided that no sales shall be made under such plan during the Lock-Up Period), and (6) the exercise of stock options or the settlement of restricted stock units outstanding on the date hereof (provided that the shares received upon such exercise or settlement shall remain subject to the Lock-Up Agreement for the remainder of the Lock-Up Period).

Each Lock-Up Agreement shall remain in full force and effect during the Lock-Up Period, and no such Lock-Up Agreement shall have been terminated, waived, or modified without the prior written consent of the Underwriter.

(f) Secretary's Certificate.

The Underwriter shall have received a certificate from Yusuf A. Okafor, Corporate Secretary of the Company, dated the Closing Date, in the form annexed hereto as Exhibit C, attaching certified copies of:

(i) the Company's certificate of incorporation (as amended and restated) as in effect on the Closing Date;

(ii) the Company's bylaws as in effect on the Closing Date; and

(iii) the resolutions duly adopted by the Board of Directors of the Company on June 2, 2021, authorizing (A) the offering and sale of up to 3,450,000 shares of Common Stock (consisting of 3,000,000 Firm Shares and up to 450,000 Option Shares), (B) the execution, delivery, and performance of this Agreement and the transactions contemplated hereby, (C) the preparation and filing of the prospectus supplement and any amendments or supplements thereto, and (D) the designation of Martin R. Calloway, Diana L. Prescott, and Yusuf A. Okafor as authorized officers of the Company to execute and deliver this Agreement and any other documents or certificates required to be delivered in connection herewith, and to take all actions necessary or advisable to consummate the transactions contemplated hereby.

The Corporate Secretary shall further certify that such resolutions have not been rescinded, amended, or modified and are in full force and effect as of the Closing Date.

(g) Good Standing Certificates.

The Underwriter shall have received certificates of good standing (or equivalent certificates) for the Company from (i) the Secretary of State of the State of Delaware and (ii) the Secretary of the State of Connecticut, each dated within five (5) business days of the Closing Date.

(h) FINRA Clearance.

FINRA shall have raised no objection with respect to the fairness and reasonableness of the underwriting terms and arrangements, including the underwriting compensation, in connection with the offering of the Shares.

(i) Nasdaq Listing.

The additional shares of Common Stock to be issued and sold by the Company pursuant to this Agreement shall have been approved for listing on the Nasdaq Global Select Market, subject only to official notice of issuance.

(j) No Material Adverse Change.

No event, development, or circumstance constituting a Material Adverse Change shall have occurred since the date of this Agreement and be continuing as of the Closing Date (or applicable Option Closing Date).

(k) 10b5-1 Representation.

The Company shall have delivered to the Underwriter the representation letter substantially in the form previously circulated and agreed upon by the parties (drafted June 7, 2021), duly executed by Martin R. Calloway, Chief Executive Officer, and Diana L. Prescott, Chief Financial Officer, of the Company.

All opinions, certificates, letters, and other documents required to be delivered under this Section 4 shall be in form and substance satisfactory to the Underwriter and its counsel, Duval & Pressler LLP.

SECTION 5. COVENANTS OF THE COMPANY

The Company covenants and agrees with the Underwriter as follows:

(a) Prospectus Delivery.

The Company shall deliver to the Underwriter, without charge, as many copies of the Prospectus (and any supplements and amendments thereto) as the Underwriter may reasonably request for the purposes contemplated by the Securities Act. The Company shall comply with Rule 424(b) under the Securities Act and shall file the prospectus supplement relating to the Shares with the Commission within the time period required by Rule 424(b) and the Rules and Regulations.

(b) Amendments and Supplements.

During the period when a prospectus relating to the Shares is required by law to be delivered (whether physically or through compliance with Rule 172 under the Securities Act) in connection with offers and sales of the Shares by the Underwriter or any dealer, the Company shall not file any amendment or supplement to the Registration Statement or the Prospectus without the prior written consent of the Underwriter (which consent shall not be unreasonably withheld, conditioned, or delayed), unless such amendment or supplement is required by law. If, during such period, any event occurs as a result of which the Prospectus, as then amended or supplemented, would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if for any other reason it shall be necessary or advisable during such period to amend or supplement the Prospectus or the Registration Statement, the Company shall promptly notify the Underwriter and shall prepare and file with the Commission, subject to the first sentence of this Section 5(b), an amendment or supplement that will correct such statement or omission.

The Company shall promptly notify the Underwriter of (i) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, (ii) the initiation of any proceedings for that purpose or for any examination of the Registration Statement pursuant to Section 8(e) of the Securities Act, and (iii) any notification by the Commission of its objection to the use of the Registration Statement or any post-effective amendment thereto. The Company shall use its reasonable best efforts to prevent the issuance of any such stop order and, if any such stop order is issued, to obtain its withdrawal as promptly as possible.

(d) Notification of Material Changes.

The Company shall advise the Underwriter promptly and, if requested by the Underwriter, shall confirm such advice in writing, of (i) any request by the Commission for amendments or supplements to the Registration Statement or the Prospectus, (ii) any material change in the financial condition, results of operations, business, properties, or prospects of the Company and its subsidiaries, taken as a whole, that would require an amendment or supplement to the Registration Statement or the Prospectus, and (iii) the receipt of any comments from, or any correspondence with, the Commission relating to the Registration Statement or the Prospectus.

(e) Blue Sky.

The securities offered and sold hereunder are "covered securities" within the meaning of Section 18 of the Securities Act, and accordingly, no state securities or Blue Sky registration or qualification is required for the offering and sale of the Shares by the Company to the Underwriter hereunder or by the Underwriter in the manner contemplated by the Prospectus. Notwithstanding the foregoing, the Company shall cooperate with the Underwriter and its counsel in connection with (i) any filings required to be made with FINRA, and (ii) any state notice filings or other filings required by applicable state securities laws, and shall pay any fees and disbursements of counsel and filing fees in connection therewith.

(f) Use of Proceeds.

The Company shall apply the net proceeds from the sale of the Shares as described in the section of the Prospectus entitled "Use of Proceeds," including general corporate purposes, potential acquisitions of specialty insurance books of business, and continued investment in the development and enhancement of the QuorumEdge technology platform. The estimated net proceeds to the Company from the offering of the Firm Shares (the base deal), after deducting the estimated underwriting discount of $2,475,000 and estimated offering expenses of approximately $385,000, are approximately $42,140,000. Pending application of the net proceeds as described in the Prospectus, the Company may invest the net proceeds in short-term, interest-bearing, investment-grade securities, certificates of deposit, or direct or guaranteed obligations of the United States government.

(g) DTC Eligibility.

The Company shall cause the Shares to be eligible for deposit and book-entry transfer and settlement through the facilities of DTC.

(h) Earnings Statement.

The Company shall, as soon as practicable, make generally available to its securityholders, and deliver to the Underwriter, an earnings statement (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act, covering a period of at least twelve (12) months beginning with the first fiscal quarter of the Company occurring after the "effective date" (as defined in Rule 158) of the Registration Statement.

(i) Transfer Agent.

The Company shall maintain Continental Transfer & Trust Co., located at 17 Ashbury Asset Advisors, New York, NY 10004, as transfer agent and registrar for the Common Stock, or shall appoint a successor transfer agent and registrar reasonably acceptable to the Underwriter, and shall promptly notify the Underwriter of any change in the identity of the transfer agent and registrar for the Common Stock.

(j) Insurance Regulatory Compliance.

The Company shall not permit any Insurance Subsidiary to pay any extraordinary dividend or make any other distribution to the Company or any other person that would reduce such Insurance Subsidiary's risk-based capital below the applicable regulatory minimum level (or below such higher level as may be required to avoid triggering any "company action level" event under applicable state insurance regulatory requirements), without prior written notice to the Underwriter and consultation with the Underwriter. The Company shall use reasonable best efforts to ensure that each Insurance Subsidiary maintains compliance with all applicable insurance regulatory requirements in all material respects throughout the Lock-Up Period.

SECTION 6. EXPENSES

The Company shall pay all costs and expenses incidental to the performance of the Company's obligations under this Agreement and in connection with the offering and sale of the Shares, including, without limitation: (i) the costs and expenses of preparing, printing, and filing the Registration Statement (including financial statements, exhibits, and schedules thereto), the Prospectus and the Pricing Disclosure Package, and all amendments and supplements thereto; (ii) EDGAR filing and conversion costs; (iii) the fees and disbursements of Calderwood & Harkness LLP, counsel to the Company, and Carver, Bain & Associates LLP, the Company's independent registered public accounting firm, in connection with the offering; (iv) all fees and expenses relating to the listing of the Shares on the Nasdaq Global Select Market; (v) all fees and expenses of Continental Transfer & Trust Co., the transfer agent and registrar, in connection with the issuance of the Shares; (vi) all filing fees required to be paid to FINRA in connection with its review of the underwriting terms and arrangements; and (vii) all expenses and filing fees in connection with Blue Sky qualifications and state securities law notice filings, if any. The estimated total offering expenses to be borne by the Company (excluding the underwriting discount) are approximately $385,000.

In addition, the Company shall reimburse the Underwriter for its reasonable and documented out-of-pocket expenses incurred in connection with the offering and sale of the Shares, including, without limitation, the fees and disbursements of Duval & Pressler LLP, counsel to the Underwriter, in an aggregate amount not to exceed $[●].

SECTION 7. INDEMNIFICATION AND CONTRIBUTION

(a) Indemnification by the Company.

The Company agrees to indemnify and hold harmless the Underwriter, its affiliates, directors, officers, employees, and agents, and each person, if any, who controls the Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the "Underwriter Indemnified Parties"), against any and all losses, claims, damages, liabilities, and expenses (including the reasonable and documented costs of investigation and fees and disbursements of counsel in connection with any action, suit, proceeding, or investigation) (collectively, "Losses"), joint or several, to which such Underwriter Indemnified Party may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or otherwise, insofar as such Losses (or actions, suits, proceedings, or investigations in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including any information deemed to be a part thereof pursuant to Rule 430B under the Securities Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto), the Pricing Disclosure Package, or any free writing prospectus, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and the Company shall reimburse each Underwriter Indemnified Party for any legal or other documented expenses reasonably incurred by such Underwriter Indemnified Party in connection with investigating, defending, settling, compromising, or paying any such Loss or action; provided, however, that the Company shall not be liable in any such case to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue stat

PRIVILEGED AND CONFIDENTIAL Calderwood & Harkness LLP — Working Draft
DRAFT — May 25, 2021
UNDERWRITING AGREEMENT
Dated as of [●], 2021
between
QUORUM INSURANCE HOLDINGS CORP.
and
GREYSTONE HARWICK & CO., LLC
C&H Matter No. 1025-00001
Right-click to update Table of Contents
UNDERWRITING AGREEMENT
This UNDERWRITING AGREEMENT (this "Agreement") is dated as of [●], 2021, between Quorum Insurance Holdings Corp., a Delaware corporation (the "Company"), and Greystone Harwick & Co., LLC, a Delaware limited liability company (the "Underwriter").
RECITALS
WHEREAS, the Company proposes to issue and sell to the Underwriter 3,000,000 shares (the "Firm Shares") of the Company's common stock, par value $0.01 per share (the "Common Stock"), in connection with a registered public offering;
WHEREAS, the Company further proposes to grant to the Underwriter an option (the "Over-Allotment Option") to purchase up to an additional 450,000 shares of Common Stock (the "Option Shares"; together with the Firm Shares, the "Shares"), exercisable in whole or in part within 30 days after the date of the Prospectus (as defined below), solely for the purpose of covering over-allotments, if any;
WHEREAS, the Shares are to be offered and sold pursuant to the Registration Statement on Form S-3 (File No. 333-248710) filed by the Company with the Securities and Exchange Commission (the "Commission" or "SEC") under the Securities Act of 1933, as amended (the "Securities Act"), which Registration Statement became effective on September 18, 2020;
WHEREAS, in connection with the offering and sale of the Shares, the Company will prepare and file with the Commission, pursuant to Rule 424(b) under the Securities Act, a prospectus supplement to the base prospectus included in the Registration Statement, describing the terms of the offering of the Shares and the plan of distribution therefor; and
WHEREAS, the Company and the Underwriter wish to set forth the terms and conditions upon which the Underwriter will purchase the Shares from the Company.
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to, and agrees with, the Underwriter as follows:
(a) Registration Statement and Prospectus.
The Company has filed with the Commission a registration statement on Form S-3 (File No. 333-248710), which registration statement became effective under the Securities Act on September 18, 2020 (the "Effective Date"). Such registration statement, as amended as of the date hereof, including the exhibits thereto and the documents incorporated by reference therein pursuant to Item 12 of Form S-3 at the time such registration statement became effective, is herein referred to as the "Registration Statement." The Registration Statement includes a base prospectus (the "Base Prospectus") relating to certain securities, including the Common Stock. The Company will file with the Commission, pursuant to Rule 424(b) under the Securities Act and the rules and regulations of the Commission thereunder (the "Rules and Regulations"), a prospectus supplement relating to the Shares and the plan of distribution thereof (together with the Base Prospectus, the "Prospectus").
As used in this Agreement:
(i) "Pricing Disclosure Package" means the most recent preliminary prospectus supplement, as amended or supplemented, together with the Base Prospectus and any free writing prospectuses (as defined in Rule 405 under the Securities Act) issued by the Company and identified on Schedule I hereto, considered together as of the Applicable Time (as defined below).
(ii) "Applicable Time" means [●] p.m. (New York City time) on the date of this Agreement, or such other time as agreed by the Company and the Underwriter.
(iii) "Registration Statement" means the shelf registration statement on Form S-3 (File No. 333-248710), as amended at the time it became effective and as thereafter amended by any post-effective amendment thereto that shall have become effective prior to the Closing Date, including all information deemed to be a part thereof at the time of effectiveness pursuant to Rule 430B under the Securities Act and including all documents incorporated by reference therein.
(iv) "Prospectus" means the Base Prospectus, as supplemented by the prospectus supplement relating to the Shares to be filed with the Commission pursuant to Rule 424(b) under the Securities Act, together with any further supplements or amendments thereto, in the form in which it is first used or first made available to purchasers of the Shares, or in which it is filed with the Commission, whichever is earlier.
The Registration Statement, at the time it became effective, complied, and as amended or supplemented, at the date hereof and at the Closing Date, will comply, in all material respects with the requirements of the Securities Act and the Rules and Regulations. The Company, at the time the Registration Statement became effective, met, and as of the date hereof and as of the Closing Date will meet, the requirements for use of Form S-3 under the Securities Act. The Company is a "well-known seasoned issuer" as defined in Rule 405 under the Securities Act, or, if not, is eligible to use a shelf registration statement on Form S-3 for the offering contemplated hereby.
(b) Accurate Disclosure.
As of the Effective Date and as of each date on which any post-effective amendment to the Registration Statement became or becomes effective, the Registration Statement did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. As of its date and as of the Closing Date (and, if applicable, each Option Closing Date), the Prospectus will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Pricing Disclosure Package, as of the Applicable Time, does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Each free writing prospectus, if any, that the Company has filed, used, referred to, or distributed in connection with the offering of the Shares, when taken together with the Pricing Disclosure Package, does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The foregoing representations and warranties in this Section 1(b) do not apply to statements in or omissions from the Registration Statement, the Prospectus, the Pricing Disclosure Package, or any free writing prospectus made in reliance upon and in conformity with written information furnished to the Company by the Underwriter expressly for use therein. The Company acknowledges that the only information that the Underwriter has furnished to the Company expressly for use in the Registration Statement, the Prospectus, and the Pricing Disclosure Package is that described in Section 2 hereof.
(c) Good Standing.
The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has full corporate power and authority to own, lease, and operate its properties and to conduct its business as presently conducted and as described in the Registration Statement, the Prospectus, and the Pricing Disclosure Package. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change. The Company is duly qualified to transact business and is in good standing in, among other jurisdictions, the State of Connecticut, where its principal executive offices are located at 200 Constitution Plaza, Suite 3100, Hartford, CT 06103. The Company's registered agent in the State of Delaware is CT Statutory Agent Services LLC, 1209 Orange Street, Wilmington, DE 19801.
(d) Subsidiaries.
Each of the Company's material subsidiaries is duly organized, validly existing, and in good standing under the laws of its respective jurisdiction of organization, and has full corporate or other organizational power and authority to own, lease, and operate its properties and to conduct its business as presently conducted and as described in the Registration Statement, the Prospectus, and the Pricing Disclosure Package. The material subsidiaries of the Company are as follows:
(i) Quorum Specialty Insurance Company, a Connecticut-domiciled stock insurance company (CT DOI entity no. 47832);
(ii) Quorum National Casualty Co., a Delaware-domiciled stock insurance company (DE DOI entity no. 10591); and
(iii) QuorumEdge Technology Solutions, Inc., a Delaware corporation.
All of the outstanding shares of capital stock or other equity interests of each material subsidiary are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities, security interests, claims, and charges of any nature whatsoever, and have been duly authorized and validly issued and are fully paid and non-assessable. There are no outstanding options, warrants, rights (including conversion or preemptive rights), or other agreements for the purchase or acquisition from the Company or any of its subsidiaries of any shares of capital stock or other equity interests of any subsidiary of the Company. Each material subsidiary is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change.
(e) Authorization.
The issuance and sale of the Shares have been duly authorized by all necessary corporate action on the part of the Company, including approval by the Board of Directors of the Company at a meeting duly convened and held on June 2, 2021, at which a quorum was present and acting throughout. The authorized capital stock of the Company consists of (i) 100,000,000 shares of Common Stock, par value $0.01 per share, of which 38,125,000 shares are issued and outstanding as of the date hereof, and (ii) 5,000,000 shares of preferred stock, par value $0.01 per share, of which no shares are issued and outstanding as of the date hereof. All of the outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid and non-assessable, and none of such shares was issued in violation of any preemptive rights, rights of first refusal, or similar rights. The Shares, when issued and delivered to and paid for by the Underwriter in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid, and non-assessable, and no holder of the Shares will be subject to personal liability by reason of being such a holder. No further approval or authorization of any stockholder, the Board of Directors, or others is required for the issuance and sale of the Shares as contemplated hereby. There are no stockholders' agreements, voting agreements, or other similar agreements with respect to the Company's capital stock to which the Company is a party, or, to the knowledge of the Company, between or among any of the Company's stockholders, except as disclosed in the Prospectus.
(f) No Conflicts.
The execution, delivery, and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby, including the issuance and sale of the Shares, will not (i) conflict with or result in a violation of any provision of the certificate of incorporation (as amended and restated) or bylaws of the Company or any subsidiary, (ii) violate or conflict with any applicable law, statute, rule, regulation, judgment, order, writ, injunction, or decree of any court, regulatory body, administrative agency, or governmental body having jurisdiction over the Company or any of its subsidiaries or any of their respective properties or assets, or (iii) result in a breach of, or constitute a default under (or an event that with notice or lapse of time or both would become a default under), or give rise to any right of termination, acceleration, or cancellation under, any bond, debenture, note, indenture, mortgage, deed of trust, lease, license, agreement, contract, or other instrument or obligation to which the Company or any of its subsidiaries is a party or by which any of them or any of their properties may be bound. Without limiting the generality of the foregoing, the execution, delivery, and performance of this Agreement and the issuance and sale of the Shares will not result in a breach of, or constitute a default under, (A) the $75,000,000 Revolving Credit Agreement, dated as of March 15, 2019, among the Company, the lenders party thereto, and Sycamore National Bank, N.A., as administrative agent (as amended, modified, or supplemented from time to time), or (B) the Indenture, dated as of October 1, 2020, between the Company and Brightwater Securities, as trustee, governing the Company's $125,000,000 aggregate principal amount of 4.875% Senior Notes due 2028. No consent, approval, authorization, license, qualification, order, or permit of, or filing or registration with, any court, governmental agency, or body, or the Nasdaq Global Select Market, is required for the valid authorization, issuance, sale, and delivery of the Shares or the execution, delivery, and performance of this Agreement, except such as have been obtained or made and such as may be required under state securities or Blue Sky laws, applicable FINRA rules, or the rules of the Nasdaq Global Select Market.
(g) Insurance Regulatory Matters.
Each of Quorum Specialty Insurance Company and Quorum National Casualty Co. (each, an "Insurance Subsidiary" and collectively, the "Insurance Subsidiaries") holds all licenses, permits, certificates of authority, and authorizations issued by applicable insurance regulatory authorities that are necessary for the lawful conduct of its respective insurance business as presently conducted in each jurisdiction in which such Insurance Subsidiary is required to hold such licenses, permits, certificates of authority, and authorizations, and no such license, permit, certificate of authority, or authorization contains any restriction or limitation that would materially impair the ability of such Insurance Subsidiary to conduct its business as presently conducted, except where the failure to hold, or the existence of any such restriction or limitation on, any such license, permit, certificate of authority, or authorization would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change.
The offering and sale of Common Stock by the Company as contemplated by this Agreement does not require the prior approval of the Connecticut Department of Insurance (the "CT DOI") or the Delaware Department of Insurance (the "DE DOI"), and no notice filing, application, or other submission to any insurance regulatory authority is required to be made or obtained by the Company in connection with the offering and sale of the Shares, except for any filings that are required to be made after the Closing Date and that will be timely made.
Each Insurance Subsidiary maintains risk-based capital ratios in excess of the applicable regulatory minimums established by the National Association of Insurance Commissioners ("NAIC") and the applicable state insurance regulatory authority. As of December 31, 2020, the risk-based capital ratios of the Insurance Subsidiaries were as follows: (i) Quorum Specialty Insurance Company maintained a risk-based capital ratio of 412% of its company action level, and (ii) Quorum National Casualty Co. maintained a risk-based capital ratio of 385% of its company action level.
The Company has made all required filings under the Connecticut Insurance Holding Company System Regulatory Act and the Delaware Insurance Holding Company System Regulatory Act, including Form B filings and all related filings, with the CT DOI and the DE DOI in a timely manner, and all such filings were accurate and complete in all material respects as of the date of filing.
The most recent triennial financial examination of Quorum Specialty Insurance Company by the CT DOI, covering the examination period from January 1, 2016 through December 31, 2018, was completed in 2019, and the examination report, as adopted by the CT DOI, did not contain any material findings, adverse comments, or recommendations for corrective action that remain unresolved.
(h) No Material Adverse Change.
Since December 31, 2020, there has been no Material Adverse Change in the financial condition, results of operations, business, properties, or prospects of the Company and its subsidiaries, taken as a whole, except as set forth in or contemplated by the Registration Statement, the Prospectus, and the Pricing Disclosure Package, and except for changes arising from general economic, market, or industry conditions that do not disproportionately affect the Company relative to other participants in the specialty insurance industry.
(i) Financial Statements.
The consolidated financial statements and the related notes and supporting schedules incorporated by reference in the Registration Statement and the Prospectus present fairly in all material respects the financial condition, results of operations, and cash flows of the Company and its consolidated subsidiaries at the respective dates and for the respective periods indicated. Such financial statements have been prepared in conformity with generally accepted accounting principles in the United States ("GAAP") applied on a consistent basis throughout the periods involved, except as otherwise noted therein, and comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Rules and Regulations.
The audited consolidated financial statements of the Company for the fiscal year ended December 31, 2020, reflecting total revenue of $487.3 million and net income of $31.6 million, and the unaudited condensed consolidated interim financial statements of the Company for the quarter ended March 31, 2021, reflecting total revenue of $131.8 million and net income of $9.4 million, have each been prepared in accordance with GAAP applied on a consistent basis (subject, in the case of the unaudited interim financial statements, to normal year-end audit adjustments and the absence of footnotes required by GAAP).
The audited consolidated financial statements of the Company incorporated by reference in the Registration Statement and the Prospectus have been audited by Carver, Bain & Associates LLP, an independent registered public accounting firm, as stated in their report thereon, which report is incorporated by reference in the Registration Statement and the Prospectus. Such report does not contain any qualification or modification as to the scope of the audit or as to accounting principles applied. Carver, Bain & Associates LLP, during the periods covered by the financial statements incorporated by reference in the Registration Statement and the Prospectus, were and are an independent registered public accounting firm with respect to the Company within the meaning of the Securities Act and the Rules and Regulations and the rules of the Public Company Accounting Oversight Board.
The statutory financial statements of each Insurance Subsidiary, as filed with the applicable state insurance regulatory authority for the most recently completed statutory reporting period, were prepared in conformity with statutory accounting principles prescribed or permitted by the applicable state insurance regulatory authority, applied on a consistent basis, and present fairly the statutory financial condition and results of operations of such Insurance Subsidiary.
(j) Litigation.
There is no pending or, to the Company's knowledge, threatened action, suit, proceeding, inquiry, arbitration, or investigation before or by any court, public board, governmental agency, self-regulatory organization, or body, domestic or foreign, that, if determined adversely, would, individually or in the aggregate, (i) be material to the Company and its subsidiaries, taken as a whole, or (ii) materially impair the ability of the Company to perform its obligations under this Agreement, except as set forth in or contemplated by the Registration Statement, the Prospectus, and the Pricing Disclosure Package.
The Company and its Insurance Subsidiaries are subject to routine insurance coverage disputes arising in the ordinary course of business, none of which, individually or in the aggregate, exceeds $5,000,000 in potential exposure. The Company's aggregate litigation reserve as of March 31, 2021 was $14.2 million, and such reserve is believed by the Company to be adequate in all material respects in accordance with GAAP and applicable statutory accounting principles to cover reasonably anticipated losses and loss adjustment expenses related to pending and incurred but not reported claims and litigation matters.
(k) Tax Matters.
The Company and each of its subsidiaries have filed all required federal, state, local, and foreign tax returns and have paid all taxes shown as due thereon, and no tax deficiency has been determined adversely to the Company or any subsidiary which has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Change. The Company's employer identification number (EIN) is 82-3741956. There are no pending or, to the knowledge of the Company, threatened examinations, investigations, or claims for additional taxes by any taxing authority with respect to the Company or any of its subsidiaries that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Change.
(l) ERISA.
The Company and each of its subsidiaries are in compliance in all material respects with the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the regulations and published interpretations thereunder, with respect to each "employee benefit plan" (as defined in ERISA) established or maintained by the Company or any of its subsidiaries. No "reportable event" (as defined in Section 4043(c) of ERISA) has occurred with respect to any such plan. Neither the Company nor any of its subsidiaries has incurred or reasonably expects to incur any liability under Title IV of ERISA (other than for contributions to, and benefits under, such plans in the ordinary course). Each such plan that is intended to be qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), has received a favorable determination letter or opinion letter from the Internal Revenue Service, and nothing has occurred, whether by action or failure to act, which could reasonably be expected to cause the loss of such qualification.
(m) intellectual Property.
The Company and its subsidiaries own, or have adequate rights to use, all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, domain names, copyrights, licenses, and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems, or procedures) (collectively, "Intellectual Property") used in the conduct of their respective businesses as currently conducted, including all intellectual Property related to the Company's proprietary technology platform known as the "QuorumEdge" platform. The Company has three (3) issued United States patents and fourteen (14) registered trademarks relating to the QuorumEdge platform and related products and services.
There is no pending or, to the knowledge of the Company, threatened action, suit, proceeding, or claim by others challenging the Company's rights in or to any material intellectual Property, and the Company is not aware of any facts that would form a reasonable basis for any such claim. There is no pending or, to the knowledge of the Company, threatened action, suit, proceeding, or claim by others that the Company infringes, misappropriates, or otherwise violates any intellectual Property or other proprietary rights of others.
The Company maintains a third-party data analytics license with Meridian DataWorks, Inc., which license is currently in full force and effect and expires in December 2024. Such license is not subject to any pending or threatened termination, cancellation, or dispute.
(n) Environmental Matters.
The Company and each of its subsidiaries are in compliance in all material respects with all applicable federal, state, local, and foreign environmental laws, regulations, and rules, including those relating to the discharge of hazardous substances, and no event has occurred that, with the passage of time or the giving of notice or both, would constitute a violation of, or give rise to any obligation or liability under, any such environmental law, regulation, or rule, except where such non-compliance, violation, or liability would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change.
(o) Anti-Bribery / FCPA.
Neither the Company nor any subsidiary, nor, to the knowledge of the Company, any director, officer, agent, employee, or other person acting on behalf of the Company or any subsidiary, has (i) used any corporate funds for any unlawful contribution, gift, entertainment, or other unlawful expense relating to political activity, (ii) made or taken any act in furtherance of an offer, promise, or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee from corporate funds, (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010, or any other applicable anti-bribery or anti-corruption law, or (iv) made, offered, agreed, requested, or taken any act in furtherance of any unlawful bribe, rebate, payoff, influence payment, kickback, or other unlawful payment or benefit.
(p) Sanctions.
Neither the Company nor any of its subsidiaries, nor, to the knowledge of the Company, any director, officer, agent, employee, or affiliate of the Company or any of its subsidiaries is currently the subject or target of any sanctions administered or enforced by the U.S. government (including the Office of Foreign Assets Control of the U.S. Department of the Treasury ("OFAC") or the U.S. Department of State, and including the designation as a "specially designated national" or "Blocked person"), the United Nations Security Council, the European Union, Her Majesty's Treasury, or any other relevant sanctions authority (collectively, "Sanctions"). The Company is in compliance in all material respects with all applicable Sanctions laws and regulations. The Company will not, directly or indirectly, use the proceeds of the offering of the Shares, or lend, contribute, or otherwise make available such proceeds to any subsidiary, joint venture partner, or other person or entity, for the purpose of financing the activities of any person currently the subject or target of any Sanctions, or in any other manner that would result in a violation by any person (including any person participating in the transaction, whether as underwriter, adviser, investor, or otherwise) of Sanctions.
(q) Cybersecurity.
The Company and its subsidiaries maintain commercially reasonable information technology systems and data security policies, procedures, and safeguards designed to protect against unauthorized access to, use of, or processing of confidential and personally identifiable information maintained by or on behalf of the Company and its subsidiaries. To the knowledge of the Company, there has been no material security breach, unauthorized access, or other compromise of or relating to the Company's or any subsidiary's information technology systems or data (including any data of the Company's or its subsidiaries' customers, employees, suppliers, vendors, or any other third party maintained by or on behalf of the Company or its subsidiaries), and neither the Company nor any of its subsidiaries has been notified of, or has any knowledge of any event or condition that would reasonably be expected to result in, any material security breach, unauthorized access, or other compromise. The Company and its subsidiaries are in compliance in all material respects with all applicable laws, statutes, judgments, orders, rules, and regulations of any court or arbitrator or governmental or regulatory authority, and all applicable industry standards, internal policies, and contractual obligations relating to the privacy and security of information technology systems and data.
(r) Investment Company Act.
The Company is not, and after giving effect to the offering and sale of the Shares and the application of the net proceeds therefrom as described under the caption "Use of Proceeds" in the Prospectus, will not be required to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules and regulations of the Commission thereunder.
(s) Transfer Agent and Registrar.
Continental Transfer & Trust Co., located at 17 Ashbury Asset Advisors, New York, NY 10004, has been duly appointed as the transfer agent and registrar for the Common Stock and is validly serving in such capacity.
(t) Nasdaq Listing.
The outstanding shares of Common Stock are listed on the Nasdaq Global Select Market under the ticker symbol "QIHC" (CUSIP: 74917R108; CIK: 0001784203). The Company is in compliance in all material respects with the listing requirements of the Nasdaq Global Select Market, and the Company has not received any notification that the Nasdaq Stock Market LLC is contemplating delisting the Common Stock. The Company has applied, or will apply prior to the Closing Date, for listing of the Shares on the Nasdaq Global Select Market and has received, or has no reason to believe it will not receive, approval for such listing, subject only to official notice of issuance.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITER
The Underwriter represents and warrants to, and agrees with, the Company as follows:
(a) The Underwriter has not made and will not make any offer or sale of the Shares in connection with the offering except by means of the Prospectus, the Pricing Disclosure Package, or a free writing prospectus that has been consented to by the Company in accordance with this Agreement. The Underwriter has not distributed and will not distribute any free writing prospectus that is not listed on Schedule I hereto without the prior written consent of the Company.
(b) The only information furnished by the Underwriter to the Company expressly for inclusion in the Registration Statement, the Prospectus, and the Pricing Disclosure Package consists of the following information in the Prospectus: (i) the name of the Underwriter as set forth on the cover page of the Prospectus; (ii) the concession and reallowance figures appearing in the section of the Prospectus entitled "Underwriting"; and (iii) the paragraphs relating to stabilization, syndicate short sales, and penalty bids appearing in the section of the Prospectus entitled "Underwriting" (collectively, the "Underwriter Information"). The Underwriter confirms that the Underwriter Information, as of the date of the Prospectus and as of the Closing Date, did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
(c) The Underwriter is a member in good standing of the Financial Industry Regulatory Authority, Inc. ("FINRA") and is duly registered as a broker-dealer under the Exchange Act and applicable state securities laws. The Underwriter will file, or cause to be filed, all required materials with the FINRA Corporate Financing Department for review of the underwriting compensation and arrangements in connection with the offering of the Shares, and will ensure that such materials are filed on a timely basis and in accordance with applicable FINRA rules.
(d) The Underwriter has the requisite power and authority to enter into this Agreement and to perform its obligations hereunder. The execution, delivery, and performance of this Agreement by the Underwriter have been duly authorized by all necessary action on the part of the Underwriter.
SECTION 3. PURCHASE AND SALE
(a) Firm Shares.
Subject to the terms and conditions and in reliance upon the representations, warranties, and agreements herein set forth, the Company agrees to sell to the Underwriter, and the Underwriter agrees to purchase from the Company, 3,000,000 Firm Shares at a purchase price of $[●] per share (the "Purchase Price"). The Purchase Price reflects the public offering price of $[●] per share (the estimated public offering price being $15.00 per share) less the underwriting discount of $[●] per share. The underwriting discount shall be equal to 5.50% of the public offering price per share (i.e., the underwriting discount is estimated to be $0.825 per share based on the estimated public offering price of $15.00 per share).
Based on the estimated public offering price of $15.00 per share, the aggregate gross proceeds to the Company from the sale of the Firm Shares (the "base deal") are estimated to be $45,000,000. The aggregate underwriting discount for the base deal is estimated to be $2,475,000 (calculated as 5.50% of $45,000,000). The aggregate net proceeds to the Company before expenses for the base deal are estimated to be $42,525,000 (calculated as $45,000,000 less $2,475,000).
(b) Over-Allotment Option.
The Company hereby grants to the Underwriter an option (the "Over-Allotment Option"), exercisable in whole or in part at any time and from time to time within thirty (30) days after the date of the Prospectus, to purchase up to 450,000 Option Shares (representing 15% of the number of Firm Shares) from the Company at the Purchase Price per share (the same purchase price per share as the Firm Shares). The Underwriter may exercise the Over-Allotment Option solely for the purpose of covering over-allotments, if any, in connection with the offering of the Firm Shares. If any Option Shares are to be purchased pursuant to the Over-Allotment Option, the Underwriter shall deliver written notice to the Company setting forth the number of Option Shares to be purchased and the date on which such Option Shares are to be delivered (each, an "Option Closing Date"), which date shall be no earlier than two (2) business days and no later than three (3) business days after the date of such notice (or such other date as the Company and the Underwriter may agree).
Upon full exercise of the Over-Allotment Option, the maximum aggregate number of Shares offered hereunder shall be 3,450,000 shares (3,000,000 Firm Shares plus 450,000 Option Shares), for maximum aggregate gross proceeds of $51,750,000 (calculated as 3,450,000 shares multiplied by the estimated public offering price of $15.00 per share). After giving effect to the issuance and sale of the Firm Shares (without exercise of the Over-Allotment Option), the number of shares of Common Stock outstanding shall be 41,125,000 (38,125,000 shares outstanding as of the date hereof plus 3,000,000 Firm Shares).
(c) Payment and Delivery.
Payment for the Firm Shares shall be made by the Underwriter to the Company by wire transfer of immediately available funds in United States dollars to such account or accounts as the Company shall designate in writing to the Underwriter, against delivery of the Firm Shares, on the Closing Date. Payment for any Option Shares shall be made by the Underwriter to the Company by wire transfer of immediately available funds in United States dollars to such account or accounts as the Company shall designate, against delivery of such Option Shares, on the applicable Option Closing Date. Delivery of the Firm Shares and any Option Shares shall be made through the facilities of The Depository Trust Company ("DTC") in book-entry form, unless the Company and the Underwriter agree to an alternative method of delivery.
SECTION 4. CONDITIONS TO CLOSING
The obligations of the Underwriter to purchase the Firm Shares on the Closing Date (and any Option Shares on the applicable Option Closing Date) shall be subject to the accuracy of the representations and warranties of the Company contained herein as of the date hereof and as of the Closing Date (or applicable Option Closing Date), to the performance by the Company of its covenants and obligations hereunder, and to the satisfaction (or waiver by the Underwriter) of each of the following additional conditions:
(a) Officer's Certificate.
The Underwriter shall have received a certificate, dated the Closing Date (or applicable Option Closing Date), signed by Martin R. Calloway, Chief Executive Officer, and Diana L. Prescott, Chief Financial Officer, of the Company (or such other officers as the Underwriter may reasonably designate), to the effect that: (i) the representations and warranties of the Company set forth in Section 1 of this Agreement are true and correct in all material respects as of the Closing Date (or applicable Option Closing Date) with the same force and effect as though expressly made at and as of the Closing Date (or applicable Option Closing Date); (ii) the Company has complied in all material respects with all agreements and covenants and satisfied all conditions on its part to be performed or satisfied under this Agreement at or prior to the Closing Date (or applicable Option Closing Date); (iii) no stop order suspending the effectiveness of the Registration Statement has been issued, and no proceedings for that purpose have been initiated or, to the knowledge of the Company, threatened by the Commission; and (iv) since the date of the most recent financial statements included or incorporated by reference in the Prospectus and the Pricing Disclosure Package, there has been no Material Adverse Change in the financial condition, results of operations, business, properties, or prospects of the Company and its subsidiaries, taken as a whole, except as set forth in or contemplated by the Prospectus and the Pricing Disclosure Package.
(b) Legal Opinions.
(i) The Underwriter shall have received a legal opinion and a negative assurance letter of Calderwood & Harkness LLP, counsel to the Company, located at 1301 Avenue of the Americas, New York, NY 10019, each dated the Closing Date (or applicable Option Closing Date), in form and substance satisfactory to the Underwriter and its counsel. Such legal opinion shall cover, among other things: (A) the due organization, valid existence, and good standing of the Company under the laws of the State of Delaware; (B) the corporate power and authority of the Company to execute, deliver, and perform this Agreement and to issue and sell the Shares; (C) the due authorization, valid issuance, full payment, and non-assessability of the Shares; (D) the absence of preemptive rights with respect to the Shares; (E) no conflicts with the certificate of incorporation, bylaws, or material agreements of the Company; (F) no consents or approvals required (other than those obtained or to be obtained); (G) the effectiveness of the Registration Statement and the absence of any stop order or proceedings therefor; (H) the status of the Company as not being required to register as an investment company under the Investment Company Act; and (I) such other matters as the Underwriter may reasonably request.
(ii) The Underwriter shall have received a negative assurance letter of Calderwood & Harkness LLP, dated as of the Closing Date (or applicable Option Closing Date), to the effect that nothing has come to the attention of such counsel that causes them to believe that (A) the Registration Statement, at the time it became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or (B) the Prospectus or the Pricing Disclosure Package, as of their respective dates and as of the Closing Date (or applicable Option Closing Date), contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no view with respect to the financial statements, financial data, or other financial or statistical information contained or incorporated by reference in the Registration Statement, the Prospectus, or the Pricing Disclosure Package).
(c) Underwriter's Counsel Opinion.
The Underwriter shall have received an opinion of Duval & Pressler LLP, located at 1185 Avenue of the Americas, 34th Floor, New York, NY 10036, counsel to the Underwriter, dated the Closing Date (or applicable Option Closing Date), with respect to the Registration Statement, the Prospectus, and the Pricing Disclosure Package, and such other matters as the Underwriter may reasonably request. In rendering such opinion, Duval & Pressler LLP may rely as to matters of fact upon certificates of officers of the Company and of governmental officials and upon such other documents as such counsel may reasonably deem appropriate.
(d) Comfort Letter.
(i) The Underwriter shall have received a comfort letter from Carver, Bain & Associates LLP, the Company's independent registered public accounting firm, located at One Federal Street, Suite 3600, Boston, MA 02110 (engagement partner: Rebecca H. Trask, CPA), dated the date of the Prospectus and addressed to the Underwriter, in form and substance customary for comfort letters delivered in connection with underwritten public offerings of equity securities and in scope satisfactory to the Underwriter and its counsel, covering the financial statements and certain financial information contained in or incorporated by reference into the Registration Statement, the Prospectus, and the Pricing Disclosure Package.
(ii) The Underwriter shall have received a bring-down comfort letter from Carver, Bain & Associates LLP, dated the Closing Date (or applicable Option Closing Date), reaffirming the statements made in the comfort letter delivered pursuant to clause (i) above, with such changes as may be necessary to reflect the passage of time and updated information.
(e) Lock-Up Agreements.
The Underwriter shall have received, on or prior to the date hereof, duly executed lock-up agreements substantially in the form annexed hereto as Exhibit A (each, a "Lock-Up Agreement") from (i) each director and executive officer of the Company, (ii) each holder of 5% or more of the outstanding shares of Common Stock (determined based on the most recent Schedule 13D or Schedule 13G filing with the Commission), including without limitation Birchwood Capital Partners, L.P. (holding approximately 4,270,000 shares, representing approximately 11.2% of the outstanding shares of Common Stock) and Redfield Mutual Fund Group (holding approximately 2,150,000 shares, representing approximately 5.6% of the outstanding shares of Common Stock), and (iii) such other stockholders as the Underwriter may reasonably designate.
Each Lock-Up Agreement shall provide for a lock-up period of ninety (90) days following the date of the Prospectus (the "Lock-Up Period"), during which each person subject thereto shall not, directly or indirectly, without the prior written consent of the Underwriter: (A) offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, or otherwise transfer or dispose of any shares of Common Stock or any securities convertible into, exchangeable for, or that represent the right to receive shares of Common Stock, whether now owned or hereafter acquired, or (B) enter into any swap, hedge, or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (A) or (B) above is to be settled by delivery of Common Stock, in cash, or otherwise. The Lock-Up Agreements shall include customary exceptions for (1) bona fide gifts, (2) transfers to family trusts and other estate planning vehicles, (3) distributions to limited partners, members, or stockholders, (4) transfers pursuant to a domestic relations order, (5) the establishment of a Rule 10b5-1 trading plan (provided that no sales shall be made under such plan during the Lock-Up Period), and (6) the exercise of stock options or the settlement of restricted stock units outstanding on the date hereof (provided that the shares received upon such exercise or settlement shall remain subject to the Lock-Up Agreement for the remainder of the Lock-Up Period).
Each Lock-Up Agreement shall remain in full force and effect during the Lock-Up Period, and no such Lock-Up Agreement shall have been terminated, waived, or modified without the prior written consent of the Underwriter.
(f) Secretary's Certificate.
The Underwriter shall have received a certificate from Yusuf A. Okafor, Corporate Secretary of the Company, dated the Closing Date, in the form annexed hereto as Exhibit C, attaching certified copies of:
(i) the Company's certificate of incorporation (as amended and restated) as in effect on the Closing Date;
(ii) the Company's bylaws as in effect on the Closing Date; and
(iii) the resolutions duly adopted by the Board of Directors of the Company on June 2, 2021, authorizing (A) the offering and sale of up to 3,450,000 shares of Common Stock (consisting of 3,000,000 Firm Shares and up to 450,000 Option Shares), (B) the execution, delivery, and performance of this Agreement and the transactions contemplated hereby, (C) the preparation and filing of the prospectus supplement and any amendments or supplements thereto, and (D) the designation of Martin R. Calloway, Diana L. Prescott, and Yusuf A. Okafor as authorized officers of the Company to execute and deliver this Agreement and any other documents or certificates required to be delivered in connection herewith, and to take all actions necessary or advisable to consummate the transactions contemplated hereby.
The Corporate Secretary shall further certify that such resolutions have not been rescinded, amended, or modified and are in full force and effect as of the Closing Date.
(g) Good Standing Certificates.
The Underwriter shall have received certificates of good standing (or equivalent certificates) for the Company from (i) the Secretary of State of the State of Delaware and (ii) the Secretary of the State of Connecticut, each dated within five (5) business days of the Closing Date.
(h) FINRA Clearance.
FINRA shall have raised no objection with respect to the fairness and reasonableness of the underwriting terms and arrangements, including the underwriting compensation, in connection with the offering of the Shares.
(i) Nasdaq Listing.
The additional shares of Common Stock to be issued and sold by the Company pursuant to this Agreement shall have been approved for listing on the Nasdaq Global Select Market, subject only to official notice of issuance.
(j) No Material Adverse Change.
No event, development, or circumstance constituting a Material Adverse Change shall have occurred since the date of this Agreement and be continuing as of the Closing Date (or applicable Option Closing Date).
(k) 10b5-1 Representation.
The Company shall have delivered to the Underwriter the representation letter substantially in the form previously circulated and agreed upon by the parties (drafted June 7, 2021), duly executed by Martin R. Calloway, Chief Executive Officer, and Diana L. Prescott, Chief Financial Officer, of the Company.
All opinions, certificates, letters, and other documents required to be delivered under this Section 4 shall be in form and substance satisfactory to the Underwriter and its counsel, Duval & Pressler LLP.
SECTION 5. COVENANTS OF THE COMPANY
The Company covenants and agrees with the Underwriter as follows:
(a) Prospectus Delivery.
The Company shall deliver to the Underwriter, without charge, as many copies of the Prospectus (and any supplements and amendments thereto) as the Underwriter may reasonably request for the purposes contemplated by the Securities Act. The Company shall comply with Rule 424(b) under the Securities Act and shall file the prospectus supplement relating to the Shares with the Commission within the time period required by Rule 424(b) and the Rules and Regulations.
(b) Amendments and Supplements.
During the period when a prospectus relating to the Shares is required by law to be delivered (whether physically or through compliance with Rule 172 under the Securities Act) in connection with offers and sales of the Shares by the Underwriter or any dealer, the Company shall not file any amendment or supplement to the Registration Statement or the Prospectus without the prior written consent of the Underwriter (which consent shall not be unreasonably withheld, conditioned, or delayed), unless such amendment or supplement is required by law. If, during such period, any event occurs as a result of which the Prospectus, as then amended or supplemented, would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if for any other reason it shall be necessary or advisable during such period to amend or supplement the Prospectus or the Registration Statement, the Company shall promptly notify the Underwriter and shall prepare and file with the Commission, subject to the first sentence of this Section 5(b), an amendment or supplement that will correct such statement or omission.
(c) Stop Orders.
The Company shall promptly notify the Underwriter of (i) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, (ii) the initiation of any proceedings for that purpose or for any examination of the Registration Statement pursuant to Section 8(e) of the Securities Act, and (iii) any notification by the Commission of its objection to the use of the Registration Statement or any post-effective amendment thereto. The Company shall use its reasonable best efforts to prevent the issuance of any such stop order and, if any such stop order is issued, to obtain its withdrawal as promptly as possible.
(d) Notification of Material Changes.
The Company shall advise the Underwriter promptly and, if requested by the Underwriter, shall confirm such advice in writing, of (i) any request by the Commission for amendments or supplements to the Registration Statement or the Prospectus, (ii) any material change in the financial condition, results of operations, business, properties, or prospects of the Company and its subsidiaries, taken as a whole, that would require an amendment or supplement to the Registration Statement or the Prospectus, and (iii) the receipt of any comments from, or any correspondence with, the Commission relating to the Registration Statement or the Prospectus.
(e) Blue Sky.
The securities offered and sold hereunder are "covered securities" within the meaning of Section 18 of the Securities Act, and accordingly, no state securities or Blue Sky registration or qualification is required for the offering and sale of the Shares by the Company to the Underwriter hereunder or by the Underwriter in the manner contemplated by the Prospectus. Notwithstanding the foregoing, the Company shall cooperate with the Underwriter and its counsel in connection with (i) any filings required to be made with FINRA, and (ii) any state notice filings or other filings required by applicable state securities laws, and shall pay any fees and disbursements of counsel and filing fees in connection therewith.
(f) Use of Proceeds.
The Company shall apply the net proceeds from the sale of the Shares as described in the section of the Prospectus entitled "Use of Proceeds," including general corporate purposes, potential acquisitions of specialty insurance books of business, and continued investment in the development and enhancement of the QuorumEdge technology platform. The estimated net proceeds to the Company from the offering of the Firm Shares (the base deal), after deducting the estimated underwriting discount of $2,475,000 and estimated offering expenses of approximately $385,000, are approximately $42,140,000. Pending application of the net proceeds as described in the Prospectus, the Company may invest the net proceeds in short-term, interest-bearing, investment-grade securities, certificates of deposit, or direct or guaranteed obligations of the United States government.
(g) DTC Eligibility.
The Company shall cause the Shares to be eligible for deposit and book-entry transfer and settlement through the facilities of DTC.
(h) Earnings Statement.
The Company shall, as soon as practicable, make generally available to its securityholders, and deliver to the Underwriter, an earnings statement (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act, covering a period of at least twelve (12) months beginning with the first fiscal quarter of the Company occurring after the "effective date" (as defined in Rule 158) of the Registration Statement.
(i) Transfer Agent.
The Company shall maintain Continental Transfer & Trust Co., located at 17 Ashbury Asset Advisors, New York, NY 10004, as transfer agent and registrar for the Common Stock, or shall appoint a successor transfer agent and registrar reasonably acceptable to the Underwriter, and shall promptly notify the Underwriter of any change in the identity of the transfer agent and registrar for the Common Stock.
(j) Insurance Regulatory Compliance.
The Company shall not permit any Insurance Subsidiary to pay any extraordinary dividend or make any other distribution to the Company or any other person that would reduce such Insurance Subsidiary's risk-based capital below the applicable regulatory minimum level (or below such higher level as may be required to avoid triggering any "company action level" event under applicable state insurance regulatory requirements), without prior written notice to the Underwriter and consultation with the Underwriter. The Company shall use reasonable best efforts to ensure that each Insurance Subsidiary maintains compliance with all applicable insurance regulatory requirements in all material respects throughout the Lock-Up Period.
SECTION 6. EXPENSES
The Company shall pay all costs and expenses incidental to the performance of the Company's obligations under this Agreement and in connection with the offering and sale of the Shares, including, without limitation: (i) the costs and expenses of preparing, printing, and filing the Registration Statement (including financial statements, exhibits, and schedules thereto), the Prospectus and the Pricing Disclosure Package, and all amendments and supplements thereto; (ii) EDGAR filing and conversion costs; (iii) the fees and disbursements of Calderwood & Harkness LLP, counsel to the Company, and Carver, Bain & Associates LLP, the Company's independent registered public accounting firm, in connection with the offering; (iv) all fees and expenses relating to the listing of the Shares on the Nasdaq Global Select Market; (v) all fees and expenses of Continental Transfer & Trust Co., the transfer agent and registrar, in connection with the issuance of the Shares; (vi) all filing fees required to be paid to FINRA in connection with its review of the underwriting terms and arrangements; and (vii) all expenses and filing fees in connection with Blue Sky qualifications and state securities law notice filings, if any. The estimated total offering expenses to be borne by the Company (excluding the underwriting discount) are approximately $385,000.
In addition, the Company shall reimburse the Underwriter for its reasonable and documented out-of-pocket expenses incurred in connection with the offering and sale of the Shares, including, without limitation, the fees and disbursements of Duval & Pressler LLP, counsel to the Underwriter, in an aggregate amount not to exceed $[●].
SECTION 7. INDEMNIFICATION AND CONTRIBUTION
(a) Indemnification by the Company.
The Company agrees to indemnify and hold harmless the Underwriter, its affiliates, directors, officers, employees, and agents, and each person, if any, who controls the Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the "Underwriter Indemnified Parties"), against any and all losses, claims, damages, liabilities, and expenses (including the reasonable and documented costs of investigation and fees and disbursements of counsel in connection with any action, suit, proceeding, or investigation) (collectively, "Losses"), joint or several, to which such Underwriter Indemnified Party may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or otherwise, insofar as such Losses (or actions, suits, proceedings, or investigations in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including any information deemed to be a part thereof pursuant to Rule 430B under the Securities Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto), the Pricing Disclosure Package, or any free writing prospectus, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and the Company shall reimburse each Underwriter Indemnified Party for any legal or other documented expenses reasonably incurred by such Underwriter Indemnified Party in connection with investigating, defending, settling, compromising, or paying any such Loss or action; provided, however, that the Company shall not be liable in any such case to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue stat

PRIVILEGED AND CONFIDENTIAL Calderwood & Harkness LLP — Working Draft

UNDERWRITING AGREEMENT

QUORUM INSURANCE HOLDINGS CORP.

GREYSTONE HARWICK & CO., LLC

UNDERWRITING AGREEMENT

RECITALS

SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITER

SECTION 3. PURCHASE AND SALE

SECTION 4. CONDITIONS TO CLOSING

SECTION 5. COVENANTS OF THE COMPANY

SECTION 6. EXPENSES

SECTION 7. INDEMNIFICATION AND CONTRIBUTION

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