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LIMITED LIABILITY COMPANY AGREEMENT

QUORUM RECEIVABLES HOLDING LLC

a Delaware Limited Liability Company

Dated as of August 3, 2022

This Limited Liability Company Agreement (this "Agreement") of Quorum Receivables Holding LLC, a Delaware limited liability company (the "Company"), is entered into and shall be effective as of August 3, 2022, by Quorum Premium Finance LLC, a Delaware limited liability company, as the sole member of the Company (the "Member").

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RECITALS

WHEREAS, the Company was formed as a Delaware limited liability company by the filing of a Certificate of Formation (as defined herein) with the Secretary of State of the State of Delaware on August 3, 2022, under Delaware Secretary of State File No. 7894228, in accordance with the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq. (the "Delaware Act");

WHEREAS, the Company is formed for the limited purpose of acting as an intermediate special purpose entity (depositor) in connection with the securitization of insurance premium finance receivables originated by the Member, and all activities of the Company shall be conducted in furtherance of such limited purpose;

WHEREAS, the Member desires to enter into this Agreement to set forth the rights, powers, duties, and obligations of the Member and to govern the affairs of the Company in a manner consistent with such limited purpose and with the requirements of the Transaction Documents (as defined herein);

WHEREAS, the Company is intended to be a bankruptcy-remote entity, and this Agreement shall be construed in all respects to further such intent and to preserve the separateness of the Company from the Member and its affiliates; and

WHEREAS, the Member acknowledges that certain provisions of this Agreement, including, without limitation, the separateness covenants, non-petition covenants, and requirements for Independent Manager consent to Material Actions, are fundamental to the structure of the Securitization Transaction and are intended to benefit the noteholders of the Issuer, the Indenture Trustee, and the other secured parties under the Transaction Documents.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Member hereby agrees as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

"Agreement" means this Limited Liability Company Agreement of Quorum Receivables Holding LLC, as it may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.

"Bankruptcy" means, with respect to any Person, (a) the filing by such Person of a voluntary petition under Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.), as now constituted or hereafter amended, or any other applicable federal, state, or foreign bankruptcy, insolvency, reorganization, or similar law; (b) the filing of an involuntary petition against such Person under any such law and the failure of such petition to be dismissed or stayed within sixty (60) days after such filing; (c) the appointment of a receiver, trustee, custodian, conservator, sequestrator, liquidator, or similar official for such Person or for a substantial part of such Person's property; (d) the making by such Person of a general assignment for the benefit of creditors; or (e) the admission in writing by such Person of its inability to pay its debts generally as they become due.

"Certificate of Formation" means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware on August 3, 2022, under Delaware Secretary of State File No. 7894228, as it may be amended, restated, or supplemented from time to time in accordance with the Delaware Act and this Agreement.

"Company" means Quorum Receivables Holding LLC, a Delaware limited liability company.

"Covered Person" means the Member, the Independent Manager, and any officer, employee, or agent of the Company, in each case acting in such capacity.

"Delaware Act" means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq., as it may be amended from time to time.

"EIN" means the Company's federal employer identification number, which is 88-1247619.

"Fortbridge" means Fortbridge Corporate Services LLC, a Delaware limited liability company, with its principal office at 1209 Orange Street, Wilmington, Delaware 19801.

"Independent Manager" means Eleanor M. Vasquez, as appointed by Fortbridge Corporate Services LLC, or any successor independent manager meeting the qualifications set forth in Section 7.2 of this Agreement.

"Independent Manager Agreement" means the Independent Manager Agreement dated as of August 3, 2022, by and between the Company and Fortbridge Corporate Services LLC, as it may be amended, restated, supplemented, or otherwise modified from time to time.

"Indenture" means the Indenture dated as of August 3, 2022, by and between Quorum Receivables Funding 2022-1 LLC, as issuer, and Calvoneth Trust Company, N.A., as indenture trustee (in such capacity, the "Indenture Trustee"), as it may be amended, restated, supplemented, or otherwise modified from time to time.

"Indenture Trustee" means Calvoneth Trust Company, N.A., a national banking association, in its capacity as indenture trustee under the Indenture, and any successor indenture trustee appointed thereunder.

"Issuer" means Quorum Receivables Funding 2022-1 LLC, a Delaware limited liability company, in its capacity as issuer of notes under the Indenture.

"Material Action" has the meaning assigned to such term in Section 7.3 of this Agreement.

"Member" means Quorum Premium Finance LLC, a Delaware limited liability company, as the sole member of the Company, and any successor member admitted in accordance with this Agreement.

"Officers" has the meaning assigned to such term in Section 8.2 of this Agreement.

"Person" means any individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated association, governmental authority, or other entity of any kind.

"QIH" means Quorum Insurance Holdings Corp., a Delaware corporation and the ultimate parent company of the Member.

"QPF" means Quorum Premium Finance LLC, a Delaware limited liability company, in its capacity as the Member.

"Receivables Sale Agreement" means the Receivables Sale Agreement dated as of August 3, 2022, by and between the Member, as seller, and the Company, as purchaser, pursuant to which the Member sells or contributes insurance premium finance receivables to the Company, as it may be amended, restated, supplemented, or otherwise modified from time to time.

"Receivables Transfer Agreement" means the Receivables Transfer Agreement dated as of August 3, 2022, by and between the Company, as transferor, and the Issuer, as transferee, pursuant to which the Company transfers or contributes insurance premium finance receivables to the Issuer, as it may be amended, restated, supplemented, or otherwise modified from time to time.

"Registered Agent" means Ashgrove Services Inc., with offices located at 28 Liberty Street, New York, New York 10005, or any successor registered agent appointed in accordance with this Agreement and the Delaware Act.

"Registered Office" means the Company's registered office in the State of Delaware, which is in care of Ashgrove Services Inc., or such other registered office as may be designated from time to time in accordance with this Agreement and the Delaware Act.

"Securitization Transaction" means the securitization of insurance premium finance receivables originated by the Member, involving the sale or contribution of such receivables by the Member to the Company pursuant to the Receivables Sale Agreement, the transfer or contribution of such receivables by the Company to the Issuer pursuant to the Receivables Transfer Agreement, and the issuance by the Issuer of notes secured by such receivables pursuant to the Indenture.

"Separateness Covenants" means the covenants set forth in Article VI of this Agreement.

"Servicing Agreement" means the Servicing Agreement dated as of August 3, 2022, by and among the Issuer, the Company, and Quorum Premium Finance LLC, as servicer, as it may be amended, restated, supplemented, or otherwise modified from time to time.

"Sole Member Interest" means the one hundred percent (100%) membership interest in the Company held by the Member.

"SPV" or "Special Purpose Entity" means an entity established as a bankruptcy-remote vehicle for the purpose of isolating assets and limiting the entity's activities to those necessary to accomplish a specified objective, typically in connection with a structured finance or securitization transaction.

"Transaction Documents" means, collectively, the Receivables Sale Agreement, the Receivables Transfer Agreement, the Indenture, the Servicing Agreement, the Independent Manager Agreement, and all other agreements, instruments, certificates, and documents executed and delivered in connection with the Securitization Transaction, as each may be amended, restated, supplemented, or otherwise modified from time to time.

"Treasury Regulations" means the regulations promulgated by the United States Department of the Treasury under the Internal Revenue Code of 1986, as amended.

Section 1.2 Rules of Construction. Unless the context otherwise requires, (a) references to "Articles," "Sections," and "Exhibits" are to Articles, Sections, and Exhibits of this Agreement; (b) words in the singular include the plural and vice versa; (c) the terms "hereof," "herein," "hereby," "hereto," and derivative or similar words refer to this Agreement as a whole; (d) the term "including" means "including without limitation"; (e) references to any law, statute, or regulation are to such law, statute, or regulation as amended, modified, supplemented, or replaced from time to time; and (f) references to any agreement or document are to such agreement or document as amended, restated, supplemented, or otherwise modified from time to time to the extent permitted by the terms thereof and of this Agreement.

ARTICLE II

FORMATION AND ORGANIZATION

Section 2.1 Formation. The Company was formed as a Delaware limited liability company pursuant to the Delaware Act by the filing of the Certificate of Formation with the Secretary of State of the State of Delaware on August 3, 2022, under Delaware Secretary of State File No. 7894228. A copy of the Certificate of Formation is attached hereto as Exhibit A. The Member hereby ratifies and confirms the actions taken in connection with the formation of the Company, including the filing of the Certificate of Formation and the designation of the Registered Agent and Registered Office.

Section 2.2 Name. The name of the Company is "Quorum Receivables Holding LLC." The Company's business shall be conducted solely under such name or such other name or names as the Member may from time to time approve in writing; provided, however, that any such name must include "Quorum Receivables Holding" and must indicate the Company's limited liability company status in a manner compliant with the Delaware Act. The Member shall cause any change of name to be reflected in an appropriate amendment to the Certificate of Formation filed with the Secretary of State of the State of Delaware.

Section 2.3 Registered Office and Registered Agent. The registered office of the Company in the State of Delaware is located at the office of Ashgrove Services Inc., and the registered agent of the Company at such address is Ashgrove Services Inc., 28 Liberty Street, New York, New York 10005. The Member may change the registered office or the registered agent, or both, from time to time by filing an appropriate amendment or statement with the Secretary of State of the State of Delaware in accordance with the Delaware Act and by giving prompt written notice thereof to the Independent Manager.

Section 2.4 Principal Office. The principal office of the Company is located at 400 Atlantic Street, Suite 2200, Stamford, Connecticut 06901, or at such other place as the Member may designate from time to time by written notice to the Independent Manager. The Company may maintain such additional offices as the Member may deem necessary or appropriate in connection with the conduct of the Company's business.

Section 2.5 Term. The Company shall have perpetual existence and shall continue in full force and effect until dissolved in accordance with the provisions of Article XIII of this Agreement and the Delaware Act. The existence of the Company as a separate legal entity shall continue until the filing of a Certificate of Cancellation with the Secretary of State of the State of Delaware in accordance with Section 13.3 of this Agreement.

Section 2.6 Employer Identification Number. The Company's federal employer identification number (EIN) is 88-1247619. The Member shall cause the Company to use such EIN in all filings and correspondence with the Internal Revenue Service and other governmental authorities, as applicable.

ARTICLE III

PURPOSE AND POWERS

Section 3.1 Limited Purpose. The purpose of the Company is strictly limited to the following:

(a) acquiring, holding, managing, and transferring insurance premium finance receivables originated by Quorum Premium Finance LLC (the Member) pursuant to the Receivables Sale Agreement;

(b) transferring, selling, or contributing such receivables to Quorum Receivables Funding 2022-1 LLC (the Issuer) pursuant to the Receivables Transfer Agreement;

(d) performing its obligations under the Transaction Documents to which it is a party, including, without limitation, the Receivables Sale Agreement, the Receivables Transfer Agreement, and the Servicing Agreement;

(e) engaging in such other activities as are necessary, incidental, or related to the foregoing, including maintaining its existence, complying with the Separateness Covenants, and preserving its bankruptcy-remote status; and

(f) taking such other actions as are expressly contemplated by the Transaction Documents.

The Company shall not engage in any business or activity other than as set forth above without the prior written consent of the Member and the affirmative vote or written consent of the Independent Manager. The foregoing limitation on purpose is a fundamental provision of this Agreement and shall be construed strictly in furtherance of the bankruptcy-remote nature of the Company.

Section 3.2 Powers. Subject to the limitations set forth herein, including the limited purpose provisions of Section 3.1, the Separateness Covenants of Article VI, and the Independent Manager consent requirements of Article VII, the Company shall have all powers necessary, suitable, or convenient to carry out the purposes set forth in Section 3.1, including, without limitation, the power to:

(a) execute, deliver, and perform the Transaction Documents and any amendments, supplements, or modifications thereto;

(b) open, maintain, and close bank accounts and invest funds in accordance with the Transaction Documents;

(c) engage accountants, attorneys, agents, and other Persons as may be necessary or advisable in connection with the Company's business;

(d) institute, prosecute, defend, settle, and compromise any and all claims or actions at law or in equity relating to the Company's business;

(e) acquire, hold, manage, and dispose of property and assets in furtherance of its limited purpose; and

(f) do all other things necessary, suitable, or convenient for the conduct of the Company's business and the accomplishment of its purposes as set forth in Section 3.1.

Notwithstanding the foregoing, the Company shall not exercise any power or engage in any activity that is not within the limited purposes set forth in Section 3.1, and shall not take any Material Action without the prior written consent of the Independent Manager as required by Section 7.3.

ARTICLE IV

MEMBER

Section 4.1 Sole Member. The sole member of the Company is Quorum Premium Finance LLC, a Delaware limited liability company, with its principal office at 400 Atlantic Street, Suite 2200, Stamford, Connecticut 06901. QPF holds the Sole Member Interest, representing a one hundred percent (100%) membership interest in the Company. The name, address, taxpayer identification number, and percentage interest of the Member are set forth on Exhibit B attached hereto.

Section 4.2 Liability of Member. The Member shall not be personally liable for any debts, obligations, or liabilities of the Company, whether arising in contract, tort, or otherwise, solely by reason of being a member of the Company. The Member's liability shall be limited to the extent provided under the Delaware Act and this Agreement. Nothing in this Section 4.2 shall be construed to limit the obligations of the Member under the Transaction Documents to which the Member is a party.

Section 4.3 Admission of Additional Members. No additional members shall be admitted to the Company without the unanimous written consent of the Member and the Independent Manager, and only if such admission (a) would not adversely affect the bankruptcy-remote status of the Company, (b) would not cause the Company to be treated as a partnership or association taxable as a corporation for federal income tax purposes, (c) would not adversely affect the ratings assigned to any notes issued by the Issuer, and (d) would not violate any provision of the Transaction Documents. Any Person admitted as an additional member shall execute a counterpart of this Agreement and agree to be bound by all of the terms and provisions hereof.

Section 4.4 Transfer of Membership Interest. The Member shall not sell, assign, pledge, hypothecate, encumber, or otherwise transfer or dispose of its membership interest in the Company, in whole or in part, without (a) the prior written consent of the Independent Manager, (b) prior notification to each of the rating agencies that have assigned ratings to any notes issued by the Issuer (as of the date hereof, Brindoval Ratings Inc. and Pinnacle Rating Services LLC) and written confirmation from each such rating agency that such transfer will not result in a reduction, qualification, or withdrawal of the ratings assigned to such notes, and (c) a determination by the Member, reasonably satisfactory to the Independent Manager, that such transfer will not adversely affect the bankruptcy-remote status of the Company, the treatment of the Company as a disregarded entity for federal income tax purposes, or the validity or enforceability of the Transaction Documents. Any purported transfer in violation of this Section 4.4 shall be null and void and of no force or effect.

Section 4.5 Withdrawal. The Member may not withdraw or resign from the Company if such withdrawal or resignation would (a) cause the Company to be dissolved in violation of Article XIII of this Agreement, (b) adversely affect the bankruptcy-remote status of the Company, (c) adversely affect the Securitization Transaction or any obligations under the Transaction Documents, or (d) result in the Company ceasing to have at least one member, as required by the Delaware Act. Nothing in this Section 4.5 shall prohibit the Member from transferring its membership interest in accordance with Section 4.4.

ARTICLE V

CAPITAL CONTRIBUTIONS AND DISTRIBUTIONS

Section 5.1 Initial Capital Contribution. The Member shall make an initial capital contribution to the Company in such amount and form as determined by the Member in connection with the formation of the Company and the consummation of the Securitization Transaction. No minimum capital contribution is required by this Agreement. The amount and nature of the initial capital contribution shall be reflected on the books and records of the Company.

Section 5.2 Additional Capital Contributions. The Member is not required to make any additional capital contributions to the Company. Any additional capital contributions shall be made at the sole discretion of the Member and shall be reflected on the books and records of the Company. No Person may make a loan to the Company that constitutes a disguised capital contribution without the consent of the Member.

Section 5.3 Capital Accounts. A capital account shall be established and maintained for the Member in accordance with applicable provisions of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder. The capital account shall be credited with the amount of any capital contributions made by the Member and all items of income and gain allocated to the Member, and shall be debited with the amount of any distributions made to the Member and all items of loss and deduction allocated to the Member, all in accordance with applicable provisions of the Treasury Regulations.

Section 5.4 Distributions. Distributions to the Member shall be made at such times and in such amounts as determined by the Member in its sole discretion; provided, however, that no distribution shall be made if, after giving effect to such distribution:

(a) the Company would be unable to pay its debts as they become due in the ordinary course of business, as contemplated by Section 18-607 of the Delaware Act;

(b) such distribution would violate any provision of the Transaction Documents, including, without limitation, any restriction on distributions to the Member set forth in the Receivables Sale Agreement, the Receivables Transfer Agreement, or the Indenture; or

(c) such distribution would violate any Separateness Covenant set forth in Article VI of this Agreement, including the requirement that the Company maintain adequate capital in light of its contemplated business purposes, transactions, and liabilities.

Section 5.5 No Interest on Capital. No interest shall accrue or be payable on any capital contribution made by the Member or on any capital account balance of the Member. The Member shall not be entitled to receive interest on its capital contributions or to demand a return of its capital contributions, except as expressly provided in this Agreement or upon dissolution and winding up of the Company in accordance with Article XIII.

ARTICLE VI

SEPARATENESS COVENANTS

Section 6.1 General. In furtherance of the bankruptcy-remote status of the Company, and as a fundamental condition to the Securitization Transaction, the Company covenants and agrees that, so long as any obligations remain outstanding under the Transaction Documents or any notes issued by the Issuer remain outstanding, whichever is later, the Company shall comply with each of the separateness covenants set forth in this Article VI. The Member acknowledges that these covenants are essential to the structure of the Securitization Transaction and to the expectations of the noteholders, the Indenture Trustee, and the rating agencies.

Section 6.2 Separate Existence. The Company shall at all times:

(a) maintain its own separate books, records, financial statements, and accounts distinct from those of the Member (Quorum Premium Finance LLC), Quorum Insurance Holdings Corp., and any other affiliate, and shall not permit the books, records, financial statements, or accounts of the Company to be maintained on a combined or consolidated basis with those of any other Person (except as may be required by generally accepted accounting principles or applicable law, in which case appropriate notation shall be made to distinguish the assets and liabilities of the Company from those of any other Person);

(b) maintain its assets and liabilities separately from those of the Member, QIH, or any other Person, and shall not commingle its funds or other assets with those of any other Person; the Company shall hold all of its assets in its own name and shall not permit any other Person to hold assets on behalf of the Company except as expressly contemplated by the Transaction Documents;

(c) not guarantee or become obligated for the debts, liabilities, or obligations of any other Person, and shall not hold itself out as being responsible for the debts, liabilities, or obligations of any other Person (other than as expressly contemplated by the Transaction Documents);

(d) not make or permit to remain outstanding any loan or advance to the Member, QIH, or any affiliate of the Member or QIH, and shall not otherwise extend credit to any such Person (other than as expressly contemplated by the Transaction Documents);

(e) not pledge, encumber, hypothecate, or grant any security interest in its assets for the benefit of any other Person (other than as expressly contemplated by the Transaction Documents, including, without limitation, the granting of security interests in receivables and related assets in connection with the Securitization Transaction);

(f) hold itself out to the public and all other Persons (including creditors, employees, vendors, and governmental authorities) as a legal entity separate and distinct from the Member, QIH, and any other Person, and shall conduct its business solely in its own name so as not to mislead others as to the identity of the entity with which they are dealing;

(g) correct any known misunderstanding regarding its separate identity and shall take all reasonable steps to ensure that third parties understand that the Company is a separate legal entity from the Member, QIH, and their respective affiliates;

(h) maintain adequate capital in light of its contemplated business purposes, transactions, and liabilities, and shall not distribute funds or make payments to the Member or any other Person to the extent that such distribution or payment would render the Company inadequately capitalized;

(i) conduct its business in its own name and use separate stationery, invoices, checks, and other business documents from those of the Member, QIH, or any affiliate; the Company's name and identity shall appear on all such documents;

(j) file its own tax returns to the extent required by applicable law, or otherwise be treated as a disregarded entity of the Member for federal income tax purposes as appropriate, and shall not file a consolidated federal income tax return with any Person other than as required by applicable law;

(k) maintain arm's-length relationships with the Member, QIH, and their respective affiliates in all transactions and dealings, and shall ensure that all transactions between the Company and any affiliate are documented in writing and conducted on terms comparable to those that would be obtained in an arm's-length transaction with an unrelated Person;

(l) pay its own liabilities and expenses from its own assets, including, without limitation, the payment of reasonable allocations of shared expenses such as overhead, legal, accounting, and administrative costs, and shall not rely upon the credit or assets of the Member or any other Person to pay its obligations (other than as expressly contemplated by the Transaction Documents);

(m) observe all company formalities required by the Delaware Act and this Agreement, including, without limitation, maintaining this Agreement and any amendments hereto, maintaining minutes or written consents reflecting actions taken on behalf of the Company, and holding itself out as a duly organized and validly existing limited liability company;

(n) not acquire obligations or securities of the Member, QIH, or any of their respective affiliates (other than as expressly contemplated by the Transaction Documents);

(o) allocate fairly and reasonably any overhead, general, administrative, or other shared expenses among itself and any affiliates sharing such expenses, and shall maintain documentation supporting such allocations;

(p) not enter into any transaction with the Member, QIH, or any affiliate of the Member or QIH except on commercially reasonable terms comparable to those that would be obtained in an arm's-length transaction with an unrelated Person; and

(q) maintain at least one Independent Manager at all times, in accordance with Article VII of this Agreement.

Section 6.3 Organizational Documents. The Company shall not amend, modify, restate, supplement, or terminate this Agreement or the Certificate of Formation in any manner that is inconsistent with the provisions of this Article VI, that would adversely affect the bankruptcy-remote status of the Company, or that would compromise the separateness of the Company from the Member and its affiliates, without the affirmative vote or written consent of the Independent Manager. Any amendment, modification, restatement, supplement, or termination of this Agreement or the Certificate of Formation shall be subject to the requirements of Section 14.2 of this Agreement.

Section 6.4 Survival. The provisions of this Article VI shall survive the dissolution of the Company and shall remain operative and in full force and effect so long as any obligations under the Transaction Documents remain outstanding or any notes issued by the Issuer remain outstanding, whichever is later. No dissolution, winding up, or termination of the Company shall affect the obligations of the Company or the Member under this Article VI until all such obligations have been satisfied in full.

ARTICLE VII

INDEPENDENT MANAGER

Section 7.1 Appointment of Independent Manager. The Company shall at all times have at least one (1) Independent Manager. As of the date hereof, Eleanor M. Vasquez, provided by Fortbridge Corporate Services LLC, located at 1209 Orange Street, Wilmington, Delaware 19801, is hereby appointed as the Independent Manager of the Company. The information regarding the Independent Manager is set forth on Exhibit C attached hereto. The Independent Manager need not be a member of the Company, an officer of the Company, a resident of the State of Delaware, or a citizen of the United States.

Section 7.2 Qualifications. The Independent Manager shall at all times be an individual who meets each of the following qualifications:

(a) the Independent Manager is not, and has not been for at least five (5) years prior to appointment, a stockholder, member, partner, director, officer, employee, or affiliate of the Company, the Member, Quorum Insurance Holdings Corp., or any of their respective affiliates (other than serving as an independent manager or independent director of a bankruptcy-remote special purpose entity in connection with an unrelated securitization transaction or structured finance transaction);

(b) the Independent Manager is not a supplier, service provider, customer, or creditor of the Company, the Member, QIH, or any of their respective affiliates (other than in the capacity of independent manager or independent director as described in clause (a) above and other than fees payable pursuant to the Independent Manager Agreement); and

(c) the Independent Manager has substantial experience serving as an independent manager or independent director of special purpose entities used in structured finance transactions, securitization transactions, or similar transactions requiring bankruptcy-remote structures.

The Company and the Member shall verify the qualifications of the Independent Manager prior to appointment and shall obtain written representations from the Independent Manager confirming compliance with the foregoing requirements.

Section 7.3 Material Actions Requiring Independent Manager Consent. Notwithstanding any other provision of this Agreement or the Delaware Act, the Company shall not, without the prior unanimous written consent of both the Member and the Independent Manager, take any Material Action. For purposes of this Agreement, "Material Action" means any of the following actions or decisions:

(a) filing a voluntary petition or otherwise commencing any case, proceeding, or action under any Bankruptcy or insolvency law, including Title 11 of the United States Code, any state insolvency law, or any similar federal, state, or foreign law;

(b) consenting to, acquiescing in, or failing to contest in a timely manner the filing of an involuntary petition against the Company under any Bankruptcy or insolvency law;

(c) filing any petition, application, or motion seeking reorganization, arrangement, adjustment, winding-up, dissolution, composition, liquidation, or other relief of or relating to the Company or its debts under any Bankruptcy, insolvency, or similar law;

(d) seeking or consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official for the Company or for a substantial part of its property or assets;

(e) making an assignment for the benefit of creditors of the Company;

(f) admitting in writing the Company's inability to pay its debts generally as they become due;

(g) taking any action in furtherance of any of the foregoing actions described in clauses (a) through (f);

(h) dissolving, liquidating, winding up, merging, or consolidating the Company, or converting the Company to another form of entity;

(i) amending, modifying, restating, supplementing, or terminating this Agreement or the Certificate of Formation in any manner that is inconsistent with the Separateness Covenants set forth in Article VI or the bankruptcy-remote provisions of this Agreement;

(j) selling, transferring, or otherwise disposing of all or substantially all of the assets of the Company outside of the ordinary course of business as contemplated by the Transaction Documents; or

(k) engaging in any business or activity that is not consistent with the limited purposes set forth in Section 3.1 of this Agreement.

The requirement of Independent Manager consent as set forth in this Section 7.3 is a fundamental term of this Agreement and of the structure of the Securitization Transaction. The Member acknowledges that the consent requirement is intended to protect the interests of the Company, the noteholders of the Issuer, the Indenture Trustee, and the other secured parties under the Transaction Documents.

Section 7.4 Fiduciary Duties of Independent Manager. When voting on or considering whether to consent to or withhold consent from any Material Action, the Independent Manager shall owe fiduciary duties to the Company, including the duty of care and the duty of loyalty. In making any such determination, the Independent Manager shall consider the interests of the Company and its creditors (including, without limitation, the noteholders of the Issuer, the Indenture Trustee, and any other parties to the Transaction Documents), as well as the interests of the Member, and shall act in a manner that the Independent Manager reasonably believes to be in the best interests of the Company. The Independent Manager shall not be required to consider the interests of any other Person, including, without limitation, the interests of QIH or any affiliate of the Member (other than the Company), unless doing so would be consistent with the Independent Manager's fiduciary duties to the Company. The provisions of this Section 7.4 are intended to replace and supersede the default fiduciary duty provisions of the Delaware Act to the fullest extent permitted by law.

Section 7.5 Removal and Replacement. The Independent Manager may be removed or replaced only (a) for cause (including, without limitation, the Independent Manager's failure to satisfy the qualification requirements set forth in Section 7.2, the Independent Manager's failure to perform the duties required under this Agreement, or the Independent Manager's commission of fraud, willful misconduct, or gross negligence), or (b) upon the resignation, death, or incapacity of the Independent Manager. In any such case, the Member shall promptly appoint a successor Independent Manager who meets the qualifications set forth in Section 7.2. Fortbridge Corporate Services LLC shall be entitled to designate the replacement Independent Manager, subject to the approval of the Member, which approval shall not be unreasonably withheld, conditioned, or delayed. No vacancy in the position of Independent Manager shall exist for more than ten (10) business days. During any period in which no Independent Manager is serving, no Material Action shall be taken by the Company. The resignation of the Independent Manager shall be effective only upon the appointment of a successor Independent Manager who meets the qualifications of Section 7.2.

Section 7.6 Compensation. The Company shall pay the compensation of the Independent Manager pursuant to the terms and conditions set forth in the Independent Manager Agreement dated as of August 3, 2022, between the Company and Fortbridge Corporate Services LLC. Such compensation shall be an expense of the Company payable from its own funds and assets and shall be paid on a timely basis. The payment of such compensation shall not be contingent upon the performance of the Company or the outcome of any Material Action.

Section 7.7 Limitation on Authority. The Independent Manager shall have no authority to bind the Company, to manage the business or affairs of the Company, to execute any agreement or instrument on behalf of the Company, or to take any other action on behalf of the Company, except as expressly set forth in this Article VII. The Independent Manager's sole authority is the right and obligation to consent to or withhold consent from Material Actions as described in Section 7.3. The Independent Manager shall not have the right to vote on or participate in the management of the Company's day-to-day operations, and the Independent Manager's consent shall be required only with respect to Material Actions.

ARTICLE VIII

MANAGEMENT AND OFFICERS

Section 8.1 Management by Member. The business and affairs of the Company shall be managed by the Member, acting in its capacity as the sole member of the Company. The Member shall have full, exclusive, and complete authority and discretion to manage and control the business, affairs, properties, and operations of the Company, subject to the limitations set forth in this Agreement, including, without limitation, the limited purpose provisions of Section 3.1, the Separateness Covenants of Article VI, and the requirements of Article VII regarding Independent Manager consent for Material Actions. The Member shall have the authority to make all decisions and take all actions on behalf of the Company that are not Material Actions, without the need for any further act, vote, or approval of any other Person.

Section 8.2 Officers. The Member may from time to time appoint one or more officers of the Company (each, an "Officer" and collectively, the "Officers"), who shall have such titles, duties, responsibilities, and authority as the Member may from time to time determine and delegate. As of the date hereof, the following Officer is appointed:

Sandra Ling-Hwang, Manager (in her capacity as Treasurer of Quorum Insurance Holdings Corp.)

Officers shall serve at the pleasure of the Member and may be removed, with or without cause, or replaced at any time by the Member in its sole discretion. The appointment of an Officer shall not create any employment relationship between the Company and such Officer. Officers shall have such duties and authority as the Member may delegate to them from time to time, subject to the limitations of this Agreement, including, without limitation, the requirements of Article VII. No Officer shall have the authority to take any Material Action without the prior written consent of the Independent Manager as required by Section 7.3.

Section 8.3 Actions by the Member. Any action required or permitted to be taken by the Member under this Agreement or the Delaware Act may be taken by the Member (acting through its own duly authorized officers, managers, or other representatives) by written consent without the need for a formal meeting or any other formality. Written consents may be executed in counterparts and delivered by electronic transmission. Records of all such written consents shall be maintained with the books and records of the Company at its principal office or at such other location as the Member may designate.

Section 8.4 Delegation. The Member may delegate its management authority to Officers, employees, or agents of the Company or of the Member; provided, however, that (a) no such delegation shall relieve the Member of its obligations under this Agreement or the Transaction Documents, (b) no such delegation shall enable any delegatee to take any Material Action without the Independent Manager's prior written consent as required by Section 7.3, and (c) the Member shall remain responsible for the acts and omissions of any Person to whom authority has been delegated. The Member may revoke any such delegation at any time in its sole discretion.

ARTICLE IX

NON-PETITION COVENANT

Section 9.1 Non-Petition. Each of the Member, the Independent Manager, and any Officer of the Company, in each case in its capacity as such, hereby covenants and agrees that it shall not, prior to the date that is one (1) year and one (1) day (or, if longer, any applicable preference period under applicable Bankruptcy or insolvency law) after the payment in full of all notes issued by the Issuer (Quorum Receivables Funding 2022-1 LLC) and all other obligations under the Transaction Documents (the "Non-Petition Period"), acquiesce, petition, or otherwise invoke or cause the Company to invoke the process of any court or governmental authority for the purpose of:

(a) commencing or sustaining a case against the Company under any federal or state bankruptcy, insolvency, reorganization, or similar law (including Title 11 of the United States Code), or seeking to have an order for relief entered with respect to the Company under any such law;

(b) appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator, or other similar official for the Company or for any substantial part of the property, assets, or revenues of the Company; or

Nothing in this Section 9.1 shall limit the obligations of the Independent Manager under Section 7.3 or Section 7.4 or the rights of the noteholders or the Indenture Trustee under the Transaction Documents.

Section 9.2 Binding Nature. The covenant set forth in Section 9.1 is given for the benefit of the Issuer, the Indenture Trustee (Calvoneth Trust Company, N.A.), the noteholders under the Indenture, and the other secured parties under the Transaction Documents, and shall be directly enforceable by each of them. Each of the foregoing Persons is an intended third-party beneficiary of this Article IX and shall have the right to enforce this covenant as if it were a party to this Agreement. The non-petition covenant set forth in Section 9.1 shall constitute a "contractual obligation" of the Member and each other Person bound hereby and shall not be dischargeable or terminable except in accordance with the terms hereof. This covenant shall survive any dissolution, winding up, or termination of the Company, and shall remain in full force and effect until the expiration of the Non-Petition Period.

ARTICLE X

TAX STATUS

Section 10.1 Tax Classification. The Company is a single-member limited liability company owned one hundred percent (100%) by Quorum Premium Finance LLC. For United States federal income tax purposes, the Company is intended to be treated as a disregarded entity within the meaning of Treasury Regulation Section 301.7701-3(b)(1)(ii), meaning that the assets and liabilities of the Company will be treated as assets and liabilities of the Member, and all items of income, gain, loss, deduction, and credit of the Company will be reported on the federal income tax returns of the Member. The Company shall not file, and the Member shall not cause the Company to file, IRS Form 8832 (Entity Classification Election) or take any other action to elect to be classified as a corporation or an association taxable as a corporation for federal income tax purposes. The Company shall not take any action, and the Member shall not cause the Company to take any action, that would cause the Company to be treated as other than a disregarded entity for federal income tax purposes, including, without limitation, admitting a second member (except in compliance with Section 4.3).

Section 10.2 State and Local Taxes. The Company shall comply with all applicable state and local tax filing and payment requirements in each jurisdiction in which the Company is required to file returns or make payments. The Company is organized and structured to avoid creating state-level franchise or income tax nexus in jurisdictions other than the State of Delaware, and the Member shall cause the Company's business to be conducted in a manner consistent with such intent. The Company shall pay any annual franchise taxes, license fees, or similar charges required by the State of Delaware or any other jurisdiction in which the Company is qualified to do business.

Section 10.3 Tax Returns. To the extent required by applicable law, the Company shall prepare and file, or cause to be prepared and filed, all required federal, state, and local tax returns and informational reports in a timely manner. The Member shall report all items of income, gain, loss, deduction, and credit of the Company on its own federal income tax returns in a manner consistent with the treatment of the Company as a disregarded entity. The Company shall furnish to the Member such information as the Member may reasonably request in connection with the preparation of its tax returns.

ARTICLE XI

BOOKS, RECORDS, AND REPORTS

Section 11.1 Books and Records. The Company shall maintain complete, accurate, and current books and records of its financial condition and operations, separate and apart from the books and records of the Member, Quorum Insurance Holdings Corp., and any other Person. Such books and records shall include, without limitation, the following: (a) a current list of the name, address, and membership interest of the Member; (b) copies of the Certificate of Formation and all amendments thereto; (c) copies of this Agreement and all amendments hereto; (d) copies of the Company's federal, state, and local income tax returns and reports, if any; (e) copies of all Transaction Documents to which the Company is a party; and (f) all financial statements and accounting records of the Company. Such books and records shall be maintained at the principal office of the Company, currently located at 400 Atlantic Street, Suite 2200, Stamford, Connecticut 06901, or at such other location as the Member may designate from time to time in writing.

Section 11.2 Inspection. The Member and the Independent Manager shall each have the right to inspect and copy the books and records of the Company at any reasonable time during normal business hours, upon reasonable prior notice to the Company. The Indenture Trustee and the rating agencies shall have such inspection rights as may be provided in the Transaction Documents.

Section 11.3 Financial Statements. The Company shall prepare, or cause to be prepared, financial statements of the Company as may be reasonably required by the Transaction Documents or as may be reasonably requested by the Member, the Indenture Trustee, or the rating agencies. Such financial statements may be prepared on a consolidated basis with the Member to the extent required by generally accepted accounting principles, provided that appropriate notation shall be made to distinguish the assets and liabilities of the Company from those of the Member and its affiliates. Independent auditing services may be provided by Meridian Ledger LLP, or such other nationally recognized independent accounting firm as the Member may designate from time to time.

Section 11.4 Annual Review. The Member shall cause the Company to conduct an annual review of the Company's compliance with the Separateness Covenants set forth in Article VI. Such review shall be documented in writing and a copy thereof shall be maintained with the books and records of the Company. The results of such review shall be made available to the Independent Manager upon request.

ARTICLE XII

EXCULPATION AND INDEMNIFICATION

Section 12.1 Exculpation. No Covered Person shall be liable to the Company or the Member for any loss, damage, liability, or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith and in a manner reasonably believed by such Covered Person to be within the scope of authority granted by this Agreement and in the best interests of the Company, unless such act or omission constitutes fraud, willful misconduct, bad faith, or gross negligence on the part of such Covered Person. The provisions of this Section 12.1 shall not be construed to limit the liability of any Covered Person for breach of the Separateness Covenants set forth in Article VI, for violation of the non-petition covenant set forth in Article IX, or for any act or omission in contravention of the specific requirements of this Agreement.

Section 12.2 Indemnification. To the fullest extent permitted by the Delaware Act and applicable law, the Company shall indemnify, defend, and hold harmless each Covered Person from and against any and all claims, demands, actions, suits, proceedings, losses, liabilities, damages, costs, and expenses (including, without limitation, reasonable attorneys' fees and disbursements) arising out of or relating to any act or omission of such Covered Person in connection with the business, affairs, or operations of the Company; provided, however, that no Covered Person shall be entitled to indemnification hereunder for any claim, loss, liability, damage, cost, or expense arising from or attributable to such Covered Person's fraud, willful misconduct, bad faith, or gross negligence. All indemnification payments shall be made solely from the assets of the Company, and no Covered Person shall have any recourse against the Member for indemnification payments except to the extent the Member voluntarily agrees to contribute to such payments. The satisfaction of any indemnification obligation under this Section 12.2 shall be from and limited to the assets of the Company, and no Covered Person shall have any right to require the Member to make any capital contribution or loan to the Company to fund any indemnification obligation.

Section 12.3 Independent Manager Indemnification. In addition to the indemnification provided under Section 12.2, the Company shall indemnify, defend, and hold harmless the Independent Manager (Eleanor M. Vasquez) and Fortbridge Corporate Services LLC from and against any and all claims, demands, actions, suits, proceedings, losses, liabilities, damages, costs, and expenses (including, without limitation, reasonable attorneys' fees and disbursements) arising from the Independent Manager's service in such capacity, to the extent provided in the Independent Manager Agreement dated as of August 3, 2022, between the Company and Fortbridge Corporate Services LLC. Such indemnification shall be an obligation of the Company payable from its own assets and shall be in addition to, and not in limitation of, any other rights to indemnification or contribution that the Independent Manager or Fortbridge may have under applicable law.

ARTICLE XIII

DISSOLUTION AND WINDING UP

Section 13.1 Events of Dissolution. The Company shall be dissolved only upon the occurrence of any of the following events:

(a) the written consent of the Member and the Independent Manager to dissolve the Company, provided that no notes issued by the Issuer (Quorum Receivables Funding 2022-1 LLC) remain outstanding and all obligations under the Transaction Documents have been indefeasibly satisfied and discharged in full;

(b) the entry of a decree of judicial dissolution of the Company by a court of competent jurisdiction under Section 18-802 of the Delaware Act; or

Notwithstanding any other provision of this Agreement or the Delaware Act, the Company shall not be dissolved by reason of the Bankruptcy, dissolution, liquidation, termination, or withdrawal of the Member (Quorum Premium Finance LLC). In the event of any such occurrence with respect to the Member, the Company shall continue in existence without dissolution, and, if necessary to preserve the Company's existence under the Delaware Act, a successor member shall be admitted to the Company in accordance with Section 4.3 of this Agreement. The provisions of this Section 13.1 are a material inducement to the parties to the Transaction Documents and are intended to ensure the continued existence of the Company as a bankruptcy-remote entity throughout the term of the Securitization Transaction.

Section 13.2 Winding Up. Upon dissolution of the Company in accordance with Section 13.1, the Member (or, in the absence of the Member, a Person appointed by the Independent Manager or, failing such appointment, by a court of competent jurisdiction) shall act as the liquidating agent and shall wind up the affairs of the Company in accordance with the Delaware Act and this Agreement. In winding up the affairs of the Company, the liquidating agent shall:

(a) collect and reduce to cash or cash equivalents all assets of the Company;

(b) discharge and pay, or make adequate provision for the payment of, all debts, liabilities, and obligations of the Company, including, without limitation, all obligations under the Transaction Documents, in the order of priority required by applicable law; and

During the winding-up period, the Separateness Covenants set forth in Article VI and the non-petition covenant set forth in Article IX shall remain in full force and effect.

Section 13.3 Certificate of Cancellation. Upon the completion of the winding up and distribution of all assets of the Company, the Member (or the liquidating agent, as applicable) shall cause a Certificate of Cancellation to be filed with the Secretary of State of the State of Delaware in accordance with Section 18-203 of the Delaware Act. Upon the filing of the Certificate of Cancellation, the existence of the Company as a separate legal entity shall cease.

ARTICLE XIV

MISCELLANEOUS

Section 14.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware (including, without limitation, the Delaware Act), without regard to principles of conflict of laws that would cause the application of the laws of any other jurisdiction; provided, however, that to the extent certain matters arising under the Transaction Documents are expressly governed by the internal laws of the State of New York, such matters shall be governed by and construed in accordance with the laws of the State of New York as specified therein. Each of the parties hereto irrevocably submits to the non-exclusive jurisdiction of the courts of the State of Delaware and the United States District Court for the District of Delaware for the purpose of any suit, action, or proceeding arising out of or relating to this Agreement.

Section 14.2 Amendments. This Agreement may be amended, modified, restated, or supplemented only by a written instrument executed by the Member with the prior written consent of the Independent Manager. No amendment, modification, restatement, or supplement shall be effective unless it satisfies each of the following conditions:

(a) such amendment does not adversely affect the bankruptcy-remote status of the Company;

(b) such amendment does not violate any Separateness Covenant set forth in Article VI;

(c) such amendment does not adversely affect the ratings assigned to any notes issued by the Issuer, as confirmed by each of the rating agencies that have rated such notes (as of the date hereof, Brindoval Ratings Inc. and Pinnacle Rating Services LLC), unless the prior written consent of each such rating agency has been obtained; and

(d) such amendment is not inconsistent with the provisions of the Transaction Documents.

Any purported amendment that does not satisfy each of the foregoing conditions shall be null and void and of no force or effect.

Section 14.3 Severability. If any provision of this Agreement, or the application of any such provision to any Person or circumstance, is held to be invalid, illegal, or unenforceable in any respect by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired, and the affected provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable while preserving, to the greatest extent possible, its original intent. If such modification is not possible, the affected provision shall be severed from this Agreement, and the remaining provisions shall continue in full force and effect.

Section 14.4 Entire Agreement. This Agreement, together with the Certificate of Formation and the exhibits and schedules attached hereto, constitutes the entire agreement of the Member with respect to the Company and its subject matter, and supersedes all prior agreements, representations, warranties, and understandings, whether oral or written, with respect thereto.

Section 14.5 No Third-Party Beneficiaries. Except as expressly provided herein, this Agreement is not intended to, and shall not, confer any rights, benefits, or remedies upon any Person other than the Member and the Independent Manager. Without limiting the generality of the foregoing, the Indenture Trustee (Calvoneth Trust Company, N.A.), the noteholders under the Indenture, and the other secured parties under the Transaction Documents are intended third-party beneficiaries of Sections 6.1 through 6.4 (Separateness Covenants), Article VII (Independent Manager), and Article IX (Non-Petition Covenant) of this Agreement, and each of them shall have the right to enforce such provisions as if it were a party to this Agreement.

Section 14.6 Waiver. No waiver of any provision of this Agreement or of any right or remedy hereunder shall be effective unless set forth in a written instrument executed by the Member and the Independent Manager. No failure or delay on the part of the Member or the Independent Manager in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. All rights and remedies hereunder are cumulative and are not exclusive of any other rights or remedies provided by law or equity.

Section 14.7 Notices. All notices, requests, demands, consents, and other communications required or permitted under this Agreement shall be in writing and shall be deemed duly given (a) when delivered personally, (b) when sent by nationally recognized overnight courier service (with written confirmation of receipt), (c) on the third (3rd) business day after being deposited in the United States mail, first class, registered or certified, return receipt requested, postage prepaid, or (d) when sent by electronic mail (with confirmation of receipt), addressed to the parties at the following addresses (or at such other address as may be designated in writing by the applicable party):

If to the Company or the Member:

Quorum Receivables Holding LLC c/o Quorum Premium Finance LLC 400 Atlantic Street, Sui

LIMITED LIABILITY COMPANY AGREEMENT
OF
QUORUM RECEIVABLES HOLDING LLC
a Delaware Limited Liability Company
Dated as of August 3, 2022
This Limited Liability Company Agreement (this "Agreement") of Quorum Receivables Holding LLC, a Delaware limited liability company (the "Company"), is entered into and shall be effective as of August 3, 2022, by Quorum Premium Finance LLC, a Delaware limited liability company, as the sole member of the Company (the "Member").
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RECITALS
WHEREAS, the Company was formed as a Delaware limited liability company by the filing of a Certificate of Formation (as defined herein) with the Secretary of State of the State of Delaware on August 3, 2022, under Delaware Secretary of State File No. 7894228, in accordance with the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq. (the "Delaware Act");
WHEREAS, the Company is formed for the limited purpose of acting as an intermediate special purpose entity (depositor) in connection with the securitization of insurance premium finance receivables originated by the Member, and all activities of the Company shall be conducted in furtherance of such limited purpose;
WHEREAS, the Member desires to enter into this Agreement to set forth the rights, powers, duties, and obligations of the Member and to govern the affairs of the Company in a manner consistent with such limited purpose and with the requirements of the Transaction Documents (as defined herein);
WHEREAS, the Company is intended to be a bankruptcy-remote entity, and this Agreement shall be construed in all respects to further such intent and to preserve the separateness of the Company from the Member and its affiliates; and
WHEREAS, the Member acknowledges that certain provisions of this Agreement, including, without limitation, the separateness covenants, non-petition covenants, and requirements for Independent Manager consent to Material Actions, are fundamental to the structure of the Securitization Transaction and are intended to benefit the noteholders of the Issuer, the Indenture Trustee, and the other secured parties under the Transaction Documents.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Member hereby agrees as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:
"Agreement" means this Limited Liability Company Agreement of Quorum Receivables Holding LLC, as it may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Bankruptcy" means, with respect to any Person, (a) the filing by such Person of a voluntary petition under Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.), as now constituted or hereafter amended, or any other applicable federal, state, or foreign bankruptcy, insolvency, reorganization, or similar law; (b) the filing of an involuntary petition against such Person under any such law and the failure of such petition to be dismissed or stayed within sixty (60) days after such filing; (c) the appointment of a receiver, trustee, custodian, conservator, sequestrator, liquidator, or similar official for such Person or for a substantial part of such Person's property; (d) the making by such Person of a general assignment for the benefit of creditors; or (e) the admission in writing by such Person of its inability to pay its debts generally as they become due.
"Certificate of Formation" means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware on August 3, 2022, under Delaware Secretary of State File No. 7894228, as it may be amended, restated, or supplemented from time to time in accordance with the Delaware Act and this Agreement.
"Company" means Quorum Receivables Holding LLC, a Delaware limited liability company.
"Covered Person" means the Member, the Independent Manager, and any officer, employee, or agent of the Company, in each case acting in such capacity.
"Delaware Act" means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq., as it may be amended from time to time.
"EIN" means the Company's federal employer identification number, which is 88-1247619.
"Fortbridge" means Fortbridge Corporate Services LLC, a Delaware limited liability company, with its principal office at 1209 Orange Street, Wilmington, Delaware 19801.
"Independent Manager" means Eleanor M. Vasquez, as appointed by Fortbridge Corporate Services LLC, or any successor independent manager meeting the qualifications set forth in Section 7.2 of this Agreement.
"Independent Manager Agreement" means the Independent Manager Agreement dated as of August 3, 2022, by and between the Company and Fortbridge Corporate Services LLC, as it may be amended, restated, supplemented, or otherwise modified from time to time.
"Indenture" means the Indenture dated as of August 3, 2022, by and between Quorum Receivables Funding 2022-1 LLC, as issuer, and Calvoneth Trust Company, N.A., as indenture trustee (in such capacity, the "Indenture Trustee"), as it may be amended, restated, supplemented, or otherwise modified from time to time.
"Indenture Trustee" means Calvoneth Trust Company, N.A., a national banking association, in its capacity as indenture trustee under the Indenture, and any successor indenture trustee appointed thereunder.
"Issuer" means Quorum Receivables Funding 2022-1 LLC, a Delaware limited liability company, in its capacity as issuer of notes under the Indenture.
"Material Action" has the meaning assigned to such term in Section 7.3 of this Agreement.
"Member" means Quorum Premium Finance LLC, a Delaware limited liability company, as the sole member of the Company, and any successor member admitted in accordance with this Agreement.
"Officers" has the meaning assigned to such term in Section 8.2 of this Agreement.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated association, governmental authority, or other entity of any kind.
"QIH" means Quorum Insurance Holdings Corp., a Delaware corporation and the ultimate parent company of the Member.
"QPF" means Quorum Premium Finance LLC, a Delaware limited liability company, in its capacity as the Member.
"Receivables Sale Agreement" means the Receivables Sale Agreement dated as of August 3, 2022, by and between the Member, as seller, and the Company, as purchaser, pursuant to which the Member sells or contributes insurance premium finance receivables to the Company, as it may be amended, restated, supplemented, or otherwise modified from time to time.
"Receivables Transfer Agreement" means the Receivables Transfer Agreement dated as of August 3, 2022, by and between the Company, as transferor, and the Issuer, as transferee, pursuant to which the Company transfers or contributes insurance premium finance receivables to the Issuer, as it may be amended, restated, supplemented, or otherwise modified from time to time.
"Registered Agent" means Ashgrove Services Inc., with offices located at 28 Liberty Street, New York, New York 10005, or any successor registered agent appointed in accordance with this Agreement and the Delaware Act.
"Registered Office" means the Company's registered office in the State of Delaware, which is in care of Ashgrove Services Inc., or such other registered office as may be designated from time to time in accordance with this Agreement and the Delaware Act.
"Securitization Transaction" means the securitization of insurance premium finance receivables originated by the Member, involving the sale or contribution of such receivables by the Member to the Company pursuant to the Receivables Sale Agreement, the transfer or contribution of such receivables by the Company to the Issuer pursuant to the Receivables Transfer Agreement, and the issuance by the Issuer of notes secured by such receivables pursuant to the Indenture.
"Separateness Covenants" means the covenants set forth in Article VI of this Agreement.
"Servicing Agreement" means the Servicing Agreement dated as of August 3, 2022, by and among the Issuer, the Company, and Quorum Premium Finance LLC, as servicer, as it may be amended, restated, supplemented, or otherwise modified from time to time.
"Sole Member Interest" means the one hundred percent (100%) membership interest in the Company held by the Member.
"SPV" or "Special Purpose Entity" means an entity established as a bankruptcy-remote vehicle for the purpose of isolating assets and limiting the entity's activities to those necessary to accomplish a specified objective, typically in connection with a structured finance or securitization transaction.
"Transaction Documents" means, collectively, the Receivables Sale Agreement, the Receivables Transfer Agreement, the Indenture, the Servicing Agreement, the Independent Manager Agreement, and all other agreements, instruments, certificates, and documents executed and delivered in connection with the Securitization Transaction, as each may be amended, restated, supplemented, or otherwise modified from time to time.
"Treasury Regulations" means the regulations promulgated by the United States Department of the Treasury under the Internal Revenue Code of 1986, as amended.
Section 1.2 Rules of Construction. Unless the context otherwise requires, (a) references to "Articles," "Sections," and "Exhibits" are to Articles, Sections, and Exhibits of this Agreement; (b) words in the singular include the plural and vice versa; (c) the terms "hereof," "herein," "hereby," "hereto," and derivative or similar words refer to this Agreement as a whole; (d) the term "including" means "including without limitation"; (e) references to any law, statute, or regulation are to such law, statute, or regulation as amended, modified, supplemented, or replaced from time to time; and (f) references to any agreement or document are to such agreement or document as amended, restated, supplemented, or otherwise modified from time to time to the extent permitted by the terms thereof and of this Agreement.
ARTICLE II
FORMATION AND ORGANIZATION
Section 2.1 Formation. The Company was formed as a Delaware limited liability company pursuant to the Delaware Act by the filing of the Certificate of Formation with the Secretary of State of the State of Delaware on August 3, 2022, under Delaware Secretary of State File No. 7894228. A copy of the Certificate of Formation is attached hereto as Exhibit A. The Member hereby ratifies and confirms the actions taken in connection with the formation of the Company, including the filing of the Certificate of Formation and the designation of the Registered Agent and Registered Office.
Section 2.2 Name. The name of the Company is "Quorum Receivables Holding LLC." The Company's business shall be conducted solely under such name or such other name or names as the Member may from time to time approve in writing; provided, however, that any such name must include "Quorum Receivables Holding" and must indicate the Company's limited liability company status in a manner compliant with the Delaware Act. The Member shall cause any change of name to be reflected in an appropriate amendment to the Certificate of Formation filed with the Secretary of State of the State of Delaware.
Section 2.3 Registered Office and Registered Agent. The registered office of the Company in the State of Delaware is located at the office of Ashgrove Services Inc., and the registered agent of the Company at such address is Ashgrove Services Inc., 28 Liberty Street, New York, New York 10005. The Member may change the registered office or the registered agent, or both, from time to time by filing an appropriate amendment or statement with the Secretary of State of the State of Delaware in accordance with the Delaware Act and by giving prompt written notice thereof to the Independent Manager.
Section 2.4 Principal Office. The principal office of the Company is located at 400 Atlantic Street, Suite 2200, Stamford, Connecticut 06901, or at such other place as the Member may designate from time to time by written notice to the Independent Manager. The Company may maintain such additional offices as the Member may deem necessary or appropriate in connection with the conduct of the Company's business.
Section 2.5 Term. The Company shall have perpetual existence and shall continue in full force and effect until dissolved in accordance with the provisions of Article XIII of this Agreement and the Delaware Act. The existence of the Company as a separate legal entity shall continue until the filing of a Certificate of Cancellation with the Secretary of State of the State of Delaware in accordance with Section 13.3 of this Agreement.
Section 2.6 Employer Identification Number. The Company's federal employer identification number (EIN) is 88-1247619. The Member shall cause the Company to use such EIN in all filings and correspondence with the Internal Revenue Service and other governmental authorities, as applicable.
ARTICLE III
PURPOSE AND POWERS
Section 3.1 Limited Purpose. The purpose of the Company is strictly limited to the following:
(a) acquiring, holding, managing, and transferring insurance premium finance receivables originated by Quorum Premium Finance LLC (the Member) pursuant to the Receivables Sale Agreement;
(b) transferring, selling, or contributing such receivables to Quorum Receivables Funding 2022-1 LLC (the Issuer) pursuant to the Receivables Transfer Agreement;
(c) acting as depositor in connection with the Securitization Transaction;
(d) performing its obligations under the Transaction Documents to which it is a party, including, without limitation, the Receivables Sale Agreement, the Receivables Transfer Agreement, and the Servicing Agreement;
(e) engaging in such other activities as are necessary, incidental, or related to the foregoing, including maintaining its existence, complying with the Separateness Covenants, and preserving its bankruptcy-remote status; and
(f) taking such other actions as are expressly contemplated by the Transaction Documents.
The Company shall not engage in any business or activity other than as set forth above without the prior written consent of the Member and the affirmative vote or written consent of the Independent Manager. The foregoing limitation on purpose is a fundamental provision of this Agreement and shall be construed strictly in furtherance of the bankruptcy-remote nature of the Company.
Section 3.2 Powers. Subject to the limitations set forth herein, including the limited purpose provisions of Section 3.1, the Separateness Covenants of Article VI, and the Independent Manager consent requirements of Article VII, the Company shall have all powers necessary, suitable, or convenient to carry out the purposes set forth in Section 3.1, including, without limitation, the power to:
(a) execute, deliver, and perform the Transaction Documents and any amendments, supplements, or modifications thereto;
(b) open, maintain, and close bank accounts and invest funds in accordance with the Transaction Documents;
(c) engage accountants, attorneys, agents, and other Persons as may be necessary or advisable in connection with the Company's business;
(d) institute, prosecute, defend, settle, and compromise any and all claims or actions at law or in equity relating to the Company's business;
(e) acquire, hold, manage, and dispose of property and assets in furtherance of its limited purpose; and
(f) do all other things necessary, suitable, or convenient for the conduct of the Company's business and the accomplishment of its purposes as set forth in Section 3.1.
Notwithstanding the foregoing, the Company shall not exercise any power or engage in any activity that is not within the limited purposes set forth in Section 3.1, and shall not take any Material Action without the prior written consent of the Independent Manager as required by Section 7.3.
ARTICLE IV
MEMBER
Section 4.1 Sole Member. The sole member of the Company is Quorum Premium Finance LLC, a Delaware limited liability company, with its principal office at 400 Atlantic Street, Suite 2200, Stamford, Connecticut 06901. QPF holds the Sole Member Interest, representing a one hundred percent (100%) membership interest in the Company. The name, address, taxpayer identification number, and percentage interest of the Member are set forth on Exhibit B attached hereto.
Section 4.2 Liability of Member. The Member shall not be personally liable for any debts, obligations, or liabilities of the Company, whether arising in contract, tort, or otherwise, solely by reason of being a member of the Company. The Member's liability shall be limited to the extent provided under the Delaware Act and this Agreement. Nothing in this Section 4.2 shall be construed to limit the obligations of the Member under the Transaction Documents to which the Member is a party.
Section 4.3 Admission of Additional Members. No additional members shall be admitted to the Company without the unanimous written consent of the Member and the Independent Manager, and only if such admission (a) would not adversely affect the bankruptcy-remote status of the Company, (b) would not cause the Company to be treated as a partnership or association taxable as a corporation for federal income tax purposes, (c) would not adversely affect the ratings assigned to any notes issued by the Issuer, and (d) would not violate any provision of the Transaction Documents. Any Person admitted as an additional member shall execute a counterpart of this Agreement and agree to be bound by all of the terms and provisions hereof.
Section 4.4 Transfer of Membership Interest. The Member shall not sell, assign, pledge, hypothecate, encumber, or otherwise transfer or dispose of its membership interest in the Company, in whole or in part, without (a) the prior written consent of the Independent Manager, (b) prior notification to each of the rating agencies that have assigned ratings to any notes issued by the Issuer (as of the date hereof, Brindoval Ratings Inc. and Pinnacle Rating Services LLC) and written confirmation from each such rating agency that such transfer will not result in a reduction, qualification, or withdrawal of the ratings assigned to such notes, and (c) a determination by the Member, reasonably satisfactory to the Independent Manager, that such transfer will not adversely affect the bankruptcy-remote status of the Company, the treatment of the Company as a disregarded entity for federal income tax purposes, or the validity or enforceability of the Transaction Documents. Any purported transfer in violation of this Section 4.4 shall be null and void and of no force or effect.
Section 4.5 Withdrawal. The Member may not withdraw or resign from the Company if such withdrawal or resignation would (a) cause the Company to be dissolved in violation of Article XIII of this Agreement, (b) adversely affect the bankruptcy-remote status of the Company, (c) adversely affect the Securitization Transaction or any obligations under the Transaction Documents, or (d) result in the Company ceasing to have at least one member, as required by the Delaware Act. Nothing in this Section 4.5 shall prohibit the Member from transferring its membership interest in accordance with Section 4.4.
ARTICLE V
CAPITAL CONTRIBUTIONS AND DISTRIBUTIONS
Section 5.1 Initial Capital Contribution. The Member shall make an initial capital contribution to the Company in such amount and form as determined by the Member in connection with the formation of the Company and the consummation of the Securitization Transaction. No minimum capital contribution is required by this Agreement. The amount and nature of the initial capital contribution shall be reflected on the books and records of the Company.
Section 5.2 Additional Capital Contributions. The Member is not required to make any additional capital contributions to the Company. Any additional capital contributions shall be made at the sole discretion of the Member and shall be reflected on the books and records of the Company. No Person may make a loan to the Company that constitutes a disguised capital contribution without the consent of the Member.
Section 5.3 Capital Accounts. A capital account shall be established and maintained for the Member in accordance with applicable provisions of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder. The capital account shall be credited with the amount of any capital contributions made by the Member and all items of income and gain allocated to the Member, and shall be debited with the amount of any distributions made to the Member and all items of loss and deduction allocated to the Member, all in accordance with applicable provisions of the Treasury Regulations.
Section 5.4 Distributions. Distributions to the Member shall be made at such times and in such amounts as determined by the Member in its sole discretion; provided, however, that no distribution shall be made if, after giving effect to such distribution:
(a) the Company would be unable to pay its debts as they become due in the ordinary course of business, as contemplated by Section 18-607 of the Delaware Act;
(b) such distribution would violate any provision of the Transaction Documents, including, without limitation, any restriction on distributions to the Member set forth in the Receivables Sale Agreement, the Receivables Transfer Agreement, or the Indenture; or
(c) such distribution would violate any Separateness Covenant set forth in Article VI of this Agreement, including the requirement that the Company maintain adequate capital in light of its contemplated business purposes, transactions, and liabilities.
Section 5.5 No Interest on Capital. No interest shall accrue or be payable on any capital contribution made by the Member or on any capital account balance of the Member. The Member shall not be entitled to receive interest on its capital contributions or to demand a return of its capital contributions, except as expressly provided in this Agreement or upon dissolution and winding up of the Company in accordance with Article XIII.
ARTICLE VI
SEPARATENESS COVENANTS
Section 6.1 General. In furtherance of the bankruptcy-remote status of the Company, and as a fundamental condition to the Securitization Transaction, the Company covenants and agrees that, so long as any obligations remain outstanding under the Transaction Documents or any notes issued by the Issuer remain outstanding, whichever is later, the Company shall comply with each of the separateness covenants set forth in this Article VI. The Member acknowledges that these covenants are essential to the structure of the Securitization Transaction and to the expectations of the noteholders, the Indenture Trustee, and the rating agencies.
Section 6.2 Separate Existence. The Company shall at all times:
(a) maintain its own separate books, records, financial statements, and accounts distinct from those of the Member (Quorum Premium Finance LLC), Quorum Insurance Holdings Corp., and any other affiliate, and shall not permit the books, records, financial statements, or accounts of the Company to be maintained on a combined or consolidated basis with those of any other Person (except as may be required by generally accepted accounting principles or applicable law, in which case appropriate notation shall be made to distinguish the assets and liabilities of the Company from those of any other Person);
(b) maintain its assets and liabilities separately from those of the Member, QIH, or any other Person, and shall not commingle its funds or other assets with those of any other Person; the Company shall hold all of its assets in its own name and shall not permit any other Person to hold assets on behalf of the Company except as expressly contemplated by the Transaction Documents;
(c) not guarantee or become obligated for the debts, liabilities, or obligations of any other Person, and shall not hold itself out as being responsible for the debts, liabilities, or obligations of any other Person (other than as expressly contemplated by the Transaction Documents);
(d) not make or permit to remain outstanding any loan or advance to the Member, QIH, or any affiliate of the Member or QIH, and shall not otherwise extend credit to any such Person (other than as expressly contemplated by the Transaction Documents);
(e) not pledge, encumber, hypothecate, or grant any security interest in its assets for the benefit of any other Person (other than as expressly contemplated by the Transaction Documents, including, without limitation, the granting of security interests in receivables and related assets in connection with the Securitization Transaction);
(f) hold itself out to the public and all other Persons (including creditors, employees, vendors, and governmental authorities) as a legal entity separate and distinct from the Member, QIH, and any other Person, and shall conduct its business solely in its own name so as not to mislead others as to the identity of the entity with which they are dealing;
(g) correct any known misunderstanding regarding its separate identity and shall take all reasonable steps to ensure that third parties understand that the Company is a separate legal entity from the Member, QIH, and their respective affiliates;
(h) maintain adequate capital in light of its contemplated business purposes, transactions, and liabilities, and shall not distribute funds or make payments to the Member or any other Person to the extent that such distribution or payment would render the Company inadequately capitalized;
(i) conduct its business in its own name and use separate stationery, invoices, checks, and other business documents from those of the Member, QIH, or any affiliate; the Company's name and identity shall appear on all such documents;
(j) file its own tax returns to the extent required by applicable law, or otherwise be treated as a disregarded entity of the Member for federal income tax purposes as appropriate, and shall not file a consolidated federal income tax return with any Person other than as required by applicable law;
(k) maintain arm's-length relationships with the Member, QIH, and their respective affiliates in all transactions and dealings, and shall ensure that all transactions between the Company and any affiliate are documented in writing and conducted on terms comparable to those that would be obtained in an arm's-length transaction with an unrelated Person;
(l) pay its own liabilities and expenses from its own assets, including, without limitation, the payment of reasonable allocations of shared expenses such as overhead, legal, accounting, and administrative costs, and shall not rely upon the credit or assets of the Member or any other Person to pay its obligations (other than as expressly contemplated by the Transaction Documents);
(m) observe all company formalities required by the Delaware Act and this Agreement, including, without limitation, maintaining this Agreement and any amendments hereto, maintaining minutes or written consents reflecting actions taken on behalf of the Company, and holding itself out as a duly organized and validly existing limited liability company;
(n) not acquire obligations or securities of the Member, QIH, or any of their respective affiliates (other than as expressly contemplated by the Transaction Documents);
(o) allocate fairly and reasonably any overhead, general, administrative, or other shared expenses among itself and any affiliates sharing such expenses, and shall maintain documentation supporting such allocations;
(p) not enter into any transaction with the Member, QIH, or any affiliate of the Member or QIH except on commercially reasonable terms comparable to those that would be obtained in an arm's-length transaction with an unrelated Person; and
(q) maintain at least one Independent Manager at all times, in accordance with Article VII of this Agreement.
Section 6.3 Organizational Documents. The Company shall not amend, modify, restate, supplement, or terminate this Agreement or the Certificate of Formation in any manner that is inconsistent with the provisions of this Article VI, that would adversely affect the bankruptcy-remote status of the Company, or that would compromise the separateness of the Company from the Member and its affiliates, without the affirmative vote or written consent of the Independent Manager. Any amendment, modification, restatement, supplement, or termination of this Agreement or the Certificate of Formation shall be subject to the requirements of Section 14.2 of this Agreement.
Section 6.4 Survival. The provisions of this Article VI shall survive the dissolution of the Company and shall remain operative and in full force and effect so long as any obligations under the Transaction Documents remain outstanding or any notes issued by the Issuer remain outstanding, whichever is later. No dissolution, winding up, or termination of the Company shall affect the obligations of the Company or the Member under this Article VI until all such obligations have been satisfied in full.
ARTICLE VII
INDEPENDENT MANAGER
Section 7.1 Appointment of Independent Manager. The Company shall at all times have at least one (1) Independent Manager. As of the date hereof, Eleanor M. Vasquez, provided by Fortbridge Corporate Services LLC, located at 1209 Orange Street, Wilmington, Delaware 19801, is hereby appointed as the Independent Manager of the Company. The information regarding the Independent Manager is set forth on Exhibit C attached hereto. The Independent Manager need not be a member of the Company, an officer of the Company, a resident of the State of Delaware, or a citizen of the United States.
Section 7.2 Qualifications. The Independent Manager shall at all times be an individual who meets each of the following qualifications:
(a) the Independent Manager is not, and has not been for at least five (5) years prior to appointment, a stockholder, member, partner, director, officer, employee, or affiliate of the Company, the Member, Quorum Insurance Holdings Corp., or any of their respective affiliates (other than serving as an independent manager or independent director of a bankruptcy-remote special purpose entity in connection with an unrelated securitization transaction or structured finance transaction);
(b) the Independent Manager is not a supplier, service provider, customer, or creditor of the Company, the Member, QIH, or any of their respective affiliates (other than in the capacity of independent manager or independent director as described in clause (a) above and other than fees payable pursuant to the Independent Manager Agreement); and
(c) the Independent Manager has substantial experience serving as an independent manager or independent director of special purpose entities used in structured finance transactions, securitization transactions, or similar transactions requiring bankruptcy-remote structures.
The Company and the Member shall verify the qualifications of the Independent Manager prior to appointment and shall obtain written representations from the Independent Manager confirming compliance with the foregoing requirements.
Section 7.3 Material Actions Requiring Independent Manager Consent. Notwithstanding any other provision of this Agreement or the Delaware Act, the Company shall not, without the prior unanimous written consent of both the Member and the Independent Manager, take any Material Action. For purposes of this Agreement, "Material Action" means any of the following actions or decisions:
(a) filing a voluntary petition or otherwise commencing any case, proceeding, or action under any Bankruptcy or insolvency law, including Title 11 of the United States Code, any state insolvency law, or any similar federal, state, or foreign law;
(b) consenting to, acquiescing in, or failing to contest in a timely manner the filing of an involuntary petition against the Company under any Bankruptcy or insolvency law;
(c) filing any petition, application, or motion seeking reorganization, arrangement, adjustment, winding-up, dissolution, composition, liquidation, or other relief of or relating to the Company or its debts under any Bankruptcy, insolvency, or similar law;
(d) seeking or consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official for the Company or for a substantial part of its property or assets;
(e) making an assignment for the benefit of creditors of the Company;
(f) admitting in writing the Company's inability to pay its debts generally as they become due;
(g) taking any action in furtherance of any of the foregoing actions described in clauses (a) through (f);
(h) dissolving, liquidating, winding up, merging, or consolidating the Company, or converting the Company to another form of entity;
(i) amending, modifying, restating, supplementing, or terminating this Agreement or the Certificate of Formation in any manner that is inconsistent with the Separateness Covenants set forth in Article VI or the bankruptcy-remote provisions of this Agreement;
(j) selling, transferring, or otherwise disposing of all or substantially all of the assets of the Company outside of the ordinary course of business as contemplated by the Transaction Documents; or
(k) engaging in any business or activity that is not consistent with the limited purposes set forth in Section 3.1 of this Agreement.
The requirement of Independent Manager consent as set forth in this Section 7.3 is a fundamental term of this Agreement and of the structure of the Securitization Transaction. The Member acknowledges that the consent requirement is intended to protect the interests of the Company, the noteholders of the Issuer, the Indenture Trustee, and the other secured parties under the Transaction Documents.
Section 7.4 Fiduciary Duties of Independent Manager. When voting on or considering whether to consent to or withhold consent from any Material Action, the Independent Manager shall owe fiduciary duties to the Company, including the duty of care and the duty of loyalty. In making any such determination, the Independent Manager shall consider the interests of the Company and its creditors (including, without limitation, the noteholders of the Issuer, the Indenture Trustee, and any other parties to the Transaction Documents), as well as the interests of the Member, and shall act in a manner that the Independent Manager reasonably believes to be in the best interests of the Company. The Independent Manager shall not be required to consider the interests of any other Person, including, without limitation, the interests of QIH or any affiliate of the Member (other than the Company), unless doing so would be consistent with the Independent Manager's fiduciary duties to the Company. The provisions of this Section 7.4 are intended to replace and supersede the default fiduciary duty provisions of the Delaware Act to the fullest extent permitted by law.
Section 7.5 Removal and Replacement. The Independent Manager may be removed or replaced only (a) for cause (including, without limitation, the Independent Manager's failure to satisfy the qualification requirements set forth in Section 7.2, the Independent Manager's failure to perform the duties required under this Agreement, or the Independent Manager's commission of fraud, willful misconduct, or gross negligence), or (b) upon the resignation, death, or incapacity of the Independent Manager. In any such case, the Member shall promptly appoint a successor Independent Manager who meets the qualifications set forth in Section 7.2. Fortbridge Corporate Services LLC shall be entitled to designate the replacement Independent Manager, subject to the approval of the Member, which approval shall not be unreasonably withheld, conditioned, or delayed. No vacancy in the position of Independent Manager shall exist for more than ten (10) business days. During any period in which no Independent Manager is serving, no Material Action shall be taken by the Company. The resignation of the Independent Manager shall be effective only upon the appointment of a successor Independent Manager who meets the qualifications of Section 7.2.
Section 7.6 Compensation. The Company shall pay the compensation of the Independent Manager pursuant to the terms and conditions set forth in the Independent Manager Agreement dated as of August 3, 2022, between the Company and Fortbridge Corporate Services LLC. Such compensation shall be an expense of the Company payable from its own funds and assets and shall be paid on a timely basis. The payment of such compensation shall not be contingent upon the performance of the Company or the outcome of any Material Action.
Section 7.7 Limitation on Authority. The Independent Manager shall have no authority to bind the Company, to manage the business or affairs of the Company, to execute any agreement or instrument on behalf of the Company, or to take any other action on behalf of the Company, except as expressly set forth in this Article VII. The Independent Manager's sole authority is the right and obligation to consent to or withhold consent from Material Actions as described in Section 7.3. The Independent Manager shall not have the right to vote on or participate in the management of the Company's day-to-day operations, and the Independent Manager's consent shall be required only with respect to Material Actions.
ARTICLE VIII
MANAGEMENT AND OFFICERS
Section 8.1 Management by Member. The business and affairs of the Company shall be managed by the Member, acting in its capacity as the sole member of the Company. The Member shall have full, exclusive, and complete authority and discretion to manage and control the business, affairs, properties, and operations of the Company, subject to the limitations set forth in this Agreement, including, without limitation, the limited purpose provisions of Section 3.1, the Separateness Covenants of Article VI, and the requirements of Article VII regarding Independent Manager consent for Material Actions. The Member shall have the authority to make all decisions and take all actions on behalf of the Company that are not Material Actions, without the need for any further act, vote, or approval of any other Person.
Section 8.2 Officers. The Member may from time to time appoint one or more officers of the Company (each, an "Officer" and collectively, the "Officers"), who shall have such titles, duties, responsibilities, and authority as the Member may from time to time determine and delegate. As of the date hereof, the following Officer is appointed:
Sandra Ling-Hwang, Manager (in her capacity as Treasurer of Quorum Insurance Holdings Corp.)
Officers shall serve at the pleasure of the Member and may be removed, with or without cause, or replaced at any time by the Member in its sole discretion. The appointment of an Officer shall not create any employment relationship between the Company and such Officer. Officers shall have such duties and authority as the Member may delegate to them from time to time, subject to the limitations of this Agreement, including, without limitation, the requirements of Article VII. No Officer shall have the authority to take any Material Action without the prior written consent of the Independent Manager as required by Section 7.3.
Section 8.3 Actions by the Member. Any action required or permitted to be taken by the Member under this Agreement or the Delaware Act may be taken by the Member (acting through its own duly authorized officers, managers, or other representatives) by written consent without the need for a formal meeting or any other formality. Written consents may be executed in counterparts and delivered by electronic transmission. Records of all such written consents shall be maintained with the books and records of the Company at its principal office or at such other location as the Member may designate.
Section 8.4 Delegation. The Member may delegate its management authority to Officers, employees, or agents of the Company or of the Member; provided, however, that (a) no such delegation shall relieve the Member of its obligations under this Agreement or the Transaction Documents, (b) no such delegation shall enable any delegatee to take any Material Action without the Independent Manager's prior written consent as required by Section 7.3, and (c) the Member shall remain responsible for the acts and omissions of any Person to whom authority has been delegated. The Member may revoke any such delegation at any time in its sole discretion.
ARTICLE IX
NON-PETITION COVENANT
Section 9.1 Non-Petition. Each of the Member, the Independent Manager, and any Officer of the Company, in each case in its capacity as such, hereby covenants and agrees that it shall not, prior to the date that is one (1) year and one (1) day (or, if longer, any applicable preference period under applicable Bankruptcy or insolvency law) after the payment in full of all notes issued by the Issuer (Quorum Receivables Funding 2022-1 LLC) and all other obligations under the Transaction Documents (the "Non-Petition Period"), acquiesce, petition, or otherwise invoke or cause the Company to invoke the process of any court or governmental authority for the purpose of:
(a) commencing or sustaining a case against the Company under any federal or state bankruptcy, insolvency, reorganization, or similar law (including Title 11 of the United States Code), or seeking to have an order for relief entered with respect to the Company under any such law;
(b) appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator, or other similar official for the Company or for any substantial part of the property, assets, or revenues of the Company; or
(c) ordering the winding up, dissolution, or liquidation of the affairs of the Company.
Nothing in this Section 9.1 shall limit the obligations of the Independent Manager under Section 7.3 or Section 7.4 or the rights of the noteholders or the Indenture Trustee under the Transaction Documents.
Section 9.2 Binding Nature. The covenant set forth in Section 9.1 is given for the benefit of the Issuer, the Indenture Trustee (Calvoneth Trust Company, N.A.), the noteholders under the Indenture, and the other secured parties under the Transaction Documents, and shall be directly enforceable by each of them. Each of the foregoing Persons is an intended third-party beneficiary of this Article IX and shall have the right to enforce this covenant as if it were a party to this Agreement. The non-petition covenant set forth in Section 9.1 shall constitute a "contractual obligation" of the Member and each other Person bound hereby and shall not be dischargeable or terminable except in accordance with the terms hereof. This covenant shall survive any dissolution, winding up, or termination of the Company, and shall remain in full force and effect until the expiration of the Non-Petition Period.
ARTICLE X
TAX STATUS
Section 10.1 Tax Classification. The Company is a single-member limited liability company owned one hundred percent (100%) by Quorum Premium Finance LLC. For United States federal income tax purposes, the Company is intended to be treated as a disregarded entity within the meaning of Treasury Regulation Section 301.7701-3(b)(1)(ii), meaning that the assets and liabilities of the Company will be treated as assets and liabilities of the Member, and all items of income, gain, loss, deduction, and credit of the Company will be reported on the federal income tax returns of the Member. The Company shall not file, and the Member shall not cause the Company to file, IRS Form 8832 (Entity Classification Election) or take any other action to elect to be classified as a corporation or an association taxable as a corporation for federal income tax purposes. The Company shall not take any action, and the Member shall not cause the Company to take any action, that would cause the Company to be treated as other than a disregarded entity for federal income tax purposes, including, without limitation, admitting a second member (except in compliance with Section 4.3).
Section 10.2 State and Local Taxes. The Company shall comply with all applicable state and local tax filing and payment requirements in each jurisdiction in which the Company is required to file returns or make payments. The Company is organized and structured to avoid creating state-level franchise or income tax nexus in jurisdictions other than the State of Delaware, and the Member shall cause the Company's business to be conducted in a manner consistent with such intent. The Company shall pay any annual franchise taxes, license fees, or similar charges required by the State of Delaware or any other jurisdiction in which the Company is qualified to do business.
Section 10.3 Tax Returns. To the extent required by applicable law, the Company shall prepare and file, or cause to be prepared and filed, all required federal, state, and local tax returns and informational reports in a timely manner. The Member shall report all items of income, gain, loss, deduction, and credit of the Company on its own federal income tax returns in a manner consistent with the treatment of the Company as a disregarded entity. The Company shall furnish to the Member such information as the Member may reasonably request in connection with the preparation of its tax returns.
ARTICLE XI
BOOKS, RECORDS, AND REPORTS
Section 11.1 Books and Records. The Company shall maintain complete, accurate, and current books and records of its financial condition and operations, separate and apart from the books and records of the Member, Quorum Insurance Holdings Corp., and any other Person. Such books and records shall include, without limitation, the following: (a) a current list of the name, address, and membership interest of the Member; (b) copies of the Certificate of Formation and all amendments thereto; (c) copies of this Agreement and all amendments hereto; (d) copies of the Company's federal, state, and local income tax returns and reports, if any; (e) copies of all Transaction Documents to which the Company is a party; and (f) all financial statements and accounting records of the Company. Such books and records shall be maintained at the principal office of the Company, currently located at 400 Atlantic Street, Suite 2200, Stamford, Connecticut 06901, or at such other location as the Member may designate from time to time in writing.
Section 11.2 Inspection. The Member and the Independent Manager shall each have the right to inspect and copy the books and records of the Company at any reasonable time during normal business hours, upon reasonable prior notice to the Company. The Indenture Trustee and the rating agencies shall have such inspection rights as may be provided in the Transaction Documents.
Section 11.3 Financial Statements. The Company shall prepare, or cause to be prepared, financial statements of the Company as may be reasonably required by the Transaction Documents or as may be reasonably requested by the Member, the Indenture Trustee, or the rating agencies. Such financial statements may be prepared on a consolidated basis with the Member to the extent required by generally accepted accounting principles, provided that appropriate notation shall be made to distinguish the assets and liabilities of the Company from those of the Member and its affiliates. Independent auditing services may be provided by Meridian Ledger LLP, or such other nationally recognized independent accounting firm as the Member may designate from time to time.
Section 11.4 Annual Review. The Member shall cause the Company to conduct an annual review of the Company's compliance with the Separateness Covenants set forth in Article VI. Such review shall be documented in writing and a copy thereof shall be maintained with the books and records of the Company. The results of such review shall be made available to the Independent Manager upon request.
ARTICLE XII
EXCULPATION AND INDEMNIFICATION
Section 12.1 Exculpation. No Covered Person shall be liable to the Company or the Member for any loss, damage, liability, or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith and in a manner reasonably believed by such Covered Person to be within the scope of authority granted by this Agreement and in the best interests of the Company, unless such act or omission constitutes fraud, willful misconduct, bad faith, or gross negligence on the part of such Covered Person. The provisions of this Section 12.1 shall not be construed to limit the liability of any Covered Person for breach of the Separateness Covenants set forth in Article VI, for violation of the non-petition covenant set forth in Article IX, or for any act or omission in contravention of the specific requirements of this Agreement.
Section 12.2 Indemnification. To the fullest extent permitted by the Delaware Act and applicable law, the Company shall indemnify, defend, and hold harmless each Covered Person from and against any and all claims, demands, actions, suits, proceedings, losses, liabilities, damages, costs, and expenses (including, without limitation, reasonable attorneys' fees and disbursements) arising out of or relating to any act or omission of such Covered Person in connection with the business, affairs, or operations of the Company; provided, however, that no Covered Person shall be entitled to indemnification hereunder for any claim, loss, liability, damage, cost, or expense arising from or attributable to such Covered Person's fraud, willful misconduct, bad faith, or gross negligence. All indemnification payments shall be made solely from the assets of the Company, and no Covered Person shall have any recourse against the Member for indemnification payments except to the extent the Member voluntarily agrees to contribute to such payments. The satisfaction of any indemnification obligation under this Section 12.2 shall be from and limited to the assets of the Company, and no Covered Person shall have any right to require the Member to make any capital contribution or loan to the Company to fund any indemnification obligation.
Section 12.3 Independent Manager Indemnification. In addition to the indemnification provided under Section 12.2, the Company shall indemnify, defend, and hold harmless the Independent Manager (Eleanor M. Vasquez) and Fortbridge Corporate Services LLC from and against any and all claims, demands, actions, suits, proceedings, losses, liabilities, damages, costs, and expenses (including, without limitation, reasonable attorneys' fees and disbursements) arising from the Independent Manager's service in such capacity, to the extent provided in the Independent Manager Agreement dated as of August 3, 2022, between the Company and Fortbridge Corporate Services LLC. Such indemnification shall be an obligation of the Company payable from its own assets and shall be in addition to, and not in limitation of, any other rights to indemnification or contribution that the Independent Manager or Fortbridge may have under applicable law.
ARTICLE XIII
DISSOLUTION AND WINDING UP
Section 13.1 Events of Dissolution. The Company shall be dissolved only upon the occurrence of any of the following events:
(a) the written consent of the Member and the Independent Manager to dissolve the Company, provided that no notes issued by the Issuer (Quorum Receivables Funding 2022-1 LLC) remain outstanding and all obligations under the Transaction Documents have been indefeasibly satisfied and discharged in full;
(b) the entry of a decree of judicial dissolution of the Company by a court of competent jurisdiction under Section 18-802 of the Delaware Act; or
(c) the occurrence of any event that makes it unlawful for the business of the Company to continue.
Notwithstanding any other provision of this Agreement or the Delaware Act, the Company shall not be dissolved by reason of the Bankruptcy, dissolution, liquidation, termination, or withdrawal of the Member (Quorum Premium Finance LLC). In the event of any such occurrence with respect to the Member, the Company shall continue in existence without dissolution, and, if necessary to preserve the Company's existence under the Delaware Act, a successor member shall be admitted to the Company in accordance with Section 4.3 of this Agreement. The provisions of this Section 13.1 are a material inducement to the parties to the Transaction Documents and are intended to ensure the continued existence of the Company as a bankruptcy-remote entity throughout the term of the Securitization Transaction.
Section 13.2 Winding Up. Upon dissolution of the Company in accordance with Section 13.1, the Member (or, in the absence of the Member, a Person appointed by the Independent Manager or, failing such appointment, by a court of competent jurisdiction) shall act as the liquidating agent and shall wind up the affairs of the Company in accordance with the Delaware Act and this Agreement. In winding up the affairs of the Company, the liquidating agent shall:
(a) collect and reduce to cash or cash equivalents all assets of the Company;
(b) discharge and pay, or make adequate provision for the payment of, all debts, liabilities, and obligations of the Company, including, without limitation, all obligations under the Transaction Documents, in the order of priority required by applicable law; and
(c) distribute any remaining assets to the Member in accordance with this Agreement.
During the winding-up period, the Separateness Covenants set forth in Article VI and the non-petition covenant set forth in Article IX shall remain in full force and effect.
Section 13.3 Certificate of Cancellation. Upon the completion of the winding up and distribution of all assets of the Company, the Member (or the liquidating agent, as applicable) shall cause a Certificate of Cancellation to be filed with the Secretary of State of the State of Delaware in accordance with Section 18-203 of the Delaware Act. Upon the filing of the Certificate of Cancellation, the existence of the Company as a separate legal entity shall cease.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware (including, without limitation, the Delaware Act), without regard to principles of conflict of laws that would cause the application of the laws of any other jurisdiction; provided, however, that to the extent certain matters arising under the Transaction Documents are expressly governed by the internal laws of the State of New York, such matters shall be governed by and construed in accordance with the laws of the State of New York as specified therein. Each of the parties hereto irrevocably submits to the non-exclusive jurisdiction of the courts of the State of Delaware and the United States District Court for the District of Delaware for the purpose of any suit, action, or proceeding arising out of or relating to this Agreement.
Section 14.2 Amendments. This Agreement may be amended, modified, restated, or supplemented only by a written instrument executed by the Member with the prior written consent of the Independent Manager. No amendment, modification, restatement, or supplement shall be effective unless it satisfies each of the following conditions:
(a) such amendment does not adversely affect the bankruptcy-remote status of the Company;
(b) such amendment does not violate any Separateness Covenant set forth in Article VI;
(c) such amendment does not adversely affect the ratings assigned to any notes issued by the Issuer, as confirmed by each of the rating agencies that have rated such notes (as of the date hereof, Brindoval Ratings Inc. and Pinnacle Rating Services LLC), unless the prior written consent of each such rating agency has been obtained; and
(d) such amendment is not inconsistent with the provisions of the Transaction Documents.
Any purported amendment that does not satisfy each of the foregoing conditions shall be null and void and of no force or effect.
Section 14.3 Severability. If any provision of this Agreement, or the application of any such provision to any Person or circumstance, is held to be invalid, illegal, or unenforceable in any respect by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired, and the affected provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable while preserving, to the greatest extent possible, its original intent. If such modification is not possible, the affected provision shall be severed from this Agreement, and the remaining provisions shall continue in full force and effect.
Section 14.4 Entire Agreement. This Agreement, together with the Certificate of Formation and the exhibits and schedules attached hereto, constitutes the entire agreement of the Member with respect to the Company and its subject matter, and supersedes all prior agreements, representations, warranties, and understandings, whether oral or written, with respect thereto.
Section 14.5 No Third-Party Beneficiaries. Except as expressly provided herein, this Agreement is not intended to, and shall not, confer any rights, benefits, or remedies upon any Person other than the Member and the Independent Manager. Without limiting the generality of the foregoing, the Indenture Trustee (Calvoneth Trust Company, N.A.), the noteholders under the Indenture, and the other secured parties under the Transaction Documents are intended third-party beneficiaries of Sections 6.1 through 6.4 (Separateness Covenants), Article VII (Independent Manager), and Article IX (Non-Petition Covenant) of this Agreement, and each of them shall have the right to enforce such provisions as if it were a party to this Agreement.
Section 14.6 Waiver. No waiver of any provision of this Agreement or of any right or remedy hereunder shall be effective unless set forth in a written instrument executed by the Member and the Independent Manager. No failure or delay on the part of the Member or the Independent Manager in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. All rights and remedies hereunder are cumulative and are not exclusive of any other rights or remedies provided by law or equity.
Section 14.7 Notices. All notices, requests, demands, consents, and other communications required or permitted under this Agreement shall be in writing and shall be deemed duly given (a) when delivered personally, (b) when sent by nationally recognized overnight courier service (with written confirmation of receipt), (c) on the third (3rd) business day after being deposited in the United States mail, first class, registered or certified, return receipt requested, postage prepaid, or (d) when sent by electronic mail (with confirmation of receipt), addressed to the parties at the following addresses (or at such other address as may be designated in writing by the applicable party):
If to the Company or the Member:
Quorum Receivables Holding LLC c/o Quorum Premium Finance LLC 400 Atlantic Street, Sui