1025-00007 · Quorum Insurance Holdings · SPV Formation & Corporate

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MANAGER'S CERTIFICATE OF QUORUM PREMIUM FINANCE LLC

Authorizing Resolutions in Connection with Insurance Premium Finance Receivables Securitization

July 27, 2022

Entity: Quorum Premium Finance LLC, a Delaware limited liability company ("QPF" or the "Company")

Principal Office: 400 Atlantic Street, Suite 2200, Stamford, CT 06901

Employer Identification Number: 84-2653198

RECITALS

The undersigned, Sandra Ling-Hwang, in her capacity as the sole Manager of Quorum Premium Finance LLC, a limited liability company duly organized and validly existing under the laws of the State of Delaware (the "Company"), hereby certifies as follows:

WHEREAS, QPF is a wholly owned subsidiary of Quorum Insurance Holdings Corp., a Delaware corporation ("QIH"), whose shares of common stock are publicly traded on the New York Stock Exchange under the ticker symbol "QIHC," with its principal executive offices located at 400 Atlantic Street, Suite 2200, Stamford, CT 06901;

WHEREAS, QIH, through QPF, proposes to undertake a securitization transaction (the "Transaction") involving the issuance by Quorum Receivables Funding 2022-1 LLC ("QRF 2022-1"), a Delaware limited liability company and bankruptcy-remote special purpose entity, of up to Five Hundred Million Dollars ($500,000,000) in aggregate principal amount of asset-backed notes (the "Notes"), backed by a revolving pool of insurance premium finance receivables originated by QPF in the ordinary course of its business;

WHEREAS, the Notes will be offered and sold in a private placement pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and Regulation S promulgated thereunder, and will not be registered under the Securities Act or the securities laws of any state;

WHEREAS, the capital structure of the Notes shall consist of the following tranches:

WHEREAS, the Board of Directors of QIH has duly authorized the Transaction by resolutions unanimously adopted at a meeting of the Board of Directors held on July 27, 2022, at which a quorum was present and acting throughout, as certified separately in the Secretary's Certificate of QIH of even date herewith, a copy of which has been delivered to issuer's counsel in connection with the closing of the Transaction;

WHEREAS, the Manager now desires to adopt the resolutions set forth herein and to make the certifications contained in this Manager's Certificate in connection with the Transaction and the execution and delivery of the Transaction Documents (as defined below);

NOW, THEREFORE, the undersigned Manager hereby certifies and resolves as follows:

SECTION 1: CERTIFICATION OF ORGANIZATION AND GOOD STANDING

The undersigned Manager hereby certifies, on behalf of the Company, as follows:

1.1 QPF was duly formed as a limited liability company under the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., by the filing of a Certificate of Formation with the Secretary of State of the State of Delaware on March 14, 2019, and is validly existing and in good standing under the laws of the State of Delaware as of the date hereof. A Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated no earlier than five (5) business days prior to the date hereof has been obtained and delivered to issuer's counsel in connection with the closing of the Transaction.

1.2 QPF is engaged in the business of originating and servicing insurance premium finance loans to commercial policyholders across all fifty (50) states of the United States. QPF's insurance premium finance loans have an average loan term of approximately nine (9) months and bear interest at a portfolio weighted-average annual percentage rate ("APR") of 7.85%. As of the date hereof, QPF maintains a total receivables portfolio of approximately Two Billion One Hundred Million Dollars ($2,100,000,000). QPF's historical net loss rate, calculated as the three-year average for the fiscal years ending December 31, 2019, December 31, 2020, and December 31, 2021, is 0.42%, reflecting the strong credit quality of QPF's receivables portfolio and the structural protection afforded by unearned premium refund rights that collateralize each loan.

1.3 The sole member of QPF is Quorum Insurance Holdings Corp., a Delaware corporation. QPF has no other members, equity holders, or persons holding any beneficial ownership interest in the Company.

1.4 The Manager of QPF is Sandra Ling-Hwang, who serves in such capacity pursuant to the Limited Liability Company Agreement of QPF, dated as of March 14, 2019, as amended from time to time (the "LLC Agreement"). Ms. Ling-Hwang concurrently serves as Treasurer of QIH, and her appointment as Manager of QPF was duly authorized by QIH in its capacity as the sole member of QPF.

SECTION 2: CERTIFICATION OF MANAGER AUTHORITY

The undersigned Manager hereby further certifies, on behalf of the Company, as follows:

2.1 Pursuant to Section 4.1 of the LLC Agreement, the Manager is authorized to take all actions and execute all documents on behalf of the Company that the Manager deems necessary or advisable in the conduct of the Company's business, including, without limitation, entering into agreements, instruments, and documents in connection with the sale, transfer, contribution, pledge, financing, or other disposition of the Company's receivables, assets, and property, and borrowing money and granting security interests in the assets of the Company in connection therewith.

2.2 Pursuant to Section 4.2 of the LLC Agreement, no other approvals, votes, consents, or authorizations of any member or other person are required under the LLC Agreement for the Manager to authorize the Transaction and the execution, delivery, and performance by the Company of the Transaction Documents (as defined below), other than the authorization of the Board of Directors of QIH (in its capacity as the sole member of the Company), which authorization has been duly obtained by resolutions of the Board of Directors of QIH adopted on July 27, 2022, as referenced in the Recitals above. The Manager has reviewed the resolutions of the Board of Directors of QIH and has confirmed that such resolutions authorize the Transaction and the execution and delivery of the Transaction Documents to the extent required by the LLC Agreement.

2.3 The Manager has full power and authority, acting alone, to adopt the resolutions set forth in Section 3 of this Manager's Certificate and to bind the Company in connection with the Transaction and the Transaction Documents, without the need for any further action, approval, or consent by any person.

SECTION 3: AUTHORIZING RESOLUTIONS

The Manager, acting in her capacity as the sole Manager of Quorum Premium Finance LLC and pursuant to the authority vested in the Manager under the LLC Agreement, hereby adopts the following resolutions, each of which shall be effective as of July 27, 2022:

Resolution 1: Authorization of the Transaction

RESOLVED, that the Company is hereby authorized to participate in the Transaction, pursuant to which QPF will sell and/or contribute insurance premium finance receivables originated by QPF in the ordinary course of its business to Quorum Receivables Holding LLC ("QRH"), a Delaware limited liability company and bankruptcy-remote intermediate special purpose entity (sole member: QPF; independent manager: Eleanor M. Vasquez of Fortbridge Corporate Services LLC, 1209 Orange Street, Wilmington, DE 19801), which will in turn transfer such receivables to QRF 2022-1 (sole member: QRH; independent manager: Timothy R. Callan of Fortbridge Corporate Services LLC), which will issue the Notes backed by such receivables in accordance with an indenture to be entered into between QRF 2022-1 and Calvoneth Trust Company, N.A., as indenture trustee; and it is further

RESOLVED, that the Transaction is consistent with the business purposes of the Company as set forth in the LLC Agreement and is in the best interests of the Company, its sole member, and its creditors; and it is further

RESOLVED, that the organizational structure of the Transaction, including the establishment of QRH as an intermediate special purpose entity between QPF and QRF 2022-1, and the appointment of independent managers for each of QRH and QRF 2022-1, is designed to achieve the bankruptcy-remoteness objectives of the Transaction and to support the characterization of the transfer of receivables from QPF to QRH as a "true sale" under applicable law.

Resolution 2: Authorization of Transaction Documents

RESOLVED, that the Company is hereby authorized to negotiate, execute, deliver, and perform its obligations under each of the following agreements and documents, together with all exhibits, schedules, annexes, supplements, and amendments thereto (collectively, the "Transaction Documents"):

(a) Receivables Sale Agreement — by and between QPF (as Seller) and QRH (as Purchaser), providing for the true sale of eligible insurance premium finance receivables from QPF to QRH on an ongoing revolving basis, including the conveyance of all related security interests, unearned premium refund rights, collections, and proceeds, in exchange for a combination of cash and deferred purchase price, all on terms and conditions to be set forth in such agreement as negotiated by the authorized officers of QPF with the advice of issuer's counsel;

(b) Servicing Agreement — among QRF 2022-1 (as Issuer), QPF (as Servicer), and Calvoneth Trust Company, N.A. (as Indenture Trustee), pursuant to which QPF will act as the servicer of the receivables pool in accordance with customary servicing standards applicable to insurance premium finance receivables, at a servicing fee equal to 1.00% per annum calculated on the outstanding pool balance, payable monthly in arrears from available collections in accordance with the priority of payments set forth in the indenture;

(c) Back-Up Servicing Agreement — among QRF 2022-1 (as Issuer), QPF (as Servicer), Northvane Bank, N.A. (as Back-Up Servicer), and Calvoneth Trust Company, N.A. (as Indenture Trustee), pursuant to which Northvane Bank, N.A. will serve as the back-up servicer of the receivables pool and will assume the servicing obligations upon the occurrence of a Servicer Termination Event (as defined in the Servicing Agreement), all on terms and conditions customary for back-up servicing arrangements in insurance premium finance receivables securitization transactions;

(d) Note Purchase Agreement — among QRF 2022-1 (as Issuer), QIH (as Sponsor), QPF (as Seller and Servicer), and Ridgeline Capital Markets LLC (as Initial Purchaser, Structuring Agent, and Lead Bookrunner), to the extent QPF is required to join therein or provide representations, warranties, indemnities, or covenants in connection therewith, including, without limitation, representations and warranties regarding the receivables, the origination practices of QPF, and the compliance of QPF with applicable licensing and usury laws;

(e) Performance Guaranty — by QIH in favor of Calvoneth Trust Company, N.A. (as Indenture Trustee for the benefit of the Noteholders), guaranteeing certain obligations of QPF in its capacity as Servicer and Seller under the Transaction Documents, to the extent QPF's cooperation, acknowledgment, or consent is required in connection with the execution and delivery of such guaranty;

(f) Administration Agreement — by and between QRF 2022-1 (as Issuer) and QIH (as Administrator), to the extent QPF is a party thereto, has obligations thereunder, or is required to provide information, cooperation, or support in connection with the administration of QRF 2022-1 and the Notes;

(g) Any and all UCC-1 financing statements, UCC-3 amendments, and related filings, including, without limitation, the UCC-1 Financing Statement naming QPF as debtor and QRH as secured party, to be filed with the Secretary of State of the State of Delaware, and any other UCC financing statements or filings required to be made in any jurisdiction in connection with the perfection of the security interests and ownership interests contemplated by the Transaction Documents;

(h) Any and all amendments, restatements, supplements, exhibits, schedules, side letters, ancillary documents, officers' certificates, bring-down certificates, closing certificates, opinions of counsel, notices, and other instruments contemplated by, required under, or otherwise related to the foregoing Transaction Documents or the Transaction.

Resolution 3: Eligible Receivables Criteria

RESOLVED, that the receivables to be sold, transferred, or contributed by QPF to QRH pursuant to the Receivables Sale Agreement shall satisfy the following eligibility criteria, among such other eligibility criteria as may be set forth in the definitive Transaction Documents as negotiated by the authorized officers of QPF with the advice of issuer's counsel:

(i) each such receivable shall have been originated by QPF in the ordinary course of its business consistent with QPF's customary origination standards and credit and collection policies;

(ii) each such receivable shall be denominated and payable in lawful currency of the United States of America;

(iii) each such receivable shall be secured by the right to receive unearned premium refunds from the applicable insurance carrier upon cancellation of the related insurance policy, with a valid notice of premium financing and power of attorney executed by the insured and delivered to the applicable insurance carrier or its agent;

(iv) each such receivable shall have an original term not exceeding twelve (12) months from the date of origination;

(v) the obligor on each such receivable shall be a commercial policyholder organized or resident in the United States of America, and no receivable shall have an obligor that is a natural person or a consumer (as defined under the Truth in Lending Act or any analogous state law);

(vi) no such receivable shall be in default, meaning that no scheduled payment on such receivable shall be more than sixty (60) days past due as of the applicable cut-off date or transfer date;

(vii) each such receivable shall have been originated in compliance with all applicable federal, state, and local laws, rules, and regulations, including, without limitation, all applicable usury laws, premium finance licensing statutes, and insurance regulatory requirements of the state in which the related insurance policy was issued or in which the obligor is located.

Resolution 4: Initial Receivables Pool

RESOLVED, that the Manager has reviewed the initial receivables pool as of the cut-off date of June 30, 2022 (the "Cut-Off Date"), and has determined that the characteristics of the initial receivables pool are as follows:

The Manager confirms that the initial receivables pool, as described above, is consistent with the eligibility criteria set forth in Resolution 3 above and the concentration limits applicable to the Transaction, including, without limitation, the following concentration limits: (a) no single obligor shall represent more than 0.75% of the aggregate pool balance; (b) no single state shall represent more than 20.0% of the aggregate pool balance; and (c) no single insurance carrier shall represent more than 15.0% of the aggregate pool balance. The Manager further confirms that the initial receivables pool has been subjected to customary data integrity and reconciliation procedures and that, to the best of the Manager's knowledge and belief, the foregoing statistical information is accurate and complete in all material respects as of the Cut-Off Date.

Resolution 5: Designation of Authorized Officers and Signatories

RESOLVED, that any of the following individuals, acting alone and without the joinder of any other person, is hereby authorized and empowered to execute and deliver, on behalf of QPF, each of the Transaction Documents and all other documents, instruments, certificates, opinions, notices, and agreements as may be necessary, desirable, or appropriate in connection with the Transaction:

(1) Sandra Ling-Hwang, Manager of QPF and Treasurer of QIH;

(2) Marcus Devereaux, Chief Executive Officer of QIH, in his capacity as an authorized representative of QPF pursuant to these resolutions and the LLC Agreement;

(3) Priya Raghavan, Chief Financial Officer of QIH, in her capacity as an authorized representative of QPF pursuant to these resolutions and the LLC Agreement; and

(4) Nolan Whitford, General Counsel of QIH, in his capacity as an authorized representative of QPF pursuant to these resolutions and the LLC Agreement.

The execution and delivery of any Transaction Document or other document, instrument, or certificate by any one of the foregoing authorized officers shall be conclusive evidence of such officer's authority to act on behalf of QPF and of QPF's authorization of the matters set forth in such document.

Resolution 6: Retention of Outside Counsel and Advisors

RESOLVED, that the engagement of Calderwood & Harkness LLP, with offices at 601 Lexington Avenue, New York, NY 10022, as issuer's counsel for the Transaction, under Firm Matter No. 1025-00007, with Douglas Carmichael serving as Responsible Partner and Francesca Morano serving as Billing Partner, is hereby ratified and confirmed, and the authorized officers of QPF identified in Resolution 5 above are directed to cooperate fully with Calderwood & Harkness LLP in connection with the preparation, negotiation, and closing of the Transaction and the Transaction Documents, including, without limitation, the provision of information, documents, and access to personnel as may be reasonably requested by such counsel; and it is further

RESOLVED, that the engagement of Meridian Ledger LLP, with Robert Falcone serving as Engagement Partner, as independent auditors for the Transaction, to provide agreed-upon procedures and comfort letters in connection with the offering of the Notes, is hereby ratified and confirmed; and it is further

RESOLVED, that the engagement of Veristead Analytics LLC, with Katharine Drummond, Managing Director, serving as the primary engagement contact, as the third-party verification agent for the Transaction, to perform sampling, re-underwriting, and data verification procedures with respect to the receivables pool, is hereby ratified and confirmed; and it is further

RESOLVED, that the authorized officers of QPF are directed to execute and deliver such engagement letters, fee agreements, indemnification agreements, and access letters as may be necessary or appropriate in connection with the foregoing engagements.

Resolution 7: UCC Filings and Perfection

RESOLVED, that the authorized officers of QPF identified in Resolution 5 above are hereby directed to cause to be prepared and filed, or to authorize issuer's counsel to prepare and file on behalf of QPF, all UCC-1 financing statements, UCC-3 amendment statements, and any other filings, recordings, or registrations as may be required under the Uniform Commercial Code as adopted in the State of Delaware and in any other applicable jurisdiction to perfect the security interests, ownership interests, and other interests contemplated by the Transaction Documents, including, without limitation:

(a) a UCC-1 Financing Statement naming QPF as debtor and QRH as secured party (or buyer, as applicable), to be filed with the Secretary of State of the State of Delaware, covering all insurance premium finance receivables sold, transferred, or contributed by QPF to QRH pursuant to the Receivables Sale Agreement, together with all related rights, collections, and proceeds;

(b) such additional UCC-1 Financing Statements, UCC-3 Amendments, or other filings as may be required by the Indenture Trustee, the rating agencies, or issuer's counsel in connection with the perfection of the interests of QRF 2022-1 and the Noteholders in the receivables pool and the related collateral; and

(c) continuation statements and amendment statements as may be required from time to time to maintain the effectiveness and priority of the filings described above.

The authorized officers are further directed to take all such actions as may be necessary to ensure that the interests of QRH, QRF 2022-1, and the Indenture Trustee in the receivables are at all times duly perfected and of first priority, subject only to such exceptions as may be expressly permitted by the Transaction Documents.

Resolution 8: General Authorization

RESOLVED, that the authorized officers of QPF identified in Resolution 5 above are hereby authorized and empowered to take any and all actions, execute and deliver any and all documents, instruments, certificates, and agreements, and make any and all filings, registrations, and recordings, as any such authorized officer may deem necessary, advisable, or appropriate to carry out the intent and purposes of the foregoing resolutions and to consummate the Transaction, the execution and delivery of any such document or the taking of any such action by any such authorized officer to be conclusive evidence of his or her authority to act on behalf of QPF and of QPF's authorization of the matters set forth therein; and it is further

RESOLVED, that all actions heretofore taken by any authorized officer of QPF, or by any officer, employee, or agent of QIH acting on behalf of QPF, in connection with the Transaction or any of the Transaction Documents, including, without limitation, negotiations with Ridgeline Capital Markets LLC, Calvoneth Trust Company, N.A., Northvane Bank, N.A., Calderwood & Harkness LLP, Meridian Ledger LLP, Veristead Analytics LLC, Fortbridge Corporate Services LLC, and any other parties to the Transaction, are hereby ratified, confirmed, and approved in all respects as the acts and deeds of the Company.

SECTION 4: CERTIFICATION OF INCUMBENCY

The undersigned Manager hereby certifies that the following individuals are the duly authorized officers and signatories of QPF as of the date hereof, that each holds the title or capacity set forth opposite his or her name, and that the specimen signature set forth opposite each name is the genuine signature of such individual:

The foregoing incumbency certifications shall remain in full force and effect until a subsequent Manager's Certificate or written notice is delivered by the Manager revoking or modifying the authority or incumbency of any of the foregoing individuals.

SECTION 5: FURTHER CERTIFICATIONS

The Manager hereby further certifies, on behalf of the Company, as follows:

(a) The foregoing resolutions adopted in Section 3 of this Manager's Certificate have not been amended, modified, supplemented, or rescinded in whole or in part since their adoption and remain in full force and effect as of the date hereof. No other resolutions have been adopted by the Manager that would conflict with, supersede, or limit the authority granted by the foregoing resolutions.

(b) The Limited Liability Company Agreement of QPF, dated as of March 14, 2019, has not been amended, restated, supplemented, or otherwise modified in any manner that would affect, limit, or impair the authority granted to the Manager herein or the ability of the Manager to adopt the foregoing resolutions and to authorize the execution, delivery, and performance by QPF of the Transaction Documents.

(c) QPF is not in default under any material agreement, indenture, mortgage, deed of trust, credit facility, or other instrument to which QPF is a party or by which any of its assets are bound, and no event has occurred and no condition exists that, with the giving of notice, the passage of time, or both, would constitute a default under any such agreement or instrument. No event has occurred that would constitute a material adverse change in the financial condition, business, operations, assets, or prospects of QPF since December 31, 2021.

(d) QPF is duly licensed, registered, or otherwise authorized as a premium finance company, or holds such other licenses, permits, or authorizations as may be required, in each of the fifty (50) states of the United States in which QPF conducts its insurance premium finance business. QPF is in compliance with all applicable state licensing and usury laws, and no proceeding is pending or, to the Manager's knowledge, threatened by any state insurance regulatory authority or other governmental authority seeking to revoke, suspend, limit, or condition any such license, registration, or authorization.

(e) There is no action, suit, proceeding, claim, arbitration, or investigation pending before any court, tribunal, governmental agency, or arbitral body, or, to the Manager's knowledge after reasonable inquiry, threatened against QPF, its assets, or its business, that would materially and adversely affect the ability of QPF to perform its obligations under the Transaction Documents, or that questions the validity or enforceability of any of the Transaction Documents or the transactions contemplated thereby. QPF has not received any written notice from any governmental authority asserting any violation of law, regulation, or order that would reasonably be expected to have a material adverse effect on QPF or the Transaction.

SIGNATURE

IN WITNESS WHEREOF, the undersigned has executed this Manager's Certificate as of July 27, 2022.

QUORUM PREMIUM FINANCE LLC

By: ________

Name: Sandra Ling-Hwang

Title: Manager

Address: 400 Atlantic Street, Suite 2200

Stamford, CT 06901

ACKNOWLEDGMENT

STATE OF CONNECTICUT COUNTY OF FAIRFIELD

On this 27th day of July, 2022, before me, the undersigned notary public, personally appeared Sandra Ling-Hwang, known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument, and acknowledged to me that she executed the same in her capacity as Manager of Quorum Premium Finance LLC, a Delaware limited liability company, and that by her signature on the instrument, the entity upon behalf of which she acted executed the instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

________________________________________

Notary Public, State of Connecticut

Printed Name: ________

My Commission Expires: ________

[NOTARIAL SEAL]

This Manager's Certificate and the resolutions set forth herein are being delivered in connection with the closing of the Transaction and may be relied upon by each of the parties to the Transaction Documents, Calderwood & Harkness LLP as issuer's counsel, Calvoneth Trust Company, N.A. as Indenture Trustee, Ridgeline Capital Markets LLC as Initial Purchaser, and each purchaser of the Notes in the initial offering thereof.

Class	Principal Amount	Percentage of Total
Class A Notes	$375,000,000	75.0%
Class B Notes	$75,000,000	15.0%
Class C Notes	$35,000,000	7.0%
Overcollateralization / Retained Interest	$15,000,000	3.0%
Total	$500,000,000	100.0%
Characteristic	Value
Initial Pool Balance	$612,000,000
Number of Loans	Approximately 82,400
Average Loan Balance	Approximately $7,427
Weighted Average APR	7.85%
Weighted Average Original Term	9.2 months
Weighted Average Remaining Term	5.7 months
Largest Single Obligor Concentration	0.38% of pool ($2,325,600)
Top 10 Obligors (aggregate)	2.14% of pool ($13,096,800)
Geographic Concentration — Texas	14.2%
Geographic Concentration — California	11.8%
Geographic Concentration — Florida	9.6%
60+ Day Delinquency Rate	0.87%
Historical Net Loss Rate (3-year avg., 2019–2021)	0.42%
Name	Title / Capacity	Specimen Signature
Sandra Ling-Hwang	Manager of QPF; Treasurer of QIH	________
Marcus Devereaux	CEO of QIH (authorized representative of QPF)	________
Priya Raghavan	CFO of QIH (authorized representative of QPF)	________
Nolan Whitford	General Counsel of QIH (authorized representative of QPF)	________

MANAGER'S CERTIFICATE OF QUORUM PREMIUM FINANCE LLC
Authorizing Resolutions in Connection with Insurance Premium Finance Receivables Securitization
July 27, 2022
Entity: Quorum Premium Finance LLC, a Delaware limited liability company ("QPF" or the "Company")
Principal Office: 400 Atlantic Street, Suite 2200, Stamford, CT 06901
Employer Identification Number: 84-2653198
RECITALS
The undersigned, Sandra Ling-Hwang, in her capacity as the sole Manager of Quorum Premium Finance LLC, a limited liability company duly organized and validly existing under the laws of the State of Delaware (the "Company"), hereby certifies as follows:
WHEREAS, QPF is a wholly owned subsidiary of Quorum Insurance Holdings Corp., a Delaware corporation ("QIH"), whose shares of common stock are publicly traded on the New York Stock Exchange under the ticker symbol "QIHC," with its principal executive offices located at 400 Atlantic Street, Suite 2200, Stamford, CT 06901;
WHEREAS, QIH, through QPF, proposes to undertake a securitization transaction (the "Transaction") involving the issuance by Quorum Receivables Funding 2022-1 LLC ("QRF 2022-1"), a Delaware limited liability company and bankruptcy-remote special purpose entity, of up to Five Hundred Million Dollars ($500,000,000) in aggregate principal amount of asset-backed notes (the "Notes"), backed by a revolving pool of insurance premium finance receivables originated by QPF in the ordinary course of its business;
WHEREAS, the Notes will be offered and sold in a private placement pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and Regulation S promulgated thereunder, and will not be registered under the Securities Act or the securities laws of any state;
WHEREAS, the capital structure of the Notes shall consist of the following tranches:
WHEREAS, the Board of Directors of QIH has duly authorized the Transaction by resolutions unanimously adopted at a meeting of the Board of Directors held on July 27, 2022, at which a quorum was present and acting throughout, as certified separately in the Secretary's Certificate of QIH of even date herewith, a copy of which has been delivered to issuer's counsel in connection with the closing of the Transaction;
WHEREAS, the Manager now desires to adopt the resolutions set forth herein and to make the certifications contained in this Manager's Certificate in connection with the Transaction and the execution and delivery of the Transaction Documents (as defined below);
NOW, THEREFORE, the undersigned Manager hereby certifies and resolves as follows:
SECTION 1: CERTIFICATION OF ORGANIZATION AND GOOD STANDING
The undersigned Manager hereby certifies, on behalf of the Company, as follows:
1.1 QPF was duly formed as a limited liability company under the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., by the filing of a Certificate of Formation with the Secretary of State of the State of Delaware on March 14, 2019, and is validly existing and in good standing under the laws of the State of Delaware as of the date hereof. A Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated no earlier than five (5) business days prior to the date hereof has been obtained and delivered to issuer's counsel in connection with the closing of the Transaction.
1.2 QPF is engaged in the business of originating and servicing insurance premium finance loans to commercial policyholders across all fifty (50) states of the United States. QPF's insurance premium finance loans have an average loan term of approximately nine (9) months and bear interest at a portfolio weighted-average annual percentage rate ("APR") of 7.85%. As of the date hereof, QPF maintains a total receivables portfolio of approximately Two Billion One Hundred Million Dollars ($2,100,000,000). QPF's historical net loss rate, calculated as the three-year average for the fiscal years ending December 31, 2019, December 31, 2020, and December 31, 2021, is 0.42%, reflecting the strong credit quality of QPF's receivables portfolio and the structural protection afforded by unearned premium refund rights that collateralize each loan.
1.3 The sole member of QPF is Quorum Insurance Holdings Corp., a Delaware corporation. QPF has no other members, equity holders, or persons holding any beneficial ownership interest in the Company.
1.4 The Manager of QPF is Sandra Ling-Hwang, who serves in such capacity pursuant to the Limited Liability Company Agreement of QPF, dated as of March 14, 2019, as amended from time to time (the "LLC Agreement"). Ms. Ling-Hwang concurrently serves as Treasurer of QIH, and her appointment as Manager of QPF was duly authorized by QIH in its capacity as the sole member of QPF.
SECTION 2: CERTIFICATION OF MANAGER AUTHORITY
The undersigned Manager hereby further certifies, on behalf of the Company, as follows:
2.1 Pursuant to Section 4.1 of the LLC Agreement, the Manager is authorized to take all actions and execute all documents on behalf of the Company that the Manager deems necessary or advisable in the conduct of the Company's business, including, without limitation, entering into agreements, instruments, and documents in connection with the sale, transfer, contribution, pledge, financing, or other disposition of the Company's receivables, assets, and property, and borrowing money and granting security interests in the assets of the Company in connection therewith.
2.2 Pursuant to Section 4.2 of the LLC Agreement, no other approvals, votes, consents, or authorizations of any member or other person are required under the LLC Agreement for the Manager to authorize the Transaction and the execution, delivery, and performance by the Company of the Transaction Documents (as defined below), other than the authorization of the Board of Directors of QIH (in its capacity as the sole member of the Company), which authorization has been duly obtained by resolutions of the Board of Directors of QIH adopted on July 27, 2022, as referenced in the Recitals above. The Manager has reviewed the resolutions of the Board of Directors of QIH and has confirmed that such resolutions authorize the Transaction and the execution and delivery of the Transaction Documents to the extent required by the LLC Agreement.
2.3 The Manager has full power and authority, acting alone, to adopt the resolutions set forth in Section 3 of this Manager's Certificate and to bind the Company in connection with the Transaction and the Transaction Documents, without the need for any further action, approval, or consent by any person.
SECTION 3: AUTHORIZING RESOLUTIONS
The Manager, acting in her capacity as the sole Manager of Quorum Premium Finance LLC and pursuant to the authority vested in the Manager under the LLC Agreement, hereby adopts the following resolutions, each of which shall be effective as of July 27, 2022:
Resolution 1: Authorization of the Transaction
RESOLVED, that the Company is hereby authorized to participate in the Transaction, pursuant to which QPF will sell and/or contribute insurance premium finance receivables originated by QPF in the ordinary course of its business to Quorum Receivables Holding LLC ("QRH"), a Delaware limited liability company and bankruptcy-remote intermediate special purpose entity (sole member: QPF; independent manager: Eleanor M. Vasquez of Fortbridge Corporate Services LLC, 1209 Orange Street, Wilmington, DE 19801), which will in turn transfer such receivables to QRF 2022-1 (sole member: QRH; independent manager: Timothy R. Callan of Fortbridge Corporate Services LLC), which will issue the Notes backed by such receivables in accordance with an indenture to be entered into between QRF 2022-1 and Calvoneth Trust Company, N.A., as indenture trustee; and it is further
RESOLVED, that the Transaction is consistent with the business purposes of the Company as set forth in the LLC Agreement and is in the best interests of the Company, its sole member, and its creditors; and it is further
RESOLVED, that the organizational structure of the Transaction, including the establishment of QRH as an intermediate special purpose entity between QPF and QRF 2022-1, and the appointment of independent managers for each of QRH and QRF 2022-1, is designed to achieve the bankruptcy-remoteness objectives of the Transaction and to support the characterization of the transfer of receivables from QPF to QRH as a "true sale" under applicable law.
Resolution 2: Authorization of Transaction Documents
RESOLVED, that the Company is hereby authorized to negotiate, execute, deliver, and perform its obligations under each of the following agreements and documents, together with all exhibits, schedules, annexes, supplements, and amendments thereto (collectively, the "Transaction Documents"):
(a) Receivables Sale Agreement — by and between QPF (as Seller) and QRH (as Purchaser), providing for the true sale of eligible insurance premium finance receivables from QPF to QRH on an ongoing revolving basis, including the conveyance of all related security interests, unearned premium refund rights, collections, and proceeds, in exchange for a combination of cash and deferred purchase price, all on terms and conditions to be set forth in such agreement as negotiated by the authorized officers of QPF with the advice of issuer's counsel;
(b) Servicing Agreement — among QRF 2022-1 (as Issuer), QPF (as Servicer), and Calvoneth Trust Company, N.A. (as Indenture Trustee), pursuant to which QPF will act as the servicer of the receivables pool in accordance with customary servicing standards applicable to insurance premium finance receivables, at a servicing fee equal to 1.00% per annum calculated on the outstanding pool balance, payable monthly in arrears from available collections in accordance with the priority of payments set forth in the indenture;
(c) Back-Up Servicing Agreement — among QRF 2022-1 (as Issuer), QPF (as Servicer), Northvane Bank, N.A. (as Back-Up Servicer), and Calvoneth Trust Company, N.A. (as Indenture Trustee), pursuant to which Northvane Bank, N.A. will serve as the back-up servicer of the receivables pool and will assume the servicing obligations upon the occurrence of a Servicer Termination Event (as defined in the Servicing Agreement), all on terms and conditions customary for back-up servicing arrangements in insurance premium finance receivables securitization transactions;
(d) Note Purchase Agreement — among QRF 2022-1 (as Issuer), QIH (as Sponsor), QPF (as Seller and Servicer), and Ridgeline Capital Markets LLC (as Initial Purchaser, Structuring Agent, and Lead Bookrunner), to the extent QPF is required to join therein or provide representations, warranties, indemnities, or covenants in connection therewith, including, without limitation, representations and warranties regarding the receivables, the origination practices of QPF, and the compliance of QPF with applicable licensing and usury laws;
(e) Performance Guaranty — by QIH in favor of Calvoneth Trust Company, N.A. (as Indenture Trustee for the benefit of the Noteholders), guaranteeing certain obligations of QPF in its capacity as Servicer and Seller under the Transaction Documents, to the extent QPF's cooperation, acknowledgment, or consent is required in connection with the execution and delivery of such guaranty;
(f) Administration Agreement — by and between QRF 2022-1 (as Issuer) and QIH (as Administrator), to the extent QPF is a party thereto, has obligations thereunder, or is required to provide information, cooperation, or support in connection with the administration of QRF 2022-1 and the Notes;
(g) Any and all UCC-1 financing statements, UCC-3 amendments, and related filings, including, without limitation, the UCC-1 Financing Statement naming QPF as debtor and QRH as secured party, to be filed with the Secretary of State of the State of Delaware, and any other UCC financing statements or filings required to be made in any jurisdiction in connection with the perfection of the security interests and ownership interests contemplated by the Transaction Documents;
(h) Any and all amendments, restatements, supplements, exhibits, schedules, side letters, ancillary documents, officers' certificates, bring-down certificates, closing certificates, opinions of counsel, notices, and other instruments contemplated by, required under, or otherwise related to the foregoing Transaction Documents or the Transaction.
Resolution 3: Eligible Receivables Criteria
RESOLVED, that the receivables to be sold, transferred, or contributed by QPF to QRH pursuant to the Receivables Sale Agreement shall satisfy the following eligibility criteria, among such other eligibility criteria as may be set forth in the definitive Transaction Documents as negotiated by the authorized officers of QPF with the advice of issuer's counsel:
(i) each such receivable shall have been originated by QPF in the ordinary course of its business consistent with QPF's customary origination standards and credit and collection policies;
(ii) each such receivable shall be denominated and payable in lawful currency of the United States of America;
(iii) each such receivable shall be secured by the right to receive unearned premium refunds from the applicable insurance carrier upon cancellation of the related insurance policy, with a valid notice of premium financing and power of attorney executed by the insured and delivered to the applicable insurance carrier or its agent;
(iv) each such receivable shall have an original term not exceeding twelve (12) months from the date of origination;
(v) the obligor on each such receivable shall be a commercial policyholder organized or resident in the United States of America, and no receivable shall have an obligor that is a natural person or a consumer (as defined under the Truth in Lending Act or any analogous state law);
(vi) no such receivable shall be in default, meaning that no scheduled payment on such receivable shall be more than sixty (60) days past due as of the applicable cut-off date or transfer date;
(vii) each such receivable shall have been originated in compliance with all applicable federal, state, and local laws, rules, and regulations, including, without limitation, all applicable usury laws, premium finance licensing statutes, and insurance regulatory requirements of the state in which the related insurance policy was issued or in which the obligor is located.
Resolution 4: Initial Receivables Pool
RESOLVED, that the Manager has reviewed the initial receivables pool as of the cut-off date of June 30, 2022 (the "Cut-Off Date"), and has determined that the characteristics of the initial receivables pool are as follows:
The Manager confirms that the initial receivables pool, as described above, is consistent with the eligibility criteria set forth in Resolution 3 above and the concentration limits applicable to the Transaction, including, without limitation, the following concentration limits: (a) no single obligor shall represent more than 0.75% of the aggregate pool balance; (b) no single state shall represent more than 20.0% of the aggregate pool balance; and (c) no single insurance carrier shall represent more than 15.0% of the aggregate pool balance. The Manager further confirms that the initial receivables pool has been subjected to customary data integrity and reconciliation procedures and that, to the best of the Manager's knowledge and belief, the foregoing statistical information is accurate and complete in all material respects as of the Cut-Off Date.
Resolution 5: Designation of Authorized Officers and Signatories
RESOLVED, that any of the following individuals, acting alone and without the joinder of any other person, is hereby authorized and empowered to execute and deliver, on behalf of QPF, each of the Transaction Documents and all other documents, instruments, certificates, opinions, notices, and agreements as may be necessary, desirable, or appropriate in connection with the Transaction:
(1) Sandra Ling-Hwang, Manager of QPF and Treasurer of QIH;
(2) Marcus Devereaux, Chief Executive Officer of QIH, in his capacity as an authorized representative of QPF pursuant to these resolutions and the LLC Agreement;
(3) Priya Raghavan, Chief Financial Officer of QIH, in her capacity as an authorized representative of QPF pursuant to these resolutions and the LLC Agreement; and
(4) Nolan Whitford, General Counsel of QIH, in his capacity as an authorized representative of QPF pursuant to these resolutions and the LLC Agreement.
The execution and delivery of any Transaction Document or other document, instrument, or certificate by any one of the foregoing authorized officers shall be conclusive evidence of such officer's authority to act on behalf of QPF and of QPF's authorization of the matters set forth in such document.
Resolution 6: Retention of Outside Counsel and Advisors
RESOLVED, that the engagement of Calderwood & Harkness LLP, with offices at 601 Lexington Avenue, New York, NY 10022, as issuer's counsel for the Transaction, under Firm Matter No. 1025-00007, with Douglas Carmichael serving as Responsible Partner and Francesca Morano serving as Billing Partner, is hereby ratified and confirmed, and the authorized officers of QPF identified in Resolution 5 above are directed to cooperate fully with Calderwood & Harkness LLP in connection with the preparation, negotiation, and closing of the Transaction and the Transaction Documents, including, without limitation, the provision of information, documents, and access to personnel as may be reasonably requested by such counsel; and it is further
RESOLVED, that the engagement of Meridian Ledger LLP, with Robert Falcone serving as Engagement Partner, as independent auditors for the Transaction, to provide agreed-upon procedures and comfort letters in connection with the offering of the Notes, is hereby ratified and confirmed; and it is further
RESOLVED, that the engagement of Veristead Analytics LLC, with Katharine Drummond, Managing Director, serving as the primary engagement contact, as the third-party verification agent for the Transaction, to perform sampling, re-underwriting, and data verification procedures with respect to the receivables pool, is hereby ratified and confirmed; and it is further
RESOLVED, that the authorized officers of QPF are directed to execute and deliver such engagement letters, fee agreements, indemnification agreements, and access letters as may be necessary or appropriate in connection with the foregoing engagements.
Resolution 7: UCC Filings and Perfection
RESOLVED, that the authorized officers of QPF identified in Resolution 5 above are hereby directed to cause to be prepared and filed, or to authorize issuer's counsel to prepare and file on behalf of QPF, all UCC-1 financing statements, UCC-3 amendment statements, and any other filings, recordings, or registrations as may be required under the Uniform Commercial Code as adopted in the State of Delaware and in any other applicable jurisdiction to perfect the security interests, ownership interests, and other interests contemplated by the Transaction Documents, including, without limitation:
(a) a UCC-1 Financing Statement naming QPF as debtor and QRH as secured party (or buyer, as applicable), to be filed with the Secretary of State of the State of Delaware, covering all insurance premium finance receivables sold, transferred, or contributed by QPF to QRH pursuant to the Receivables Sale Agreement, together with all related rights, collections, and proceeds;
(b) such additional UCC-1 Financing Statements, UCC-3 Amendments, or other filings as may be required by the Indenture Trustee, the rating agencies, or issuer's counsel in connection with the perfection of the interests of QRF 2022-1 and the Noteholders in the receivables pool and the related collateral; and
(c) continuation statements and amendment statements as may be required from time to time to maintain the effectiveness and priority of the filings described above.
The authorized officers are further directed to take all such actions as may be necessary to ensure that the interests of QRH, QRF 2022-1, and the Indenture Trustee in the receivables are at all times duly perfected and of first priority, subject only to such exceptions as may be expressly permitted by the Transaction Documents.
Resolution 8: General Authorization
RESOLVED, that the authorized officers of QPF identified in Resolution 5 above are hereby authorized and empowered to take any and all actions, execute and deliver any and all documents, instruments, certificates, and agreements, and make any and all filings, registrations, and recordings, as any such authorized officer may deem necessary, advisable, or appropriate to carry out the intent and purposes of the foregoing resolutions and to consummate the Transaction, the execution and delivery of any such document or the taking of any such action by any such authorized officer to be conclusive evidence of his or her authority to act on behalf of QPF and of QPF's authorization of the matters set forth therein; and it is further
RESOLVED, that all actions heretofore taken by any authorized officer of QPF, or by any officer, employee, or agent of QIH acting on behalf of QPF, in connection with the Transaction or any of the Transaction Documents, including, without limitation, negotiations with Ridgeline Capital Markets LLC, Calvoneth Trust Company, N.A., Northvane Bank, N.A., Calderwood & Harkness LLP, Meridian Ledger LLP, Veristead Analytics LLC, Fortbridge Corporate Services LLC, and any other parties to the Transaction, are hereby ratified, confirmed, and approved in all respects as the acts and deeds of the Company.
SECTION 4: CERTIFICATION OF INCUMBENCY
The undersigned Manager hereby certifies that the following individuals are the duly authorized officers and signatories of QPF as of the date hereof, that each holds the title or capacity set forth opposite his or her name, and that the specimen signature set forth opposite each name is the genuine signature of such individual:
The foregoing incumbency certifications shall remain in full force and effect until a subsequent Manager's Certificate or written notice is delivered by the Manager revoking or modifying the authority or incumbency of any of the foregoing individuals.
SECTION 5: FURTHER CERTIFICATIONS
The Manager hereby further certifies, on behalf of the Company, as follows:
(a) The foregoing resolutions adopted in Section 3 of this Manager's Certificate have not been amended, modified, supplemented, or rescinded in whole or in part since their adoption and remain in full force and effect as of the date hereof. No other resolutions have been adopted by the Manager that would conflict with, supersede, or limit the authority granted by the foregoing resolutions.
(b) The Limited Liability Company Agreement of QPF, dated as of March 14, 2019, has not been amended, restated, supplemented, or otherwise modified in any manner that would affect, limit, or impair the authority granted to the Manager herein or the ability of the Manager to adopt the foregoing resolutions and to authorize the execution, delivery, and performance by QPF of the Transaction Documents.
(c) QPF is not in default under any material agreement, indenture, mortgage, deed of trust, credit facility, or other instrument to which QPF is a party or by which any of its assets are bound, and no event has occurred and no condition exists that, with the giving of notice, the passage of time, or both, would constitute a default under any such agreement or instrument. No event has occurred that would constitute a material adverse change in the financial condition, business, operations, assets, or prospects of QPF since December 31, 2021.
(d) QPF is duly licensed, registered, or otherwise authorized as a premium finance company, or holds such other licenses, permits, or authorizations as may be required, in each of the fifty (50) states of the United States in which QPF conducts its insurance premium finance business. QPF is in compliance with all applicable state licensing and usury laws, and no proceeding is pending or, to the Manager's knowledge, threatened by any state insurance regulatory authority or other governmental authority seeking to revoke, suspend, limit, or condition any such license, registration, or authorization.
(e) There is no action, suit, proceeding, claim, arbitration, or investigation pending before any court, tribunal, governmental agency, or arbitral body, or, to the Manager's knowledge after reasonable inquiry, threatened against QPF, its assets, or its business, that would materially and adversely affect the ability of QPF to perform its obligations under the Transaction Documents, or that questions the validity or enforceability of any of the Transaction Documents or the transactions contemplated thereby. QPF has not received any written notice from any governmental authority asserting any violation of law, regulation, or order that would reasonably be expected to have a material adverse effect on QPF or the Transaction.
SIGNATURE
IN WITNESS WHEREOF, the undersigned has executed this Manager's Certificate as of July 27, 2022.
QUORUM PREMIUM FINANCE LLC
By: ________
Name: Sandra Ling-Hwang
Title: Manager
Address: 400 Atlantic Street, Suite 2200
Stamford, CT 06901
ACKNOWLEDGMENT
STATE OF CONNECTICUT COUNTY OF FAIRFIELD
On this 27th day of July, 2022, before me, the undersigned notary public, personally appeared Sandra Ling-Hwang, known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument, and acknowledged to me that she executed the same in her capacity as Manager of Quorum Premium Finance LLC, a Delaware limited liability company, and that by her signature on the instrument, the entity upon behalf of which she acted executed the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
________________________________________
Notary Public, State of Connecticut
Printed Name: ________
My Commission Expires: ________
[NOTARIAL SEAL]
This Manager's Certificate and the resolutions set forth herein are being delivered in connection with the closing of the Transaction and may be relied upon by each of the parties to the Transaction Documents, Calderwood & Harkness LLP as issuer's counsel, Calvoneth Trust Company, N.A. as Indenture Trustee, Ridgeline Capital Markets LLC as Initial Purchaser, and each purchaser of the Notes in the initial offering thereof.
Class | Principal Amount | Percentage of Total
Class A Notes | $375,000,000 | 75.0%
Class B Notes | $75,000,000 | 15.0%
Class C Notes | $35,000,000 | 7.0%
Overcollateralization / Retained Interest | $15,000,000 | 3.0%
Total | $500,000,000 | 100.0%
Characteristic | Value
Initial Pool Balance | $612,000,000
Number of Loans | Approximately 82,400
Average Loan Balance | Approximately $7,427
Weighted Average APR | 7.85%
Weighted Average Original Term | 9.2 months
Weighted Average Remaining Term | 5.7 months
Largest Single Obligor Concentration | 0.38% of pool ($2,325,600)
Top 10 Obligors (aggregate) | 2.14% of pool ($13,096,800)
Geographic Concentration — Texas | 14.2%
Geographic Concentration — California | 11.8%
Geographic Concentration — Florida | 9.6%
60+ Day Delinquency Rate | 0.87%
Historical Net Loss Rate (3-year avg., 2019–2021) | 0.42%
Name | Title / Capacity | Specimen Signature
Sandra Ling-Hwang | Manager of QPF; Treasurer of QIH | ________
Marcus Devereaux | CEO of QIH (authorized representative of QPF) | ________
Priya Raghavan | CFO of QIH (authorized representative of QPF) | ________
Nolan Whitford | General Counsel of QIH (authorized representative of QPF) | ________