UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT UNDER
SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934
HireRight Holdings Corporation
(Name of the Issuer)
HireRight Holdings Corporation
Hearts Parent, LLC
Hearts Merger Sub, Inc.
General Atlantic, L.P.
GAP (Bermuda) L.P.
General Atlantic GenPar (Bermuda), L.P.
General Atlantic Partners (Bermuda) IV, L.P.
General Atlantic Partners (Bermuda) EU, L.P.
General Atlantic GenPar, L.P.
General Atlantic (Lux) S.à r.l.
GAP Coinvestments III, LLC
GAP Coinvestments IV, LLC
GAP Coinvestments V, LLC
GAP Coinvestments CDA, L.P.
General Atlantic GenPar (Lux) SCSp
General Atlantic Partners (Lux) SCSp
General Atlantic Partners AIV-1 A, L.P.
General Atlantic Partners AIV-1 B, L.P.
General Atlantic (SPV) GP, LLC
General Atlantic Partners 100, L.P.
General Atlantic (HRG) Collections, L.P.
GAPCO AIV Holdings, L.P.
GAPCO AIV Interholdco (GS), L.P.
GA AIV-1 B Interholdco, L.P.
GA AIV-1 B Interholdco (GS), L.P.
GA AIV-1 A Interholdco (GS), L.P.
General Atlantic Partners (Bermuda) HRG II, L.P.
General Atlantic (SPV) GP (Bermuda), LLC
Trident VII, L.P.
Trident VII Parallel Fund, L.P.
Trident VII DE Parallel Fund, L.P.
Trident VII Professionals Fund, L.P.
Trident Capital VII, L.P.
Stone Point GP Ltd.
(Names of Persons Filing Statement)
Common Stock, Par Value $0.001 per share
(Title of Class of Securities)
Common Stock: 433537107
(CUSIP Number of Class of Securities)
HireRight Holdings Corporation
100 Centerview Drive, Suite 300
Nashville, TN 37214
Tel: (615) 320-9800 | | | Hearts Parent, LLC
Hearts Merger Sub, Inc.
c/o General Atlantic Service Company, L.P.,
55 East 52nd Street, 32nd Floor
New York, NY 10055
Tel: (212) 715-4000 | | | Trident VII, L.P.
Trident VII Parallel Fund, L.P.
Trident VII DE Parallel Fund, L.P.
Trident VII Professionals Fund, L.P.
Trident Capital VII, L.P.
Stone Point GP Ltd.
c/o Stone Point Capital LLC
20 Horseneck Lane
Greenwich, CT 06830
Tel: (203) 862-2900 |
General Atlantic (Lux) S.à r.l.
General Atlantic GenPar (Lux) SCSp
General Atlantic Partners (Lux) SCSp
412F, Route d’Esch,
Luxembourg L-1471
Tel: (212) 715-4000 | | | General Atlantic, L.P.
General Atlantic GenPar, L.P.
GAP Coinvestments III, LLC
GAP Coinvestments IV, LLC
GAP Coinvestments V, LLC
GAP Coinvestments CDA, L.P.
General Atlantic Partners AIV-1 A, L.P.
General Atlantic Partners AIV-1 B, L.P.
General Atlantic (SPV) GP, LLC
General Atlantic Partners 100, L.P.
General Atlantic (HRG) Collections, L.P.
GAPCO AIV Holdings, L.P.
GAPCO AIV Interholdco (GS), L.P.
GA AIV-1 B Interholdco, L.P.
GA AIV-1 B Interholdco (GS), L.P.
GA AIV-1 A Interholdco (GS), L.P.
c/o General Atlantic Service Company, L.P.,
55 East 52nd Street, 33rd Floor,
New York, NY 10055
Tel: (212) 715-4000 | | | GAP (Bermuda) L.P.
General Atlantic GenPar (Bermuda), L.P.
General Atlantic Partners (Bermuda) IV, L.P.
General Atlantic Partners (Bermuda) EU, L.P.
General Atlantic Partners (Bermuda) HRG II, L.P.
General Atlantic (SPV) GP (Bermuda), LLC
Clarendon House, 2 Church Street,
Hamilton, Bermuda HM 11
Tel: (441) 295-1422 |
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Persons Filing Statement)
With copies to
Elizabeth A. Cooper
Mark C. Viera
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
Tel: (212) 455-2000 | | | John D. Amorosi
H. Oliver Smith
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
Tel: (212) 450-4000 | | | Matthew W. Abbott
Christopher J. Cummings
Cullen L. Sinclair
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Tel: (212) 373-3000 |
This statement is filed in connection with (check the appropriate box): |
a. | | | ☒ | | | The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934. |
b. | | | ☐ | | | The filing of a registration statement under the Securities Act of 1933. |
c. | | | ☐ | | | A tender offer. |
d. | | | ☐ | | | None of the above. |
Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: ☒
Check the following box if the filing is a final amendment reporting the results of the transaction: ☐
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of this transaction, passed upon the merits or fairness of this transaction, or passed upon the adequacy or accuracy of the disclosure in this transaction statement on Schedule 13E-3. Any representation to the contrary is a criminal offense.
INTRODUCTION
This Rule 13e-3 Transaction Statement on Schedule 13E-3, together with the exhibits hereto (this “Schedule 13E-3” or “Transaction Statement”), is being filed with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the “Exchange Act”), jointly by the following persons (each, a “Filing Person,” and collectively, the “Filing Persons”): (i) HireRight Holdings Corporation (“HireRight” or the “Company”), a Delaware corporation and the issuer of the common stock, par value $0.001 per share (the “Shares”), that is subject to the Rule 13e-3 transaction, (ii) Hearts Parent, LLC, a Delaware limited liability company (“Parent”), (iii) Hearts Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), (iv) General Atlantic, L.P., a Delaware limited partnership, (v) GAP (Bermuda) L.P., a Bermuda exempted limited partnership, (vi) General Atlantic GenPar (Bermuda), L.P., a Bermuda exempted limited partnership, (vii) General Atlantic Partners (Bermuda) IV, L.P., a Bermuda exempted limited partnership, (viii) General Atlantic Partners (Bermuda) EU, L.P., a Bermuda exempted limited partnership, (ix) General Atlantic GenPar, L.P., a Delaware limited partnership, (x) General Atlantic (Lux) S.à.r.l., a Luxembourg private limited liability company, (xi) GAP Coinvestments III, LLC, a Delaware limited liability company, (xii) GAP Coinvestments IV, LLC, a Delaware limited liability company, (xiii) GAP Coinvestments V, LLC, a Delaware limited liability company, (xiv) GAP Coinvestments CDA, L.P., a Delaware limited partnership, (xv) General Atlantic GenPar (Lux) SCSp, a Luxembourg special limited partnership, (xvi) General Atlantic Partners (Lux), SCSp, a Luxembourg special limited partnership, (xvii) General Atlantic Partners AIV-1 A, L.P., a Delaware limited partnership, (xviii) General Atlantic Partners AIV-1 B, L.P., a Delaware limited partnership, (xix) General Atlantic (SPV) GP, LLC, a Delaware limited liability company, (xx) General Atlantic Partners 100, L.P., a Delaware limited partnership, (xxi) General Atlantic (HRG) Collections, L.P., a Delaware limited partnership, (xxii) GAPCO AIV Holdings, L.P., a Delaware limited partnership, (xxiii) GAPCO AIV Interholdco (GS), L.P., a Delaware limited partnership, (xxiv) GA AIV-1 B Interholdco, L.P., a Delaware limited partnership, (xxv) GA AIV-1 B Interholdco (GS), L.P., a Delaware limited partnership, (xxvi) GA AIV-1 A Interholdco (GS), L.P., a Delaware limited partnership, (xxvii) General Atlantic Partners (Bermuda) HRG II, L.P., a Bermuda exempted limited partnership, (xxviii) General Atlantic (SPV) GP (Bermuda), LLC, a Bermuda limited liability company (together with Filing Persons (iv) through (xxvii), “General Atlantic”), (xxix) Trident VII, L.P., a Cayman Islands exempted limited partnership, (xxx) Trident VII Parallel Fund, L.P., a Cayman Islands exempted limited partnership, (xxxi) Trident VII DE Parallel Fund, L.P., a Delaware limited partnership, (xxxii) Trident VII Professionals Fund, L.P., a Cayman Islands exempted limited partnership, (xxxiii) Trident Capital VII, L.P., a Cayman Islands exempted limited partnership and (xxxiv) Stone Point GP Ltd., a Cayman Islands exempted company with limited liability (together with Filing Persons (xxix) through (xxxiii), “Stone Point”). Parent, Merger Sub, General Atlantic and Stone Point are Filing Persons of this Transaction Statement because they may be deemed to be affiliates of the Company under the SEC rules governing “going-private” transactions.
On February 15, 2024, the Company, Parent and Merger Sub entered into an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”), pursuant to which, subject to the satisfaction or waiver of certain conditions and on the terms set forth therein, Merger Sub will merge with and into the Company, with the Company as the surviving corporation (the “Merger”). Concurrently with the filing of this Schedule 13E-3, the Company is filing with the SEC a preliminary Proxy Statement (the “Proxy Statement”) under Regulation 14A of the Exchange Act, relating to a special meeting of the stockholders of the Company (the “Special Meeting”) at which the stockholders of the Company will consider and vote upon a proposal to (i) approve and adopt the Merger Agreement and the transactions contemplated thereby, including the Merger and (ii) a proposal to adjourn the Special Meeting, if necessary or appropriate, including adjournments to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the Merger Agreement. The adoption of the Merger Agreement will require the affirmative vote of (i) the holders of a majority of the voting power of all outstanding Shares entitled to vote, outstanding as of the close of business on the record date for the Special Meeting and (ii) the holders of a majority of the outstanding shares of Company common stock held by the Unaffiliated Stockholders entitled to vote thereon. A copy of the Proxy Statement is attached hereto as Exhibit (a)(2)(i) and incorporated herein by reference. A copy of the Merger Agreement is attached hereto as Exhibit (d)(i) and is also included as Annex A to the preliminary Proxy Statement and incorporated herein by reference.
Under the terms of the Merger Agreement, and subject to the conditions thereof, at the effective time of the Merger (the “Effective Time”), among other things, each Share outstanding immediately prior to the Effective
Time, other than as provided below, will be converted into the right to receive $14.35 in cash (the “Merger Consideration”), without interest and less any applicable withholding taxes. The following Shares will not be converted into the right to receive the Merger Consideration in connection with the Merger: (i) Shares held by the Company as treasury stock or otherwise, (ii) Shares owned by Parent, Merger Sub and any of their subsidiaries (including the Shares held of record by the Sponsor Stockholders) and (iii) Shares that are issued and outstanding immediately prior to the Effective Time and that have not been voted in favor of the adoption of the Merger Agreement or consented thereto in writing and whose holders have properly exercised and validly perfected appraisal rights with respect to such Shares in accordance with, and who have complied with, Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”), a copy of which is attached hereto as Exhibit (f) and is also included as Annex E to the Proxy Statement and incorporated herein by reference.
The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Proxy Statement of the information required to be included in response to the items of Schedule 13E-3. Pursuant to General Instruction F to Schedule 13E-3, the information contained in the Proxy Statement, including all annexes and appendices thereto, is incorporated in its entirety herein by reference, and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the Proxy Statement and the annexes and appendices thereto.
Capitalized terms used but not expressly defined in this Schedule 13E-3 shall have the respective meanings given to them in the Proxy Statement.
The information concerning the Company contained in, or incorporated by reference into, this Schedule 13E-3 and the Proxy Statement was supplied by the Company. Similarly, all information concerning each other Filing Person contained in, or incorporated by reference into this Schedule 13E-3 and the Proxy Statement was supplied by such Filing Person. No Filing Person, including the Company, is responsible for the accuracy of any information supplied by any other Filing Person.
While each of the Filing Persons acknowledges that the Merger is a “going private” transaction for purposes of Rule 13e-3 under the Exchange Act, the filing of this Transaction Statement shall not be construed as an admission by any Filing Person, or by any affiliate of a Filing Person, that the Company is “controlled” by any Filing Person.
Item 1.
| Summary Term Sheet |
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
Item 2.
| Subject Company Information |
(a) Name and Address. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“PARTIES TO THE MERGER”
(b) Securities. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“THE SPECIAL MEETING - Voting”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Market Price of Shares of Company Common Stock and Dividends”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Security Ownership of Certain Beneficial Owners and Management”
(c) Trading Market and Price. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“SUMMARY TERM SHEET”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Market Price of Shares of Company Common Stock and Dividends”
(d) Dividends. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Market Price of Shares of Company Common Stock and Dividends”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Dividends”
(e) Prior Public Offerings. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Prior Public Offerings”
(f) Prior Stock Purchases. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Stock Repurchases”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Certain Transactions in the Shares of Company Common Stock”
Item 3.
| Identity and Background of Filing Person |
(a)-(c) Name and Address; Business and Background of Entities; Business and Background of Natural Persons. HireRight Holdings Corporation is the subject company. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“PARTIES TO THE MERGER”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT”
“OTHER IMPORTANT INFORMATION REGARDING THE PURCHASER FILING PARTIES”
Item 4.
| Terms of the Transaction |
(a)(1) Material Terms. Tender Offers. Not Applicable.
(a)(2) Material Terms. Mergers or Similar Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
“SPECIAL FACTORS - Plans for HireRight After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“SPECIAL FACTORS - Material U.S. Federal Income Tax Consequences of the Merger”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS - Accounting Treatment”
“THE MERGER AGREEMENT”
“THE SPECIAL MEETING - Vote Required”
Annex A - Agreement and Plan of Merger
(c) Different Terms. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Plans for HireRight After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS - Support Agreements”
“THE MERGER AGREEMENT - Employee Benefits”
Annex A - Agreement and Plan of Merger
Annex B - General Atlantic Support Agreement
Annex C - Stone Point Support Agreement
(d) Appraisal Rights. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Appraisal Rights”
“THE MERGER AGREEMENT - Merger Consideration”
“THE SPECIAL MEETING - Appraisal Rights”
“THE MERGER (THE MERGER AGREEMENT PROPOSAL - PROPOSAL 1) - Appraisal Rights”
Annex A - Agreement and Plan of Merger
Annex E - Section 262 of the DGCL
(e) Provisions for Unaffiliated Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“PROVISIONS FOR UNAFFILIATED STOCKHOLDERS”
(f) Eligibility for Listing or Trading. Not Applicable.
Item 5.
| Past Contacts, Transactions, Negotiations and Agreements |
(a) Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“THE MERGER AGREEMENT”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Certain Transactions in the Shares of Company Common Stock”
“WHERE YOU CAN FIND MORE INFORMATION”
Annex A - Agreement and Plan of Merger
(b) Significant Corporate Events. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
“SPECIAL FACTORS - Plans for HireRight After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS - Limited Guarantees”
“SPECIAL FACTORS - Support Agreements”
“THE MERGER AGREEMENT”
(c) Negotiations or Contacts. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
“SPECIAL FACTORS - Plans for HireRight After the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“THE MERGER AGREEMENT”
(e) Agreements Involving the Subject Company’s Securities. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Plans for HireRight After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“SPECIAL FACTORS - Intent of the Directors and Executive Officers to Vote in Favor of the Merger”
“SPECIAL FACTORS - Intent of the Purchaser Filing Parties to Vote in Favor of the Merger”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS - Limited Guarantees”
“SPECIAL FACTORS - Support Agreements”
“THE MERGER AGREEMENT”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Certain Transactions in the Shares of Company Common Stock”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Stockholders Agreement”
“WHERE YOU CAN FIND MORE INFORMATION”
Annex A - Agreement and Plan of Merger
Annex B - General Atlantic Support Agreement
Annex C - Stone Point Support Agreement
Item 6.
| Purposes of the Transaction and Plans or Proposals |
(b) Use of Securities Acquired. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
“SPECIAL FACTORS - Plans for HireRight After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Exchange and Payment Procedures”
“THE MERGER AGREEMENT”
“DELISTING AND DEREGISTRATION OF COMMON STOCK”
Annex A - Agreement and Plan of Merger
(c)(1)-(8) Plans. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
“SPECIAL FACTORS - Plans for HireRight After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“SPECIAL FACTORS - Intent of the Directors and Executive Officers to Vote in Favor of the Merger”
“SPECIAL FACTORS - Intent of the Purchaser Filing Parties to Vote in Favor of the Merger”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS - Limited Guarantees”
“SPECIAL FACTORS - Support Agreements”
“THE MERGER AGREEMENT”
“THE SPECIAL MEETING”
“DELISTING AND DEREGISTRATION OF COMMON STOCK”
Annex A - Agreement and Plan of Merger
Annex B - General Atlantic Support Agreement
Annex C - Stone Point Support Agreement
Item 7.
| Purposes, Alternatives, Reasons and Effects |
(a) Purposes. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
“SPECIAL FACTORS - Plans for HireRight After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
(b) Alternatives. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
“SPECIAL FACTORS - Certain Effects on HireRight if the Merger is Not Completed”
(c) Reasons. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Opinion of the Special Committee’s Financial Advisor”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
“SPECIAL FACTORS - Plans for HireRight After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
Annex D - Opinion of Centerview Partners LLC
(d) Effects. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
“SPECIAL FACTORS - Plans for HireRight After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Certain Effects on HireRight if the Merger is Not Completed”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“SPECIAL FACTORS - Material U.S. Federal Income Tax Consequences of the Merger”
“SPECIAL FACTORS - Fees and Expenses”
“SPECIAL FACTORS - Accounting Treatment”
“SPECIAL FACTORS - Exchange and Payment Procedures”
“THE MERGER AGREEMENT”
“DELISTING AND DEREGISTRATION OF COMMON STOCK”
Annex A - Agreement and Plan of Merger
Item 8.
| Fairness of the Transaction |
(a), (b) Fairness; Factors Considered in Determining Fairness. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Opinion of the Special Committee’s Financial Advisor”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“THE MERGER AGREEMENT”
Annex D - Opinion of Centerview Partners LLC
(c) Approval of Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“THE MERGER AGREEMENT - Conditions to the Closing of the Merger”
“THE SPECIAL MEETING - Record Date and Quorum”
“THE SPECIAL MEETING - Vote Required”
“THE SPECIAL MEETING - Voting”
“THE SPECIAL MEETING - How to Vote”
“THE SPECIAL MEETING - Proxies and Revocation”
Annex A - Agreement and Plan of Merger
(d) Unaffiliated Representative. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Opinion of the Special Committee’s Financial Advisor”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
(e) Approval of Directors. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to the Fairness of the Merger”
(f) Other Offers. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
“THE MERGER AGREEMENT - Solicitation of Other Offers”
“THE MERGER AGREEMENT - Recommendation Changes”
Annex A - Agreement and Plan of Merger
Item 9.
| Reports, Opinions, Appraisals and Negotiations |
(a)-(c) Report, Opinion or Appraisal; Preparer and Summary of the Report, Opinion or Appraisal; Availability of Documents. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Opinion of the Special Committee’s Financial Advisor”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
“WHERE YOU CAN FIND MORE INFORMATION”
Annex D - Opinion of Centerview Partners LLC
Item 10.
| Source and Amount of Funds or Other Consideration |
(a), (b) Source of Funds; Conditions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS - Limited Guarantees”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“SPECIAL FACTORS - Exchange and Payment Procedures”
“THE MERGER AGREEMENT - Effect of the Merger”
“THE MERGER AGREEMENT - Closing and Effective Time”
“THE MERGER AGREEMENT - Conduct of Business Pending the Merger”
“THE MERGER AGREEMENT - Conditions to the Closing of the Merger”
Annex A - Agreement and Plan of Merger
(c) Expenses. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Fees and Expenses”
“THE MERGER AGREEMENT - Termination of the Merger Agreement”
“THE MERGER AGREEMENT - Termination Fees”
“THE MERGER AGREEMENT - Fees and Expenses”
“THE SPECIAL MEETING - Solicitation of Proxies; Payment of Solicitation Expenses”
Annex A - Agreement and Plan of Merger
(d) Borrowed Funds.
“SPECIAL FACTORS - Financing of the Merger”
Item 11.
| Interest in Securities of the Subject Company |
(a) Securities Ownership. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“SPECIAL FACTORS - Support Agreements”
“THE SPECIAL MEETING - Record Date and Quorum”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Security Ownership of Certain Beneficial Owners and Management”
Annex B - General Atlantic Support Agreement
Annex C - Stone Point Support Agreement
(b) Securities Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“SPECIAL FACTORS - Support Agreements”
“THE MERGER AGREEMENT”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Stock Repurchases”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Certain Transactions in the Shares of Company Common Stock”
Annex A - Agreement and Plan of Merger
Annex B - General Atlantic Support Agreement
Annex C - Stone Point Support Agreement
Item 12.
| The Solicitation or Recommendation |
(d) Intent to Tender or Vote in a Going-Private Transaction. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“SPECIAL FACTORS - Intent of the Directors and Executive Officers to Vote in Favor of the Merger”
“SPECIAL FACTORS - Intent of the Purchaser Filing Parties to Vote in Favor of the Merger”
“SPECIAL FACTORS - Support Agreements”
“THE SPECIAL MEETING - Record Date and Quorum”
“THE SPECIAL MEETING - Voting Intentions of HireRight’s Directors and Executive Officers”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Directors and Executive Officers of HireRight”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Security Ownership of Certain Beneficial Owners and Management”
Annex B - General Atlantic Support Agreement
Annex C - Stone Point Support Agreement
(e) Recommendation of Others. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing Parties for the Merger”
Item 13.
| Financial Statements |
(a) Financial Information. The audited consolidated financial statements of the Company for the fiscal years ended December 31, 2023 and 2022 are incorporated herein by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed on March 12, 2024 (see “Item 8. Financial Statements and Supplementary Data” beginning on page 81).
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Book Value per Share”
“OTHER IMPORTANT INFORMATION REGARDING HIRERIGHT - Selected Historical Consolidated Financial Data”
“WHERE YOU CAN FIND MORE INFORMATION”
(b) Pro Forma Information. Not Applicable.
Item 14.
| Persons/Assets, Retained, Employed, Compensated or Used |
(a) Solicitations or Recommendations. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of HireRight for the Merger; Recommendation of the HireRight Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Fees and Expenses”
“THE SPECIAL MEETING - Solicitation of Proxies; Payment of Solicitation Expenses”
(b) Employees and Corporate Assets. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of HireRight in the Merger”
“THE SPECIAL MEETING”
“THE SPECIAL MEETING - Solicitation of Proxies; Payment of Solicitation Expenses”
Item 15.
| Additional Information |
(b) Golden Parachute Compensation. Not applicable.
(c) Other Material Information. The entirety of the Proxy Statement, including all annexes and appendices thereto, is incorporated herein by reference.
The following exhibits are filed herewith:
| | | Preliminary Proxy Statement of HireRight Holdings Corporation (included in the Schedule 14A filed on March 20, 2024, and incorporated herein by reference) (the “Preliminary Proxy Statement”). |
| | | Form of Proxy Card (included in the Preliminary Proxy Statement and incorporated herein by reference). |
| | | Letter to Stockholders (included in the Preliminary Proxy Statement and incorporated herein by reference). |
| | | Notice of Special Meeting of Stockholders (included in the Preliminary Proxy Statement and incorporated herein by reference). |
| | | Current Report on Form 8-K, dated February 16, 2024 (included in Schedule 14A filed on February 16, 2024 and incorporated herein by reference). |
| | | LinkedIn Post, dated February 16, 2024 (included in Schedule 14A filed on February 16, 2024 and incorporated herein by reference). |
| | | Email to Employees, dated February 16, 2024 (included in Schedule 14A filed on February 16, 2024 and incorporated herein by reference). |
| | | Employee FAQs, dated February 16, 2024 (included in Schedule 14A filed on February 16, 2024 and incorporated herein by reference). |
| | | Press Release, dated February 16, 2024 (incorporated by reference to Exhibit 99.1 to HireRight Holdings Corporation’s Form 8-K (filed February 16, 2024) (File No. 001-40982)). |
| | | Opinion of Centerview Partners LLC, dated February 15, 2024 (included as Annex D to the Preliminary Proxy Statement, and incorporated herein by reference). |
| | | The Presentation of Centerview Partners LLC to the Special Committee, dated December 20, 2023. |
| | | The Presentation of Centerview Partners LLC to the Special Committee, dated January 21, 2024. |
| | | The Presentation of Centerview Partners LLC to the Special Committee, dated January 26, 2024. |
| | | The Presentation of Centerview Partners LLC to the Special Committee, dated February 15, 2024. |
| | | Agreement and Plan of Merger, dated February 15, 2024 by and among HireRight Holdings Corporation, Hearts Parent, LLC and Hearts Merger Sub, Inc. (included as Annex A to the Preliminary Proxy Statement, and incorporated herein by reference). |
| | | Support Agreement, dated February 15, 2024, by and among HireRight Holdings Corporation, Hearts Parent, LLC, General Atlantic Partners (Bermuda) HRG II, L.P., General Atlantic (HRG) Collections, L.P., GAPCO AIV Interholdco (GS), L.P., GA AIV-1 B Interholdco (GS), L.P. and GA AIV-1 A Interholdco (GS), L.P. (included as Annex B to the Preliminary Proxy Statement, and incorporated herein by reference). |
| | | Support Agreement, dated as of February 15, 2024, by and among HireRight Holdings Corporation, Hearts Parent, LLC, Trident VII, L.P., Trident VII Parallel Fund, L.P., Trident VII DE Parallel Fund, L.P. and Trident VII Professionals Fund, L.P. (included as Annex C to the Preliminary Proxy Statement, and incorporated herein by reference). |
| | | Interim Investors’ Agreement dated as of February 15, 2024, by and among General Atlantic Partners (Bermuda) HRG II, L.P., General Atlantic (HRG) Collections, L.P., GAPCO AIV Interholdco (GS), L.P., GA AIV-1 B Interholdco (GS), L.P., GA AIV-1 A Interholdco (GS), L.P., Trident VII, L.P., Trident VII Parallel Fund, L.P., Trident VII DE Parallel Fund, L.P., Trident VII Professionals Fund, L.P. and Hearts Buyer Corporation. |
| | | Debt Commitment Letter, dated February 15, 2024, from Goldman Sachs Bank USA and Royal Bank of Canada and accepted and agreed to by Hearts Parent, LLC. |
| | | Section 262 of the DGCL (included as Annex E to the Preliminary Proxy Statement, and incorporated herein by reference). |
(g) | | | Not Applicable. |
| | | Filing Fee Table. |
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: March 20, 2024
| | | HIRERIGHT HOLDINGS CORPORATION |
| | | | | | | | | |
| | | By: | | | /s/ Guy Abramo |
| | | | | | Name: | | | Guy Abramo |
| | | | | | Title: | | | President and Chief Executive Officer |
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: March 20, 2024
| | | HEARTS PARENT, LLC |
| | | | | | | | | |
| | | By: | | | /s/ Rene Kern |
| | | | | | Name: | | | Rene Kern |
| | | | | | Title: | | | President |
| | | | | | | | | |
| | | HEARTS MERGER SUB, INC. |
| | | | | | | | | |
| | | By: | | | /s/ Rene Kern |
| | | | | | Name: | | | Rene Kern |
| | | | | | Title: | | | President |
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: March 20, 2024
| | | GENERAL ATLANTIC, L.P. |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GAP (BERMUDA) L.P. |
| | | | | | | |
| | | By: | | | GAP (BERMUDA) GP LIMITED, its general partner |
| | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GENERAL ATLANTIC GENPAR (BERMUDA), L.P. |
| | | | | | | | | |
| | | By: | | | GAP (BERMUDA) L.P., its general partner |
| | | | | | | |
| | | By: | | | GAP (BERMUDA) GP LIMITED, its general partner |
| | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GENERAL ATLANTIC PARTNERS (BERMUDA) IV, L.P. |
| | | | | | | |
| | | By: | | | GENERAL ATLANTIC GENPAR (BERMUDA), L.P.,
its general partner |
| | | | | | | | | |
| | | By: | | | GAP (BERMUDA) L.P., its general partner |
| | | | |
| | | By: | | | GAP (BERMUDA) GP LIMITED, its general partner |
| | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GENERAL ATLANTIC PARTNERS (BERMUDA) EU, L.P. |
| | | | | | | |
| | | By: | | | GENERAL ATLANTIC GENPAR (BERMUDA),
L.P., its general partner |
| | | | | | | | | |
| | | By: | | | GAP (BERMUDA) L.P., its general partner |
| | | | | | | | | |
| | | By: | | | GAP (BERMUDA) GP LIMITED, its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GENERAL ATLANTIC GENPAR, L.P. |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC, L.P., its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GENERAL ATLANTIC (LUX) S.À R.L. |
| | | | | | | | | |
| | | By: | | | /s/ Ingrid van der Hoorn |
| | | | | | Name: | | | Ingrid van der Hoorn |
| | | | | | Title: | | | Manager A |
| | | | | | | | | |
| | | By: | | | /s/ William Blackwell |
| | | | | | Name: | | | William Blackwell |
| | | | | | Title: | | | Manager B |
| | | | | | | | | |
| | | GAP COINVESTMENTS III, LLC |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC, L.P., its managing member |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GAP COINVESTMENTS IV, LLC |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC, L.P., its managing member |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GAP COINVESTMENTS V, LLC |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC, L.P., its managing member |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GAP COINVESTMENTS CDA, L.P. |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC, L.P., its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GENERAL ATLANTIC GENPAR (LUX) SCSp |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC (LUX) S.À R.L.,
its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Ingrid van der Hoorn |
| | | | | | Name: | | | Ingrid van der Hoorn |
| | | | | | Title: | | | Manager A |
| | | | | | | | | |
| | | By: | | | /s/ William Blackwell |
| | | | | | Name: | | | William Blackwell |
| | | | | | Title: | | | Manager B |
| | | | | | | | | |
| | | GENERAL ATLANTIC PARTNERS (LUX) SCSp |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC GENPAR (LUX) SCSp,
its general partner |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC (LUX) S.À R.L.,
its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Ingrid van der Hoorn |
| | | | | | Name: | | | Ingrid van der Hoorn |
| | | | | | Title: | | | Manager A |
| | | | | | | | | |
| | | By: | | | /s/ William Blackwell |
| | | | | | Name: | | | William Blackwell |
| | | | | | Title: | | | Manager B |
| | | | | | | | | |
| | | GENERAL ATLANTIC PARTNERS AIV-1 A, L.P. |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC GENPAR, L.P.,
its general partner |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC, L.P., its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GENERAL ATLANTIC PARTNERS AIV-1 B, L.P. |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC GENPAR, L.P.,
its general partner |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC, L.P., its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GENERAL ATLANTIC (SPV) GP, LLC |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC, L.P., its sole member |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GENERAL ATLANTIC PARTNERS 100, L.P. |
| | | | | | | |
| | | By: | | | GENERAL ATLANTIC GENPAR, L.P.,
its general partner |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC, L.P., its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GENERAL ATLANTIC (HRG) COLLECTIONS, L.P. |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC (SPV) GP, LLC,
its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GAPCO AIV HOLDINGS, L.P. |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC (SPV) GP, LLC,
its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GAPCO AIV INTERHOLDCO (GS), L.P. |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC (SPV) GP, LLC,
its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GA AIV-1 B INTERHOLDCO, L.P. |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC GENPAR, L.P.,
its general partner |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC, L.P., its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GA AIV-1 B INTERHOLDCO (GS), L.P. |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC (SPV) GP, LLC,
its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GA AIV-1 A INTERHOLDCO (GS), L.P. |
| | | | | | | |
| | | By: | | | GENERAL ATLANTIC (SPV) GP, LLC,
its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GENERAL ATLANTIC PARTNERS (BERMUDA) HRG II, L.P. |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC (SPV) GP (BERMUDA), LLC,
its general partner |
| | | | | | | |
| | | By: | | | GAP (BERMUDA), L.P., its sole member |
| | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
| | | | | | | | | |
| | | GENERAL ATLANTIC (SPV) GP (BERMUDA), LLC |
| | | | | | | | | |
| | | By: | | | GENERAL ATLANTIC GENPAR (BERMUDA), L.P.,
its sole member |
| | | | | | | | | |
| | | By: | | | GAP (BERMUDA), L.P., its general partner |
| | | | | | | | | |
| | | By: | | | /s/ Michael Gosk |
| | | | | | Name: | | | Michael Gosk |
| | | | | | Title: | | | Managing Director |
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: March 20, 2024
| | | TRIDENT VII, L.P. |
| | | | | | | | | |
| | | By: | | | Trident Capital VII, L.P., its sole general partner |
| | | | | | | | | |
| | | By: | | | DW Trident GP, LLC, a general partner |
| | | | | | | | | |
| | | By: | | | /s/ Jacqueline Giammarco |
| | | | | | Name: | | | Jacqueline Giammarco |
| | | | | | Title: | | | Vice President |
| | | | | | | | | |
| | | TRIDENT VII PARALLEL FUND, L.P. |
| | | | | | | | | |
| | | By: | | | Trident Capital VII, L.P., its sole general partner |
| | | | | | | | | |
| | | By: | | | DW Trident GP, LLC, a general partner |
| | | | | | | | | |
| | | By: | | | /s/ Jacqueline Giammarco |
| | | | | | Name: | | | Jacqueline Giammarco |
| | | | | | Title: | | | Vice President |
| | | | | | | | | |
| | | TRIDENT VII DE PARALLEL FUND, L.P. |
| | | | | | | | | |
| | | By: | | | Trident Capital VII, L.P., its sole general partner |
| | | | | | | | | |
| | | By: | | | DW Trident GP, LLC, a general partner |
| | | | | | | | | |
| | | By: | | | /s/ Jacqueline Giammarco |
| | | | | | Name: | | | Jacqueline Giammarco |
| | | | | | Title: | | | Vice President |
| | | | | | | | | |
| | | TRIDENT VII PROFESSIONALS FUND, L.P. |
| | | | | | | | | |
| | | By: | | | Stone Point GP Ltd., its sole general partner |
| | | | | | | | | |
| | | By: | | | /s/ Jacqueline Giammarco |
| | | | | | Name: | | | Jacqueline Giammarco |
| | | | | | Title: | | | Vice President |
| | | | | | | | | |
| | | TRIDENT CAPITAL VII, L.P. |
| | | | | | | | | |
| | | By: | | | DW Trident GP, LLC, a general partner |
| | | | | | | |
| | | By: | | | /s/ Jacqueline Giammarco |
| | | | | | Name: | | | Jacqueline Giammarco |
| | | | | | Title: | | | Vice President |
| | | | | | | | | |
| | | STONE POINT GP LTD. |
| | | | | | | | | |
| | | By: | | | /s/ Jacqueline Giammarco |
| | | | | | Name: | | | Jacqueline Giammarco |
| | | | | | Title: | | | Vice President |
Exhibit c(ii)
– Highly Confidential;
For Discussion Purposes Only – December 20, 2023 Discussion Materials for the Special Committee Project Hydro
– Highly Confidential; For Discussion Purposes Only – Disclaimer This presentation has been prepared by Centerview
Partners LLC (“Centerview”) for use solely by the Special Committee of the Board of Directors of HireRight Holdings
Corporation (“Hydro”, the “Company” or the “Special Committee”) in connection with its evaluation
of proposed strategic alternatives for Hydro and for no other purpose. The information contained herein is based upon information
supplied by or on behalf of Hydro and publicly available information, and portions of the information contained herein may be
based upon statements, estimates and forecasts provided by Hydro. Centerview has relied upon the accuracy and completeness of
the foregoing information, and has not assumed any responsibility for any independent verification of such information or for
any independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of Hydro or any other entity,
or concerning the solvency or fair value of Hydro or any other entity. The financial analysis in this presentation is complex
and is not necessarily susceptible to a partial analysis or summary description. In performing this financial analysis, Centerview
has considered the results of its analysis as a whole and did not necessarily attribute a particular weight to any particular
portion of the analysis considered. Furthermore, selecting any portion of Centerview’s analysis, without considering the
analysis as a whole, would create an incomplete view of the process underlying its financial analysis. Centerview may have deemed
various assumptions more or less probable than other assumptions, so the reference ranges resulting from any particular portion
of the analysis described above should not be taken to be Centerview’s view of the actual value of Hydro. These materials
and the information contained herein are confidential, were not prepared with a view toward public disclosure, and may not be
disclosed publicly or made available to third parties without the prior written consent of Centerview. These materials and any
other advice, written or oral, rendered by Centerview are intended solely for the benefit and use of the Special Committee of
the Board of Directors of Hydro (in its capacity as such) in its consideration of strategic alternatives, and are not for the
benefit of, and do not convey any rights or remedies for any holder of securities of Hydro or any other person. Centerview will
not be responsible for and has not provided any tax, accounting, actuarial, legal or other specialist advice. These materials
are not intended to provide the sole basis for evaluating strategic alternatives, and this presentation does not represent a fairness
opinion, recommendation, valuation or opinion of any kind, and is necessarily incomplete and should be viewed solely in conjunction
with the oral presentation provided by Centerview.
– Highly Confidential;
For Discussion Purposes Only – Executive Summary ▪ Centerview is progressing the workplan discussed with the Special
Committee – Engaged with Hydro management on December 7 and shared a list of information requests to assess the current
strategy and management plan – Management shared a draft long range plan on December 14 (the “Preliminary LRP”),
prepared by management in advance of an in-person discussion on the same day – Substantial work is already underway on several
items ▪ In today’s materials, Centerview will provide context to aid the Special Committee in its assessment of Hydro’s
current position and the Preliminary LRP, including any risks / opportunities A Macro / Sector Backdrop B Update on Information
Gathering C Benchmarking D Next Steps Contents: Executive Summary
– Highly Confidential;
For Discussion Purposes Only – Special Committee “Roadmap Dashboard” ▪ Information gathering x Share initial
request list x Receive draft LRP / financial model x Meet with mgmt. to discuss forecast, risks / opportunities – Follow-up
discussions with mgmt. to cover incremental questions ▪ Present initial views on valuation and potential alternatives to
the Special Committee ▪ Determine strategy and response to large SHs ▪ Determine negotiation process tactics and acknowledge
specific dynamics of the process – Special Committee to update appropriate parties based on guidance of counsel ▪
Determine opportunity to pursue alternative transactions, if applicable ▪ Design process based on the above ▪ Execute
process to optimize price, process and certainty ‒ Understand “pressure points” in the process ▪ Assess
and deploy tactics and “tools” at the Special Committee’s disposal to be in a position to create the best outcome
available ▪ No specific path is presupposed – full discretion to change course throughout not presupposing any outcome
If the Special Committee chooses to… If so, run process to optimize outcomes Focus For Today’s Call Phase I: Initial
Diligence, Valuation and Evaluation of Materials Phase II: Prepare for Execution (If Applicable) Phase III: Delivering a Superior
Outcome Executive Summary
– Highly Confidential;
For Discussion Purposes Only – ▪ Centerview contacted management to conduct diligence on Hydro on Thursday, December
7 – Centerview provided management with an information request list – Management provided numerous documents in response
to that list, including an overview of recent performance, the Preliminary LRP and an update on business strategy ▪ Centerview
attended a diligence session with management on December 14
– Guy Abramo
(CEO), Tom Spaeth (CFO) and Lisa Troe (Chair of the Special Committee) were present at the discussion – Topics covered included
business strategy, competitive environment, and operational improvements – Management provided an initial walk-through of
the Preliminary LRP – There were additional data requests shared with management ▪ Centerview continues to review
information as management provides it in order to further its information gathering Engaging With Management on Information Gathering
Executive Summary
– Highly Confidential;
For Discussion Purposes Only – Moderate “Pulse” on 2024, With Greater Belief of a “Soft Landing”
A Macro / Sector Backdrop Bears Current “Pulse” Bulls Inflation ▪ Inflation remains sticky, path to 2% unlikely
without some level of recession ▪ Peaking inflation, strong likelihood to decline through 2024 Interest Rates ▪ Aggressive
Fed QT, rates remain >5%+ for longer, stagnation due to recession ▪ Dovish Fed, ongoing disinflation, interest rate reduction
in H2’24 Geopolitical ▪ Deep recession in Europe; China slowdown; energy prices soar; heightened geopolitical risk
▪ Mild recession in Europe; energy prices moderate; China stimulus Capital Markets ▪ Access to capital remains tight,
IPO markets remain dormant, limited attractive refinancing options ▪ Moderated volatility and increased capital access,
lending activity resurges GDP ▪ 2024 recession with sharper and longer decline in activity versus pundit expectations ▪
Soft landing, recession averted, neutral or modest real GDP growth in 2024 Unemployment ▪ Layoffs higher than expected versus
H2’23 trend, hiring freezes ▪ Unemployment remains low, labor demand in-line with supply Consumer Spending ▪
Consumers spending decelerates due to inflation and high rates, excess savings exhausted, high housing costs ▪ Spending
withstands headwinds due to labor market strength, decline in rates, housing costs soften Source: Federal Reserve Economic Data,
Wall Street research, Bloomberg and FactSet. Illustrative
– Highly Confidential;
For Discussion Purposes Only – 3.5 4.4 5.4 5.1 4.1 3.8 Thousands $50.7 $86.2 $155.8 $8.6 $18.6 $7.2 168 224 416 90 100 80
'19 '20 '21 '22 YTD Q3'23 YTD Q3'22 Hiring, Growth & Capital Markets Access Meaningfully Impacted A Macro / Sector Backdrop
Source: U.S. BLS, St. Louis FRED and FactSet. (1) Reflects data from Dealogic through Q3’23. (2) Reflects average of multiples
for the Nasdaq at month-end for each year. 2023 reflects YTD through November. Top-line Growth Compressed Nasdaq Composite YoY
Sales Growth & Annual Average Federal Funds Rate Capital Markets Challenged US IPO Volume and Proceeds(1) vs. New Business
Applications (mm) Hiring Activity Has Decelerated in 2023 6.9 7.3 7.5 8.2 8.1 9.0 8.2 '17 '18 '19 '20 '21 '22 '23 YTD 1.0 1.1
1.1 1.0 1.3 1.3 0.8 '17 '18 '19 '20 '21 '22 '23 YTD Total Gross New Hires (mm) Proceeds ($bn) IPO count New Business Applications
(mm) Healthcare & Social Assistance Information (Incl. Technology) 1.7 1.6 1.7 1.7 1.8 1.9 1.4 '17 '18 '19 '20 '21 '22 '23
YTD Finance & Insurance YoY Sales Growth (%) Average Fed Funds Rate Memo: Nasdaq NTM P/E Multiples(2) 31.6x 25.9x 10.7% 13.2%
6.1% 6.3% 26.7% 10.9% 1.0% 4.4% 1.8% 2.2% 0.4% 0.1% 1.7% 5.0% '17 '18 '19 '20 '21 '22 '23E
– Highly Confidential;
For Discussion Purposes Only – – $5 $10 $15 $20 $25 $30 Oct-21 Feb-22 Jun-22 Sep-22 Jan-23 May-23 Aug-23 Dec-23 Background
Checking Sector Has Underperformed the Market Hydro Share Price Over Time (Nasdaq, First Advantage and Sterling Check Rebased
to Hydro) (30%)(1) October 29, 2021 Hydro IPO’d at $19/sh November 14, 2022 Board of Directors announced twoyear $100mm
share buyback program: +23% March 9, 2023 Hydro announced Q4’22 earnings beating full-year and quarterly cons. estimates
for revenue and Adj. EBITDA: +8% (4%) Source: Company filings and FactSet as of December 18, 2023. Note: Percentages in annotations
reflect one-day impact to unaffected unless otherwise specified. (1) Reflects Hydro’s performance since IPO to current.
(2) Reflects Hydro’s share price and performance from IPO to the unaffected date before Gulf and Shore’s 13D filings.
May 12, 2022 Q1’22 earnings missed cons. Adj. EBITDA estimates; stock traded down (10%) over the next 5 days $19.00 November
17, 2023 Gulf and Shore posted Schedule 13D filings after market close: +32% March 21, 2022 Hydro announced Q4’21 earnings
highlighting international revenue diversification: +24% November 3, 2022 Hydro missed Q3’22 revenue versus consensus estimates:
(37%) A Macro / Sector Backdrop (38%) (13%) Hydro Nasdaq (47%)(2) $10.05(2) (11/17/23)
– Highly Confidential;
For Discussion Purposes Only – Preliminary Learnings from Information Gathering To Date ▪ Hydro drove profitable growth
in 2022 – 10% revenue growth and 23% Adj. EBITDA margin – ~170bps gross margin expansion vs. 2021, the majority of
which came from direct labor efficiencies – Adjusted EBITDA margin increased ~140bps year-over-year 2023 Preliminary LRP
▪ Management expects ~7% ’23E-’26E revenue CAGR and ~7% from ’23E-’30E ▪ GM expansion from
~48% in ’23E to 50% in ’26E and to ~52% in ’30E ▪ +680bps Adj. EBITDA margin expansion expected –
from ~25% in ’23E to ~32% in ’30E ▪ Hydro management expects 10% revenue decline in 2023 (base down ~15%), as
a result of base hiring volumes and churn significantly lower than in previous years and vertical end-market mix ▪ ~240bps
gross margin expansion and ~160bps Adj. EBITDA margin increase ▪ Restructuring initiatives ongoing; expected to incur ~$26mm
of expenses for the entire year B Update on Information Gathering Overview Drivers ▪ Implied base hiring levels at flat
to modestly positive; company’s revenue growth assumes cross-sell / up-sell and market share gain over time ▪ Revenue
mix between surcharge and service not changing significantly ▪ GM margin expansion mainly driven by direct labor optimization
▪ Benefits of restructuring initiatives reflected in LRP ▪ Operating efficiencies at SG&A level driving cost reductions
(indirect costs lower by ~510bps from ’23E-’30E) – Adj. EBITDA growing faster than revenue over the forecast
period Source: Hydro Preliminary LRP and Company filings. 2022
– Highly Confidential;
For Discussion Purposes Only – $160 $188 $181 $200 $226 $253 $282 $307 $331 $357 '21A '22A '23E '24E '25E '26E '27E '28E
'29E '30E Source: Hydro Preliminary LRP and Company filings. Note: Dollars in millions. Overview of Preliminary LRP Adj. EBITDA
($mm) % Margin Revenue Gross Profit Adj. EBITDA Historicals Preliminary LRP 35% 10% (10%) 9% 7% 6% 6% 6% 6% 6% '21A '22A '23E
'24E '25E '26E '27E '28E '29E '30E $730 $807 $723 $785 $840 $890 $943 $1,000 $1,060 $1,124 '21A '22A '23E '24E '25E '26E '27E
'28E '29E '30E Revenue ($mm) YoY Growth (%) ’23-’30E CAGR: 7% ’23-’30E CAGR: 10% B Update on Information
Gathering 22% 23% 25% 25% 27% 28% 30% 31% 31% 32% '21A '22A '23E '24E '25E '26E '27E '28E '29E '30E $323 $371 $349 $373 $410 $445
$482 $514 $547 $581 '21A '22A '23E '24E '25E '26E '27E '28E '29E '30E Gross Profit ($mm) % Margin ’23-’30E CAGR: 8%
44% 46% 48% 48% 49% 50% 51% 51% 52% 52% '21A '22A '23E '24E '25E '26E '27E '28E '29E '30E +340bps since ’23E +680bps since
’23E
– Highly Confidential;
For Discussion Purposes Only – Growth & Margin Drivers Revenue CAGR vs. ’23E For Ref.: ’23E ’26E ’30E
$723mm $890mm $1,124mm +7% +7% Gross Margin Margin Exp. vs. ’23E 48.3% 50.0% 51.7% +160bps +340bps Adj. EBITDA Margin Exp.
vs. ’23E 25.0% 28.4% 31.8% +350bps +680bps Source: Hydro Preliminary LRP, Company filings and transcripts. Note: Dollars
in millions. Observations Service (+6%) and Surcharge (+10%) Drivers Drivers Service (+6%) and Surcharge (+8%) B Update on Information
Gathering ▪ Hiring and churn within the employment market highly correlated with rev. growth ▪ Revenue recovery in
2024 based on improvement in base hiring level vs. 2022 and execution on customer pipeline ▪ Management expects to continue
to maintain net revenue retention rates in long range plan above 95% ▪ Management emphasis on up-sell and cross-sell revenue
▪ Automation driving margin improvement over the duration of the plan Direct labor 324bps lower as % of revenue Data costs
16bps lower as % of revenue Direct labor 196bps lower as % of revenue Offset by data costs (34bps rise as % of rev.) Indirect
labor 149bps lower as % of revenue Non-labor indirect OpEx 121bps lower as % of rev. Indirect labor 232bps lower as % of revenue
Non-labor indirect OpEx 276bps lower as % of rev.
– Highly Confidential;
For Discussion Purposes Only – $723 +265 +136 $1,124 2023E Service Revenue Surcharge Revenue 2030E 72% 28% 70% 30% Revenue
Bridge Source: Hydro Preliminary LRP. Note: Dollars in millions. B Update on Information Gathering Contribution to 66% 34% Revenue
Growth: Revenue Bridge Revenue Mix Shift: 2023 – 2030E Service Revenue Surcharge Revenue 2023E 2030E Revenue Growth by Segment:
2023 – 2030E CAGR +6.1% +7.5% +6.5% Service Surcharge Total Revenue While revenue mix remains relatively stable across the
projection period, management expects MSD+ revenue growth with surcharge revenue growing modestly faster than service revenue
Base growth: Flat – modestly positive
– Highly Confidential;
For Discussion Purposes Only – $349 +401 (153) (16) $581 2023E Gross Profit Revenue Increase Data Cost Increase Direct Labor
Increase 2030E Gross Profit Gross Profit Analysis Source: Hydro Preliminary LRP. Note: Dollars in millions. B Update on Information
Gathering Gross Profit Bridge: 2023 – 2030E +7% +6% ’23E –’30E CAGR +2% +8% Net COGS increase of +$169mm
from 2023 – 2030E Gross margin improvement driven primarily by direct labor expense efficiencies $349 +194 +38 $581 2023E
Gross Profit GP Incr. @ Const. Margin Contribution from Margin Impr. 2030E Gross Profit 48% GM Improvement of +340bps 52% from
2023E – 2030E GM%
– Highly Confidential;
For Discussion Purposes Only – COGS Expense Profile Over Time B Update on Information Gathering Source: Hydro Preliminary
LRP. Note: Dollars in millions. Cost of Goods Sold Mix COGS Items as % of Revenue Direct Labor 13% 12% 12% 11% 10% 10% 10% 10%
2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 75% 78% 80% 25% 22% 20% 2023E 2026E 2030E Direct Labor Data Cost & Other Direct
Data Cost & Other Direct 39% 40% 40% 39% 39% 39% 39% 39% 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Direct Labor $94
$98 $110 Data & Other $279 $347 $433 Direct labor cost improvement accounts for 320bps of 340bps of gross margin improvement
– Highly Confidential;
For Discussion Purposes Only – 48.3% 47.2% 46.5% 47.6% 47.8% 47.3% 48.8% 48.4% 47.7% 51.7% Benchmarking Hydro’s Gross
Margin B Update on Information Gathering Gross Margin: Hydro (Preliminary LRP) vs. Peers (Consensus) Hydro Hydro Hydro Hydro Memo:
Δ vs. ’23E Gross Margin Source: Hydro Preliminary LRP and FactSet. Gross margin consistent with peers through 2025E;
Hydro 2030E gross margin ~+370bps above peer average 2025 margin 2023E 2024E 2025E Memo: 2030E (79bps) +68bps +74bps +49bps +119bps
+120bps +340bps
– Highly Confidential;
For Discussion Purposes Only – $181 +138 +38 $357 2023E Adj. EBITDA Adj. EBITDA Incr. @ Const. OpEX % Contribution from
OpEx % Impr. 2030E Adj. EBITDA $181 +232 (40) (11) (4) $357 2023E Adj. EBITDA Gross Profit Incr. Indirect Labor Incr. Indirect
Expenses Incr. Adjustments 2030E Adj. EBITDA Adj. EBITDA Margin Analysis B Update on Information Gathering ’23 –’30E
+8% +4% CAGR +2% Indirect labor and expenses grow slower than revenue, driving additional OpEx margin benefit Source: Hydro Preliminary
LRP. Note: Dollars in millions. +10% Adj. EBITDA Bridge: 2023E – 2030E 25% Δ Adj. EBITDA Margin +680bps 32% Adj. EBITDA
Margin
– Highly Confidential;
For Discussion Purposes Only – 25% 26% 31% 25% 27% 32% 27% 28% 33% 32% Benchmarking Hydro’s Adj. EBITDA Margin B Update
on Information Gathering Adj. EBITDA Margin: Hydro (Preliminary LRP) vs. Peers (Consensus) Hydro Hydro Hydro Hydro Hydro’s
Adj. EBITDA margin, while below peers through 2025, expected to reach current First Advantage levels by 2030E 2023E 2024E 2025E
Memo: 2030E Memo: Δ vs. ’23E +49bps +123bps +73bps +192bps +191bps +129bps +680bps Adj. EBITDA Margin Source: Hydro
Preliminary LRP and FactSet.
– Highly Confidential;
For Discussion Purposes Only – Operating Expense Profile Over Time B Update on Information Gathering Source: Hydro Preliminary
LRP. Note: Dollars in millions. Operating Expense Mix Operating Expense Items as % of Revenue Indirect Labor Indirect Labor Indirect
Expenses Indirect Expenses 11% 10% 10% 9% 9% 9% 8% 8% 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Ind. Labor $75 $68 $35 Ind.
Expenses $76 $83 $87 D&A $118 $133 $158 44% 47% 56% 28% 29% 31% 28% 24% 13% 2023E 2026E 2030E D&A Depreciation & Amortization
10% 9% 9% 8% 6% 5% 4% 3% 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 16% 15% 15% 15% 15% 14% 14% 14% 2023E 2024E 2025E 2026E
2027E 2028E 2029E 2030E
– Highly Confidential;
For Discussion Purposes Only – Summary 2023E – 2030E Growth B Update on Information Gathering Source: Hydro Preliminary
LRP. (1) Includes adjustments based on Preliminary LRP. 2023E 2030E CAGR: ’23 – ’30E Revenue Data Cost &
Other Direct Labor Indirect Expenses Indirect Labor COGS $723mm $1,124mm +7% $279mm $433mm +6% $94mm $110mm +2% $373mm $542mm
+5% $76mm $87mm +2% $118mm $158mm +4% Adj. EBITDA(1) $181mm $357mm +10% Gross Profit Total Indirect Exp. $349mm $581mm +8% $195mm
$246mm +3%
– Highly Confidential;
For Discussion Purposes Only – Incremental Profit Margin Analysis B Update on Information Gathering Source: Hydro Preliminary
LRP. Note: Dollars in millions. Incremental profit margin calculated as change in profit metric divided by change in revenue over
the period. Incremental Adj. EBITDA Margin: 2022A – 2030E Δ in Revenue Δ Adj. EBITDA +$28 ($8) +$19 +$26 +$27
+$29 +$24 Analysis suggests Hydro’s incremental adjusted EBITDA margin above recent historical levels +$77 ($84) +$62 +$55
+$50 +$53 +$57 37% 31% 47% 54% 55% 43% 41% 41% 2022A 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E +$24 +$26 +$60 +$64 n.m.
– Highly Confidential;
For Discussion Purposes Only – Δ '30E Adj. EBITDA vs. Preliminary LRP Δ Gross Margin Realization vs. Preliminary
LRP 50% 75% 100% 50% ($48) ($38) ($28) 60% ($42) ($32) ($23) 70% ($36) ($27) ($17) 80% ($30) ($21) ($11) 90% ($25) ($15) ($6)
100% ($19) ($10) – '30E Adj. EBITDA Margin Δ Gross Margin Realization vs. Preliminary LRP 50% 75% 100% 50% 27.5% 28.4%
29.2% 60% 28.1% 28.9% 29.8% 70% 28.6% 29.4% 30.3% 80% 29.1% 29.9% 30.8% 90% 29.6% 30.4% 31.3% 100% 30.1% 30.9% 31.8% '30E Adj.
EBITDA Δ Gross Margin Realization vs. Preliminary LRP 50% 75% 100% 50% $310 $319 $329 60% $315 $325 $334 70% $321 $330 $340
80% $327 $336 $346 90% $332 $342 $351 100% $338 $348 $357 Δ '23 - '30E Adj. EBITDA Margin Δ Gross Margin Realization
vs. Preliminary LRP 50% 75% 100% 50% +257bps +342bps +427bps 60% +307bps +392bps +477bps 70% +358bps +443bps +528bps 80% +409bps
+494bps +579bps 90% +459bps +544bps +629bps 100% +510bps +595bps +680bps Preliminary LRP Sensitivities Source: Hydro Preliminary
LRP. Note: Dollars in millions. B Update on Information Gathering 2030E Adj. EBITDA Sensitivities Based On Margin Realization
Reflects Preliminary LRP SG&A Cost Improvement Realization vs. LRP SG&A Cost Improvement Realization vs. LRP SG&A
Cost Improvement Realization vs. LRP SG&A Cost Improvement Realization vs. LRP
– Highly Confidential;
For Discussion Purposes Only – Potential Opportunities and Risks of Preliminary LRP Potential Opportunities Potential Risks
? Tougher macro environment reducing demand for labor / new hires ? Pushout of end-market recovery timing ? Implementation of
automation projects not being completed on schedule and/or limits to degree of associated margin improvement ? Move into “premium
services” from the competition ? Potential loss of large customer account(s) ? Self-Service technology outdated and in need
of investment x Recovery of the hiring base rate to neutral / moderately positive levels x Ability to continue to take market
share x Rate of new business wins and conversion of customer pipeline x Further expansion into drug and health screening and U.S.
financial services (not in current plan) x Momentum of customer demands for HCM platform integration x Increasing automation to
reduce service costs and need for human verification Management has highlighted the below opportunities and risks B Update on
Information Gathering
– Highly Confidential;
For Discussion Purposes Only – 2023E 2024E Comparison of Preliminary LRP Revenue vs. Consensus Estimates 5% 9% 7% Source:
Hydro Preliminary LRP, Wall Street research and FactSet as of December 18, 2023. Note: Dollars in millions. 1% 2025E 9% 7% 10%
C Benchmarking 10% Preliminary LRP Consensus Median Analyst Estimates YoY Growth $729 $721 $726 $723 (10%) (10%) (10%) (11%) $726
$782 $759 $785 $796 $861 $826 $840
– Highly Confidential;
For Discussion Purposes Only – 2023E 2024E Comparison of Preliminary LRP Adj. EBITDA vs. Consensus Est. 2025E C Benchmarking
24% / +90bps 24% / +80bps 25% / +160bps 24% / +80bps 26% / +160bps 25% / +110bps 25% / +50bps 25% / +50bps 25% / (10bps) 27% /
+140bps 24% / (40bps) 26% / +60bps Preliminary LRP Consensus Median Analyst Estimates Implied Margin / YoY Expansion $176 $174
$176 $181 $193 $228 $208 $226 $202 $179 $192 $200 Source: Hydro Preliminary LRP, Wall Street research and FactSet as of December
18, 2023. Note: Dollars in millions.
– Highly Confidential;
For Discussion Purposes Only – Considerations Regarding Spectrum of Valuation Approaches Intrinsic Relative ▪ Trading
multiples based on selected comparable public companies ▪ Appropriate forecasts necessary to drive analysis ▪ In addition
to financial forecasts, drivers include discount rate and perpetuity growth rate Reference Only ▪ Hydro trading levels over
the last 12 months Discounted Cash Flow Analysis Selected Public Trading Comparables Analyst Price Targets 52-Week Trading Range
▪ Range of analyst price targets Discounted Future Share Price ▪ Appropriate forecasts necessary to drive analysis
▪ In addition to financial forecasts, drivers include discount rate and multiple To aid the Special Committee, Centerview
may choose to consider a range of valuation approaches (circumstance dependent) D Next Steps
Appendix Supplementary Materials
– Highly Confidential;
For Discussion Purposes Only – Preliminary LRP as of December 14, 2023 Consolidated P&L Appendix Source: Hydro Preliminary
LRP and filings. Note: Dollars in millions. (1) Historical years based on company filings. (2) Includes adjustments based on Preliminary
LRP. 2021A 2022A 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Service Revenue 541 578 517 546 584 619 656 696 738 782 Surcharge
Revenue 189 229 206 239 256 271 287 304 323 342 Total Revenue $730 $807 $723 $785 $840 $890 $943 $1,000 $1,060 $1,124 YoY Growth
10% (10%) 9% 7% 6% 6% 6% 6% 6% Data Costs & Other Direct (291) (319) (279) (315) (332) (347) (363) (385) (408) (433) Direct
Labor (116) (115) (94) (96) (98) (98) (99) (101) (105) (110) Other (0) (2) – – – – – – –
– Gross Profit(1) $323 $371 $349 $373 $410 $445 $482 $514 $547 $581 % Margin 44% 46% 48% 48% 49% 50% 51% 51% 52% 52% Indirect
Labor (98) (118) (118) (121) (127) (133) (139) (145) (151) (158) Indirect Expenses (67) (81) (76) (80) (80) (83) (86) (88) (85)
(87) Restructuring & One-time costs (23) (4) (26) (1) – – – – – – Adjusted EBITDA(2) $160
$188 $181 $200 $226 $253 $282 $307 $331 $357 % Margin 22% 23% 25% 25% 27% 28% 30% 31% 31% 32% D&A 78 72 75 74 75 68 57 49
41 35 % of Revenue 11% 9% 10% 9% 9% 8% 6% 5% 4% 3%
Exhibit c(iii)
– Highly Confidential;
For Discussion Purposes Only – January 21, 2024 Discussion Materials for the Special Committee Project Hydro
– Highly Confidential; For Discussion Purposes Only – Disclaimer This presentation has been prepared by Centerview
Partners LLC (“Centerview”) for use solely by the Special Committee of the Board of Directors of HireRight Holdings
Corporation (“Hydro”, the “Company” or the “Special Committee”) in connection with its evaluation
of proposed strategic alternatives for Hydro and for no other purpose. The information contained herein is based upon information
supplied by or on behalf of Hydro and publicly available information, and portions of the information contained herein may be
based upon statements, estimates and forecasts provided by Hydro. Centerview has relied upon the accuracy and completeness of
the foregoing information, and has not assumed any responsibility for any independent verification of such information or for
any independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of Hydro or any other entity,
or concerning the solvency or fair value of Hydro or any other entity. Any financial analysis in this presentation is complex
and is not necessarily susceptible to a partial analysis or summary description. In performing any financial analysis, Centerview
has considered the results of its analysis as a whole and did not necessarily attribute a particular weight to any particular
portion of the analysis considered. Furthermore, selecting any portion of Centerview’s analysis, without considering the
analysis as a whole, would create an incomplete view of the process underlying its financial analysis. Centerview may have deemed
various assumptions more or less probable than other assumptions, so the reference ranges resulting from any particular portion
of the analysis described above should not be taken to be Centerview’s view of the actual value of Hydro. These materials
and the information contained herein are confidential, were not prepared with a view toward public disclosure, and may not be
disclosed publicly or made available to third parties without the prior written consent of Centerview. These materials and any
other advice, written or oral, rendered by Centerview are intended solely for the benefit and use of the Special Committee of
the Board of Directors of Hydro (in its capacity as such) in its consideration of strategic alternatives, and are not for the
benefit of, and do not convey any rights or remedies for any holder of securities of Hydro or any other person. Centerview will
not be responsible for and has not provided any tax, accounting, actuarial, legal or other specialist advice. These materials
are not intended to provide the sole basis for evaluating strategic alternatives, and this presentation does not represent a fairness
opinion, recommendation, valuation or opinion of any kind, and is necessarily incomplete and should be viewed solely in conjunction
with the oral presentation provided by Centerview.
– Highly Confidential;
For Discussion Purposes Only – Executive Summary ▪ Centerview is progressing the workplan discussed with the Special
Committee ▪ In the filing dated December 8, 2023, the Sponsors indicated they are “interested only in pursuing the
Proposed Transaction(1) and do not intend to sell [their] respective stakes in the Company to any third party” ▪ As
context for the Special Committee, today’s materials reflect potential third party alternatives and considerations for Hydro,
notwithstanding the Sponsors’ stated intent Source: Company filings. (1) As defined in the December 8, 2023 proposal.
– Highly Confidential;
For Discussion Purposes Only – Overview of Illustrative Strategic Paths Status Quo Sale of the Public Stub Sale of Public
Stub + Portion of Sponsors’ Equity to a Third Party ▪ Execute strategic plan ▪ Potential to sell the public
stub to either of the Sponsors or a third party ▪ Stub of ~10.2mm public shares with current market value of ~$132mm(1)
Source: Term Loan Credit Agreement, Company filings and FactSet as of January 19, 2024. (1) Assumes share price of $12.92 (as
of January 19, 2024) and share count provided by Hydro Management. (2) Per Term Loan Credit Agreement, a greater than 35% ownership
by a third party can trigger a change of control, subject to Permitted Holders (as defined in the Credit Agreement) losing the
right or ability to elect or designate a majority of the board of directors. ▪ 3rd party could acquire up to ~24.9mm shares
or 35.0% of total economic ownership, with a value of ~$322mm(1) at the current market price while keeping Hydro’s current
capital structure intact(2) Sale of the Full Company ▪ Pursue full company sale to third party in which buyer will need
to provide new financing / capital structure for whole transaction
– Highly Confidential;
For Discussion Purposes Only – Potential Illustrative Strategic Participants Source: Company filings, Wall Street research
and FactSet as of January 19, 2024. Note: Adj. EBITDA unburdened by stock-based compensation expense and amortization of capitalized
software development investment. (1) Assumes all-cash, 100% debt-funded acquisition of Hydro at offer price of $12.75 per share
as stated in the proposal. Balance sheet data as of September 30, 2023. (2) Reflects valuation from Checkr press release as of
series E fundraise on September 1, 2021. (3) Rounded to nearest 0.05x PF net leverage multiple. Company Illustrative Background
Screening Services Illustrative Staffing Services Mkt. Cap. / Ent. Val. ($bn) $2.5 / $2.9 $1.4 / $1.8 $4.6(2) $8.6 / $7.9 $3.8
/ $4.2 EV / NTM Adj. EBITDA 10.8x 8.8x 11.3x 7.2x LTM Net Leverage 1.6x 2.4x (1.0x) 0.7x CY’23 – ’25E Rev. CAGR
+8.1% +7.0% +3.1% +1.5% CY’24E Adj. EBITDA Mgn. 32.0% 27.1% 11.1% 3.1% Private company; limited disclosure PF LTM Net Lev.
(All-cash Acq.)(1) 4.7x 5.6x 0.9x 2.6x (Public) (Public) (Private) (Public) (Public) Entities affiliated with Silver Lake own
~62% of the equity and hold chair plus two board seats (3/8 total) PF Incr. LTM Net Lev. Per $1 Offer Price Inc.(3) ~ +0.15x ~
+0.20x ~ +0.10x ~ +0.10x Entities affiliated with Goldman Sachs own ~61% of the equity and hold two board seats (2/10); Entities
affiliated with William Greenblatt (founder) own ~11% of the equity
– Highly Confidential;
For Discussion Purposes Only – Potential Illustrative Sponsor Participants Potential Illustrative Participant Fund Size
($bn) Key Contact Name(s) Source: Company filings, press releases and Pitchbook. Note: Sorted by flagship fund size from largest
to smallest. Potential Illustrative Participant Fund Size ($bn) Key Contact Name(s) Craig Bondy (Senior Advisor) Stephen Master
(MD) ~$12bn ~$8bn Todd Bright (Partner) Patrick Langan (Senior Investment Leader) Helen Chiang (MD) Will Chan (Vice President)
~$7bn ~$5bn Matthew Norton (MD) John Eric Knutsen (MD) ~$3bn Harv Barenz (Partner & Head of Business Dev.) Pat Dugoni (Principal)
~$14bn David Golob (CIO) Deep Shah (Co-President) Matt Holt (MD & President) Pete Massuci (MD) ~$12bn ~$20bn Rob Kalsow-Ramos
(Partner) ~$6bn Mike Gallagher (MD) Carlos Soto (MD) ~$15bn Tim Millikin (Partner & Co-Head of Tech) John Flynn (Partner)
Jason Wright (Partner) ~$12bn Ramzi Musallam (Managing Partner) ~$12bn Aneal Krishnan (Partner)
Exhibit c(iv)
– Highly Confidential;
For Discussion Purposes Only – January 26, 2024 Discussion Materials for the Special Committee Project Hydro
– Highly Confidential;
For Discussion Purposes Only – Disclaimer This presentation has been prepared by Centerview Partners LLC (“Centerview”)
for use solely by the Special Committee of the Board of Directors of HireRight Holdings Corporation (“Hydro”, the
“Company” or the “Special Committee”) in connection with its evaluation of proposed strategic alternatives
for Hydro and for no other purpose. The information contained herein is based upon information supplied by or on behalf of Hydro
and publicly available information, and portions of the information contained herein may be based upon statements, estimates and
forecasts provided by Hydro. Centerview has relied upon the accuracy and completeness of the foregoing information, and has not
assumed any responsibility for any independent verification of such information or for any independent evaluation or appraisal
of any of the assets or liabilities (contingent or otherwise) of Hydro or any other entity, or concerning the solvency or fair
value of Hydro or any other entity. Any financial analysis in this presentation is complex and is not necessarily susceptible
to a partial analysis or summary description. In performing any financial analysis, Centerview has considered the results of its
analysis as a whole and did not necessarily attribute a particular weight to any particular portion of the analysis considered.
Furthermore, selecting any portion of Centerview’s analysis, without considering the analysis as a whole, would create an
incomplete view of the process underlying its financial analysis. Centerview may have deemed various assumptions more or less
probable than other assumptions, so the reference ranges resulting from any particular portion of the analysis described above
should not be taken to be Centerview’s view of the actual value of Hydro. These materials and the information contained
herein are confidential, were not prepared with a view toward public disclosure, and may not be disclosed publicly or made available
to third parties without the prior written consent of Centerview. These materials and any other advice, written or oral, rendered
by Centerview are intended solely for the benefit and use of the Special Committee of the Board of Directors of Hydro (in its
capacity as such) in its consideration of strategic alternatives, and are not for the benefit of, and do not convey any rights
or remedies for any holder of securities of Hydro or any other person. Centerview will not be responsible for and has not provided
any tax, accounting, actuarial, legal or other specialist advice. These materials are not intended to provide the sole basis for
evaluating strategic alternatives, and this presentation does not represent a fairness opinion, recommendation, valuation or opinion
of any kind, and is necessarily incomplete and should be viewed solely in conjunction with the oral presentation provided by Centerview.
– Highly Confidential;
For Discussion Purposes Only – Discussion Agenda Long Range Plan in Context Illustrative Valuation Analysis Selected Precedents
and Next Steps
Long Range Plan
in Context Section 1
Highly Confidential;
For Discussion Purposes Only – Summary of Diligence Historical and Recent Financial Performance Tax Attributes ▪ Centerview
reviewed recent board updates, strategy presentations, analyst models, budgets, previous forecasts, debt and equity capitalization
and other information provided by management ▪ In-person and virtual diligence sessions with management and follow-up questions/conversations
with management to understand Hydro’s strategy, industry dynamics, historical and recent business trends and financial performance
▪ Review of data/analysis from Hydro management based on diligence questions Long-Range Plan ▪ Centerview and the
Special Committee met on 13 occasions between December 8 and January 24 ▪ Centerview and members of Hydro’s management
team discussed key areas of diligence of the long range plan, including, but not limited to: – FY2023 and FY2024 budget,
cash flow forecast and performance to date – Go-forward expectations for base growth and labor market dynamics – Historical
trends vs. assumptions in the LRP – Go-to-market and competitive differentiation – Margin trends and sources of operating
leverage – Cost savings, productivity initiatives and implementation status – Investments required in the business
– Capital expenditure plan – Net working capital needs and trends ▪ Review of materials provided by Hydro management
to understand the tax attributes covered under Hydro’s tax receivables agreement (“TRA”) ▪ Follow-up discussions
with the management team to update the TRA schedule to estimate the potential tax benefits available to Hydro under the LRP
Highly Confidential;
For Discussion Purposes Only – LRP Summary Source: LRP and Company filings. Note: Dollars in millions. (1) Included in Indirect
Expenses in LRP. Historical Projections '23E - '25E '25E - '30E 2021A 2022A 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E CAGR
CAGR Total Revenue $730 $807 $722 $785 $832 $874 $913 $950 $983 $1,013 +7.4% +4.0% YoY Growth 10.5% (10.5%) 8.8% 6.0% 5.0% 4.5%
4.0% 3.5% 3.0% Data Costs & Other Direct (291) (319) (278) (315) (329) (341) (356) (370) (383) (396) +8.7% +3.8% Direct Labor
(116) (115) (94) (96) (101) (104) (108) (111) (112) (114) +3.6% +2.5% Other (0) (2) – – – – – –
– – Gross Profit $323 $371 $350 $373 $403 $429 $449 $469 $487 $503 +7.3% +4.5% % Margin 44.3% 46.0% 48.5% 47.6% 48.4%
49.1% 49.1% 49.3% 49.6% 49.7% Indirect Labor (98) (118) (118) (127) (128) (134) (140) (146) (153) (159) +3.9% +4.5% Indirect Expenses
(67) (81) (76) (80) (80) (82) (83) (85) (81) (82) +2.6% +0.5% Restructuring & O ne-time Costs (23) (2) (24) (1) – –
– – – – Depreciation & Amortization (78) (72) (75) (74) (75) (75) (56) (32) (32) (32) Operating Income
$57 $98 $56 $92 $120 $138 $169 $205 $221 $230 +46.0% +13.9% Plus: D&A 78 72 75 74 75 75 56 32 32 32 Plus: Amort. of Cap. Cloud-Based
SW(1) – 3 7 8 7 7 7 7 1 – Plus: SBC & Other Adjustments 25 16 42 26 21 22 23 24 25 25 Adjusted EBITDA $160 $188
$180 $201 $222 $242 $254 $268 $278 $287 +11.1% +5.2% % Margin 21.9% 23.4% 25.0% 25.5% 26.7% 27.6% 27.8% 28.2% 28.3% 28.3% Tax-deductible
D&A $15 $13 $19 $18 $27 $27 $32 $32 $26 $25 % of Revenue 2% 1.6% 2.6% 2.3% 3.2% 3.1% 3.5% 3.3% 2.6% 2.5% Capex $14 $17 $14
$23 $21 $22 $23 $24 $25 $25 % of Revenue 1.9% 2.1% 1.9% 3.0% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%

– Highly Confidential;
For Discussion Purposes Only – $146 $93 $160 $188 $180 $201 $222 $242 $254 $268 $278 $287 '19A '20A '21A '22A '23E '24E
'25E '26E '27E '28E '29E '30E Source: LRP and Company filings. Note: Dollars in millions. Overview of LRP Adj. EBITDA ($mm) %
Margin Revenue Gross Profit Adj. EBITDA Historicals LRP 1% (17%) 35% 10% (11%) 9% 6% 5% 5% 4% 4% 3% '19A '20A '21A '22A '23E '24E
'25E '26E '27E '28E '29E '30E $648 $540 $730 $807 $722 $785 $832 $874 $913 $950 $983 $1,013 '19A '20A '21A '22A '23E '24E '25E
'26E '27E '28E '29E '30E Revenue ($mm) YoY Growth (%) ’23-’30E CAGR: 5% ’23-’30E CAGR: 7% 23% 17% 22%
23% 25% 26% 27% 28% 28% 28% 28% 28% '19A '20A '21A '22A '23E '24E '25E '26E '27E '28E '29E '30E $291 $238 $323 $371 $350 $373
$403 $429 $449 $469 $487 $503 '19A '20A '21A '22A '23E '24E '25E '26E '27E '28E '29E '30E Gross Profit ($mm) % Margin ’23-’30E
CAGR: 5% 45% 44% 44% 46% 48% 48% 48% 49% 49% 49% 50% 50% '19A '20A '21A '22A '23E '24E '25E '26E '27E '28E '29E '30E +116bps since
’23E +336bps since ’23E ’19A-’23E CAGR: 3% ’19A-’23E CAGR: 5% ’19A-’23E CAGR:
5%
– Highly Confidential;
For Discussion Purposes Only – (16.6%) 35.1% 10.5% (10.5%) 8.8% (16.6%) 35.1% 10.5% (10.0%) 4.9% (8.7%) 41.4% 19.5% (5.7%)
5.7% 3.9% 39.9% 13.7% (4.7%) 7.4% 2020A 2021A 2022A 2023E 2024E Historical and Forecasted Revenue Growth vs. Peers Actual / LRP
Hydro Consensus(1) Source: LRP and FactSet as of January 24, 2024. (1) Hydro Consensus as of unaffected date of November 17, 2023.
YoY Revenue Growth: Hydro (Actual / LRP) vs. Peers (Consensus) CAGR: ’19A – 23E 2.8% 2.9% 9.8% 12.5% CAGR: ’19A
– 24E 3.9% 3.3% 8.6% 11.5% Hydro has historically underperformed (in positive or negative growth years) during 2020A –
2023E compared to First Advantage and Sterling Check
– Highly Confidential;
For Discussion Purposes Only – 32.3% 32.9% 25.6% 2.6% (11.7%) (11.7%) (13.6%) (10.5%) 35.1% 37.7% 29.1% 17.5% (2.1%) (6.6%)
(7.4%) (9.4%) 35.8% 43.7% 15.3% 6.8% 0.0% (7.6%) (8.1%) (2.7%) Q4'21A Q1'22A Q2'22A Q3'22A Q4'22A Q1'23A Q2'23A Q3'23A Historical
Quarterly Revenue Growth vs. Peers Hydro Source: Company filings and FactSet as of January 24, 2024. Note: Reflects periods where
data is available for all three companies. YoY Revenue Growth: Hydro vs. Peers In all but one of the last 8 quarters, Hydro’s
year-on-year growth has underperformed both First Advantage and Sterling Check
– Highly Confidential;
For Discussion Purposes Only – 12% 3% 23% 22% 7% 24% 9% ~23% ~10% ~18% ~17% ~23% 16% ~9% 16% 23% 13% 19% 6% 7% Benchmarking
End Market Exposure vs. Peers End Market Mix Hydro Healthcare Technology Financial and Business Services Transportation Manufacturing,
Government and Education Retail and Hospitality All Other Source: Company filings and presentations. Note: Reflects FY22 end market
data. End market terminology reflects Hydro’s nomenclature. First Advantage eliminations allocated to respective regional
segment based on its percent of total revenue. (1) Sterling classifies Hospitality within its Technology, Media, Entertainment
and Hospitality end market. (2) Reflects Sterling’s Tech, Media, Entertainment and Hospitality end market. (3) Reflects
First Advantage’s General Staffing and Small Business end markets. (4) Reflects Sterling’s Contingent, Gig, Consumers
and Volunteers end markets. (2) (4) (1) (3) Hydro has higher exposure to technology and financial & business services as compared
to First Advantage and Sterling Check
– Highly Confidential;
For Discussion Purposes Only – 21.9% 27.9% 31.8% 23.4% 25.9% 30.7% 25.0% 26.0% 31.1% 25.5% 27.2% 32.0% 26.7% 28.5% 32.9%
28.3% Benchmarking Hydro’s Adj. EBITDA Margin vs. Peers Adj. EBITDA Margin(1): Hydro (LRP) vs. Peers (Consensus) FY’21A
FY’22A FY’23E Memo: FY’30E LRP Memo: Δ vs. ’23E +56bps +123bps +83bps +174bps +253bps +178bps +336bps
Adj. EBITDA Margin Source: LRP, Company filings and FactSet as of January 24, 2024. (1) Unburdened by stock-based compensation
expense. Hydro’s historical margin is lower than First Advantage and Sterling Check and expected to be lower through 2025E;
also, Hydro’s long-term margin (in 2030E) remains lower vs. First Advantage or Sterling Check in 2025E FY’24E FY’25E
Hydro LRP Hydro Actual Hydro Actual Hydro LRP Hydro LRP Hydro LRP
– Highly Confidential;
For Discussion Purposes Only – 2023E 2024E Comparison of LRP Revenue vs. Consensus Estimates 4.9% 8.8% 7.3% Source: LRP,
Wall Street research and FactSet as of January 24, 2024. Note: Dollars in millions. 0.6% $721 $729 $726 $722 $726 $782 $762 $785
$796 $861 $838 $832 2025E 10.0% 6.0% 9.7% 10.0% (9.6%) (10.0%) (10.5%) (10.6%) LRP Consensus Median Analyst Estimates Implied
YoY Growth
– Highly Confidential;
For Discussion Purposes Only – 2023E 2024E Comparison of LRP Adj. EBITDA vs. Consensus Est. 2025E 24.2% / +85bps 24.2% /
+80bps 25.0% / +165bps 24.1% / +80bps 25.8% / +165bps 25.1% / +95bps 25.5% / +55bps 24.7% / +50bps 26.0% / +85bps 26.7% / +120bps
24.3% / (35bps) 26.4% / +60bps Source: LRP, Wall Street research and FactSet as of January 24, 2024. Note: Dollars in millions.
Adj. EBITDA unburdened by stock-based compensation expense. Margin expansion figures rounded to the nearest 5bps. LRP Consensus
Median Analyst Estimates Implied YoY Growth $179 $202 $191 $201 $193 $228 $218 $222 $174 $176 $175 $180
Illustrative Valuation
Analysis Section 2
– Highly Confidential;
For Discussion Purposes Only – Methodology Relevant Metrics Implied Share Price Range(1) 52-Week Trading Range Low: 9/12/23
/ High: 12/2/22 Analyst Price Targets Discounted Cash Flow Terminal Multiple 11.75% - 13.00% WACC; 7.0x - 9.0x NTM Adj. EBITDA
Multiple Trading Multiples 2024E Adj. EBITDA 7.0x - 9.0x 2024E Adj. EBITDA of $201mm $10.00 $8.75 $10.55 $12.80 $15.00 $13.15
$16.20 $17.95 Hydro Valuation Analysis Source: LRP, Wall Street research, Company filings and FactSet as of January 24, 2024.
Note: Estimated balance sheet as of December 31, 2023. (1) Implied share price ranges rounded to the nearest $0.05. (2) Implied
share price includes the value from tax attributes of the TRA attributable to common shareholders. (3) Reflects closing prices
for the period ending as of unaffected date of November 17, 2023. (4) As of unaffected date of November 17, 2023. (5) Reflects
low value of $10.00 - $12.00 price target range. For Reference Only (4) (3) 12/8 Proposal: $12.75 Low: High: (5) (2)
– Highly Confidential;
For Discussion Purposes Only – Discounted Cash Flow Analysis Source: LRP. Note: Dollars in millions except per share amounts.
Assumes mid-period discounting convention. Valuation and estimated balance sheet as of December 31, 2023. Equity value per share
excludes the present value of tax attributes. (1) Unburdened by stock-based compensation expense. (2) Reflects tax deductible
D&A. (3) Statutory tax rate of 26% per Hydro management. (4) Represents tax deductible D&A. Also includes $4.9mm of other
non-cash adjustments in 2024E. Terminal NTM EBITDA Multiple Terminal NTM EBITDA Multiple 7.0x 8.0x 9.0x 7.0x 8.0x 9.0x 11.75%
$1,637 $1,773 $1,909 $13.84 $15.75 $17.60 12.38% $1,588 $1,719 $1,849 $13.15 $14.99 $16.79 13.00% $1,541 $1,666 $1,792 $12.49
$14.25 $16.02 WACC Enterprise Value ($mm) Equity Value Per Share Fiscal Year Ending December 31, Terminal 2024E 2025E 2026E 2027E
2028E 2029E 2030E Year Revenue $785 $832 $874 $913 $950 $983 $1,013 $1,043 % Growth 8.8% 6.0% 5.0% 4.5% 4.0% 3.5% 3.0% 3.0% Adj.
EBITDA(1) $201 $222 $242 $254 $268 $278 $287 $296 % Growth 11.2% 10.9% 8.6% 5.3% 5.2% 4.0% 3.1% 3.0% % Margin 25.5% 26.7% 27.6%
27.8% 28.2% 28.3% 28.3% 28.3% (Less): D&A(2) (18) (27) (27) (32) (32) (26) (25) (Less): SBC (25) (21) (22) (23) (24) (25)
(25) (Less): Restructuring Costs (1) – – – – – – Taxable Income $157 $175 $193 $200 $212 $228
$237 % Growth 24.2% 11.7% 10.3% 3.5% 6.2% 7.6% 3.7% % Margin 19.9% 21.0% 22.1% 21.9% 22.3% 23.2% 23.4% (Less): Taxes(3) (41) (45)
(50) (52) (55) (59) (62) After-tax Income $116 $129 $143 $148 $157 $169 $175 Plus: D&A(4) 23 27 27 32 32 26 25 (Less): Δ
in NWC (10) (14) (5) (4) (3) (3) (3) (Less): Capex (23) (21) (22) (23) (24) (25) (25) Unlevered Free Cash Flow $106 $121 $143
$153 $161 $167 $172 % Growth 2.1% 14.6% 18.0% 7.1% 5.5% 3.2% 3.4%
– Highly Confidential;
For Discussion Purposes Only – Valuation of Hydro Tax Attributes Cash Flow Benefit of Tax Receivable Agreement (TRA) Source:
LRP, Hydro Management and Company filings. Note: Dollars in millions. Present value as of December 31, 2023. Assumes mid-period
discounting convention. (1) 15% represents the TRA cash flow benefit retained by Hydro common shareholders. Pending updated information
from Hydro Management Year Incurred >> 2022A 2023E 2024E 2025E 2026E 2027E 2028E 2028E+ Year of Payment >> 2024E 2025E
2026E 2027E 2028E 2029E 2030E 2030E+ Total Benefit $38 $35 $34 $17 $11 $16 $25 $73 (x) 15%(1) 15% 15% 15% 15% 15% 15% 15% 15%
Benefit to Common $6 $5 $5 $3 $2 $2 $4 $11 PV of Implied Value Discount Rate Tax Attr. Per Share 11.75% $5 $4 $4 $2 $1 $1 $2 $4
$24 $0.33 13.00% $5 $4 $4 $2 $1 $1 $2 $4 $23 $0.32 11.75% $30 $25 $22 $10 $5 $7 $10 $25 $135 13.00% $30 $25 $21 $10 $5 $7 $10
$22 $130 TRA Cash Flow Payments Reference: PV of TRA Payments to Pre-IPO Shareholders Present Value (PV) of TRA Payments to Common
Shareholders
– Highly Confidential;
For Discussion Purposes Only – Selected Peer Companies Enterprise Market Total Debt / Beta Name Value ($mm) Cap ($mm) Debt
Equity Levered (1) Unlevered (2) First Advantage $2,871 $2,473 $565 23% 1.31 1.11 Sterling Check 1,810 1,357 502 37% 1.30 1.00
Mean / Median 30% 1.30 1.06 Memo: Hydro (Unaff.)(3) $1,367 $715 $748 105% 1.28 0.72 Memo: Hydro (Curr.) $1,552 $899 $748 83% 1.31
0.81 WACC Analysis Source: LRP, Bloomberg, FactSet, Company filings and other market data as of January 24, 2024 and Duff and
Phelps, 2023. (1) Represents two-year adjusted weekly average Beta. (2) Unlevered Beta equals (levered Beta / (1 + ((1 –
tax rate) * debt / equity)). (3) Reflects figures as of unaffected date of November 17, 2023 and latest diluted share count per
management. Hydro estimated balance sheet data as of December 31, 2023. (4) Statutory tax rate per LRP. (5) Represents United
States 20-year treasury bond yield. (6) Duff & Phelps, 2023. (7) Duff & Phelps, 2023. Based on size premium for companies
with $0.4bn - $2.4bn current market capitalization. (8) Based on latest available daily value of ICE BofA B US High Yield Index
effective yield as of January 23, 2024. (9) WACC equals ((debt / capitalization * (cost of debt * (1 – tax rate))) + (equity
/ capitalization * levered cost of equity)). WACC Calculation Cost of Equity Unlevered Beta 0.975 Tax Rate(4) 26% Peer Mean Debt
/ Equity 30% Levered Beta 1.19 Risk Free Rate(5) 4.52% Market Risk Premium(6) 7.17% Size Premium(7) 1.21% Cost of Equity 14.3%
Cost of Debt Pre-tax Cost of Debt(8) 7.7% After-tax Cost of Debt 5.7% % Equity 77% % Debt 23% WACC(9) 12.3% WACC Analysis Debt
/ Debt / Unlevered Beta Equity Total Cap. 0.90 0.975 1.05 20% 17% 11.9% 12.4% 12.9% 30% 23% 11.8% 12.3% 12.8% 40% 29% 11.7% 12.2%
12.7%
– Highly Confidential;
For Discussion Purposes Only – FY'22A - 23E FY'23E - 25E FY'24E FY'24E FY'23E - 25E EV / Equity Enterprise Revenue Revenue
Gross Adj. EBITDA Adj. EBITDA FY'24E Company Value ($mn) Value ($mn) Growth CAGR Margin Margin CAGR Adj. EBITDA $2,473 $2,871
(4.7%) 8.2% 51.0% 32.0% 11.2% 10.8x 1,357 1,810 (5.7%) 6.9% 48.1% 27.2% 12.0% 8.9x Peer Median (5.2%) 7.6% 49.6% 29.6% 11.6% 9.8x
Memo: Hydro Cons.(1) 715 1,367 (10.0%) 7.4% 49.5% 25.1% 11.4% 7.1x Memo: LRP(1) 715 1,367 (10.5%) 7.4% 47.6% 25.5% 11.1% 6.8x
Public Trading Metrics and Financial Outlook vs. Peers Source: LRP, Company filings and FactSet as of January 24, 2024. Note:
Adj. EBITDA unburdened by stock-based compensation expense. Hydro estimated balance sheet data as of December 31, 2023. Peer balance
sheet data as of September 30, 2023. (1) As of unaffected date of November 17, 2023.
– Highly Confidential;
For Discussion Purposes Only – PT Prem. / (Disc.) Broker Price Target (PT) to Unaff. Share Price Valuation Methodology Hydro
Unaffected Hydro Current Price +26% +49% n.a. +49% 10.5x FY'24E Adj. EPS (Base Case) +29% 8.0x FY'24E EBITDA +19% ~9.0x FY'24E
Adj, EPS +11% 6.25x NTM + 1 Year EBITDA +9% ~8.0x FY'24E EBITDA (Base Case) +9% n.a. +9% 6.7x FY'25E EBITDA n.a. 6.0 - 6.5x FY'25E
EBITDA (0%) ~11.8x FY'24E Adj. EPS - SBC n.a. 7.5x FY'24E EBITDA (Base Case) n.a. Valued on FY'24E Adj. EPS Median +10% $10.05
$12.64 $15.00 $15.00 $13.00 $12.00 $11.20 $11.00 $11.00 $11.00 $10.00 - $12.00 $10.00 n.a. n.a. $11.10 Analyst Price Targets Prior
to Unaffected Date Source: Wall Street research and FactSet as of January 24, 2024. (1) Rating as of August 8, 2023. (2) Reflects
8.3x P/E multiple if using FY’24E Barclays Adj. EPS. (3) No price target provided. (4) Valuation discussed on P/E basis.
Buy Hold (3) (3,4) (1) (2)
Selected Precedents
and Next Steps Section 3
– Highly Confidential;
For Discussion Purposes Only – Premia in Selected Precedent Minority “Squeeze Out” Transactions Selected Precedent
Minority “Squeeze Out” Transactions(1) Source: Company filings and FactSet as of January 24, 2024. Note: Dollars in
billions. (1) All cash, minority “squeeze out” transactions with U.S. targets and over $100mm in equity consideration
over the last ~10 years with offers from only single acquiror. Excludes transactions in real-estate, energy, financial institutions
and oil and gas industries (n=13). (2) Reflects unaffected date of first bid. (3) Reflects 30 trading days. (4) Reflects unaffected
date of transaction announcement. (5) On June 24, 2013, Crown Media filed an amendment to its Schedule 13D disclosing it was evaluating
a “short-form merger to eliminate the minority stockholders”. Final price reflects 151% premium to share price on
June 24, 2013. % of Implied Initial Bid Premium to Initial to Final Bid Premium to Equity Enterprise Unaff. 30-Day Final Bid Unaff.
30-Day Date Target Acquiror Owned Value Price VWAP % Increase Price VWAP Aug-23 SciPlay Light & Wonder 83% $2.5 29% 17% 15%
47% 34% Dec-22 Weber BDT Capital 72% 3.7 24% (4%) 29% 60% 24% Jun-22 Convey Health TPG Capital 75% 1.1 66% 46% 17% 143% 99% Nov-20
Urovant Sciences Sumitovant Bio 72% 0.7 55% 46% 30% 96% 92% Aug-20 Akcea Thera. Ionis Pharma 76% 1.5 42% 33% 13% 59% 56% Aug-20
Hudson Dufry AG 57% 1.1 24% 12% 23% 50% 64% Feb-20 AVX KYOCERA 72% 2.9 30% 26% 12% 45% 40% Jun-18 Foundation Medicine Roche 57%
5.3 30% 49% 3% 29% 47% Nov-16 Synutra Investor Group 64% 0.8 54% 26% 2% 58% 29% Sep-16 Federal-Mogul Icahn 82% 2.1 41% 61% 43%
101% 130% Mar-16 Crown Media Hallmark 90% 4.4 2% 13% 0% 2% 13% Sep-13 Cornerstone Thera. Chiesi Farmaceutici 58% 0.3 22% 20% 45%
78% 74% Mar-13 Sauer-Danfoss Danfoss 76% 2.6 24% 24% 19% 49% 48% 25th Percentile 64% 24% 17% 12% 47% 34% Median 72% 30% 26% 17%
58% 48% 75th Percentile 76% 42% 46% 29% 78% 74% (5) (2) (3) (4) (3)
– Highly Confidential;
For Discussion Purposes Only – Timing in Selected Precedent Minority “Squeeze Out” Transactions Timing in Selected
Precedent Minority “Squeeze Out” Transactions (1) Source: Company filings and FactSet as of January 24, 2024. (1)
All cash, minority “squeeze out” transactions with U.S. targets and over $100mm in equity consideration over the last
~10 years with offers from only single acquiror. Excludes transactions in real-estate, energy, financial institutions and oil
and gas industries (n=13). Days Between # of Initial & Initial Bid Signing Initial Bid Date Target Acquiror Bids Final Bid
& Signing & Closing & Closing Aug-23 SciPlay Light & Wonder 5 78 82 n.a. n.a. Dec-22 Weber BDT Capital 5 36 48
72 120 Jun-22 Convey Health TPG Capital 3 42 47 109 156 Nov-20 Urovant Sciences Sumitovant Bio 5 4 6 137 143 Aug-20 Akcea Thera.
Ionis Pharma 4 9 11 43 54 Aug-20 Hudson Dufry AG 3 40 44 103 147 Feb-20 AVX KYOCERA 4 62 86 38 124 Jun-18 Foundation Medicine
Roche 4 3 3 43 46 Nov-16 Synutra Investor Group 2 239 308 180 488 Sep-16 Federal-Mogul Icahn 4 309 191 139 330 Mar-16 Crown Media
Hallmark 1 – 54 – 54 Sep-13 Cornerstone Thera. Chiesi Farmaceutici 5 205 209 141 350 Mar-13 Sauer-Danfoss Danfoss
5 85 93 42 135 25th Percentile 3 9 44 43 104 Median 4 42 54 88 139 75th Percentile 5 85 93 138 200
– Highly Confidential;
For Discussion Purposes Only – Non-Economic Terms in Selected Precedent Minority “Squeeze Out” Transactions
Non-Economic Terms in Selected Precedent Minority “Squeeze Out” Transactions(1) Source: Company filings and FactSet
as of January 24, 2024. (1) All-cash, minority “squeeze out” transactions with U.S. targets and over $100mm in equity
consideration over the last 10 years. Excludes transactions in realestate, energy, financial institutions and oil and gas industries
(n=11). (2) Acquisition was conditioned upon completion of an equity rights offering by Dufry, which required the approval of
its shareholders. Merger agreement included an additional reverse termination fee payable to Hudson if Dufry failed to gain approval
of its equity rights offering, which was to provide capital to consummate the merger. Structure Non-Economic Terms Merger or Go-Shop
Majority of Written No Financing Reverse Date Target Acquiror Tender Provision Minority? Consent Contingency? Term. Fee? Aug-23
SciPlay Light & Wonder Merger Dec-22 Weber BDT Capital Merger Jun-22 Convey Health TPG Capital Merger Nov-20 Urovant Sciences
Sumitovant Bio Merger Aug-20 Akcea Thera. Ionis Pharma Tender Aug-20 Hudson Dufry AG Merger Feb-20 AVX KYOCERA Tender Jun-18 Foundation
Medicine Roche Tender Nov-16 Synutra Investor Group Merger Sep-16 Federal-Mogul Icahn Tender Mar-16 Crown Media Hallmark Tender
Sep-13 Cornerstone Thera. Chiesi Farmaceutici Merger Mar-13 Sauer-Danfoss Danfoss Tender % of Deals 15% 46% 23% 92% 23% (2)
– Highly Confidential;
For Discussion Purposes Only – Illustrative Analysis At Various Prices 12/8 Bidder Proposal Source: LRP, Company filings
and FactSet as of January 24, 2024. Note: Dollars in millions except per share amounts. Diluted share count as of latest equity
personnel plan provided by management on January 8, 2024. (1) As of unaffected date of November 17, 2023. (2) Reflects volume-weighted
average price over 30 trading day period through unaffected date of November 17, 2023. (3) Reflects Estimated balance sheet as
of December 31, 2023. (4) Unburdened by stock-based compensation expense. Unaffected Share Price(1) Share Price $10.05 $12.75
$13.00 $14.00 $15.00 $16.00 $17.00 % Premium / (Discount) to: Unaffected Price (11/17/23) $10.05 -- +27% +29% +39% +49% +59% +69%
30-Day VWAP (2) $9.78 +3% +30% +33% +43% +53% +64% +74% Implied Equity Value $715 $907 $925 $996 $1,067 $1,138 $1,212 Plus: Net
Debt and NCI(3) 653 653 653 653 653 653 653 Implied Enterprise Value $1,367 $1,559 $1,577 $1,648 $1,720 $1,791 $1,865 LRP EV /
Adj. EBITDA(4) 2023E $180 7.6x 8.6x 8.7x 9.1x 9.5x 9.9x 10.3x 2024E $201 6.8x 7.8x 7.9x 8.2x 8.6x 8.9x 9.3x Hydro Consensus (1)
EV / Adj. EBITDA(4) 2023E $175 7.8x 8.9x 9.0x 9.4x 9.8x 10.2x 10.6x 2024E $191 7.1x 8.2x 8.2x 8.6x 9.0x 9.4x 9.7x
– Highly Confidential;
For Discussion Purposes Only – Next Steps ▪ Discuss and align on response to Bidders
Appendix Supporting
Materials
– Highly Confidential;
For Discussion Purposes Only – Overview of the Bidders’ December 8th Proposal ▪ $12.75 per share in cash for
all outstanding shares of Hydro common stock – Proposal states offer price represents an approximately 30% premium over
the unaffected 30-day VWAP of $9.78(1) Headline Offer ▪ Assumption of all indebtedness and liabilities of the Company, including
obligations under the Tax Receivable Agreement (“TRA”) ▪ Non-waivable condition requires: – Approval and
recommendation to board by Special Committee – Approval of a “majority of the minority” ▪ Bidders do not
intend to sell their respective stakes in the Company to any third party as part of the potential transaction ▪ If a transaction
is not consummated, Bidders intend to remain as long-term stockholders ▪ No indication provided to date regarding timing,
financing and other associated contingencies, or approvals required by each of the respective Bidders Other Key Terms Certain
Conditions of Proposal Proposal Overview Implied Offer Metrics Source: Bidders’ non-binding proposal received on December
8, 2023, LRP and FactSet as of January 24, 2023. Note: Dollars in millions, except per share amounts. (1) Reflects volume-weighted
average price over 30 trading day period through unaffected date of November 17, 2023. (2) Reflects estimated balance sheet as
of December 31, 2023. (3) Unburdened by stock-based compensation expense. Share Price $12.75 % Premium / (Discount) to: Unaffected
Price (11/17/23) $10.05 +27% 30-Day VWAP (1) $9.78 +30% Implied Equity Value $907 Plus: Net Debt and NCI(2) 653 Implied Enterprise
Value $1,559 LRP EV / Adj. EBITDA(3) 2023E $180 8.6x 2024E $201 7.8x Hydro Consensus (as of November 17, 2023) EV / Adj. EBITDA(3)
2023E $175 8.9x 2024E $191 8.2x
– Highly Confidential;
For Discussion Purposes Only – 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x Nov-21 Jun-22 Dec-22 Jul-23 Jan-24 Average Multiple
(3) 2-Yr. 1-Yr. 6-Mo. 3-Mo. Hydro 8.5x 7.8x 7.4x 7.1x Sterling Check 9.1x 7.6x 7.8x 8.0x First Advantage 9.2x 9.0x 9.3x 9.8x Multiples
Over Time Source: Public filings and FactSet as of January 24, 2024. Note: Reflects multiples since approximately 1-month after
Hydro IPO due to lack of estimates. (1) Unburdened by stock-based compensation expense. (2) Hydro metrics as of unaffected date
of November 17, 2023. Peer metrics as of January 24, 2024 7.2x 10.8x (NTM Adj. EBITDA Multiple as of 11/17/23) 8.1x 14.3x 13.3x
Hydro Consensus 14.1x 8.8x EV / NTM Adj. EBITDA Over Time(1) Δ: Hydro Multiple vs Peers Through Unaffected Date (6.0x) (4.0x)
(2.0x) 0.0x +2.0x Nov-21 Jun-22 Dec-22 Jul-23 (2.0x) (1.0x) (0.7x) (0.7x) Nov-23
– Highly Confidential;
For Discussion Purposes Only – 56% 58% 67% 75% 14% 15% 14% 3% 30% 27% 19% 22% Nov-21 Apr-22 Apr-23 Current 75% 59% 61% 62%
8% 4% 5% 4% 16% 37% 34% 35% Jun-21 Apr-22 Apr-23 Current 64% 62% 61% 53% 19% 18% 20% 14% 17% 19% 19% 33% Sep-21 Apr-22 Apr-23
Current Public Float Over Time Source: Company filings, press releases and FactSet as of January 24, 2024. (1) Reflects unaffected
date as of November 17, 2023. Hydro Goldman Sachs Gulf and Shore Insiders / Former Mgt. Public Float First Advantage Silver Lake
Insiders / Other Public Float Sterling Check Insiders / Former Mgt. Public Float Goldman Sachs executed a secondary offering in
June 2023 ~$150(1) Public Float Market Value ($mm) ~$450 ~$380 ~$150 ~$410 Public Float Market Value ($mm) ~$370 ~$490 ~$210 ~$830
Public Float Market Value ($mm) ~$360 ~$1,020 ~$640 Silver Lake executed a secondary offering in November 2021 RJC GIS Holdings,
LLC ownership has declined from ~11% to 3% since the proxy filed April 14, 2023
– Highly Confidential;
For Discussion Purposes Only – Hydro Public Market Overview and Fully-Diluted Share Count Source: Hydro Management, Company
Filings and FactSet as of January 24, 2024. Note: Share count and capitalization table as of January 8, 2024 per Hydro Management.
Estimated balance sheet as of December 31, 2023. (1) Reflects dilution utilizing treasury stock method. (2) Includes 2.13mm shares
owned by RJC GIS Holdings, LLC per data provided by Hydro Management on January 8, 2024 and 43k and 64k shares for Guy Abramo
and Scott Collins respectively per latest publicly available information. Public Market Overview Unaffected Current Share Price
($) $10.05 $12.64 Basic Shares Outstanding (mm) 67.4 67.4 (Plus): Options + PSUs + RSUs(1) 3.8 3.8 Diluted Shares Outstanding
(mm) 71.1 71.1 Equity Value ($mm) $715 $899 (Less): Cash (113.2) (113.2) (Plus): Debt 748.1 748.1 (Plus): NCI 17.7 17.7 Memo:
Net Debt 634.9 634.9 Enterprise Value $1,367 $1,552 Type Price Number of Shares (000s) $15.97 2,589 $17.57 103 $18.05 192 $23.00
13 Option - 2018 Total 2,896 $7.61 22 $10.47 42 $13.18 17 $14.14 15 $16.41 102 $19.00 1,398 Option - 2021 Total 1,597 PSUs 2,291
RSUs 1,463 Options + PSUs + RSUs 8,247 Option - 2018 Option - 2021 Capitalization Table Shares % Own. General Atlantic 32.1 48%
Stone Point 18.5 27% Insiders / Former Management(2) 2.2 3% Remaining Public Float 14.5 22% Total Basic Shares 67.4 100%
– Highly Confidential;
For Discussion Purposes Only – – $2 $4 $6 $8 $10 $12 $14 Nov-22 Feb-23 May-23 Aug-23 Nov-23 LTM Share Price Prior
to the Unaffected Date Hydro LTM Share Price (as of November 17, 2023)(1) August 8, 2023 Hydro announced Q2’23 earnings
beating quarterly consensus estimates for revenue and Adj. EBITDA by +3% and +27%, respectively; stock traded up +1% November
7, 2023 Hydro announced Q3’23 earnings beating quarterly consensus estimates for revenue and Adj. EBITDA by +1% and +4%,
respectively; stock traded up +1% Source: Company filings and FactSet as of January 24, 2024. Note: Percentages in annotations
reflect one-day impact to unaffected share price. (1) Reflects date of Gulf and Shore’s 13D filings after market close.
$9.14 November 17, 2023 Gulf and Shore posted Schedule 13D filings after market close March 9, 2023 Hydro announced Q4’22
earnings beating quarterly consensus estimates for revenue and Adj. EBITDA by +3% and +20% respectively; stock traded up +8% +10%
$10.05 $13.14 High: (12/2/22) $8.75 Low: (9/12/23) May 9, 2023 Hydro announced Q1’23 earnings beating consensus estimates
for quarterly revenue by +2% and missing quarterly estimates for Adj. EBITDA by (11%); stock traded down (5%)
Exhibit
c(v)
–
Highly Confidential Draft; For Discussion Purposes Only – February 15, 2024 Discussion Materials for the Special Committee
Project Hydro

– Highly Confidential Draft; For Discussion Purposes Only – Disclaimer This presentation has been prepared by Centerview
Partners LLC (“Centerview”) for use solely by the Special Committee of the Board of Directors of HireRight Holdings
Corporation (“Hydro”, the “Company” or the “Special Committee”) in connection with its evaluation
of proposed strategic alternatives for Hydro and for no other purpose. The information contained herein is based upon information
supplied by or on behalf of Hydro and publicly available information, and portions of the information contained herein may be
based upon statements, estimates and forecasts provided by Hydro. Centerview has relied upon the accuracy and completeness of
the foregoing information, and has not assumed any responsibility for any independent verification of such information or for
any independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of Hydro or any other entity,
or concerning the solvency or fair value of Hydro or any other entity. Any financial analysis in this presentation is complex
and is not necessarily susceptible to a partial analysis or summary description. In performing any financial analysis, Centerview
has considered the results of its analysis as a whole and did not necessarily attribute a particular weight to any particular
portion of the analysis considered. Furthermore, selecting any portion of Centerview’s analysis, without considering the
analysis as a whole, would create an incomplete view of the process underlying its financial analysis. Centerview may have deemed
various assumptions more or less probable than other assumptions, so the reference ranges resulting from any particular portion
of the analysis described above should not be taken to be Centerview’s view of the actual value of Hydro. These materials
and the information contained herein are confidential, were not prepared with a view toward public disclosure, and may not be
disclosed publicly or made available to third parties without the prior written consent of Centerview. These materials and any
other advice, written or oral, rendered by Centerview are intended solely for the benefit and use of the Special Committee of
the Board of Directors of Hydro (in its capacity as such) in its consideration of strategic alternatives, and are not for the
benefit of, and do not convey any rights or remedies for any holder of securities of Hydro or any other person. Centerview will
not be responsible for and has not provided any tax, accounting, actuarial, legal or other specialist advice. These materials
are not intended to provide the sole basis for evaluating strategic alternatives, and this presentation does not represent a fairness
opinion, recommendation, valuation or opinion of any kind, and is necessarily incomplete and should be viewed solely in conjunction
with the oral presentation provided by Centerview.
–
Highly Confidential Draft; For Discussion Purposes Only – Overview of the Bidders’ February 14th Proposal Proposal
Overview Implied Offer Metrics Source: Draft Merger Agreement, LRP and FactSet as of February 14, 2024. Note: Dollars in millions,
except per share amounts. Share count as of February 12, 2024. (1) Reflects volume-weighted average price over 30 trading day
period through unaffected date of November 17, 2023. (2) Reflects balance sheet as of December 31, 2023. (3) Unburdened by stock-based
compensation expense. Offer Price $14.35 % Premium / (Discount) to: Unaffected Price (11/17/23) $10.05 +43% 30-Day VWAP (1) $9.78
+47% Implied Equity Value $1,006 Plus: Net Debt and NCI(2) 644 Implied Enterprise Value $1,650 LRP EV / Adj. EBITDA(3) 2023E $180
9.2x 2024E $201 8.2x Hydro Consensus (as of November 17, 2023) EV / Adj. EBITDA(3) 2023E $175 9.4x 2024E $191 8.6x Preliminary
Merger Agreement Terms – Subject to Negotiations ▪ Proposal to acquire for cash all outstanding shares of Hydro not
owned by Gulf and Shore (“Bidders”) ▪ Purchase price of $14.35 per share in cash Headline Offer ▪ Acquisition
of Hydro by Bidders as follows: one-step merger pursuant to which a wholly owned sub of Parent will merge with and into Hydro,
with Hydro continuing as the surviving corporation and a wholly owned subsidiary of Parent Transaction Structure Certain Closing
Conditions ▪ Hydro required to pay a termination fee of $30mm, equivalent to 3% of Hydro’s implied equity value if
the merger agreement is terminated under the following circumstances: – Hydro terminates the merger to accept a superior
proposal; – Parent terminates merger because Hydro Board changes its recommendation; or – Failure to obtain Hydro
stockholder approval, Parent or Hydro terminates the merger agreement prior to the effective date and time, or breach by Hydro,
but only if an alternative proposal was previously announced and Hydro signs or consummates an alternative acquisition within
12 months of such termination Certain Termination Provisions and Fees ▪ Hydro majority of the minority stockholder approval
▪ Receipt of U.S. antitrust clearance or expiration of HSR waiting period ▪ Generally, no breach of representations
and warranties, subject to varying degrees of materiality ▪ Absence of a material adverse effect with respect to Hydro Financing;
Reverse Termination Fee ▪ No financing closing condition, but if financing is not available at close, Hydro can terminate
and collect a reverse termination fee of $65mm, equivalent to 6.5% of Hydro’s implied equity value
–
Highly Confidential Draft; For Discussion Purposes Only – – $2 $4 $6 $8 $10 $12 $14 Nov-22 Feb-23 May-23 Aug-23 Nov-23
Hydro LTM Share Price Prior to the Unaffected Date Share Price Performance (as of November 17, 2023)(1) August 8, 2023 Hydro announced
Q2’23 earnings beating quarterly consensus estimates for revenue and Adj. EBITDA by +3% and +27%, respectively; stock traded
up +1% November 7, 2023 Hydro announced Q3’23 earnings beating quarterly consensus estimates for revenue and Adj. EBITDA
by +1% and +4%, respectively; stock traded up +1% Source: Company filings and FactSet as of February 14, 2024. Note: Percentages
in annotations reflect one-day impact to unaffected share price. Reflects closing prices for the period ending as of unaffected
date of November 17, 2023. (1) Reflects date of Gulf and Shore’s 13D filings after market close. $9.14 November 17, 2023
Schedule 13Ds filed after market close March 9, 2023 Hydro announced Q4’22 earnings beating quarterly consensus estimates
for revenue and Adj. EBITDA by +3% and +20% respectively; stock traded up +8% +10% $10.05 $13.14 High: (12/2/22) $8.75 Low: (9/12/23)
May 9, 2023 Hydro announced Q1’23 earnings beating consensus estimates for quarterly revenue by +2% and missing quarterly
estimates for Adj. EBITDA by (11%); stock traded down (5%)
–
Highly Confidential Draft; For Discussion Purposes Only – LRP Summary Source: LRP and Company filings. Note: Dollars in
millions. (1) Included in Indirect Expenses. Historical Projections '23E - '25E '25E - '30E 2021A 2022A 2023E 2024E 2025E 2026E
2027E 2028E 2029E 2030E CAGR CAGR Total Revenue $730 $807 $722 $785 $832 $874 $913 $950 $983 $1,013 +7.4% +4.0% YoY Growth 10.5%
(10.5%) 8.8% 6.0% 5.0% 4.5% 4.0% 3.5% 3.0% Data Costs & Other Direct (291) (319) (278) (315) (329) (341) (356) (370) (383)
(396) +8.7% +3.8% Direct Labor (116) (115) (94) (96) (101) (104) (108) (111) (112) (114) +3.6% +2.5% Other (0) (2) – –
– – – – – – Gross Profit $323 $371 $350 $373 $403 $429 $449 $469 $487 $503 +7.3% +4.5% % Margin
44.3% 46.0% 48.5% 47.6% 48.4% 49.1% 49.1% 49.3% 49.6% 49.7% Indirect Labor (98) (118) (118) (127) (128) (134) (140) (146) (153)
(159) +3.9% +4.5% Indirect Expenses (67) (81) (76) (80) (80) (82) (83) (85) (81) (82) +2.6% +0.5% Restructuring & O ne-time
Costs (23) (2) (24) (1) – – – – – – Depreciation & Amortization (78) (72) (75) (74) (75)
(75) (56) (32) (32) (32) Operating Income $57 $98 $56 $92 $120 $138 $169 $205 $221 $230 +46.0% +13.9% Plus: D&A 78 72 75 74
75 75 56 32 32 32 Plus: Amort. of Cap. Cloud-Based SW(1) – 3 7 8 7 7 7 7 1 – Plus: SBC & Other Adjustments 25
16 42 26 21 22 23 24 25 25 Adjusted EBITDA $160 $188 $180 $201 $222 $242 $254 $268 $278 $287 +11.1% +5.2% % Margin 21.9% 23.4%
25.0% 25.5% 26.7% 27.6% 27.8% 28.2% 28.3% 28.3% Tax-deductible D&A $15 $13 $19 $18 $27 $27 $32 $32 $26 $25 % of Revenue 2.1%
1.6% 2.6% 2.3% 3.2% 3.1% 3.5% 3.3% 2.6% 2.5% Capex $14 $17 $14 $23 $21 $22 $23 $24 $25 $25 % of Revenue 1.9% 2.1% 1.9% 3.0% 2.5%
2.5% 2.5% 2.5% 2.5% 2.5%
–
Highly Confidential Draft; For Discussion Purposes Only – Methodology Relevant Metrics Implied Share Price Range(1) 52-Week
Trading Range Low: 9/12/23 / High: 12/2/22 Analyst Price Targets Discounted Cash Flow Terminal Multiple 11.75% - 13.00% WACC;
7.0x - 9.0x NTM Adj. EBITDA Multiple Trading Multiples 2024E Adj. EBITDA 7.0x - 9.0x 2024E Adj. EBITDA of $201mm $10.00 $8.75
$10.85 $13.10 $15.00 $13.15 $16.55 $18.30 Hydro Valuation Analysis Source: LRP, Wall Street research, Company filings and FactSet
as of February 14, 2024. Note: Balance sheet as of December 31, 2023. Share count as of February 12, 2024. (1) Implied share price
ranges rounded to the nearest $0.05. (2) Implied share price includes the value from tax attributes of the TRA attributable to
common shareholders. (3) Reflects closing prices for the 52-week period ending as of unaffected date of November 17, 2023. (4)
As of unaffected date of November 17, 2023. (5) Reflects low value of $10.00 - $12.00 price target range. For Reference Only (4)
(3) 2/14 Proposal: $14.35 Low: High: (5) (2)
–
Highly Confidential Draft; For Discussion Purposes Only – Discounted Cash Flow Analysis Source: LRP. Note: Dollars in millions
except per share amounts. Assumes mid-period discounting convention. Valuation and balance sheet as of December 31, 2023. Equity
value per share excludes the present value of tax attributes. Share count as of February 12, 2024. (1) Unburdened by stock-based
compensation expense. (2) Reflects tax deductible D&A. (3) Statutory tax rate of 26% per Hydro management. (4) Represents
tax deductible D&A. Also includes $4.9mm of other non-cash adjustments in 2024E. Fiscal Year Ending December 31, Terminal
2024E 2025E 2026E 2027E 2028E 2029E 2030E Year Revenue $785 $832 $874 $913 $950 $983 $1,013 $1,043 % Growth 8.8% 6.0% 5.0% 4.5%
4.0% 3.5% 3.0% 3.0% Adj. EBITDA(1) $201 $222 $242 $254 $268 $278 $287 $296 % Growth 11.2% 10.9% 8.6% 5.3% 5.2% 4.0% 3.1% 3.0%
% Margin 25.5% 26.7% 27.6% 27.8% 28.2% 28.3% 28.3% 28.3% (Less): D&A(2) (18) (27) (27) (32) (32) (26) (25) (Less): SBC (25)
(21) (22) (23) (24) (25) (25) (Less): Restructuring Costs (1) – – – – – – Taxable Income $157
$175 $193 $200 $212 $228 $237 % Growth 24.2% 11.7% 10.3% 3.5% 6.2% 7.6% 3.7% % Margin 19.9% 21.0% 22.1% 21.9% 22.3% 23.2% 23.4%
(Less): Taxes(3) (41) (45) (50) (52) (55) (59) (62) After-tax Income $116 $129 $143 $148 $157 $169 $175 Plus: D&A(4) 23 27
27 32 32 26 25 (Less): Δ in NWC (10) (14) (5) (4) (3) (3) (3) (Less): Capex (23) (21) (22) (23) (24) (25) (25) Unlevered
Free Cash Flow $106 $121 $143 $153 $161 $167 $172 % Growth 2.1% 14.6% 18.0% 7.1% 5.5% 3.2% 3.4% Enterprise Value ($mm) Equity
Value Per Share Terminal NTM EBITDA Multiple Terminal NTM EBITDA Multiple 7.0x 8.0x 9.0x 7.0x 8.0x 9.0x 11.75% $1,637 $1,773 $1,909
$14.16 $16.09 $17.95 12.38% $1,588 $1,719 $1,849 $13.46 $15.32 $17.14 13.00% $1,541 $1,666 $1,792 $12.79 $14.58 $16.35 WACC

–
Highly Confidential Draft; For Discussion Purposes Only – Selected Peer Companies Enterprise Market Total Debt / Beta Name
Value ($mm) Cap ($mm) Debt Equity Levered (1) Unlevered (2) First Advantage $2,964 $2,566 $565 22% 1.32 1.12 Sterling Check 1,744
1,292 502 39% 1.31 1.00 Median 30% 1.31 1.06 Memo: Hydro (Unaff.)(3) $1,349 $705 $750 106% 1.28 0.72 Memo: Hydro (Curr.) $1,544
$900 $750 83% 1.29 0.80 WACC Analysis Source: LRP, Bloomberg, FactSet, Company filings and other market data as of February 14,
2024 and Duff and Phelps, YE 2023. (1) Represents two-year adjusted weekly average Beta. (2) Unlevered Beta equals (levered Beta
/ (1 + ((1 – tax rate) * debt / equity)). (3) Reflects figures as of unaffected date of November 17, 2023 and share count
as of February 12, 2024. Hydro balance sheet data as of December 31, 2023. (4) Statutory tax rate per LRP. (5) Represents United
States 20-year treasury bond yield. (6) Duff & Phelps, YE 2023. (7) Duff & Phelps, YE 2023. Based on size premium for
companies with $0.6bn - $3.0bn current market capitalization. (8) Based on latest available daily value of ICE BofA B US High
Yield Index effective yield as of February 13, 2024. (9) WACC equals ((debt / capitalization * (cost of debt * (1 – tax
rate))) + (equity / capitalization * levered cost of equity)). WACC Calculation Cost of Equity Unlevered Beta 0.975 Tax Rate(4)
26% Peer Mean Debt / Equity 30% Levered Beta 1.19 Risk Free Rate(5) 4.57% Market Risk Premium(6) 7.17% Size Premium(7) 1.24% Cost
of Equity 14.4% Cost of Debt Pre-tax Cost of Debt(8) 7.7% After-tax Cost of Debt 5.7% % Equity 77% % Debt 23% WACC(9) 12.4% WACC
Analysis Debt / Debt / Unlevered Beta Equity Total Cap. 0.90 0.975 1.05 20% 17% 12.0% 12.5% 13.0% 30% 23% 11.9% 12.4% 12.9% 40%
29% 11.8% 12.3% 12.8%
–
Highly Confidential Draft; For Discussion Purposes Only – FY'22A - 23E FY'23E - 25E FY'24E FY'24E FY'23E - 25E EV / Equity
Enterprise Revenue Revenue Gross Adj. EBITDA Adj. EBITDA FY'24E Company Value ($mn) Value ($mn) Growth CAGR Margin Margin CAGR
Adj. EBITDA $2,566 $2,964 (4.7%) 8.2% 51.0% 32.0% 11.2% 11.2x 1,292 1,744 (5.7%) 6.9% 48.1% 27.2% 12.0% 8.5x Peer Median (5.2%)
7.6% 49.6% 29.6% 11.6% 9.9x Memo: Hydro Cons.(1) 705 1,349 (10.0%) 7.4% 49.5% 25.1% 11.4% 7.1x Memo: LRP(1) 705 1,349 (10.5%)
7.4% 47.6% 25.5% 11.1% 6.7x Public Trading Metrics and Financial Outlook vs. Peers Source: LRP, Company filings and FactSet as
of February 14, 2024. Note: Adj. EBITDA unburdened by stock-based compensation expense. Hydro balance sheet data as of December
31, 2023. Peer balance sheet data as of September 30, 2023. (1) As of unaffected date of November 17, 2023.
–
Highly Confidential Draft; For Discussion Purposes Only – Appendix Supporting Materials
–
Highly Confidential Draft; For Discussion Purposes Only – Valuation of Hydro Tax Attributes Cash Flow Benefit of Tax Receivable
Agreement (TRA) Source: LRP, Hydro Management and Company filings. Note: Dollars in millions. Present value as of December 31,
2023. Assumes mid-period discounting convention. (1) 15% represents the TRA cash flow benefit retained by Hydro common shareholders.
(2) Based on fully diluted shares at midpoint of DCF value. Year Incurred >> 2022A 2023E 2024E 2025E 2026E 2027E 2028E 2028E+
Year of Payment >> 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2030E+ Total Benefit $32 $25 $27 $29 $20 $10 $19 $87 (x) 15%(1)
15% 15% 15% 15% 15% 15% 15% 15% Benefit to Common $5 $4 $4 $4 $3 $1 $3 $13 PV of Implied Value Discount Rate Tax Attr. Per Share
11.75% $5 $3 $3 $3 $2 $1 $1 $5 $23 $0.32 13.00% $5 $3 $3 $3 $2 $1 $1 $4 $22 $0.31 11.75% $26 $18 $17 $16 $10 $5 $8 $28 $128 13.00%
$26 $18 $17 $16 $10 $4 $7 $25 $123 TRA Cash Flow Payments Reference: PV of TRA Payments to Pre-IPO Shareholders Present Value
(PV) of TRA Payments to Common Shareholders (2)
–
Highly Confidential Draft; For Discussion Purposes Only – Illustrative Analysis At Various Prices Source: LRP, Company filings
and FactSet as of February 14, 2024. Note: Dollars in millions except per share amounts. Share count as of February 12, 2024.
(1) As of unaffected date of November 17, 2023. (2) Reflects volume-weighted average prices through unaffected date of November
17, 2023. (3) Reflects balance sheet as of December 31, 2023. (4) Unburdened by stock-based compensation expense. 12/8 Proposal
Unaffected Share Price(1) 1/31 Proposal 2/8 Proposal 2/13 Proposal Share Price $10.05 $12.75 $13.00 $14.10 $14.25 $14.35 % Premium
/ (Discount) to: Unaffected Price (11/17/23) $10.05 -- +27% +29% +40% +42% +43% 30-Day VWAP (2) $9.78 +3% +30% +33% +44% +46%
+47% 52-Week High (12/2/22) (1) $13.14 (24%) (3%) (1%) +7% +8% +9% 52-Week Low (9/12/23) (1) $8.75 +15% +46% +49% +61% +63% +64%
Fully Diluted Shares Outstanding 70.1 70.1 70.1 70.1 70.1 70.1 Implied Equity Value $705 $894 $911 $989 $999 $1,006 Plus: Debt
and NCI(3) 768 768 768 768 768 768 Less: Cash(3) (123) (123) (123) (123) (123) (123) Implied Enterprise Value $1,349 $1,538 $1,556
$1,633 $1,643 $1,650 Non-Bidder Shares 16.7 16.7 16.7 16.7 16.7 16.7 Non-Bidder Equity Value $168 $213 $217 $236 $238 $240 LRP
EV / Adj. EBITDA(4) 2023E $180 7.5x 8.5x 8.6x 9.1x 9.1x 9.2x 2024E $201 6.7x 7.7x 7.8x 8.1x 8.2x 8.2x Hydro Consensus (1) EV /
Adj. EBITDA(4) 2023E $175 7.7x 8.8x 8.9x 9.3x 9.4x 9.4x 2024E $191 7.1x 8.0x 8.1x 8.5x 8.6x 8.6x 2/14 Proposal
–
Highly Confidential Draft; For Discussion Purposes Only – PT Prem. / (Disc.) Broker Price Target (PT) to Unaff. Share Price
Valuation Methodology Hydro Unaffected Hydro Current Price +28% +49% n.a. +49% 10.5x FY'24E Adj. EPS (Base Case) +29% 8.0x FY'24E
EBITDA +19% ~9.0x FY'24E Adj, EPS +11% 6.25x NTM + 1 Year EBITDA +9% ~8.0x FY'24E EBITDA (Base Case) +9% n.a. +9% 6.7x FY'25E
EBITDA n.a. 6.0 - 6.5x FY'25E EBITDA (0%) ~11.8x FY'24E Adj. EPS - SBC n.a. 7.5x FY'24E EBITDA (Base Case) n.a. Valued on FY'24E
Adj. EPS Median +10% $10.05 $12.83 $15.00 $15.00 $13.00 $12.00 $11.20 $11.00 $11.00 $11.00 $10.00 - $12.00 $10.00 n.a. n.a. $11.10
Analyst Price Targets Prior to Unaffected Date Source: Wall Street research and FactSet as of February 14, 2024. (1) Rating as
of August 8, 2023. (2) Reflects 8.3x P/E multiple if using FY’24E Barclays Adj. EPS. (3) No price target provided. (4) Valuation
discussed on P/E basis. Buy Hold (3) (3,4) (1) (2)
13
– Highly Confidential Draft; For Discussion Purposes Only – Shares Under TSM (000s) Number of Unaffected Offer Type
Price Shares (000s) Price ($10.05) Price ($14.35) $15.97 2,589 – – $17.57 103 – – $18.05 192 – –
$23.00 13 – – Total 2018 Options 2,896 – – $7.61 22 5 11 $10.47 42 – 11 $13.18 17 – 1 $14.14
15 – 0 $16.41 102 – – $19.00 1,398 – – Total 2021 Options 1,597 5 23 TSR PRSUs(2) 1,009 –
– AEBITDA PRSUs 1,273 1,273 1,273 Company RSUs 1,472 1,472 1,472 Options + PRSUs + RSUs 8,247 2,751 2,769 2018 Company Options
2021 Company Options Capitalization Table Shares % Own. General Atlantic 32.1 48% Stone Point 18.5 27% Remaining Shares 16.7 25%
Total Basic Shares 67.4 100% Hydro Public Market Overview and Fully-Diluted Share Count Source: Hydro Management, Company Filings
and FactSet as of February 14, 2024. Note: Share count and capitalization table as of February 12, 2024. Balance sheet as of December
31, 2023. (1) Reflects dilution utilizing treasury stock method. (2) To be cancelled for no consideration in transaction. Public
Market Overview Unaffected Offer Price Share Price ($) $10.05 $14.35 Basic Shares Outstanding (mm) 67.4 67.4 (Plus): Options +
PRSUs + RSUs(1) 2.8 2.8 Diluted Shares Outstanding (mm) 70.1 70.1 Equity Value ($mm) $705 $1,006 (Less): Cash (123) (123) (Plus):
Debt 750 750 (Plus): NCI 18 18 Memo: Net Debt 627 627 Enterprise Value $1,349 $1,650
Exhibit
(d)(iv)
INTERIM
INVESTORS’ AGREEMENT
This
INTERIM INVESTORS’ AGREEMENT (this “Agreement”), dated as of February 15, 2024, is made and entered into
by and among (i) General Atlantic Partners (Bermuda) HRG II, L.P., a Bermuda limited partnership, General Atlantic (HRG) Collections,
L.P., a Delaware limited partnership, GAPCO AIV Interholdco (GS), L.P., a Delaware limited partnership, GA AIV-1 B Interholdco
(GS), L.P., a Delaware limited partnership and GA AIV-1 A Interholdco (GS), L.P., a Delaware limited partnership (collectively,
“General Atlantic”), (ii) Trident VII, L.P., a Cayman Islands exempted limited partnership, Trident VII Parallel
Fund, L.P., a Cayman Islands exempted limited partnership, Trident VII DE Parallel Fund, L.P., a Delaware limited partnership,
and Trident VII Professionals Fund, L.P., a Cayman Islands exempted limited partnership (collectively, “Trident”
and, together with General Atlantic, collectively, the “Sponsors,” and each individually, a “Sponsor”),
and (iii) Hearts Buyer Corporation, a Delaware corporation (“Topco”).
BACKGROUND
1. Topco
has formed Parent and Merger Sub, collectively referred to as the “Buyer Parties,” for the purpose of entering
into the Agreement and Plan of Merger, dated as of the date hereof (as amended, supplemented or modified from time to time in
accordance with the terms thereof and in compliance with this Agreement, the “Merger Agreement”), with HireRight
Holdings Corporation, a Delaware corporation (the “Company”), pursuant to which, upon the terms and subject
to the conditions set forth therein, Parent will acquire the Company by causing Merger Sub to merge with and into the Company
(“Merger”), with the Company surviving as a wholly owned subsidiary of Parent. Capitalized terms used but not
defined herein shall have the meanings given to them in the Merger Agreement.
2. On
or prior to the date hereof, each Sponsor has executed and delivered a Support Agreement, pursuant to which, among other things,
each Sponsor has agreed to, subject to the terms and conditions set forth therein, contribute, directly or indirectly, all of
the shares of Company Common Stock held by it to Topco in exchange for interests in Topco, in each case, as specified in such
Support Agreements (each, a “Support Agreement,” references to which include such agreements as amended, supplemented
or modified from time to time in accordance with the terms thereof and this Agreement).
3. On
or prior to the date hereof, each Sponsor has executed and delivered to the Company a limited guarantee in which it has agreed,
on the terms and subject to the conditions and limitations set forth therein, to guarantee a portion of the Parent Termination
Fee and certain related expenses under the Merger Agreement (each, a “Limited Guarantee,” references to which
include such guarantees as amended, supplemented or modified from time to time in accordance with the terms thereof and this Agreement).
4. This
Agreement governs the relations of the parties hereto pending the Closing, including in respect of the Merger Agreement, the Limited
Guarantees, the Support Agreements and the transactions contemplated thereby and, in the case of any inconsistency between this
Agreement, on the one hand, and the Merger Agreement, the Limited Guarantees or the Support Agreements on the other hand, the
parties intend for this Agreement to control solely as among the parties hereto.
Article
I
ROLLOVER COMMITMENTS; CONTRIBUTION
1.1 Rollover Commitments; Support Agreements. Each of General Atlantic and Trident
has entered into a Support Agreement, which
Support Agreements are attached hereto as Exhibits A-1 and A-2, respectively. The
rights and obligations of General Atlantic and Trident under their respective Support Agreements may not be transferred or assigned
except in accordance with this Agreement and the applicable Support Agreement. The following matters shall be subject to
the mutual written consent of General Atlantic and Trident: (i) any agreement by Parent, General Atlantic or Trident to amend,
modify or waive the Support Agreements or any obligations thereunder and (ii) any assignment or consent to assignment by General
Atlantic or Trident under the Support Agreements (unless such assignee becomes party to this Agreement and accedes to the rights
and obligations of General Atlantic or Trident hereunder and thereunder, as applicable). Each of General Atlantic and Trident
hereby affirms and agrees that (A) it will comply with, and is bound by, the provisions set forth in the Support Agreements, (B)
will fulfil its respective obligations under the Support Agreements, including consummate the Exchange (as defined therein), subject
to the conditions and limitations therein and (C) Parent shall be entitled to enforce the provisions of each Support Agreement
in accordance with this Agreement and the terms of such Support Agreement, but, with respect to consummating the Exchange, only
(1) acting at the direction of General Atlantic and Trident, if General Atlantic and Trident have jointly determined that all
of the conditions to Parent’s obligations to effect the Closing set forth in Article VII of the Merger Agreement
have been satisfied and any other conditions to consummating the Exchange set forth in the
applicable Support Agreement have been satisfied (or, in either case, are capable of being satisfied at the Closing) (which determination
shall be final and binding), or (2) acting at the direction of General Atlantic and Trident, if General Atlantic and Trident have
jointly determined to waive all unsatisfied conditions under the Merger Agreement and the applicable Support Agreement, and that
the Closing is required to occur pursuant to Section 2.3 of the Merger Agreement. None of the Sponsors, Parent, Topco or
Merger Sub shall attempt to enforce any Support Agreement until the conditions set forth in Section 1.1(C) have been satisfied.
Parent shall not have any right to enforce any Support Agreement unless (x) acting at the direction of General Atlantic and Trident
and (y) such enforcement is pro rata as between General Atlantic and Trident (e.g., if Parent enforces 50% of General Atlantic’s
aggregate commitment in respect of the Exchange, then Parent shall enforce 50% of Trident’s aggregate commitment in respect
of the Exchange).
1.2 Limited
Guarantees. Each of General Atlantic and Trident has entered into a Limited Guarantee, which Limited Guarantees are attached
hereto as Exhibits B-1 and B-2, respectively. The rights and obligations of
General Atlantic and Trident under their respective Limited Guarantees may not be transferred or assigned except in accordance
with this Agreement and the applicable Limited Guarantee. The following matters shall be subject to the mutual written consent
of General Atlantic and Trident: (i) any agreement by Parent, General Atlantic or Trident to amend, modify or waive the Limited
Guarantees or any obligations thereunder and (ii) any assignment or consent to assignment by General Atlantic or Trident under
the Limited Guarantees (unless such assignee becomes party to this Agreement and accedes to the rights and obligations of General
Atlantic or Trident hereunder and thereunder, as applicable). Each of General Atlantic and Trident hereby affirms and agrees that
it will comply with, and is bound by, the provisions set forth in the Limited Guarantees and will fulfil its respective obligations
under the Limited Guarantees, subject to the conditions and limitations therein.
1.3 Contribution with Respect to Limited Guarantees. Each of General Atlantic and Trident
shall cooperate in defending any claim that General Atlantic and Trident are or any one of them is liable to make payments under
the Limited Guarantees. Each of General Atlantic and Trident agrees to contribute to the amount paid or payable by the other in
respect of the Limited Guarantees so that each of General Atlantic and Trident will have paid an amount equal to the product of
the aggregate amount paid under all of the Limited Guarantees multiplied by such Sponsor’s Pro Rata Percentage of the aggregate
amounts payable under the Limited Guarantees, it being understood that no Sponsor shall be obligated to pay, in the aggregate,
an amount pursuant to its Limited Guarantee and this Section 1.3 that, in the aggregate, exceeds the applicable maximum
amount it is obligated to pay pursuant to its Limited Guarantee. In this Agreement, “Pro Rata Percentage”
refers to, (a) in the case of General Atlantic, 63.5% and (b) in the case of Trident, 36.5%.
Article
II
EQUITY INTERESTS
2.1 Equity
Interests Pending the Closing. Topco represents and warrants that, as of the date hereof,
Merger Sub has issued 100 shares of its common stock to Parent, and such shares are, and will remain through the Closing, the
only shares of capital stock of Merger Sub that are issued or issuable without the written consent of the Sponsors. Topco represents
and warrants that Parent is indirectly wholly owned by Topco and further covenants that no additional equity interests or capital
stock of Parent (or Topco or any direct or indirect subsidiary of Topco that directly or indirectly owns any equity interests
or capital stock of Parent) shall be issued or issuable prior to the Closing without the written consent of the Sponsors.
Topco represents and warrants that each of Topco, any direct or indirect subsidiary of Topco
that directly or indirectly owns any equity interests or capital stock of Parent, Parent and Merger Sub (i) is a newly
formed entity, (ii) has conducted no operations and, prior to the Closing, shall not conduct any operations and (iii) has no,
and prior to the Closing shall not have any, assets, obligations or liabilities of any nature, in each case of clause (ii) and
(iii), other than those incident to their respective formation and in connection with the Merger Agreement, this Agreement and
the transactions contemplated hereby and thereby. Prior to the Closing, neither General Atlantic nor Trident shall, without the
prior written consent of the other Sponsor, sell, dispose or otherwise transfer any
equity interests or capital stock of Topco or Parent. Prior to the Closing, Topco shall not, without the prior written
consent of each Sponsor, sell, dispose or otherwise transfer, directly or indirectly any equity interests of Parent, and
Parent shall not, without the prior written consent of each of Sponsor, sell, dispose
or otherwise transfer any shares of common stock of Merger Sub. Prior to the Closing, Topco shall not, without the prior written
consent of each Sponsor, declare, set aside, make or pay any dividend or distribution, payable in cash, stock, property
or otherwise, or make any other payment on or with respect to any of the equity interests of Topco.
2.2 Equity Interests Issued at Closing. All equity securities issued by Topco
shall, in connection with the Exchange and the
Closing, be issued to the Sponsors in accordance with their respective Pro Rata Percentages; provided that each Sponsor
may adjust the allocations among itself and its affiliated, sponsored or managed investment funds, vehicles and accounts, and
any holding companies or similar vehicles for such funds, vehicles and accounts, and in its sole discretion. The equity securities
to be issued by Parent to General Atlantic and Trident in connection with the Exchange and the Closing shall be subscribed for
by General Atlantic and Trident, respectively, pursuant to the applicable Support Agreement and a contribution and subscription
agreement in customary form for a transaction of this nature, in each case, as mutually acceptable to General Atlantic and Trident
and which will not contain any representations or warranties other than customary fundamental representations and warranties.
2.3 Tax Classification. Topco shall elect
to be treated as a corporation for U.S. federal,
and applicable state and local, income tax purposes, effective as of the date of its formation, and each of the Sponsors shall
take such actions (including executing any documents or forms) as may be reasonably required in order to secure such treatment.
The Sponsors agree that no additional investment or follow-on investment in respect of the Company shall be made other than through
Topco without the consent of both Sponsors.
Article
III
INTERIM GOVERNANCE; OTHER AGREEMENTS AMONG THE SPONSORS
3.1 Actions Under the Merger Agreement. General Atlantic and Trident acting
jointly shall have the right to cause the Buyer
Parties to take any action or refrain from taking any action in order for the Buyer Parties to comply with their respective obligations,
satisfy their respective closing conditions or exercise their respective rights under the Merger Agreement, including (a) determining
that the conditions to Closing set forth in Article VII of the Merger Agreement have been satisfied (which determination
shall be final and binding) and, assuming such satisfaction, determining to close the Merger, (b) waiving compliance with any
covenants, agreements or the conditions to Closing contained in the Merger Agreement, (c) amending, supplementing or modifying,
or waiving any provision of, the Merger Agreement or any other agreement entered into in connection therewith, including the Debt
Commitment Letters or any other agreement with a Debt Financing Source in any manner, (d) terminating the Merger Agreement or
(e) subject to Section 3.6, settling any stockholder-related suit or any other claim or proceeding arising in connection
with the transactions contemplated by the Merger Agreement. Notwithstanding anything to the contrary contained herein, the Sponsors
shall each use reasonable best efforts to jointly cause the Buyer Parties to comply with their obligations under the Merger Agreement
and consummate the Closing in accordance with the Merger Agreement unless both Sponsors determine otherwise.
3.2 Debt
Financing. Each of the Sponsors (and its Affiliates) and Topco and its Subsidiaries shall use their respective reasonable
best efforts to assist the Buyer Parties in connection with their obligations under Section 6.6 of the Merger Agreement.
3.3 Expense Sharing.
3.3.1
In the event the Closing occurs, Topco, Parent and/or Merger Sub (through the Surviving Corporation) will bear all out-of-pocket
expenses of the Sponsors and their Affiliates that relate to the transactions contemplated by the Merger Agreement and this Agreement,
including, without limitation, the reasonable fees, expense and disbursements of counsel, accountants, consultants and other advisors
retained by the Sponsors, but excluding, in each case, any payments in respect of the Obligations (as defined in any Limited Guarantee)
(“Sponsor Transaction Expenses”).
3.3.2
In the event of a termination of the Merger Agreement in which any amount, either as payment of the Company Termination Fee or
an expense reimbursement, damages or otherwise, is paid to Topco, Parent or Merger Sub by the Company or its Subsidiaries or Affiliates,
Topco shall first pay all Sponsor Transaction Expenses and discharge all of Topco’s, Parent’s and Merger Sub’s
other liabilities, from such expense reimbursement or damages and pay any remaining amount of such payment to the Sponsors in
accordance with their respective Pro Rata Percentages.
3.3.3
In the event of a termination in which no amount, either as expense reimbursement, damages or otherwise, is paid to Topco, Parent
or Merger Sub, or in the event that the amount paid is insufficient to pay all applicable Sponsor Transaction Expenses, each Sponsor
agrees that it will be responsible for its Pro Rata Percentage of Sponsor Transaction Expenses in excess of any such amount so
paid to Topco, Parent or Merger Sub. Each Sponsor will also be responsible for its Pro Rata Percentage of any liability that any
Sponsor incurs pursuant to customary indemnities and contribution obligations that it has agreed to provide to its respective
counsel, accountants, consultants or other advisors (including, without limitation, Debt Financing Sources, consultants and accountants)
who have been engaged with respect to the Merger and related transactions. The obligations under this Section 3.3 shall
exist whether or not the Merger is consummated and shall survive any termination of any other provisions of this Agreement; provided,
that such fees and expenses are not paid by the Surviving Corporation, Topco, Parent or Merger Sub.
3.4
Regulatory Matters. Each Sponsor (and its Affiliates) and Topco and its Subsidiaries shall (i) furnish all information
and documents required for any filing, form, declaration, notification, registration and notice with respect to the HSR Act applicable
to the Merger and related transactions, and (ii) respond at the earliest practicable date to any requests for additional information
made by any Governmental Authority, and act in good faith and reasonably cooperate in connection with any investigation by any
Governmental Authority. Each Sponsor shall, if not prohibited by law or regulation, give
the other Sponsor the reasonable opportunity to review and comment on any documents, written communications and filings that include
such Sponsor as a filing party before transmitting to any Governmental Authority, and shall consider in good faith any comments
or suggestions proposed by such Sponsor. Notwithstanding anything to the contrary in this Agreement, no Sponsor (or its
Affiliates) or Topco or any of its Subsidiaries shall, whether prior to or following the Closing, be required to cause any portfolio
company, investment fund, vehicle or account, and any holding companies or similar vehicles for such fund, vehicle or account,
or other Affiliate of any Sponsor or Topco or any director, officer, employee, general partner, limited partner, member, stockholder
or manager of any of the foregoing (in each case, other than the Buyer Parties as required pursuant to Section 6.2 of the Merger
Agreement) to take any action, undertake any divestiture or restrict its conduct, other than to provide responsive information
required to make any submission or application to a Governmental Authority and to otherwise cooperate in connection with any such
submission or application as is necessary and customary under the circumstances; provided, that Topco shall be required
to take, or cause its Subsidiaries to take, any such actions to the extent requested by General Atlantic and Trident, and conditioned
on the occurrence of the Closing. Without limiting the foregoing, each Sponsor and Topco agrees to comply with and perform (and
cause its applicable Subsidiaries and Affiliates to comply with and perform) those agreements under Section 6.2 of the Merger
Agreement that are applicable to the Sponsors and/or their applicable Subsidiaries or Affiliates.
3.5
Certain Representations and Warranties.
3.5.1
Each Sponsor hereby represents and warrants to the other Sponsors that (i) it owns the number of shares of Company Common Stock
set forth opposite its name on Exhibit D hereto; (ii) it has not entered into any formal or informal agreement, arrangement
or understanding with any other potential investor or group of investors, the Company or any Company Stockholders with respect
to the subject matter of this Agreement or the Merger Agreement, other than the agreements expressly contemplated by this Agreement,
the Merger Agreement and the Debt Commitment Letters; (iii) it is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified to conduct business, and is in good standing, in each other
jurisdiction where the ownership of its properties or the conduct of its business makes such qualification necessary; (iv) it
has all necessary power and authority to execute, deliver and perform its obligations under this Agreement in accordance with
the terms of this Agreement; (v) the execution, delivery and performance of this Agreement have been duly authorized by all necessary
action and do not contravene any provision of its partnership agreement or other organizational documents or any law, regulation,
rule, decree, order, judgment or contractual restriction binding on such Sponsor or its assets; (vi) except for any consents,
approvals, authorizations, permits of, filings with and notifications to, any Governmental Authority contemplated by the Merger
Agreement, all consents, approvals, authorizations, permits of, filings with and notifications to, any Governmental Authority
necessary for the due execution, delivery and performance of this Agreement by such Sponsor have been obtained or made and all
conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any Governmental Authority
is required in connection with the execution, delivery or performance of this Agreement; and (vii) this Agreement constitutes
a legal, valid and binding obligation of such Sponsor enforceable against such Sponsor in accordance with its terms, subject to
Enforceability Limitations. No Sponsor, any of its Affiliates, Topco, any of its Subsidiaries or any of their respective officers,
employees, agents or representatives makes or has made any express or implied representation or warranty on behalf of such Sponsor
or any of its Affiliates in connection with the transactions contemplated hereby other than those expressly set forth in this
Section 3.5 and no Sponsor, any of its Affiliates, Topco, any of its Subsidiaries or any of their respective officers,
employees, agents or representatives has relied on any express or implied representation or warranty in connection with the transactions
contemplated hereby other than those expressly set forth in this Section 3.5.
3.5.2
Topco hereby represents and warrants to the Sponsors that (i) the equity securities of Topco to be issued to the Sponsors pursuant
to the Exchange shall be duly and validly authorized and issued, fully paid and nonassessable (if applicable), and free and clear
of all liens, other than restrictions arising under applicable securities laws or the organizational documents of Topco, and good
and valid title to such equity securities of Topco shall pass to the Sponsors upon the consummation of the Exchange; (ii) it is
duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified
to conduct business, and is in good standing, in each other jurisdiction where the ownership of its properties or the conduct
of its business makes such qualification necessary; (iii) it has all necessary power and authority to execute, deliver and perform
its obligations under this Agreement in accordance with the terms of this Agreement; (iv) the execution, delivery and performance
of this Agreement have been duly authorized by all necessary action and do not contravene any provision of its organizational
documents or any law, regulation, rule, decree, order, judgment or contractual restriction binding on Topco or its assets; (v)
except for any consents, approvals, authorizations, permits of, filings with and notifications to, any Governmental Authority
contemplated by the Merger Agreement, all consents, approvals, authorizations, permits of, filings with and notifications to,
any Governmental Authority necessary for the due execution, delivery and performance of this Agreement by Topco have been obtained
or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any
Governmental Authority is required in connection with the execution, delivery or performance of this Agreement; and (vi) this
Agreement constitutes a legal, valid and binding obligation of Topco enforceable against Topco in accordance with its terms, subject
to Enforceability Limitations.
3.6
Conduct of Litigation. In the event that the Buyer Parties become subject to an action, suit or proceeding pursuant to
the Merger Agreement that (a) involves an allegation of a breach by Buyer Parties of an obligation under the Merger Agreement
or (b) involves a factual allegation that, if true, would constitute a breach by a Sponsor of an obligation under this Agreement
or its Limited Guarantee (with respect to such Sponsor, a “Related Claim”), then Topco shall deliver notice
of such Related Claim to such Sponsor reasonably promptly after becoming aware of such Related Claim; provided that the
failure of Topco to give reasonably prompt notice of any Related Claim shall not release, waive or otherwise affect the Sponsor’s
obligations with respect thereto except to the extent that the Sponsor is actually and materially prejudiced as a result of such
failure. Such Sponsor shall have the right (but not the obligation), within 30 days after receipt of notice of such Related Claim,
to elect to (i) in the case of a Related Claim primarily or exclusively related to such Sponsor, jointly with Topco control the
defense of such Related Claim and (ii) in the case of any other Related Claim, participate in the defense of such Related Claim
with Topco and any other Sponsor in respect of which such claim is a Related Claim, it being understood that with respect to any
Related Claim, such Sponsor may employ counsel (which shall be reasonably satisfactory to Topco), at its own expense, separate
from the counsel employed by Topco. If such Sponsor exercises its right pursuant to the preceding sentence to control or participate
in such Related Claim, then the Sponsors shall reasonably cooperate with such Sponsor in the defense thereof (and in any event
each Sponsor shall reasonably cooperate with Topco in the defense of such Related Claim); provided, however, that no Sponsor shall
be required to commence or participate in any legal action in connection therewith. Such Sponsor will not admit any liability
with respect to, or settle, compromise or discharge, any such Related Claim without Topco’s prior written consent (which
consent shall not be unreasonably withheld, conditioned or delayed). Whether or not such Sponsor assumes the defense of a Related
Claim, Topco shall not, and cause the Buyer Parties not to, admit any liability with respect to, or settle, compromise or discharge,
such Related Claim without such Sponsors’ prior written consent (which consent shall not be unreasonably withheld, conditioned
or delayed).
Article
IV
CLOSING ARRANGEMENTS
4.1
Organizational Documents; Investor Rights Agreement. Each Sponsor agrees to negotiate in good faith with the other Sponsor
to, prior to the consummation of the Merger, enter into one or more definitive agreements with respect to the matters set forth
on Exhibit C hereto (the “Investor Rights Agreement”). The Investor Rights Agreement and such organizational
and other relevant corporate documents will be consistent with all of the terms and conditions set forth on Exhibit C and
any inconsistent terms and conditions must be approved by each Sponsor. The parties hereto will cooperate with one another to
enter into, and will negotiate in good faith concerning the form and substance of, the Investor Rights Agreement. The parties
hereto will cooperate with one another to implement a new equity incentive plan at Topco or a Subsidiary thereof on terms approved
by each of the Sponsors. If (and only if) for any reason Topco and the Sponsors have not entered into the Investor Rights Agreement
at or prior to the Closing, (i) the terms set forth on Exhibit C shall be binding on Topco and the Sponsors from and after the
Closing until such time as the Investor Rights Agreement shall be in effect and (ii) Topco and the Sponsors shall (1) operate
Topco and its Subsidiaries (including the Surviving Corporation) in accordance with the terms set forth on Exhibit C, to the extent
applicable, until such time as the Investor Rights Agreement shall be in effect, (2) continue to negotiate in good faith with
each other to enter into the Investor Rights Agreement as soon as reasonably practicable following the Closing and (3) take (or
cause to be taken) all actions required to be taken such that the board of managers or similar governing body of Topco has the
composition contemplated by Exhibit C immediately following the Closing. Upon the execution and delivery of the Investor Rights
Agreement by Topco and any Sponsor, this Section 4.1 shall cease to have any force or effect with respect to Topco and
such Sponsor.
Article
V
MISCELLANEOUS
5.1
Amendment and Waiver. Any provision of this Agreement may be amended or waived only in a writing signed (a) in the case
of any amendment, by each Sponsor and (b) in the case of a waiver, by the party or parties waiving rights hereunder. No waiver
of any provision hereunder or any breach or default thereof shall extend to or affect in any way any other provision or prior
or subsequent breach or default.
5.2
Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective
and valid under applicable law. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability
of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid or unenforceable, the parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce the scope, duration or area of the term or provision,
to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that
is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision,
and this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed.
5.3
Remedies. The parties hereto agree that, except as provided herein, this Agreement (including all covenants and agreements
herein) will be enforceable by all parties hereto by all available remedies at law or in equity (including, without limitation,
specific performance, without bond or other security being required).
5.4
No Recourse. Notwithstanding any provision of this Agreement or otherwise, the parties to this Agreement agree on their
own behalf and on behalf of their respective Affiliates that this Agreement may only be enforced against, and any litigation for
breach of this Agreement may only be made against, the Persons specifically identified as the parties to this Agreement, and,
with respect to each party to this Agreement, none of such party’s former, current or future equity holders, controlling
persons, directors, officers, employees, agents, representatives, Affiliates, members, managers, general or limited partners,
attorneys or assignees (or any former, current or future equity holder, controlling person, director, officer, employee, agent,
representative, Affiliate, member, manager, general or limited partner, attorney or assignee of any of the foregoing) (each, a
“Non-Recourse Party”) that is not a party to this Agreement shall have any liability relating to this Agreement
or any of the transactions contemplated herein (except under the Limited Guarantees and the Support Agreements (in each case,
subject to the terms and conditions thereof and solely to the extent provided therein)) or in respect of any oral representations
made or alleged to be made in connection herewith. None of the parties shall have any rights of recovery in respect hereof against
any Non-Recourse Party and no personal liability shall attach to any Non-Recourse Party through any party hereto, or otherwise,
whether by or through attempted piercing of the corporate veil, by or through a litigation (whether in tort, contract or otherwise),
by the enforcement of any judgment, fine or penalty or by virtue of any law, or otherwise.
5.5
Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION
AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS, TO THE
EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD PERMIT OR REQUIRE THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION. Each party hereby irrevocably submits to the jurisdiction of the Court of Chancery of the State of Delaware
and the federal courts of the United States of America located in the State of Delaware solely in respect of the interpretation
and enforcement of the provisions of this Agreement and in respect of the transactions contemplated hereby. Each party irrevocably
agrees that all claims in respect of the interpretation and enforcement of the provisions of this Agreement and in respect of
the transactions contemplated hereby, or with respect to any such action, suit or proceeding, shall be heard and determined in
such Court of Chancery of the State of Delaware or Delaware federal court, and that such jurisdiction of such courts with respect
thereto shall be exclusive, except solely to the extent that all such courts shall lawfully decline to exercise such jurisdiction.
Each party hereby waives, and agrees not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement
hereof or in respect of any such transaction, that it is not subject to such jurisdiction. Each party hereby waives, and agrees
not to assert, to the maximum extent permitted by law, as a defense in any action, suit or proceeding for the interpretation or
enforcement hereof or in respect of any such transaction, that such action, suit or proceeding may not be brought or is not maintainable
in such courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by such courts.
The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter
of any such dispute and agree that mailing of process or other papers in connection with any such action, suit or proceeding in
the manner provided in Section 5.15 or in such other manner as may be permitted by law, shall be valid and sufficient service
thereof.
5.6
Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
5.7
Exercise of Rights and Remedies. No delay of or omission in the exercise of any right, power or remedy accruing to any
party as a result of any breach or default by any other party under this Agreement shall impair any such right, power or remedy,
nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring
later; nor shall any such delay, omission or waiver of any single breach or default be deemed a waiver of any other breach or
default occurring before or after that waiver.
5.8
Other Agreements; Assignment. This Agreement, together with the agreements referenced herein, constitutes the entire agreement,
and supersedes all prior agreements, understandings, negotiations and statements, both written and oral, among the parties or
any of their Affiliates with respect to the transactions contemplated hereby (other than the Merger Agreement and the other agreements
expressly referred to herein or therein as being entered into in connection with the Merger Agreement). This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of each of the parties hereto and each of their respective
successors and permitted assigns. Other than as provided herein, this Agreement shall not be assigned without the prior consent
of the parties hereto.
5.9
Non-Circumvention. Each party hereto agrees that it shall not indirectly accomplish that which it is not permitted to accomplish
directly under this Agreement.
5.10
No Third-Party Beneficiaries. This Agreement shall be binding on each party hereto solely for the benefit of each other
party hereto and nothing set forth in this Agreement, express or implied, shall be construed to confer, directly or indirectly,
upon or give to any Person other than the parties hereto any benefits, rights or remedies under or by reason of, or any rights
to enforce or cause the parties hereto to enforce, any provisions of this Agreement, except the Non-Recourse Parties shall have
the right to enforce their rights under Section 5.4.
5.11
Press Release; Communications. Any notices, releases, statements or communications to the general public or the press relating
to this Agreement shall be made only at such times and in such manner as may be agreed by each of the Sponsors; provided,
that the parties hereto shall be entitled to issue such press releases and to make such public statements as are required by applicable
law or stock exchange rule, in which case the Sponsors shall be advised thereof and afforded a reasonable opportunity to review
and comment (unless prohibited by law or regulation), and the parties shall use their reasonable efforts to cause a mutually agreeable
release or announcement to be issued. Once information has been made available to the general public in accordance with this Agreement
or the Merger Agreement, this Section 5.11 shall no longer apply to such information.
5.12
Counterparts. This Agreement may be executed in any number of counterparts (including by electronic transmission in “portable
document format”), each such counterpart when executed shall be deemed to be an original instrument, and all such counterparts
shall together constitute one and the same agreement.
5.13
Interpretation. The descriptive headings used herein are inserted for convenience of reference only and are not intended
to be part of or to affect the meaning or interpretation of this Agreement. As used in this Agreement, (a) the words “include”
and “including,” and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed
to be followed by the words “without limitation”, (b) the phrase “to the extent” means the degree by which
(rather than if), (c) the word “or” is not exclusive and (d) unless the context otherwise clearly indicates, each
defined term used in this Agreement shall have a comparable meaning when used in its plural or in its singular form. In the event
an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the Sponsors, and no presumption
or burden of proof shall arise, or rule of strict construction applied, favoring or disfavoring any Sponsor by virtue of the authorship
of any of the provisions of this Agreement. The parties agree that email transmission of an affirmative statement of consent to
a request to take an action, or to omit to act, shall suffice as “written” consent required hereunder.
5.14
Termination. Except with respect to Sections 3.3 (Expense Sharing), 3.5 (Certain Representations
and Warranties) and Article V, this Agreement will terminate automatically without any further action of any Person
upon the earlier to occur of (a) the Closing and (b) the valid termination of the Limited Guarantee in accordance with its terms;
provided, that any liability for any failure to comply with the terms of this Agreement prior to termination shall survive
such termination. Any provision that, in accordance with the immediately foregoing sentence, shall survive in accordance with
its terms shall survive for the term specified therein or, if no term is specified, until such time as all obligations thereunder
required to be performed on or after the date of termination have been fully performed.
5.15
Notices. Any notices or correspondence received by Topco, Parent or Merger Sub under, in connection with, or related to
this Agreement or the Merger Agreement shall be promptly provided to each Sponsor in the manner provided for in Section 9.2 of
the Merger Agreement at the address set forth below for each Sponsor or any other address designated by any Sponsor in writing
to Parent and each Sponsor.
If
to General Atlantic to:
General
Atlantic Service Company, L.P.
55 East 52nd Street, 33rd Floor
New York, NY 10055
Attn: Gordon Cruess
Email: gcruess@generalatlantic.com
with
a copy to (which shall not constitute notice) to:
Paul,
Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Attn: Matthew Abbott
Cullen Sinclair
Facsimile No.: (212) 757-3900
Email: mabbott@paulweiss.com
csinclair@paulweiss.com
If
to Trident:
c/o Stone Point Capital LLC
20 Horseneck Lane
Greenwich, CT 06830
Attn: Stephen Levey
Email: slevey@stonepoint.com
with
a copy (which will not constitute notice) to:
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
Attn: Elizabeth Cooper
Mark Viera
Email: ecooper@stblaw.com
mark.viera@stblaw.com
5.16
Confidentiality. The provisions of Section 7 (Confidential Information) of the Company Stockholders Agreement shall
apply mutatis mutandis to this Agreement as if such provisions were fully set forth herein.
[Signature
pages follow]
IN
WITNESS WHEREOF, each of the undersigned has duly executed this Agreement (or caused this Agreement to be executed on its behalf
by its officer or representative thereunto duly authorized) as of the date first above written.
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Hearts Buyer Corporation |
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By: |
/s/ Rene Kern |
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Name: Rene Kern |
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Title: President |
[Signature
Page to Interim Investors Agreement]
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GENERAL ATLANTIC PARTNERS (BERMUDA) HRG II, L.P. |
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By: General Atlantic (SPV) (Bermuda) GP, |
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LLC, its general partner |
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By: |
/s/ Kelly Pettit |
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Name: Kelly Pettit |
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Title: Managing Director |
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Address: |
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c/o General Atlantic Service Company, L.P., |
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55 East 52nd Street, 33rd Floor New York, New York 10055 |
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GENERAL ATLANTIC (HRG) COLLECTIONS, L.P. |
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By: General Atlantic (SPV) GP, LLC, its general partner |
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By: |
/s/ Kelly Pettit |
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Name: Kelly Pettit |
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Title: Managing Director |
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Address: |
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c/o General Atlantic Service Company, L.P., |
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55 East 52nd Street, 33rd Floor New York, New York 10055 |
[Signature
Page to Interim Investors Agreement]
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GAPCO AIV INTERHOLDCO (GS), L.P. |
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By: General Atlantic (SPV) GP, LLC, its general partner |
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By: |
/s/ Kelly Pettit |
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Name: Kelly Pettit |
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Title: Managing Director |
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Address: |
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c/o General Atlantic Service Company, L.P., |
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55 East 52nd Street, 33rd Floor New York, New York 10055 |
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GA AIV-1 B INTERHOLDCO (GS), L.P. |
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By: General Atlantic (SPV) GP, LLC, its general partner |
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By: |
/s/ Kelly Pettit |
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Name: Kelly Pettit |
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Title: Managing Director |
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Address: |
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c/o General Atlantic Service Company, L.P., |
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55 East 52nd Street, 33rd Floor New York, New York 10055 |
[Signature
Page to Interim Investors Agreement]
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GA AIV-1 A INTERHOLDCO (GS), L.P. |
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By: General Atlantic (SPV) GP, LLC, its general partner |
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By: |
/s/ Kelly Pettit |
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Name: Kelly Pettit |
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Title: Managing Director |
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Address: |
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c/o General Atlantic Service Company, L.P., |
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55 East 52nd Street, 33rd Floor New York, New York 10055 |
[Signature
Page to Interim Investors Agreement]
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TRIDENT VII, L.P. |
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By: Trident Capital VII, L.P., its general partner |
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By: DW Trident GP, LLC, a general partner |
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By: |
/s/ Stephen Levey |
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Name: Stephen Levey |
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Title: Vice President |
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Address: |
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c/o Stone Point Capital LLC |
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20 Horseneck Lane, Greenwich, Connecticut 06830 |
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Attention: Stephen Levey |
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Email: slevey@stonepoint.com |
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TRIDENT VII PARALLEL FUND, L.P. |
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By: Trident Capital VII, L.P., its general partner |
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By: DW Trident GP, LLC, a general partner |
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By: |
/s/ Stephen Levey |
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Name: Stephen Levey |
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Title: Vice President |
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Address: |
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c/o Stone Point Capital LLC |
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20 Horseneck Lane, Greenwich, Connecticut 06830 |
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Attention: Stephen Levey |
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Email: slevey@stonepoint.com |
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TRIDENT VII DE PARALLEL FUND, L.P. |
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By: Trident Capital VII, L.P., its general partner |
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By: DW Trident GP, LLC, a general partner |
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By: |
/s/ Stephen Levey |
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Name: Stephen Levey |
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Title: Vice President |
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Address: |
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c/o Stone Point Capital LLC |
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20 Horseneck Lane, Greenwich, Connecticut 06830 |
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Attention: Stephen Levey |
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Email: slevey@stonepoint.com |
[Signature Page
to Interim Investors Agreement]
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TRIDENT VII PROFESSIONALS FUND, L.P. |
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By: Stone Point GP Ltd., its general partner |
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By: |
/s/ Stephen Levey |
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Name: Stephen Levey |
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Title: Vice President |
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Address: |
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c/o Stone Point Capital LLC |
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20 Horseneck Lane, Greenwich, Connecticut 06830 |
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Attention: Stephen Levey |
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Email: slevey@stonepoint.com |
[Signature
Page to Interim Investors Agreement]
Exhibit
a-1
Support
Agreement – General Atlantic
Exhibit
a-2
Support
Agreement – Stone Point
Exhibit
B-1
Limited
Guarantee – General Atlantic
Exhibit
B-2
Limited
Guarantee – Stone Point
Exhibit
C
Investor
Rights Agreement TERM SHEET
Exhibit
D
COMPANY
COMMON STOCK OWNERSHIP
Exhibit (d)(v)
EXECUTION
VERSION
GOLDMAN SACHS BANK USA
200
West Street
New
York, NY 10282
|
ROYAL
BANK OF CANADA
RBC
CAPITAL MARKETS, LLC
200
Vesey Street
New
York, NY 10281
|
CONFIDENTIAL
Hearts
Parent, LLC
c/o
General Atlantic Service Company, L.P.
Park
Avenue Plaza
55 East 52nd Street, 33rd Floor
New York, NY 10055
Attention: Justin Kotzin; Graham Robertson
and
c/o
Stone Point Capital LLC
20
Horseneck Lane
Greenwich, CT 06830
Attn: Andrew R. Reutter
February
15, 2024
Project
Hearts
Incremental Commitment Letter
Ladies
and Gentlemen:
You
have advised Goldman Sachs Bank USA (“Goldman” or the “Lead Left Arranger”)
and Royal Bank of Canada (“Royal Bank”) and RBC Capital Markets, LLC1 (“RBCCM”
and, together with Royal Bank, “RBC” and, together with Goldman and any Additional Commitment Party
(as defined below), collectively, the “Commitment Parties”, “we” or “us”)
that Hearts Parent, LLC, a Delaware limited liability company (“you”), formed at the direction of General
Atlantic Service Company, L.P. and its affiliates (collectively, “GA”) and Stone Point Capital LLC and
its affiliates (collectively, “Stone Point” and, together with GA, the “Sponsors”
and each a “Sponsor”), intends to acquire (the “Acquisition”), directly or
indirectly, the equity interests of certain entities and assets previously identified to us by you as “Hearts” (the
“Company”). You have further advised us that, in connection with the foregoing, you intend to consummate
the other Transactions described in the Transaction Description attached hereto as Exhibit A (the “Transaction
Description”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Transaction
Description and in the Summary of Principal Terms and Conditions attached hereto as Exhibit B (the “Term Sheet”;
this commitment letter, the Transaction Description, the Term Sheet and the Summary of Additional Conditions attached hereto as
Exhibit C, collectively, the “Commitment Letter”) or, if applicable, in the Existing Credit Agreement
(as defined in Exhibit B).
You
have further advised us that, in connection therewith, (1) it is intended that the financing for the Transactions will include
(i) an incremental first lien term loan facility described in the Term Sheet, in an aggregate principal amount of up to $250.0
million (plus, at the Borrower’s election, an amount sufficient to fund any upfront fees or OID required to be funded due
to the exercise of the Market Flex Provisions in the Fee Letter (as defined below)) (the “Incremental Facility”)
and (2) you may, in your sole discretion, request the Borrower to seek certain amendments to the Existing Credit Agreement as
set out more particularly on Annex I to Exhibit B hereto (the “Potential Amendments”).
1
RBC Capital Markets is a brand name for the capital markets activities of Royal Bank of Canada and its affiliates.
In
connection with the foregoing, each of Goldman and Royal Bank (collectively, with any Additional Commitment Party, the “Initial
Incremental Lenders”) is pleased to advise you of its several and not joint commitment to provide 50% and 50%, respectively,
of the Incremental Facility (and hereby commits to provide the corresponding proportion of any increase or differing amounts required
due to the exercise of the Market Flex Provisions in the Fee Letter), subject only to the satisfaction (or waiver by the Commitment
Parties) of the applicable conditions set forth in the Summary of Additional Conditions attached hereto as Exhibit C. The
Initial Incremental Lenders, together with any Additional Commitment Parties, are referred to herein as the “Initial
Incremental Lenders” and each individually as an “Initial Incremental Lender”.
It
is agreed that each of Goldman and RBCCM will act as a lead arranger and joint bookrunner for the Incremental Facility (in such
capacity, together with any Additional Commitment Party appointed in accordance with the terms of this Commitment Letter, the
“Lead Arrangers”). It is further agreed that Goldman shall have “left” placement in any
and all marketing materials or other documentation used in connection with the Incremental Facility.
In
addition, it is agreed that each Lead Arranger shall, if requested by you in your sole discretion, solicit consent to the Potential
Amendments and shall use its reasonable best efforts to obtain the requisite consent to the Potential Amendments required pursuant
to the Existing Credit Agreement. Notwithstanding anything to the contrary herein, you acknowledge and agree that this Commitment
Letter (a) is not a guarantee with respect to the successful outcome of obtaining the requisite consents for the Potential Amendments
and (b) does not create an obligation on the part of any Commitment Party or Lead Arranger to purchase any loans or commitments
(or to pay any fees) in respect of the Existing Credit Agreement in order to obtain the necessary consents required to achieve
the effectiveness of the Potential Amendments.
Within
15 business days after the Acceptance Date (as defined below) (or 15 business days after the Acceptance Date with respect to funds
or other investment vehicles advised or managed by entities affiliated or associated with any Sponsor (each, a “Sponsor
Related Arranger”)) (or in each case, such later date as agreed by the Lead Left Arranger), you may appoint additional
joint lead arrangers, joint bookrunners, agents, co-agents or co-managers, including a Sponsor Related Arranger (any such arranger,
bookrunner, agent, co-agent or co-manager, an “Additional Commitment Party”) or confer other titles
in respect of the Incremental Facility in a manner and with economics determined by you (it being understood that to the extent
you appoint Additional Commitment Parties or confer other titles in respect of the Incremental Facility, the economics allocated
to, and the amount of the commitments of, each Commitment Party in respect of the Incremental Facility will be ratably reduced
by the economics allocated to and the amount of the commitments of such appointed entities upon the execution by such financial
institution of customary joinder documentation and, thereafter, each such financial institution shall constitute a “Commitment
Party”, “Lead Arranger” and “Initial Incremental Lender” hereunder and under the Fee Letter); provided
that (i) the Sponsor Related Arrangers shall be entitled to no more than 33-1/3% of the economics of the Incremental Facility,
(ii) the Initial Incremental Lenders on the date hereof shall have not less than 50% of the total economics for the Incremental
Facility on the Closing Date (as defined below) and (iii) any Additional Commitment Party shall assume a proportion of the commitments
in respect of the Incremental Facility equal to the proportion of the economics allocated to such Additional Commitment Party
in respect of the Incremental Facility. Except as provided in this paragraph, no other titles will be awarded and no compensation
(other than that expressly contemplated by this Commitment Letter and the Fee Letter referred to below and other than in connection
with any Additional Commitment Party) will be paid to any Lender (as defined below) in order to obtain its commitment to participate
in the Incremental Facility unless you and the Commitment Parties shall so agree. The respective commitments of each Initial Incremental
Lender and any Additional Commitment Party shall be several and not joint.
The
Lead Arrangers reserve the right, prior to or after the execution of the Credit Documentation (as defined in Exhibit B),
which the Lead Arrangers agree will be initially drafted by your counsel, to syndicate all or a portion of the Initial Incremental
Lenders’ respective commitments hereunder to a group of banks, financial institutions and other institutional lenders identified
by the Lead Arrangers in consultation with you and reasonably acceptable to them and you with respect to the identity of such
lenders (your consent not to be unreasonably withheld or delayed) including, without limitation, any relationship lenders designated
by you and reasonably acceptable to the Lead Arrangers (such banks, financial institutions and other institutional lenders, together
with the Initial Incremental Lenders, the “Lenders”); provided that, notwithstanding each Lead
Arranger’s right to syndicate the Incremental Facility and receive commitments with respect thereto, it is agreed that,
other than in connection with any assignment to an Additional Commitment Party: (i) syndication of, or receipt of commitments
or participations in respect of, all or any portion of an Initial Incremental Lender’s commitments hereunder prior to the
date of the consummation of the Acquisition and/or the date of the initial funding under the Incremental Facility and, if applicable,
the effectiveness of the Potential Amendments (the date of such funding, the “Closing Date”) shall not
be a condition to such Initial Incremental Lender’s commitments or the funding of the Incremental Facility on the Closing
Date or, if applicable, soliciting consent to the Potential Amendments; (ii) except as provided above with respect to appointment
of Additional Commitment Parties, and upon the joinder of such Additional Commitment Party as an Initial Incremental Lender pursuant
to the immediately preceding paragraph, in respect of the amount allocated to such Additional Commitment Party, no Initial Incremental
Lender shall be relieved, released or novated from its obligations hereunder (including its obligation to fund the Incremental
Facility on the Closing Date) in connection with any syndication, assignment or participation of the Incremental Facility, including
its commitments in respect thereof, until after the initial funding of the Incremental Facility has occurred; (iii) no assignment
or novation (except as contemplated in the immediately preceding clause (ii)) shall become effective with respect to all or any
portion of any Initial Incremental Lender’s commitments in respect of the Incremental Facility until after the initial funding
of the Incremental Facility; (iv) unless you otherwise agree in writing, each Commitment Party shall retain exclusive control
over all rights and obligations with respect to its commitments in respect of the Incremental Facility, including all rights with
respect to consents, modifications, supplements, waivers and amendments, until the Closing Date has occurred; and (v) we will
not syndicate our commitments to Disqualified Lenders (as defined in the Existing Credit Agreement), provided that in no
event shall any notice given under the provisions of this clause (v) apply to retroactively disqualify any person who previously
acquired, and continues to hold, any loans, commitments or participations prior to the receipt of such notice.
Without
limiting your obligations to assist with syndication efforts as set forth herein, it is understood and agreed that the Initial
Incremental Lenders’ commitments hereunder are not conditioned upon the syndication of, or receipt of commitments or participations
in respect of, the Incremental Facility and in no event shall the commencement or successful completion of syndication of the
Incremental Facility constitute a condition to the availability of the Incremental Facility on the Closing Date. The Lead Arrangers
intend to commence syndication efforts promptly upon the execution by each party of this Commitment Letter and as part of their
syndication efforts, it is their intent to have Lenders commit to the Incremental Facility prior to the Closing Date (subject
to the limitations set forth in the preceding paragraph). You agree actively to assist the Lead Arrangers, until the earlier to
occur of (i) a Successful Syndication (as defined in the Fee Letter) and (ii) 30 days after the Closing Date (such earlier date,
the “Syndication Date”), in seeking to complete a timely syndication that is reasonably satisfactory
to them and you. Such assistance shall include, without limitation, (a) your using commercially reasonable efforts to ensure that
any syndication efforts benefit materially from your existing lending and investment banking relationships and the existing lending
and investment banking relationships of each Sponsor and, to the extent not in contravention of the terms of the Acquisition Agreement,
the Company, (b) direct contact between senior management, representatives and advisors of you and the Sponsors, on the one hand,
and the proposed Lenders, on the other hand (and your using commercially reasonable efforts, to the extent not in contravention
of the terms of the Acquisition Agreement, to ensure such contact between senior management, representatives and advisors of the
Company, on the one hand, and the proposed Lenders, on the other hand), in all such cases at times and places mutually agreed
upon, (c) your and the Sponsors’ assistance, and your using commercially reasonable efforts to cause the Company to
assist, to the extent not in contravention of the terms of the Acquisition Agreement, in the preparation of customary confidential
information memoranda for the Incremental Facility (any such memorandum, a “Confidential Information Memorandum”)
and other marketing materials to be used in connection with the syndications, in each case, in a form customarily delivered in
connection with senior secured bank financings of the Sponsors in the United States, (d) using your commercially reasonable
efforts to procure a public corporate credit rating and a public corporate family rating in respect of the Borrower from each
of S&P Global Ratings (“S&P”) and Moody’s Investors Service, Inc. (“Moody’s”),
respectively, and public ratings for the Incremental Facility from each of S&P and Moody’s, in each case, prior to the
launch of general syndication, (e) the hosting, with the Lead Arrangers, of no more than two calls with prospective Lenders at
times and locations to be mutually agreed upon and (f) your ensuring (and with respect to the Company and its subsidiaries, to
the extent not in contravention of the terms of the Acquisition Agreement, your using commercially reasonable efforts to ensure)
that, prior to the later of the Closing Date and the Syndication Date, there shall be no competing issues of debt securities or
commercial bank or other credit facilities (other than the Incremental Facility) of you, the Company or any of their respective
subsidiaries being offered, placed or arranged if such debt securities or commercial bank or other credit facilities would, in
the reasonable judgment of the Lead Arrangers, materially impair the primary syndication of the Incremental Facility (it is understood
and agreed that any deferred purchase price obligations, ordinary course working capital facilities and ordinary course capital
lease, purchase money, equipment financings or indebtedness permitted to be incurred or remain outstanding by the Acquisition
Agreement will not be deemed to materially impair the primary syndication of the Incremental Facility). Notwithstanding anything
to the contrary contained in this Commitment Letter or the Fee Letter or any other letter agreement or undertaking concerning
the financing of the Transactions to the contrary, neither the obtaining of the ratings referenced above nor the compliance with
any of the other provisions set forth in clauses (a) through (f) above or any other provision of this paragraph
shall constitute a condition to the commitments hereunder or the funding of the Incremental Facility on the Closing Date. Your
obligations in this Commitment Letter to use commercially reasonable efforts to cause the Company or its management to take (or
refrain from taking) any action will not require you to take action that is not practical, appropriate or reasonable in light
of the circumstances or in contravention of the terms of the Acquisition Agreement.
The
Lead Arrangers, in their capacities as such, will, in consultation with you, manage all aspects of any syndication of the Incremental
Facility, including decisions as to the selection of institutions reasonably acceptable to you to be approached and when they
will be approached, when their commitments will be accepted, which institutions will participate (subject to your consent rights
and rights of appointment set forth in the second preceding paragraph), the allocation of the commitments among the Lenders and
the amount and distribution of fees among the Lenders from the amounts to be paid to the Commitment Parties pursuant to this Commitment
Letter and the Fee Letter. To assist the Lead Arrangers in their syndication efforts, you agree promptly to assist (including
using your commercially reasonable efforts to cause the Company to assist) in the preparation of a customary confidential information
memorandum and other customary marketing materials to be used in connection with the syndication of the Incremental Facility,
subject to the limitations on your rights to request information concerning the Company and its subsidiaries as set forth in the
Acquisition Agreement and limited in the case of financial statements to the financial statements specified in paragraph 4
of Exhibit C. For the avoidance of doubt, you will not be required to provide any information to the extent that the
provision thereof would violate any law, rule or regulation binding upon you or any of your subsidiaries or affiliates or upon
the Company or any of its respective subsidiaries or affiliates or any obligation of confidentiality binding upon, or waive any
attorney-client privilege of, you, the Company or your or its respective subsidiaries and affiliates (and, to the extent practicable
and not prohibited by applicable law, rule or regulation, you will promptly notify us that information is being withheld pursuant
to this sentence). Notwithstanding anything herein to the contrary, the only financial statements that shall be required to be
provided to the Commitment Parties in connection with the syndication of the Incremental Facility on or prior to the Closing Date
shall be those required to be delivered pursuant to paragraph 4 of Exhibit C.
You
hereby represent and warrant that (in the case of Information (as defined below) regarding the Company and its subsidiaries and
its and their respective businesses, to your knowledge), (a) all written information and written data (such information and data,
other than (i) the projections (such projections, including financial estimates, budgets, forecasts and other forward-looking
information, the “Projections”) and (ii) information of a general economic or industry specific nature,
the “Information”) that has been or will be made available to the Commitment Parties by or on your behalf
(at your direction), taken as a whole, is or will be, when furnished, correct in all material respects and does not or will not,
when furnished, and when taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements
are made (after giving effect to all supplements and updates thereto from time to time) and (b) the Projections that have
been or will be made available to the Commitment Parties by or on your behalf (at your direction) have been or will be, at the
time of delivery, prepared in good faith based upon assumptions that you believe to be reasonable at the time made and at the
time the related Projections are so furnished to the Commitment Parties, it being understood that the Projections are as to future
events and are not to be viewed as facts, that the Projections are subject to significant uncertainties and contingencies, many
of which are beyond your control, that no assurance can be given that any particular Projections will be realized and that actual
results during the period or periods covered by any such Projections may differ significantly from the projected results and such
differences may be material. You agree that if, at any time prior to the later of the Closing Date and the Syndication Date, you
become aware that any of the representations and warranties in the preceding sentence would be (with respect to the Company and
its subsidiaries and its and their respective businesses, to your knowledge) incorrect in any material respect if the Information
and Projections were being furnished, and such representations and warranties were being made, at such time, then you will use
commercially reasonable efforts to promptly supplement the Information and the Projections so that (with respect to the Company
and its subsidiaries and its and their respective businesses, to your knowledge) such representations and warranties remain true
in all material respects under those circumstances; provided that any such supplementation shall cure any breach of such
representations. In arranging and syndicating the Incremental Facility, the Commitment Parties will be entitled to use and rely
primarily on the Information and the Projections without responsibility for independent verification thereof.
You
hereby acknowledge that (a) the Lead Arrangers will make available Information and Projections to the proposed syndicate of Lenders
by posting such Information and Projections on IntraLinks, SyndTrak Online or similar electronic means and (b) certain of the
Lenders may be “public side” Lenders (i.e., Lenders that wish to receive only information that (i) is publicly available,
(ii) is not material with respect to you, Holdings, the Borrower, the Company, your or its respective subsidiaries or the respective
securities of any of the foregoing for purposes of United States federal and state securities laws or (iii) constitutes information
of a type that would be publicly available if you were a public reporting company (as reasonably determined by you) (collectively,
the “Public Side Information”; any information that is not Public Side Information, “Private
Side Information”) and who may be engaged in investment and other market-related activities with respect to you,
Holdings, the Borrower, the Company, any of your or its respective subsidiaries or the respective securities of any of the foregoing)
(each, a “Public Sider” and each Lender that is not a Public Sider, a “Private Sider”).
If
reasonably requested by the Lead Arrangers you will use commercially reasonable efforts to assist us in preparing a customary
additional version of the Confidential Information Memorandum to be used in connection with the syndication of the Incremental
Facility that includes only Public Side Information with respect to you, Holdings, the Borrower, the Company, your or its respective
subsidiaries or the respective securities of any of the foregoing to be used by Public Siders. It is understood that in connection
with your assistance described above, customary authorization letters will be included in any Confidential Information Memorandum
that authorize the distribution of the Confidential Information Memorandum to prospective Lenders in a form customarily included
in the Confidential Information Memorandum for senior secured bank financings of portfolio company affiliates of the Sponsors
in the United States, that contain the representations set forth in the second preceding paragraph (and represent that the additional
version of the Confidential Information Memorandum contains only Public Side Information with respect to you, Holdings, the Borrower,
the Company, your or its respective subsidiaries and the respective securities of any of the foregoing (other than as set forth
in the following paragraph)) and each version of the Confidential Information Memorandum shall exculpate you, your equity holders,
Holdings, the Borrower, each Sponsor, the Company and your and their respective subsidiaries and affiliates and us with respect
to any liability related to the use or misuse of the contents of the Confidential Information Memorandum or any related marketing
material by the recipients thereof.
You
agree, at the request of the Lead Arrangers, to use commercially reasonable efforts to identify that portion of the Information
that may be distributed to the Public Siders as “PUBLIC”. You agree that, subject to the confidentiality and other
provisions of this Commitment Letter, the Lead Arrangers on your behalf may distribute the following documents to all prospective
lenders in the form provided to you and to your counsel a reasonable time prior to their distribution, unless you or your counsel
advise the Lead Arrangers in writing (including by email) within a reasonable time prior to their intended distribution that such
material should only be distributed to Private Siders: (a) the Term Sheet, (b) interim and final drafts of the applicable Credit
Documentation, (c) administrative materials prepared by the Lead Arrangers for prospective Lenders (such as a lender meeting invitation,
allocations and funding and closing memoranda) and (d) changes in the terms of the Incremental Facility. If you advise us
that any of the foregoing items should be distributed only to Private Siders, then the Lead Arrangers will not distribute such
materials to Public Siders without your consent.
As
consideration for the commitments of the Initial Incremental Lenders hereunder and for the agreement of the Lead Arrangers to
perform the services described herein, you agree to pay (or cause to be paid) the fees set forth in the Term Sheet and in the
Fee Letter dated the date hereof and delivered herewith with respect to the Incremental Facility and, if applicable, the Potential
Amendments (the “Fee Letter”), if and to the extent payable. Once paid, such fees shall not be refundable
under any circumstances, except as otherwise contemplated by the Fee Letter.
The
several commitments of the Initial Incremental Lenders hereunder to fund the Incremental Facility on the Closing Date and the
several agreements of the Lead Arrangers to perform the services described herein are subject solely to the applicable conditions
set forth in Exhibit C hereto, and upon satisfaction (or waiver by the Commitment Parties) of such conditions, the initial
funding of the Incremental Facility shall occur and, if applicable, the Potential Amendments shall become effective (subject to
obtaining the requisite consents therefor), it being understood that there are no conditions (implied or otherwise) to the commitments
hereunder and there will be no conditions (implied or otherwise) under the Credit Documentation to the funding of the Incremental
Facility on the Closing Date, including compliance with the terms of this Commitment Letter, the Fee Letter or the Credit Documentation,
other than those that are expressly stated in Exhibit C hereto. Nothing in the Credit Documentation shall increase or expand
such conditions.
Notwithstanding
anything to the contrary in this Commitment Letter (including each of the exhibits attached hereto), the Fee Letter, the Existing
Credit Agreement, the Credit Documentation or any other agreement or other undertaking concerning the financing of the Transactions
to the contrary, (i) the only representations and warranties the making of which shall be a condition to the availability of the
Incremental Facility on the Closing Date shall be (A) such of the representations and warranties made by the Company, its subsidiaries
and their respective businesses in the Acquisition Agreement as are material to the interests of the Initial Incremental Lenders,
but only to the extent that you (or one of your affiliates) have the right (taking into account any applicable cure provisions)
to terminate your (or its) obligations under the Acquisition Agreement pursuant to Section 8.1(e) of the Acquisition Agreement
(or otherwise decline to consummate the Acquisition pursuant to Section 7.2(a) of the Acquisition Agreement without any
liability) as a result of a breach of any such representations and warranties in the Acquisition Agreement (to such extent, the
“Company Representations”) and (B) the Specified Representations (as defined below) and (ii) the
terms of the Credit Documentation shall be in a form such that they do not impair the availability of the Incremental Facility
on the Closing Date if the conditions set forth in Exhibit C hereto are satisfied (or waived by the Commitment Parties)
(provided that, to the extent any security interest in any Collateral (as defined in the Existing Credit Agreement) acquired
in the Acquisition (if any) is not or cannot be provided and/or perfected on the Closing Date after your use of commercially reasonable
efforts to do so or without undue burden or expense, then the provision and/or perfection of a security interest in such Collateral
(if any) shall not constitute a condition precedent to the availability and funding of the Incremental Facility on the Closing
Date but instead shall be required to be delivered and/or perfected after the Closing Date pursuant to arrangements and timing
pursuant to Section 9.11 of the Existing Credit Agreement (or such longer period, as may be agreed by the Administrative Agent
in its reasonable discretion). For purposes hereof, “Specified Representations” means the representations
and warranties made by the Borrower and, to the extent applicable, the Guarantors to be set forth in the Credit Documentation
relating to the corporate or other organizational existence of the Borrower and, to the extent applicable, the Guarantors, power
and authority, due authorization, execution, delivery and enforceability, in each case related to entry into and performance of,
the Credit Documentation; the incurrence of the loans and the provision of the Guarantees, in each case under the Incremental
Facility, and the granting of the security interests in the Collateral to secure the Incremental Facility, not conflicting with
the Borrower’s and, to the extent applicable, the Company’s and the Guarantors’ constitutional documents (after
giving effect to the Acquisition); solvency as of the Closing Date (after giving effect to the Transactions) of the Borrower and
its subsidiaries on a consolidated basis (solvency to be defined in a manner consistent with the Existing Credit Agreement); creation
and perfection of security interests in the Collateral to be perfected on the Closing Date (subject to permitted liens and the
foregoing provisions of this paragraph relating to Collateral); use of proceeds of borrowings under the Incremental Facility on
the Closing Date not violating the PATRIOT Act; Federal Reserve margin regulations and the Investment Company Act. This paragraph,
and the provisions herein, shall be referred to as the “Limited Conditionality Provision”. To the extent
any Specified Representations are qualified or subject to “material adverse effect”, the definition shall be “Material
Adverse Effect” as defined in the Acquisition Agreement for the purposes of any representations and warranties made or to
be made on, or as of, the Closing Date (or a date prior thereto). Without limiting the conditions precedent provided herein to
funding the consummation of the Acquisition with the proceeds of the Incremental Facility, the Lead Arrangers will cooperate with
you as reasonably requested in coordinating the timing and procedures for the funding of the Incremental Facility in a manner
consistent with the Acquisition Agreement.
You
agree (a) to indemnify and hold harmless each of the Commitment Parties, their respective affiliates and the respective officers,
directors, employees, agents, advisors, controlling persons, members and the successors and permitted assigns of each of the foregoing
(each an “Indemnified Person”) from and against any and all losses, claims, damages and liabilities
of any kind or nature, joint or several, actually incurred or suffered by, any such Indemnified Person or to which it may become
subject, to the extent arising out of or in connection with any claim, litigation, investigation or proceeding, actual or threatened,
relating to this Commitment Letter (including the Term Sheet), the Fee Letter, the Transactions, the Incremental Facility, the
Potential Amendments (if applicable) or any related transaction contemplated hereby (any of the foregoing, a “Proceeding”),
regardless of whether any such Indemnified Person is a party thereto and whether such Proceeding is brought by you or any other
person, and to reimburse each such Indemnified Person promptly upon written demand (with reasonable supporting detail if you shall
so request) for any reasonable and documented out-of-pocket legal fees and out-of-pocket expenses incurred in connection with
investigating or defending any of the foregoing by one firm of counsel for all Indemnified Persons, taken as a whole, and, if
reasonably necessary, by a single firm of local counsel in each appropriate material jurisdiction for all such Indemnified Persons,
taken as a whole (and, in the case of an actual or perceived conflict of interest where the Indemnified Person affected by such
conflict notifies you of the existence of such conflict and thereafter, after receipt of your written consent (which consent shall
not be unreasonably withheld or delayed), retains its own counsel, by another firm of counsel (and local counsel) for such affected
Indemnified Person) or other reasonable and documented out-of-pocket fees and out-of-pocket expenses incurred in connection with
investigating or defending any of the foregoing; provided that the foregoing indemnity will not, as to any Indemnified
Person, apply to losses, claims, damages, liabilities or related expenses to the extent that they have resulted from (i) the willful
misconduct, bad faith or gross negligence of such Indemnified Person or any of such Indemnified Person’s affiliates or any
of its or their respective officers, directors, employees, agents, controlling persons, members, advisors or the successors and
permitted assigns of any of the foregoing (as determined by a court of competent jurisdiction in a final and non-appealable decision),
(ii) a material breach of the obligations of such Indemnified Person (or any of such Indemnified Person’s affiliates or
any of its or their respective officers, directors, employees, agents, controlling persons, members, advisors or the successors
and permitted assigns of any of the foregoing) under this Commitment Letter, the Fee Letter or the Existing Credit Agreement (as
determined by a court of competent jurisdiction in a final and non-appealable decision), (iii) in the case of a Proceeding initiated
by you or one of your permitted assignees against the relevant Indemnified Person, a material breach of the obligations of such
Indemnified Person or any of such Indemnified Person’s affiliates or of any of its or their respective officers, directors,
employees, agents, advisors, other representatives or permitted assigns of any of the foregoing under this Commitment Letter,
the Fee Letter or the Existing Credit Agreement (as determined by a court of competent jurisdiction in a final and non-appealable
decision) or (iv) any Proceeding not arising from any act or omission by you or any of your affiliates that is brought by an Indemnified
Person against any other Indemnified Person (other than disputes involving claims against any Lead Arranger or the Administrative
Agent in its capacity as such), and (b) to reimburse each Commitment Party and each Indemnified Person from time to time, promptly
upon written demand and presentation of a summary statement (with reasonable supporting detail if you shall so request), for all
reasonable and documented out-of-pocket expenses (including but not limited to expenses of each Commitment Party’s due diligence
investigation, consultants’ fees (to the extent any such consultant has been retained with your prior written consent (such
consent not to be unreasonably withheld or delayed)), syndication expenses, travel expenses and reasonable and documented out-of-pocket
fees, disbursements and other charges of one firm of counsel to the Lead Arrangers identified in the Term Sheet and of a single
firm of local counsel to the Lead Arrangers in each appropriate material jurisdiction (other than any allocated costs of in-house
counsel) or otherwise retained with your consent (such consent not to be unreasonably withheld or delayed)), in each case incurred
in connection with the Incremental Facility, the Potential Amendments (if applicable) and the preparation of this Commitment Letter,
the Fee Letter, the Incremental Amendment and any security arrangements in connection therewith (collectively, the “Expenses”);
provided that except as set forth in the Fee Letter, you shall not be required to reimburse any of the Expenses in the
event the Closing Date does not occur.
Notwithstanding
any other provision of this Commitment Letter, (i) no Indemnified Person shall be liable for any damages arising from the use
by others of information or other materials obtained through internet, electronic, telecommunications or other information transmission
systems (including IntraLinks or SyndTrak Online), except to the extent that such damages have resulted from the willful misconduct,
bad faith or gross negligence of such Indemnified Person or any of such Indemnified Person’s affiliates or any of its or
their officers, directors, employees, agents, controlling persons, members or the successors and permitted assigns of any of the
foregoing (as determined by a court of competent jurisdiction in a final and non-appealable decision) and (ii) none of we, you,
Holdings, the Borrower, the Company, the Sponsors (or any of their respective affiliates), any subsidiaries of the foregoing or
any Indemnified Person shall be liable for any indirect, special, punitive or consequential damages (including, without limitation,
any loss of profits, business or anticipated savings) in connection with this Commitment Letter, the Fee Letter, the Transactions
(including the Incremental Facility, the Potential Amendments (if applicable), and the use of proceeds thereunder), or with respect
to any activities related to the Incremental Facility or the Potential Amendments (if applicable), including the preparation of
this Commitment Letter, the Fee Letter and the Credit Documentation; provided that nothing in this paragraph shall limit
your indemnity and reimbursement obligations to the extent that such indirect, special, punitive or consequential damages are
included in any claim by a third party unaffiliated with any of the Commitment Parties with respect to which the applicable Indemnified
Person is entitled to indemnification under the preceding paragraph.
You
shall not be liable for any settlement of any Proceeding effected without your prior written consent (which consent shall not
be unreasonably withheld or delayed), but if settled with your prior written consent or if there is a final and non-appealable
judgment by a court of competent jurisdiction in any such Proceeding, you agree to indemnify and hold harmless each Indemnified
Person from and against any and all actual losses, claims, damages, liabilities and reasonable and documented legal or other out-of-pocket
expenses incurred or paid by reason of such settlement or judgment in accordance with and to the extent provided in the other
provisions herein.
You
shall not, without the prior written consent of any Indemnified Person (which consent shall not be unreasonably withheld or delayed),
effect any settlement of any pending or threatened proceedings in respect of which indemnity could have been sought hereunder
by such Indemnified Person unless such settlement (i) includes an unconditional release of such Indemnified Person in form and
substance reasonably satisfactory to such Indemnified Person from all liability or claims that are the subject matter of such
proceedings and (ii) does not include any statement as to or any admission of fault, culpability, wrong doing or a failure to
act by or on behalf of any Indemnified Person.
In
case any Proceeding is instituted involving any Indemnified Person for which indemnification is to be sought hereunder by such
Indemnified Person, then such Indemnified Person will promptly notify you of the commencement of any Proceeding; provided,
however, that the failure so to notify you will not relieve you from any liability that you may have to such Indemnified Person
pursuant to this Commitment Letter, except to the extent that you are materially prejudiced by such failure. Notwithstanding the
above, following such notification, you may elect in writing to assume the defense of such Proceeding, and, upon such election,
you will not be liable for any legal costs subsequently incurred by such Indemnified Person (other than reasonable costs of investigation
and providing evidence) in connection therewith, unless (i) you have failed to provide counsel reasonably satisfactory to such
Indemnified Person in a timely manner, (ii) counsel provided by you reasonably determines that its representation of such Indemnified
Person would present it with a conflict of interest, or (iii) the Indemnified Person reasonably determines that there are actual
conflicts of interest between you and the Indemnified Person, including situations in which there may be legal defenses available
to it which are different from or in addition to those available to you. In connection with any one Proceeding, you will not be
responsible for the fees and expenses of more than one separate law firm for all Indemnified Persons except as expressly provided
above.
Each
Indemnified Person shall, in consultation with you, take all reasonable steps to mitigate any losses, claims, damages, liabilities
and expenses and shall give (subject to confidentiality or legal restrictions) such information and assistance to you as you may
reasonably request in connection with any Proceeding.
You
acknowledge that the Commitment Parties and their affiliates may be providing debt financing, equity capital or other services
(including financial advisory services) to other persons in respect of which you or your affiliates may have conflicting interests
regarding the transactions described herein and otherwise. Neither the Commitment Parties nor any of their affiliates will use
confidential information obtained from you or the Company by virtue of the transactions contemplated by this Commitment Letter
or their other relationships with you in connection with the performance by them of services for other persons, and neither the
Commitment Parties nor any of their affiliates will furnish any such information to other persons. You also acknowledge that neither
the Commitment Parties nor any of their affiliates have any obligation to use in connection with the transactions contemplated
by this Commitment Letter, or to furnish to you, confidential information obtained by them from other persons.
As
you know, each Commitment Party and its respective affiliates may be a full service securities firm engaged, either directly or
through its affiliates, in various activities, including securities trading, commodities trading, investment management, financing
and brokerage activities and financial planning and benefits counseling for both companies and individuals. In the ordinary course
of these activities, the Commitment Parties and their respective affiliates may actively engage in commodities trading or trade
the debt and equity securities (or related derivative securities) and financial instruments (including bank loans and other obligations)
of you, Holdings, the Borrower, the Company, any of your or their respective subsidiaries and affiliates and other companies which
may be the subject of the arrangements contemplated by this letter for their own account and for the accounts of their customers
and may at any time hold long and short positions in such securities. The Commitment Parties and their respective affiliates may
also co-invest with, make direct investments in, and invest or co-invest client monies in or with funds or other investment vehicles
managed by other parties, and such funds or other investment vehicles may trade or make investments in securities of you, Holdings,
the Borrower, the Company, any of your or their respective subsidiaries and affiliates or other companies which may be the subject
of the arrangements contemplated by this Commitment Letter or engage in commodities trading with any thereof.
The
Commitment Parties and their respective affiliates may have economic interests that conflict with those of the Company and you.
You agree that the Commitment Parties will act under this letter as independent contractors and that nothing in this Commitment
Letter or the Fee Letter or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other
implied duty between the Commitment Parties and you and the Company, your and its respective equity holders or your and its respective
affiliates. You acknowledge and agree that (i) the transactions contemplated by this Commitment Letter and the Fee Letter are
arm’s-length commercial transactions between the Commitment Parties, on the one hand, and you and the Company, on the other,
(ii) in connection therewith and with the process leading to such transaction each Commitment Party is acting solely as a principal
and not as agents or fiduciaries of you, the Company, your and its management, equity holders, creditors or any other person,
(iii) the Commitment Parties have not assumed an advisory or fiduciary responsibility or any other obligation in favor of you
with respect to the transactions contemplated hereby or the process leading thereto (irrespective of whether the Commitment Parties
or any of their respective affiliates have advised or are currently advising you or the Company on other matters) except the obligations
expressly set forth in this Commitment Letter and the Fee Letter and (iv) you have consulted your own legal, tax, accounting and
financial advisors to the extent you deemed appropriate. You further acknowledge and agree that you are responsible for making
your own independent judgment with respect to such transactions and the process leading thereto. Please note that the Commitment
Parties and their affiliates have not provided any legal, accounting, regulatory or tax advice. You agree that you will not claim
that the Commitment Parties (in their capacity as such) or their applicable affiliates, as the case may be, have rendered advisory
services of any nature or respect, or owe a fiduciary or similar duty to you or your affiliates, in connection with the transactions
contemplated by this Commitment Letter or the process leading thereto.
This
Commitment Letter and any claim, controversy or dispute arising under or related to this Commitment Letter and the commitments
hereunder shall not be assignable by any party hereto (other than, (i) occurring as a matter of law pursuant to, or otherwise
substantially simultaneously with (and subject to the consummation of), the Acquisition, in each case to one or more of the Company
and/or any other subsidiary of the Company and (ii) by you to the Ultimate Borrower and/or to any of its Subsidiaries already
existing or established in connection with the Transactions, with all obligations and liabilities of you under the Commitment
Letter and the Fee Letter being assumed by the Ultimate Borrower and/or such other entities upon the effectiveness of such assignment)
without the prior written consent of each other party hereto (such consent not to be unreasonably withheld or delayed) (and any
attempted assignment without such consent shall be null and void). This Commitment Letter and the commitments hereunder are intended
to be solely for the benefit of the parties hereto (and Indemnified Persons) and are not intended to confer any benefits upon,
or create any rights in favor of, any person other than the parties hereto (and Indemnified Persons to the extent expressly set
forth herein). Subject to the limitations otherwise set forth herein, each Commitment Party reserves the right to employ the services
of its respective affiliates or branches in providing services contemplated hereby and to allocate, in whole or in part, to their
affiliates or branches certain fees payable to such Commitment Party in such manner as such Commitment Party and its respective
affiliates or branches may agree in their sole discretion and, to the extent so employed, such affiliates and branches shall be
entitled to the benefits and protections afforded to, and subject to the provisions governing the conduct of, such Commitment
Party hereunder. This Commitment Letter may not be amended or any provision hereof waived or modified except by an instrument
in writing signed by each of the Commitment Parties and you. This Commitment Letter may be executed in any number of counterparts,
each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed
counterpart of a signature page of this Commitment Letter by facsimile transmission or other electronic transmission (i.e., a
“pdf” or “tif” file ) shall be effective as delivery of a manually executed counterpart hereof. For purposes
hereof, the words “execution,” “execute,” “executed,” “signed,” “signature”
and words of like import shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract
formulations on electronic platforms, or the keeping of records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may
be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National
Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic
Transaction Act. This Commitment Letter (including the exhibits hereto) and the Fee Letter (i) are the only agreements that have
been entered into among the parties hereto with respect to the Incremental Facility and the Potential Amendments and (ii) supersede
all prior understandings, whether written or oral, among us with respect to the Incremental Facility and the Potential Amendments
and set forth the entire understanding of the parties hereto with respect thereto.
Each
of the parties hereto agrees that (i) this Commitment Letter is a binding and enforceable agreement (subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors’
rights generally and general principles of equity (whether considered in a proceeding in equity or law)) with respect to the subject
matter contained herein, including an agreement to negotiate in good faith the Credit Documentation by the parties hereto in a
manner consistent with this Commitment Letter, it being acknowledged and agreed that the funding of the Incremental Facility is
subject only to the conditions set forth in Exhibit C hereto and (ii) the Fee Letter is a binding and enforceable agreement (subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting
creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law)) of the
parties thereto with respect to the subject matter set forth therein.
THIS
COMMITMENT LETTER AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES
OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION;
provided, however, that it is understood and agreed that (a) the interpretation of the definition of “Company Material Adverse
Effect” (as defined in the Acquisition Agreement) (and whether or not such Company Material Adverse Effect has occurred),
(b) the determination of the accuracy of any Company Representations and whether as a result of any inaccuracy thereof you (or
one of your affiliates) have the right (taking into account any applicable cure provisions) to terminate your (or its) obligations
under the Acquisition Agreement pursuant to Section 8.1(e) of the Acquisition Agreement (or otherwise decline to consummate the
Acquisition pursuant to Section 7.2(a) of the Acquisition Agreement without any liability) and (c) the determination of
whether the Acquisition has been consummated in accordance with the terms of the Acquisition
Agreement and, in any case, claims or disputes arising out of any such interpretation or determination or any aspect thereof,
shall be governed by and construed and enforced in accordance with the internal laws (both substantive and procedural), and not
the laws of conflicts, of the State of Delaware.
EACH
OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY
OR ON BEHALF OF ANY PARTY HERETO RELATED TO OR ARISING OUT OF THIS COMMITMENT LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER.
Each
of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction
of any New York State court or Federal court of the United States of America sitting in New York City in the Borough of Manhattan,
and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Commitment Letter, the
Fee Letter, the Transactions or the transactions contemplated hereby, or for recognition or enforcement of any judgment, and agrees
that all claims in respect of any such action or proceeding shall be heard and determined in such New York State court or, to
the extent permitted by law, in such Federal court, (b) waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating
to this Commitment Letter, the Fee Letter, the Transactions or the transactions contemplated hereby in any such New York State
court or in any such Federal court, (c) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court and (d) agrees that a final judgment in any such suit, action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other matter provided
by law. Each of the parties hereto agrees to commence any such action, suit, proceeding or claim either in the United States District
Court for the Southern District of New York or in the Supreme Court of the State of New York, New York County located in the Borough
of Manhattan.
This
Commitment Letter is delivered to you on the understanding that none of the Fee Letter and its terms or substance, or, prior to
your acceptance hereof, this Commitment Letter and its terms or substance or the activities of any Commitment Party pursuant hereto
or to the Fee Letter, shall be disclosed, directly or indirectly, to any other person or entity (including other lenders, underwriters,
placement agents, advisors or any similar persons) except (a) to the Investors, and to your and any of the Investors’ subsidiaries
and affiliates and your and their respective officers, directors, employees, agents, attorneys, accountants, advisors and controlling
persons who are informed of the confidential nature thereof, on a confidential and need-to-know basis, (b) if the Commitment
Parties consent to such proposed disclosure (such consent not to be unreasonably withheld or delayed) or (c) pursuant to the order
of any court or administrative agency in any pending legal or administrative proceeding, or otherwise as required by applicable
law, rule or regulation or compulsory legal process or to the extent requested or required by governmental and/or regulatory authorities,
in each case based on the reasonable advice of your legal counsel (in which case, you agree, to the extent practicable and not
prohibited by applicable law, rule or regulation, to inform us promptly thereof); provided that (i) you may disclose this
Commitment Letter (but not the Fee Letter) and the contents hereof to the Company and its officers, directors, employees, agents,
attorneys, accountants, advisors and controlling persons, on a confidential and need-to-know basis, (ii) you may disclose
the Commitment Letter (but not the Fee Letter) and its contents in any syndication or other marketing materials in connection
with the Incremental Facility (including any confidential information memorandum and other customary marketing materials) or in
connection with any public or regulatory filing requirement relating to the Transactions, (iii) you may disclose the Term Sheet
and the other exhibits and annexes to the Commitment Letter (but not the Fee Letter) and the contents thereof, to potential Lenders
and their affiliates involved in the related commitments, to equity investors and to rating agencies in connection with obtaining
ratings for the Borrower and the Incremental Facility, (iv) you may disclose the aggregate fees contained in the Fee Letter as
part of Projections, pro forma information or a generic disclosure of aggregate sources and uses related to fee amounts related
to the Transactions to the extent customary or required in offering and marketing materials for the Incremental Facility or in
any public or regulatory filing requirement relating to the Transactions, (v) to the extent the amounts of fees and other economic
terms of the market flex provisions set forth therein have been redacted in a customary manner, you may disclose the Fee Letter
and the contents thereof to the Company, and its officers, directors, employees, agents, attorneys, accountants, advisors and
controlling persons, on a confidential and need-to-know basis, (vi) you may disclose this Commitment Letter (but not the Fee Letter)
in any tender offer or proxy relating to the Transactions and (vii) you may disclose (x) the Fee Letter and the contents thereof
to any prospective Additional Commitment Party or (y) the Fee Letter and the contents thereof to any prospective equity investor
and their respective officers, directors, employees, attorneys, accountants and advisors, in each case on a confidential basis.
The confidentiality provisions set forth in this paragraph shall survive the termination of this Commitment Letter and expire
and shall be of no further effect after the second anniversary of the date hereof.
Each
Commitment Party and its affiliates will use all non-public information provided to any of them or such affiliates by or on behalf
of you hereunder or in connection with the Transactions solely for the purpose of providing the services that are the subject
of this Commitment Letter and negotiating, evaluating and consummating the transactions contemplated hereby and shall treat confidentially
all such information and shall not publish, disclose or otherwise divulge such information; provided that nothing herein
shall prevent such Commitment Party from disclosing any such information (a) pursuant to the order of any court or administrative
agency or in any pending legal, judicial or administrative proceeding, or otherwise as required by applicable law, rule or regulation
or compulsory legal process (in which case such Commitment Party agrees (except with respect to any routine or ordinary course
audit or examination conducted by bank accountants or any governmental, bank regulatory or self-regulatory authority exercising
examination or regulatory authority), to the extent practicable and not prohibited by applicable law, rule or regulation, to inform
you promptly thereof prior to disclosure), (b) upon the request or demand of any regulatory authority (including any self-regulatory
authority) having jurisdiction over such Commitment Party or any of its affiliates (in which case such Commitment Party agrees
(except with respect to any routine or ordinary course audit or examination conducted by bank accountants or any governmental
or bank regulatory or self-regulatory authority exercising examination or regulatory authority) to the extent practicable and
not prohibited by applicable law, rule or regulation, to inform you promptly thereof prior to disclosure), (c) to the extent that
such information becomes publicly available other than by reason of improper disclosure by such Commitment Party or any of its
affiliates or any related parties thereto in violation of any confidentiality obligations owing to you, Holdings, the Borrower,
the Investors, the Company or any of your or their respective subsidiaries or affiliates or related parties (including those set
forth in this paragraph), (d) to the extent that such information is received by such Commitment Party from a third party that
is not, to such Commitment Party’s knowledge, subject to confidentiality obligations owing to you, Holdings, the Borrower,
the Company or any of your or their respective subsidiaries or affiliates or related parties, (e) to the extent that such information
was already in our possession prior to any duty or other undertaking of confidentiality or is independently developed by the Commitment
Parties without the use of such information, (f) to other Commitment Parties and such Commitment Parties’ affiliates and
to its and their respective officers, directors, partners, employees, legal counsel, independent auditors and other experts or
agents who need to know such information in connection with the Transactions and who are informed of the confidential nature of
such information and who are subject to customary confidentiality obligations of professional practice or who agree to be bound
by the terms of this paragraph (or language substantially similar to this paragraph) (with each such Commitment Party, to the
extent within its control, responsible for such person’s compliance with this paragraph), (g) to potential or prospective
Lenders, hedge providers, participants or assignees, in each case who agree (pursuant to customary syndication practice) to be
bound by the terms of this paragraph (or language substantially similar to this paragraph); provided that (i) the disclosure
of any such information to any Lenders, hedge providers or prospective Lenders, hedge providers or participants or prospective
participants referred to above shall be made subject to the acknowledgment and acceptance by such Lender, hedge provider or prospective
Lender or participant or prospective participant that such information is being disseminated on a confidential basis (on substantially
the terms set forth in this paragraph or as is otherwise reasonably acceptable to you and each Commitment Party, including, without
limitation, as agreed in any Information Materials or other marketing materials) in accordance with the standard syndication processes
of such Commitment Party or customary market standards for dissemination of such type of information, which shall in any event
require “click through” or other affirmative actions on the part of recipient to access such information and (ii)
no such disclosure shall be made by such Commitment Party to any person that is at such time a Disqualified Lender or (h) for
purposes of establishing a “due diligence” defense. In the event that the Incremental Facility is funded, the Commitment
Parties’ and their respective affiliates’, if any, obligations under this paragraph, shall terminate automatically
and be superseded by the confidentiality provisions in the Existing Credit Agreement upon the initial funding of Incremental Loans
thereunder to the extent that such provisions are binding on such Commitment Parties. Otherwise, the confidentiality provisions
set forth in this paragraph shall survive the termination of this Commitment Letter and expire and shall be of no further effect
after the second anniversary of the date hereof.
The
syndication, reimbursement (if applicable), compensation (if applicable in accordance with the terms hereof and the Fee Letter),
indemnification, confidentiality, jurisdiction, governing law, absence of fiduciary relationship and waiver of jury trial provisions
contained herein and in the Fee Letter shall remain in full force and effect regardless of whether the Credit Documentation shall
be executed and delivered and notwithstanding the termination of this Commitment Letter or the Commitment Parties’ commitments
hereunder; provided that your obligations under this Commitment Letter, other than those relating to confidentiality and
to the syndication of the Incremental Facility, shall automatically terminate and be superseded by the corresponding provisions
of the Credit Documentation upon the initial funding thereunder, and you shall be automatically released from all liability in
connection therewith at such time. You may terminate this Commitment Letter and/or all or a portion of the Initial Incremental
Lenders’ respective commitments with respect to the Incremental Facility (or any portion thereof as selected by you) hereunder
at any time subject to the provisions of the preceding sentence.
We
hereby notify you that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October
26, 2001, as amended from time to time, the “PATRIOT Act”) and 31 C.F.R. § 1010.230 (the “Beneficial
Ownership Regulation”), each of us and each of the Lenders may be required to obtain, verify and record information
that identifies the Borrower and the Guarantors, which information may include their names, addresses, tax identification numbers
and other information that will allow each of us and the Lenders to identify the Borrower and Guarantors in accordance with the
PATRIOT Act and the Beneficial Ownership Regulation. This notice is given in accordance with the requirements of the PATRIOT Act
and the Beneficial Ownership Regulation and is effective as to each of us and each Lender.
If
the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms of this Commitment Letter and of
the Fee Letter by returning to us executed counterparts hereof and of the Fee Letter not later than 11:59 p.m., New York City
time, on the date that is five (5) business days after the date hereof (the “Acceptance Date”). The
Initial Incremental Lenders’ respective commitments hereunder and the obligations and agreements of the Commitment Parties
contained herein will expire at such time in the event that we have not received such executed counterparts in accordance with
the immediately preceding sentence. If you do so execute and deliver to us this Commitment Letter and the Fee Letter, this Commitment
Letter and the commitments and undertakings of each of the Commitment Parties shall remain effective and available for you until
the earliest to occur of (i) after execution of the Acquisition Agreement and prior to the consummation of the Acquisition, the
termination of the Acquisition Agreement by you (or your affiliates) in accordance with its terms (other than with respect to
provisions therein that expressly survive termination), (ii) 11:59 p.m., New York City time, on the date that is five business
days after the Termination Date (as defined in the Acquisition Agreement as in effect on the date hereof), which shall automatically
be extended to the extent the Termination Date (as defined in the Acquisition Agreement as in effect on the date hereof) is extended
in accordance with the Acquisition Agreement as in effect on the date hereof or (iii) the consummation of the Acquisition without
the funding of the Incremental Facility. Upon the occurrence of any of the events referred to in the preceding sentence, this
Commitment Letter and the commitments of the Commitment Parties hereunder and the agreement of the Commitment Parties to provide
the services described herein shall automatically terminate unless each of the Commitment Parties shall, in its sole discretion,
agree to an extension; provided that the termination of any such commitment does not prejudice your rights and remedies
in respect of any breach of this Commitment Letter.
[Remainder
of this page intentionally left blank]
The
Commitment Parties are pleased to have been given the opportunity to assist you in connection with the financing for the Acquisition.
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Very truly yours, |
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GOLDMAN SACHS BANK USA |
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By: |
/s/ Charles Johnston |
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Name: Charles Johnston |
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Title: Authorized Signatory |
[Signature
Page to Commitment Letter]
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Name: |
Charles D. Smith |
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Title: |
Managing Director, Head of Leveraged Finance |
[Signature
Page to Commitment Letter]
Accepted
and agreed to as of
the date first above written:
HEARTS
PARENT, LLC
Name:
Rene Kern
Title:
President
[Signature Page to Commitment Letter]
EXHIBIT A
Project
Hearts
Transaction
Description
Capitalized
terms used but not defined in this Exhibit A shall have the meanings set forth in the other Exhibits to the Commitment Letter
to which this Exhibit A is attached (the “Commitment Letter”) or in the Commitment Letter.
Hearts
Parents, LLC, a Delaware limited liability company (“you”), intends to acquire, directly or indirectly,
all of the equity interests of the business previously identified to us by you as “Hearts” (collectively, the “Company”)
from the equity holders of the Company other than the Sponsors. In connection with the foregoing, it is intended that:
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a) |
The proceeds from the Incremental Facility funded on the Closing Date shall be used to consummate the Acquisition (the “Acquisition
Consideration”) and to pay fees, premiums and expenses incurred in connection with the Transactions (such fees, premiums and expenses, the “Transaction Costs” and together with the Acquisition Consideration, the “Acquisition
Funds”). |
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b) |
Pursuant to the Agreement and Plan of Merger, by and among, inter alios, you, Hearts Merger Sub, Inc. and the Company, dated as of
February 15, 2024 (together with all exhibits, annexes, schedules and disclosure letters thereto, collectively, as modified, amended, supplemented or waived, the “Acquisition Agreement”), you will acquire, directly or indirectly,
all of the outstanding equity interests of the Company that are not owned directly or indirectly by the Sponsors (the “Acquisition”) and, subsequent to the Acquisition, merge with and into the Company (the “Merger”). |
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c) |
The Borrower will obtain up to $250.0 million (plus, at the Borrower’s election, an amount sufficient to fund any upfront fees or OID required
to be funded due to the exercise of the Market Flex Provisions in the Fee Letter) under the Incremental Facility (the “Incremental Facility”) on the Closing Date of the Acquisition. |
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d) |
At your sole option, you will cause the Borrower to obtain the Potential Amendments to the Existing Credit Agreement on the Closing Date. |
The
Acquisition, the Merger, the other transactions described above, the transactions consummated in connection therewith and the
payment of related fees and expenses are collectively referred to herein as the “Transactions”.
EXHIBIT B
Project
Hearts
$250.0
million Incremental Term Loan Facility
Summary
of Principal Terms and Conditions
All
capitalized terms used but not defined herein shall have the meanings given to them in the Commitment Letter to which this term
sheet is attached, including Exhibit A thereto or the Existing Credit Agreement, as applicable.
Borrower: |
(i) Prior to the funding of the Incremental Facility, Hearts Parent, LLC (the "Initial
Borrower") and (ii) for the funding of the Incremental Facility and thereafter, subject to the Potential Amendments (if applicable), Genuine Financial Holdings LLC, a Delaware limited liability company (the “Ultimate Borrower”
and each the “Borrower” as applicable). |
Holdings: |
Genuine Mid Holdings LLC, a Delaware limited liability company (“Holdings”). |
Transaction: |
As set forth in Exhibit A to the Commitment Letter. |
Administrative Agent: |
Bank of America, N.A. will act as sole and exclusive administrative agent and collateral agent (in
such capacity, the “Administrative Agent”) in respect of the Incremental Facility. |
Joint Bookrunners and Lead Arrangers: |
Each of Goldman and RBCCM will act as a lead arranger and bookrunner (together with any Additional
Commitment Party appointed pursuant to the Commitment Letter, the “Lead Arrangers,” each in such capacity, a “Lead Arranger”) with respect to the Incremental Facility and will perform the duties customarily
associated with such roles. |
Incremental
Facility: |
An incremental senior secured first lien term loan facility (the “Incremental Facility”)
in U.S. Dollars in an aggregate principal amount of up to $250.0 million, plus, at the Borrower’s election, an amount sufficient to fund any upfront fees or OID required to be funded due to the exercise of the Market Flex Provisions in the Fee
Letter. The loans under the Incremental Facility are referred to as the “Incremental Term Loans” and the Lenders thereunder are referred to as the “Incremental Term Loan Lenders” and, together with the Lenders under
the Existing Credit Agreement, the “Lenders”). |
Purpose/Use of Proceeds: |
The proceeds of borrowings under the Incremental Facility will be used by the Borrower, on the date
of the initial borrowing under the Incremental Facility (the “Closing Date”), together with the proceeds of any equity contribution (if applicable), Revolving Loans and cash on hand of the Borrower and the Company, solely to
finance the Transactions and fund upfront fees or OID in respect of any of the Incremental Facility imposed due to the exercise of the “Market Flex Provisions” under the Fee Letter. |
Availability: |
The Incremental Facility will be available in U.S. Dollars in a single drawing on the Closing Date. Amounts borrowed under
the Incremental Facility that are repaid or prepaid may not be reborrowed. |
Interest Rates and Fees:
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The same as those set forth in the Existing Credit Agreement. |
Default Rate: |
The same as set forth in the Existing Credit Agreement. |
Final Maturity and Amortization: |
The Incremental Facility will mature on the same date as the
Initial Term Loans set forth in the Existing Credit Agreement (i.e. September 28, 2030).
The Incremental Facility will amortize on the same terms as the
Term Loans set forth in the Existing Credit Agreement.
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Guarantees: |
All obligations of the Borrower under the Incremental Facility (the “Obligations”) will
be unconditionally guaranteed by the Guarantors (as defined in the Existing Credit Agreement) to the extent required under the Existing Credit Agreement. |
Security: |
Subject the Limited Conditionality Provisions, the Obligations and the Guarantees in respect of the
Obligations will be secured on a first priority basis by the Collateral (as defined in the Existing Credit Agreement) on a pari passu basis with the obligations under the Existing Credit Agreement. |
Mandatory Prepayments: |
The Incremental Term Loans shall be prepaid on the same terms and conditions as those set forth in
the Existing Credit Agreement. |
Incremental Amendment Credit Documentation: |
Subject to the Limited Conditionality Provisions, the making of the Incremental Loans will be
governed by the Borrower’s existing First Lien Credit Agreement, dated as of July 12, 2018, among Holdings, the Borrower, Bank of America, N.A., the lenders from time to time party thereto (the “Existing Lenders”) and the other
parties thereto (as amended by that certain Amendment No. 1 to First Lien Credit Agreement, dated as of June 3, 2022 and that certain Second Amendment to First Lien Credit Agreement, dated as of September 28, 2023, the “Existing Credit
Agreement”), as amended by an amendment to the Existing Credit Agreement to be dated as of the Closing Date, among Holdings, the Borrower, the Incremental Lenders and the Administrative Agent setting forth the terms of the
Incremental Term Loans as required by Section 2.14 of the Existing Credit Agreement (the “Incremental Amendment”) and any other First Lien Loan Documents as may be required by Section 2.14 of the Existing Credit Agreement (such
documentation, collectively, the “Credit Documentation”); provided that, if applicable, the Incremental Amendment shall also give effect to the Potential Amendments and be signed by the requisite Lenders under the Existing
Credit Agreement with respect to the same. |
Representations and Warranties: |
Subject in all respects to the Limited Conditionality Provisions, the same as those set forth in the
Existing Credit Agreement. |
Affirmative Covenants: |
The same as those set forth in the Existing Credit Agreement. |
Negative Covenants: |
The same as those set forth in the Existing Credit Agreement. |
Financial Covenant: |
None. |
Events of Default: |
The same as those set forth in the Existing Credit Agreement. |
Voting: |
On the same terms as those set forth in the Existing Credit Agreement. |
Cost and Yield Protection: |
On the same terms as those set forth in the Existing Credit Agreement. |
Assignments and Participations: |
On the same terms as those set forth in the Existing Credit Agreement. |
Expenses and Indemnification: |
On the same terms as those set forth in the Existing Credit Agreement. |
EU/UK Bail-In Provisions: |
On the same terms as those set forth in the Existing Credit Agreement. |
Governing Law and Forum: |
New York. |
Counsel to the Lead Arrangers: |
Latham & Watkins LLP. |
ANNEX I TO EXHIBIT
B
Project
Hearts
Potential
Amendments
Modify
the Existing Credit Agreement in form reasonably satisfactory to the Lead Arrangers to:
1. add Hearts Parent, LLC or a wholly-owned subsidiary thereof
or a parent entity of Hearts Parent, LLC that wholly owns Hearts Parent,
LLC as an additional borrower (the “Buyer Borrower”) that shall execute the Security Documents and grant
security interests in its assets pursuant thereto and guarantee the Obligations of the other Loan Parties;
2. permit the Buyer Borrower to borrow the Incremental Facility;
and
3. subject
to the ultimate corporate structure after giving effect to the Transactions, provide that either (the selection of such choice
to be at your option) (a) the Buyer Borrower shall be subject to the passive holding company covenant contained in Section 10.8
(and at the election of the Borrower, may be merged or otherwise consolidated with Holdings, the Borrower or a Restricted Subsidiary
after the Closing Date) or (b) the “top-level borrower” for purposes of the Existing Credit Agreement shall be amended
to be the Buyer Borrower and “Holdings” shall be amended to be the immediate parent of the Buyer Borrower.
EXHIBIT C
Project
Hearts
Summary of Additional Conditions
The
availability and initial funding on the Closing Date of the Incremental Facility and the effectiveness of the Potential Amendments
(if applicable and subject to obtaining the requisite consents therefor) shall be subject solely to the satisfaction or waiver
by the Lead Arrangers of the following conditions:
1. The Acquisition shall have been prior to or, substantially
concurrently with the initial borrowing under the Incremental Facility
shall be, consummated in all material respects in accordance with the terms of the Acquisition Agreement, without giving effect
to any modifications, amendments or express waivers or consents by you (or your affiliates) thereto that are materially adverse
to the Initial Incremental Lenders in their capacities as such without the consent of the Lead Arrangers (in each case, not to
be unreasonably withheld, conditioned or delayed) (it being understood and agreed that (a) any change to the definition of Company
Material Adverse Effect (as defined in the Acquisition Agreement) shall be deemed materially adverse to the Initial Incremental
Lenders and (b) any modification, amendment or express waiver or consents by you (or your affiliates) that results in an increase
or reduction in the purchase price shall be deemed to not be materially adverse to the Initial Incremental Lenders so long as
(i) any increase in the purchase price shall not be funded with additional indebtedness other than amounts permitted to be drawn
under the Revolving Facility and (ii) any reduction shall be allocated to reduce the Incremental Facility; provided that
the Lead Arrangers shall be deemed to have consented to such amendment, waiver or consent unless they shall object thereto within
three (3) days after notice of such proposed amendment, waiver or consent is delivered to the Lead Arrangers.
2. No Company Material Adverse Effect (as defined in the
Acquisition Agreement) will have occurred after the date of the Acquisition
Agreement.
3. All fees required to be paid on the Closing Date pursuant to
the Fee Letter and reasonable and documented out-of-pocket expenses
required to be paid on the Closing Date pursuant to the Commitment Letter, to the extent invoiced at least three business days
prior to the Closing Date (except as otherwise reasonably agreed by the Borrower), shall, upon the initial borrowings under the
Incremental Facility, have been, or will be substantially simultaneously, paid (which amounts may, at your option, be offset against
the proceeds of the Incremental Facility).
4. The Lead Arrangers shall have received the consolidated
financial statements referred to in Section 3.10(a) of the Acquisition
Agreement that have been filed with the Company SEC Reports (as defined in the Acquisition Agreement) prior to the date hereof.
The Lead Arrangers hereby acknowledge receipt of the financial statements referred to in the preceding sentence. The Lead Arrangers
shall have received (i) the audited financial statements required by Section 9.1(a) of the Existing Credit Agreement with respect
to the fiscal year ended December 31, 2023 to the extent the Closing Date occurs more than 90 days after December 31, 2023 and
(ii) the unaudited financial statements required by Section 9.1(b) of the Existing Credit Agreement with respect to any fiscal
quarter ending after December 31, 2023 that ends at least 45 days prior to the Closing Date.
5. The
Administrative Agent and the applicable Lead Arrangers shall have received, at least three (3) Business Days (as defined in the
Acquisition Agreement) prior to the Closing Date, all documentation and other information about the Borrowers and the Guarantors
that is (i) (x) required by regulatory authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including, without limitation, the PATRIOT Act and regulations pertaining to beneficial ownership of legal
entity customers (such rules and regulations, the “KYC Rules”) and (y) (I) set forth on the list of
KYC Requirements delivered to you on or prior to the date hereof or (II) in connection with the appointment of any Additional
Commitment Party, delivered to you by such Additional Commitment Party on or prior to the date that such Additional Commitment
Party becomes party hereto and (ii) all other documentation and other information about the Borrowers and the Guarantors that
is (x) requested in writing at least ten (10) Business Days prior to the Closing Date by the Administrative Agent or the Lead
Arrangers and (y) (i) required by regulatory authorities under the KYC Rules as a result of a change to the KYC Rules occurring
after the date hereof, (ii) required as a result of the occurrence of any change in the Administrative Agent’s or any Lead
Arranger’s, as applicable, circumstances, which change results in additional information being required under the KYC Rules
or (iii) after the Administrative Agent’s or Lead Arranger’s review of any information delivered pursuant to this
paragraph 6, reasonably determined to be required under the KYC Rules.
6. Subject in all respects to the Limited Conditionality
Provision, (a) the Credit Documentation (which shall, in each case, be in
accordance with the terms of the Commitment Letter and the Term Sheet and the Existing Credit Agreement) shall have been executed
and delivered by the Borrower, (b) the delivery of a customary borrowing notice and (c) customary legal opinions, customary
secretary certificates (certifying as to resolutions, organizational documents, incumbency and the accuracy in all material respects
of the Specified Representations), organizational documents, customary evidence of authorization and good standing certificates
in jurisdictions of formation/organization, in each case with respect to the Borrower and the Guarantors (to the extent applicable)
and a solvency certificate (as of the Closing Date after giving effect to the Transactions and in the same form used in connection
with the Existing Credit Agreement, certified by a senior authorized financial officer of the Borrower) shall have been delivered
to the applicable Lead Arrangers.
7. Subject to the Limited Conditionality Provision and the
terms of the Existing Credit Agreement, the Company Representations and
the Specified Representations shall be true and correct in all material respects (except in the case of any Specified Representation
which expressly related to a given date or period, such representation and warranty shall be true and correct in all material
respects as of the respective date for the respective period, as the case may be); provided, that to the extent any of the Specified
Representations are qualified by or subject to the “material adverse effect”, “material adverse change”
or similar term or qualification, the definition thereof shall be the definition of Company Material Adverse Effect (as defined
in the Acquisition Agreement) for purposes of any such representations and warranties made or deemed made on, or as of, the Closing
Date (or any date prior thereto).
8. The Closing Date shall not occur prior to the date that is
30 days after the date hereof.
C-2
Exhibit 107
CALCULATION OF FILING FEE TABLES
Schedule 13E-3
(Form Type)
HireRight Holdings Corporation
Hearts Parent, LLC
Hearts Merger Sub, Inc.
General Atlantic, L.P.
GAP (Bermuda) L.P.
General Atlantic GenPar (Bermuda), L.P.
General Atlantic Partners (Bermuda) IV, L.P.
General Atlantic Partners (Bermuda) EU, L.P.
General Atlantic GenPar, L.P.
General Atlantic (Lux) S.à r.l.
GAP Coinvestments III, LLC
GAP Coinvestments IV, LLC
GAP Coinvestments V, LLC
GAP Coinvestments CDA, L.P.
General Atlantic GenPar (Lux) SCSp
General Atlantic Partners (Lux) SCSp
General Atlantic Partners AIV-1 A, L.P.
General Atlantic Partners AIV-1 B, L.P.
General Atlantic (SPV) GP, LLC
General Atlantic Partners 100, L.P.
General Atlantic (HRG) Collections, L.P.
GAPCO AIV Holdings, L.P.
GAPCO AIV Interholdco (GS), L.P.
GA AIV-1 B Interholdco, L.P.
GA AIV-1 B Interholdco (GS), L.P.
GA AIV-1 A Interholdco (GS), L.P.
General Atlantic Partners (Bermuda) HRG II, L.P.
General Atlantic (SPV) GP (Bermuda), LLC
Trident VII, L.P.
Trident VII Parallel Fund, L.P.
Trident VII DE Parallel Fund, L.P.
Trident VII Professionals Fund, L.P.
Trident Capital VII, L.P.
Stone Point GP Ltd.
(Exact Name of Registrant and Name of Person Filing Statement)
Table 1: Transaction Valuation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proposed
Maximum
Aggregate Value of
Transaction
|
Rate
|
|
Fees to be Paid
|
|
$
|
279,918,554.54
|
(1)
|
|
|
0.00014760
|
|
|
$
|
41,315.98
|
(2)
|
Fees Previously Paid
|
|
$
|
0
|
|
|
|
|
|
|
$
|
0
|
|
Total Transaction Valuation
|
|
$
|
279,918,554.54
|
|
|
|
|
|
|
|
|
|
Total Fees Due for Filing
|
|
|
|
|
|
|
|
|
|
$
|
41,315.98
|
|
Total Fees Previously Paid
|
|
|
|
|
|
|
|
|
|
$
|
0
|
|
Total Fee Offsets
|
|
|
|
|
|
|
|
|
|
$
|
41,315.98
|
(3)
|
Net Fee Due
|
|
|
|
|
|
|
|
|
|
$
|
0
|
|
(1)
|
Aggregate number of securities to which transaction applies: As of March 18, 2024, the maximum number of shares of HireRight Holdings Corporation’s common stock to which this transaction applies is estimated to be
19,618,682, which consists of (1) 16,779,666 shares of common stock entitled to receive the per share merger consideration of $14.35; (2) 2,516,247 shares of common stock underlying outstanding restricted stock units, which may be entitled to
receive the per share merger consideration of $14.35; (3) 176,553 shares of common stock underlying outstanding performance restricted stock units (assuming target performance), which may be entitled to receive the per share merger
consideration of $14.35; (4) 97,000 shares of common stock underlying stock options granted under the HireRight Holdings Corporation 2021 Omnibus Incentive Plan that have an exercise price per share that is less than $14.35 (such options, the
“In-the-Money 2021 Plan Options”), which may be entitled to receive the per share merger consideration of $14.35 minus the applicable exercise price, and (5) 49,216 shares of common stock underlying outstanding purchase rights under the
employee stock purchase plan, which may be entitled to receive the per share merger consideration of $14.35 less the price per share applicable to the purchases under the employee stock purchase plan.
|
(2)
|
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): Estimated solely for
the purposes of calculating the filing fee, as of March 18, 2024, the underlying value of the transaction was calculated based on the sum of (1) the product of 16,779,666 shares of common stock and the per share merger consideration of
$14.35; (2) the product of 2,516,247 shares of common stock underlying outstanding restricted stock units and the per share merger consideration of $14.35; (3) the product of 176,553 shares of common stock underlying outstanding performance
restricted stock units (assuming target performance) and the per share merger consideration of $14.35; (4) the product of 97,000 shares of common stock underlying the In-the-Money 2021 Plan Options and $3.47 (which is the difference between
the per share merger consideration of $14.35 and the weighted average exercise price of $10.88) and (5) the product of 49,216 shares of common stock underlying outstanding purchase rights under the employee stock purchase plan and $3.09
(which is the difference between the per share merger consideration of $14.35 and $11.2625, which represents the product of (i) the closing price of the common stock on November 20, 2023 of $13.25 and (ii) 85%, which is the percentage of the
price per share applicable to purchases under the employee stock purchase plan). In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying the sum calculated in the
preceding sentence by 0.00014760.
|
(3)
|
HireRight Holdings Corporation previously paid $41,315.98 upon the filing of its Preliminary Proxy Statement on Schedule 14A on March 20, 2024 in connection with the transaction reported hereby.
|
Table 2: Fee Offset Claims and Sources
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registrant or Filer
Name
|
Form or
Filing Type
|
File Number
|
Initial Filing Date
|
Filing Date
|
Fee Offset
Claimed
|
Fee Paid with
Fee Offset
Source
|
Fee Offset
Claims
|
|
Schedule 14A
|
001-40982
|
March 20, 2024
|
|
$41,315.98
|
|
Fee Offset
Sources
|
HireRight Holdings Corporation
|
Schedule 14A
|
001-40982
|
|
March 20, 2024
|
|
$41,315.98 (3)
|