EXHIBIT E
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XXXXX XXXXXXX FUND VII, X.X.
Xxxxx Tower, 92nd Floor
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx , XX 00000
October 17, 2004
EGL Holding Company
c/o Welsh, Carson, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Equity Commitment Letter
Ladies and Gentlemen:
Reference is hereby made to (i) the Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), by and among EGL Holding
Company, a Delaware corporation ("Parent"), EGL Acquisition Corp., a Delaware
corporation ("Acquisition"), and Select Medical Corporation, a Delaware
corporation (the "Company"), (ii) the Agreement, dated as of the date hereof
(the "Rollover Agreement"), by and among Parent and the Rollover Investors named
therein and (iii) the Equity Commitment Letter, dated the date hereof (the "WCAS
Equity Commitment Letter"), by and between Parent and Welsh, Carson, Xxxxxxxx &
Xxxxx IX, L.P ("WCAS"). Capitalized terms used and not otherwise defined herein
have the meanings ascribed to them in the Merger Agreement.
Xxxxx Xxxxxxx Fund VII, L.P. ("TCEP") hereby commits to Parent that,
at the Effective Time, subject to the satisfaction or waiver of each of the
conditions precedent set forth in Sections 6.1 and 6.2 of the Merger Agreement,
TCEP and its related co-investors, if any, (together with TCEP, the "Investors")
shall purchase equity securities of Parent for an aggregate purchase price of
$50,000,000 in cash. Such purchase shall be (i) made by TCEP pursuant to
investment documentation substantially in the forms attached as Exhibits A, B, C
and D to the Rollover Agreement, (ii) conditioned upon and made concurrently
with the equity investment contemplated by the WCAS Equity Commitment Letter
(the "WCAS Investment") and (iii) made at the same price per share and in the
same relative proportions (as between classes of equity securities) as are
applicable to the WCAS Investment. The proceeds of such purchase will be
contributed by Parent to Acquisition in exchange for common equity of
Acquisition and used by Acquisition to provide a portion of the funds needed to
consummate the Merger, to finance the Company's tender offer for its existing
senior subordinated notes, to repay certain of the existing senior indebtedness
of the Company and its subsidiaries and to pay transaction expenses in
connection with the Merger
and the transactions related thereto. TCEP's commitment and other obligations
under this letter agreement will terminate upon the termination of the Merger
Agreement.
Notwithstanding anything that may be expressed or implied in this
letter agreement, Parent covenants, agrees and acknowledges that no Person other
than TCEP shall have any obligation to capitalize Parent or Acquisition
hereunder and that, notwithstanding that TCEP and certain of the other Investors
are partnerships, no recourse hereunder or under any documents or instruments
delivered in connection herewith shall be had against any current or future
officer, agent or employee of TCEP or of any other Investor, against any current
or future general or limited partner of TCEP or of any other Investor or against
any current or future director, officer, employee, general or limited partner,
member, affiliate or assignee of any of the foregoing, whether by the
enforcement of any assessment or by any legal or equitable proceeding, or by
virtue of any statute, regulation or other applicable law, or otherwise. Without
limiting the generality of the foregoing it is expressly agreed and acknowledged
by Parent that no personal liability whatsoever shall attach to, be imposed on
or otherwise be incurred by any current or future officer, agent or employee of
TCEP or of any other Investor or any current or future general or limited
partner of TCEP or of any Investor or any current or future director, officer,
employee, general or limited partner, member, affiliate or assignee of any of
the foregoing, as such for any obligations of TCEP or of any Investor under this
letter agreement or any documents or instruments delivered in connection
herewith or for any claim relating to, based on, in respect of or by reason of
such obligations or their creation.
Each of TCEP and Parent covenants, agrees and acknowledges that: (i)
this letter agreement may be executed in two or more counterparts (and may be
delivered by facsimile), each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument; (ii) this letter
agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; (iii) nothing express or implied is
intended to or shall confer upon any other Person any other right, benefit or
remedy of any nature whatsoever relating to, under or by reason of this letter
agreement; (iv) this letter agreement and all claims arising hereunder shall be
governed by and construed and enforced in accordance with the Laws of the State
of New York, without giving effect to the principles of conflicts of Laws
thereof; (v) any claim arising under this letter agreement shall be brought
exclusively in the state or federal courts sitting in New York County, New York,
and such courts are agreed to be a convenient forum for such claims and (vi)
this letter agreement, together with the Merger Agreement, the Rollover
Agreement and the other agreements executed in connection with the Merger
Agreement on the date hereof, sets forth the entire agreement and understanding
of the parties with respect to the subject matter hereof and supercedes all
prior written and oral agreements and understandings with respect thereto.
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Very truly yours,
XXXXX XXXXXXX FUND VII, L.P.
By: TC Partners VII, L.P.
Its General Partner
By: Xxxxx Xxxxxxx Equity Partners, Inc.
Its General Partner
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Vice President
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Accepted and agreed to as of
the first date above written:
EGL HOLDING COMPANY
By /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer
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