EXHIBIT G
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WCAS CAPITAL PARTNERS IV, L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
October 17, 2004
EGL Holding Company
c/o Welsh, Carson, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Commitment Letter
Ladies and Gentlemen:
Reference is hereby made to 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"). Capitalized terms used and not otherwise defined herein have the
meanings ascribed to them in the Merger Agreement.
WCAS Capital Partners IV, L.P. ("WCAS XX XX") hereby commits to Parent
that, at the Effective Time, subject to the satisfaction or waiver (with WCAS CP
IV's consent) of each of the conditions precedent set forth in Sections 6.1 and
6.2 of the Merger Agreement, WCAS XX XX shall purchase, for an aggregate
purchase price of $150,000,000 in cash, (i) senior subordinated notes of Parent
in an aggregate principal amount of $150,000,000 and having the terms described
on Annex A hereto and (ii) equity securities of Parent (the amount and type of
such equity securities to be determined in accordance with the methodology
referred to in the Amended and Restated Agreement of Limited Partnership of WCAS
XX XX). 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. WCAS CP IV's commitment and other obligations
under this letter agreement will terminate upon the termination of the Merger
Agreement.
At the Closing, Parent shall cause the Surviving Corporation to
reimburse WCAS XX XX and its affiliates for (or pay on their behalf) all of the
out-of-pocket fees and expenses incurred by them in connection with the
transactions contemplated by the Merger Agreement and this letter agreement,
including, without limitation, the fees and expenses of their legal, accounting,
financial and other advisors.
Notwithstanding anything that may be expressed or implied in this
letter agreement, Parent covenants, agrees and acknowledges that no Person other
than WCAS XX XX shall have any obligation to capitalize Parent or Acquisition
hereunder and that, notwithstanding that WCAS XX XX is a partnership, 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 WCAS XX XX, against any current or future general or limited partner of WCAS
XX XX 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 WCAS XX XX or any current or future general or limited partner of
WCAS XX XX 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 WCAS XX XX 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 WCAS 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 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,
WCAS CAPITAL PARTNERS IV, L.P.
By WCAS XX XX Associates LLC,
General Partner
By /s/ Xxxx X. Xxxxxxx
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Managing Member
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
ANNEX A
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Summary of Principal Terms of Notes
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Issuer Parent
Principal Amount: $150,000,000
Ranking: Subordinate in right of payment to any guaranty by
Parent of the Surviving Corporation's senior credit
facility ("Senior Indebtedness") on terms satisfactory
to the providers of the senior credit facility and
bridge loan facility
Maturity: The tenth anniversary of the Closing Date
Optional Prepayment: At any time at par
Mandatory Prepayment: Upon a change of control or an IPO
Interest Rate: 10.0% per annum for interest paid in cash and 12.0% per
annum for interest paid-in-kind
Interest Payments: Payable in cash on a semi-annual basis to the extent
allowed under the agreements governing Senior
Indebtedness. If not paid in cash, interest shall be
paid-in-kind
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