EXECUTION COPY

          NINTH AMENDMENT AND WAIVER dated as of October 22, 2004 (this
“Amendment”), to the Credit Agreement dated as of September 22, 2000 (the
“Credit Agreement”), as heretofore amended, among Select Medical Corporation, a
Delaware corporation (the “Company”), Canadian Back Institute Limited, an
Ontario corporation and a wholly owned subsidiary of the Company (“CBIL” and,
together with the Company, the “Borrowers”), the Lenders party thereto, JPMorgan
Chase Bank, as US Agent and US Collateral Agent, JPMorgan Chase Bank, Toronto
Branch (as successor to J.P. Morgan Bank Canada), as Canadian Agent and Canadian
Collateral Agent, Banc of America Securities, LLC, as Syndication Agent, and
CIBC, Inc., as Documentation Agent.

          WHEREAS, the Borrowers have requested that the Lenders (such term and
each other capitalized term used but not otherwise defined herein having the
meaning assigned to it in the Credit Agreement) approve the amendment of certain
provisions of the Credit Agreement;

          WHEREAS, the undersigned Lenders are willing, on the terms and subject
to the conditions set forth herein, to approve such amendment;

          NOW, THEREFORE, in consideration of the premises, the Borrowers and
the undersigned Lenders hereby agree as follows:

          SECTION 1. Amendment. Effective as of the Amendment Effective Date (as
defined in Section 4), the parties hereto hereby amend the Credit Agreement as
follows:

          (a) Amendment of Section 1.01. Section 1.01 is hereby amended as
follows:

          (i) The definition of “Change of Control” is amended to read as
follows:

          “‘Change of Control’ means

     (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) or group is or becomes at any time the “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for
purposes of this clause (i) such person or group shall be deemed to have
“beneficial ownership” of all shares that any such person or group has the right
to acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of voting stock of the Company
representing in excess of 30% of the total voting power represented by the
issued and outstanding Equity Interests of the Company;

 

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     (ii) occupation of a majority of the seats (other than vacant seats) on the
board of directors of the Company by Persons who were neither (a) nominated by
the board of directors of the Company nor (b) appointed by directors so
nominated;

     (iii) at any time, the failure of the Company, directly or indirectly, to
(a) own at least 51% of the outstanding shares of voting stock of CBIL or
(b) have the power to direct the management and policies of CBIL; or

     (iv) at any time, the occurrence of a “change in control” or similar event,
however denominated, under the Senior Subordinated Notes, any other Indebtedness
with a principal amount in excess of $5,000,000 or any preferred stock of the
Company or any Significant Subsidiary.”

          (ii) The definition of “Prepayment Event” is amended by revising
paragraph (c) of such definition to read as follows:

     “(c) the issuance by the Company or any Subsidiary of any Equity Interests,
or the receipt by the Company or any Subsidiary of any capital contribution,
other than any such issuance of Equity Interests to, or receipt of any such
capital contribution from, the Company or a Subsidiary; or”

          (iii) The definition of “Controlling Shareholders” is deleted in its
entirety.

          (iv) The following new definition is inserted in its proper
alphabetical position:

          ““Exchange Act” means the Securities Exchange Act of 1934. ”

          (b) Amendment of Section 7.01. Section 7.01 is amended by replacing “;
or” at the end of paragraph (o) with “.” and deleting paragraph (p) in its
entirety.

          SECTION 2. Waiver. The Lenders waive any Default that would not have
occurred had this Amendment been in effect immediately prior to its occurrence.

          SECTION 3. Representations and Warranties. Each of the Borrowers
represents and warrants to each of the Lenders that, after giving effect to the
amendments contemplated hereby, (a) the representations and warranties of such
Borrower set forth in the Credit Agreement are true and correct in all material
respects on and as of the date of this Amendment, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties shall be true and correct in all
material respects as of the earlier date) and (b) no Default has occurred and is
continuing.

          SECTION 4. Effectiveness. This Amendment shall become effective as of
the date (the “Amendment Effective Date”) when the US Agent (or its counsel)
shall have received (i) counterparts of this Amendment signed on behalf of the
Borrowers and

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the Required Lenders or (ii) written evidence satisfactory to the US Agent
(which may include telecopy transmissions of signed signature pages) that the
Borrowers and the Required Lenders have signed counterparts of this Amendment.

          SECTION 5. Applicable Law. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

          SECTION 6. No Other Amendments. Except as expressly set forth herein,
this Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect the rights and remedies of any party under, the
Credit Agreement, nor alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the Credit
Agreement, all of which are ratified and affirmed in all respects and shall
continue in full force and effect. This Amendment shall apply and be effective
only with respect to the provision of the Credit Agreement specifically referred
to herein. This Amendment shall constitute a “Loan Document” for all purposes of
the Credit Agreement and the other Loan Documents.

          SECTION 7. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one contract. Delivery of an executed
counterpart of a signature page of this Amendment by facsimile transmission
shall be as effective as delivery of a manually executed counterpart of this
Amendment.

          SECTION 8. Headings. Section headings used herein are for convenience
of reference only, are not part of this Amendment and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Amendment.

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          IN WITNESS WHEREOF, the Borrower and the undersigned Lenders have
caused this Amendment to be duly executed by their duly authorized officers, all
as of the date first above written.

              SELECT MEDICAL CORPORATION,
 
       

       by:   /s/ Michael E. Tarvin

     

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      Name: Michael E. Tarvin

      Title:   Senior Vice President
 
            CANADIAN BACK INSTITUTE LIMITED,
 
       

       by:   /s/ Michael E. Tarvin

     

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      Name: Michael E. Tarvin
Title:   Vice President
 
            JPMORGAN CHASE BANK, individually and as US Agent
and US Collateral Agent,
 
       

       by:   /s/ Stephanie Parker

     

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      Name: Stephanie Parker
Title:   Vice President
 
            JPMORGAN CHASE BANK, TORONTO BRANCH, individually     and as
Canadian Agent and Canadian Collateral     Agent,
 
       

       by:   /s/ Stephanie Parker

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      Name: Stephanie Parker

      Title:   Vice President

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              To approve the Ninth Amendment and Waiver (the
“Amendment”) to the Select Medical Corporation
Credit Agreement dated as of October 22, 2004:
 
            Name of Institution:
 
            Bank of America, N.A.
 
       

       by:   /s/ Kevin Wagley

     

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      Name: Kevin Wagley

      Title: Principal

 

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              To approve the Ninth Amendment and Waiver (the     “Amendment”) to
the Select Medical Corporation     Credit Agreement dated as of October 22,
2004:
 
            Name of Institution:
 
            CAYLON NEW YORK BRANCH
 
       

       by:   /s/ Charles Heidsieck

     

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      Name: Charles Heidsieck

      Title: Managing Director
 
       

       by:   /s/ Misha Zabotin

     

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      Name: Misha Zabotin

      Title: Managing Director

 

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              To approve the Ninth Amendment and Waiver (the     “Amendment”) to
the Select Medical Corporation     Credit Agreement dated as of October 22,
2004:
 
            Name of Institution:
 
            CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH
 
       

       by:   /s/ Paul L. Colon

     

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      Name: Paul L. Colon

      Title: Director
 
       

       by:   /s/ Karim Blasetti

     

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      Name: Karim Blasetti

      Title: Associate

 

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              To approve the Ninth Amendment and Waiver (the     “Amendment”) to
the Select Medical Corporation     Credit Agreement dated as of October 22,
2004:
 
            Name of Institution:
 
            GENERAL ELECTRIC CAPITAL CORPORATION
 
       

       by:   /s/ Mei Nishiwaki

     

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      Name: Mei Nishiwaki

      Title: Duly Authorized Signatory
 
       

       by:    

     

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      Name:

      Title:

 

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              To approve the Ninth Amendment and Waiver (the     “Amendment”) to
the Select Medical Corporation     Credit Agreement dated as of October 22,
2004:
 
            Name of Institution:
 
            WACHOVIA BANK, NATIONAL ASSOCIATION
 
       

       by:   /s/ Jeanette A. Griffin

     

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      Name: Jeanette A. Griffin

      Title: Director
 
       

       by:    

     

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      Name:

      Title: