<PAGE>

                                                                   Exhibit 10.49


                                    THIRD AMENDMENT dated as of May 31, 2001
                  (this "Amendment") to the Credit Agreement dated as of
                         ---------
                  September 22, 2000 (the "Credit Agreement") as amended by the
                                           ----------------
                  First Amendment dated as of December 28, 2000 and the Second
                  Amendment dated as of January 18, 2001, 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, The
                                ---------
                  Chase Manhattan Bank, as US Agent and US Collateral Agent, The
                  Chase Manhattan Bank of 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 amendments to
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 amendments to the
Credit Agreement;

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

                  SECTION 1. Amendments. Effective as of the Amendment Effective
                             ----------
Date (as defined in Section 4 hereof), the Credit Agreement is hereby amended as
follows:

                  (a) Clause (d) of the definition of "Prepayment Event" in
Section 1.01 is amended by inserting the words "(but in any event the term
"Prepayment Event" shall include Indebtedness incurred under Section
6.05(d)(iii))" at the end of such clause.

                  (b) The following definition is inserted in an appropriate
alphabetical position in Section 1.01:

                           "Qualified Subordinated Indebtedness" means
                            -----------------------------------
         Subordinated Indebtedness of the Company (a) that shall contain
         covenants and events of default in the aggregate not less favorable to
         the Company than those set forth in the Preliminary Offering Memorandum
         dated May [ ], 2001 (the "Offering Memorandum") relating to
<PAGE>

                                                                               2

         the offering of senior subordinated notes by the Company, (b) that
         shall contain subordination provisions in the aggregate at least as
         favorable to the Lenders as those set forth in the Offering Memorandum
         and (c) that shall mature no earlier than, and, except as set forth in
         the Offering Memorandum, require no amortization, redemption,
         repurchase, prepayment or defeasance earlier than, six months following
         the latest of the US Term Maturity Date, the Canadian Term Maturity
         Date and the Revolving Maturity Date and (d) 100% of the Net Proceeds
         of which shall be applied as set forth in Section 2.11(c).

                  (c) Section 2.11(c) is amended by amending and restating in
its entirety the last sentence of such Section as follows:

         Notwithstanding the foregoing, (a) in the event that Net Proceeds of
         the Planned IPO are received by or on behalf of the Company or any
         Subsidiary, the prepayment requirements of this Section 2.11(c) with
         respect to such Net Proceeds shall be limited to the prepayment of US
         Term Loans in an amount equal to the sum of (i) US$24,000,000 plus (ii)
         50% of the excess of such Net Proceeds over US$138,000,000 and (b) in
         the event that Net Proceeds of the issuance of Qualified Subordinated
         Indebtedness are received by or on behalf of the Company, the
         prepayment requirements of this Section 2.11(c) with respect to such
         Net Proceeds shall be as follows: (i) first, within five Business Days
         after such Net Proceeds are received, US$90,000,000 shall be applied to
         repay the Senior Subordinated Notes; (ii) second, within five Business
         Days after such Net Proceeds are received, an amount not less than
         US$35,000,000 shall be applied to prepay US Term Loans; (iii) third,
         within five Business Days after such Net Proceeds are received, the
         lesser of the amount outstanding of the Revolving Borrowings on such
         date and the amount of any remaining Net Proceeds shall be applied to
         prepay Revolving Borrowings (which prepayment shall not reduce the
         Revolving Commitments hereunder unless the Company shall elect to
         reduce such Commitments pursuant to Section 2.08(b)); and (iv)
         thereafter, any remaining Net Proceeds may be retained by the Company
         for general corporate purposes.

                  (d) Section 2.20 is amended and restated in its entirety to
read as follows:

                           SECTION 2.20. Increase in Revolving Commitments. The
                                         ---------------------------------
         Company may, by written notice to the
<PAGE>

                                                                               3


     US Agent, executed by the Company and one or more financial institutions
     (any such financial institution referred to in this Section being called a
     "Prospective Revolving Lender"), which may include any Lender, cause the
      ----------------------------
     Revolving Commitments of the Prospective Revolving Lenders to be increased
     (or cause Revolving Commitments to be extended by the Prospective Revolving
     Lenders, as the case may be) in an amount for each Prospective Revolving
     Lender set forth in such notice, provided, however, that (a) the aggregate
                                      --------  -------
     amount of the Lenders' Revolving Commitments after giving effect to such
     increase shall in no event exceed US$185,000,000, (b) each Prospective
     Revolving Lender, if not already a Lender hereunder, shall be subject to
     the approval of the US Agent (which approval shall not be unreasonably
     withheld) and (c) each Prospective Revolving Lender, if not already a
     Lender hereunder, shall become a party to this Agreement by completing and
     delivering to the US Agent a duly executed Accession Agreement. Increases
     and new Revolving Commitments created pursuant to this Section shall become
     effective (A) in the case of Prospective Revolving Lenders already parties
     hereunder, on the date specified in the notice delivered pursuant to this
     Section and (B) in the case of Prospective Revolving Lenders not already
     parties hereunder, on the effective date of the Accession Agreement. Upon
     the effectiveness of any Accession Agreement to which any Prospective
     Revolving Lender is a party, (i) such Prospective Revolving Lender shall
     thereafter be deemed to be a party to this Agreement and shall be entitled
     to all rights, benefits and privileges accorded a Lender hereunder and
     subject to all obligations of a Lender hereunder and (ii) Schedule 2.01
     shall be deemed to have been amended to reflect the Revolving Commitment of
     the additional Lender as provided in such Accession Agreement. Upon the
     effectiveness of any increase pursuant to this Section in the Revolving
     Commitment of a Lender already a party hereunder, Schedule 2.01 shall be
     deemed to have been amended to reflect the increased Revolving Commitment
     of such Lender. Notwithstanding the foregoing, no increase in the aggregate
     Revolving Commitments (or in the Revolving Commitment of any Lender) shall
     become effective under this Section unless, on the date of such increase,
     the conditions set forth in paragraphs (a) and (b) of Section 4.02 shall be
     satisfied (with all references in such paragraphs to a Borrowing being
     deemed to be references to such increase) and the US Agent shall have
     received a certificate to that effect dated such date and executed by a
     Financial Officer of the Company.
<PAGE>

                                                                               4

         Following any increase of a Lender's Revolving Commitment or any
         extension of a new Revolving Commitment pursuant to this paragraph, any
         Revolving Loans outstanding prior to the effectiveness of such increase
         or extension shall continue outstanding until the ends of the
         respective Interests Periods applicable thereto, and shall then be
         repaid or refinanced with new Revolving Loans made pursuant to Sections
         2.01 and 2.03.

                  (e) Section 5.15 is amended by deleting in its entirety
 paragraph (a) thereof and deleting "(b)" appearing immediately prior to the
 words "The Company and CBIL shall pay and perform".

                  (f) Section 6.05(d) is amended and restated in its entirety to
 read as follows:

                           (d) (i) the Senior Subordinated Notes; (ii) any other
         Subordinated Indebtedness of the Company the proceeds of which are
         solely applied to repay the Senior Subordinated Notes; provided that
                                                                --------
         the terms of any such other Subordinated Indebtedness (including
         maturity, amortization, redemption, repurchase or prepayment
         requirements, covenants and events of default and subordination
         provisions) shall (x) be in the aggregate not less favorable to the
         Company than those of the Senior Subordinated Notes, (y) contain
         subordination provisions at least as favorable to the Lenders as those
         contained in the Senior Subordinated Notes and (z) mature no earlier
         than, and require no amortization, redemption, repurchase or prepayment
         earlier than, the Senior Subordinated Notes; and (iii) Qualified
         Subordinated Indebtedness in an aggregate principal amount not to
         exceed US$225,000,000;

                  (g) Section 6.15 is amended and restated in its entirety to
read as follows:

                           SECTION 6.15. Subordinated Indebtedness. The Company
                                         -------------------------
         will not, and will not permit any Subsidiary to, make or agree to make,
         directly or indirectly, any payment or other distribution (whether in
         cash, securities or other property) of or in respect of the principal
         of or interest on the Senior Subordinated Notes or any other
         Subordinated Indebtedness, or any payment or other distribution
         (whether in cash, securities or other property), including any sinking
         fund or similar deposit, on account of the purchase, redemption,
         retirement,
<PAGE>

                                                                               5

         defeasance, cancellation or termination of the Senior Subordinated
         Notes or any other Subordinated Indebtedness, except (i) scheduled and
         other mandatory payments of interest and principal in respect thereof
         (other than any prepayments of the Senior Subordinated Notes Due 2009
         with the proceeds of any offering or issuance of Equity Interests or
         Indebtedness), (ii) the prepayment of the Senior Subordinated Notes
         with the proceeds of other Subordinated Indebtedness, including
         Qualified Subordinated Indebtedness, permitted under Section 6.05(d)
         and (iii) after an Initial Public Offering, the prepayment of Senior
         Subordinated Notes with up to US$25,000,000 (or US$45,000,000 if such
         Initial Public Offering is the Planned IPO) of the Net Proceeds from
         such Initial Public Offering, provided that, in the case of clauses
                                       --------
         (ii) and (iii) above, (A) the Net Proceeds from such Initial Public
         Offering are applied first to prepay US Term Loans and, unless such
         Initial Public offering is the Planned IPO, amounts owed in respect of
         Canadian Term Loans and outstanding B/As in accordance with Section
         2.11(c), (B) the Net Proceeds from the issuance of Qualified
         Subordinated Indebtedness are applied to prepay Senior Subordinated
         Notes, US Term Loans and Revolving Borrowings in accordance with
         Section 2.11(c) and (C) the Leverage Ratio does not exceed 3.5 to 1.0
         (calculated on a pro forma basis to give effect to the application of
         such Net Proceeds in accordance with Section 2.11 and to any prepayment
         of Senior Subordinated Notes); provided that, in any case, no payment
                                        --------
         shall be made in respect of the Senior Subordinated Notes or any other
         Subordinated Indebtedness that is prohibited by the subordination
         provisions applicable thereto. Notwithstanding the forgoing proviso, it
         is agreed that any prepayment of the Senior Subordinated Notes with
         proceeds from an issuance of Qualified Subordinated Indebtedness
         permitted by clause (ii) of the preceding sentence or with proceeds
         from an Initial Public Offering permitted by clause (iii) of the
         preceding sentence shall not be received in trust for, held for the
         benefit of, or paid over, delivered or transferred to, the Lenders.

                  SECTION 2. Increase in Revolving Commitments of Certain
                             --------------------------------------------
Existing Lenders. In the event that the Amendment Effective Date (as defined in
----------------
Section 4 below) shall have occurred, effective as of the date on which US Term
Loans are prepaid with Net Proceeds of the issuance of Qualified Subordinated
Indebtedness pursuant to Section 2.11(c) of the Credit Agreement, each of the US
Term Lenders that executes a separate signature block appearing on its signature
page
<PAGE>

                                                                               6


 hereto set forth therein for such purpose agrees that its Revolving Commitment
 shall be automatically increased without any further action on the part of any
 Person on such date in an amount equal to (i) the aggregate principal amount of
 such US Term Lender's outstanding US Term Loans prepaid on such date with the
 Net Proceeds of the issuance of Qualified Subordinated Indebtedness plus (ii)
 in the case of CIBC, Inc. and First Union National Bank, the additional amount
 appearing on such US Term Lender's signature page hereto. On the date of such
 prepayment, Schedule 2.01 shall be deemed to be modified to reflect the
 increase in the Revolving Commitment of each such US Term Lender, subject to
 such US Term Lender's indicating its agreement to the terms of this Section 2
 on its signature page hereto (and the last sentence of the definition of
 "Revolving Commitment" shall be deemed to be modified to reflect the resulting
 increase in the aggregate Revolving Commitments pursuant to this Section 2).
 Following any increase of any of the Lenders' Revolving Commitments pursuant to
 this Section 2, any Revolving Loans outstanding prior to the effectiveness of
 such increase shall continue outstanding until the ends of the respective
 Interest Periods applicable thereto, and shall then be repaid or refinanced
 with new Revolving Loans made pursuant to Sections 2.01 and 2.03.

                  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 following
                               ------------------------
conditions shall have been satisfied:

                  (a) The Administrative Agent (or its counsel) shall have
         received copies hereof that, when taken together, bear (i) the
         signatures of the Borrowers and the Required Lenders, (ii) the
         signatures of US Term Lenders having outstanding US Term Loans
         representing more than 50% of the total outstanding US Term Loans on
         the Amendment Effective Date, (iii) the signatures of Canadian Term
         Lenders having outstanding Canadian Term Loans and outstanding accepted
         B/As representing more
<PAGE>

                                                                               7

         than 50% of the sum of the total outstanding Canadian Term Loans and
         accepted B/As on the Amendment Effective Date and (iv) the signatures
         of each Lender increasing its Revolving Commitment pursuant to Section
         2 of this Amendment.

                  (b) The Company shall have received gross cash proceeds from
         the issuance of the Qualified Subordinated Indebtedness of at least
         $125,000,000.

                  (c) The Administrative Agent shall have received a certificate
         of the President, a Vice President or a Financial Officer of the
         Company, confirming compliance as of the Amendment Effective Date with
         the conditions set forth in paragraphs (a) and (b) of Section 4.02 of
         the Credit Agreement.

                  (d) The Administrative Agent and the Lenders shall have
         received all fees, expenses and other consideration presented for
         payment on or before the date hereof.

 The Administrative Agent shall notify the Borrower and the Lenders of the
 occurrence of the Amendment Effective Date and shall distribute to the Borrower
 and the Lenders an updated Schedule 2.01 on the date when such Schedule may be
 modified pursuant to Section 2 hereof.

                  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 provisions of the Credit
 Agreement specifically referred to herein.

                  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
<PAGE>

                                                                               8

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.
<PAGE>

                                                                               9


                  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: Michael E. Tarvin
                                                    ----------------------------
                                                    Name:  Michael E. Tarvin
                                                    Title: Senior Vice President



                                               CANADIAN BACK INSTITUTE LIMITED,


                                                 by: Michael E. Tarvin
                                                    ----------------------------
                                                    Name:  Michael E. Tarvin
                                                    Title: Vice President

<PAGE>

                                                                              10

                                             To approve the Amendment:
                                             -------------------------

                                             THE CHASE MANHATTAN BANK,
                                             individually and as US Agent
                                             and US Collateral Agent,

                                              by: Dawn Lee Lum
                                                 -------------------------------
                                                Name:  Dawn Lee Lum
                                                Title: Vice President



                                             To increase the Revolving
                                             Commitment of The Chase
                                             Manhattan Bank pursuant to
                                             Section 2 of the Amendment:
                                             ---------------------------

                                             THE CHASE MANHATTAN BANK,
                                             individually,

                                              by: Dawn Lee Lum
                                                 -------------------------------
                                                Name:  Dawn Lee Lum
                                                Title: Vice President



                                             To approve the Amendment:
                                             -------------------------

                                             THE CHASE MANHATTAN BANK OF
                                             CANADA, individually and as
                                             Canadian Agent and Canadian
                                             Collateral Agent,


                                              by: Chris (illegible) Collins
                                                 -------------------------------
                                                Name:
                                                Title:

<PAGE>

                                             To approve the Third Amendment
                                             dated as of May 31, 2001 (the
                                             "Amendment") to the Credit
                                             Agreement dated as of September 22,
                                             2000 (the "Credit Agreement"), as
                                                        ----------------
                                             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, The Chase Manhattan Bank,
                                             as US Agent and US Collateral
                                             Agent, The Chase Manhattan Bank of
                                             Canada, as Canadian Agent and
                                             Canadian Collateral Agent, Banc of
                                             America Securities, LLC, as
                                             Syndication Agent, and CIBC, Inc.,
                                             as Documentation Agent:


                                             Name of Institution:

                                             Bank of America, N.A.
                                             -----------------------------------


                                             by Kevin Wagley
                                               ---------------------------------
                                                Name: Kevin Wagley
                                                Title: Principal


                                             by ________________________________
                                                Name:
                                                Title:


                                             To approve the increase in the
                                             above named institution's Revolving
                                             Commitment pursuant to Section 2 of
                                             the Amendment:


                                             by ________________________________
                                                Name:
                                                Title:

                                             by ________________________________
                                                Name:
                                                Title:
<PAGE>


                                             To approve the Third Amendment
                                             dated as of May 31, 2001 (the
                                             "Amendment") to the Credit
                                             Agreement dated as of September 22,
                                             2000 (the "Credit Agreement"), as
                                                        ----------------
                                             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, The Chase Manhattan Bank,
                                             as US Agent and US Collateral
                                             Agent, The Chase Manhattan Bank of
                                             Canada, as Canadian Agent and
                                             Canadian Collateral Agent, Banc of
                                             America Securities, LLC, as
                                             Syndication Agent, and CIBC, Inc.,
                                             as Documentation Agent:


                                             Name of Institution:

                                             Merrill Lynch Capital Corporation
                                             -----------------------------------

                                             by Chris Berosak
                                               ---------------------------------
                                                Name: Chris Berosak
                                                Title: Vice President

                                             by ________________________________
                                                Name:
                                                Title:

                                             To approve the increase in the
                                             above named institution's Revolving
                                             Commitment pursuant to Section 2 of
                                             the Amendment:


                                             by Chris Berosak
                                               ---------------------------------
                                                Name: Chris Berosak
                                                Title: Vice President

                                             by ________________________________
                                                Name:
                                                Title:

<PAGE>


                                             To approve the Third Amendment
                                             dated as of May 31, 2001 (the
                                             "Amendment") to the Credit
                                             Agreement dated as of September 22,
                                             2000 (the "Credit Agreement"), as
                                                        ----------------
                                             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, The Chase Manhattan Bank,
                                             as US Agent and US Collateral
                                             Agent, The Chase Manhattan Bank of
                                             Canada, as Canadian Agent and
                                             Canadian Collateral Agent, Banc of
                                             America Securities, LLC, as
                                             Syndication Agent, and CIBC, Inc.,
                                             as Documentation Agent:


                                             Name of Institution:

                                             PNC Bank National Association
                                             -----------------------------------

                                             by Marie T. Boyer
                                               ---------------------------------
                                                Name: Marie T. Boyer
                                                Title: Vice President

                                             by ________________________________
                                                Name:
                                                Title:

                                             To approve the increase in the
                                             above named institution's Revolving
                                             Commitment pursuant to Section 2 of
                                             the Amendment:


                                             by Marie T. Boyer
                                               ---------------------------------
                                                Name: Marie T. Boyer
                                                Title: Vice President

                                             by ________________________________
                                                Name:
                                                Title:

<PAGE>


                                            To approve the Third Amendment
                                            dated as of May 31, 2001 (the
                                            "Amendment") to the Credit
                                            Agreement dated as of September 22,
                                            2000 (the "Credit Agreement"), as
                                                       ----------------
                                            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, The Chase Manhattan Bank,
                                            as US Agent and US Collateral
                                            Agent, The Chase Manhattan Bank of
                                            Canada, as Canadian Agent and
                                            Canadian Collateral Agent, Banc of
                                            America Securities, LLC, as
                                            Syndication Agent, and CIBC, Inc.,
                                            as Documentation Agent:


                                            Name of Institution:

                                            Societe Generale
                                            ------------------------------------

                                            by Richard Bernal
                                              ----------------------------------
                                              Name: Richard Bernal
                                              Title: Director, Corporate Banking

                                            by________________________________
                                              Name:
                                              Title:


                                            To approve the increase in the
                                            above named institution's Revolving
                                            Commitment pursuant to Section 2 of
                                            the Amendment:


                                            by Richard Bernal
                                              ----------------------------------
                                              Name: Richard Bernal
                                              Title: Director, Corporate Banking

                                            by________________________________
                                              Name:
                                              Title:

<PAGE>


                                             To approve the Third Amendment
                                             dated as of May 31, 2001 (the
                                             "Amendment") to the Credit
                                             Agreement dated as of September 22,
                                             2000 (the "Credit Agreement"), as
                                                        ----------------
                                             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, The Chase Manhattan Bank,
                                             as US Agent and US Collateral
                                             Agent, The Chase Manhattan Bank of
                                             Canada, as Canadian Agent and
                                             Canadian Collateral Agent, Banc of
                                             America Securities, LLC, as
                                             Syndication Agent, and CIBC, Inc.,
                                             as Documentation Agent:


                                             CIBC, INC.

                                             by Douglas J. (illegible)
                                               ---------------------------------
                                                Name: Douglas J. (illegible)
                                                Title: Executive Director


                                             To approve the increase in the
                                             above named institution's Revolving
                                             Commitment pursuant to Section 2 of
                                             the Amendment, and an additional
                                             US$5,000,000 increase in such
                                             Revolving Commitment:

                                             by Douglas J. (illegible)
                                               ---------------------------------
                                                Name: Douglas J. (illegible)
                                                Title: Executive Director

<PAGE>


                                             To approve the Third Amendment
                                             dated as of May 31, 2001 (the
                                             "Amendment") to the Credit
                                             Agreement dated as of September 22,
                                             2000 (the "Credit Agreement"), as
                                                        ----------------
                                             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, The Chase Manhattan Bank,
                                             as US Agent and US Collateral
                                             Agent, The Chase Manhattan Bank of
                                             Canada, as Canadian Agent and
                                             Canadian Collateral Agent, Banc of
                                             America Securities, LLC, as
                                             Syndication Agent, and CIBC, Inc.,
                                             as Documentation Agent:


                                             FIRST UNION NATIONAL BANK

                                             by Jeanette A. Griffin
                                               ---------------------------------
                                                Name: Jeanette A. Griffin
                                                Title: Vice President


                                             To approve the increase in the
                                             above named institution's Revolving
                                             Commitment pursuant to Section 2 of
                                             the Amendment, and an additional
                                             US$15,000,000 increase in such
                                             Revolving Commitment:


                                             by Jeanette A. Griffin
                                               ---------------------------------
                                                Name: Jeanette Griffin
                                                Title: Vice President