Document:

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                                                                   Exhibit 10.61

                           SELECT MEDICAL CORPORATION

                     P.O. Box 2034, 4716 Old Gettysburg Road
                        Mechanicsburg, Pennsylvania 17055

                                February 23, 2001

Mr. James J. Talalai
Select Medical Corporation
P.O. Box 2034
4716 Old Gettysburg Road
Mechanicsburg, PA 17055

     Re:  Amendment to Agreement in the Event of a Change of Control of SMC
          -----------------------------------------------------------------

Dear Mr. Talalai:

     The following will confirm our desire to amend the Letter Agreement dated
as of March 1, 2000 (the "Letter Agreement") of Select Medical Corporation, a
Delaware corporation (the "Company"), with you concerning the consequences upon
certain terminations of your employment in connection with a change in control
of the Company.

     In consideration of your past and continued service to the Company and in
consideration of the mutual covenants and agreements contained in this Amendment
to the Letter Agreement (the "Amendment"), the Company and you hereby agree,
intending to be legally bound hereby, as follows:

     1. The portion of Section 1 of the Letter Agreement which appears before
clause (ii) is hereby amended and restated as follows:

     "A "Covered Termination" shall be deemed to occur if (i) within the
     five-year period immediately following a Change of Control (as defined
     below), (a) your employment with the Company is terminated by the Company
     without Cause (as defined below), (b) there is a reduction by the Company
     in your compensation from that in effect prior to such Change of Control,
     or (c) you are required to be based anywhere other than the Company's
     principal executive offices in (or within 25 miles of) Mechanicsburg,
     Pennsylvania (except for required travel on the Company's business to an
     extent substantially consistent with your business travel obligations prior
     to the Change of Control),"

     2. Section 3(c) of the Letter Agreement is hereby amended and restated as
follows:
<PAGE>

     "(c) Good Reason. For purposes of this Letter Agreement, you shall have
          -----------
     "Good Reason" to terminate your employment after a Change of Control if you
     make good faith determination that, as a result of such Change of Control,
     you are unable to perform your services effectively or there is any
     significant adverse change in your authority or responsibilities, as
     performed immediately prior to such Change of Control."

     3. The Letter Agreement is hereby amended by the addition of the following
Section 7 in its entirety, to be inserted immediately after Section 6 in its
entirety:

     "7. Claims Procedure. Any claim for benefits under this Letter Agreement by
         ----------------
you shall be made in writing and sent to the Company at its principal offices in
Mechanicsburg, Pennsylvania, or such other place as the Company shall hereafter
designate in writing. If you, or any beneficiary following your death
(collectively, the "Claimant"), believes he or she has been denied any benefits
or payments under this Letter Agreement, either in total or in an amount less
than the full benefit or payment to which the Claimant would normally be
entitled, the Company shall advise the Claimant in writing of the amount of the
benefit, or payment, if any, and the specific reasons for the denial within
thirty (30) days of the receipt of the Claimant's claim. The Company shall also
furnish the Claimant at that time with a written notice containing:

     (A) A specific reference to pertinent provisions of this Letter Agreement;

     (B) A description of any additional material or information necessary for
     the Claimant to perfect the claim if possible, and an explanation of why
     such material or information is needed; and

     (C) An explanation of the claim review procedure set forth in this Section
     7.

Within sixty (60) days of receipt of the information described above, the
Claimant shall, if further review is desired, file a written request of
reconsideration of the Company's decision with the Appeal Committee. The Appeal
Committee shall consist of those individuals who were serving as the
Compensation Committee of the Board of Directors of the Company immediately
prior to the Change of Control. The Appeal Committee shall select from its
membership a chairperson and a secretary and may adopt such rules and procedures
as it deems necessary to carry out its functions. In the event any individual is
unable to serve on the Appeal Committee, then the chairperson of the Appeal
Committee shall appoint a successor provided such successor must have been a
member of the Board of Directors of the Company prior to the Change of Control
("Prior Board Member"). So long as the Claimant's request for review is pending
with the Appeal Committee (including such 60-day period), the Claimant, or his
duly authorized representative, may review pertinent documents and may submit
issues and comments in writing to the Appeal Committee. A final and binding
decision shall be made by the Appeal Committee within thirty (30) days of the
filing by the Claimant of the request for reconsideration. The Appeal
Committee's decision shall be conveyed to the Claimant in writing and shall
include specific reasons for the decision and specific references to the
pertinent provisions of this Letter

                                      -2-
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Agreement on which the decision is based. The Appeal Committee shall discharge
its duties under this claims procedure in accordance with the fiduciary
standards of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and in doing so, to the extent permitted by law, shall be indemnified
and held harmless by the Company (to the extent not indemnified or saved
harmless under any liability insurance or other indemnification arrangement with
the Company) for or against all liability to which the Appeal Committee may be
subjected by reason of any act done in good faith with respect to the
adjudication of any claim under this Letter Agreement, including reasonable
expenses. Notwithstanding anything to the contrary herein contained, the
Claimant shall be entitled to submit his or her claim for determination to any
court having competent jurisdiction regardless of whether he or she has first
exercised his or her right to have the Company's decision reconsidered by the
Appeal Committee."

     4. Except as amended hereby, the Letter Agreement shall continue in effect
in accordance with its terms.

     Please indicate your acceptance of the above Amendment by signing below in
the space indicated.

                                        Very truly yours,

                                        SELECT MEDICAL CORPORATION, a Delaware
                                        Corporation

                                        By:  /s/ Robert A. Ortenzio,
                                           -------------------------------------
                                               Robert A. Ortenzio,
                                               President

Agreed to and accepted:

 /s/ James J. Talalai
---------------------------
     James J. Talalai<PAGE>

                                                                    Exhibit 10-C
                                                                    ------------

                                                      ACE WHOLLY OWNED AGREEMENT

                               SECOND AMENDMENT
                                    TO THE
                          PURCHASE AND SALE AGREEMENT
                                BY AND BETWEEN
                        ATLANTIC CITY ELECTRIC COMPANY
                                      AND
                               NRG ENERGY, INC.

          SECOND AMENDMENT TO THE PURCHASE AND SALE AGREEMENT (the "Second
Amendment") by and between Atlantic City Electric Company, a New Jersey
corporation ("ACE" or "Seller"), and NRG Energy, Inc., a Delaware corporation
("Buyer"), dated as of October 31, 2001.  Seller and Buyer may each be referred
to herein individually as a "Party" and collectively as the "Parties."
Capitalized terms used and not otherwise defined in this Second Amendment shall
have the respective meanings assigned to them in the Amended Agreement (as
defined below).

          WHEREAS, Seller and Buyer are Parties to the Purchase and Sale
Agreement, dated as of January 18, 2000 (the "Agreement"), and the Amendment to
the Agreement, dated as of June 22, 2001 (the "First Amendment" and, together
with the Agreement, the "Amended Agreement"), providing for the sale and
assignment by Seller of the Purchased Assets and the Assumed Liabilities and the
purchase and assumption by Buyer of the Purchased Assets and the Assumed
Liabilities, upon the terms and conditions set forth in the Amended Agreement;
and

          WHEREAS, the Closing of the transactions contemplated by the Amended
Agreement and the ACE Related Purchase Agreement, as amended, has been
unexpectedly delayed; and

          WHEREAS, as a result of the delay of the Closing, the Parties desire
to further amend the Amended Agreement as set forth herein and the ACE Related
Purchase Agreement, as amended, as set forth in the amendment thereto, which is
being entered into simultaneously with this Second Amendment, to, among other
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things, extend the termination date of the Amended Agreement and the ACE Related
Purchase Agreement, as amended.

          NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Seller and Buyer hereby agree as
follows:

                                   ARTICLE I

           Amendment of Certain Provisions of the Amended Agreement
           --------------------------------------------------------

          Section 1.1  Certain Definitions.  Section 1.1 of the Agreement is
                       -------------------
hereby amended to include the following additional provision:

     "(165) "Special Access Agreement" means the easement and license agreement
             ------------------------
     between Buyer and Seller, or any Affiliate thereof, to be delivered at the
     Closing, pursuant to which Buyer will provide Seller, or an Affiliate
     thereof, with rights with respect to certain Excluded Assets, comprised of
     microwave antennae, transmission lines and associated equipment located at
     the B.L. England Station, relating to the transmission and delivery of
     electric power or the operation of B.L. England Station."

          Section 1.2  Deliveries by Seller.  Section 3.6(f) is hereby amended
                       --------------------
and restated in its entirety to read as follows:

     "(f) The Access Agreement and the Special Access Agreement, in each case,
     duly executed by Seller, or an Affiliate thereof, and in recordable form;"

          Section 1.3  Deliveries by Buyer.  Section 3.7(e) is hereby amended
                       -------------------
and restated in its entirety to read as follows:

     "(e) The Access Agreement and the Special Access Agreement, in each case,
     duly executed by Buyer and in recordable form;"

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<PAGE>

          Section 1.4  Certain Representations and Warranties of Seller.
                       ------------------------------------------------
Section 4.2 of the Agreement is hereby amended and restated in its entirety to
read as follows:

          "Seller has full corporate power and authority to execute and deliver
     this Agreement and each Additional Agreement to which it is a party and to
     consummate the transactions contemplated hereby and thereby.  Except for
     the approval of the respective provisos to clauses (iii) and (iv) of
     Section 9.1(b) hereof by the Board of Directors of Seller, the execution
     and delivery by Seller of this Agreement and each Additional Agreement to
     which it is a party and the consummation by Seller of the transactions
     contemplated hereby and thereby have been duly and validly authorized by
     all necessary corporate action required on the part of Seller.  This
     Agreement has been duly and validly executed and delivered by Seller and,
     subject to the receipt of Seller's Required Regulatory Approvals, this
     Agreement constitutes, and upon the execution and delivery by Seller of
     each Additional Agreement to which it is a party, each such Additional
     Agreement will constitute, the legal, valid and binding obligation of
     Seller, enforceable against Seller in accordance with its terms, except
     that such enforceability may be limited by applicable bankruptcy,
     insolvency, reorganization, fraudulent conveyance, moratorium or other
     similar Laws affecting or relating to enforcement of creditors' rights
     generally and general principles of equity (regardless of whether
     enforcement is considered in a proceeding at law or in equity)."

          Section 1.5  Certain Covenants of the Parties.
                       --------------------------------

               (a)  Section 6.5 of the Agreement is hereby amended to include
the following additional provisions:

          "(e) Without limiting the generality of Section 6.5(b) of the
     Agreement, from and after the date of this Second Amendment, Seller and
     Buyer shall reasonably cooperate with each other to supplement the
     testimony provided to the NJBPU prior to the date hereof."

          "(f) Seller and Buyer shall use their respective Commercially
     Reasonable Efforts to promptly enter into a Joint Defense Agreement
     relating to B.L. England Station, in form and substance satisfactory to
     each of Seller and Buyer.  Notwithstanding any provision of such Joint
     Defense Agreement to the contrary, the provisions of this Agreement shall
     govern and control any

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     conflict or inconsistency between or among the provisions hereof and the
     provisions of such Joint Defense Agreement."

               (b)  Article VI of the Agreement is hereby amended to include the
following additional provision:

     "Section 6.18  Special Access Agreement. Without limiting the generality of
                    ------------------------
     Section 6.4(a), Buyer and Seller shall prepare, negotiate and enter into,
     or cause to be entered into, the Special Access Agreement, in form and
     substance satisfactory to each of Buyer and Seller, on or prior to the
     Closing Date."

          Section 1.6  Certain Termination Provisions.  Section 9.1(b) of the
                       ------------------------------
Agreement, as amended by Section 1.9 of the First Amendment, is hereby amended
and restated in its entirety to read as follows:

          "This Agreement may be terminated by Seller, on the one hand, or
     Buyer, on the other hand, upon written notice to the other Party, (i) at
     any time prior to the Closing if any court of competent jurisdiction shall
     have issued an order, judgment or decree permanently restraining, enjoining
     or otherwise prohibiting the Closing, and such order, judgment or decree
     shall have become final and nonappealable; (ii) at any time prior to the
     Closing if any Law shall have been enacted or issued by any Governmental
     Authority which, directly or indirectly, prohibits the consummation of the
     transactions contemplated by this Agreement or by any Additional Agreement;
     (iii) solely with respect to the Deepwater Station Transactions, at any
     time after December 31, 2001, if the Closing of the Deepwater Station
     Transactions shall not have occurred on or before such date, provided,
     however, that neither Seller nor Buyer shall be permitted to so terminate
     this Agreement, solely with respect to the Deepwater Station Transactions,
     at any time prior to March 1, 2002, if the Board of Directors of Seller
     shall have approved this proviso to this clause (iii) on or prior to
     December 31, 2001; or (iv) solely with respect to the B.L. England Station
     Transactions, at any time after December 31, 2001, if the Closing of the
     B.L. England Station Transactions shall not have occurred on or before such
     date, provided, however, that neither Seller nor Buyer shall be permitted
     to so terminate this Agreement, solely with respect to the B.L. England
     Station Transactions, at any time prior to March 1, 2002, if the Board of
     Directors of Seller shall have approved this proviso to this clause (iv) on
     or prior to December 31, 2001; and, provided,

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<PAGE>

     further, that the right to terminate this Agreement under Section
     9.1(b)(iii) or Section 9.1(b)(iv) shall not be available to any Party whose
     breach of this Agreement has caused, or resulted in, the failure of the
     Closing to occur on or before such applicable date."

                                  ARTICLE II

                   Release, Waiver and Additional Provisions
                   -----------------------------------------

          Section 2.1  Release and Waiver of Claims Against Seller Parties.
                       ---------------------------------------------------

               (a)  Buyer and each of its Affiliates hereby unconditionally and
irrevocably releases, acquits and forever discharges Seller and its Affiliates,
shareholders, officers, directors, employees, agents, representatives,
successors and assigns (collectively, the "Seller Parties"), effective as of the
                                           --------------
date hereof, of and from, and hereby unconditionally and irrevocably waives, any
and all claims, demands, debts, losses, costs, expenses, proceedings, judgments,
damages, actions, causes of action, suits, contracts, agreements, obligations,
accounts and liabilities of any kind or character whatsoever, known or unknown,
suspected or unsuspected, in contract or in tort, at law or in equity
("Claims"), that the Buyer or any of its Affiliates alone or with any other
Person had, now has, or might hereafter have against the Seller Parties or any
of them jointly and/or severally, for or by reason of any matter, circumstance,
event, action, omission, cause or thing whatsoever occurring or existing on or
before the date of this Second Amendment, arising under, relating to or in
connection with the Amended Agreement (or any of the Exhibits or Schedules
thereto) and which are set forth in Schedule 2.1 to this Second Amendment.
                                    --------

                    (b)  Buyer hereby represents and warrants to Seller that, as
of the date of this Second Amendment, to Buyer's knowledge, Buyer does not have
any Claims against any Seller Party, other than as set forth in Schedule 2.1 to
                                                                --------
this Second Amendment, which Claims have been released and waived pursuant to
Section 2.1(a).

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<PAGE>

          Section 2.2  Release and Waiver of Claims Against Buyer Parties.
                       --------------------------------------------------

               (a)  Seller and each of its Affiliates hereby unconditionally and
irrevocably releases, acquits and forever discharges Buyer and its Affiliates,
shareholders, officers, directors, employees, agents, representatives,
successors and assigns (collectively, the "Buyer Parties"), effective as of the
date hereof, of and from, and hereby unconditionally and irrevocably waives, any
and all Claims, that the Seller or any of its Affiliates alone or with any other
Person had, now has, or might hereafter have against the Buyer Parties or any of
them jointly and/or severally, for or by reason of any matter, circumstance,
event, action, omission, cause or thing whatsoever occurring or existing on or
before the date of this Second Amendment, arising under, relating to or in
connection with the Amended Agreement (or any of the Exhibits or Schedules
thereto) and which are set forth in Schedule 2.2 to this Second Amendment.
                                    --------

               (b)  Seller hereby represents and warrants to Buyer that, as of
the date of this Second Amendment, to Seller's knowledge, Seller does not have
any Claims against any Buyer Party, other than as set forth in Schedule 2.2 to
                                                               --------
this Second Amendment, which Claims have been released and waived pursuant to
Section 2.2(a).

          Section 2.3  Disclosed Matters.  Pursuant to Section 6.7 of the
                       -----------------
Agreement, Buyer and Seller hereby acknowledge and agree that the supplemental
or amended disclosure set forth in the Schedules to the Amended Agreement being
delivered by Seller to Buyer contemporaneously with this Second Amendment and
dated as of the date hereof shall, for purposes of the Amended Agreement, as
further  amended hereby, including for purposes of determining whether the
conditions to Closing set forth in Article VII of the Agreement are satisfied,
be deemed to have been disclosed as of January 18, 2000.

                                       6
<PAGE>

                                  ARTICLE III

                           Miscellaneous Provisions
                           ------------------------

          Section 3.1  Amendment and Modification.  Subject to applicable Law,
                       --------------------------
this Second Amendment may be amended, supplemented or otherwise modified only by
written agreement entered into by all Parties.

          Section 3.2  Waiver of Compliance; Consents.  To the extent
                       ------------------------------
permitted by applicable Law, any failure of any of the Parties to comply with
any covenant, agreement or condition set forth herein may be waived by the Party
entitled to the benefit thereof only by a written instrument signed by such
Party, but any such waiver shall not operate as a waiver of, or estoppel with
respect to, any prior or subsequent failure to comply therewith.

          Section 3.3  Notices.  All notices and other communications hereunder
                       -------
shall be in writing and shall be given in accordance with Section 10.8 of the
Agreement.

          Section 3.4  Assignment.  This Second Amendment shall be binding upon
                       ----------
and inure to the benefit of the Parties and their respective successors and
permitted assigns, but neither this Second Amendment nor any of the rights,
interests, obligations or remedies hereunder shall be assigned by any Party
hereto, including by operation of law, without the prior written consent of the
other Parties, nor is this Second Amendment intended to confer upon any other
Person any rights, interests, obligations or remedies hereunder.  Without
limiting the generality of the foregoing, no provision of this Second Amendment
shall create any third-party beneficiary rights in any Employee or former
employee of Seller (including any beneficiary or dependent thereof) in respect
of continued employment or resumed employment, and no provision of this Second
Amendment shall create any rights in any such Persons in respect of any benefits
that may be provided, directly or indirectly, under any employee benefit plan or
arrangement except  as expressly provided for thereunder.  Notwithstanding the
foregoing, (i) Seller may assign all or any portion of its rights, interests,
obligations and remedies hereunder to Conectiv, a Delaware corporation, or any
of Conectiv's wholly owned subsidiaries; provided, however, that no such
                                         --------  -------
assignment shall (A) materially impair or delay the consummation of the
transactions contemplated hereby or by the Amended Agreement or (B) relieve or
discharge Seller from any of its obligations hereunder or under the Amended
Agreement; and (ii) Buyer may assign all or any portion of its

                                       7
<PAGE>

rights, interests, obligations and remedies hereunder to (A) any of its wholly
owned subsidiaries or (B) a trustee, lending institution or other Person solely
for purposes of financing the transactions contemplated hereby; provided,
                                                                --------
however, that no such assignment shall (A) materially impair or delay the
-------
consummation of the transactions contemplated hereby or by the Amended Agreement
or (B) relieve or discharge Buyer from any of its obligations hereunder or under
the Amended Agreement.

          Section 3.5  Governing Law.  This Second Amendment shall be governed
                       -------------
by and construed in accordance with the laws of the State of Delaware (without
giving effect to conflicts of law principles) as to all matters, including
validity, construction, effect, performance and remedies.  Venue in any and all
suits, actions and proceedings related to the subject matter of this Second
Amendment shall be in the state and federal courts located in and for the State
of Delaware (the "Courts"), which shall have exclusive jurisdiction for such
                  ------
purpose, and the Parties hereby irrevocably submit to the exclusive jurisdiction
of such courts and irrevocably waive the defense of an inconvenient forum to the
maintenance of any such suit, action or proceeding.  Service of process may be
made in any manner recognized by such Courts.  Each of the Parties hereby
irrevocably waives its right to a jury trial arising out of any dispute in
connection with this Second Amendment or the transactions contemplated hereby.

          Section 3.6  Counterparts.  This Second Amendment may be executed in
                       ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

          Section 3.7  Interpretation.  The article and section headings
                       --------------
contained in this Second Amendment are solely for the purpose of reference, are
not part of the agreement of the parties and shall not in any way affect the
meaning or construction of this Second Amendment.  Ambiguities and uncertainties
in the wording of this Second Amendment shall not be construed for or against
any Party, but shall be construed in the manner that most accurately reflects
the Parties' intent as of the date of this Second Amendment.  Each Party
acknowledges that it has been represented by counsel in connection with the
review and execution of this Second Amendment, and, accordingly, there shall be
no presumption that this Second Amendment or any provision hereof be construed
against the Party that drafted this Second Amendment.

                                       8
<PAGE>

          Section 3.8  Effect; Entire Agreement.  Except as amended,
                       ------------------------
supplemented or otherwise modified by this Second Amendment, the Amended
Agreement shall remain in full force and effect, and the valid and binding
obligation of each Party.  The Amended Agreement, as further amended hereby
(including the Schedules and Exhibits thereto), together with the
Confidentiality Agreement and the ACE Related Purchase Agreement, as amended,
embody the entire agreement and understanding of the Parties hereto and thereto
in respect of the transactions contemplated by the Amended Agreement, as further
amended hereby, the Additional Agreements and the ACE Related Purchase
Agreement, as amended, and supersedes all prior agreements and understandings
between or among the Parties with respect to the transactions contemplated
hereby or thereby.

                           [Signature Page Follows]

                                       9
<PAGE>

          IN WITNESS WHEREOF, the Parties have caused this Second Amendment to
be duly executed and delivered as of the date and year first written above.

                         ATLANTIC CITY ELECTRIC COMPANY

                         By:___________________________________
                            Name:
                            Title:

                         NRG ENERGY, INC.

                         By:___________________________________
                            Name:
                            Title:

                                                     (ACE WHOLLY OWNED STATIONS)

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