SELECT MEDICAL CORPORATION





                                 $175,000,000





                   9 1/2% Senior Subordinated Notes due 2009





                  EXCHANGE AND REGISTRATION RIGHTS AGREEMENT





                                                                   June 11, 2001





J.P. MORGAN SECURITIES INC.

MERRILL LYNCH, PIERCE, FENNER & SMITH

          INCORPORATED

CREDIT SUISSE FIRST BOSTON CORPORATION

CIBC WORLD MARKETS CORP.

FIRST UNION SECURITIES, INC.

c/o J.P. MORGAN SECURITIES INC.

270 Park Avenue, 4th floor

New York, New York  10017



Ladies and Gentlemen:



          Select Medical Corporation, a Delaware corporation (the "Company"),

proposes to issue and sell to J.P. Morgan Securities Inc. ("JP Morgan"), Merrill

Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse First Boston

Corporation, CIBC World Markets Corp. and First Union Securities, Inc.

(collectively, together with JPMorgan, the "Initial Purchasers"), upon the terms

and subject to the conditions set forth in a purchase agreement dated June 6,

2001 (the "Purchase Agreement"), $175,000,000 aggregate principal amount of its

9 1/2% Senior Subordinated Notes due June 11, 2009 (the "Securities") to be

jointly and severally guaranteed on a senior subordinated basis by the

subsidiaries of the Company listed on Schedule I and signatories hereto

(collectively, the "Guarantors"). Capitalized terms used but not defined herein

shall have the meanings given to such terms in the Purchase Agreement.



     As an inducement to the Initial Purchasers to enter into the Purchase

Agreement and in satisfaction of a condition to the obligations of the Initial

Purchasers thereunder, the Company and the Guarantors agree with the Initial

Purchasers, for the benefit of the holders (including the Initial Purchasers) of

the Securities, the Exchange Securities (as defined herein) and the Private

Exchange Securities (as defined herein) (collectively, the "Holders"), as

follows:

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          1.   Registered Exchange Offer. The Company and the Guarantors shall

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(i) prepare and, not later than 75 days following the date of original issuance

of the Securities (the "Issue Date"), file with the Commission a registration

statement (the "Exchange Offer Registration Statement") on an appropriate form

under the Securities Act with respect to a proposed offer to the Holders of the

Securities (the "Registered Exchange Offer") who are not prohibited by any law

or policy of the Commission from participating in the Registered Exchange Offer

to issue and deliver to such Holders, in exchange for the Securities, a like

aggregate principal amount of debt securities of the Company (the "Exchange

Securities") that are identical in all material respects to the Securities,

except for the transfer restrictions relating to the Securities and the

provisions related to the matters described in Section 3 hereof, (ii) use their

reasonable best efforts to cause the Exchange Offer Registration Statement to

become effective under the Securities Act no later than 150 days after the Issue

Date and the Registered Exchange Offer to be consummated no later than 180 days

after the Issue Date and (iii) keep the Exchange Offer Registration Statement

effective for not less than 30 days (or longer, if required by applicable law)

after the date on which notice of the Registered Exchange Offer is mailed to the

Holders (such period being called the "Exchange Offer Registration Period"). The

Exchange Securities will be issued under the Indenture or an indenture (the

"Exchange Securities Indenture") between the Company, the Guarantors and the

Trustee or such other bank or trust company that is reasonably satisfactory to

the Initial Purchasers, as trustee (the "Exchange Securities Trustee"), such

indenture to be identical in all material respects to the Indenture, except for

the transfer restrictions relating to the Securities (as described above) and

the provisions related to the matters described in Section 3 hereof.



          Upon the effectiveness of the Exchange Offer Registration Statement,

the Company and the Guarantors shall promptly commence the Registered Exchange

Offer, it being the objective of such Registered Exchange Offer to enable each

Holder electing to exchange Securities for Exchange Securities (assuming that

such Holder (a) is not an affiliate of the Company or an Exchanging Dealer (as

defined herein) not complying with the requirements of the next sentence, (b) is

not an Initial Purchaser holding Securities that have, or that are reasonably

likely to have, the status of an unsold allotment in an initial distribution,

(c) acquires the Exchange Securities in the ordinary course of such Holder's

business and (d) has no arrangements or understandings with any person to

participate in the distribution of the Exchange Securities and is not prohibited

by any law or policy of the Commission from participating in the Registered

Exchange Offer) and to trade such Exchange Securities from and after their

receipt without any limitations or restrictions under the Securities Act and

without material restrictions under the securities laws of the several states of

the United States. The Company, the Guarantors, the Initial Purchasers and each

Exchanging Dealer acknowledge that, pursuant to current interpretations by the

Commission's staff of Section 5 of the Securities Act, each Holder that is a

broker-dealer electing to exchange Securities, acquired for its own account as a

result of market-making activities or other trading activities, for Exchange

Securities (an "Exchanging Dealer"), is required to deliver a prospectus

containing substantially the information set forth in Annex A hereto on the

cover, in Annex B hereto in the "Exchange Offer Procedures" section and the

"Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of

Distribution" section of such prospectus in connection with a sale of any such

Exchange Securities received by such Exchanging Dealer pursuant to the

Registered Exchange Offer.



                                       2

{PAGE}



          If, prior to the consummation of the Registered Exchange Offer, any

Holder holds any Securities acquired by it that have, or that are reasonably

likely to be determined to have, the status of an unsold allotment in an initial

distribution, or any Holder is not entitled to participate in the Registered

Exchange Offer, the Company shall, upon the request of any such Holder,

simultaneously with the delivery of the Exchange Securities in the Registered

Exchange Offer, issue and deliver to any such Holder, in exchange for the

Securities held by such Holder (the "Private Exchange"), a like aggregate

principal amount of debt securities of the Company (the "Private Exchange

Securities") that are identical in all material respects to the Exchange

Securities, except for the transfer restrictions relating to such Private

Exchange Securities. The Private Exchange Securities will be issued under the

same indenture as the Exchange Securities, and the Company shall use its

reasonable best efforts to cause the Private Exchange Securities to bear the

same CUSIP number as the Exchange Securities.



          In connection with the Registered Exchange Offer, the Company shall:



          (a)  mail to each Holder a copy of the prospectus forming part of the

     Exchange Offer Registration Statement, together with an appropriate letter

     of transmittal and related documents;



          (b)  keep the Registered Exchange Offer open for not less than 30 days

     (or longer, if required by applicable law) after the date on which notice

     of the Registered Exchange Offer is mailed to the Holders;



          (c)  utilize the services of a depositary for the Registered Exchange

     Offer with an address in the Borough of Manhattan, The City of New York,

     which may be the Trustee or an affiliate of the Trustee;



          (d)  permit Holders to withdraw tendered Securities at any time prior

     to the close of business, New York City time, on the last business day on

     which the Registered Exchange Offer shall remain open; and



          (e)  otherwise comply in all respects with all laws that are

     applicable to the Registered Exchange Offer.



          As soon as practicable after the close of the Registered Exchange

     Offer and any Private Exchange, as the case may be, the Company shall:



          (a)  accept for exchange all Securities validly tendered and not

     validly withdrawn pursuant to the Registered Exchange Offer and the Private

     Exchange;



          (b)  deliver to the Trustee for cancellation all Securities so

     accepted for exchange; and



          (c)  cause the Trustee or the Exchange Securities Trustee, as the case

     may be, promptly to authenticate and deliver to each Holder, Exchange

     Securities or Private Exchange Securities, as the case may be, equal in

     principal amount to the Securities of such Holder so accepted for exchange.



                                       3

{PAGE}



          The Company and the Guarantors shall use their reasonable best efforts

to keep the Exchange Offer Registration Statement effective and to amend and

supplement the prospectus contained therein in order to permit such prospectus

to be used by all persons subject to the prospectus delivery requirements of the

Securities Act for such period of time as such persons must comply with such

requirements in order to resell the Exchange Securities; provided that (i) in

the case where such prospectus and any amendment or supplement thereto must be

delivered by an Exchanging Dealer or an Initial Purchaser, such period shall be

the lesser of 180 days and the date on which all Exchanging Dealers and the

Initial Purchasers have sold all Exchange Securities held by them and (ii) the

Company shall make such prospectus and any amendment or supplement thereto

available to any broker-dealer for use in connection with any resale of any

Exchange Securities for a period of not less than 90 days after the consummation

of the Registered Exchange Offer.



          The Indenture or the Exchange Securities Indenture, as the case may

be, shall provide that the Securities, the Exchange Securities and the Private

Exchange Securities shall vote and consent together on all matters as one class

and that none of the Securities, the Exchange Securities or the Private Exchange

Securities will have the right to vote or consent as a separate class from one

another on any matter.



          Interest on each Exchange Security and Private Exchange Security

issued pursuant to the Registered Exchange Offer and in the Private Exchange

will accrue from the last interest payment date on which interest was paid on

the Securities surrendered in exchange therefor or, if no interest has been paid

on the Securities, from the Issue Date.



          Each Holder participating in the Registered Exchange Offer shall be

required to represent to the Company in writing that at the time of the

consummation of the Registered Exchange Offer (i) any Exchange Securities

received by such Holder will be acquired in the ordinary course of business,

(ii) such Holder will have no arrangements or understanding with any person to

participate in the distribution of the Securities or the Exchange Securities

within the meaning of the Securities Act, (iii) such Holder is not an affiliate

of the Company or, if it is such an affiliate, such Holder will comply with the

registration and prospectus delivery requirements of the Securities Act to the

extent applicable, (iv) if such Holder is not a broker-dealer, that it is not

engaged in, and does not intend to engage in, the distribution of the Exchange

Securities and (v) if such Holder is a broker-dealer, that it will receive

Exchange Securities for its own account in exchange for Securities that were

acquired as a result of market-making activities or other trading activities and

that it will be required to acknowledge that it will deliver a prospectus in

connection with any resale of such Exchange Securities.



          Notwithstanding any other provisions hereof, the Company and the

Guarantors will ensure that (i) any Exchange Offer Registration Statement and

any amendment thereto and any prospectus forming part thereof and any supplement

thereto complies in all material respects with the Securities Act and the rules

and regulations of the Commission thereunder, (ii) any Exchange Offer

Registration Statement and any amendment thereto does not, when it becomes

effective, contain an untrue statement of a material fact or omit to state a

material fact required to be stated therein or necessary to make the statements

therein not misleading and (iii) any prospectus forming part of any Exchange

Offer Registration Statement, and any supplement to



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{PAGE}



such prospectus, does not, as of the consummation of the Registered Exchange

Offer, include an untrue statement of a material fact or omit to state a

material fact necessary in order to make the statements therein, in the light of

the circumstances under which they were made, not misleading.



          2.   Shelf Registration. If (i) because of any change in law or

               ------------------

applicable interpretations thereof by the Commission's staff the Company and the

Guarantors are not permitted to effect the Registered Exchange Offer as

contemplated by Section 1 hereof, or (ii) any Securities validly tendered

pursuant to the Registered Exchange Offer are not exchanged for Exchange

Securities within 180 days after the Issue Date, or (iii) any Initial Purchaser

so requests with respect to Securities or Private Exchange Securities not

eligible to be exchanged for Exchange Securities in the Registered Exchange

Offer and held by it following the consummation of the Registered Exchange

Offer, or (iv) any applicable law or interpretations do not permit any Holder to

participate in the Registered Exchange Offer, or (v) any Holder that

participates in the Registered Exchange Offer does not receive freely

transferable Exchange Securities in exchange for tendered Securities, or (vi)

the Company so elects, then the following provisions shall apply:



          (a)  The Company and the Guarantors shall use their reasonable best

     efforts to file as promptly as practicable (but in no event more than 30

     days after so required or requested pursuant to this Section 2) with the

     Commission, and thereafter shall use their reasonable best efforts to cause

     to be declared effective, a shelf registration statement on an appropriate

     form under the Securities Act relating to the offer and sale of the

     Transfer Restricted Securities (as defined below) by the Holders thereof

     from time to time in accordance with the methods of distribution set forth

     in such registration statement (hereafter, a "Shelf Registration Statement"

     and, together with any Exchange Offer Registration Statement, a

     "Registration Statement") provided, however, that no Holder (other than an

                               --------  -------

     Initial Purchaser) shall be entitled to have the Securities, the Exchange

     Securities or the Private Exchange Securities held by it covered by the

     Shelf Registration Statement unless such Holder agrees in writing to be

     bound by all the provisions of this Agreement applicable to such Holder.



          (b)  The Company and the Guarantors shall use their reasonable best

     efforts to keep the Shelf Registration Statement continuously effective in

     order to permit the prospectus forming part thereof to be used by Holders

     of Transfer Restricted Securities for a period ending on the earlier of (i)

     two years from the Issue Date or such shorter period that will terminate

     when all the Transfer Restricted Securities covered by the Shelf

     Registration Statement have been sold pursuant thereto and (ii) the date on

     which the Securities become eligible for resale without volume restrictions

     pursuant to Rule 144 under the Securities Act (in any such case, such

     period being called the "Shelf Registration Period"). The Company and the

     Guarantors shall be deemed not to have used their reasonable best efforts

     to keep the Shelf Registration Statement effective during the requisite

     period if they voluntarily take any action that would result in Holders of

     Transfer Restricted Securities covered thereby not being able to offer and

     sell such Transfer Restricted Securities during that period, unless such

     action is required by applicable law.



          (c)  Notwithstanding any other provisions hereof, the Company and the

     Guarantors will ensure that (i) any Shelf Registration Statement and any

     amendment thereto and any



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{PAGE}



     prospectus forming part thereof and any supplement thereto complies in all

     material respects with the Securities Act and the rules and regulations of

     the Commission thereunder, (ii) any Shelf Registration Statement and any

     amendment thereto (in either case, other than with respect to information

     included therein in reliance upon or in conformity with written information

     furnished to the Company by or on behalf of any Holder specifically for use

     therein (the "Holders' Information")) does not contain an untrue statement

     of a material fact or omit to state a material fact required to be stated

     therein or necessary to make the statements therein not misleading and

     (iii) any prospectus forming part of any Shelf Registration Statement, and

     any supplement to such prospectus (in either case, other than with respect

     to Holders' Information), does not include an untrue statement of a

     material fact or omit to state a material fact necessary in order to make

     the statements therein, in the light of the circumstances under which they

     were made, not misleading.



          3.   Additional Interest.

               -------------------



          (a)  The parties hereto agree that the Holders of Transfer Restricted

Securities will suffer damages if the Company and the Guarantors fail to fulfill

their obligations under Section 1 or Section 2, as applicable, and that it would

not be feasible to ascertain the extent of such damages. Accordingly, if (i) the

Exchange Offer Registration Statement is not filed with the Commission on or

prior to 75 days after the Issue Date or the Shelf Registration Statement is not

filed with the Commission on or prior to 30 days after required to be filed or

requested to be filed pursuant to Section 2 hereof, (ii) the Exchange Offer

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