THIRD AMENDMENT TO
                    REVOLVING CREDIT AND TERM LOAN AGREEMENT

     THIS THIRD  AMENDMENT,  dated as of January 31,  1997,  amends and modifies
that  certain  Revolving  Credit and Term Loan  Agreement,  dated as of June 24,
1994, as amended by First Amendment to Revolving Credit and Term Loan agreement,
dated as of March 31, 1995 and Second  Amendment  to  Revolving  Credit and Term
Loan  Agreement  dated  as of  January  19,  1996  (as  so  amended,  the  "Loan
Agreement"),  between HEALTH RISK MANAGEMENT, INC., a Minnesota corporation (the
"Borrower") and FIRST BANK NATIONAL ASSOCIATION,  a national banking association
(the "Bank").  Terms not otherwise  expressly  defined herein shall the meanings
set forth in the Loan Agreement. 

                                    RECITALS

     WHEREAS,  The  Borrower  and the Bank desire to extend the  maturity of the
loan facilities as hereinafter set forth.

     NOW  THEREFORE,  for value  received,  the  Borrower  and the Bank agree as
follows. 

                  ARTICLE I - AMENDMENTS TO THE LOAN AGREEMENT

     1.1 Definitions.

          (a) The  definition of  "Termination  Date" is amended by deleting the
     date  "January 31, 1997" and  inserting the date "January 31, 1998" in lieu
     thereof.  

          (b) The  definition of  "Revolving  Credit  Commitment"  is amended by
     deleting   the   amount    "$2,500,000.00"   and   inserting   the   amount
     "$3,750,000.00"  in lieu thereof.  

     1.2 Confirmation of Security  Agreement.  The Borrower hereby reaffirms its
Security  Agreement,  dated as of June 24, 1994 (the "Security  Agreement")  and
further  agrees  that  the  Security  Agreement  secures  all of the  Borrower's
obligations  to the Bank,  including the Borrower's  obligations  under the Loan
Agreement, as amended by this Amendment. 

     1.3 Construction. All references in the Loan Agreement to "this Agreement",
"herein" and similar  references  shall be deemed to refer to the Loan Agreement
as amended by this Amendment 
<PAGE>

                  ARTICLE II - REPRESENTATIONS AND WARRANTIES

     To induce the Bank to enter into this  Amendment  and to make and  maintain
the Loans  under the Loan  Agreement  as amended  hereby,  the  Borrower  hereby
warrants and  represents  to the Bank that it is duly  authorized to execute and
deliver this Amendment,  and to perform its obligations under the Loan Agreement
as amended  hereby,  and that this Amendment  constitutes  the legal,  valid and
binding obligation of the Borrower, enforceable in accordance with its terms.

                        ARTICLE III- CONDITIONS PRECEDENT

     This  Amendment  shall become  effective on the date first set forth above;
provided,  however,  that the  effectiveness of this Amendment is subject to the
satisfaction  of each of the following  conditions  precedent:  

     3.1  Warranties.  Before and after  giving  effect to this  Amendment,  the
representations  and  warranties in ARTICLE Vll of the Loan  Agreement  shall be
true and correct as though made on the date hereof,  except for changes that are
permitted by the terms of the Loan  Agreement.  The execution by the Borrower of
this Amendment shall be deemed a  representation  that the Borrower has complied
with the foregoing  condition.  

     3.2 Defaults.  Before and after giving effect to this Amendment, no Default
or Event of  Default  shall  have  occurred  and be  continuing  under  the Loan
Agreement.  The  execution by the Borrower of this  Amendment  shall be deemed a
representation that the Borrower has complied with the foregoing condition.  

     3.3 Documents.  The following  shall have been delivered to the Bank,  each
duly executed and dated,  or certified,  as of the date hereof.  as the case may
be: 
          (a)  Amendment.  This  Amendment,  appropriately  completed  and  duly
     executed by the Borrower. 

          (b)  Resolutions.  Certified  copies  of  resolutions  of the Board of
     Directors of the Borrower authorizing or ratifying the execution,  delivery
     and  performance,  respectively,  of this  Amendment  and  other  documents
     provided  for in this  Amendment.  

          (c)  Consents.  Certified  copies  of  all  documents  evidencing  any
     necessary corporate action,  consent or governmental or regulatory approval
     (if any) with respect to this Amendment 

          (d)  Incumbency and  Signatures.  A certificate of the Secretary or an
     Assistant  Secretary of the Borrower certifying the names of the officer or
     officers  of the  Borrower  authorized  to sign  this  Amendment  and other
     documents  provided for in this  Amendment,  together  with a sample of the
     true signature of each such officer.

          (e) Certificate of Incorporation and By-laws.  A certified copy of any
     amendment or restatement of the Certificate or Articles of Incorporation or
     the  By-laws of the  Borrower  made or entered  following  date of the most
     recent certified copies furnished to the Bank. 
<PAGE>

          (f)  Confirmation  of Security  Agreement.  A Confirmation of Security
     Agreement,   appropriately   completed  and  duly  executed  by  HRM  Claim
     Management,  inc. 

          (g)  Confirmation  of Security  Agreement.  A Confirmation of Security
     Agreement,  appropriately  completed  and duly  executed by  Institute  for
     Healthcare Quality, Inc.

          (h)Confirmation  of Security  Agreement.  A  Confirmation  of Security
     Agreement,  appropriately  completed and duly  executed by Health  Resource
     Management, Ltd. 

                              ARTICLE IV - GENERAL

     4.1 Expenses. The Borrower agrees to reimburse the Bank upon demand for all
reasonable  expenses (including  reasonable  attorneys' fees and legal expenses)
incurred  by the Bank in the  preparation,  negotiation  and  execution  of this
Amendment  and any other  document  required to be  furnished  herewith,  and in
enforcing the  obligations  of the Borrower  hereunder,  and to pay and save the
Bank  harmless  from all  liability  for any stamp or other  taxes  which may be
payable  with  respect to the  execution  or delivery of this  Amendment,  which
obligations of the Borrower shall survive any termination of the Loan Agreement.


     4.2 Counterparts. This Amendment may be executed in as many counterparts as
may be deemed  necessary or convenient,  and by the different  parties hereto on
separate  counterparts,  each of  which,  when so  executed,  shall be deemed an
original  but all  such  counterparts  shall  constitute  but  one and the  same
instrument.  

     4.3  Severability.  Any provision of this Amendment  which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining  portions hereof or affecting the validity or  enforceability  of such
provisions  in any  other  jurisdiction.  

     4.4 Law.  This  Amendment  shall be a  contract  made under the laws of the
State of Minnesota, which laws shall govern all the rights and duties hereunder.

     4.5  Successors:  Enforceability.  This Amendment shall be binding upon the
Borrower and the Bank and their  respective  successors  and assigns,  and shall
inure to the benefit of the Borrower and the Bank and the successors and assigns
of the Bank.  Except as hereby amended,  the Loan Agreement shall remain in full
force and  effect and is hereby  ratified  and  confirmed  in all  respects.  IN

     WITNESS  WHEREOF,  the parties  hereto have  caused  this  Amendment  to be
executed by their respective  officers  "hereunto duly authorized as of the date
first written above.

                                   HEALTH RISK MANAGEMENT. INC.
                                   
                                   By:      /s/ Thomas P. Clark
                                   Title:   CFO

                                   FIRST BANK NATIONAL ASSOCIATION

                                   By:      Illegible
                                   Title:   Illegible