FIRST AMENDMENT TO
            SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

     This  Amendment,  dated as of May 16, 1997,  is made by and between  HEALTH
FITNESS PHYSICAL THERAPY,  INC., a Minnesota  corporation (the "Borrower"),  and
NORWEST BANK MINNESOTA,  NATIONAL  ASSOCIATION,  a National Banking  Association
(the "Lender").

                                    Recitals

     The Borrower and the Lender have entered into a Second Amended and Restated
Credit  and  Security  Agreement  dated as of  February  4,  1997  (the  "Credit
Agreement").

     Due to the  proposed  stock  acquisition  of  Duffy &  Associates  Physical
Therapy,  P.C., an Iowa  corporation  ("Duffy") by Health Fitness Rehab of Iowa,
Inc., an Iowa corporation  ("HFRI"), a subsidiary of the Borrower,  the Borrower
has  requested  that certain  amendments  be made to the Credit  Agreement.  The
Lender is willing to make such  amendments  pursuant to the terms and conditions
set forth herein.

     NOW,  THEREFORE,  in  consideration  of the  premises  and  of  the  mutual
covenants and agreements herein contained, it is agreed as follows:

     1. Defined Terms.  Capitalized  terms used in this Amendment shall have the
same  meanings  given them in the Credit  Agreement,  unless  otherwise  defined
herein. In addition, Section 1.1 of the Credit Agreement is amended by adding or
amending, as the case may be, the following definitions:

          "`Affiliate'  or  `Affiliates'  means  Sports  &  Orthopedic  Physical
     Therapy,  Inc.,  Health Fitness  Physical Therapy of Tahoe,  Inc.,  Fitness
     Centers of America, Health Fitness Rehab, Inc., Preferred Companies,  HFRI,
     Duffy and any other  Person  Controlled  by,  Controlling  or under  common
     Control with the Borrower, including (without limitation) any Subsidiary of
     the Borrower."

          "`Corporate  Guarantors'  means Sports & Orthopedic  Physical Therapy,
     Inc.,  Health Fitness Physical Therapy of Tahoe,  Inc.,  Fitness Centers of
     America, Preferred Companies, Health Fitness Rehab, Inc., HFRI, and Duffy."

          "`Duffy'  means Duffy & Associates  Physical  Therapy  Corp.,  an Iowa
     corporation."

               "`First  Amendment'  means that certain First Amendment to Second
          Amended and Restated  Credit and Security  Agreement,  dated as of May
          16, 1997, by and between the Borrower and the Lender."
<PAGE>

               "`First  Amendment  Date'  means  the  date on  which  the  First
          Amendment becomes effective."

               "`Subsidiary'   means   any   corporation,    including   without
          limitation, Sports & Orthopedic Physical Therapy, Inc., Health Fitness
          Physical Therapy of Tahoe,  Inc.,  Fitness Centers of America,  Health
          Fitness  Rehab,  Inc.,  Preferred   Companies,   HFRI,  and  Duffy  (a
          subsidiary of HFRI), of which more than 50% of the outstanding  shares
          of  capital  stock  having   general   voting  power  under   ordinary
          circumstances  to elect a majority of the board of  directors  of such
          corporation,  irrespective  of whether or not at the time stock of any
          other class or classes shall have or might have voting power by reason
          of the  happening  of any  contingency,  is at the  time  directly  or
          indirectly  owned by the  Borrower,  by the  Borrower  and one or more
          other Subsidiaries, or by one or more other Subsidiaries."

               "`Term Note' means the  Borrower's  first  replacement  term note
          dated  as of May  16,  1997,  payable  to  the  order  of the  Lender,
          substantially in the form of Exhibit A to the First Amendment, and any
          note or notes issued in substitution or replacement  therefor,  as the
          same may hereafter be amended,  supplemented  or restated from time to
          time."

     2. Term  Advances.  Section 2.3 of the Credit  Agreement  is amended in its
entirety and replaced with the following new section:

               "Section 2.3 Term Advances.  The Lender agrees,  on the terms and
          subject to the  conditions  herein  set forth,  to make (a) an initial
          advance  to the  Borrower  on  the  Funding  Date  in  the  amount  of
          $1,250,000 less the amount of Existing Term Advances then  outstanding
          (the "Initial Term Advance"),  (b) a second advance to the Borrower in
          the amount of $250,000 upon the  satisfaction  of all  conditions  set
          forth in Section 4.3 hereof (the "Second Term  Advance"),  (c) a third
          advance  to  the  Borrower  in  the  amount  of  $1,000,000  upon  the
          satisfaction  of all  conditions  set forth in Section 4.4 hereof (the
          "Third Term Advance"), and (d) a fourth advance to the Borrower in the
          amount of  $350,000  on the First  Amendment  Date (the  "Fourth  Term
          Advance",  and together with the Initial Term Advance, the Second Term
          Advance  and the Third  Term  Advance,  the "Term  Advances").  If the
          Second  Term  Advance  is not made on or before  March 31,  1997,  the
          Lender's   obligation  to  make  the  Second  Term  Advance  shall  be
          terminated,  and no Second Term  Advance  shall be made.  If the Third
          Term  Advance is not made on or before  March 31,  1997,  the Lender's
          obligation to make the Third Term Advance shall be terminated,  and no
          Third Term  Advance  shall be made.  If the Fourth Term Advance is not
          made on or before May 31, 1997,  the Lender's  obligation  to make the
          Fourth Term Advance  shall be  terminated,  and no Fourth Term Advance
          shall be made.  The  Borrower's  obligation  to pay the Term  Advances
          shall be  evidenced  by the  Term  Note and  shall be  secured  by the
          Collateral as provided in Article III."

     3. New Trade Names, Chief Executive Office, Principal Place of Business and
Locations of Collateral. Schedule 5.1 is hereby amended by deleting paragraph 7.
therein and inserting the following:
<PAGE>

          "7. Health Fitness Rehab of Iowa, Inc.

               A. Trade Names and Division Names

                  K.A.M. Physical Therapy Services
                  Duffy & Associates Physical Therapy

               B. Chief Executive Office/Principal Place of Business

                  Health Fitness Rehab of Iowa, Inc.
                  3500 West 80th Street
                  Suite 130
                  Bloomington, Minnesota 55431

               C. Other Inventory and Equipment Locations

                  K.A.M. locations:

                  Mercy Hospital of Franciscan Sisters
                  201 8th Avenue S.E.
                  Oelwein, Iowa

                  West Union Good Samaritan Center
                  201 Hall Street
                  West Union, Iowa

                  Peoples Memorial Hospital
                  Hiway 20, East
                  Independence, Iowa

                  Central Community Hospital
                  Elkader, Iowa

                  Duffy & Associates Physical Therapy locations:

                  925 East  First  Street  Suites I, J., K & L
                  Schneider's Square Ankeny, Iowa 50021

                  7116, 7120 & 7124 University Avenue
                  Des Moines, Iowa 50311"
<PAGE>

     4. Subsidiaries.  Schedule 5.4 of the Credit Agreement is hereby amended by
deleting the parenthetical  "(after the acquisition of K.A.M. is completed)" and
adding the following:

                   "Duffy & Associates Physical Therapy Corp."

     5. Permitted Liens.  Schedule 7.1 of the Credit Agreement is hereby amended
by adding the following to the end of the Permitted Liens list:

<TABLE>
<CAPTION>

--------------------- ------------------ ----------------------- -------------------- ---------------- --------------
       Debtor             Creditor             Collateral           Jurisdiction        Filing Date     Filing No.
--------------------- ------------------ ----------------------- -------------------- ---------------- --------------
<S>                    <C>                  <C>                   <C>                   <C>               <C>    

       Duffy           Bankers Leasing      Specific Leased       Iowa Secretary of     January 23,       K619708
                           Company             Equipment                State              1995
--------------------- ------------------ ----------------------- -------------------- ---------------- --------------
       Duffy           Bankers Leasing      Specific Leased       Iowa Secretary of    September 12,      K675167
                           Company             Equipment                State              1995
--------------------- ------------------ ----------------------- -------------------- ---------------- --------------
</TABLE>

     6. Permitted  Indebtedness.  Schedule 7.2 of the Credit Agreement is hereby
amended by adding the following to the end of the Permitted Indebtedness list:
<TABLE>
<CAPTION>

------------------------- ---------------- ---------------------- ------------------- -------------------------------
        Creditor            Principal          Maturity Date       Monthly Payment              Collateral
                              Amount
------------------------- ---------------- ---------------------- ------------------- -------------------------------
<S>                         <C>               <C>                     <C>              <C>    

Bankers Leasing Company     $50,000.00        March 20, 1997          $2,304.75        Lease of Specific Equipment
------------------------- ---------------- ---------------------- ------------------- -------------------------------
Bankers Leasing Company      $3,995.00        August 20, 1998          $138.43        Minolta 1081 Copier, Document
                                                                                           Feeder & Bin Sorter
------------------------- ---------------- ---------------------- ------------------- -------------------------------
</TABLE>

     7. No Other Changes. Except as explicitly amended by this Amendment, all of
the terms and conditions of the Credit  Agreement shall remain in full force and
effect and shall apply to any advance or letter of credit thereunder.

     8. Consent to Acquisition of Duffy & Associates  Physical Therapy.  Section
7.7 of the Credit  Agreement  prohibits the Borrower and its  Subsidiaries  from
acquiring,  consolidating  with or merging  into any Person,  provided  that the
Borrower is permitted to acquire 100% of all common and preferred  stock of HFRI
and HFRI is  permitted  to acquire  100% of K.A.M.  The  Borrower  and HFRI have
requested that the Lender consent to HFRI's  acquisition of Duffy, and waive any
Default arising as a result of such acquisition  under Section 7.7 of the Credit
Agreement.  Effective as of the First  Amendment  Date,  and  provided  that the
contemplated merger occurs within 10 days thereafter, the Lender hereby consents
to such acquisition and waives any default arising under Section 7.7 as a result
of such acquisition.
<PAGE>

     9. Amendment Fee. The Borrower shall pay the Lender as of the date hereof a
fully earned, non-refundable fee in the amount of $1,750 in consideration of the
Lender's execution of this Amendment.

     10. Conditions Precedent.  This First Amendment shall be effective when the
Lender shall have received an executed  original  hereof,  together with each of
the following,  each in substance and form  acceptable to the Lender in its sole
discretion:

          ( a) The first  replacement  term note,  substantially  in the form of
     Exhibit A hereto, duly executed on behalf of the Borrower (the "Replacement
     Note").

          ( b) The  Acknowledgment  and Agreement of Guarantors set forth at the
     end of this Amendment, duly executed by each Guarantor.

          ( c) A Certificate of the Secretary of the Borrower certifying as to (
     i) the resolutions of the board of directors of the Borrower  approving the
     execution and delivery of this  Amendment and the  Replacement  Note, ( ii)
     the fact that the  Articles of  Incorporation  and Bylaws of the  Borrower,
     which  were  certified  and  delivered  to  the  Lender   pursuant  to  the
     Certificate of Authority of the Borrower's  Secretary  dated as of February
     4,  1997 in  connection  with the  execution  and  delivery  of the  Credit
     Agreement  continue  in full force and effect and have not been  amended or
     otherwise  modified except as set forth in the Certificate to be delivered,
     and ( iii) certifying that the officers and agents of the Borrower who have
     been certified to the Lender,  pursuant to the  Certificate of Authority of
     the Borrower's  Secretary dated as of February 4, 1997, as being authorized
     to sign and to act on behalf of the Borrower  continue to be so  authorized
     or setting  forth the sample  signatures of each of the officers and agents
     of the  Borrower  authorized  to execute and deliver  this  Amendment,  the
     Replacement  Note, and all other documents,  agreements and certificates on
     behalf of the Borrower.

          ( d) An opinion of the Borrower's  counsel as to the matters set forth
     in  paragraphs  9(a) and 9(b)  hereof and as to such  other  matters as the
     Lender shall require.

          ( e) The Agreement of Purchase and Sale by and among Duffy,  Pamela A.
     Duffy, the sole  shareholder of Duffy,  the Borrower and HFRI,  pursuant to
     which HFRI acquires and controls 100% of the common and preferred  stock of
     Duffy,  and such other  documents and evidence of a successful  purchase as
     the Lender may reasonably require.

          ( f) An  opinion  of  counsel  to  Duffy,  addressed  to HFRI  and the
     Borrower, opining as to the acquisition of Duffy by HFRI.
<PAGE>

          ( g) Evidence  that the Borrower owns and controls 100% of the capital
     stock of HFRI and that HFRI owns and controls  100% of the capital stock of
     Duffy.

          ( h) Evidence that the legal name of Duffy has been changed to Duffy &
     Associates Physical Therapy Corp.

          ( i) A separate guaranty,  substantially in the form of the guaranties
     executed  by the other  Corporate  Guarantors,  properly  executed by Duffy
     pursuant  to which  Duffy  unconditionally  guaranties  the full and prompt
     payment of all Obligations.

          ( j) A separate Corporate Guarantor Security Agreement,  substantially
     in the form of the  security  agreements  executed  by the other  Corporate
     Guarantors, duly executed by Duffy.

          ( k) A certificate  of the  Secretary or Assistant  Secretary of Duffy
     certifying as to (i) the  resolutions  of the  directors  and, if required,
     shareholders,  of Duffy authorizing the execution, delivery and performance
     of the guaranty executed and delivered to the Lender by Duffy; (ii) Duffy's
     articles of  incorporation  and  bylaws;  and (iii) the  signatures  of the
     officers  or agents  authorized  to execute and  deliver  such  guaranty on
     behalf of Duffy.

          ( l) Current searches of appropriate  filing offices showing that ( i)
     no state or  federal  tax or  judgment  liens have been filed and remain in
     effect  against  Pamela  A.  Duffy,  Duffy  or  HFRI,  ( ii)  no  financing
     statements  have been filed and remain in effect  against  Pamela A. Duffy,
     Duffy or HFRI except financing  statements  acceptable to the Lender in its
     sole  discretion,  and ( iii) the  Lender  has  duly  filed  all  financing
     statements  necessary to perfect its security  interests in the property of
     HFRI, to the extent such security  interests are capable of being perfected
     by filing.

          ( m) An opinion of counsel to the Borrower and Duffy, addressed to the
     Lender.

          ( n) Payment of the fee described in Paragraph 9.

          ( o) Such other matters as the Lender may reasonably require.

     11.  Representations  and Warranties.  The Borrower  hereby  represents and
warrants to the Lender as follows:

          (a) The Borrower has all requisite power and authority to execute this
     Amendment and the  Replacement  Note and to perform all of its  obligations
     hereunder,  and this  Amendment  and the  Replacement  Note  have been duly
     executed and delivered by the Borrower and constitute the legal,  valid and
     binding  obligation of the  Borrower,  enforceable  in accordance  with its
     terms  (subject to laws generally  affecting the  enforcement of creditors'
     rights).
<PAGE>

          (b) The  execution,  delivery and  performance by the Borrower of this
     Amendment  and the  Replacement  Note  have  been  duly  authorized  by all
     necessary  corporate  action  and do not ( i)  require  any  authorization,
     consent or  approval by any  governmental  department,  commission,  board,
     bureau,  agency or instrumentality,  domestic or foreign, ( ii) violate any
     provision of any law, rule or regulation or of any order, writ,  injunction
     or decree presently in effect, having applicability to the Borrower, or the
     articles of incorporation or by-laws of the Borrower, or ( iii) result in a
     breach of or  constitute  a default  under any  indenture or loan or credit
     agreement or any other agreement, lease or instrument to which the Borrower
     is a party or by which it or its properties may be bound or affected.

          (c) All of the representations  and warranties  contained in Article V
     of the Credit  Agreement are correct on and as of the date hereof as though
     made on and as of such date, except to the extent that such representations
     and warranties relate solely to an earlier date.

     12. References.  All references in the Credit Agreement to "this Agreement"
shall be deemed to refer to the Credit Agreement as amended hereby;  and any and
all references in the Security Documents to the Credit Agreement shall be deemed
to refer to the Credit  Agreement as amended  hereby.  Upon the  satisfaction of
each of the conditions set forth in paragraph 9 hereof,  the definition of "Term
Note" and all references thereto in the Credit Agreement shall be deemed amended
to describe the Replacement  Note, which Replacement Note shall be issued by the
Borrower  to the  Lender  in  replacement,  renewal  and  amendment,  but not in
repayment, of the original Note in the principal amount of $250,000.

     13. No Waiver.  The  execution  of this  Amendment  and  acceptance  of the
Replacement  Note and any documents  related  hereto shall not be deemed to be a
waiver of any Default or Event of Default under the Credit  Agreement or breach,
default or event of default under any Security  Document or other  document held
by the Lender, whether or not known to the Lender and whether or not existing on
the date of this Amendment.

     14. Release. The Borrower, and each Guarantor by signing the Acknowledgment
and  Agreement  of  Guarantors  set forth  below,  each  hereby  absolutely  and
unconditionally  releases  and forever  discharges  the Lender,  and any and all
participants,   parent   corporations,   subsidiary   corporations,   affiliated
corporations,  insurers,  indemnitors,  successors and assigns thereof, together
with all of the present and former directors,  officers, agents and employees of
any of the  foregoing,  from any and all claims,  demands or causes of action of
any  kind,  nature  or  description,  whether  arising  in law or equity or upon
contract  or tort or under  any state or  federal  law or  otherwise,  which the
Borrower or such  Guarantor  has had,  now has or has made claim to have against
any such person for or by reason of any act,  omission,  matter,  cause or thing
whatsoever  arising from the beginning of time to and including the date of this
Amendment,  whether  such  claims,  demands  and causes of action are matured or
unmatured or known or unknown.
<PAGE>

     15. Costs and Expenses.  The Borrower hereby  reaffirms its agreement under
the Credit  Agreement to pay or reimburse the Lender on demand for all costs and
expenses  incurred by the Lender in connection  with the Credit  Agreement,  the
Security  Documents  and all other  documents  contemplated  thereby,  including
without  limitation  all  reasonable  fees and  disbursements  of legal counsel.
Without  limiting the  generality of the  foregoing,  the Borrower  specifically
agrees  to pay all fees and  disbursements  of  counsel  to the  Lender  for the
services  performed by such counsel in connection  with the  preparation of this
Amendment,  the Replacement Note,  Duffy's Guaranty,  Duffy's Security Agreement
and all other  documents  and  instruments  incidental  hereto and thereto.  The
Borrower  hereby agrees that the Lender may, at any time or from time to time in
its sole discretion and without further  authorization  by the Borrower,  make a
loan to the Borrower  under the Credit  Agreement,  or apply the proceeds of any
loan, for the purpose of paying any such fees, disbursements, costs and expenses
and the fee required under paragraph 9 hereof.

     16.  Miscellaneous.  This Amendment and the Acknowledgment and Agreement of
Guarantors may be executed in any number of counterparts,  each of which when so
executed  and   delivered   shall  be  deemed  an  original  and  all  of  which
counterparts, taken together, shall constitute one and the same instrument.

     IN WITNESS WHEREOF,  the parties hereto have caused this First Amendment to
be duly executed as of the date first written above.

NORWEST BANK MINNESOTA,                  HEALTH FITNESS PHYSICAL THERAPY, 
  NATIONAL ASSOCIATION                     INC.


By /s/ Douglas L. Van Metre              By /s/ Don Paul Cochran
     Douglas L. Van Metre                    Don Paul Cochran
     Its Vice President                      Its Treasurer



<PAGE>
                   ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS

     The  undersigned,  each a guarantor of the  indebtedness  of Health Fitness
Physical  Therapy,  Inc. (the  "Borrower") to Norwest Bank  Minnesota,  National
Association  (the  "Lender")  pursuant to separate  Guaranties  each dated as of
February 4, 1997 (each, a "Guaranty"),  hereby (i)  acknowledges  receipt of the
foregoing  First  Amendment;  (ii)  consents  to the  terms  (including  without
limitation the release set forth in paragraph 14 of the Amendment) and execution
thereof;  (iii)  reaffirms his or its  obligations to the Lender pursuant to the
terms of his or its Guaranty;  and (iv)  acknowledges that the Lender may amend,
restate,  extend,  renew  or  otherwise  modify  the  Credit  Agreement  and any
indebtedness or agreement of the Borrower, or enter into any agreement or extend
additional or other credit  accommodations,  without  notifying or obtaining the
consent  of  the  undersigned  and  without   impairing  the  liability  of  the
undersigned  under his or its  Guaranty  for all of the  Borrower's  present and
future indebtedness to the Lender.

                                     SPORTS & ORTHOPEDIC PHYSICAL 
                                          THERAPY, INC.


/s/ Loren S. Brink                   By /s/ Don Paul Cochran
  Loren Scott Brink                     Don Paul Cochran             
                                     Its Treasurer and Chief Financial Officer

HEALTH FITNESS PHYSICAL THERAPY      FITNESS CENTERS OF AMERICA
OF TAHOE, INC.  

By /s/ Don Paul Cochran              By /s/ Don Paul Cochran    
     Don Paul Cochran                   Don Paul Cochran
Its Treasurer and Chief              Its Treasurer and Chief Financial Officer
       Financial Officer  

HEALTH FITNESS REHAB, INC.           THE PREFERRED COMPANIES, INC.


By /s/ Don Paul Cochran              By /s/ Don Paul Cochran
     Don Paul Cochran                   Don Paul Cochran
Its Treasurer and Chief              Its Treasurer and Chief Financial Officer
       Financial Officer                   

                                     HEALTH FITNESS REHAB OF IOWA, INC.


                                     By /s/ Don Paul Cochran
                                        Don Paul Cochran
                                     Its Treasurer and Chief Financial Officer

<PAGE>

                                                                  Exhibit A to
                                                               First Amendment
                                                             to Second Amended
                                                         & Restated Credit and
                                                            Security Agreement

                           FIRST REPLACEMENT TERM NOTE

$2,850,000                                              Bloomington, Minnesota
                                                                  May 16, 1997

     For value received, the undersigned, HEALTH FITNESS PHYSICAL THERAPY, INC.,
a  Minnesota  corporation  (the  "Borrower"),  hereby  promises  to  pay  on the
Termination  Date under the Credit Agreement  (defined  below),  to the order of
NORWEST BANK MINNESOTA,  NATIONAL  ASSOCIATION,  a national banking  association
(the "Lender"),  at its office in Bloomington,  Minnesota, or at any other place
designated  at any time by the  holder  hereof,  in lawful  money of the  United
States of America and in immediately  available  funds, the principal sum of Two
Million Eight Hundred  Fifty  Thousand  Dollars  ($2,850,000)  or, if less,  the
unpaid  principal amount of the Term Advances made by the Lender to the Borrower
under the Credit  Agreement  (defined  below),  together  with  interest  on the
principal amount hereunder  remaining unpaid from time to time,  computed on the
basis of the actual  number of days  elapsed and a 360-day  year,  from the date
hereof  until  this  Note is fully  paid at the rate from time to time in effect
under the Second Amended and Restated Credit and Security Agreement of even date
herewith (as the same may  hereafter be amended,  supplemented  or restated from
time to  time,  the  "Credit  Agreement")  by and  between  the  Lender  and the
Borrower.  The principal  hereof and interest  accruing thereon shall be due and
payable as provided in the Credit  Agreement.  This Note may be prepaid  only in
accordance with the Credit Agreement.

     This Note is issued  pursuant,  and is  subject,  to the Credit  Agreement,
which provides,  among other things, for acceleration  hereof.  This Note is the
Term Note referred to in the Credit Agreement. To the extent this Note evidences
the Borrower's  obligation to pay the Term Advances prior to the First Amendment
Date,  this Note is issued in  substitution  for and  replacement  of but not in
payment of the Borrower's  promissory note dated as of February 4, 1997, payable
to the order of the Lender in the original principal amount of $2,500,000.

     This Note is secured, among other things,  pursuant to the Credit Agreement
and the  Security  Documents  as therein  defined,  and may now or  hereafter be
secured by one or more other  security  agreements,  mortgages,  deeds of trust,
assignments or other instruments or agreements.

     The  Borrower  hereby  agrees  to pay all  costs of  collection,  including
attorneys'  fees and legal expenses in the event this Note is not paid when due,
whether or not legal proceedings are commenced.

     Presentment or other demand for payment, notice of dishonor and protest are
expressly waived.

                                       HEALTH FITNESS PHYSICAL THERAPY, INC.


                                       By /s/ Don Paul Cochran
                                          Don Paul Cochran
                                          Its Treasurer