4

                 AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT



         AMENDMENT dated June 26, 1998, by and among Health Fitness Corporation,
a Minnesota  corporation  ("Borrower"),  Health Fitness Rehab, Inc., a Minnesota
corporation ("HF Rehab"), The Preferred Companies,  Inc., an Arizona corporation
("TPC"),  Health  Fitness Rehab of Iowa,  Inc., an Iowa  corporation  ("HF Rehab
Iowa"),   Duffy  &  Associates  Physical  Therapy  Corp.,  an  Iowa  corporation
("Duffy"),  Medlink  Corporation,  an  Iowa  corporation  ("Medlink"),   Medlink
Services,  Inc., an Iowa corporation  ("Medlink  Services"),  Midlands  Physical
Therapy, Inc., a Nebraska corporation ("Midlands"),  Fitness Centers of America,
a California  corporation  ("Fitness  Centers"),  Sports &  Orthopedic  Physical
Therapy,  Inc., a Minnesota  corporation  ("Sports  Therapy") and  International
Fitness Club Network, Inc., a Rhode Island corporation,  formerly known as David
W. Pickering,  Inc. ("IFCN", and together with Sports Therapy, HF Rehab, TPC, HF
Rehab Iowa,  Duffy,  Medlink,  Medlink  Services,  Midlands and Fitness Centers,
collectively,   "Guarantors"  and  sometimes   referred  to  individually  as  a
"Guarantor")  and  Madeleine  L.L.C.,  a  New  York  limited  liability  company
("Lender").


                               W I T N E S S E T H

         WHEREAS,  Lender and Borrower have entered into financing  arrangements
pursuant to which Lender may make loans and advances and provide other financial
accommodations  to  Borrower  as set forth in the Loan and  Security  Agreement,
dated  February 17, 1998,  by and among  Lender,  Borrower  and  Guarantors,  as
amended by Amendment No. 1 to Loan and Security  Agreement,  dated  February 28,
1998 and Amendment No. 2 to Loan and Security Agreement, dated June 4, 1998 (and
as  amended  hereby  and  as  the  same  may  be  further   amended,   modified,
supplemented, extended, renewed, restated or replaced, the "Loan Agreement") and
the agreements,  documents and instruments at any time executed and/or delivered
in connection therewith or related thereto (collectively, together with the Loan
Agreement, the "Financing Agreements");

         WHEREAS,  Borrower and Guarantors have requested certain  amendments to
the Loan Agreement and Lender is willing to agree to such amendments, subject to
the terms and conditions contained herein;

         NOW,   THEREFORE,   in  consideration  of  the  mutual  conditions  and
agreements set forth herein and for other good and valuable  consideration,  the
receipt and  sufficiency  of which is hereby  acknowledged,  the parties  hereto
agree as follows:

         1.       Definitions.

         1.1  Additional   Definition.   As  used  herein,   the  term  "Special
Availability  Reserve"  shall mean a reserve in an amount equal to the Borrowing
Base  (calculated  without  regard to the Special  Availability  Reserve)  minus
$8,000,000,  and the Loan  Agreement  shall be deemed  and is hereby  amended to
include, in addition and not in limitation, such definition.


<PAGE>

         1.2  Interpretation.  For purposes of this Amendment,  unless otherwise
defined  herein,  all terms used  herein,  including,  but not limited to, those
terms used  and/or  defined in the  recitals  above,  shall have the  respective
meanings assigned to such terms in the Loan Agreement.

         2.       Amendments.

                  (a) Borrowing  Base.  Section  1.8(b) of the Loan Agreement is
hereby  amended to add the  following at the end  thereof:  "and  including  the
Special Availability Reserve."

                  (b) Loan, Investments,  Guarantees. Section 8.7(e) of the Loan
Agreement  is hereby  deleted  in its  entirety  and the  following  substituted
therefor: "intentionally omitted."

                  (c)  Change in  Retained  Earnings.  Section  8.10 of the Loan
Agreement is hereby amended by deleting the reference to the figure "($200,000)"
contained  therein and substituting the following  therefor:  "$(650,000)".  The
parentheses with the number indicate that it is a negative number.

                  (d) Fixed  Charge  Coverage  Ratio.  The  Section  of the Loan
Agreement  titled "8.10 Fixed Charged  Coverage  Ratio" is hereby deleted in its
entirety and the following substituted therefor:

                  "8.10A  Fixed  Charged  Coverage  Ratio.   Borrower  and  each
         Guarantor  shall not permit  the Fixed  Charge  Coverage  Ratio for any
         fiscal quarter to be less than the ratio set forth opposite such fiscal
         quarter:

                           Fiscal Quarter Ending                  Ratio

                           March 31, 1998                       1.75 to 1
                           June 30, 1998                          .8 to 1
                           September 30, 1998                   1.75 to 1
                           December 31, 1998 and each
                              fiscal quarter thereafter            2 to 1"

         3. Binding Effect.  This Amendment has been duly executed and delivered
by  Borrower  and  Guarantors  and is in full  force  and  effect as of the date
hereof, and the agreements and obligations of Borrower and Guarantors  contained
herein  constitute  the legal,  valid and binding  obligations  of Borrower  and
Guarantors  enforceable against Borrower and Guarantors in accordance with their
respective terms.

         4. Conditions  Precedent.  The effectiveness of the other provisions of
this Amendment  shall be subject to the receipt by Lender of an original of this
Amendment, duly authorized, executed and delivered by Borrower and Guarantors.


<PAGE>

         5. Effect of this Amendment.  Except as modified  pursuant  hereto,  no
other  changes or  modifications  to the  Financing  Agreements  are intended or
implied  and  in  all  other  respects  the  Financing   Agreements  are  hereby
specifically  ratified,  restated and confirmed by all parties  hereto as of the
effective  date  hereof.  To the extent of  conflict  between  the terms of this
Amendment and the other Financing Agreements,  the terms of this Amendment shall
control.

         6. Further  Assurances.  The parties  hereto shall  execute and deliver
such additional documents and take such additional action as may be necessary or
proper to effectuate the provisions and purposes of this Amendment.

         7. Governing Law. The rights and  obligations  hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the  internal  laws of the  State of New York  (without  giving  effect  to
principles of conflicts of law or choice of law).

         8. Binding  Effect.  This Amendment  shall be binding upon and inure to
the benefit of each of the parties  hereto and their  respective  successors and
assigns.

         9.  Counterparts.  This  Amendment  may be  executed  in any  number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one  counterpart  thereof  signed by each of
the parties hereto.

         IN WITNESS WHEREOF,  each of the undersigned have caused this agreement
to be duly authorized, executed and delivered as of the day and year first above
written.


HEALTH FITNESS CORPORATION                 HEALTH FITNESS REHAB, INC.

By:  /s/ Charles E. Bidwell                By:  /s/ Charles E. Bidwell
Title:  Chief Financial Officer            Title:  Chief Financial Officer



DUFFY & ASSOCIATES PHYSICAL                THE PREFERRED COMPANIES, INC.
  THERAPY SERVICES CORP.

By:  /s/ Charles E. Bidwell                By:  /s/ Charles E. Bidwell
Title:  Chief Financial Officer            Title:  Chief Financial Officer



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MEDLINK CORPORATION                        HEALTH FITNESS REHAB OF IOWA, INC.

By:  /s/ Charles E. Bidwell                By:  /s/ Charles E. Bidwell
Title:  Chief Financial Officer            Title:  Chief Financial Officer


MEDLINK SERVICES, INC.                     FITNESS CENTERS OF AMERICA

By:  /s/ Charles E. Bidwell                By:  /s/ Charles E. Bidwell
Title:  Chief Financial Officer            Title:  Chief Financial Officer


SPORTS & ORTHOPEDIC PHYSICAL               INTERNATIONAL FITNESS CLUB
  THERAPY, INC.                              NETWORK, INC.

By:  /s/ Charles E. Bidwell                By:  /s/ Charles E. Bidwell
Title:  Chief Financial Officer            Title:  Chief Financial Officer


MIDLANDS PHYSICAL THERAPY, INC.

By:  /s/ Charles E. Bidwell
Title:  Chief Financial Officer


MADELEINE, L.L.C.

By:  /s/ Daniel E. Wolf
Title:  Managing Director