Document:

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                                                                   EXHIBIT 10.13

                            ASSET PURCHASE AGREEMENT

         THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of the 25th day of August, 2003 by and between JOHNSON & JOHNSON HEALTH
CARE SYSTEMS INC., a New Jersey corporation ("HCS") located at 425 Hoes Lane,
Piscataway, NJ 08855, and HEALTH FITNESS CORPORATION, a Minnesota corporation
("HFC") located at 3600 West 80th Street, Suite 560, Minneapolis, MN 55431.

RECITALS:

A.       HCS, through its Health & Fitness Services Division, conducts a
business of providing corporate fitness and wellness services and products to
Johnson & Johnson affiliated entities and to other companies and entities,
including assessment programs, consulting, operations management, wellness
programs and data analysis services (the "Business"). For purposes of this
Agreement, the term the "Business" does not mean the Integrated Behavioral
Solutions business of HCS (the "Behavioral Solutions Business").

B.       HFC and HCS have agreed that HFC shall purchase certain assets of the
Business pursuant to the terms and conditions of this Agreement.

AGREEMENTS:

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
for other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:

1.       Purchase of Assets. Subject to the terms and conditions hereof, HCS
         agrees to sell, assign and deliver to HFC, and HFC agrees to purchase
         and accept from HCS, at the Closing, all of its right, title and
         interest in and to the following assets and properties of HCS (except
         any such items that are Excluded Assets) (the "Acquired Assets"):

(a)      All furniture, equipment, machinery, trade fixtures, leasehold
         improvements and other tangible personal property ("Equipment") listed
         on the equipment schedule attached as Schedule 1(a) hereto, and all
         other Equipment owned by HCS and used at any of the Business' customer
         sites solely for the purpose of conducting the Business;

(b)      (i) All tradenames, trademarks or service mark registrations and
         applications, common law trademarks ("Trademarks") listed on Schedule
         1(b)(i), and all other Trademarks relating exclusively to the Business,
         including without limitation the "Live for Life" name, subject to
         Section 4(e); (ii) all copyrights in any copyrightable materials listed
         on Schedule 1(b)(ii) and all other copyrights in any

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         copyrightable materials relating exclusively to the Business
         ("Copyrights"); and (iii) all goodwill associated therewith;

(c)      Subject to Section 13(f) below, all promotional materials, product and
         service manuals, customer lists and customer information, member lists
         and member information ("Customer Materials") identified on Schedule
         1(c) and all other Customer Materials relating exclusively to the
         Business, whether in written or electronic form, and all goodwill
         associated therewith; and all books, ledgers and other business records
         to the extent relating to the Business (HCS having the right to retain
         copies) whether in written or electronic form;

(d)      All know-how, trade secrets, business models and business systems, and
         computer programs and telephone numbers, and all documentary evidence
         thereof ("Technology") identified on Schedule 1(d), including without
         limitation, the INSIGHT health risk assessment software and online
         version thereof, including without limitation all such health risk
         assessment software and material in a non-English language, and such
         other health risk assessment software and online applications and all
         books and records relating thereto, as are listed on Schedule 1(d)
         hereto, and all other Technology relating exclusively to the Business;

(e)      All governmental licenses and permits ("Governmental Licenses")
         relating exclusively to the Business, subject to Section 3;

(f)      Subject to Section 3, the following contracts of the Business (the
         "Contracts"), but only insofar as HFC shall have assumed all
         obligations arising from and after the Closing Date with respect to
         same;

                  (i)      All contracts identified in Schedule 1(f)(i) hereto
                           and all other contracts relating exclusively to the
                           Business pursuant to which HCS provides goods or
                           services to customers of the Business other than
                           Affiliates of HCS (the "Customer Contracts");

                  (ii)     All contracts identified in Schedule 1(f)(ii) hereto
                           and all other contracts for the purchase by HCS of
                           goods or services relating exclusively to the
                           Business, but only insofar as HFC has not, prior to
                           the Closing, determined that HFC will not assume the
                           obligations thereunder, which determination shall be
                           in HFC's sole discretion and shall be communicated to
                           HCS in writing at or prior to the Closing;

                  (iii)    All agreements pursuant to which any person or entity
                           has agreed not to compete with the Business or
                           solicit any of its employees, but only to the extent
                           relating to the Business ("Noncompete Contracts");

                  (iv)     All real estate leases identified in Schedule
                           1(f)(iv) and all other real estate leases to which
                           HCS is a party with respect to the premises of any of
                           the Business' customer sites (other than sites of

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                           HCS's Affiliates) which HCS uses solely for the
                           purpose of conducting the Business; and

                  (v)      Except as identified on Schedule 1(f)(v), all
                           personal property leases to which HCS is a party to
                           the extent relating to equipment, furniture and other
                           tangible personal property located on the premises of
                           any of the Business' customer sites (other than sites
                           of HCS's Affiliates) solely for the purpose of
                           conducting the Business.

(g)      All other assets and properties of HCS of every kind and description
         relating exclusively to the Business as presently conducted by HCS,
         wherever located, whether real, personal or mixed, tangible or
         intangible.

2.       Behavioral Solutions Assets. At the Closing, HCS will grant HFC,
         pursuant to a license agreement in the form attached hereto as Exhibit
         2 (the "Behavioral Solutions License Agreement"), a worldwide,
         irrevocable, paid-up, royalty-free, non-exclusive license to use
         certain materials, know-how and methodologies of HCS covered by such
         license agreement and relating to weight management programs that HCS
         currently markets under the name "Pathways to Change" through the
         Behavioral Solutions Business (such materials, know-how and
         methodologies are hereinafter referred to as the "Behavioral Solutions
         Assets"); provided that such license shall be subject to the terms and
         conditions of such Behavioral Solutions License Agreement; and provided
         further that in no event shall HFC have any rights to the name
         "Pathways to Change" or related logos or marks, if any; and provided,
         further, that HFC shall have no right pursuant to such license to use
         any of the Behavioral Solutions Assets in connection with any clinical
         trials or marketing of any pharmaceutical or surgical products.

3.       Assignment of Governmental Licenses and Contracts and Rights.

(a)      Anything in this Agreement to the contrary notwithstanding, this
         Agreement shall not constitute an agreement or attempted agreement to
         assign or transfer any Governmental License or any Contract if an
         attempted assignment or transfer, without the consent of the relevant
         governmental entity with respect to such Governmental License or the
         other party to such Contract, would constitute a breach thereof or in
         any material way adversely affect the rights thereunder of HFC (if the
         assignment were effective) or of HCS (if the assignment were not
         effective), unless and until written consent to such assignment or
         transfer is received from such governmental entity or contracting
         party, as applicable. Such Governmental Licenses and such Contracts
         (other than Customer Contracts) that are not assigned or transferred to
         HFC pursuant to this Section 3(a) are referred to as the
         "Non-Consenting License/Contracts." In addition, and without limiting
         the generality of the foregoing, HCS shall have no obligation to assign
         to HFC any real property lease that HCS has entered into in connection
         with a Customer Contract unless and until such Customer Contract is
         assigned to HFC hereunder.

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(b)      Beginning promptly, the parties shall cooperate in the process of
         obtaining, in writing, customer consents required for the assignment of
         the Customer Contracts (the "Required Customer Consents"). For the
         purpose of obtaining such customer consents, the parties agree to
         adhere to the following process (the "Assignment Process"):

                  (i)      The parties agree that Jerry Noyce, the President and
                           CEO of HFC, and Patricia Flynn, Vice President of
                           HCS's Health & Fitness Services division, or their
                           respective designees (provided that any such designee
                           is reasonably acceptable to the non-designating
                           party) (the "Assignment Representatives"), shall be
                           the respective representatives of each party
                           responsible for initiating discussions with the
                           customers party to the Customer Contracts and for
                           soliciting the Required Customer Consents. Such
                           discussions and solicitations may be conducted in
                           person or by phone, as determined by the Assignment
                           Representatives. Except as provided otherwise in the
                           Communication Plan (as defined below), all such
                           discussions and solicitations shall be conducted
                           jointly by both Assignment Representatives, unless
                           previously agreed in writing by the party whose
                           Assignment Representative will not participate in
                           such discussion or solicitation.

                  (ii)     The parties have mutually developed and agreed upon a
                           customer communication plan, which is attached hereto
                           as Exhibit 3(b)(ii) (the "Communication Plan"). The
                           Communication Plan is designed to be used by the
                           Assignment Representatives during customer meetings
                           and in other correspondence with customers in order
                           to achieve the following objectives:

                           A.       To inform each customer of the general
                                    background of the transaction between the
                                    parties and the general reasons for their
                                    deciding to enter into such transaction;

                           B.       to present the general terms of the
                                    transaction to each customer (but not any
                                    financial or specific terms without the
                                    written consent of both parties);

                           C.       to discuss the process of transferring
                                    ownership of the Business and the conduct of
                                    the Business after the Closing Date;

                           D.       to present each customer with a letter
                                    substantially in the form attached hereto as
                                    Exhibit 3(b)(ii)(D) permitting the
                                    assignment of such customer's Customer
                                    Contract to HFC (the "Consent Letter");

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                           E.       to outline "next steps" for each customer
                                    and identify an appropriate contact person
                                    assigned to assist such customer during the
                                    Assignment Process; and

                           F.       to address any concerns any customer may
                                    raise in connection with any of the
                                    foregoing.

                  (iii)    As soon as practicable after the date hereof, the
                           Assignment Representatives shall begin conducting
                           meetings with the Business' customers. The parties
                           shall cause their respective Assignment
                           Representatives to pursue the objectives listed above
                           during such customer meetings. The parties shall
                           cause their respective Assignment Representatives to
                           adhere in all material respects to the Communication
                           Plan during customer meetings.

(c)      Neither HFC nor HCS shall at any time, including during visits and
         calls to customers and prospective customers of the Business, act (or
         permit any of its respective Assignment Representatives, agents,
         employees, affiliates, officers or directors to act) in any manner to
         disparage the businesses or products of the other party or any
         Affiliates of such other party.

(d)      Notwithstanding anything herein to the contrary, no Customer Contract
         for which a Required Customer Consent is not obtained (each a
         "Non-Consenting Customer Contract") will be assigned to HFC at the
         Closing. At the Closing, with respect to each Non-Consenting Customer
         Contract, HCS will either (i) enter into a subcontract with HFC
         containing the terms set forth in paragraph 3(f) below (a
         "Subcontract") or provide another arrangement reasonably acceptable to
         HFC for HFC to manage the sites included in such Non-Consenting
         Customer Contract (each site so managed, whether pursuant to a
         Subcontract or otherwise, an "HFC Managed Customer Site") or (ii)
         terminate such Non-Consenting Customer Contract (each Customer Contract
         so terminated, a "Terminated Contract") as soon as possible in
         accordance with its terms by delivering a termination notice to the
         relevant customer in the form of Exhibit 3(d)(ii); provided that this
         paragraph 3(d) shall not apply to any Non-Consenting Customer Contract
         that cannot be terminated by HCS without cause and with respect to
         which the parties have not, as of the Closing, agreed upon terms on
         which the related customer site would be an HFC Managed Customer Site
         despite their good faith efforts to reach such agreement.

(e)      HFC shall have no rights, obligations or liabilities under any
         Terminated Contract, but shall have the right immediately to solicit a
         new contract from the customer party to such Terminated Contract.

(f)      HFC will be responsible for all of HCS's obligations under the related
         Non-Consenting Customer Contract that applies to each HFC Managed
         Customer Site. HCS will continue to record and collect the revenues
         under the Non-Consenting Customer Contract that accrue after the
         Closing Date (the "Non-Assigned

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         Revenues") with respect to each HFC Managed Customer Site. In
         consideration of HFC's covenants and other obligations undertaken in
         connection with each HFC Managed Customer Site, HCS agrees to pay HFC
         an amount equal to the Non-Assigned Revenues associated with such HFC
         Managed Customer Site promptly upon receipt thereof. HCS's efforts to
         collect the Non-Assigned Revenues with respect to each HFC Managed
         Customer Site shall be at a level equal to or greater than its efforts
         to collect receivables of the Business prior to the Closing; provided
         that, subject to the foregoing, HFC shall bear all credit risk with
         respect to receivables accruing after the Closing with respect to the
         services performed by HFC at each HFC Managed Customer Site. HCS will,
         upon request by HFC at any time after the Closing Date and prior to
         receipt of the consent of the customer party thereto to assign a
         Non-Consenting Customer Contract covering an HFC Managed Customer Site
         to HFC, terminate as soon as possible after such request, in accordance
         with the terms thereof, such Non-Consenting Customer Contract. Except
         as described in the immediately preceding sentence and except as agreed
         in writing by HFC, HCS shall take no action after the Closing to amend,
         terminate or waive any of HCS's rights under any Non-Consenting
         Customer Contract relating to an HFC Managed Customer Site.
         Notwithstanding the foregoing, (i) HCS shall have the right, in its
         sole and absolute discretion, to terminate, in accordance with its
         terms, each Non-Consenting Customer Contract relating to an HFC Managed
         Customer Site, (A) if the customer objects to the fact that HFC is
         managing such site, or (B) if the Required Customer Consent for such
         contract has not been received as of the three-month anniversary of the
         Closing Date, with the termination in the case of this sub-clause (B)
         to be effective no earlier than the end of the sixth calendar month
         following the month in which the Closing occurs (provided that HCS
         shall provide to HFC, and HFC may reasonably object to, the form of any
         termination notice related to a termination under this clause (i)), and
         (ii) in no event shall HCS be required to extend or renew any Customer
         Contract upon its expiration or otherwise. HCS shall have no further
         obligation to HFC with respect to any terminated or expired contract
         following the effective date of such termination or expiration, or on
         account of such termination or expiration, except that in the case of
         Customer Contracts with respect to each HFC Managed Customer Site, HCS
         shall continue to turn over all Non-Assigned Revenues received by HCS
         with respect thereto as provided herein.

(g)      With respect to any Non-Consenting License/Contract or any claim, right
         or benefit arising thereunder or resulting therefrom (each an
         "Interest" and collectively the "Interests"), HCS shall, during the
         remaining term of such Interest, use commercially reasonable efforts to
         cooperate with HFC in any reasonable and lawful arrangements designed
         to provide the benefits of such Interest to HFC, so long as HFC
         cooperates with HCS in such arrangements and advances to HCS, or
         reimburses HCS for, any and all payments that HCS has notified HFC at
         least 3 business days in advance of the due date thereof will be
         required from HCS after the Closing Date by the terms of the document
         governing such Interest (as the same shall be in effect on the Closing
         Date).

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(h)      At any time after the Closing, if the relevant governmental entity or
         third party to any Non-Consenting License/Contract or any
         Non-Consenting Customer Contract (each a "Non-Consenting Right")
         consents in writing to the assignment to HFC of such Non-Consenting
         Right, (x) the assignment of such Non-Consenting Right shall become
         effective immediately as of the date of such consent, and HFC shall
         thereafter be entitled to all of the rights, and assume all of the
         obligations and liabilities, thereunder and (y) such Non-Consenting
         Right shall, for all purposes hereunder (except, with respect to
         Terminated Contracts but subject to Section 7(a), in the calculation or
         post-Closing recalculation of the Purchase Price), be treated as an
         Acquired Asset and an Assumed Liability from and after such effective
         date.

(i)      The parties agree that their respective obligations to obtain the
         Required Customer Consents shall be solely as set forth expressly in
         Section 3(b), and that, notwithstanding any other provision of this
         Section 3, neither HCS nor HFC shall be required to pay any
         consideration to any person or entity in order to obtain any consent to
         assign, subcontract or transfer any Contract or Governmental License.

(j)      For each Non-Consenting Customer Contract that has not been terminated
         as of the Closing Date, HFC shall, for the remaining term of such
         Customer Contract, grant HCS a license to any and all Acquired Assets
         to the extent the same are needed by HCS to continue to perform its
         obligations under such Customer Contract.

4.       Excluded Assets. Notwithstanding anything in this Agreement to the
         contrary, HFC shall not purchase, acquire or obtain under this
         Agreement or the transactions contemplated hereby any right, title or
         interest in or to, and HCS shall not and does not agree to sell, assign
         or deliver to HFC, any of the following assets or properties ("Excluded
         Assets"):

(a)      Any bank accounts, or any cash or cash equivalents, including
         marketable securities, on hand or on deposit at any bank as of the
         Closing Date;

(b)      Any furniture, equipment, machinery, trade fixtures, office supplies,
         leasehold improvements or other fixed assets owned, held or used by HCS
         at its New Jersey headquarters located at 425 Hoes Lane, Piscataway, NJ
         08855, and any other tangible personal property identified on Schedule
         4(b);

(c)      Any accounts receivable as of the Closing Date ("Accounts Receivable"),
         including without limitation the accounts set forth on Schedule 8(i)(i)
         hereto; provided, however, that Schedule 8(i)(ii) sets forth a true and
         complete list of all pre-payments that HCS has received with respect to
         any services to be provided or products to be sold by the Business
         after the Closing Date, the amount of which pre-payments shall be a
         reduction in the Purchase Price pursuant to Section 7(a);

(d)      Any insurance policies of HCS; provided that any insurance claims or
         proceeds under any HCS insurance policy, or other insuring agreement,
         to the extent

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         relating to loss of or damage to any Acquired Assets occurring after
         the date hereof and before the Closing, shall themselves be Acquired
         Assets;

(e)      Any and all trade names, trademarks, service marks, copyrights, trade
         dress, logos, domain names and any similar proprietary rights (i)
         containing or resembling the name "Pathways to Change" or, except as
         provided in Section 1(b), the names and logos of Johnson & Johnson or
         any of its Affiliates or (ii) except as provided in Section 1(b), held
         by HCS or any of its Affiliates;

(f)      Any assets or properties related to, or developed for or used to
         conduct the Behavioral Solutions business of HCS; provided that HFC
         shall have a right to use certain of such assets, to the extent such
         assets are currently used to conduct the Business, pursuant to the
         terms of the Behavioral Solutions License Agreement and subject to the
         conditions and limitations set forth therein;

(g)      All inventory sold or otherwise disposed of in the ordinary course
         consistent with past practice from the date hereof until the Closing
         Date;

(h)      All of HCS's (and its Affiliates') right, title and interest in their
         respective Employee Benefit Plans and the related assets;

(i)      Any deferred tax asset of the Business;

(j)      All claims, credits, causes of action and rights under insurance
         policies that result from or arise out of events, facts or
         circumstances occurring or existing on or prior to the Closing, except
         as provided in Section 4(d);

(k)      All books, records, files and papers, whether in hard copy or computer
         format, prepared in connection with this Agreement or the transactions
         contemplated hereby, or related to any employee that is not a Hired
         Employee, and all minute books, tax records, shareholder records and
         other similar corporate records (including historical financial
         records) of HCS and its Affiliates;

(l)      All consideration to be received by HCS hereunder and all other rights
         of HCS hereunder; and

(m)      The other assets identified in Schedule 4(m) hereto.

5.       Assumption of Liabilities.

(a)      At the Closing, HFC shall assume and agree to pay, perform and
         discharge when due (i) all obligations arising from and after the
         Closing Date under any and all Contracts listed on Schedules 1(f)(i),
         1(f)(ii) and 1(f)(iv) that are assigned to HFC by HCS ("Assumed
         Contracts"); provided however, that other than as described in Section
         3, HFC shall not, until assigned to HFC, assume or agree to pay,
         perform or discharge when due any obligation arising under any
         Contracts that are not assigned to HFC at the Closing, (ii) all trade
         payables outstanding as of the Closing Date to the extent relating to
         goods or services to be provided to HFC

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         after the Closing Date in connection with the Acquired Assets, the
         amount of which trade payables shall not exceed in the aggregate
         $10,000, and (iii) all liabilities arising out of the marketing, sale
         or delivery of any product, program or service by HFC or its Affiliates
         after the Closing Date (whether or not such product, program or service
         was, or was derived from, any of the Acquired Assets), including,
         without limitation, warranty obligations and other product liabilities
         with respect to products, programs and services sold by HFC or its
         Affiliates after the Closing Date.

(b)      HFC hereby acknowledges and agrees that HFC, not HCS, shall have sole
         responsibility for any and all debts, liabilities and obligations
         arising after the Closing out of the employment relationship between
         HFC and any employees or consultants formerly employed or retained by
         HCS, specifically excluding any debts, liabilities or obligations
         arising out of the termination of such person's employment relationship
         with HCS, but specifically including any debts, liabilities and
         obligations arising out of any allegation that HFC discriminated
         against any person in deciding not to offer employment to such person.

(c)      The debts, liabilities and obligations described in the foregoing
         clauses (a) and (b) are hereinafter referred to as "Assumed
         Liabilities".

6.       Excluded Liabilities. HFC does not assume any liabilities, obligations
         or undertakings of HCS of any kind or nature whatsoever, whether fixed
         or contingent, known or unknown, determined or determinable, due or not
         yet due, whether arising out of employment, consulting, management or
         other business relationships or other business operations prior to the
         Closing Date, or arising out of sale of any of the Acquired Assets
         under this Agreement, or otherwise, other than the Assumed Liabilities
         (the "Excluded Liabilities"). Without limiting the generality of the
         foregoing sentence, the Excluded Liabilities include, and HFC
         specifically disclaims assumption of the following, except insofar as
         they are Assumed Liabilities: (a) any liabilities or obligations
         arising out of negligence, strict liability, product liability or
         breach of warranty claims to the extent resulting from or arising out
         of the operation of the Business or the Acquired Assets prior to the
         Closing Date; (b) any liabilities and obligations to the extent
         relating to the Business and arising prior to the Closing Date under
         contracts of HCS with the Business' customers, suppliers or licensees;
         (c) any claims or liabilities relating to the Business and arising
         under any of HCS's payroll, compensation, bonus, employee vacation,
         termination, employee benefits, employee tax, severance, sick leave,
         tuition reimbursement, pro-rated pension or other employee plans,
         programs or policies in connection with the termination of any of HCS's
         employees as such, whether as contemplated by this Agreement or
         otherwise, or arising prior to the Closing Date with respect to any of
         HCS' employees as such under COBRA or federal and state plant
         closing/mass layoff laws, if applicable to the transactions
         contemplated hereby, or workers compensation obligations relating to
         injuries sustained by HCS's employees prior to the Closing Date, or
         sexual harassment, OSHA or Equal Employment Opportunity Commission
         claims by HCS's employees or former employees, as such, based on acts
         or omissions of

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         HCS alleged to have occurred prior to the Closing Date during such
         person's employment relationship with HCS; (d) any liabilities, claims
         or fees payable under contracts between HCS (or its Affiliates) and any
         third party staffing organization, such as Kelly Services, Inc., or any
         other person or entity arising out of or in connection with the
         employment of any employee, consultant or contractor of the Business by
         HFC, HFC's retention of any such employee, consultant or contractor as
         a consultant or contractor or any solicitation by HCS or HFC of any
         such employee, consultant or contractor in connection with such
         employment or retention; (e) any lease, license and utility payments
         with respect to the Business to the extent related to any period prior
         to the Closing Date; and (f) any liability of HCS or its predecessors
         or Affiliates for income taxes or sales or use taxes arising out of
         business operations to the extent attributable to any period prior to
         the Closing Date or arising out of the sale of any of the Acquired
         Assets under this Agreement. Notwithstanding any other provision of
         this Agreement, HCS acknowledges that HFC is under no obligation to HCS
         to offer employment to or enter into any employment relationship with
         any HCS employee. HCS further acknowledges that neither this Agreement
         nor any agreement between HCS (or its Affiliates) and any third party
         staffing organization, such as Kelly Services, Inc., creates any
         obligation on the part of HFC to such third party staffing
         organization.

7.       Payment for Acquired Assets.

(a)      To induce HCS to enter into this Agreement, HFC has caused the sum of
         Five Million Two Hundred Fifty Thousand United States Dollars
         ($5,250,000.00) to be deposited with Wells Fargo Bank Minnesota,
         National Association (the "Escrow Agent") to be held in escrow pursuant
         to the Escrow Agreement dated as of even date herewith (the "Escrowed
         Funds"), a copy of which is attached hereto as Exhibit 7. At the
         Closing, in exchange for the Acquired Assets HFC shall pay HCS, or
         cause the Escrow Agent to disburse to HCS from the Escrowed Funds, the
         foregoing sum plus one half of the Summex Fee (as defined in Section
         10(g)) reduced by the amount of prepayments received by HCS for
         services to be performed by the Business after the Closing Date, as
         indicated in Schedule 8(i)(ii) hereto (the "Purchase Price"); provided
         that if the Assigned Nominal Revenue does not equal at least
         $14,400,000, then the Purchase Price shall be further reduced as set
         forth in the next sentence. The amount of such further reduction (the
         "Holdback Amount") shall be $25,000 for each $80,000 by which
         $14,400,000 exceeds the Assigned Nominal Revenue; provided that the
         Holdback Amount shall in no event exceed $750,000. At the end of each
         of the six calendar months following the month in which the Closing
         occurs, the Purchase Price shall be recalculated (taking into
         consideration all Customer Contracts and Non-Contracted Accounts
         assigned to HFC since the Closing) and HFC shall make payment to HCS,
         or cause the Escrow Agent to release to HCS Escrowed Funds, in the
         amount, if any, by which the Purchase Price as recalculated at such
         month-end exceeds the total Purchase Price theretofore paid to HCS. For
         purposes of this paragraph, a Non-affiliated Customer Contract or a
         Non-Contracted Account shall be deemed to have been assigned to HFC,
         regardless of any formal consent

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         or assignment document, and even if already terminated, if (i) the
         customer shall have executed a contract with HFC for substantially the
         same services on terms no less favorable in any material respect to HFC
         than as originally provided for under such Non-affiliated Customer
         Contract (or, in the case of a Non-Contracted Account, the current
         course of dealing between HCS and such customer) or (ii) the customer
         shall, other than under any management arrangement contemplated by
         Section 3(d) with respect to an HFC Managed Customer Site, have
         accepted from HFC and paid HFC for substantially the same services on
         terms no less favorable in any material respect to HFC than as
         originally provided for under such Non-affiliated Customer Contract
         (or, in the case of a Non-Contracted Account, the current course of
         dealing between HCS and such customer) and such conduct has continued
         for at least three months. The conditions set forth in clauses (i) and
         (ii) above shall not be deemed to have failed by virtue of the fact
         that the fees or other amounts payable to HFC thereunder are less than
         those payable to HCS under the corresponding original Customer Contract
         (or, in the case of a Non-Contracted Account, the current course of
         dealing between HCS and such customer), provided that, for purposes of
         calculating the Assigned Nominal Revenue, only the reduced fees and
         amounts shall be counted. For the avoidance of doubt, once a contract
         or a Non-Contracted Account has been assigned or deemed to have been
         assigned (as described above) to HFC, no subsequent termination of such
         contract or relationship, or reduction in fees or other amounts payable
         thereunder, shall change the extent to which it shall have been counted
         as an assigned contract for purposes of this paragraph. Notwithstanding
         anything herein to the contrary, (i) no Terminated Contract shall, at
         any time after the Closing, be deemed to have been assigned to HFC
         unless such Terminated Contract shall have been assigned or deemed to
         have been assigned (as described above) to HFC prior to the six month
         anniversary of the Closing Date, and (ii) no management arrangement
         contemplated by Section 3(d) with respect to an HFC Managed Customer
         Site, and no services provided by HFC pursuant to any such arrangement,
         shall itself be deemed to constitute an assignment of the related
         Customer Contract. Each payment with respect to the Purchase Price
         shall be paid out of the Escrowed Funds to HCS in immediately available
         funds by wire transfer to the account designated in writing by HCS
         prior to the applicable date of payment.

(b)      Subject to HCS' right to all accounts receivable as of the Closing Date
         pursuant to Section 4(c), receivables accrued from customers of the
         Business, and payables to vendors of the Business, for services,
         including rents, utility charges, prepaid service contracts, ad valorem
         and personal and real property taxes, and other similar items, relating
         to any period that begins prior to the Closing Date and ends after the
         Closing Date shall be adjusted ratably as of the Closing Date based on
         the number of calendar days in each relevant period, with (i) HCS being
         entitled to and liable for such amounts relating to the period prior to
         the Closing Date and (ii) HFC being entitled to and liable for such
         amounts relating to the period from and after the Closing Date. In the
         event that, on or after the Closing Date, either party shall receive
         any payments or other funds due to the other pursuant to the terms
         hereof or otherwise, then the party receiving such funds shall promptly

                                     - 11 -
<PAGE>

         forward such funds to the proper party. With respect to payments
         relating to accounts receivable, the party receiving any such payment
         shall apply such payment to accounts receivable pursuant to the intent
         of the customer making such payment, as such intent is reasonably
         determined by the receiving party (i) first by the invoice number or
         other identifying information, if any, indicated on the check, (ii)
         second by matching the check amount to invoice amounts, and (iii)
         finally by inquiry to such customer.

(c)      The parties shall use their reasonable efforts to agree upon an
         allocation of the Purchase Price among the Acquired Assets (the
         "Allocation") promptly following Closing (but in no event later than 60
         days following the Closing Date). The Allocation shall be made in
         accordance with all applicable provisions of the Internal Revenue Code
         and all applicable state or local laws. Each of HFC and HCS agrees to
         reflect the allocation of the Purchase Price among the Acquired Assets
         upon its respective books for tax reporting purposes in accordance with
         the agreed upon Allocation and to file all tax returns in accordance
         with and based upon such Allocation.

(d)      Neither party shall in any manner pay, compromise, offset or credit any
         amount which the other party is responsible for under the provisions of
         this Agreement.

8.       HCS Representations and Warranties. HFC acknowledges and agrees that
         the Acquired Assets are being sold, assigned and delivered "as is" and
         "where is" and HFC agrees to accept delivery of the Acquired Assets in
         the condition and in the location they are in on the Closing Date based
         on its or its representatives' own inspection, examination and
         determination with respect to all matters, and without any reliance
         upon any express or implied representations or warranties of any nature
         made by, on behalf of or imputed to HCS, except as expressly set forth
         in this Agreement (including the Schedules hereto and the certificates,
         instruments and agreements delivered pursuant to Section 11 hereof.
         Without limiting the generality of the foregoing, HFC acknowledges that
         HCS (i) makes no representation or warranty with respect to any
         forecasts, projections, estimates or budgets delivered or made
         available to HFC of future revenues, future results of operations (or
         any component thereof), future cash flows or future financial condition
         (or any component thereof) of the Business or any future business or
         operations conducted with the Acquired Assets and (ii) except as
         expressly set forth in this Agreement (including the Schedules hereto
         and the certificates, instruments and agreements delivered pursuant to
         Section 11 hereof), makes no representation or warranty with respect to
         any other information or documents made available with respect to the
         Business to HFC or its counsel, financial advisors, accountants,
         auditors and other authorized representatives. HFC AGREES THAT THE
         REPRESENTATIONS AND WARRANTIES GIVEN HEREIN BY HCS ARE IN LIEU OF, AND
         HFC HEREBY EXPRESSLY WAIVES ALL RIGHTS TO, ANY IMPLIED WARRANTIES WHICH
         MAY OTHERWISE BE APPLICABLE BECAUSE OF THE PROVISIONS OF THE UNIFORM
         COMMERCIAL CODE OR ANY OTHER STATUTE, INCLUDING, WITHOUT LIMITATION,
         THE WARRANTIES OF

                                     - 12 -
<PAGE>

         MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. Subject to the
         foregoing, HCS makes the following representations and warranties to
         HFC with the intention that HFC may rely upon the same and with the
         understanding that the same are true as of the date hereof and shall
         survive the Closing in accordance with Section 12(d).

(a)      Organization; Authority; No Consents; No Conflicts.

                  (i)      HCS is a corporation duly organized, validly existing
                           and in good standing under the laws of the State of
                           New Jersey, has all requisite power and authority,
                           corporate, legal and otherwise, to own its properties
                           and assets and to conduct the Business in all states
                           where the Business is conducted and has all requisite
                           power and authority to execute, perform and carry out
                           the provisions of this Agreement, except for such
                           authorizations, qualifications and permits the
                           absence of which would not have a Material Adverse
                           Effect. HCS has taken all requisite corporate action
                           authorizing and empowering HCS to enter into this
                           Agreement and to consummate the transactions
                           contemplated herein. This Agreement is the legal,
                           valid and binding obligation of HCS, enforceable in
                           accordance with its terms, except as such enforcement
                           may be limited by bankruptcy, insolvency,
                           reorganization, moratorium or other similar laws now
                           or hereafter in effect relating to or affecting the
                           rights and remedies of creditors and general
                           principles of equity (whether considered in a
                           proceeding at law or in equity) and the discretion of
                           the court before which any proceeding therefor may be
                           brought.

                  (ii)     Neither the execution and delivery of this Agreement
                           by HCS, nor compliance by HCS with the terms and
                           provisions of this Agreement, will require the
                           consent of any person or entity or conflict with or
                           result in a breach of or a default or an event of
                           default under or create a right of acceleration,
                           termination or cancellation or a loss of rights with
                           respect to (A) any of the terms, conditions or
                           provisions of the Articles of Incorporation, Bylaws
                           or other governing instruments of HCS, (B) any
                           judgment, order, decree or ruling to which HCS is a
                           party, (C) any injunction of any court or
                           governmental authority to which HCS is subject, (D)
                           any Governmental License or any Contract (provided
                           that HCS makes no representation or warranty as to
                           HCS's ability to subcontract its obligations, or
                           otherwise allow HFC to manage any customer sites,
                           under the Non-Consenting Customer Contracts), or (E)
                           any laws affecting HCS, any of its subsidiaries or
                           the Acquired Assets.

(b)      Financial Information. A true, correct and complete copy of the
         Business' audited financial statements and related notes for the year
         ended December 29, 2002 is attached hereto as Schedule 8(b) ("Audited
         Financials"). The Audited Financials

                                     - 13 -
<PAGE>

         have been prepared in accordance with the books and records of HCS and
         generally accepted accounting principles. Subject to the following
         sentence and the assumptions, conditions and qualifications contained
         in the Audited Financials (including in the notes thereto) and in the
         accompanying Report of Independent Accountants, the Audited Financials,
         except as noted therein and in such Report with respect to
         uncertainties regarding cost allocations, present fairly in all
         material respects the historical financial performance of the Business
         for the periods covered thereby. HFC acknowledges that the assets and
         liabilities and revenues and expenses reflected in the Audited
         Financials may differ from those that would have resulted had the
         Business operated autonomously or as an entity (or as part of another
         entity) independent of Johnson & Johnson.

(c)      No Adverse Changes. As of the date of this Agreement, since December
         29, 2002, (i) there has not occurred or arisen (whether or not in the
         ordinary course of business) any event, condition or change resulting
         in a Material Adverse Effect, and (ii) HCS has conducted the Business
         only in the ordinary course and in conformity with past practice.

(d)      Acquired Assets. Except as set forth on Schedule 8(d), and except for
         Contracts and Governmental Licenses that are not assignable, and
         subject to restrictions on the use and disclosure of participants'
         personal health information, HCS has good and marketable title to (or
         in the case of any leased property, a valid leasehold interest in), or
         the right to use and transfer to HFC (in the case of its interests in
         certain intangible property), the Acquired Assets, free and clear of
         all liens, charges, encumbrances and third party claims or interests of
         any kind whatsoever, except for tax liens, mechanic's liens and similar
         liens incurred in the ordinary course of business that do not in any
         material respect affect the value or use of the relevant Acquired Asset
         and that relate to obligations that are not yet due. Except for
         Contracts and Governmental Licenses that are not assignable, and
         subject to restrictions on the use and disclosure of participants'
         personal health information, the Acquired Assets, together with the
         Behavioral Solutions Assets, constitute all of the assets that are used
         by the Business in its provision of the products and services currently
         being provided by the Business to its customers, except as described on
         Schedule 8(d) and except for assets that are used by HCS to provide
         administrative, information management, human resources and other
         overhead services throughout HCS and for which costs are allocated to
         the Business as reflected in the Audited Financials.

(e)      Contracts. Except as set forth on Schedule 8(e), HCS has provided HFC
         with true, complete and correct copies of all Customer Contracts and
         all other Contracts that are material to the Business. Neither HCS nor,
         to the knowledge of HCS, the other parties thereto are in material
         breach of any of the Contracts, nor does HCS have knowledge of any
         facts or events, whether existing, pending, threatened or contemplated,
         which, after the giving of notice, or the lapse of time, would
         constitute or result in a material breach or a material default by HCS
         or the other parties to such Contracts. Except as set forth on Schedule
         8(e), to the knowledge of HCS, each of the Assumed Contracts is valid
         and binding on the

                                     - 14 -
<PAGE>

         parties to it in accordance with their respective terms, except as such
         enforcement may be limited by bankruptcy, insolvency, reorganization,
         moratorium or other similar laws now or hereafter in effect relating to
         or affecting the rights and remedies of creditors and general
         principles of equity (whether considered in a proceeding at law or in
         equity) and the discretion of the court before which any proceeding
         therefor may be brought. Except as set forth in Schedule 8(e), none of
         such Assumed Contracts requires the consent of any party thereto to
         consummate the transaction contemplated by this Agreement; provided
         that HCS makes no representation or warranty as to the customer consent
         required to assign any Customer Contract, or to subcontract its
         obligations, or otherwise allow HFC to manage any customer sites,
         thereunder.

(f)      Compliance with Laws. HCS has conducted the Business in material
         compliance with all applicable federal, foreign, state and local laws,
         ordinances, rules and regulations, including without limitation the
         Health Insurance Portability and Accountability Act of 1996, as amended
         ("HIPAA"). At no time during the last three (3) years has any
         governmental investigation or inspection relating to the Business
         resulted in HCS receiving a citation or being requested by any
         governmental authority to take any remedial action under any applicable
         health, environmental, safety, labor, employment or other applicable
         laws or regulations. There are no ongoing, pending or, to HCS's
         knowledge, threatened governmental citations which relate to the
         Business. To HCS's knowledge, there are no ongoing, pending or
         threatened governmental investigations or inspections which relate to
         the Business.

(g)      Customers. Schedule 8(g)(i) contains a true and complete list of the
         current customers of the Business and the date on which the Customer
         Contract, if any, of each such customer expires. Except as described in
         Schedule 8(g)(ii), none of the persons identified in Schedule 8(g)(ii)
         has been informed during the past year (but prior to the time at which
         such customer was informed of the transactions contemplated hereby
         pursuant to Section 3) by any of the Business' twenty (20) largest
         unaffiliated customers for the 12-month period ended December 31, 2002,
         that such customer intends, after the date hereof, to terminate, or not
         renew, any contract with HCS, or intends to materially reduce or is
         considering a material reduction in the volume of products or services
         it purchases from HCS, or is dissatisfied in any material respect with
         the Business as conducted by HCS. No refunds or warranty claims are due
         any customer of the Business for products or services sold on or before
         the Closing Date. Except for communications by HCS to customers as
         described in Section 3, HCS has not communicated with or provided any
         information to any of the Business' unaffiliated customers regarding
         the transactions contemplated by this Agreement or any proposed sale of
         the Business.

(h)      Intellectual Property. Except as described in Schedule 8(h) and except
         for restrictions on the use and disclosure of participants' personal
         health information, HCS is entitled to use all of the Copyrights,
         Trademarks, Technology and other intellectual property included in the
         Acquired Assets and the Behavioral Solutions

                                     - 15 -
<PAGE>

         Assets (collectively, the "Intellectual Property") free and clear of
         any claims or demands of any third person and such use does not require
         the consent of any other third person to use any of the Intellectual
         Property, except for consents that will have been obtained as of the
         Closing. Except as described in Schedule 8(h) and except for
         restrictions on the use and disclosure of participants' personal health
         information, HCS does not know of any encumbrances on the Intellectual
         Property and has no ongoing obligation to pay licensing fees, royalties
         or other payments to any third party with respect to any of the
         Intellectual Property for the use thereof. Except as described in
         Schedule 8(h), and except for restrictions on the use and disclosure of
         participants' personal health information, HCS's right to use and
         transfer any and all of the Intellectual Property is, or as of the
         Closing will be, unlimited in time and unrestricted. HCS has taken
         normal and customary measures to protect the confidentiality of all
         trade secrets included in the Technology. No person has asserted
         against HCS in writing during the last five years any claims to any of
         the Intellectual Property which claim that HCS's use thereof infringes
         another party's intellectual property rights. Except as described in
         Schedule 8(h), HCS has no knowledge that any of the Intellectual
         Property is being infringed upon or otherwise used by others, or is
         subject to any outstanding judicial order, decree, judgment or
         stipulation.

(i)      Receivables. Schedule 8(i)(i) sets forth a true and complete schedule
         of the aging of all of the receivables related to the Business as of
         July 28, 2003, and the names of all customers owing past due amounts.
         Such schedule shall be updated by HCS immediately prior to the Closing.
         There are no set-offs, counterclaims or disputes asserted by any
         customers, and no discount or allowance has been made to any customers,
         that would result in a deduction by any customer from receivables
         relating to services performed after the Closing Date. Schedule
         8(i)(ii) describes and quantifies all prepayments received by HCS for
         services to be performed by the Business after the Closing Date,
         including without limitation prepayments by fitness center
         participants. Such schedule shall be updated by HCS immediately prior
         to the Closing.

(j)      Employment Matters. Schedule 8(j)(i) hereto identifies all employment
         agreements, collective bargaining or other labor agreements, any
         agreements containing severance or termination pay arrangements,
         deferred compensation arrangements, retainer or consulting
         arrangements, and all pension or retirement plans, bonus or
         profit-sharing plans, stock option or purchase plans or other plans
         providing fringe benefits to employees of the Business, and true,
         correct and complete copies of the foregoing have been furnished to
         HFC. HCS has performed in all material respects all obligations
         required to be performed under all such agreements, plans and
         arrangements. All employees of the Business are employed on an at-will
         basis. To the knowledge of HCS, the Business is in material compliance
         with all employment and labor laws, rules and regulations, including,
         but not limited to, OSHA regulations. There are no claims pending or,
         to HCS's knowledge, threatened, from present or former employees or
         consultants of the Business on account of pay, benefits, discrimination
         or termination. Except as set forth in Schedule 8(j)(ii), HCS will
         have, effective as of the Closing,

                                     - 16 -
<PAGE>

         terminated the employment of all of the employees of the Business. HCS
         acknowledges that HFC is under no obligation to HCS to offer employment
         to or enter into any consultancy agreement with any employee of the
         Business or any third party staffing organization, such as Kelly
         Services, Inc., nor does this Agreement or any agreement between HCS
         (or its Affiliates) and any third party staffing organization, such as
         Kelly Services, Inc., create any such obligation on the part of HFC to
         any such third party staffing organization. Except for joint
         communications by HFC and HCS to employees or consultants and other
         communications that have been approved by HFC, and except as described
         on Schedule 8(j)(iii), HCS has not communicated with or provided any
         information to any of the Business' employees or consultants regarding
         their termination by HCS or, if applicable, their rehire by HFC, in
         connection with the transactions contemplated by this Agreement.

(k)      Environmental. The operation of the Business and Acquired Assets has
         been and is in material compliance with all, and HCS does not have any
         liability related to any Acquired Asset under any, applicable laws,
         rules, regulations, orders, ordinances, judgments and decrees of all
         governmental authorities with respect to the environment.

(l)      Litigation and Related Matters. There is no pending or, to the
         knowledge of HCS, threatened litigation or proceeding or, to the
         knowledge of HCS, any pending or threatened investigation against HCS
         related to the Business or the Acquired Assets, nor is HCS subject to
         any existing judgment, order, decree or other governmental action
         materially affecting the operation of the Business or the Acquired
         Assets. No claims for personal injury or harassment have been asserted
         against HCS by users of any facilities managed by the Business.

(m)      Taxes. HCS has timely filed all material federal and applicable state
         and local tax or assessment reports and returns of every kind related
         to the Business required to be filed by HCS, and such reports and
         returns are complete and accurate in all material respects. HCS has
         duly paid all taxes and other charges (including interest and
         penalties) related to the Business due to or claimed to be due by any
         taxing authorities.

9.       HFC Representations and Warranties. HFC makes the following
         representations and warranties to HCS, with the intention that HCS may
         rely upon the same and with the understanding that the same are true as
         of the date hereof and shall survive the Closing in accordance with
         Section 12(d).

(a)      Organization. HFC is a corporation, duly organized, validly existing
         and in good standing under the laws of the State of Minnesota.

(b)      Corporate Authority. HFC has all requisite power and authority to
         execute, perform and carry out the provisions of this Agreement. HFC
         has taken all requisite corporate action authorizing and empowering HFC
         to enter into this Agreement and to consummate the transactions
         contemplated herein. This

                                     - 17 -
<PAGE>

         Agreement is the legal, valid and binding obligation of HFC,
         enforceable in accordance with its terms, except as such enforcement
         may be limited by bankruptcy, insolvency, reorganization, moratorium or
         other similar laws now or hereafter in effect relating to or affecting
         the rights and remedies of creditors and general principles of equity
         (whether considered in a proceeding at law or in equity) and the
         discretion of the court before which any proceeding therefor may be
         brought.

(c)      No Consents or Conflicts. Neither the execution and delivery of this
         Agreement by HFC, nor compliance by HFC with the terms and provisions
         of this Agreement will require the consent of any person or entity or
         conflict with or result in a breach of or a default or an event of
         default under or create a right of acceleration, termination or
         cancellation or a loss of rights with respect to (i) any of the terms,
         conditions or provisions of the Articles of Incorporation, Bylaws or
         other governing instruments of HFC, (ii) any judgment, order, decree or
         ruling to which HFC is a party, (iii) any injunction of any court or
         governmental authority to which HFC is subject, (iv) any note,
         instrument, agreement, mortgage, lease, license, franchise, permit or
         other material authorization, right, restriction or obligation to which
         HFC or any of its subsidiaries is a party or by which HFC or any of its
         subsidiaries is bound, or (v) any laws affecting HFC or any of its
         subsidiaries.

(d)      Litigation and Related Matters. There is no pending or, to the
         knowledge of HFC, threatened litigation or proceeding or, to the
         knowledge of HFC, any pending or threatened investigation against HFC
         that would, if adversely determined, have a material adverse effect on
         the ability of HFC to perform its obligations hereunder, nor is HFC
         subject to any existing judgment, order, decree or other governmental
         action materially affecting the ability of HFC to perform its
         obligations hereunder.

(e)      No Finder's Fees. Other than a fee payable to Goldsmith, Agio, Helms &
         Lynner, LLC for which HCS and its Affiliates will have no liability,
         there is no investment banker, broker, finder or other intermediary
         which has been retained by or is authorized to act on behalf of HFC who
         might be entitled to any fee or commission from HCS or any of its
         Affiliates in connection with the transactions contemplated by this
         Agreement.

10.      Pre-Closing Obligations.

(a)      Operation of Business. At all times prior to the Closing, HCS will,
         except as otherwise contemplated by this Agreement or except as
         approved by HFC in writing:

                  (i)      operate the Business in the ordinary course of
                           business;

                  (ii)     not sell or otherwise dispose of, or contract to sell
                           or otherwise dispose of, any of the Business'
                           properties or assets other than in the ordinary
                           course of business;

                                     - 18 -
<PAGE>

                  (iii)    except in each case in the ordinary course of
                           business, not incur any trade payables related to the
                           Business;

                  (iv)     not (x) increase the compensation payable or to
                           become payable to the Business' employees or to the
                           Business' consultants or independent contractors, (y)
                           increase the benefits to any such persons under any
                           Employee Benefit Plan, or (z) pay (or offer to pay)
                           any severance amount to any employee of the Business
                           prior to receiving notice from HFC that HFC does not
                           intend to employ or retain such person after the
                           Closing;

                  (v)      not change in any material respect any contract with
                           the Business' customers or, except in the ordinary
                           course of Business and except for price increases in
                           accordance with the terms of the Customer Contracts,
                           the prices at which it sells services or goods to its
                           customers;

                  (vi)     not enter into any other transactions that
                           individually or in the aggregate are material to the
                           Business other than in the ordinary course of
                           business;

                  (vii)    maintain the Business' properties and facilities in
                           as good working order and condition as at present,
                           ordinary wear and tear excepted; and

                  (viii)   with respect to the Business, use its normal and
                           commercially reasonable efforts to maintain and
                           preserve, in all material respects, its business
                           organization intact, retain its present employees and
                           maintain its relationships with independent operators
                           and others having business relations with it;
                           provided that nothing in this Agreement shall require
                           HCS to extend or renew any Contract upon its
                           expiration or otherwise.

(b)      Press Releases and Announcements. Prior to the Closing, neither HCS nor
         HFC shall, and they shall cause their respective Affiliates and
         representatives not to, issue any press release (or make any other
         public announcement) related to this Agreement or the transactions
         contemplated hereby without prior approval of the other party hereto;
         provided, however, that (i) HFC may, at any time prior to the earlier
         of the Closing and the termination of this Agreement, issue a press
         release in the form attached hereto as Exhibit 10(b) (the "8-K
         Compliant Press Release") and file with the Securities and Exchange
         Commission a Current Report on Form 8-K, and any other form, disclosing
         the information contained in the 8-K Compliant Press Release, and (ii)
         either party may issue any other press release (or make any other
         public announcement) regarding this Agreement that is necessary, in the
         opinion of counsel to such party, to comply with applicable law (an
         "Additional Required Announcement"). The party making any Additional
         Required Announcement shall consult with the other party prior to
         making such

                                     - 19 -
<PAGE>

         disclosure and the parties hereto shall use all reasonable efforts,
         acting in good faith, to agree upon the text for such disclosure.

(c)      Due Diligence Review by HFC. Subject to attorney-client and attorney
         work product privileges, prior to the Closing, HCS shall, and shall
         cause its Affiliates to, afford to the officers, attorneys, accountants
         and other representatives of HFC reasonable access during normal
         business hours, and at such times and in such manner as to minimize
         disruption of HCS's normal business operations, to the facilities,
         assets and books and records of HCS related to the Acquired Assets so
         as to afford HFC a reasonable opportunity to make, at its sole cost and
         expense, such review, examination and investigation of the ownership,
         operation and condition of the Acquired Assets as HFC may desire to
         make in its sole discretion. HFC will be permitted to make extracts
         from or to make copies of such books and records, to the extent they
         relate to the Acquired Assets, as it deems necessary.

(d)      No Solicitation of Other Offers. HCS shall not, and shall cause its
         Affiliates and representatives not to, directly or indirectly,
         initiate, solicit, propose, encourage, pursue, engage in or enter into
         any proposals, substantive discussions, negotiations, letters or
         statements of intent or agreements (whether preliminary or definite)
         with any person or entity of any nature that contemplate or provide for
         the sale, transfer, encumbrance or other disposition, directly or
         indirectly, of the Business or, except in the ordinary course of
         business, any of the Acquired Assets.

(e)      Kelly Services Information. Promptly after the date hereof and in any
         event at least 20 days prior to the Closing, HCS shall provide, or
         cause Kelly Services, Inc. or any other third-party staffing
         organization used in the Business to provide, to HFC the names, rate of
         pay, hours per week worked and work sites of all of the Business'
         independent contractors retained through Kelly Services, Inc. or such
         other third-party staffing organization. HCS acknowledges that HFC will
         use such information to solicit such persons for employment by HFC.

(f)      Access to Employees. Promptly upon the execution and delivery of this
         Agreement, HCS shall provide access to HFC to all of the Business'
         regional managers and other corporate level employees listed on
         Schedule 10(f) for purposes of soliciting such employees to join HFC
         and determining whether such employees will do so if offered terms of
         employment at substantially the same base salary, with benefits
         commensurate with benefits provided to similarly situated HFC
         employees. Notwithstanding anything herein to the contrary, HFC shall
         have the right to terminate this Agreement at any time before the
         earlier of five business days after the date hereof and HFC's issuance
         of the 8-K Compliant Press Release or other public announcement of the
         transactions contemplated hereby if HFC determines that at least half
         of such employees listed on Schedule 10(f) do not intend to join HFC.

                                     - 20 -
<PAGE>

(g)      Transfer of Information to Summex. The parties acknowledge that certain
         Customer Materials related to health risk assessment data of HCS's
         affiliated customers that will be transferred to HFC hereunder will,
         prior to the Closing, be transferred by HCS to Summex Corporation
         ("Summex") to be held for and on behalf of HFC, and that Summex will
         charge a fee (the "Summex Fee") in connection with such transfer. The
         parties agree to cooperate in effecting such transfer to Summex in a
         timely manner. The parties agree that HCS will pay in full to Summex
         the Summex Fee but that HFC will, as reflected in the Purchase Price
         pursuant to Section 7(a), reimburse HCS at the Closing for one half of
         the Summex Fee, provided such reimbursement does exceed $75,000.

11.      Closing.

(a)      Time and Place of Closing. The closing of the transactions contemplated
         by this Agreement (the "Closing") shall take place via facsimile at the
         offices of Fredrikson & Byron, P.A. at 10:00 A.M. local time on the
         third business day after all conditions to closing contained herein
         have been satisfied or waived, or at such other place or at such other
         time as HCS and HFC may mutually agree in writing. The date on which
         and the time at which the Closing occurs is the "Closing Date." Time is
         of the essence because HCS's intention to exit the Business is or will
         become known to its employees, customers, suppliers and others having
         dealings with HCS.

(b)      Documents Delivered by HCS. At or before the Closing, HCS shall deliver
         to HFC the following documents, duly executed as appropriate:

                  (i)      Certified copies of corporate resolutions of HCS
                           authorizing and approving the execution, delivery and
                           performance by HCS of this Agreement and the
                           consummation of the transactions contemplated hereby.

                  (ii)     A Bill of Sale for the sale of the Acquired Assets,
                           duly executed by an authorized officer of HCS.

                  (iii)    Assignment and assumption agreement relating to the
                           Contracts being assigned to HFC as of the Closing
                           Date, other than real property leases, in the form
                           attached hereto as Exhibit 11(b)(iii) (the
                           "Assignment and Assumption Agreement"), executed by a
                           duly authorized officer of HCS.

                  (iv)     Trademark and copyright assignments relating to the
                           transfer of the Trademarks and Copyrights to be
                           transferred under this Agreement, executed by a duly
                           authorized officer of HCS or, in the case of
                           Trademarks, the Affiliate(s) of HCS that own the
                           Trademark registrations in question.

                  (v)      The Behavioral Solutions License Agreement.

                                     - 21 -
<PAGE>

                  (vi)     A Master Services Agreement between HFC and Johnson &
                           Johnson Services, Inc., substantially in the form
                           attached hereto as Exhibit 11(b)(vi), providing for
                           HFC's management through the end of calendar year
                           2006 of all fitness sites of Johnson & Johnson and
                           its Affiliates currently being managed by the
                           Business.

                  (vii)    Such other instruments of assignment as HFC may
                           reasonably request for the purpose of assigning the
                           Acquired Assets.

(c)      Documents Delivered by HFC. At or before the Closing, HFC shall deliver
         to HCS the following documents and other items, duly executed as
         appropriate:

                  (i)      Certified copies of corporate resolutions of HFC
                           authorizing and approving the execution, delivery and
                           performance by HFC of this Agreement and the
                           consummation of the transactions contemplated hereby.

                  (ii)     The Purchase Price in accordance with Section 7(a).

                  (iii)    The Assignment and Assumption Agreement, executed by
                           a duly authorized officer of HFC.

                  (iv)     Such other agreements to assume as HCS may reasonably
                           request for the purpose of HFC's assumption of the
                           Assumed Liabilities.

(d)      Conditions to Closing.

                  (i)      Conditions Precedent to HFC's Obligations. All of the
                           obligations of HFC hereunder to consummate the
                           Closing are subject to fulfillment, prior to or at
                           the Closing, of the following conditions (compliance
                           with which or the occurrence of which may be waived
                           in whole or in part by HFC):

                           (A)      The representations and warranties of HCS
                                    contained herein (disregarding, for the
                                    purpose of this subparagraph only, any
                                    reference to materiality contained therein),
                                    taken together, shall be accurate, true and
                                    correct in all material respects on and as
                                    of the Closing Date or, in the case of
                                    representations and warranties made as of a
                                    specified date, at the Closing with respect
                                    to such specified date, in each case with
                                    the exception of any inaccuracies to the
                                    extent resulting from the loss of customers
                                    or employees following the disclosure, in
                                    accordance with this Agreement, of the
                                    transactions contemplated hereby. HCS shall
                                    have performed and complied in all material
                                    respects with all the terms, provisions and
                                    conditions of this Agreement to be complied
                                    with and performed by HCS at or before the
                                    Closing (disregarding, for the purpose of
                                    this

                                     - 22 -
<PAGE>

                                    subparagraph only, any reference to
                                    materiality contained in such terms,
                                    provisions and conditions). HFC shall have
                                    received a certificate of an officer of HCS
                                    dated the Closing Date certifying as to the
                                    satisfaction of the conditions set forth in
                                    this Section 11(d)(i)(A).

                           (B)      No law or governmental regulation, rule or
                                    directive shall have been enacted, issued or
                                    promulgated, and no proceeding shall be
                                    pending, which would prevent or restrain
                                    completion of the transactions contemplated
                                    hereunder.

                           (C)      Since the date hereof, there shall not have
                                    occurred any event, condition or change that
                                    has a Material Adverse Effect.

                           (D)      HFC shall have received acceptances of its
                                    offers of employment from persons
                                    constituting a majority of the Business'
                                    current on-site account managers who are
                                    offered employment by HFC on terms
                                    consistent with Section 13(h)(iii).

                           (E)      HCS shall have received all consents and
                                    approvals that are required to be obtained
                                    by HCS to assign or transfer to HFC the
                                    Acquired Assets listed on Schedule
                                    11(d)(i)(E) as contemplated by this
                                    Agreement.

                           (F)      HCS shall have received from the customers
                                    party to the Non-affiliated Customer
                                    Contracts all consents and approvals that
                                    are required to be obtained by HCS under
                                    Non-affiliated Customer Contracts in order
                                    to assign to HFC Non-affiliated Customer
                                    Contracts (each on terms that are no less
                                    favorable to the Business than the current
                                    terms of such Non-affiliated Customer
                                    Contract) such that the Assigned Nominal
                                    Revenue is at least $12,000,000.

                           (G)      HCS shall have duly executed and delivered
                                    to HFC each of the documents and agreements
                                    provided for in Section 11(b).

                  (ii)     Conditions Precedent to HCS's Obligations. All of the
                           obligations of HCS hereunder to consummate the
                           Closing are subject to fulfillment, prior to or at
                           the Closing, of the following conditions (compliance
                           with which or the occurrence of which may be waived
                           in whole or in part by HCS):

                                     - 23 -
<PAGE>

                           (A)      The representations and warranties of HFC
                                    contained herein (disregarding, for the
                                    purpose of this subparagraph only, any
                                    reference to materiality contained therein),
                                    taken together, shall be accurate, true and
                                    correct in all material respects on and as
                                    of the Closing Date or, in the case of
                                    representations and warranties made as of a
                                    specified date, at the Closing with respect
                                    to such specified date. HFC shall have
                                    performed and complied in all material
                                    respects with all the terms, provisions and
                                    conditions of this Agreement to be complied
                                    with and performed by HFC at or before the
                                    Closing (disregarding, for the purpose of
                                    this subparagraph only, any reference to
                                    materiality contained in such terms,
                                    provisions and conditions). HCS shall have
                                    received a certificate of an officer of HFC
                                    dated the Closing Date certifying as to the
                                    satisfaction of the conditions set forth in
                                    this Section 11(d)(ii)(A).

                           (B)      No law or governmental regulation, rule or
                                    directive shall have been enacted, issued or
                                    promulgated, and no proceeding shall be
                                    pending, proposed or threatened which would
                                    prevent or restrain completion of the
                                    transactions contemplated hereunder.

                           (C)      HCS shall have received the Purchase Price
                                    in accordance with Section 7(a).

                           (D)      HCS shall have received from the customers
                                    party to the Non-affiliated Customer
                                    Contracts all consents and approvals that
                                    are required to be obtained by HCS under
                                    Non-affiliated Customer Contracts in order
                                    to assign to HFC Non-affiliated Customer
                                    Contracts such that the Assigned Nominal
                                    Revenue is at least $9,600,000.

                           (E)      HFC shall have duly executed and delivered
                                    to HCS each of the documents and agreements
                                    provided for in Section 11(c).

12.      Indemnification.

(a)      Indemnification by HCS. HCS agrees to indemnify and hold harmless HFC
         and HFC's officers, directors, shareholders, Affiliates, employees and
         agents and its and their respective heirs, successors and assigns
         (collectively, the "HFC Indemnified Parties," each of which shall be a
         third party beneficiary under this Section 12) from and against:

                  (i)      any and all claims, demands, actions, damages,
                           losses, costs and expenses (including reasonable
                           attorneys' fees actually incurred)

                                     - 24 -
<PAGE>

                           (collectively, "Damages") sustained or incurred by
                           such HFC Indemnified Party, to the extent resulting
                           from: (A) any inaccuracy or misrepresentation in, or
                           any breach of, any representation or warranty made by
                           HCS to HFC in this Agreement, in the Behavioral
                           Solutions License Agreement or in any certificate or
                           instrument delivered pursuant to Section 11(b) or
                           11(d)(i)(A) hereof; (B) any breach of any covenant or
                           agreement to be performed by HCS under this Agreement
                           or under any certificate or instrument delivered
                           pursuant to Section 11(b) hereof; or (C) the failure
                           of HCS to comply with any bulk transfer laws or bulk
                           sales laws that may be applicable in connection with
                           the transactions contemplated by this Agreement; or

                  (ii)     to the extent not indemnified pursuant to clause (i)
                           above, any claim, action, suit, proceeding, demand,
                           debt, liability, obligation, fine or penalty, and,
                           subject to Section 12(e) below, the costs and
                           expenses (including reasonable attorneys' fees
                           actually incurred) associated with the defense
                           thereof (each, a "Claim") asserted against such HFC
                           Indemnified Party by a third party to the extent
                           arising out of or resulting from (A) HCS's possession
                           or use of the Acquired Assets or HCS's conduct of the
                           Business prior to the Closing, or (B) any Excluded
                           Liability.

(b)      Indemnification by HFC. HFC agrees to indemnify and hold harmless HCS
         and HCS's officers, directors, shareholders, Affiliates, employees and
         agents and its and their respective heirs, successors and assigns
         (collectively, the "HCS Indemnified Parties," each of which shall be a
         third party beneficiary under this Section 12) from and against:

                  (i)      any and all Damages sustained or incurred by such HCS
                           Indemnified Party, to the extent resulting from: (A)
                           any inaccuracy or misrepresentation in, or any breach
                           of, any representation or warranty made by HFC to HCS
                           in this Agreement or in any certificate or instrument
                           delivered pursuant to Section 11(c) or 11(d)(ii)(A)
                           hereof; (B) any breach of any covenant or agreement
                           to be performed by HFC under this Agreement or under
                           any certificate or instrument delivered pursuant to
                           Section 11(c) hereof; or

                  (ii)     to the extent not indemnified pursuant to clause (i)
                           above, any Claim asserted against such HCS
                           Indemnified Party by a third party to the extent
                           arising out of or resulting from (A) HFC's possession
                           or use of the Acquired Assets or HFC's conduct of the
                           Business after the Closing, or (B) any Assumed
                           Liability.

(c)      Limits. Notwithstanding anything to the contrary in this Section 12,
         HCS shall have no liability for indemnification pursuant to

                                     - 25 -
<PAGE>

         Section 12(a)(i)(A) unless and until the aggregate amount of all
         indemnifiable Damages sustained or incurred by all HFC Indemnified
         Parties, taken together, cumulatively exceeds $50,000, and then only to
         the extent of such excess, and in no event will HCS's aggregate
         indemnification obligation under Section 12(a)(i) exceed the Purchase
         Price. Notwithstanding anything to the contrary in this Section 12, HFC
         shall have no liability for indemnification pursuant to Section
         12(b)(i)(A) unless and until the aggregate amount of all indemnifiable
         Damages sustained or incurred by all HCS Indemnified Parties, taken
         together, cumulatively exceeds $50,000, and then only to the extent of
         such excess, and in no event will HFC's aggregate indemnification
         obligation under Section 12(b)(i) exceed the Purchase Price.
         Notwithstanding the foregoing, this Section 12(c) shall not apply to
         Damages resulting from or in connection with any fraudulent
         misrepresentation.

(d)      Survival of Claims. All representations and warranties made in this
         Agreement, in the Behavioral Solutions License Agreement or in any
         certificate or other document delivered pursuant hereto, and all
         indemnification obligations with respect to any such representation or
         warranty, shall terminate and expire on the second anniversary hereof.
         No action or proceeding seeking indemnification, damages or other
         relief for breach of any such representation or warranty or for any
         misrepresentation or inaccuracy with respect thereto shall be commenced
         after such date with respect to all claims of any indemnified person
         under this Section 12, which shall not have been previously asserted,
         with reasonable specificity, by written notice to the other party.
         Notwithstanding the foregoing, the representations and warranties
         (together with the related indemnification obligations) contained in
         Sections 8(a)(i), 8(d) (solely insofar as it relates to title to the
         Acquired Assets), 8(h), 8(m), 9(a) and 9(b) of this Agreement and
         clauses (i) through (iv) of Section 11 of the Behavioral Solutions
         License Agreement shall survive until 60 days following the expiration
         of the statute of limitations applicable to the matters covered
         thereby. If a claim with respect to any representation or warranty is
         asserted in writing, with reasonable specificity, under this Section 12
         prior to the otherwise applicable expiration date, such claim shall
         survive until it is finally resolved.

(e)      Indemnification Procedures with Respect to Third Party Claims. In the
         event that any Claim shall be asserted in writing against an HFC
         Indemnified Party or an HCS Indemnified Party (each, an "Indemnitee")
         that, if sustained, would result in indemnifiable loss hereunder, the
         Indemnitee, as soon as reasonably practicable and within a reasonable
         time after learning of such Claim (which shall not be in excess of
         fifteen (15) days), shall notify in writing the indemnifying party
         hereunder (the "Indemnitor") of such Claim, and shall permit the
         Indemnitor, at

                                     - 26 -
<PAGE>

         its option and expense, to assume complete control of the defense
         against such Claim through legal counsel selected by it and reasonably
         satisfactory to the Indemnitee, provided that the Indemnitor proceed in
         good faith and with reasonable diligence. The failure to give notice as
         required by this Section 12(e) shall not result in a waiver of any
         right to indemnification hereunder except to the extent that the
         Indemnitor is prejudiced thereby. The Indemnitee shall cooperate with
         the Indemnitor in connection with any defense assumed by the Indemnitor
         hereunder, and no effort to recover the amount of the loss related to
         such Claim shall be made by the Indemnitee while such defense is still
         being made until the earlier of (a) the resolution of said Claim by the
         Indemnitor with the claimant, or (b) the termination of the defense by
         the Indemnitor against such Claim or the failure of the Indemnitor to
         prosecute such defense in good faith and with reasonable diligence. The
         Indemnitee shall, at its option and expense, have the right to
         participate, with legal counsel of its own selection (and at its own
         expense), in any defense of a Claim undertaken by the Indemnitor;
         provided, however, that if joint representation would give rise to a
         conflict of interest for legal counsel, then the Indemnitee shall be
         entitled to engage separate legal counsel to defend the Indemnitee
         against such Claim at the sole expense of the Indemnitor. No settlement
         or compromise of any Claim which may result in a loss to Indemnitee may
         be made by the Indemnitor without the prior written consent of the
         Indemnitee (which shall not be unreasonably withheld) unless (x) prior
         to such settlement or compromise the Indemnitor acknowledges in writing
         its obligation to pay in full the amount of the settlement or
         compromise and the Indemnitee is furnished with (i) security reasonably
         satisfactory to it that the Indemnitor will in fact pay such amount and
         (ii) a full release of such Claim against the Indemnitee and (y) such
         settlement or compromise provides for no relief or remedy other than
         money damages. Notwithstanding anything to the contrary herein, with
         respect to any Claim asserted by a governmental authority relating to
         taxes (a "Tax Claim"), the Indemnitor shall be entitled to participate
         in the defense of such Tax Claim, but the Indemnitee shall control such
         defense. The Indemnitee will not settle any such Tax Claim without the
         prior consent of the Indemnitor, such consent not to be unreasonably
         withheld. As to any Claims (including Tax Claims) with respect to which
         the Indemnitor does not assume control of the defense, all costs of
         such defense by the Indemnitee shall be borne by the Indemnitor.

(f)      Exclusive Remedy. From and after the Closing the sole and exclusive
         remedies of the parties with respect to any and all claims relating to
         the subject matter of this Agreement or the Behavioral Solutions
         License Agreement (other than equitable remedies and remedies to
         enforce any arbitration decision rendered pursuant to Section 16(j))
         shall be pursuant to the indemnification provisions set forth in this
         Section 12. In furtherance of the foregoing, each of HFC and HCS
         hereby, on their own behalf and on behalf of the HFC Indemnified
         Parties and HCS Indemnified Parties (as the case may be), waives, to
         the fullest extent permitted under applicable laws, any other rights
         and claims it may have against the other party relating to the Acquired
         Assets, the Business or the transactions contemplated hereby.

                                     - 27 -
<PAGE>

(g)      Other Indemnity Matters. Upon making any payment to an indemnified
         party for any indemnification claim pursuant to this Section 12, the
         indemnifying party shall be subrogated, to the extent of such payment,
         to any rights which the indemnified party may have against other
         persons with respect to the subject matter underlying such
         indemnification claim. If, after an indemnification payment is made
         hereunder, the party to which such payment is made receives insurance
         proceeds in respect of the loss, such amount shall promptly be remitted
         to the indemnifying party. Notwithstanding anything to the contrary
         contained herein, no party may make a claim for indemnification
         hereunder with respect to a matter actually known by such party prior
         to the Closing to conflict with the accuracy of any representation or
         warranty hereunder.

13.      Other Covenants.

(a)      Access to and Preservation of Records. After the Closing Date, HFC
         shall allow HCS to examine (and at HCS's own expense, copy) files,
         books of account, correspondence and other records as reasonably
         necessary: (i) to respond to any government investigation of HCS, (ii)
         to resolve tax issues with respect to any period prior to the Closing,
         or (iii) in connection with any litigation, administrative proceeding
         or other dispute involving HCS. If such examination unreasonably
         interferes with HFC's business, HCS shall reimburse HFC for any lost
         profits and for time expended by its employees resulting from such
         unreasonable interference. HFC shall not dispose of any of its records
         relating to the Business or the Acquired Assets until the fifth
         anniversary of the Closing Date.

(b)      Noncompetition. After the Closing Date and for a period of three years
         thereafter, HCS agrees (i) that it will not compete with HFC by
         participating in the management of any fitness center facility in the
         United States that is devoted to physical exercise (other than physical
         rehabilitative therapy) and is owned by any person or entity that is
         not an Affiliate of HCS, or (ii) not to market through any such fitness
         center facility in the United States owned by any person or entity that
         is not an Affiliate of HCS any health risk assessment (except as it may
         relate to pharmacological studies), smoking cessation, weight loss or
         physical exercise programs or services (provided that the
         subcontracting and other arrangements pertaining to HFC Managed
         Customer Sites contemplated by Section 3(d) or Section 3(g) of this
         Agreement shall not be deemed to conflict with this provision). HCS
         agrees that the covenant in this Section 13(b) applies to any act taken
         by HCS directly, or indirectly through any of its Affiliates, whether
         as agent, consultant or otherwise. Nothing in this Section 13(b) shall
         (i) restrict any such Affiliate from engaging in any activity if done
         independently of HCS, or (ii) apply to the sale of any products of HCS
         or its Affiliates, or to the sale to health maintenance, managed care
         and similar healthcare organizations of any Behavioral Solutions
         programs to the extent they are sold in connection with related
         products.

                                     - 28 -
<PAGE>

(c)      Use of Office Space. For a term of one year following the Closing Date,
         HCS shall grant HFC a license, substantially in the form of Exhibit
         13(c) attached hereto (the "Office Space License"), to use at least
         1,500 square feet of contiguous office space at 377 Hoes Lane,
         Piscataway, New Jersey where the Business is currently located, or in
         any other comparable building owned or leased by HCS that is within ten
         miles of 377 Hoes Lane (the "Licensed Space"). The Licensed Space shall
         include furniture reasonably requested by HFC and of a type and
         quantity customarily used in the Business prior to Closing in similar
         office spaces of the Business. The monthly license fee for the Licensed
         Space shall be no higher than HCS's cost of providing such Licensed
         Space to HFC. HFC shall have access to the Licensed Space consistent
         with all normal security policies applicable to the Licensed Space. HFC
         may make minor, reasonable modifications and repairs to the Licensed
         Space with the prior written consent of HCS which will not be
         unreasonably withheld. HCS shall make available to HFC, at cost, the
         following utilities for the Licensed Space: ambient heat, ventilation
         and air conditioning, and water, electricity and telephone; provided
         that HFC shall pay for its own telephone expenses.

(d)      Covenant not to Hire or Solicit. Until the second anniversary of the
         Closing Date, neither HFC nor any of its Affiliates will, directly or
         indirectly, solicit (other than indirectly by means of general
         advertising) for employment or hire any person now or hereafter
         employed or retained by HCS in connection with the Behavioral Solutions
         Business. Until the first anniversary of the Closing Date, HCS will
         not, directly or indirectly, solicit (other than indirectly by means of
         general advertising) for employment or hire any Hired Employee who is,
         at the time of such solicitation or hiring, an employee of HFC.

(e)      Further Assurances; Cooperation. The parties hereto agree that they
         will, at any time and from time to time after the Closing Date, upon
         request of the other, take or cause to be taken such further action and
         execute and deliver or cause to be executed and delivered all such
         further documents as such other party may reasonably require for the
         assigning, transferring and delivering of the Acquired Assets and
         assuming the Assumed Liabilities and documenting the transactions
         contemplated hereby. HCS will not take any action that is designed or
         intended to have the effect of discouraging any lessor, licensor,
         customer, supplier or other business associate of the Business from
         maintaining substantially the same business relationships with HFC
         after the Closing Date as it maintained with HCS prior to the Closing
         Date, and HCS will assist HFC in effecting an orderly and effective
         transition of the Business from HCS to HFC. Without limiting the
         generality of the foregoing, during the six (6) months immediately
         following the Closing, Patricia Flynn, on behalf of HCS, shall, to the
         extent she remains employed by HCS or any Affiliate of HCS, (i) be
         reasonably available to assist HFC, and shall provide HFC with such
         assistance as it may reasonably request, in connection with such
         orderly and effective transition, including by answering questions
         regarding the history of the Business' relationships with its customers
         (provided that such assistance shall not, in any material respect,
         interfere with her performance of her full-time duties to HCS), and
         (ii) have primary responsibility

                                     - 29 -
<PAGE>

         for overseeing the management by HCS of any Terminated Contracts,
         communicating with HFC regarding the status of such Terminated
         Contracts and coordinating with HFC in the transitioning of any such
         Terminated Contracts, including the employees and contractors of HCS
         who service such Terminated Contracts, to HFC; provided, however, that
         no such Terminated Contract shall be transitioned to HFC unless and
         until the customer party thereto has consented in writing to such
         transition.

(f)      Use of the Names and Trademarks of HCS, Johnson & Johnson and their
         Affiliates. HFC covenants that neither it nor any of its Affiliates
         shall use in any manner any trademark, service mark, domain name or
         trade name of HCS, Johnson & Johnson or any of their respective
         Affiliates (other than the trademarks, domain names and service marks
         transferred to HFC pursuant to this Agreement), including, without
         limitation, "Pathways to Change", "Johnson & Johnson" or "J&J" or any
         derivative or similar name or mark. This provision shall not prohibit
         HFC from quoting publications by HCS, its Affiliates or any other
         person or entity that are publicly available; provided that, in the
         case of publications by HCS or its Affiliates, they are properly
         attributed to HCS or its Affiliate, as the case may be.

(g)      Bulk Sales. Subject to Section 12, HFC hereby waives compliance by HCS
         with the provisions of the bulk transfer and bulk sales laws of any
         applicable jurisdictions; provided that nothing in this Agreement will
         estop or prevent either party from asserting as a bar or defense in any
         action or proceeding brought under any bulk sales or bulk transfer law
         that such law does not apply to the transactions contemplated by this
         Agreement.

(h)      Hired Employees.

                  (i)      If, at any time during the period beginning on the
                           Closing Date and ending on the six month anniversary
                           thereof, HFC terminates for any reason other than
                           Cause any former employee of HCS hired by HFC in
                           connection with the transactions contemplated by this
                           Agreement (a "Hired Employee"), HFC shall pay such
                           employee the severance amount set forth opposite such
                           employee's name on Schedule 13(h) (including the
                           amount set forth in Schedule 13(h) if such employee
                           has signed a release that releases all claims that
                           such employee may then have against HFC); provided,
                           however, that HCS agrees to reimburse HFC for
                           one-half of any such severance payment that is
                           payable on account of the termination, during the
                           first three months following the Closing, of a Hired
                           Employee for a Customer-Related Reason; and provided,
                           further, that HCS agrees to reimburse HFC for any
                           such severance payment that is payable on account of
                           the termination of a Hired Employee for any reason
                           between three months and six months following the
                           Closing. For purposes of this Section 13(h), an
                           employee will be deemed to be terminated for "Cause"
                           by HFC if

                                     - 30 -
<PAGE>

                           such termination arises from or is in any way related
                           to any of the following with respect to such
                           employee: (a) such employee's material or repeated
                           neglect of, or other failure to perform in all
                           material respects, any of his or her duties, or such
                           employee's failure to carry out reasonable directives
                           from HFC; (b) such employee's material or repeated
                           violation of HFC company policy; (c) such employee's
                           willful or repeated misconduct; (d) any statement,
                           representation or warranty made to HFC by such
                           employee that he or she knows to be false or
                           misleading; (e) such employee's commission of a
                           felony, whether or not against HFC and whether or not
                           committed during such employee's employment with HFC;
                           or (f) such employee's acting in a manner materially
                           adverse to the best interests of HFC. For purposes of
                           this Section 13(h), an employee will be deemed to be
                           terminated for a "Customer-Related Reason" if such
                           employee's employment with HFC is related primarily
                           to a specific customer, and such employee is
                           terminated in connection with the termination of
                           HFC's relationship with such customer or a reduction
                           in the services provided by HFC to such customer, or
                           such customer's dissatisfaction for any reason with
                           such employee.

                  (ii)     The severance obligations of HFC set forth in clause
                           (i) above shall not apply to any employees whose
                           employment with HFC is related primarily to an HFC
                           Managed Customer Site and who are terminated in
                           connection with the termination of the arrangements
                           by which HFC manages such site due to the fact that
                           the customer does not consent to assignment of the
                           applicable Customer Contract or enter into a new
                           contract with HFC on terms no less favorable to HFC.

                  (iii)    For a period of eighteen months after the Closing
                           Date, HFC shall provide to each Hired Employee, while
                           such Hired Employee remains employed by HFC, a base
                           salary substantially comparable to that which was
                           provided to such employee by HCS. For purposes of
                           this Section 13(h)(iii), HCS represents that it has
                           provided to HFC complete and accurate information
                           regarding the base salaries provided by HCS to the
                           Hired Employees. Subject to the immediately following
                           sentence, HFC also agrees to provide benefits to each
                           Hired Employee comparable to those that it offers to
                           similarly situated employees currently employed by
                           HFC, and to use commercially reasonable efforts to
                           make medical and dental insurance available to Hired
                           Employees without waiting periods. HFC agrees that,
                           with respect to all Employee Benefit Plans covering
                           any of the Hired Employees, service with HCS or any
                           of its Affiliates shall be counted as service with
                           HFC for purposes of determining any period of
                           eligibility to participate or to vest in benefits.

                                     - 31 -
<PAGE>

(i)      Insurance. Except as provided in Section 4(d), the coverage under all
         insurance policies related to the Business shall continue in force, if
         at all, only for the benefit of HCS and its Affiliates, and not for the
         benefit of HFC. As of the Closing Date HFC agrees to arrange for its
         own insurance policies with respect to the Acquired Assets and the
         Business covering all periods and agrees not to seek, through any
         means, to benefit from any of HCS's, Johnson & Johnson's or its
         Affiliates' insurance policies which may provide coverage for claims
         relating in any way to the Acquired Assets or the Business on or prior
         to the Closing Date, except as provided in Section 4(d).

(j)      Client and Participant Information. HFC agrees to treat all client and
         participant data transferred hereunder in accordance with each client's
         respective Customer Contract. In addition, HFC agrees to treat all such
         client and participant data that was collected through the Business's
         online health risk assessments or other online applications in
         accordance with the Business's online privacy policy as set forth in
         Exhibit 13(j). HFC agrees to maintain all other personally identifiable
         participant data transferred hereunder in strict confidence.

(k)      Shared Assets. Based on its due diligence, HFC in good faith believes
         that there are no Technology assets used in the Business that are
         material to operation of the Business that are not included in the
         Acquired Assets. However, if any such material Technology assets are
         identified following Closing, HCS will, to the extent it has the right
         to do so, permit HFC such limited use thereof as may be reasonably
         necessary to enable HFC to provide customers with management services
         substantially equivalent to those provided to such customers by the
         Business prior to the Closing; provided that (i) such use shall not
         interfere with HCS' own use of such assets; (ii) such use shall not
         continue for a period of more than 90 days following the Closing; (iii)
         HFC shall diligently undertake to obtain alternative assets as soon as
         possible in an effort to minimize the extent to which HFC must take
         advantage of the rights set forth in this paragraph; and (iv) in no
         event shall HCS be required to permit HFC to have access to any
         computer network of HCS or its Affiliates.

14.      Termination. This Agreement may be terminated prior to the Closing as
         follows:

(a)      At the written election of HFC, without liability to HFC on account of
         such termination, if (i) any representation or warranty of HCS made
         herein is untrue in any respect and such breach is not cured within ten
         (10) business days of HCS's receipt of written notice from HFC that
         such breach exists or occurred and such breach has a Material Adverse
         Effect, or (ii) HCS has defaulted in any respect in the performance of
         any obligation under this Agreement and such default is not cured
         within ten (10) business days of HCS's receipt of a written notice from
         HFC that such default exists or has occurred and such default has a
         Material Adverse Effect;

(b)      At the written election of HCS, without liability to HCS on account of
         such termination, if (i) any representation or warranty of HFC made
         herein is untrue in

                                     - 32 -
<PAGE>

         any material respect and such breach is not cured within ten (10)
         business days of HFC's receipt of written notice from HCS that such
         breach exists or occurred, or (ii) HFC has defaulted in any material
         respect in the performance of any material obligation under this
         Agreement and such default is not cured within ten (10) business days
         of HFC's receipt of a written notice from HCS that such default exists
         or has occurred; or

(c)      At the written election of either HFC or HCS after 90 days following
         the date hereof (but only if the Closing has not occurred other than
         through the failure of any party seeking to terminate this Agreement to
         comply with its obligations under this Agreement in all material
         respects).

15.      Certain Definitions.

(a)      "Affiliate" means, with respect to any person or entity, any other
         person or entity that directly, or indirectly through one or more
         intermediaries, Controls or is Controlled by or is under common Control
         with such person or entity.

(b)      "Assigned Nominal Revenue" shall mean the fixed amounts payable by
         customers during the twelve months following the Closing Date under all
         Non-affiliated Customer Contracts and Non-Contracted Accounts assigned
         to HFC, assuming that such customers' contracts (or, in the case of
         Non-Contracted Accounts, the customer's current level of business with
         the Business) will remain in effect during such entire 12-month period,
         such customers will not exercise any termination rights that they may
         have under such contracts, and taking into consideration any reduction
         in such fees or payments that were conceded by HCS in order to obtain
         any Required Customer Consent for any such contract; provided, however,
         that if a customer has informed HCS or HFC that such customer intends
         to terminate, or not renew, its contract or relationship with the
         Business, or intends to materially reduce or is considering a material
         reduction of services from the Business, in each case during such
         12-month period, then the information provided by such customer will be
         taken into account in calculating the Assigned Nominal Revenue.

(c)      "Control" of a person or entity means the power, direct or indirect, to
         direct or cause the direction of the management and policies of such
         person or entity, whether by contract, ownership of voting securities
         or otherwise.

(d)      "Employee Benefit Plan" shall mean (i) any "employee benefit plan" (as
         defined in Section 3(3) of the Employee Retirement Income Security Act
         of 1974, as amended), whether a single employer, a multiple employer or
         a multiemployer plan, including each related trust, custodial account
         or insurance contract, or (ii) any other plan, policy, program,
         practice or arrangement providing compensation or benefits, including,
         without limitation, retirement, pension, profit sharing, vacation,
         holiday, medical, severance, disability, death, incentive compensation,
         stock option or stock purchase or other similar benefits, whether
         written or unwritten.

                                     - 33 -
<PAGE>

(e)      "Material Adverse Effect" means a material adverse effect on the
         Acquired Assets, taken as a whole, or on the financial condition or
         operating results of the Business, or on the ability of the Business to
         consummate the transactions contemplated by this Agreement, but shall
         not mean any such effect resulting from or arising in connection with
         (i) changes in economic, regulatory or political conditions generally
         and changes or conditions affecting the industry that the Business is
         in (including, without limitation, changes due to seasonality or war or
         terrorism) and not specifically relating to the Business, (ii)
         fluctuations in currency exchange rates, (iii) the transactions
         contemplated by this Agreement, or any announcement thereof, (iv)
         resignations or departures of employees or consultants of HCS, or (v)
         changes resulting from any action taken by HFC prior to the Closing.

(f)      "Non-affiliated Customer Contracts" means Customer Contracts between
         HCS and a person or entity other than Johnson & Johnson or any
         Affiliate of Johnson & Johnson.

(g)      "Non-Contracted Account" shall mean any customer of the Business that
         is currently purchasing goods or services from the Business without any
         written contract, either because its contract with HCS has expired and
         not been renewed (other than on a month-to-month or other informal
         basis) or because no contract has yet been executed with such customer.

16.      General Terms.

(a)      Schedules and Exhibits. Each Schedule and Exhibit delivered pursuant to
         the terms of this Agreement shall be in writing, and shall constitute a
         part of the Agreement.

(b)      Notices. Any notice or other communication required or permitted
         hereunder shall be in writing and shall be deemed to have been given,
         when received, if personally delivered, and, when deposited, if placed
         in the U.S. mails for delivery by registered or certified mail, return
         receipt requested, postage prepaid, addressed at the addresses set
         forth above. Addresses may be changed by written notice given pursuant
         to this Section, however any such notice shall not be effective, if
         mailed, until three (3) working days after depositing in the U.S. mails
         or when actually received, whichever occurs first.

(c)      Severability. If any term of this Agreement is deemed unenforceable,
         void or illegal, such term shall be deemed severable from all other
         terms of this Agreement which shall otherwise continue in full force
         and effect. Further, in the event that any provision is found by such a
         court to be overbroad as written, such provision shall be deemed to be
         amended to narrow its application to the extent necessary to make the
         provision enforceable to the fullest extent permitted by law or equity.

                                     - 34 -
<PAGE>

(d)      Counterparts. This Agreement may be executed in counterparts and by
         different parties on different counterparts with the same effect as if
         the signatures thereto were on the same instrument.

(e)      Expenses. Except as otherwise provided herein, each party hereto shall
         bear and pay for its own costs and expenses incurred by it or on its
         behalf in connection with the transactions contemplated hereby,
         including, without limitation, all fees and disbursements of lawyers,
         accountants and financial advisors incurred through the Closing Date.

(f)      Entire Agreement; Modification and Waiver. This Agreement, together
         with the Schedules, Exhibits and the related written agreements
         specifically referred to herein, represents the only agreement among
         the parties concerning the subject matter hereof and supersedes all
         prior agreements whether written or oral, relating thereto, including
         without limitation the letter agreement between HCS and HFC dated
         January 9, 2003. No purported amendment, modification or waiver of any
         provision hereof shall be binding unless set forth in a written
         document signed by all parties (in the case of amendments or
         modifications) or by the party to be charged thereby (in the case of
         waivers). Any waiver shall be limited to the provision hereof and the
         circumstance or event specifically made subject thereto and shall not
         be deemed a waiver of any other term hereof or of the same circumstance
         or event upon any recurrence thereof.

(g)      Binding Effect. This Agreement shall be binding upon and shall inure to
         the benefit of the parties hereto and their respective heirs and
         successors in interest.

(h)      No Third Party Beneficiaries. Except as expressly set forth in Section
         12, this Agreement shall not create any rights in or be enforceable in
         any part by persons other than the parties hereto.

(i)      Governing Law. This Agreement and the legal relations between the
         parties shall be governed by and construed in accordance with the laws
         of the State of New York applicable to contracts executed and performed
         wholly within that State.

(j)      Dispute Resolution.

                  (i)      Any controversy or claim arising out of or relating
                           to this Agreement shall be resolved by arbitration
                           before a single arbitrator in accordance with the
                           Commercial Arbitration Rules of the American
                           Arbitration Association ("AAA") then pertaining
                           (available at www.adr.org), except where those rules
                           conflict with this provision, in which case this
                           provision controls. Any court with jurisdiction shall
                           enforce this clause and enter judgment on any award.
                           The arbitrator shall be selected within twenty
                           business days from commencement of the arbitration
                           from the AAA's National Roster of Arbitrators
                           pursuant to agreement or through selection procedures
                           administered by the AAA. Within 45 days of

                                     - 35 -
<PAGE>

                           initiation of arbitration, the parties shall reach
                           agreement upon and thereafter follow procedures,
                           including limits on discovery, assuring that the
                           arbitration will be concluded and the award rendered
                           within no more than eight months from selection of
                           the arbitrator or, failing agreement, procedures
                           meeting such time limits will be designed by the AAA
                           and adhered to by the parties. The arbitration shall
                           be held in New York, New York and the arbitrator
                           shall apply the substantive law of New York, except
                           that the interpretation and enforcement of this
                           arbitration provision shall be governed by the
                           Federal Arbitration Act. Prior to commencement of
                           arbitration, emergency relief is available from any
                           court to avoid irreparable harm. THE ARBITRATOR SHALL
                           NOT AWARD EITHER PARTY PUNITIVE, EXEMPLARY,
                           MULTIPLIED OR CONSEQUENTIAL DAMAGES, OR ATTORNEYS
                           FEES OR COSTS.

                  (ii)     Prior to commencement of arbitration, the parties
                           must attempt to mediate their dispute using a
                           professional mediator from AAA, the CPR Institute for
                           Dispute Resolution, or like organization selected by
                           agreement or, absent agreement, through selection
                           procedures administered by the AAA. Within a period
                           of 45 days after the request for mediation, the
                           parties agree to convene with the mediator, with
                           business representatives present, for at least one
                           session to attempt to resolve the matter. In no event
                           will mediation delay commencement of the arbitration
                           for more than 45 days absent agreement of the parties
                           or interfere with the availability of emergency
                           relief.

                                     - 36 -
<PAGE>

[Signature page to Asset Purchase Agreement between Health Fitness Corporation
and Johnson & Johnson Health Care Systems Inc.]

         Each of the parties hereto has caused this Purchase Agreement to be
executed by its duly authorized representative and in the manner appropriate to
each, all as of the day and year first above written.

HFC:

HEALTH FITNESS CORPORATION

By:     /s/ Jerry V. Noyce
   ---------------------------------------
   Name:    Jerry V. Noyce
   Title:   President and CEO

HCS:

JOHNSON & JOHNSON HEALTH CARE SYSTEMS INC.

By:      /s/ Dave P. Carberry
   ---------------------------------------
   Name:  David P. Carberry
   Title:    Vice President, Finance

                                     - 37 -
<PAGE>

                                    EXHIBIT 2

                                     FORM OF

                                LICENSE AGREEMENT

         This License Agreement ("Agreement") is effective as of [_________],
2003 (the "Effective Date"), by and between Johnson & Johnson Health Care
Systems Inc., a New Jersey corporation with an office at 425 Hoes Lane,
Piscataway, NJ 08855 ("Licensor"), and Health Fitness Corporation, a Minnesota
corporation with an office at 3600 West 80th Street, Suite 560, Minneapolis, MN
55431 ("Licensee").

                                    RECITALS

         A.       Licensor and Licensee are parties to an Asset Purchase
Agreement (the "Purchase Agreement") dated as of August [_______], 2003 pursuant
to which Licensor has, on the date hereof, sold to Licensee assets used in
Licensor's business of providing corporate fitness and wellness services and
products to Johnson & Johnson affiliated entities and to other companies and
entities, including assessment programs, consulting, operations management,
wellness programs and data analysis services (the "Business"). Capitalized terms
used but not defined herein shall have the respective meanings ascribed to them
in the Purchase Agreement.

         B.       The Purchase Agreement contemplates that Licensor and Licensee
will enter into a license agreement pursuant to which Licensor will grant to
Licensee a worldwide, irrevocable, paid-up, royalty-free, non-exclusive license
to use the materials (whether in written, electronic or other form) listed on
Schedule A attached hereto, in the form in which they exist on the date hereof,
together with the know-how and methodologies embodied therein (collectively, the
"Materials and Methodology").

                                    AGREEMENT

         In consideration of the mutual covenants contained in this Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto each agree to the terms and
conditions in this Agreement intending to be legally bound by them.

         1.       License Grant. Licensor hereby grants Licensee and its
Affiliates a worldwide, irrevocable, paid-up, royalty-free, non-exclusive
license to use, disclose and otherwise exploit the Materials and Methodology for
any purpose in connection with the Business and Licensee's business of managing
corporate and retail fitness and wellness facilities, and in connection with the
development, manufacture and marketing of any product or service incorporating
or utilizing any of the Materials and Methodology (the "Licensed Products and
Services"), subject to the other terms and conditions set forth herein.
Notwithstanding anything herein to the contrary, Licensed Products and Services
shall not include any pharmaceutical or surgical products, and the license
granted hereunder

                                     - 38 -
<PAGE>

shall not include any right to use any of the Materials and Methodology in
connection with any clinical trials or marketing of any pharmaceutical or
surgical products.

         2.       Disclosure of Materials and Methodology to Licensee. In
connection with the execution of this Agreement, Licensor is providing Licensee
with copies of all the materials described on Schedule A.

         3.       No License of Mark. The license grant set forth in Section 1
is a license of the Materials and Methodology only, and nothing in Section 1 or
in any other part of this Agreement shall be deemed to be a license of (a) the
name "Pathways to Change", including without limitation U.S. trademark nos.
1,884,929 and 2,023,025 for such name (collectively, the "Mark"), or any
derivative or similar name or mark, or (b) any other trade name, trademark,
service mark, logo or domain name of Licensor or its Affiliates or any
derivative or similar name or trademark, or to otherwise convey any rights or
interest in or to any of the items described in clause (a) or (b) above.

         4.       Use of Materials and Methodology. Licensee agrees that its and
its Affiliates' use of the Materials and Methodology, including the nature and
quality of the Licensed Products and Services provided by Licensee and its
Affiliates, shall conform to the standards set by Licensor. Licensee and its
Affiliates shall be in compliance with Licensor's quality standards so long as
Licensee and its Affiliates maintain the level of quality characterized by the
products and services currently offered by Licensee. Licensee agrees to provide
Licensor with specimens showing use of the Materials and Methodology in
connection with the Licensed Products and Services upon Licensor's request.

         5.       Goodwill. Licensee recognizes that the goodwill associated
with the Materials and Methodology has great value and acknowledges that, as
between Licensee and Licensor, the Materials and Methodology and all rights
therein and goodwill pertaining thereto belong exclusively to Licensor, and that
Licensee's use of the Materials and Methodology inures solely to the benefit of
Licensor. Licensee agrees that it will not attack the title or any rights of
Licensor in and to the Materials and Methodology or attack the validity of this
Agreement.

         6.       Notice of Infringement. Licensee agrees to notify Licensor of
any infringement by others of the Materials and Methodology or the Mark that may
come to Licensee's attention. Licensor shall have the sole right to determine
whether or not to take any action or enforcement on account of any infringement
of the Materials and Methodology or the Mark. Licensee shall not institute any
suit or take any action on account of any such infringement without first
obtaining the written consent of Licensor to do so.

         7.       Term. Subject to the termination provisions below, this
Agreement shall continue in force and effect perpetually.

         8.       Termination by Licensor. Licensor shall have the right to
terminate the license granted in this Agreement immediately upon the appointment
of any receiver or

                                     - 39 -
<PAGE>

trustee to take possession of the properties of Licensee or any sequestration by
governmental authority of Licensee or its assets. Licensor shall also have the
right terminate the license granted in this Agreement if (a) Licensee has
materially breached this Agreement, (b) Licensor has provided Licensee written
notice of such breach, and (c) Licensee has failed to cure such breach within
sixty (60) days after Licensee's receipt of such written notice and continues to
be in such breach upon the effectiveness of such termination.

         9.       Termination by Licensee. Licensee shall have the right to
terminate the license granted in this Agreement immediately upon written notice
to Licensor.

         10.      Post-Termination. Upon termination of this Agreement, Licensee
agrees to discontinue immediately all use of the Materials and Methodology.
Licensee acknowledges that all rights in the Materials and Methodology and the
goodwill connected therewith shall remain the property of Licensor.

         11.      Representations of Licensor; Indemnification.

         Licensor represents and warrants that: (i) Licensor exclusively owns,
or has valid and subsisting license rights (with the right to sublicense) to,
the Materials and Methodology, subject to no lien or encumbrance whatsoever;
(ii) to the knowledge of Licensor, the Materials and Methodology has not been
challenged in any judicial or administrative proceeding and Licensor has not
received and is not aware of any claim or notice of any person that such person
is contemplating such action; (iii) to the knowledge of Licensor, Licensor's
execution and performance of this Agreement, the transactions contemplated
herein and Licensee's use of the Materials and Methodology will not infringe,
misappropriate, misuse or conflict with the rights, including patent and other
intellectual property or contractual rights, of third parties; (iv) Licensor has
the right and authority to enter into this Agreement and to grant the license
granted herein; and (v) the materials listed on Schedule A constitute all of
Licensor's existing methodologies and materials (including all software relating
thereto) for worksite versions of weight management programs that Licensor
markets under the Mark.

         12.      Miscellaneous.

         (a)      Relationship. Nothing in this Agreement shall be construed to
place the parties in the relationship of principal and agent, partners or joint
venturers for any purpose whatsoever. Neither party is granted any right or
authority to assume or to create any obligation or responsibility, express or
implied, on behalf of or in the name of the other party. In fulfilling its
obligations pursuant to this Agreement, each party shall be acting as an
independent party.

         (b)      Entire Agreement. This Agreement, together with the Purchase
Agreement, constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements whether
written or oral relating hereto.

                                     - 40 -
<PAGE>

         (c)      Waiver, Discharge, Amendment, Etc. The failure of any party
hereto to enforce at any time any of the provisions of this Agreement shall in
no way be construed to be a waiver of any such provision, nor in any way to
affect the validity of this Agreement or any part thereof or the right of the
party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to be a waiver of any other or subsequent
breach. Any amendment to this Agreement shall be in writing and signed by the
parties hereto.

         (d)      Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument. Copies of this Agreement with signatures
transmitted by facsimile shall be deemed to be original signed versions of this
Agreement.

         (e)      Assignment. This Agreement shall be binding upon and inure to
the benefit of the successors and permitted assigns of the respective parties,
provided, however, that Licensee may not assign this Agreement without the
written consent of Licensor except to an Affiliate of Licensee or in connection
with a sale of all or substantially all of Licensee's business, whether by
merger, sale or license of assets or otherwise.

         (f)      Severability. In the event any part of this Agreement is found
to be unenforceable, the parties agree that part shall be modified by the court
to make it enforceable to the maximum extent possible. If the part cannot be
modified, that part may be severed and the other parts of the Agreement shall
remain enforceable.

         (g)      Dispute Resolution. Any controversy or claim arising out of or
relating to this Agreement shall be resolved pursuant to Section 16(j) of the
Purchase Agreement.

JOHNSON & JOHNSON HEALTH CARE            HEALTH FITNESS CORPORATION
SYSTEMS INC.

By: __________________________________      By: ________________________________
Name:_________________________________      Name: ______________________________
Its: _________________________________      Its: _______________________________

                                     - 41 -
<PAGE>

                         SCHEDULE A TO LICENSE AGREEMENT

                        List of Materials and Methodology

The Materials and Methodology consist of the following components of Licensor's
Worksite Weight Management Tool Kit:

         1.       Worksite Weight Management Program Protocol

         2.       Health Action Guide Titles

         3.       Templates for Weight Management Tools, i.e., Food & Activity
                  Tracker, Your Formula for Burning Calories, BMI Calculator,
                  Calorie Calculator & Grocery Shopping List

         4.       Cookbook recommendations

         5.       Counselor Resource Manual

         6.       Counselor Qualification Checklist

         7.       Counselor Training Workshop (1) Materials

         8.       Program Training Workshop (1) Materials

                                     - 42 -
<PAGE>

                                EXHIBIT 3(b)(ii)

COMMUNICATION PLAN

The Communication Plan consists of three documents. The first is the script and
general guidance document to be used by HCS in telephone calls to customers,
which calls may be made after HFC has publicly announced this Agreement
(pursuant to its press release (Exhibit 10(b)) or otherwise). HFC will notify
HCS promptly upon the release of such press release (or upon such other public
announcement). This script and general guidance document may also be used by the
parties' respective Assignment Representatives (or their designees) during their
joint meetings or telephone calls to customers of the Business as contemplated
by Section 3(b)(iii) of the Asset Purchase Agreement.

The second document is a letter that HCS may distribute to customers of the
Business as soon as HFC has publicly announced this Agreement.

The third document is a letter that HFC may distribute to customers of the
Business, provided that it shall not be delivered until the second business day
following the public announcement of this Agreement.

                                     - 43 -
<PAGE>

DOCUMENT ONE

BACKGROUND INFORMATION: JOHNSON & JOHNSON'S EMPLOYEE WORKSITE ENVIRONMENT
INCLUDES A STRONG COMMITMENT TO HEALTH EDUCATION, PREVENTION, AND WELLNESS. A
MAJOR COMPONENT OF THIS CULTURE IS AN EXTENSIVE HEALTH & WELLNESS PROGRAM,
OFFERED AS AN ELEMENT OF THE COMPANY'S HEALTH CARE BENEFITS AT MOST MAJOR
JOHNSON & JOHNSON SITES ACROSS THE COUNTRY.

ESTABLISHED IN 1983 AND BRANDED AS LIVE FOR LIFE(R), THESE PROGRAMS FOR
EMPLOYEES ARE NOW IDENTIFIED AS HEALTH & WELLNESS(R) AND ARE DESIGNED TO PROVIDE
EMPLOYEES, THROUGH THEIR PARTICIPATION, WITH AN OPPORTUNITY TO POTENTIALLY
IMPROVE THEIR HEALTH AND WELL-BEING. IN 1986, THESE PROGRAMS WERE INTRODUCED
OUTSIDE OF THE CORPORATION TO EXTERNAL CUSTOMERS THROUGH A JOHNSON & JOHNSON
AFFILIATE COMPANY. THESE POSITIVE LIFESTYLE PROGRAMS CONTINUE TO BE WIDELY USED
BY EMPLOYEES OF JOHNSON & JOHNSON AND ITS OPERATING COMPANIES, AS WELL AS BY
EMPLOYEES OF OUTSIDE CLIENT COMPANIES.

Talking Points

-        The health, fitness and well-being of our employees is a key component
         of our corporate environment. It helps define us as a company and
         reinforces our responsibilities to our customers, employees and the
         communities in which we live and work.

-        Our internal Health and Wellness program has been well received, with
         high employee participation. In 1986, these services were offered to
         external customers through a Johnson & Johnson affiliate company.

-        Creation of the Health and Fitness Division within Johnson & Johnson
         Health Care Systems allowed us to share our commitment and our skills
         with other companies and we are proud of the value we have provided as
         a result of this venture.

-        We want this business to continue to grow and prosper.

-        It is our belief that a better way for this business to grow and
         prosper is to pass it on to a company that is focused on health and
         fitness services as its core business. As a result, Health Fitness
         Corporation (HFC) is acquiring the Health & Fitness Division and its
         key program components.

-        The Johnson & Johnson Family of Companies will be HFC's largest client
         after the transaction.

-        In transitioning the Health & Fitness business, we are working closely
         with the acquiring company to identify employment opportunities for our
         H&F employees.

-        Our commitment to the health, fitness and well-being of employees will
         continue to be important to our overall success.

                                     - 44 -
<PAGE>

DOCUMENT TWO

                            EXTERNAL CUSTOMERS LETTER

Dear client name (from merge):

This is to let you know about some planned changes related to the Health &
Fitness Division of Johnson & Johnson Health Care Systems Inc. Health Fitness
Corporation (HFC) has signed an agreement with us to acquire most of the
programs and accounts of our Health & Fitness Division. This transaction is
subject to certain conditions, but we expect these to be met within the near
future.

We have given a great deal of thought and consideration to reach this decision.
Our Health & Fitness organization has enabled us to successfully share our
people, our scientifically based programs, and skills with you and our other
customers for more than two decades and we are proud of the value it has
provided.

We also believe that providing an opportunity for this business to be integrated
into a company focused on health and fitness services as its core business
provides a greater opportunity for the business and for you as customers. The
Johnson & Johnson Family of Companies will become HFC's largest single client
after completion of the transaction.

In addition, we will work closely with HFC with the aim of ensuring that the
transition from our ownership is a smooth one.

We will continue to keep you updated as the transaction progresses. In the
meantime contact me at 732/562-7123 or pflynn@hcsus.jnj.com for more
information.

Please let me know a good time to meet via phone and face-to-face to discuss
transition issues.

Sincerely,

Patricia Flynn

                                      - 45 -

<PAGE>

DOCUMENT THREE

                               [Letterhead of HFC]

Date

Name
Title

Company
Address

City State ZIP

Dear Name,

I am pleased to announce that Health Fitness Corporation, a leader in corporate
health and fitness, has agreed to acquire the Health & Fitness Services Division
of Johnson & Johnson Health Care Systems Inc. (the "Health & Fitness
Division")This expanded, "new HFC" will be able to serve your company and its
employees' health, wellness, and fitness needs with even more resources.

The "new HFC" will be focused on providing the best of class in management,
consulting, and programs services to our clients across the United States and
Canada. This transaction will bring together the most formidable team of talent
in the industry -- more than 3,000 health and fitness professionals -- totally
focused on serving corporate America with the latest in programs and services to
achieve our clients' goals.

I wanted to get this announcement and accompanying material to you immediately.
I have been working with Pat Flynn, Vice President of the Health & Fitness
Division, and we are in the process of making calls to all clients (we may or
may not have been able to reach you already) and ideally we would like to
arrange a time to meet with you. For your review, I have enclosed a brief write
up about the new expanded HFC.

We eagerly look forward to the opportunity to meet with you personally to
discuss this transition and to request the continuation of your business through
the assignment of your contract to HFC. You are very important to us. We at HFC
are excited about the opportunity to continue to serve your health and fitness
needs.

/s/ Jerry Noyce
Jerry Noyce
President and CEO
Health Fitness Corporation
Attachment:

                                     - 46 -

<PAGE>

                               EXHIBIT 3(b)(i)(D)

           [LETTERHEAD OF JOHNSON & JOHNSON HEALTH CARE SYSTEMS INC.]

                               [___________], 2003

[CUSTOMER NAME]
[CUSTOMER ADDRESS]
[CUSTOMER ADDRESS]
Attention:  [CUSTOMER CONTACT PERSON]

Dear [CUSTOMER CONTACT PERSON]:

         This letter confirms our conversation regarding the proposed sale of
our Health & Fitness Services business to Health Fitness Corporation ("HFC"),
which we expect to occur within the next [90] days. As part of this sale, we
would like to assign to HFC your Management Services Agreement with us dated
[_______________] (the "Agreement"). We are confident that HFC, as successor to
our Health & Fitness services business, will want to continue to serve your
fitness and wellness needs as set forth in that Agreement, and we hope you will
give them that opportunity.

         As evidenced by the signature of its authorized representative below,
HFC agrees that, on and after the effective date of the proposed sale, it will
assume all obligations to you under the Agreement, and will accept and be bound
by all of the terms and conditions of the Agreement.

         By countersigning this letter, you consent to our assignment of the
Agreement to HFC (and to the transfer of all related participant and other data
to HFC, which it will treat in accordance with the Agreement), and you confirm
your understanding that HFC will, once the proposed sale is complete, continue
to serve your fitness and other wellness needs as set forth in the Agreement,
which will continue in full force and effect in accordance with its terms.

         If you have any questions regarding the above, please do not hesitate
to call me at (732) 562-7123.

                                     Sincerely,

                                     JOHNSON & JOHNSON HEALTH CARE SYSTEMS INC.,
                                     by its Health & Fitness Services Division

                                     By:________________________________
                                     Patricia Flynn, Vice President

                                     - 47 -

<PAGE>

Accepted and agreed as of the
_____ day of ______________, 2003:

HEALTH FITNESS CORPORATION

By:_____________________________
Jerry V. Noyce, President and CEO

Accepted and agreed as of the
_____ day of ______________, 2003:

[CUSTOMER NAME]

By:_____________________________
Name:
Title:

                                     - 48 -

<PAGE>

                                EXHIBIT 3(d)(ii)

           [LETTERHEAD OF JOHNSON & JOHNSON HEALTH CARE SYSTEMS INC.]

                               [___________], 2003

[CUSTOMER NAME]
[CUSTOMER ADDRESS]
[CUSTOMER ADDRESS]
Attention:  [CUSTOMER CONTACT PERSON]

Dear [CUSTOMER CONTACT PERSON]:

         As you know, we are selling our Health & Fitness Services business to
Health Fitness Corporation ("HFC"). To date, we have not yet received your
consent to our proposed assignment to HFC of your Management Services Agreement
with us dated [_________________]. Therefore, we are terminating that Agreement
effective [___] days after the date of this letter, in accordance with the
termination clause of the Agreement. This letter constitutes the notice required
by that clause.

         We are confident, however, that HFC, as successor to our Health &
Fitness Services business, will want to continue meeting your fitness and other
wellness needs, and we hope you will give them that opportunity. Therefore, if
instead of allowing the Agreement to terminate, you prefer to have HFC take over
the services as set forth in the Agreement, please sign and return to me the
attached consent form. If you do so, this termination notice will be deemed to
be rescinded (provided we receive your signed consent form prior to the
effective date of the termination) and the Agreement will be assigned to HFC as
of the date our Health & Fitness Services business is sold to HFC or, if later,
the date we receive your signed consent form. Following assignment to HFC, the
Agreement will continue in full force and effect in accordance with its terms.

         If you have any questions regarding the above, please do not hesitate
to call me at (732) 562-7123.

                         Sincerely,

                         JOHNSON & JOHNSON HEALTH CARE SYSTEMS INC., by its
                         Health & Fitness Services Division

                         By:__________________________________

                         Patricia Flynn, Vice President

                                     - 49 -

<PAGE>

                                     CONSENT

         The undersigned customer ("Customer") hereby consents to the assignment
by Johnson & Johnson Health Care Systems Inc. ("JJHCS") to Health Fitness
Corporation ("HFC") of the Management Services Agreement dated
[__________________] between JJHCS and Customer, and to the transfer of all
related participant and other data to HFC, which it agrees to treat in
accordance with the Agreement. The assignment will be effective as of the date
JJHCS's Health & Fitness Services business is sold to HFC or, if later, the date
JJHCS receives this signed consent form from Customer (the "Assignment Date").
The foregoing consent is given with the understanding that HFC will, on and
after the Assignment Date, assume all obligations to Customer under the
Agreement and accept and be bound by all of the terms and conditions of the
Agreement. Customer agrees that the notice of termination set forth in the
accompanying letter from JJHCS will be rescinded effective as of JJHCS's receipt
of this signed consent form from Customer (provided that such receipt occurs
before the effective date of the termination), and that the Agreement, as
assigned to HFC, will continue in full force and effect in accordance with its
terms.

Date: ___________________                   [CUSTOMER NAME]

                                            ____________________________________
                                            Name:
                                            Title:

Accepted and agreed as of the
_____ day of _____________, 2003:

HEALTH FITNESS CORPORATION

By:___________________________
Jerry V. Noyce, President and CEO

Acknowledged as of the ____ day of
_________________, 2003:

JOHNSON & JOHNSON HEALTH CARE
SYSTEMS INC., by its Health & Fitness
Services Division

By:___________________________
Patricia Flynn, Vice President

                                     - 50 -

<PAGE>

                                    EXHIBIT 7

                                ESCROW AGREEMENT

         This ESCROW AGREEMENT (this "Escrow Agreement"), is dated as of August
___, 2003 by and among Johnson & Johnson Health Care Systems Inc., a New Jersey
corporation ("J&J Health"), Bayview Capital Partners LP, a Delaware limited
partnership ("Bayview"), Wells Fargo Bank, National Association, as lender
("Lender"), and Wells Fargo Bank Minnesota, National Association, as escrow
agent (the "Escrow Agent").

                              W I T N E S S E T H:

         WHEREAS, Health Fitness Corporation, a Minnesota corporation ("HFC"),
and J&J Health are parties to that certain Asset Purchase Agreement, dated as of
the date hereof (the "Asset Purchase Agreement"), pursuant to which HFC will
acquire certain assets (the "Acquired Assets") of the Health & Fitness Services
division of J&J Health;

         WHEREAS, to induce J&J Health to enter into the Asset Purchase
Agreement, Section 7(a) of the Asset Purchase Agreement provides that, in
connection with the purchase of the Acquired Assets, the sum of Five Million Two
Hundred Fifty Thousand Dollars ($5,250,000.00) (the "Escrow Contribution") shall
be deposited with the Escrow Agent and held by the Escrow Agent in an escrow
account established pursuant to this Escrow Agreement, and subsequently
disbursed in accordance with the terms of this Escrow Agreement;

         WHEREAS, the Lender will deposit Two Million Two Hundred and Fifty
Thousand Dollars ($2,250,000) of the Escrow Contribution with the Escrow Agent
and Bayview will deposit Three Million Dollars ($3,000,000) of the Escrow
Contribution with the Escrow Agent; and

         WHEREAS, the Escrow Agent has agreed to hold the Escrow Fund (as
defined herein) pursuant to the terms of this Escrow Agreement.

         NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:

                                    ARTICLE I
                                  DEFINED TERMS

         1.1)     Defined Terms. Capitalized terms used and not otherwise
defined in this Agreement shall have the meanings assigned to them in the Asset
Purchase Agreement.

         1.2)     Additional Definitions. The following terms shall have the
following meanings:

         "Closing Distribution Notice" means as defined in Section 4.1.

                                      - 51 -

<PAGE>

         "Escrow Fund" means the Escrow Contribution deposited with the Escrow
Agent pursuant to Section 7(a) of the Asset Purchase Agreement, together with
interest and other earnings and profits upon or in respect of such amount, minus
amounts paid or distributed pursuant to this Agreement.

         "Permitted Investments" means as defined in Section 3.1.

         "Post-Closing Distribution Notice" means as defined in Section 4.1.

                                   ARTICLE II
                                     ESCROW

         2.1)     Funds Placed in Escrow. On the date hereof, Lender and Bayview
have deposited the Escrow Contribution with the Escrow Agent. The Escrow Agent
hereby acknowledges receipt of such deposits and accepts delivery of the Escrow
Contribution. The Escrow Agent agrees to hold the Escrow Fund in an escrow
account, subject to the terms and conditions of this Agreement. The escrow
account shall be a trust fund and shall not be subject to any lien, attachment,
trustee process or any other judicial process of any creditor of any party to
this Agreement.

         2.2)     Repayment; Reimbursement. The Escrow Fund shall be utilized to
pay to J&J Health the Purchase Price at the Closing for the Acquired Assets and
to pay J&J Health any adjusted Purchase Price after the Closing, all as provided
in Section 7(a) of the Asset Purchase Agreement.

         2.3)     Escrow Taxes. Unless otherwise required by law, J&J Health
will include in its income, for federal, state, local and foreign tax purposes,
that portion of income and gains realized by the Escrow Fund that is disbursed
to J&J Health, and shall pay all income taxes due with respect thereto. HFC will
include in its income, for federal, state, local and foreign tax purposes, that
portion of income and gains realized by the Escrow Fund that is disbursed other
than to J&J Health. As soon as practicable after December 31 of each calendar
year (but in no event later than required by applicable law), the Escrow Agent
shall report, as required by applicable law, income and gains realized by the
Escrow Fund in a manner consistent with this section.

                                   ARTICLE III
                               INVESTMENT OF FUND

         3.1)     Permitted Investments; Interest. From the date hereof until
the final disbursement from the Escrow Fund pursuant to Article 4 of this Escrow
Agreement, the Escrow Agent is authorized and directed to invest and reinvest
the Escrow Fund in the Wells Fargo Treasury Plus Money Market Fund (the
"Permitted Investments"). The Escrow Agent hereby represents that the Wells
Fargo Treasury Plus Money Market Fund is a money market fund that is rated AAA
or Aaa by Standard & Poor's or Moody's, respectively, and that provides daily
liquidity without penalty. The Permitted Investments and interest accruing on,
and any profit resulting from, such investments

                                     - 52 -

<PAGE>

shall be added to, and become a part of, the Escrow Fund pursuant to this Escrow
Agreement. For purposes of this Escrow Agreement, "interest" on the Escrow Fund
shall include all proceeds thereof and investment earnings with respect thereto.
The Permitted Investments shall be registered in the name of the Escrow Agent.
The Escrow Agent shall have full power and authority to sell any and all of the
Permitted Investments held by it under this Escrow Agreement as necessary to
make disbursements under this Escrow Agreement, and may use its bond department
to effect such sales. The Escrow Agent shall not be responsible for any
unrealized profit or realized loss realized on such investments.

                                   ARTICLE IV
                            RELEASE OF ESCROW ACCOUNT

         4.1)     Closing of the Asset Purchase Agreement. In connection with
the consummation of the Closing under the Asset Purchase Agreement, J&J Health
and HFC shall deliver to the Escrow Agent, with a copy to Bayview and the
Lender, a notice jointly executed by J&J Health and HFC stating that all
conditions precedent to the Closing of the Asset Purchase Agreement, with the
exception of delivery of the Purchase Price, have been satisfied and not waived
(provided that J&J Health may, in its sole and absolute discretion, waive any
one or more conditions precedent to J&J Health's obligation to consummate the
Closing set forth in Section 11(d)(ii) of the Asset Purchase Agreement), and
setting forth the amount of the Purchase Price to be distributed to J&J Health
in accordance with Section 7(a) of the Asset Purchase Agreement (the "Closing
Distribution Notice"), and the Escrow Agent thereupon shall promptly make a
disbursement to J&J Health from the Escrow Fund in the amount set forth in the
Closing Distribution Notice. Thereafter, at the end of each of the six calendar
months following the month in which the Closing occurs, the Escrow Agent shall
disburse to J&J Health an amount equal to the amount, if any, by which the
Purchase Price as recalculated in accordance with Section 7(a) of the Asset
Purchase Agreement at such month-end exceeds the total Purchase Price
theretofore paid to J&J Health upon the receipt of a notice, with a copy to
Bayview and the Lender, jointly executed by J&J Health and HFC setting forth and
directing the disbursement of any such amount (each a "Post-Closing Distribution
Notice"). Promptly following full payment of all amounts set forth in the
Closing Distribution Notice and all amounts set forth in the Post-Closing
Distribution Notices, any amounts remaining in the Escrow Fund shall be
disbursed to Lender.

         4.2)     Termination of the Asset Purchase Agreement. On receipt of a
notice jointly executed by J&J Health and HFC stating that the Asset Purchase
Agreement has been terminated (the "Termination Distribution Notice"), the
Escrow Agent shall promptly disburse all amounts in the Escrow Fund to Lender
and to Bayview pro rata based on the percentage of the Escrow Contribution
contributed by each.

         4.3)     No Closing or Termination. If the Escrow Agent has not
received the Closing Distribution Notice or Termination Distribution Notice on
or before November 30, 2003, the Escrow Agent shall promptly disburse all
amounts in the Escrow Fund to

                                     - 53 -

<PAGE>

Lender and to Bayview pro rata based on the percentage of the Escrow
Contribution contributed by each.

                                    ARTICLE V
                   LIABILITY AND COMPENSATION OF ESCROW AGENT

         5.1)     No Implied Duties. The duties and obligations of the Escrow
Agent hereunder shall be determined solely by the express provisions of this
Escrow Agreement, and no implied duties or obligations shall be read into this
Escrow Agreement against the Escrow Agent. The Escrow Agent shall, in
determining its duties hereunder, be under no obligation to refer to any other
documents between or among the parties related in any way to this Escrow
Agreement (except to the extent that this Escrow Agreement specifically refers
to or incorporates by reference provisions of any other document).

         5.2)     Indemnification of Escrow Agent. HFC and the Escrow Agent have
entered into a separate letter agreement dated the date hereof relating to
indemnification of the Escrow Agent for certain liability and expense which may
arise out of actions taken or omitted by the Escrow Agent in accordance with
this Escrow Agreement (except such liability and expense as may result from the
gross negligence or willful misconduct of the Escrow Agent).

         5.3)     Standard of Care; Reliance. The Escrow Agent shall not be
liable to any person by reason of any error of judgment or for any act done or
step taken or omitted by it, or for any mistake of fact or law or anything which
it may do or refrain from doing in connection herewith unless caused by or
arising out of its own gross negligence or willful misconduct. The Escrow Agent
shall be entitled to rely in good faith on, and shall be protected in acting in
reliance in good faith upon, any instructions or directions furnished to it in
writing jointly executed by J&J Health and HFC or by Lender and Bayview, as
applicable, pursuant to any provision of this Escrow Agreement and shall be
entitled to treat as genuine, and as the document it purports to be, any letter,
paper or other document furnished to it by J&J Health and HFC or by Lender and
Bayview, and reasonably believed by the Escrow Agent to be genuine and to have
been signed and presented by the proper party or parties. In performing its
obligations hereunder, the Escrow Agent may consult with counsel to the Escrow
Agent and shall be entitled to rely in good faith on, and shall be protected in
acting in reliance in good faith upon, the advice or opinion of such counsel.

         5.4)     Compensation of Escrow Agent. The Escrow Agent shall be
entitled to its customary fee for the performance of services by the Escrow
Agent hereunder for each year or portion thereof that any portion of the Escrow
Fund remains in escrow and shall be reimbursed for reasonable costs and expenses
incurred by it in connection with the performance of such services (such fees,
costs and expenses are hereinafter referred to as the "Escrow Agent's
Compensation"). The Escrow Agent's Compensation shall be paid by HFC pursuant to
the terms of a separate letter agreement between the Escrow Agent and HFC dated
the date hereof.

                                     - 54 -

<PAGE>

         5.5)     Resignation and Successor. The Escrow Agent may resign at any
time by giving sixty (60) days written notice to Lender, Bayview and J&J Health;
provided, that such resignation shall not be effective unless and until a
successor Escrow Agent has been appointed and accepts such position pursuant to
the terms of this Section 5.5. In such event, Lender, Bayview and J&J Health
shall jointly appoint a successor Escrow Agent. If a successor Escrow Agent is
not appointed within the 30-day period following such notice, the Escrow Agent
may petition any court of competent jurisdiction to name a successor Escrow
Agent. Such appointment shall be effective on the effective date of the
aforesaid resignation (the "Escrow Transfer Date"). On the Escrow Transfer Date,
all right title and interest to the Escrow Fund, including interest thereon,
shall be transferred to the successor Escrow Agent and this Escrow Agreement
shall be assigned by the Escrow Agent to such successor Escrow Agent, and
thereafter, the resigning Escrow Agent shall be released from any further
obligations hereunder. The Escrow Agent shall continue to serve until its
successor is appointed, assumes this Escrow Agreement and receives the
transferred Escrow Fund.

         5.6)     Disputes. It is understood and agreed that in the event any
adverse claims or demands are made in connection with the Escrow Fund, or in the
event the Escrow Agent in good faith is in doubt as to what action it should
take hereunder, the Escrow Agent shall retain the Escrow Fund until the Escrow
Agent shall have received (i) an enforceable final order of a court or
arbitrator of competent jurisdiction which is not subject to further appeal
directing delivery of the Escrow Fund or (ii) a written statement jointly
executed by J&J Health and HFC, on the one hand, and Lender and Bayview, on the
other hand, directing delivery of the Escrow Fund, in which event Escrow Agent
shall disburse the Escrow Fund in accordance with such order or agreement. Any
court or arbitrator order referred to in clause (i) immediately above shall be
accompanied by a legal opinion of counsel for the presenting party satisfactory
to the Escrow Agent to the effect that said court or arbitrator order or
judgment is final and enforceable and is not subject to further appeal. The
Escrow Agent shall act on such court or arbitrator order and legal opinion
without further question.

         5.7)     Limitation on Damages. In no event shall the Escrow Agent be
liable in connection with this Escrow Agreement for any special, indirect or
consequential loss or damage of any kind whatsoever, even if the Escrow Agent
has been previously advised of such loss or damage.

                                   ARTICLE VI
                         REPRESENTATIONS AND WARRANTIES

         6.1)     Representations by Escrow Agent. The Escrow Agent represents
and warrants to each of the other parties hereto that it is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
formation; that it has the power and authority to execute and deliver this
Escrow Agreement and to perform its obligations hereunder; that the execution,
delivery and performance of this Escrow Agreement by it has been duly authorized
and approved by all necessary action; that this Escrow Agreement constitutes its
legal, valid and binding obligation, enforceable against it in

                                     - 55 -

<PAGE>

accordance with its terms; and that the execution, delivery and performance of
this Escrow Agreement by it will not result in a breach of or loss of rights
under or constitute a default under or a violation of any trust (constructive or
other), agreement, judgment, decree, order or other instrument to which it is a
party or by which it or its properties or assets may be bound.

         6.2)     Representations by J&J Health, Bayview and Lender. J&J Health,
Bayview and Lender each represents to each of the other parties hereto that it
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of formation; that it has the power and authority to execute and
deliver this Escrow Agreement and to perform its obligations hereunder; that the
execution, delivery and performance of this Escrow Agreement by it has been duly
authorized and approved by all necessary action; that this Escrow Agreement
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms; and that the execution, delivery and performance of
this Escrow Agreement by it will not result in a breach of or loss of rights
under or constitute a default under or a violation of any trust (constructive or
other), agreement, judgment, decree, order or other instrument to which it is a
party or by which it or its properties or assets may be bound.

                                   ARTICLE VII
                                   TERMINATION

         7.1)     Termination. This Agreement shall terminate on the date all
amounts in the Escrow Fund have been disbursed as provided herein.

                                  ARTICLE VIII
                                     GENERAL

         8.1)     Other Agreements. Nothing in this Agreement is intended to
limit any of the rights of HFC or J&J Health, or any obligation of HFC or J&J
Health, under the Asset Purchase Agreement (or any agreement entered into in
connection with the transactions contemplated by the Asset Purchase Agreement).

         8.2)     Governing Law. This Agreement shall be governed by the laws of
the State of Minnesota (regardless of the laws that might otherwise govern under
applicable Minnesota principles of conflicts of law).

         8.3)     Arbitration.

                  (i)      The parties hereby agree that any dispute shall be
                           resolved by arbitration before a single arbitrator in
                           accordance with the Commercial Arbitration Rules of
                           the American Arbitration Association ("AAA") then
                           pertaining (available by www.adr.org), except where
                           those rules conflict with this provision, in which
                           case this provision controls. Any court with
                           jurisdiction shall enforce this clause and enter
                           judgment on any award. The arbitrator shall be
                           selected within twenty business days from
                           commencement of

                                     - 56 -
<PAGE>

                           the arbitration from the AAA's National Roster of
                           Arbitrators pursuant to agreement or through
                           selection procedures administered by the AAA. Within
                           45 days of initiation of arbitration, the parties
                           shall reach agreement upon and thereafter follow
                           procedures, including limits on discovery, assuring
                           that the arbitration will be concluded and the award
                           rendered within no more than eight months from the
                           selection of the arbitrator, or, failing agreement,
                           procedures meeting such time limits will be designed
                           by the AAA and adhered to by the parties. The
                           arbitration shall be held in Minneapolis, Minnesota
                           and the arbitrator shall apply the substantive law of
                           Minnesota, except that the interpretation and
                           enforcement of this arbitration provision shall be
                           governed by the Federal Arbitration Act. Prior to
                           commencement of arbitration, emergency relief is
                           available from any court to avoid irreparable harm.
                           THE ARBITRATOR SHALL NOT AWARD EITHER PARTY PUNITIVE,
                           EXEMPLARY, MULTIPLIED OR CONSEQUENTIAL DAMAGES, OR
                           ATTORNEYS' FEES OR COSTS.

                  (ii)     Prior to the commencement of arbitration, the parties
                           must attempt to mediate their dispute using a
                           professional mediator from AAA, the CPR Institute for
                           Dispute Resolution, or like organization selected by
                           agreement or, absent agreement, through selection
                           procedures administered by the AAA. Within a period
                           of 45 days after the request for mediation, the
                           parties agree to convene with the mediator, with
                           business representatives present, for at least one
                           session to attempt to resolve the matter. In no event
                           will mediation delay commencement of the arbitration
                           for more than 45 days absent agreement of the parties
                           or interfere with the availability of emergency
                           relief.

         8.4)     Benefit; Successor and Assigns. This Escrow Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns but shall not be assignable by any party hereto
without the written consent of all of the other parties hereto. The parties
acknowledge that HFC is an intended third-party beneficiary of this Escrow
Agreement and that this Escrow Agreement will not be amended without the consent
of HFC. This Escrow Agreement is not intended to confer on any person not a
party hereto, other than HFC pursuant to the immediately preceding sentence, any
rights or remedies hereunder.

         8.5)     Severability. If any provision of this Agreement, or the
application of such a provision, is for any reason and to any extent invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other circumstances shall be interpreted so as reasonably to effect the
intent of the parties to this Agreement. The parties shall replace such void or
unenforceable provision of this Agreement with a

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<PAGE>

valid and enforceable provision that shall achieve, to the greatest extent
possible, the economic, business and other purposes of the void or unenforceable
provision.

         8.6)     Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts of it, individually or taken together,
whether delivered via facsimile or otherwise, bear the signatures of all the
parties reflected hereon as signatories.

         8.7)     Amendment and Waivers. Any term or provision of this Agreement
may be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a writing signed by the party to be bound thereby. Except
with respect to HFC pursuant to Section 8.4, notwithstanding any rights that may
be created in any third party under the terms of this Agreement, no such
amendment or waiver shall require the consent of such third party to be
effective. The waiver by a party of any breach of this Agreement or default in
the performance of any obligations under this Agreement shall not be deemed to
constitute a waiver of any other default or any succeeding breach or default.

         8.8)     Notices. All notices and other communications hereunder shall
be in writing and shall be delivered personally by commercial courier service or
otherwise, or by telecopier, or by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):

         If to J&J Health:

         Johnson & Johnson Health Care Systems Inc.
         425 Hoes Lane
         Piscataway, NJ  08855
         FAX:  (732) 562-3121
         Attention: David P. Carberry

         If to Escrow Agent:

         Wells Fargo Bank Minnesota, N.A.
         Corporate Trust Services
         MAC N9303-110
         Sixth and Marquette
         Minneapolis, MN 55479
         FAX: 612-667-2160
         Attention: Steven R. Gubrud

         If to Lender:
         Wells Fargo Bank, N.A.
         7900 Xerxes Avenue South
         MAC N9307-013
         Bloomington, MN 55431

                                     - 58 -

<PAGE>

         FAX: (612) 316-1621
         Attention: Kent A. Paulson

         If to Bayview:

         Bayview Capital Partners LP
         641 East Lake Street, Suite 2400
         Wayzata, MN 55391
         FAX: (952) 345-2001
         Attention: Cary Musech and Sean A. Epp

Any party may change the above-specified recipient and/or mailing address by
notice to all other parties given in the manner herein prescribed. All notices
shall be deemed given on the day when actually delivered as provided above (if
delivered personally or by telecopy) or on the day shown on the return receipt
(if delivered by mail).

         8.9)     Construction of Agreement. This Escrow Agreement has been
negotiated by the respective parties hereto and their attorneys and the language
of this Agreement shall not be construed for or against any party. A reference
to a Section shall mean a Section in this Agreement unless otherwise explicitly
set forth. The titles and headings in this Agreement are for reference purposes
only and shall not in any manner limit the construction of this Agreement, which
shall be considered as a whole.

         8.10)    Further Assurances. Each party agrees to cooperate fully with
the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to evidence and reflect the transactions described
in this Escrow Agreement and contemplated by it and to carry into effect the
intents and purposes of this Escrow Agreement.

         8.11)    Absence of Third Party Beneficiary Rights. No provisions of
this Escrow Agreement are intended, nor shall be interpreted, to provide or
create any third party beneficiary rights or any other rights of any kind in any
client, customer, affiliate, stockholder or partner of any party to this Escrow
Agreement or any other person or entity unless specifically provided otherwise
in it, and, except as so provided, all provisions of this Escrow Agreement shall
be personal solely among the parties to this Escrow Agreement.

         8.12)    Entire Agreement. This Escrow Agreement and the Asset Purchase
Agreement and the exhibits and schedules to this Escrow Agreement and to the
Asset Purchase Agreement constitute the entire understanding and agreement of
the parties to this Escrow Agreement with respect to the subject matter of this
Agreement and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect hereto. The express terms of this Escrow
Agreement control and supersede any course of performance or usage of trade
inconsistent with any of the terms of this Escrow Agreement.

                                     - 59 -

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as
of the date first above written.

JOHNSON & JOHNSON HEALTH CARE SYSTEMS INC.  Wells Fargo Bank Minnesota, National
                                            Association, as Escrow Agent

By:  _________________________________      By: ________________________________
Name: ________________________________      Name:_______________________________
Title: _______________________________      Title:______________________________

WELLS FARGO BANK, NATIONAL ASSOCIATION,     BAYVIEW CAPITAL PARTNERS LP
AS LENDER
                                            BY: BAYVIEW CAPITAL MANAGEMENT LLC
                                            ITS: GENERAL PARTNER
By:  _________________________________      By:  _______________________________
Name: ________________________________      Name: ______________________________
Title: _______________________________      Title: _____________________________

                                     - 60 -

<PAGE>

                                  EXHIBIT 10(b)

FORM IMMEDIATE RELEASE

FROM:    Health Fitness Corporation
         3600 West 80th Street Minneapolis, Minnesota 55431

CONTACT: Geri Martin
         Vice President of Marketing
         952.897.5245 or gmartin@hfit.com

        HEALTH FITNESS CORPORATION TO PURCHASE HEALTH & FITNESS SERVICES
             DIVISION OF JOHNSON & JOHNSON HEALTH CARE SYSTEMS INC.

                                        (a)       Creating America's Largest
                                                  Worksite Health, Wellness And
                                                  Fitness Company

MINNEAPOLIS, MINNESOTA, _________________, 2003 - Health Fitness Corporation
(OTC BB: HFIT), today announced it has signed an agreement to acquire the
business assets of the Health & Fitness Services Division (HFS Division) of
Johnson & Johnson Health Care Systems Inc. (JJHCS) for an undisclosed purchase
price.

Assets to be acquired by Health Fitness Corporation consist primarily of client
contracts, proprietary wellness, lifestyle and health promotion programs and
other health and wellness services of the HFS Division. Johnson & Johnson Health
Care Systems will retain its Integrated Behavioral Solutions business unit, and
will license certain Behavioral Solutions methodologies to Health Fitness
Corporation for use in its business. As part of the transaction, HFC will enter
into a multi-year management contract with another subsidiary of Johnson &
Johnson under which HFC will manage 30 Johnson & Johnson affiliate sites, making
J&J and its affiliates HFC's largest client.

As a result of this acquisition, Health Fitness Corporation will have the
largest market share and geographical presence in the industry, and will be
well-positioned to continue serving all of its existing clients together with
those of the HFS Division, and to build new business. The closing is subject to
certain conditions that the parties are endeavoring to satisfy within the next
45 to 60 days.

The HFS Division of Johnson & Johnson Health Care Systems has been serving
clients since 1986, providing corporate fitness and wellness services and
programs to companies across the United States and Canada and in Latin America.
Services include: health and fitness center management, consulting, occupational
health services, health risk assessment programs, wellness, fitness, injury
prevention and treatment programs and data analysis services. Currently, the HFS
Division manages approximately 190 health fitness centers throughout the U.S.

Health Fitness Corporation plans to finance its acquisition of the HFS Division
primarily with a bank term loan; supplemented with venture financing.

"This transaction will make Health Fitness Corporation the leader in the
worksite wellness and corporate fitness industry," said Jerry Noyce, Health
Fitness Corporation CEO and president. "Driving corporate health and wellness
needs are a number of widely publicized health concerns

                                     - 61 -

<PAGE>

in the U.S. related to unhealthy lifestyles, including tobacco use, poor diet,
and sedentary habits which lead to overweight, obesity, heart disease and
diabetes. As companies seek relief from their rising health care premiums and
medical costs, they increasingly look to their health and wellness program
providers to deliver a more complete range of health enhancement offerings. We
are tremendously excited about the opportunity to broaden our program offerings
by integrating the Health & Fitness Services division of Johnson & Johnson
Health Care Services into Health Fitness Corporation. Employers want programs
that produce quantifiable results. We have a greater opportunity to impact those
trends by combining our existing program offerings with those we are acquiring,
and delivering superior services to the worksite."

                                        (i)       ABOUT HEALTH FITNESS
                                                  CORPORATION

Health Fitness Corporation is the leading provider of results-oriented fitness,
assessment, wellness, and occupational health services to corporations,
hospitals, universities and communities. HFC has been serving clients since 1975
and manages 200 sites across the U.S. and Canada. For more information about
Health Fitness Corporation, go to www.hfit.com.

This press release contains forward-looking statements within the meaning of
federal securities laws. These statements include statements regarding intent,
belief or current expectations of Health Fitness Corporation and its management.
These forward-looking statements are not guarantees of future performance and
involve a number of risks and uncertainties that may cause Health Fitness'
actual results to differ materially from the results discussed in these
statements. Please refer to Management's Discussion and Analysis contained
within the Company's Annual Report on Form 10-K for the year ended December 31,
2002 and the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 2003.

                                     - 62 -

<PAGE>

                               EXHIBIT 11(b)(iii)

                                     FORM OF

                     ASSIGNMENT AND ASSUMPTION OF CONTRACTS

         THIS ASSIGNMENT AND ASSUMPTION (this "Assignment and Assumption") is
made this ____ day of ________________, 2003 by and between Johnson & Johnson
Health Care Systems Inc., a New Jersey corporation with an office at 425 Hoes
Lane, Piscataway, NJ 08855 ("Assignor"), and Health Fitness Corporation, a
Minnesota corporation with an office at 3600 West 80th Street, Suite 560,
Minneapolis, MN 55431 ("Assignee").

         WHEREAS, pursuant to that certain Asset Purchase Agreement, dated as of
July ____, 2003, by and between Assignor and Assignee (the "Purchase
Agreement"), Assignor has, on the date hereof, sold to Assignee assets used in
the Company's Health & Fitness Services business (the "Business"); and

         WHEREAS, Purchase Agreement provides that, at the Closing (as defined
in the Purchase Agreement), Assignor will assign to Assignee certain contracts
relating to the Business, and Assignee will assume such contracts from Assignor;

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereby agree
as follows:

         1.       All capitalized terms used but not defined herein shall have
                  the respective meanings ascribed to them in the Purchase
                  Agreement.

         2.       Assignor hereby assigns, sets over and transfers to Assignee
                  all of Assignor's right, title and interest in, to and under
                  the Contracts that are listed on Schedule A attached hereto,
                  and Assignee hereby accepts such assignment and assumes and
                  agrees to pay, perform and discharge when due all of the
                  liabilities and obligations of Assignor arising on or after
                  the Closing Date under such Contracts.

         3.       This Assignment and Assumption and the obligations of the
                  parties hereunder shall survive the Closing, shall be binding
                  upon and inure to the benefit of the parties hereto, their
                  respective legal representatives, successors and assigns,
                  shall be governed by and construed in accordance with the laws
                  of the State of New York (without regard to conflicts of laws
                  principles), and may not be modified or amended in any manner
                  other than by a written agreement signed by both parties.

                                     - 63 -

<PAGE>

         4.       This Assignment and Assumption may be executed in
                  counterparts, each of which shall be deemed an original, but
                  all of which shall constitute one and the same instrument.
                  Copies of this Assignment and Assumption with signatures
                  transmitted by facsimile shall be deemed to be original signed
                  versions of this Assignment and Assumption.

         5.       Assignor and Assignee each hereby covenants and agrees that it
                  will, at any time and from time to time if requested by the
                  other party, or its successors or assigns, do, execute,
                  deliver and acknowledge, or will cause to be done, executed,
                  delivered and acknowledged, to such other party, or its
                  successors or assigns, as the case may be, such and all
                  further acts, assignments, assumptions and additional papers
                  and instruments as such other party may reasonably request,
                  and do or cause to be done all acts or things as often as such
                  other party may reasonably request and which may be proper or
                  necessary or advisable for better evidencing or effecting the
                  agreements made hereby, and effectively to carry out the
                  intent hereof.

         6.       This Assignment and Assumption is delivered pursuant to and is
                  subject to the terms and provisions of the Purchase Agreement.
                  If any provision hereof is construed to conflict with any
                  provision of the Purchase Agreement, the provisions of the
                  Purchase Agreement shall be deemed controlling.

         IN WITNESS WHEREOF, the parties have executed this Assignment and
Assumption with the intent and agreement that the same shall be effective as of
the day and year first above written.

                                      JOHNSON & JOHNSON HEALTH CARE SYSTEMS INC.

                                      By:_______________________________
                                      Name:
                                      Title:

                                      HEALTH FITNESS CORPORATION

                                      By:_______________________________
                                      Name:
                                      Title:

                                     - 64 -

<PAGE>

                                EXHIBIT 11(b)(vi)

                        MASTER SERVICES AGREEMENT BETWEEN

                        JOHNSON & JOHNSON SERVICES, INC.,

                                       AND

                           HEALTH FITNESS CORPORATION

__________________, 2003

                                     - 65 -
<PAGE>
         This Agreement, dated as of ______________, 2003 ("Effective Date")
between Health Fitness Corporation, a Minnesota corporation (hereinafter "HFC"),
and Johnson & Johnson Services, Inc., a ____________ corporation (hereinafter
"J&J Services"), sets forth the terms and conditions upon which the parties
agree to implement and manage the system of corporate health fitness centers of,
and provide other health, wellness and fitness services to J&J Services and its
affiliates.

1.       Service Level Agreements; Exclusive Field

1.1      The parties contemplate that HFC and J&J Services will, during the term
of this Agreement, enter into service level agreements on an annual basis (each
"Service Level Agreement") relating to the implementation and/or management of
all of the corporate health fitness centers of, and/or the provision of all
other health, wellness and fitness programs, products and services ("Wellness
and Fitness Core") to, J&J Services and its affiliates in the United States (the
"Field"). Each Service Level Agreement will contemplate that HFC will perform
services (the "Services") to J&J Services and/or its affiliates (each entity to
which such Services are provided, a "Service Recipient"). The Services will
include, without limitation, services necessary to implement and manage all of
the health fitness centers of J&J Services and its affiliates (the "Centers")
and will provide to each Service Recipient at least those services provided for
in the service agreement which each Service Recipient currently has in place
with Johnson & Johnson Health Care Systems Inc, which services are described on
the attached Exhibits "I-A" (Wellness and Fitness Core Services - All
Locations), I-B (Wellness and Fitness Core and Additional Services - By Site)
and "I-C" (J&J Site Locations and Services Summary). The terms and conditions
relating to HFC's provision of the Services shall be as set forth in the
applicable Service Level Agreement and in this Agreement, with such Service
Level Agreement controlling to the extent of any conflict between such Service
Level Agreement and this Agreement. In addition, notwithstanding anything to the
contrary in this Agreement or in any Service Level Agreement, HFC shall have the
right, upon the specific written approval of the Service Recipient, to offer
additional programming, products and services in the Field to the employees,
contractors and other agents of the Service Recipients, where the fees for such
programming, products or services are paid directly to HFC by such employees,
contractors or other agents.

1.2      In order to facilitate the provision by HFC of the Services, each
Service Recipient will agree to provide various support services described in
the applicable Service Level Agreements (the "J&J Support"). J&J Services
guaranties that each Service Recipient will perform the J&J Support in a
professionally competent manner, using the standard of care a reasonable person
would use in the provision of the applicable J&J Support service being
performed. In addition, with respect to Services related to Centers, J&J
Services or the applicable Service Recipient shall be responsible for furnishing
to the Center electricity, gas, water, steam, telephone, cleaning services,
extermination services, elevator and boiler maintenance, air conditioning
maintenance, master television antennas, and other necessary utilities or
services. J&J Services or the applicable Service Recipient shall also be
responsible for making or installing such alterations, repairs or

                                     - 66 -

<PAGE>

decorations of the facilities at which the Centers are located as J&J Services
or the applicable Service Recipient deems reasonable or necessary. Each Service
Recipient will provide physical exercise equipment, which HFC will service and
maintain in accordance with the accompanying equipment manuals and instructions.
In addition, each Service Recipient will provide HFC with at least one computer
terminal at each fitness site with access to the Johnson & Johnson computer
network for Fitness Center Tracking.

1.3      J&J Services agrees that, during the term of this Agreement, HFC shall
be the exclusive provider of services in the Field to the extent that those
services are currently being provided by Johnson & Johnson Health Care Systems
Inc. ("Exclusive Services"), and J&J Services shall not, and shall cause its
affiliates not to, do, perform or conduct any Exclusive Services or contract
with any third party other than HFC for the provision of any Exclusive Services.
Notwithstanding the foregoing, but subject to any Service Level Agreement,
neither J&J Services nor any of its affiliates shall be under any obligation to
develop or maintain any Center or contract with HFC for any services to be
performed in the Field.

2.       Fees

2.1      The fees payable to HFC for its provision of Services under a Service
Level Agreement will be set forth in such Service Level Agreement (the "Service
Level Fees"). With respect to Services related to the management of Centers, the
Service Level Fees shall be no less than (i) HFC's "Entire Costs" for providing
such Services, including, but not limited to(A) wages of HFC employees, and
insurance costs (including the insurance noted in Section 7.2) (collectively
referred to as "fixed costs"), and (B) costs for administrative and operating
supplies, telephone calls and facsimile, office and other equipment, maintenance
of office and other equipment, any publications, travel expenses, any applicable
sales tax fees, and any charges for shipping and handling (collectively referred
to as "variable costs"), plus (ii) the percentage of the Entire Costs set forth
opposite the applicable year in which such Entire Cost becomes payable:

<TABLE>
<CAPTION>
Year                                      Percentage of  Entire Costs
<S>                                       <C>
2003                                                 15%

2004                                                 15%

2005                                                 16%

2006                                                 16%
</TABLE>

Notwithstanding the foregoing, HFC's Service Level Fees during the remainder of
calendar year 2003 shall not exceed the total costs currently incurred by J&J
Services for the same services. J&J Services' total projected costs for calendar
year 2003 are $4,923,035. Subsequent increases in Service Level Fees for the
same services shall not

                                     - 67 -

<PAGE>

exceed the increase in the cost of living as reflected in the Consumer Price
Index published by the Bureau of Labor Statistics of the United States
Department of Labor unless they have been first discussed with the Service
Recipient and agreed to in writing.

In addition, HFC and J&J Services agree to develop a performance based
"Risk/Reward" Incentive Plan for HFC to attain on an annual basis. The
parameters for, and the monetary value of, the plan will be jointly developed
and agreed to during the first six months of the contract. Annual review of the
specific parameters for each contract year will be mutually agreed upon during
the fourth quarter of the preceding year.

2.2      From time to time, as agreed to by the parties, HFC shall provide
additional services ("Additional Services") to J&J Services other than the
Wellness and Fitness Core. Services Fees for the Additional Services shall be as
agreed to annually by the parties; provided, however, that no fee for any
Additional Services shall be higher than the lowest fee offered for the same
service to any other customer of HFC ("Additional Fees"). In addition, Service
Level Fees are subject to renegotiation up or down from time to time as
warranted by major increases or decreases in the personnel census and/or level
of services at various Field locations as per Exhibit I-C.

2.3      HFC shall invoice J&J Services monthly for the Service Level Fees and
any Additional Fees (collectively, the "Fees") incurred by J&J Services in the
month prior to such invoice. Fixed fees and variable fees shall be separately
itemized on such invoices. The invoices shall set forth the basis for such Fees
in reasonable detail. All Fees shall be paid by J&J Services to HFC within
forty- five (45) days after the date of the HFC invoice. Amounts invoiced and
not paid within 45 days of receipt shall be subject to monthly interest of
one-half percent (.5%), which shall be added to the Fees due.

3.       Term & Termination

3.1      This Agreement shall remain in effect from the Effective Date and until
December 31, 2006 (the "Termination Date"), unless terminated earlier as
provided in Section 3.2. Following the Termination Date, this Agreement shall
automatically be renewed for successive one year periods unless either party
delivers written notice to the other party at least 90 days prior to the
Termination Date.

3.2      If at any time during the term of this Agreement HFC, on the one hand,
or J&J Services, on the other hand, commits a material breach of this Agreement
and such breach is not cured within sixty (60) days following receipt of written
notice of the breach by the non-breaching party, the non-breaching party shall
have the right (but not the obligation) to terminate this Agreement. The parties
acknowledge that the breach of a Service Level Agreement that is material with
respect to the Services under such Service Level Agreement will not be deemed a
material breach of this Agreement for purposes of this Section 3.2 unless such
breach, together with other then uncured breaches of Service Level Agreements,
in the aggregate are material.

                                     - 68 -

<PAGE>

3.3      It is recognized that HFC has responsibility for the hosting of the
Health Profile program during the entire term of this Agreement. However, if,
after the second anniversary of the date hereof, J&J Services decides that
because of cost or service J&J Services wants to explore other options with
respect to the hosting location of the Health Profile program, HFC and J&J
Services shall negotiate in good faith regarding the transfer of such hosting
location so as to minimize costs and maximize service with respect to the Health
Profile program. Upon the termination of this Agreement, HFC shall, to the
extent not prohibited from doing so, grant J&J Services a non-transferable,
non-exclusive license to use, and shall promptly transfer to J&J Services, all
Health Profile program written materials, employee data and software (including
a license to use the Health Profile portion of Insight +). The scope of such
license shall be solely for the purpose of conducting the Health Profile program
with the employees of Johnson & Johnson and its affiliates.

3.4      Termination of this Agreement shall not affect the rights and
obligations of the parties that have accrued prior to the date of termination.

3.5      J&J Services will not, and will cause its affiliates not to, during the
term of this Agreement and for a period of one (1) year following its
termination, without the prior written consent of HFC, hire any employee or
retain any consultant who was, at any time during the term of this Agreement,
employed or retained by HFC to provide services related in any material respect
to the Services. Notwithstanding the foregoing, either J&J Services or its
affiliates may at any time rehire any of those persons who were employees of
Johnson & Johnson or its affiliates on the date of this Agreement and who are
named on the attached Exhibit "II".

3.6      A waiver of a breach of any provision of this Agreement shall not
constitute a waiver of any subsequent breach of that provision or a breach of
any other provision hereof. Failure of either party to enforce at any time or
from time to time any provision of this Agreement shall not be construed as a
waiver thereof.

4.       Third Party Information

4.1      In order for HFC to render services hereunder it may be necessary for
J&J Services and/or a Service Recipient to disclose to HFC information
concerning or obtained from employees, patients, vendors and other third
parties. J&J Services represents and warrants to HFC that all such information
heretofore and in the future disclosed to HFC in pursuance hereof has been and
will be disclosed in a manner which does not violate the rights of third
parties. With respect to any such information provided to HFC and/or a Service
Recipient, and not improperly disclosed by HFC, J&J Services agrees to indemnify
HFC with respect to a third party's claim that such information was improperly
obtained from such third party or improperly disclosed to HFC.

4.2      HFC shall disclose and use such information in a manner that does not
violate the rights of third parties. HFC agrees on behalf of itself, its
employees, agents and subcontractors to indemnify J&J Services with respect to a
third party's claim that

                                     - 69 -

<PAGE>

such information was improperly disclosed by HFC, or any employee, agent or
subcontractor of HFC, but only to the extent improperly disclosed by HFC.

4.3      HFC shall, if and to the extent required by HIPAA or any other
applicable law, execute and deliver to J&J Services a "business associate" or
other similar agreement in a form so required, and HFC shall thereafter be
subject to the provisions thereof. If HFC and J&J Services disagree about
whether or the extent to which HFC is required by HIPAA or other applicable law
to execute and deliver to J&J Services such a "business associate" or other
similar agreement, HFC and J&J Services shall submit such issue to a
third-party, disinterested expert on HIPAA, whose determination with respect to
such issue shall be final and binding on both HFC and J&J Services. HFC and J&J
Services shall each pay one-half of the costs associated with retaining such
expert.

5.       Intellectual Property and Confidential Information

5.1      All intellectual property used or generated by HFC in the
implementation of this Agreement shall remain the sole property of HFC. During
the term of this Agreement, HFC hereby grants to J&J Services and the applicable
Service Recipient a worldwide, royalty-free (except for the payments described
elsewhere herein), non-exclusive license to use, but not to sell, transfer or
sublicense, such intellectual property insofar as necessary to enable J&J
Services to realize intended benefits of the Services, provided that, this
license does not apply to any trademark, service mark, trade name or corporate
name owned or used by HFC or any of its affiliates.

5.2      J&J Services acknowledges that the programming and operational manuals
prepared by HFC for operation and management of the Centers are copyrighted and
owned by HFC and that HFC's systems and methods of operations for the Centers
are proprietary to HFC (such copyrighted and proprietary information is
hereafter referred to as "HFC Intellectual Property"). J&J Services acknowledges
that HFC is in the business of managing similar centers for third parties and
that HFC utilizes HFC Intellectual Property at such other centers. Upon
termination of this Agreement for any reason, HFC shall retain all rights to and
copies of any materials, documents and media (including computer software)
containing HFC Intellectual Property, and J&J Services agrees that it will not,
and it will cause its affiliates not to, use any of the HFC Intellectual
Property after termination.

5.3      HFC and J&J Services agree to hold in confidence each other's
confidential information in the same manner (but not less than a reasonable
standard of care) that they employ to protect their own confidential information
of like importance. "Confidential Information" includes, but is not limited to,
any and all of either party's product information relating to design,
functionality, pricing, manufacturing, or marketing; the terms and conditions of
any proposed or actual agreement between the parties; either party's business
policies, practices or trade secrets; and the information of others that is
received by either party under an obligation of confidentiality.

                                     - 70 -

<PAGE>

5.4      Notwithstanding the foregoing or anything else herein to the contrary,
HFC shall have the right to disclose to current and potential customers and
other third parties information about HFC's provision of the Services, and the
success thereof, but only to the extent that such information is in the public
domain. HFC may not otherwise use the names, trademarks, or logos of Johnson &
Johnson or any of its affiliates in any public utterance or publication without
the express written permission of J&J Services.

6.       Relationship of Parties

6.1      HFC shall perform the Services in a professionally competent manner,
using the standard of care customary among the providers of health care
management and consulting services in the United States similar to the
applicable Service being performed.

6.2      Neither this Agreement nor the services to be rendered hereunder are
intended for the benefit of third parties, including without limitation any
Service Recipient.

6.3      All services rendered by HFC hereunder are rendered only to J&J
Services (and not to any Service Recipient), and J&J Services is solely
responsible for whether and how such services (and the advice embodied therein)
are used with respect to the Service Recipients and the employees, patients and
other third parties thereof.

6.4      HFC is an independent contractor of J&J Services and not a partner,
agent or joint venturer of J&J Services; and neither party shall hold itself out
contrary to these terms by advertising or otherwise, nor shall either party be
bound by any representation, act or omission whatsoever of the other. J&J
Services and HFC acknowledge that each is solely responsible for all activities
conducted by its respective employees or agents during the term of this
Agreement.

7.       Indemnity; Insurance

7.1      HFC shall indemnify, defend and hold harmless J&J Services and its
affiliates and their directors, officers, and employees("Indemnified Parties") ,
from and against claims by third parties arising out of or based upon the
performance of the Services, except insofar as any such claim arises out of or
is based upon the negligent or willful misconduct of any Indemnified Party. J&J
Services shall indemnify, defend and hold harmless HFC and its affiliates and
their directors, officers, and employees, from and against claims by third
parties arising out of or based upon any action to be taken by J&J Services
hereunder, except insofar as any such claim arises out of or is based upon HFC's
negligent or willful misconduct. The "Indemnified Party" shall give the party
from which indemnification is sought (the "Indemnifying Party") prompt notice of
any claim with respect to which such Indemnified Party seeks indemnification.
The Indemnified Party allow the Indemnifying Party to control the defense and/or
settlement of such claim (except to the extent that such settlement shall
materially adversely affect the Indemnified Party's interest, in which case the
Indemnifying Party shall obtain the Indemnified Party's consent to such
settlement) and shall cooperate to the extent

                                     - 71 -

<PAGE>

reasonable with the Indemnifying Party in all matters related thereto. The
indemnity obligations set forth herein shall survive the termination of this
Agreement.

7.2      At all times during the term of this Agreement, HFC shall maintain,
with financially responsible carriers, the following insurance, which shall not
be cancelable on less than 30 days notice to J&J Services, and under all of
which such insurance except for workers compensation and employers liability
coverage subrogation shall be waived by all applicable carriers, and under all
of which such insurance except workers compensation and employers liability
coverage J&J Services shall be named an additional insured:

i.       Commercial General Liability, including contractual liability coverage,
with a per occurrence limit of not less than $1,000,000, provided that this
requirement may be made either through insurance or self-insurance;

ii.      Worker's Compensation and Occupational Disease coverage as statutorily
required, and Employers Liability coverage with a per occurrence limit of not
less than $500,000;

iii.     Incidental Professional coverage with a per occurrence limit of not
less than $1,000,000.00;

iv.      Automobile Liability coverage, covering all motor vehicles owned,
hired, or used in the performance of this Agreement with a per occurrence limit
of not less than $1,000,000.

8.       Work Environment Policy

It is the policy of HFC and J&J Services to provide a work environment free of
harassment, either physical or verbal, including, but not limited to, sexual,
racial, ethnic, age-related, and other areas prohibited by law. The parties
shall communicate this policy to their respective employees, agents and
representatives.

9.       Notices

Any notice, demand, waiver, consent, approval or other communication given in
connection with this Agreement shall be in writing and shall be deemed given
only if delivered personally or sent by postage prepaid registered or certified
mail (return receipt requested), by recognized overnight courier or by confirmed
facsimile to the address or facsimile number of the recipient as set forth below
or as changed by notice given hereunder. Notices or communications shall be
effective when properly delivered:

if to HFC:                 Health Fitness Corporation
                           3600 West 80th Street
                           Suite 560
                           Minneapolis, MN  55431

                                     - 72 -

<PAGE>

                           Attention:  ________________________
                           Facsimile No:  _____________________

if to J&J Services:        ________________
                           ___________________
                           _____________
                           __________, _____________ _______
                           Attention:  ________________________
                           Facsimile No.:  _____________________

10.      Dispute Resolution

Any controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The arbitration shall be held in New York and the
arbitrator shall apply the substantive law of the State of New York, except that
the interpretation and enforcement of this arbitration provision shall be
governed by the Federal Arbitration Act. The arbitrator shall not award any
party punitive or consequential damages, and each party hereby irrevocably
waives any right to seek such damages in arbitration or in judicial proceedings.
The parties agree to complete all arbitration proceedings within six (6) months
of the initiation of the arbitration.

11.      Change of Law

If any governmental entity shall enact or amend a law or adopt or amend a
regulation, or if any governmental entity or court of competent jurisdiction
shall adopt or amend an interpretation of a law or regulation that has the
effect of (a) prohibiting any right or obligation of a party under this
Agreement, or (b) making any such right materially less valuable or any such
obligation materially more burdensome to a party, then such party may upon
notice to the other party terminate immediately such right or obligation in the
geographical area to which such law, regulation or interpretation applies.

12.      Assignment

This Agreement and the rights and obligations hereunder shall be binding upon
and inure to the benefit of the parties hereto, their respective successors and
assigns, but except as provided below, this Agreement shall not be assignable by
either party without the prior written consent of the other party. Upon written
notice, either party may assign this Agreement to any majority-owned subsidiary
of the party or to any entity that acquires all or substantially all of the
stock or assets of the party.

13.      Force Majeure

                                     - 73 -

<PAGE>

Noncompliance with any obligation under this Agreement for reasons of force
majeure (such as acts, regulations or laws of any government; war or civil
commotion or destruction of production facilities or materials; fire, earthquake
or storm; labor disturbances; failure of public utilities or common carriers;
and any other causes beyond the reasonable control of the party affected) shall
not constitute a breach of this Agreement.

14.      Agreement

14.1     The Section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

14.2     This Agreement may be executed in two counterparts, each of which shall
be deemed to be an original, but all of which shall be deemed to constitute only
one agreement.

14.3     To the extent either of the parties utilizes purchase order and/or
shipping documents in connection with this Agreement which contain any terms
inconsistent with the terms of this Agreement, such inconsistent terms in the
purchase order and/or shipping documents shall not be applicable and the terms
of this Agreement shall govern.

14.4     This Agreement sets forth the entire understanding of the parties
hereto with respect to the subject matter hereof. This Agreement may not
otherwise be amended or modified except by written instrument duly executed by
each party. Any and all previous agreements and understandings, whether written
or oral, between the parties regarding the subject matter of this Agreement are
superseded by this Agreement.

         In Witness Whereof, the parties have caused this Agreement to be
executed by their duly authorized officers as of the Effective Date written
above.

HEALTH FITNESS CORPORATION

By _________________________________
     Printed Name & Title

JOHNSON & JOHNSON SERVICES, INC.

By _________________________________
     Printed Name & Title

                                     - 74 -

<PAGE>

                                  EXHIBIT 13(c)

                                     FORM OF

                       LICENSE AGREEMENT FOR OFFICE SPACE

                  This Agreement is made as of the day of , 2003, by and between
         Johnson & Johnson Health Care Systems Inc., a New Jersey corporation
         having principal offices at 425 Hoes Lane, Piscataway, NJ 08855 (the
         "Company"), and Health Fitness Corporation, a Minnesota corporation
         having principal offices at 3600 West 80th Street, Suite 560,
         Minneapolis, MN 55431 (the "Licensee").

                  WHEREAS, the Company and the Licensee are parties to an Asset
         Purchase Agreement (the "Purchase Agreement") dated as of August
         [_______], 2003 pursuant to which the Company has, on the date hereof,
         sold to the Licensee assets used in the Company's Health & Fitness
         Services business (the "Business"); and

                  WHEREAS, The Purchase Agreement contemplates that the Company
         and the Licensee will enter into a license agreement pursuant to which
         the Licensee will have the right to use certain office space subleased
         by the Company pursuant to that certain Sublease Agreement dated as of
         November 11, 2002 (the "Sublease") by and between the Company and
         Opencom Systems, Inc. ("Sublessor");

                  NOW, THEREFORE, in consideration of the mutual agreements
         expressed herein, and other consideration, the receipt and adequacy of
         which is hereby acknowledged, the parties hereto agree as follows:

         1.       LICENSE.

                           (a) The Company does hereby grant to the Licensee a
                  license to use approximately 1,500 square feet of contiguous
                  office space at 377 Hoes Lane, Piscataway, New Jersey, where
                  the Business is currently located ("the Premises"), which
                  space is more specifically described on Exhibit A attached
                  hereto. Such license shall be irrevocable until the expiration
                  or termination of this Agreement. The Licensee acknowledges
                  and agrees that the Premises are being provided to it "AS IS",
                  and the Company makes no representation or warranty, express
                  or implied, including without limitation, any warranty of
                  habitability, to the Licensee, its customers or any other
                  party, regarding the Premises. The Company also agrees to
                  provide to the Licensee, within the Premises, (a) the office
                  furniture listed on Exhibit B attached hereto (the
                  "Furniture"), (b) the following utilities: ambient heat,
                  ventilation and air conditioning; water; electricity; and
                  telephone (collectively, the "Utilities"), and (c) cleaning
                  services substantially similar to the cleaning services
                  received by the Company with respect to other parts of the
                  building of which the Premises are a part (the "Building").

                           The Licensee's access to the Premises shall be
                  subject to the Licensee's compliance with the security rules
                  of the Company, Sublessor and Piscataway Centre Associates,
                  L.P., as owner of the Building ("Owner").

                           Licensee and its employees, agents and guests shall
                  be entitled to use the Common Areas in common with the Company
                  and any other tenants in the Building, subject to compliance
                  with the rules of Owner, Sublessor and the Company pertaining
                  to such Common Areas. "Common Areas" means all automobile
                  parking areas, pedestrian

<PAGE>

                  sidewalks, entrances and exits to the Building, interior
                  stairways and elevators, hallways, bathrooms, kitchen
                  facilities and other areas and improvements provided by Owner
                  for general use, in common, by the Company and any other
                  tenants of the Building.

                           (b) In exchange for the use of the Premises and the
                  Utilities, the Licensee shall pay to the Company a fee of
                  $3,000 per month (the "License Fee"), which License Fee shall
                  be payable in advance on or before the first business day of
                  each month. In addition to the License Fee, the Licensee shall
                  pay for its own telephone usage charges.

         2.       USE OF THE PREMISES.

                           The Licensee agrees to use the Premises solely for
                  the purpose of conducting the Business in accordance with all
                  applicable laws.

                           The Licensee recognizes that the Building is a modern
                  first class office building and, as a further inducement to
                  the Company to enter into this Agreement, covenants and agrees
                  that the Licensee business to be conducted at, through and
                  from the Premises and the maintenance thereof by the Licensee
                  staff will be in conformity, in all material respects, with
                  the standards of a modern first class office building. The
                  operating and advertising employed in furtherance of the
                  Licensee business will be dignified and in conformity, in all
                  material respects, with the standards of a modern first class
                  office building. The Company acknowledges that Licensee's use
                  of the Premises in a manner substantially similar, in all
                  material respects, to the manner in which the Company used the
                  Premises in its operation of the Business will be deemed to be
                  in conformity with Licensee's obligations under this
                  paragraph.

                           The Licensee specifically represents and covenants
                  that it shall not store any hazardous material, or allow any
                  contamination of the Premises as a result of the Licensee's
                  operation and in the event of any such contamination will be
                  responsible for all costs of remediation or cleanup associated
                  with any contamination caused as a result of the Licensee's
                  use of the Premises.

                           The Licensee shall not make any changes to the
                  Premises, whether they be structural, electrical, or affecting
                  any of the mechanical systems applicable thereto without it
                  first obtaining the prior written consent of the Company.
                  Notwithstanding the foregoing, the Licensee may make minor,
                  reasonable modifications and repairs to the Premises with the
                  prior written consent of the Company, which will not be
                  unreasonably withheld.

                           The Company's employees and agents, and those of
                  Owner and Sublessor, will have access to the Premises as
                  necessary or convenient for purposes of maintaining the
                  security of the Company's facilities, and for purposes of
                  cleaning or maintaining the Premises if the Company has
                  requested or agreed to provide such services. Notwithstanding
                  the foregoing, the Company acknowledges that the Premises may
                  contain cash and/or other financial instruments as well as
                  important and/or sensitive records and other documents, all of
                  which may be secured in safes, strongboxes, cabinets,

<PAGE>

                  drawers or similar containers having their own security
                  systems, locks, codes, etc. The Company acknowledges that the
                  Licensee need not provide the Company with the security codes,
                  lock combinations, keys, etc. to such containers.

                           Licensee agrees that its rights and obligations
                  hereunder shall be subject to the provisions of the Sublease
                  and the Lease dated as of December 29, 1995 between Sublessor
                  and Owner, as amended by a Lease Modification and Extension
                  Agreement dated June 15, 1998 (as so amended, the "Lease") and
                  Owner's written consent, dated October 31, 2002, to the
                  Sublease. Licensee further agrees not to do anything that
                  would constitute a default under the Lease or the Sublease.

         3.       RELATIONSHIP.

                           The relationship between the parties shall be that of
                  licensor and licensee with the Company as the licensor and the
                  Licensee as the licensee.

                           The Company shall exercise no supervision over the
                  Licensee's mode and manner of operation. The Licensee and its
                  employees shall not be deemed to be employees or agents of the
                  Company. It is understood that the Licensee is an independent
                  contractor for all purposes and at all times. It is agreed
                  that nothing contained in this Agreement shall be deemed or
                  construed as creating a partnership, joint venture, or the
                  relationship of landlord and tenant between Johnson & Johnson
                  or the Company and the Licensee.

         4.       TERM AND TERMINATION.

                           This Agreement shall have a term of one year from the
                  date hereof unless earlier terminated as provided below.
                  Notwithstanding the foregoing, this Agreement may be
                  terminated prior to the end of its term (or any renewal or
                  extension thereof) upon the following terms and conditions:

                  a.   With Cause. Either party shall have the right to
                       immediately terminate this Agreement if the other party
                       fails to cure any material defect in the performance of
                       its obligations as set forth in this Agreement within
                       thirty (30) days of written notice thereof.

                  b.   Destruction of Premises. Either the Company or Licensee
                       may terminate this Agreement immediately upon written
                       notice to the other if the Premises are either completely
                       or substantially destroyed and such destruction is not
                       caused by the party seeking to terminate this Agreement.

         The termination of this Agreement shall not affect the responsibility
of the parties for transactions or obligations incurred prior to the termination
of this Agreement.

         5.       INSURANCE.

<PAGE>

                  The Licensee will, at its own cost and expense, obtain and
maintain in full force and effect during the term of this Agreement:

                  a.   Fidelity bond coverage reasonably acceptable to the
                       Company in an amount of not less than $5 million;

                  b.   Worker's compensation insurance in accordance with the
                       statutory requirements of the state of New Jersey;

                  c.   Employer's liability insurance with a minimum limit of
                       $500,000.00;

                  d.   Comprehensive general liability insurance for bodily
                       injury and property damage, including contractual
                       liability and broad form property damage, with limits of
                       at least $5 million combined single limit for personal
                       injury and property damage for each occurrence.

                  The Licensee shall provide insurance certificates to confirm
the foregoing to the Company and shall designate the Company as an additional
insured. All such insurance must be primary and required to respond and pay
prior to any other available coverage. Each insurance policy obtained by the
Licensee pursuant to this section will provide that thirty (30) days prior
written notice of cancellation of, or material change to, the insurance will be
given to the Company.

                  The Licensee and the Licensee's subcontractors shall furnish,
prior to the start of work, certification or adequate proof of the foregoing
insurance, including copies of the endorsements and insurance policies.

                  The Licensee acknowledges that it is familiar with the manner
in which the Company, Sublessor and Owner maintain and secure the Premises and
the facilities within which the Premises are located, and the Licensee hereby
assumes all risks in connection with its use of the Premises, including without
limitation all risk of loss (whether by fire, theft, casualty or otherwise) with
respect to the Licensee's property located therein and within such facilities.
The Licensee further agrees that the Company shall have no liability to the
Licensee for any loss of or damage to such property, and the Licensee shall look
only to its insurer and not to the Company for payment in respect of any such
loss or damage. Notwithstanding the foregoing, this paragraph shall not apply to
the extent that any loss or damage results from the Company's negligence or
willful misconduct; provided that the Company's liability with respect to its
negligence shall be limited to the amount of the License Fee.

         6.       INDEMNIFICATION.

                  The Licensee agrees to indemnify and hold harmless the
Company, its Affiliates and their respective officers, directors, employees and
agents from and against any and all claims, losses, liability or expenses
(including reasonable attorneys' fees and expenses) (collectively, "Losses") to
the extent arising out of, or to the extent resulting from, the Licensee's (a)
breach of any of its obligations under this Agreement, (b) negligence and/or
willful misconduct with respect to its

<PAGE>

performance under this Agreement or (c) occupation of, or acts or omissions on
or about, the Building, including without limitation (i) the conduct or
management of any business, and any work done or condition created, by the
Licensee, its employees, agents or contractors and (ii) all acts and omissions
of the Licensee's employees, agents, contractors or invitees. This paragraph
shall not apply to any Losses to the extent they resulted from the Company's
negligence or willful misconduct.

                  The Company agrees to indemnify and hold harmless the
Licensee, its Affiliates and their respective officers, directors, employees and
agents from and against any and all Losses to the extent arising out of, or to
the extent resulting from, the Company's (a) breach of any of its obligations
under this Agreement, or (b) negligence and/or willful misconduct with respect
to its performance under this Agreement; provided that the Company's indemnity
obligations hereunder shall be limited to the amount of the License Fee, except
to the extent such Losses resulted from the Company's willful misconduct. This
paragraph shall not apply to any Losses to the extent they resulted from the
Licensee's negligence or willful misconduct.

7.       CONFIDENTIALITY.

                  Any confidential information including specifications,
drawings, sketches, product information, samples, data, computer programs,
reports, work, work product, documentation or other technical or business
information ("Confidential Information") furnished or disclosed by either party
(the "Disclosing Party") to the other party (the "Recipient") or to which the
Recipient may have access as a result of the transactions contemplated by this
Agreement is the property of and shall be deemed confidential to the Disclosing
Party, and shall not be copied or distributed by the Recipient and shall be
returned to the Disclosing Party at the expiration or earlier termination of
this Agreement, or shall be destroyed if the Disclosing Party shall so direct in
writing. Unless such Confidential Information was previously known to the
Recipient free of any obligation to keep it confidential, or is subsequently
made public by the Disclosing Party or by a third party having a legal right to
make such disclosure, it shall be held in confidence by the Recipient, shall be
used only for the purposes hereunder, and may be used for other purposes only
upon such terms and conditions as may be mutually agreed upon in writing by the
parties.

8.       ASSIGNMENT.

                  This Agreement may not be assigned by the Licensee, nor may
the Licensee's obligations hereunder be subcontracted or delegated without the
Company's prior written consent, which the Company may withhold in its sole
discretion. Any purported assignment hereof or delegation of services or
assignment of rights by the Licensee under this Agreement without such written
consent shall be void.

                  No legal representative, successor, receiver or trustee of the
Licensee, and no other person, firm or corporation shall acquire or succeed to
the rights of the Licensee in this Agreement or to any rights under this
Agreement, either by purported assignment, operation of law, devolution or
otherwise, except with the prior written consent of the Company, which consent
the Company may withhold in its sole discretion.

<PAGE>

9.       SUBSTITUTE PREMISES.

                  The Company may, at its option and expense, but only once
during the term of this Agreement, elect by sixty (60) days written notice to
the Licensee to substitute for all of the Premises, other office space in a
building owned or leased by the Company within five miles of the Building (the
"Substitute Premises"). The Substitute Premises shall be located in a modern
first class office building and shall be substantially similar to the Premises.
The Licensee shall vacate and surrender the Premises and shall occupy the
Substitute Premises promptly after the Substitute Premises are ready for
occupancy.

10.      MISCELLANEOUS PROVISIONS.

                  a.   Notice. All notifications, letters, and other
                       correspondence issued by a party to the other party
                       hereunder shall be addressed as follows:

                 IF TO THE COMPANY:   Johnson & Johnson Health Care Systems Inc.
                                      425 Hoes Lane
                                      Piscataway, NJ 08855
                                      Attention: David Carberry

                    WITH A COPY TO:   Johnson & Johnson
                                      Office of General Counsel
                                      One Johnson & Johnson Plaza
                                      New Brunswick, NJ 08933
                                      Attention: Michael Coughlin

                IF TO THE LICENSEE:   Health Fitness Corporation
                                      3600 West 80th Street, Suite 560
                                      Minneapolis, MN 55431
                                      Attention: Jerry Noyce

                  b.   Amendments. This Agreement cannot be amended except in a
                       writing executed by both parties.

                  c.   Severability. If any term or provision of this Agreement
                       shall be held invalid or unenforceable, the remaining
                       terms hereof shall not be affected, but shall be valid
                       and enforceable. If any of the terms and provisions of
                       this Agreement are in conflict with any applicable
                       statute or rule of law, then such terms or provisions
                       shall be deemed inoperative to the extent that they
                       conflict therewith and shall be deemed to be modified to
                       conform with such statute or rule of law.

                  d.   Force Majeure. Neither party to this Agreement shall be
                       liable for delays or failure of performance caused by
                       events unforeseeable and beyond its reasonable control.
                       When one party claims excuse under this section, it must
                       give written notice to the other party.

<PAGE>

                  e.   Non-Waiver. The failure of either party at any time to
                       enforce any rights or remedies available to it under this
                       Agreement with respect to any breach or failure by the
                       other party shall not be construed to be a waiver of such
                       right or remedy with respect to any other breach or
                       failure by the other party.

                  f.   Survival of Obligations. The obligations of the parties
                       under this Agreement that by their nature continue beyond
                       the expiration or termination of this Agreement shall
                       survive the expiration or termination of this Agreement.

                  g.   Captions. The captions in this Agreement are included for
                       convenience only and shall not be construed to define or
                       limit any of the provisions contained herein.

                  h.   Interpretation of this Agreement. In the event of any
                       dispute concerning the interpretation of any of the terms
                       and provisions of this Agreement, the fact that this
                       Agreement was drafted by one of the parties shall not be
                       considered.

                  i.   Definitions. All capitalized terms used by not defined
                       herein shall have the respective meanings ascribed to
                       them in the Purchase Agreement.

                  j.   Integration. This Agreement constitutes the entire
                       agreement and understanding between the parties with
                       respect to the subject matter hereof and there are no
                       promises, representations, conditions, provisions or
                       terms related thereto other than those set forth in this
                       Agreement. Accordingly, this Agreement supersedes all
                       previous undertakings, agreements and representations
                       between the parties, written or oral, with respect to the
                       subject matter hereof.

                  k.   Choice of Law/Dispute Resolution. The construction,
                       interpretation and performance of this Agreement shall be
                       governed by the laws of the State of New Jersey
                       applicable to contracts executed and to be performed in
                       that State. All disputes between the parties arising out
                       of or relating to this Agreement or the validity,
                       inducement, or breach thereof shall be resolved pursuant
                       to Section 16(j) of the Purchase Agreement.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be fully executed as of the date first written above:

                                      JOHNSON & JOHNSON HEALTH CARE
                                      SYSTEMS INC.

                                      By:______________________________
                                               David P. Carberry
                                               Vice President, Finance

                                      HEALTH FITNESS CORPORATION

                                      By:______________________________
                                               Jerry V. Noyce
                                               President and CEO<PAGE>
                                                                   EXHIBIT 10.14

                       THIRD AMENDMENT TO LEASE AGREEMENT

         THIS AGREEMENT made this 25th day of August, 2003 between NEOC HOLDINGS
LLC, a Minnesota limited liability company ("Landlord") and HEALTH FITNESS
CORPORATION, a Minnesota corporation, f/k/a "Health Fitness Physical Therapy"
("Tenant").

         WHEREAS, Landlord's predecessor in interest and Tennant did enter into
a certain lease agreement dated June 13, 1996, which lease agreement was amended
on March 1, 2001, and again on June 12, 2002 (as so amended, the "Lease
Agreement"), under the terms of which Tenant is leasing from Landlord Suite 560
containing 8,159 rentable square feet (the "Existing Premises") of the building
at 3600 West 80th Street, Bloomington, MN. The terms defined in the Lease
Agreement shall have the same meanings when used herein; and

         WHEREAS, Tenant has requested to lease additional space on the fifth
(5th) floor of the 3600 Building and Landlord has agreed to such a request, but
only on the terms and conditions hereinafter set forth.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
and conditions contained herein, it is hereby agreed that the Lease Agreement
be, and it hereby is further amended as follows:

         1. Effective on that date (the "Effective Date") when Landlord has
delivered possession of the Expansion Area (as defined below) to Tenant in the
condition required by paragraph 3 below, which date is estimated to be September
1, 2003, there shall be added to the Premises under the Lease Agreement that
area on the fifth (5th) floor of the 3600 Building containing 1,865 rentable
square feet and graphically depicted on Exhibit A attached hereto (the
"Expansion Area"). Beginning on the Effective Date and continuing thereafter for
the remainder of the Term of the Lease Agreement expiring on October 31, 2007,
the Premises under the Lease Agreement shall consist of the Existing Premises
and the Expansion Area together containing 10,024 rentable square feet in the
aggregate.

         2. Until the Effective Date Tenant shall continue to pay Landlord
monthly Minimum Rental of $8,498.96 for the Premises under the Lease Agreement
(i.e., the Existing Premises only). Commencing on the Effective Date ("ED") and
on the first (1st) day of each and every month thereafter for the remainder of
the Term of the Lease Agreement, to and including October 1, 2007, Tenant shall
pay Landlord monthly Minimum Rental for the Premises under the Lease Agreement
(i.e., the Existing Premises and the Expansion Area together) as follows:

<TABLE>
<CAPTION>
Period of Term                                    Annual Rate Per RSF                  Monthly Minimum Rental
--------------                                    -------------------                  ----------------------

FOR THE EXISTING PREMISES:
-------------------------

<S>                                               <C>                                   <C>
ED-10/31/03                                             $12.50                                $8,498.96
11/1/03-10/31/04                                        $12.75                                $8,668.94
11/1/04-10/31/05                                        $13.00                                $8,838.92
11/1/05-10/31/06                                        $13.25                                $9,008.90
11/1/06-10/31/07                                        $13.50                                $9,178.88

FOR THE EXPANSION AREA:
----------------------

ED-10/31/03                                             $11.50                                $1,787.29
11/1/03-10/31/04                                        $11.75                                $1,826.15
11/1/04-10/31/05                                        $12.00                                $1,865.00
11/1/05-10/31/06                                        $12.25                                $1,903.85
11/1/06-10/31/07                                        $12.50                                $1,942.71
</TABLE>

                                       2

<PAGE>

In the event the Effective Date occurs on other than the first (1st) day of the
calendar month, the monthly Minimum Rental and monthly Additional Rental under
Article 6 of the Lease Agreement for the calendar month in which the Effective
Date occurs shall be prorated between the Existing Premises alone and the
Existing Premises and the Expansion Area together.

         3. Plans for permanent improvements to the Expansion Area are attached
hereto as Exhibit B (the "Plans". The Plans have been approved by each of
Landlord and Tenant. The parties acknowledge that the Plans are to modify the
Expansion Area to accommodate Tennant's intended use. Landlord shall be
responsible for constructing the improvements shown on the Plans (the "Tenant
Improvements") for and on behalf of Tenant. Landlord and Tenant have agreed that
the costs of such Tenant Improvements shall be paid by Tenant, although
initially advanced by Landlord and repaid to Landlord as part of Tenant's
payments of monthly Minimum Rental for the Expansion Area as provided above. No
changes shall be made to the Plans or the Tenant Improvements without prior
written approval of both Landlord and Tenant, it being acknowledged and agreed
by Tenant that Landlord may absolutely withhold its approval to any change in
the Plans or the Tenant Improvements that would increase the cost of the Tenant
Improvements unless arrangements satisfactory to Landlord have been made for
Tenant to pay such increase in the costs. Any improvements to the Expansion
Area, other than as shown on the Plans, and the furnishing of the Expansion Area
shall be made by Tenant at its sole cost and expanse, subject to all other
provisions of the Lease Agreement.

         In addition to the Tenant Improvements, if requested to do so in
writing by Tenant on or before September 1, 2005, Landlord, at its cost, shall
remove the wall between the Existing Premises and the Expansion Area and shall
patch, repair and re-paint, as necessary the ceiling and wall surfaces adjoining
such wall.

         4. Except as hereinabove amended, all of the terms, covenants and
conditions of the Lease Agreement shall remain in full force and effect, are
herby ratified and confirmed and shall apply to the Expansion Area, including
the payment of Additional Rental under Article 6 for Real Estate Taxes and
Operation Expenses.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
         of the day and year first above written.

                                           NEOC HOLDINGS LLC

                                           By: /s/ Eva B. Stevens
                                               ---------------------------------
                                           Eva B. Stevens, Vice President --
                                           Investments

                                           HEALTH FITNESS CORPORATION

                                           By: /s/ Jerry Noyce
                                               ---------------------------------
                                           Its:       CEO

                                       2

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