MODIFICATION AGREEMENT

         This Modification Agreement ("Agreement") is made and entered into
effective as of March 25, 1997, by and among LifeRate Systems, Inc., a Minnesota
corporation ("LifeRate"), Anthony Furnary, M.D., a resident of Portland, Oregon
("Furnary"), and APF, LLC an Oregon limited liability company ("APF").

                                    RECITALS

A.       LifeRate, Furnary and APF entered into the "CORIS" Computer Software
         Purchase Agreement, dated July 2, 1995 (the "Prior Agreement").

B.       The parties desire to amend the Prior Agreement as set forth herein and
         to provide for the continuing services of Furnary to LifeRate.

         ACCORDINGLY, the parties hereby agree as follows:

1. Article I. Article I is hereby amended as follows:

         (a) Section 1.3 is amended in its entirety to read as follows:

         1.3 "Gross Billings" means the gross revenues of LifeRate, its
         licensees or any successor or assign related to the Products. Gross
         Billings shall include, without limitation, all revenue derived from
         the Products or any services related to the Products, including all
         revenue derived from the licensing, leasing, renting, or sale of the
         Products or the provision of installation, consulting, maintenance,
         support, customization or development services related to the Products.
         In the case of fees for development services which exceed $500,000 for
         a particular product or group of related products, the parties agree to
         discuss the appropriateness of whether the royalties payable under
         Section 6.1 hereof should apply to less than all of such development
         fees. As of the date of the Modification Agreement, Gross Billings to
         date constitutes the entire gross revenues of the Company (defined as
         "Net Revenues" in the Company's Annual Report on Form 10-KSB). In the
         event LifeRate chooses to sublicense the Products or to distribute the
         Products through independent distributors rather than directly, Gross
         Billings will be the fees paid by the sublicensee or distributor to the
         Company, provided that, for any transactions over a 12-month period
         where the aggregate price to be paid is in excess of $500,000 (a
         "Material Transaction"), the price paid by such sublicensees or
         distributors represents no more than a 40 percent discount from the
         Company's published or standard list price. In the event that with
         respect to any Material Transaction, the actual discount granted is
         greater than 40 percent, Gross Billings shall be calculated as though
         the discount were 40 percent.

         (b) A new Section 1.4 is added as follows:

         1.4 "LifeRate System" shall mean the LifeRate system, including all
         current components of the LifeRate system (identified on Exhibit A
         hereto), all extensions of the current system (or the use of specific
         methodologies embodied in the current system) into other medical
         practice areas which extensions or methodologies are developed during
         the term of this Agreement and all upgrades and modifications thereto.

2. Article III of Prior Agreement. Article III of the Prior Agreement is hereby
deleted in its entirety, and none of the parties shall have any further
obligations thereunder.

3. Article IV of Prior Agreement. Since the Effective Date, LifeRate
acknowledges that Furnary has functioned as a primary system architect and has
directed the clinical design of the LifeRate system, including co-design of the
database structure, co-invention of the inventions claimed in the patent
application entitled "System for Multistate Display Representation of
Conditions" and in the patent application currently being prepared concerning
"flexidate technology," and other data entry software tools incorporated in the
Products. Accordingly, Article IV of the Prior Agreement is hereby amended by
adding Section 4.3 at the end thereof:

         4.3 Other Intellectual Property Rights. Furnary and APF acknowledge and
         agree, that except as expressly set forth in this Agreement, neither
         Furnary nor APF has any right, title or interest in any intellectual
         property rights related to the Products or the LifeRate System,
         including, but not limited to, any inventions, copyrights, trade
         secrets, trademarks or confidential information embodied in source code
         or object code, regardless of whether or not Furnary or APF or any of
         its employees or agents, conceived, developed or reduced to practice
         any such intellectual property rights ("Intellectual Property Rights").
         Furnary and APF hereby assign all of their right, title and interest in
         and to any Intellectual Property Rights to LifeRate. To the extent that
         any Intellectual Property Rights qualify as "work made for hire" as
         defined in 17 U.S.C. Section 101 (1976), as amended, such any
         Intellectual Property Rights shall constitute "work made for hire" and,
         as such, shall be the exclusive property of LifeRate.

4. Article VI of Prior Agreement. Article VI of the Prior Agreement is hereby
amended in its entirety as follows:

         6.1 Royalties.

         (a) Royalty Payments to APF. In consideration of the sale of CORIS to
         LifeRate, LifeRate shall pay to APF, its successors or assigns, a
         royalty equal to: (i) Seven and Five/Tenths Percent (7.5%) of Gross
         Billings from the date of the first licensing or sale of any of the
         Products (which the parties acknowledge to be the licensing of the
         Products to Atlanta Cardiology Group in January 1995) through March 31,
         1997, after which date no royalties shall become owing to APF under
         this Prior Agreement or under this Modification Agreement until the
         following clauses become applicable; (ii) Three Percent (3.0%) of Gross
         Billings received after the earlier of (a) January 1, 1999 or (b) the
         date LifeRate achieves Cumulative Revenues (as defined below) of Twenty
         Million Dollars ($20,000,000), and such royalty rate shall continue
         until LifeRate achieves Cumulative Revenues of One Hundred Million
         Dollars ($100,000,000); and (iii) Three and Six/Tenths Percent (3.6%)
         of Gross Billings in excess of One Hundred Million Dollars
         ($100,000,000).

         (b) LifeRate shall pay the royalties due to APF for the preceding
         calendar quarter, within thirty (30) days after the last day of each
         calendar quarter.

         (c) "Cumulative Revenues" means the gross revenues of LifeRate
         calculated on a cumulative basis since its inception as a company, as
         reported on LifeRate's publicly available financial statements
         (identified therein as "net revenues"). For the year ended December 31,
         1996, the Company's gross revenues, as reported in the Company's Annual
         Report on Form 10-KSB for the year ended December 31, 1996, were
         $615,585, Cumulative Revenues through December 31, 1996 were
         $1,190,300.

         (d) Foreign Currencies. The royalty on sales in currencies other than
         U.S. Dollars shall be calculated using the appropriate foreign exchange
         rate for such currency quoted by the Bank of America (San Francisco)
         foreign exchange desk, on the close of business on the last banking day
         of each calendar quarter. Royalty payments to APF shall be in U.S.
         Dollars. All non-U.S. taxes related to royalty payments shall be paid
         by LifeRate and are not deductible from the payments due APF.

         (e) Revenue in Kind. Gross Billings include consideration or value of
         any kind whatsoever. If revenue is paid in a form other than cash, the
         non-cash consideration shall be accounted for at fair value.

         6.2 Milestone Royalty Payments. In consideration of the sale of CORIS
         to LifeRate, LifeRate shall pay APF milestone royalties as follows: (i)
         One Hundred Thousand Dollars ($100,000) within five (5) business days
         of the completion by LifeRate of its next round of financing involving
         the sale of its equity securities raising gross proceeds to LifeRate of
         at least Five Million Dollars ($5,000,000), provided that if LifeRate
         does not successfully complete such financing by June 30, 1997, the
         parties shall mutually agree upon a method to provide to APF the net
         present value of One Hundred Thousand Dollars ($100,000); (ii) One
         Hundred Fifty Thousand Dollars ($150,000) within forty-five (45) days
         of the end of the calendar quarter in which LifeRate first achieves
         cumulative Gross Billings of more than Twenty Million Dollars
         ($20,000,000); and (ii) Two Hundred Thousand Dollars ($200,000) within
         forty-five (45) days of the end of the calendar quarter in which
         LifeRate first achieves cumulative Gross Billings of more than Fifty
         Million Dollars ($50,000,000). If LifeRate does not achieve the
         cumulative Gross Billings as set forth in clauses (ii) and (iii) of the
         foregoing sentence, LifeRate shall have no obligation to make such
         milestone royalty payments.

         6.3 Records. LifeRate shall maintain accurate records of all billings
         and sales related to the Products. LifeRate shall submit to APF, within
         45 days after the end of each calendar quarter, a clearly itemized
         statement setting forth: the identity of each end-user customer from
         which Gross Billings were received during each quarter, the amount of
         Gross Billings received from such customer during such quarter, and the
         royalty due on the aggregate gross billings for such quarter, and the
         calculations upon which such royalty was based. A statement setting
         forth such information for such quarter through December 31, 1996 is
         attached as Schedule 2. LifeRate shall permit APF and its agents, upon
         reasonable advance notice, to inspect, audit and analyze all of
         LifeRate's records related to the Products or to Gross Billings.

         6.4 Duration of Royalty. The parties acknowledge and agree that APF
         shall continue to receive royalty payments as set forth herein,
         notwithstanding: (i) the Products become public information; (ii) any
         of the Products are sold, assigned or otherwise transferred by LifeRate
         to a third party; or (iii) the death of Furnary.

         6.5 Right of First Refusal. Upon receipt by LifeRate of a bona fide
         offer to purchase any of the CORIS(TM) and CORIS(TM) Related Items,
         LifeRate shall provide written notice to APF of the receipt and terms
         of such offer. For a period of thirty (30) days after receipt of such
         notice, APF shall have the option to purchase the products identified
         in the notice on the terms stated in the offer. Such option must be
         exercised in writing. In the event of a timely exercise of APF's option
         rights hereunder, the purchase of the Product(s) by APF shall be closed
         within sixty (60) days after the date the option is exercised. If APF
         fails to exercise its option as to any bona fide offer, LifeRate may
         proceed to sell the Product(s) identified in the offer to the offeror
         on the terms specified in the original offer. APF's failure to exercise
         its option rights as to any bona fide offer will not effect its option
         rights as to any Products not sold pursuant to the provisions of this
         paragraph.

         6.7 Prior Stock Option. On the Effective Date, LifeRate granted to APF
         the non-qualified right and option to purchase (the "Option") up to
         Twenty-Six Thousand (26,000) common shares of LifeRate, subject and
         pursuant ot the terms and provisions of the Stock Option Agreement,
         attached hereto as Exhibit B and incorporated in this Agreement by
         reference. LifeRate agrees to amend the Option and the Stock Option
         Agreement to provide that the exercise price of such options shall be
         $2 5/8 per share. Except as set forth herein, such prior option shall
         remain in effect in accordance with its terms.

         6.8 Buy-Out of Royalties. LifeRate may notify APF at any time during
         the term of the Consulting Agreement of LifeRate's interest in
         converting a portion or all royalties and milestone payments payable
         under this Agreement to a fully paid-up status by making a lump-sum
         payment to APF. Within a reasonable period of time thereafter, LifeRate
         and APF agree to enter into discussions concerning the amount of such
         lump-sum payment and the nature of the consideration such payment might
         take, including LifeRate stock or rights to acquire stock. If LifeRate
         and APF are able to reach a mutual agreement on all aspects of such
         lump-sum payment, then all royalties and other payments payable to APF
         hereunder shall terminate on the payment of such lump-sum. LifeRate
         agrees to pay all out-of-pocket expenses, including all professional
         fees, of APF incurred in connection with any such discussions,
         regardless of whether the parties reach mutual agreement concerning a
         buy-out. Nothing in this Section 6.8 shall be construed to imply that
         either party shall have a duty or obligation to modify the terms of
         this Agreement, and each party expressly reserves the sole discretion
         to determine whether any such modification is acceptable to such party
         and the failure of the parties to reach mutual agreement shall be not
         deemed a breach of this Agreement. Until any such mutual agreement is
         reached, if ever, this Agreement shall remain in full force and effect.

5. Section 10.1 of Prior Agreement. Section 10.1 of the Prior Agreement is
hereby amended by adding the following at the end of the section:

         Notwithstanding the foregoing, the parties acknowledge that it will be
         impossible to measure the damages that would be suffered upon any
         breach of Article 4 and Section 6.5 of this Agreement and that in the
         event of any such failure, there shall not exist an adequate remedy at
         law. Either party shall, therefore, be entitled to obtain specific
         performance of the other party's obligations under Article 4 and
         Section 6.5 and to obtain immediate injunctive relief. Such other party
         shall not urge, as a defense to any proceeding for such specific
         performance or injunctive relief, that there exists an adequate remedy
         at law.

6. Definitions. All terms used in this Agreement in initial letters which are
not otherwise defined herein shall have the meanings set forth in the Prior
Agreement.

7. Effective Date. The amendments to the Prior Agreement as set forth herein
shall be effective as of the effective date of this Agreement.

8. No Other Amendment. Except as specifically set forth herein, the Prior
Agreement shall remain in full force and effect in accordance with its terms.

9. Counterparts. This Agreement may be executed in one or more counterparts each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

10. Governing Law. This Agreement shall be governed by the laws of the state of
Minnesota.

11. Entire Agreement. This Agreement, the Consulting Agreement and the Warrant
and the Prior Agreement, as amended hereby, including the exhibits thereto
constitute the entire agreement among the parties with respect to the matters
contemplated by such agreements, and supersede any and all other written or oral
promises or representations regarding such subject matter.

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

                                          LIFERATE SYSTEMS, INC.

                                          By___________________________________

                                          Its__________________________________


                                          _____________________________________
                                          ANTHONY FURNARY, M.D.



                                          APF, LLC

                                          By___________________________________

                                          Its__________________________________