EXHIBIT B
                                                                    To Agreement


                      NON-STATUTORY STOCK OPTION AGREEMENT

         THIS AGREEMENT is effective as of September 1, 1996 (the "Date of
Grant"), by and between LifeRate Systems, Inc. (the "Company") and Donna J.
Edmonds (the "Optionee").

         A. Optionee has entered into an Agreement with the Company dated the
date hereof (the "Agreement") regarding the settlement of certain claims.

         B. The Company desires to advance the interests of the Company by
granting to the Optionee an option to purchase shares of common stock of the
Company.

         Accordingly, the parties hereby agree as follows:


ARTICLE 1.  GRANT OF OPTION.

         The Company hereby grants to the Optionee the right, privilege, and
option (the "Option") to purchase Eighty Thousand (80,000) shares (the "Option
Shares") of the Company's common stock, no par value (the "Common Stock"),
according to the terms and subject to the conditions set forth in this
Agreement.


ARTICLE 2.  OPTION EXERCISE PRICE.

         The per share price to be paid by Optionee in the event of an exercise
of the Option shall be $5.00, which was the closing reported bid price on
September 12, 1996.


ARTICLE 3.  DURATION OF OPTION AND TIME OF EXERCISE.

         3.1 Period of Exercisability. The Option shall be exercisable with
respect to all of the Option Shares from the date hereof and until the Time of
Termination (as defined below).In no event shall this Option be exercisable
after, and this Option shall become void and expire as to all unexercised Option
Shares at, 5:00 p.m. (Minneapolis, Minnesota time) on September 1, 2006 (the
"Time of Termination").


ARTICLE 4.  MANNER OF OPTION EXERCISE.

         4.1 Notice. This Option may be exercised by the Optionee in whole or in
part from time to time, subject to the conditions contained herein, by delivery,
in person or by registered mail, to the Company at its principal executive
office in Edina, Minnesota (Attention: Chief Financial Officer), of a written
notice of exercise. Such notice shall be specify the number of Option Shares
with respect to which the Option is being exercised, and shall be signed by the
Optionee. In the event that the Option is being exercised by any person or
persons other than the Optionee (such as by the Optionee's heir(s) or legal
represenetative(s), in the event of death or disability of Optionee), the notice
shall be accompanied by appropriate proof of right of such person or persons to
exercise the Option. As soon as practicable after the effective exercise of the
Option, the Optionee shall be recorded on the stock transfer books of the
Company as the owner of the Option Shares purchased, and the Company shall
deliver to the Optionee one or more duly issued stock certificates evidencing
such ownership.

         4.2 Payment. At the time of exercise of this Option, the Optionee shall
pay the total purchase price of the Option Shares to be purchased solely in cash
(including a personal check or a certified or bank cashier's check, payable to
the order of the Company; provided, however, that the Company shall allow such
payments to be made, in whole or in part, by delivery of a Broker Exercise
Notice or a promissory note (containing such terms and conditions as the Company
may in its discretion determine), by transfer from the Optionee to the Company
of Previously Acquired Shares, or by a combination thereof. For purposes of this
Agreement, the terms "Broker Exercise Notice" and "Previously Acquired Shares"
shall have the meanings set forth in this Section 4.2.

"Broker Exercise Notice" means a written notice from the Optionee to the Company
at its principal executive office in Edina, Minnesota (Attention: Chief
Financial Officer), made on a form and in the manner as the Company may from
time to time determine, pursuant to which the Optionee irrevocably elects to
exercise all or any portion of the Option and irrevocably directs the Company to
deliver the Optionee's stock certificates to be issued to such Optionee upon
such Option exercise directly to a broker or dealer. A Broker Exercise Notice
must be accompanied by or contain irrevocable instructions to the broker or
dealer (i) to promptly sell a sufficient number of shares of such Common Stock
or to loan the Optionee a sufficient amount of money to pay the exercise price
for the Options and, if not otherwise satisfied by the Optionee, to fund any
related employment and withholding tax obligations due upon such exercise, and
(ii) to promptly remit such sums to the Company upon the broker's or dealer's
receipt of the stock certificates.

"Previously Acquired Shares" means shares of Common Stock that are already owned
by the Optionee and shares of Common Stock that are to be acquired by the
Optionee pursuant to the exercise of an Option. In the event the Optionee is
permitted to pay the total purchase price of this Option in whole or in part
with Previously Acquired Shares, the value of such shares shall be equal to
their Fair Market Value on the date of exercise of this Option.

"Fair Market Value" means, with respect to the Common Stock, the following:

                      (a) If the Common Stock is listed or admitted to unlisted
         trading privileges on any national securities exchange or is not so
         listed or admitted but transactions in the Common Stock are reported on
         the NASDAQ National Market System, the reported closing sale price of
         the Common Stock on such exchange or by the NASDAQ National Market
         System as of such date (or, if no shares were traded on such day, as of
         the next preceding day on which there was such a trade).

                      (b) If the Common Stock is not so listed or admitted to
         unlisted trading privileges or reported on the NASDAQ National Market
         System, and bid and asked prices therefor in the over-the-counter
         market are reported by the NASDAQ System or the National Quotation
         Bureau, Inc. (or any comparable reporting service), the mean of the
         closing bid and asked prices as of such date, as so reported by the
         NASDAQ System, or, if not so reported thereon, as reported by the
         National Quotation Bureau, Inc. (or such comparable reporting service).

                      (c) If the Common Stock is not so listed or admitted to
         unlisted trading privileges, or reported on the NASDAQ National Market
         System, and such bid and asked prices are not so reported, such price
         as the Committee determines in good faith in the exercise of its
         reasonable discretion.

         4.3 Investment Purpose. The Company shall not be required to issue or
deliver any shares of Common Stock under this Option unless (1)(a) such shares
are covered by an effective and current registration statement under the
Securities Act of 1933 and applicable state securities laws or (b) exemptions
from registration under the Securities Act of 1933 and applicable state
securities laws are available for such issuance (as determined by counsel to the
Company) and the Company has received from the Optionee (or, in the event of
death or disability, the Optionee's heir(s) or legal representative(s)) any
representations or agreements requested by the Company in order to permit such
issuance to be made pursuant to such exemptions, and (2) the Company has
obtained any other consent, approval or permit from any state or federal
governmental agency which the Company shall, in its sole discretion upon the
advice of counsel, deem necessary or advisable. In the event that, at the time
of the attempted exercise of this Option, any of these conditions to the
issuance of a certificate for shares of Common Stock have not been satisfied,
such exercise shall be deemed withdrawn and the Company shall return any
payments made with respect thereto unless the Optionee, within 15 days after
being informed of the nonsatisfaction of such conditions, gives the Company
written notice that he or she wants such exercise to remain suspended (in which
event such exercise shall be deemed to be effective on the earliest date upon
which such conditions have been satisfied). Unless a registration statement
under the Securities Act of 1933 is in effect with respect to the issuance or
transfer of Option Shares, each certificate representing any such shares shall
be restricted by the Company as to transfer unless the Company receives an
opinion of counsel satisfactory to the Company to the effect that registration
under the Securities Act of 1933 and applicable state securities laws is not
required with respect to such transfer.


ARTICLE 5.  NONTRANSFERABILITY.

         Other than pursuant to a qualified domestic relations order (as defined
by the Internal Revenue Code of 1986, as amended), no right or interest of the
Optionee in this Option prior to the exercise of such Option shall be assignable
or transferable, or subjected to any lien, during the lifetime of the Optionee,
either voluntarily or involuntarily, directly or indirectly, by operation of law
or otherwise, including execution, levy, garnishment, attachment, pledge,
divorce or bankruptcy. The Optionee shall, however, be entitled to designate a
beneficiary to receive the Option upon such Optionee's death. In the event of
the Optionee's death, such Optionee's rights and interest in the Option shall be
transferable by testamentary will or the laws of descent and distribution, and
exercise of the Option may be made by the Optionee's legal representatives,
heirs or legatees. Any attempt to transfer or encumber this Option other than in
accordance with this Agreement shall be null and void and shall void this
Option.


ARTICLE 6. WITHHOLDING TAXES.

         The Company is entitled to (a) withhold and deduct from future fees
payable to the Optionee (or from other amounts which may be due and owing to the
Optionee from the Company), or make other arrangements for the collection of,
all legally required amounts necessary to satisfy any federal, state or local
withholding and employment-related tax requirements attributable to the grant or
exercise of this Option or otherwise incurred with respect to this Option, or
(b) require the Optionee promptly to remit the amount of such withholding to the
Company before acting on the Optionee's notice of exercise of this Option. In
the event that the Company is unable to withhold such amounts, for whatever
reason, the Optionee hereby agrees to pay to the Company an amount equal to the
amount the Company would otherwise be required to withhold under federal, state
or local law.


ARTICLE 7. ADJUSTMENTS.

         In the event of any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, extraordinary dividend or divestiture
(including a spin-off) or any other change in the corporate structure or shares
of the Company, the Company (or, if the Company is not the surviving corporation
in any such transaction, the board of directors of the surviving corporation),
in order to prevent dilution or enlargement of the rights of the Optionee, shall
make appropriate adjustment (which determination shall be conclusive) as to the
number, kind and exercise price of securities subject to this Option.


ARTICLE 8.  MISCELLANEOUS.

         8.1 Binding Effect. This Agreement shall be binding upon the heirs,
executors, administrators and successors of the parties hereto.

         8.2 Governing Law. This Agreement and all rights and obligations
hereunder shall be construed in accordance with and governed by the laws of the
State of Minnesota.

         8.3 Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the grant and exercise
of this Option and supersedes all prior agreements, arrangements, plans and
understandings relating to the grant and exercise of this Option.

         8.4 Amendment and Waiver. This Agreement may be amended, waived,
modified or canceled only by a written instrument executed by the parties hereto
or, in the case of a waiver, by the party waiving compliance.


         The parties hereto have executed this Agreement effective as of the day
and year first above written.

                                     LIFERATE SYSTEMS, INC.


                                     By: _________________________________

                                     Its: ________________________________



                                     _____________________________________
                                     Donna J. Edmonds