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                      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 William D. Knopf, 
M.D. (the "OPTIONEE").

     A.   The Company has adopted the 1993 Stock Option Plan (the "PLAN") 
authorizing the Board of Directors of the Company, or a committee as provided 
for in the Plan (the Board or such a committee to be referred to as the 
"COMMITTEE"), to grant non-statutory stock options to employees and nonemployee 
consultants and independent contractors of the Company.

     B.   Optionee is a consultant to the Company and has entered into a 
Consulting Agreement with the Company (the "CONSULTING AGREEMENT") dated the 
date hereof, and an Agreement with the Company dated the date hereof (the 
"AGREEMENT") regarding the settlement of certain claims.

     C.   The Company desires to give the Optionee an inducement to acquire a 
proprietary interest in the Company and an added incentive to advance the 
interests of the Company by granting to the Optionee an option to purchase 
shares of common stock of the Company pursuant to the Plan.

     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 Fifty Thousand (50,000) shares (the "OPTION SHARES") 
of the Company's common stock (the "COMMON STOCK"), according to the terms and 
subject to the conditions set forth in this Agreement and the Plan.  The Option 
is not intended to be in a "incentive stock option," as that term is used in 
Section 422 of the Internal Revenue Code of 1986, as amended (the "CODE").

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 the Fair Market Value (as defined in the Plan) on August 
27, 1996.

ARTICLE 3.  DURATION OF OPTION AND TIME OF EXERCISE.

     3.1  INITIAL PERIOD OF EXERCISABILITY.  The Option shall become 
exercisable with respect to the Option Shares in three installments.  The 
following table sets forth the initial dates of exercisability of each 
installment and the number of Option Shares as to which this Option shall 
become exercisable on such dates:


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          Initial Date of                    Number of Option Shares
          Exercisability                     Available for Exercise
          ---------------                    -----------------------

         September 1, 1996                             16,667
         September 1, 1997                             16,667
         September 1, 1998                             16,666

     The foregoing rights to exercise this Option shall be cumulative with 
respect to the Option Shares becoming exercisable on each such date but 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").

     3.2  INITIAL PERIOD OF EXERCISABILITY

     (a)  In the event the Optionee's service with the Company is terminated 
for "Cause" (as defined in the Consulting Agreement) or the Optionee terminates 
his service with the Company prior to September 1, 1998, this Option shall 
remain exercisable to the extent exercisable as of such termination until three 
months after such termination.

     (b)  In the event the Optionee's service with the Company is terminated 
without "Cause" or by death or total disability, this Option shall become 
immediately exercisable in full until the Time of Termination.

     (c)  Notwithstanding anything in this Agreement or the Plan to the 
contrary, in the event that the Optionee materially breaches the terms of any 
confidentiality or non-compete agreement entered into by the Optionee with the 
Company or the Optionee's actions result in a material breach of the terms of 
any confidentiality or non-compete agreement with the Company, whether such 
breach occurs before or after termination of the Optionee's service with the 
Company, the Committee in its sole discretion may immediately terminate all 
rights of the Optionee under this Agreement and the Plan without notice of any 
kind.

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 
representative(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.  Such notice shall be accompanied by payment in full of 
the total purchase price of the Option Shares purchased.  In the event that the 
Option is being


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exercised, as provided by the Plan, by any person or persons other than the 
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 to the extent 
permitted by the Plan, the Committee, in its sole discretion, may 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 the Plan.  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.

     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.


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ARTICLE 5.  NONTRANSFERABILITY.

     Neither this Option nor the Option Shares acquired upon exercise may be 
transferred by the Optionee, either voluntarily or involuntarily, or subjected 
to any lien, directly or indirectly, by operation of law or otherwise, except 
as provided in the Plan.  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.  LIMITATION OF LIABILITY

     Nothing in this Agreement shall be construed to (a) limit in any way the 
right of the Company to terminate the service of the Optionee at any time, or 
(b) be evidence of any agreement or understanding, express or implied, that the 
Company will retain the Optionee in any particular position, at any particular 
rate of compensation or for any particular period of time.

ARTICLE 7.  NO 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 8. 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.


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ARTICLE 9.  SUBJECT TO PLAN.

     The Option and the Option Shares granted and issued pursuant to this 
Agreement have been granted and issued under, and are subject to the terms of, 
the Plan.  The terms of the Plan are incorporated by reference herein in their 
entirety, and the Optionee, by execution hereof, acknowledges having received a 
copy of the Plan.  The provisions of this Agreement shall be interpreted as to 
be consistent with the Plan, and any ambiguities herein shall be interpreted by 
reference to the Plan.  In the event that any provision hereof is inconsistent 
with the terms of the Plan, the terms of the Plan shall prevail.

ARTICLE 10.  MISCELLANEOUS.

     10.1  BINDING EFFECT.  This Agreement shall be binding upon the heirs, 
executors, administrators and successors of the parties hereto.

     10.2  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.

     10.3  ENTIRE AGREEMENT.  This Agreement and the Plan set forth the entire 
agreement and understanding of the parties hereto with respect to the grant and 
exercise of this Option and the administration of the Plan and supersedes all 
prior agreements, arrangements, plans and understandings relating to the grant 
and exercise of this Option and the administration of the Plan.

     10.4  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.

     10.5  RESCISSION OF OPTION.  Notwithstanding any provision in this Option 
Agreement to the contrary, in the event the Optionee delivers a Notice of 
Rescission (a defined in the Settlement Agreement) to the Company, then this 
Option Agreement and the Option and Option Shares shall, upon receipt of the 
Notice of Rescission by the Company, also be deemed to be simultaneously 
rescinded and rendered null and void in all respects.

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

                                   LIFERATE SYSTEMS, INC.

                                   By:/s/ William W. Chorske
                                      --------------------------------------
                                   Its: CEO
                                       -------------------------------------


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                                   OPTIONEE:

[By execution hereof, the               /s/ William D. Knopf, M.D.
Optionee acknowledges having            ------------------------------------
received a copy of the Plan.]           William D. Knopf, M.D.


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