Document:

Prepared by MERRILL CORPORATION

Exhibit

10.9

08/24/01

 

 

RURAL CELLULAR CORPORATION

RETENTION BONUS AND

SEVERANCE BENEFIT PLAN

2001

 

 

 

TABLE OF CONTENTS

 

	

  ARTICLE

  I PURPOSE

  	

   

  
	

   

  	

   

  
	

  ARTICLE

  II DEFINITIONS

  	

   

  
	

   

  	

   

  
	

  2.1

  	

  Administrator.

  
	

  2.2

  	

  Affiliated

  Organization.

  
	

  2.3

  	

  Base Pay.

  
	

  2.4

  	

  Closing Date.

  
	

  2.5

  	

  Code.

  
	

  2.6

  	

  Company.

  
	

  2.7

  	

  Definitive

  Agreement.

  
	

  2.8

  	

  Effective Date.

  
	

  2.9

  	

  Employee.

  
	

  2.10

  	

  Employer.

  
	

  2.11

  	

  ERISA.

  
	

  2.12

  	

  Excise Tax.

  
	

  2.13

  	

  Good Reason.

  
	

  2.14

  	

  Highest

  Marginal Tax Rate.

  
	

  2.15

  	

  Just Cause.

  
	

  2.16

  	

  Officer.

  
	

  2.17

  	

  Parachute

  Payment.

  
	

  2.18

  	

  Participant.

  
	

  2.19

  	

  Plan.

  
	

  2.20

  	

  Plan Year.

  
	

  2.21

  	

  Sale or Merger.

  
	

  2.22

  	

  Unexercised

  Stock Option.

  
	

   

  	

   

  
	

  ARTICLE III BONUSES

  	

   

  
	

   

  	

   

  
	

  3.1

  	

  Bonus Pool.

  
	

  3.2

  	

  Completion

  Bonuses.

  
	

  3.3

  	

  Discretionary Stay

  in Place Bonuses.

  
	

  3.4

  	

  Non-Discretionary

  Stay in Place Bonuses.

  
	

   

  	

   

  
	

  ARTICLE

  IV SEVERANCE BENEFITS

  	

   

  
	

   

  	

   

  
	

  4.1

  	

  Severance Pay.

  
	

  4.2

  	

  Stock

  Option Adjustment.

  
	

   

  	

   

  
	

  ARTICLE

  V CLAIMS FOR BENEFITS

  	

   

  
	

   

  	

   

  
	

  5.1

  	

  Claims

  Procedure.

  
	

  5.2

  	

  Appeals.

  
	

   

  	

   

  
	

  ARTICLE

  VI ADMINISTRATION

  	

   

  
	

   

  	

   

  
	

  6.1

  	

  Administrator.

  
	

  6.2

  	

  Administrator’s Discretion.

  
	

  6.3

  	

  Retention

  of Services.

  
	

   

  	

   

  
	

  ARTICLE VII LIMITATIONS AND LIABILITIES

  	

   

  
	

   

  	

   

  
	

  7.1

  	

  No Guarantee of Employment.

  
	

  7.2

  	

  No

  Alienation of Benefits.

  
	

  7.3

  	

  Reliance on

  Others.

  
	

  7.4

  	

  Indemnification.

  
	

   

  	

   

  
	

  ARTICLE VIII FUNDING

  	

   

  
	

   

  	

   

  
	

  8.1

  	

  No Obligation to Fund

  Benefits.

  
	

  8.2

  	

  Insured

  Benefits.

  
	

  8.3

  	

  Benefits Funded Through

  a Trust.

  
	

  8.4

  	

  Other Benefits.

  
	

   

  	

   

  
	

  ARTICLE

  IX AMENDMENT AND TERMINATION

  	

   

  
	

   

  	

   

  
	

  9.1

  	

  Amendments.

  
	

  9.2

  	

  Termination.

  
	

   

  	

   

  
	

  ARTICLE

  X GENERAL PROVISIONS

  	

   

  
	

   

  	

   

  
	

  10.1

  	

  ERISA

  Requirements.

  
	

  10.2

  	

  Applicable Law.

  
	

  10.3

  	

  No

  Waiver or Estoppel.

  
	

  10.4

  	

  Overpayments.

  
	

  10.5

  	

  Successors.

  
	

  10.6

  	

  Legal Actions.

  
			

 

 

ARTICLE I

PURPOSE

In anticipation of the

sale or merger of Rural Cellular Corporation, a Minnesota corporation (the

“Company”), the Board of Directors of the Company wishes to provide incentives

to its employees to remain with the Company and perform tasks and activities

necessary to produce operating and financial results that are satisfactory to

the new owners, to complete the transaction and transfer ownership and

operations to the new owners at closing, and to provide services to the new

owners for a reasonable period after closing. 

The Board of Directors of the Company also wishes to provide for

payments to loyal employees who lose their jobs due to new ownership.  To accomplish these purposes, the Company

has adopted this Plan.

ARTICLE

II

DEFINITIONS

Where the following words

and phrases appear in this Plan, they shall have the respective meanings set

forth below, unless otherwise specifically provided:

                2.1           Administrator. 

The “Administrator” is a committee consisting of the persons from time

to time serving as the Chief Executive Officer, Chief Financial Officer, and

Chief Operating Officer of the Company.

                2.2           Affiliated Organization.  A

corporation, partnership or other entity that, prior to a Sale or Merger,

controls, is controlled by or is under common control with the Company.

                2.3           Base

Pay. 

An Employee’s regular rate of pay (excluding overtime, bonuses and

incentive pay) at the time a Definitive Agreement is signed or, if later, at

the time the Employee is first employed by an Employer.

                2.4           Closing Date.  The date

established pursuant to a Definitive Agreement for the closing of a Sale or

Merger.

                2.5           Code.  The

Internal Revenue Code of 1986, as from time to time amended.

                2.6           Company. 

Rural Cellular Corporation, a Minnesota corporation, and any successor

thereto.

                2.7           Definitive Agreement.  A written agreement that is legally binding

on the parties, that sets forth all of the terms and conditions of a Sale or

Merger, and that requires the parties to consummate the Sale or Merger subject

only to the accomplishment of conditions precedent that are customary in

similar transactions.  A “letter of

intent” or similar document requiring subsequent, more detailed agreements is

not a Definitive Agreement.

                2.8           Effective Date. 

The provisions of the Plan other than Section 4.1 hereof, are effective

as of July 24, 2001.  Section 4.1 of the

Plan shall become effective on the date a Definitive Agreement is signed.

                2.9           Employee.  An individual who performs services as a

common-law employee for an Employer, and who has not acknowledged or agreed

that he or she is an independent contractor or that he or she is ineligible for

participation in the Plan.  An

individual’s status as an Employee for any period shall be determined solely on

the basis of the Employer’s classifications, and the Employee’s

acknowledgements and agreements, in effect during such period.  The classification or reclassification of a

person as an employee of an Employer for any period by any court, government

agency or other entity shall not result in the classification or

reclassification of such person as an Employee for such period for the purposes

of this Plan.

                2.10         Employer. 

The Company, and any Affiliated Organization that has been designated by

the Administrator as an Employer.

                2.11         ERISA. 

The Employee Retirement Income Security Act of 1974, as from time to

time amended.

                2.12         Excise Tax.  The excise

tax imposed by Section 4999 of the Code, together with any interest or

penalties incurred by an Employee with respect to such excise tax.

                2.13         Good Reason.  The occurrence, with

respect to an Officer, of any of the following events that have not been

consented to in advance by the Officer in writing:

(a)           If the Officer is employed at the

Company’s principal executive offices at the time of a Sale or Merger, a

relocation of such principal executive offices to a location more than 50 miles

from such location, or a requirement that the Officer be based anywhere other

than the Company’s principal executive offices.

(b)           If the Officer is not employed at the

Company’s principal executive offices at the time of a Sale or Merger, the

Officer’s relocation to any place other than the location at which the Officer

principally performed his or her duties prior to the Closing Date of the Sale

or Merger.

(c)           Required travel by the Officer on the

Company’s business to an extent substantially greater than the Officer’s

business travel obligations on the Closing Date of the Sale or Merger.

(d)           A failure by the Company to maintain

the Officer’s base compensation in effect on the Closing Date of the Sale or

Merger and the existing material fringe benefit, stock option, performance

incentive and employee benefit plans (other than stock based plans).

(e)           An assignment to the Officer of

duties and responsibilities other than those normally associated with the

highest position held by the Officer during the 12-month period immediately

preceding the Closing Date of the Sale or Merger.

(f)            A material diminution or reduction

of the Officer’s responsibilities or authority.

(g)           A failure by the Company to comply

with the requirements of Section 10.5(a) hereof.

                2.14         Highest

Marginal Tax Rate. 

The highest marginal rate of federal individual income tax, plus the

highest marginal rates of state, local and/or foreign individual income taxes

in the state and locality or foreign jurisdiction of an Officer’s residence

(net of the reduction in federal income taxes which could be obtained from any

deduction or credit attributable to the state, local or foreign taxes), that

are in effect for the calendar year in which a Gross-Up Payment is to be made

pursuant to Section 3.2(e).

                2.15         Just Cause.  “Just

Cause” means:

(a)           an Employee’s conviction of a felony;

or

(b)           an Employee’s intentionally engaging

in conduct that is demonstrably and materially injurious to the Company,

monetarily or otherwise.

No

act or failure to act on an Employee’s part shall be considered “intentional”

unless the Employee has acted or failed to act with an absence of good faith

and without a reasonable belief that the Employee’s action or failure to act

was in the best interest of the Company.

                2.16         Officer.  Any Vice President of the Company.

                2.17         Parachute Payment.  A parachute payment as defined in Section

280G(b)(2) of the Code.

                2.18         Participant. 

An individual who becomes an Employee prior to the Closing Date and who

is eligible for a bonus or severance benefit, subject only to the occurrence of

the events for which the bonus or severance benefit is provided.

                2.19         Plan. 

The Rural Cellular Corporation Retention Bonus and Severance Benefit

Plan, as set forth herein, and as from time to time amended.

                2.20         Plan Year. 

A period beginning on the Effective Date or any subsequent January 1 and

ending on the succeeding December 31.

                2.21         Sale

or Merger.

(a)           The acquisition of 85% or more of the

outstanding voting stock of the Company by any person (other than the Company,

or any subsidiary or parent of the Company, or an employee benefit plan of the

Company or any subsidiary or parent of the Company) or group of persons acting

in concert, whether by purchase, merger, exchange of shares or otherwise; or

(b)           A sale or other disposition of 85% or

more of the assets of the Company (based on the value of such assets as most

recently determined for the purposes of the Company’s audited financial

statements).

                2.22         Unexercised Stock Option.  A stock option granted to a Participant

under the Rural Cellular Corporation 1995 Stock Compensation Plan, or a stock

option issued as a replacement or in substitution for any such stock option, to

the extent such stock option has neither expired nor been exercised on the day

preceding the date on which the Participant’s employment with an Employer

terminates.

When words are used

herein in the singular form, they shall be construed as though they were also

used in the plural form in all cases where they would so apply.  Headings of sections and subsections of this

Plan are inserted for convenience of reference, are not part of this Plan, and

are not to be considered in the construction hereof.  The words “hereof,” “herein,” “hereunder,” and other similar

compounds of the word “here” shall mean and refer to the entire Plan, and not

to any particular provision or section.

ARTICLE

III

BONUSES

                3.1           Bonus Pool.

(a)           An aggregate of $1,200,000 shall be

available for the payment of “Completion Bonuses” and “Discretionary Stay in

Place Bonuses” pursuant to Sections 3.2 and 3.3.  If the aggregate amount of Completion Bonuses and Discretionary

Stay in Place Bonuses awarded pursuant to Sections 3.2 and 3.3 exceeds

$1,200,000, each such bonus shall be reduced pro rata until the aggregate

amount of the bonuses so awarded equals $1,200,000.

(b)           The amount of any Completion or

Discretionary Stay in Place Bonus that is

forfeited for any reason prior to the Closing Date shall be available for the

granting of new or additional Completion or Discretionary Stay in Place

Bonuses.

                3.2           Completion Bonuses.

(a)           The right to receive a Completion

Bonus may be awarded to any Employee who is or becomes an Officer on or after

the Effective Date and prior to the Closing

Date.  The amount of the Completion

Bonus (if any) that is awarded to an Officer shall be determined by the

Administrator, in its sole and exclusive discretion.  The Administrator’s determinations need not be uniform and may be

made by it selectively among eligible Officers.

(b)           A

Completion Bonus awarded pursuant to this Section 3.2 shall become payable if:

(i)            a Definitive Agreement is signed

prior to July 1, 2002;

(ii)           the recipient is an Officer on the

date the Definitive Agreement is signed (if the Completion Bonus is awarded

prior to such date); and

(iii)          a Closing Date occurs under the terms

of the Definitive Agreement;

but only to the extent

the recipient is employed on the payment dates provided for in paragraph (c)

below.  A Completion Bonus (or any

portion thereof) that does not become payable pursuant to this paragraph (b)

shall be forfeited.

(c)           A Completion Bonus that becomes

payable to an Officer pursuant to paragraph (b) shall be paid as follows:

(i)            one-third of the Completion Bonus

shall be paid on the 90th day immediately following the Closing Date, if the

Officer is an Employee on such date;

(ii)           one-third of the Completion Bonus

shall be paid on the first anniversary of the Closing Date, if the Officer is

an Employee on such date; and

(iii)          one-third of the Completion Bonus

shall be paid on the second anniversary of the Closing Date, if the Officer is

an Employee on such date;

provided, that if the Officer’s employment is terminated by an

Employer without Just Cause on or after the date on which a Definitive

Agreement is signed, or by the Officer for Good Reason on or after the Closing

Date, the unpaid amount of the Completion Bonus shall be paid to the Officer

within ten business days following the later of the Closing Date or the date of

the Officer’s termination of employment.

(d)           If, when added to the payments or

benefits due an Officer under any other plan or program of an Employer, a

Completion Bonus would be subject to an Excise Tax, and if the amount of the

Officer’s Parachute Payments taken into account for the purposes of such Excise

Tax does not exceed 330% of the Officer’s Base Amount, then the payments or

benefits which are subject to the Excise Tax shall be adjusted until the amount

of such Parachute Payments equals 299% of the Officer’s Base Amount.  The adjustments shall be made in such

manner, and to such payments or other benefits, as the Officer and the Company

shall mutually agree.

(e)           If, when added to the payments or

benefits due an Officer under any other plan or program of an Employer, a

Completion Bonus would be subject to the Excise Tax, and if the amount of the

Officer’s Parachute Payments taken into account for the purposes of such Excise

Tax exceeds 330% of the Officer’s Base Amount, the Company shall pay to the

Officer an additional amount (the “Gross-Up Payment”) so that the net amount that

is retained by the Officer, after the deduction of the Excise Tax and any other

taxes (including Excise Taxes) that are imposed on the Gross-Up Payment, is

equal to the payments and other benefits the Officer would have retained in the

absence of the Excise Tax.  For the

purpose of calculating the Gross-Up Payment, the Officer’s individual income

tax rate will be deemed to be the Highest Marginal Tax Rate.

(f)            An initial determination as to whether a

Gross-Up Payment is required pursuant to this Agreement and the amount of such

Gross-Up Payment shall be made at the Company’s expense by an accounting firm

selected by the Company and reasonably acceptable to the Officer which is

designated as one of the five largest accounting firms in the United States (the

“Accounting Firm”).  The Accounting Firm

shall provide its determination (the “Determination”), together with detailed

supporting calculations and documentation, to the Company and the Officer at

such time as may be requested by the Company or the Officer (provided the

Officer reasonably believes that [s]he may be subject to the Excise Tax).  If the Accounting Firm determines that no

Excise Tax is payable by the Officer, it shall furnish the Officer with an

opinion to that effect which is reasonably acceptable to the Officer.  Within ten days of the delivery of the

Determination to the Officer, the Officer shall have the right to dispute the

Determination (the “Dispute”).  The Gross-Up

Payment, if any, as determined pursuant to paragraph (e), shall be paid by the

Company to the Officer within five days of the receipt of the

Determination.  The existence of the

Dispute shall not in any way affect the Officer’s right to receive the Gross-Up

Payment in accordance with the Determination. 

Upon the final resolution of a Dispute, the Company shall promptly pay

to the Officer any additional amount required by such resolution or, if it is

determined that the Excise Tax is lower than originally determined, the Officer

shall repay to the Company the excess amount of the Gross-Up Payment.  If there is no Dispute, the Determination

shall be binding, final and conclusive upon the Company and the Officer subject

to the application of paragraph (g) below.

(g)           Notwithstanding anything herein to the

contrary:

(i)            In the event that, according to the Determination, an

Excise Tax will be imposed on any payment or benefit, the Company shall pay to

the applicable government taxing authorities as Excise Tax withholding, the

amount of the Excise Tax that the Company has actually withheld from the

payment or benefit.

(ii)           A Gross-Up Payment shall not be

payable to an Officer under this Plan to the extent the Officer is entitled to

a similar payment under any other plan of, or agreement with, an Employer that

takes the Officer’s Completion Bonus under this Plan into account in

determining the amount of such payment.

(h)           A Completion Bonus shall not reduce

any severance pay or benefits to which an Officer may otherwise become

entitled.

                3.3           Discretionary

Stay in Place Bonuses.

(a)           The right to receive a Discretionary

Stay in Place Bonus may be awarded to any Employee (other than the Chief

Executive Officer, Chief Financial Officer or Chief Operating Officer of the

Company) who is not an Officer.  The amount of the Discretionary Stay

in Place Bonus (if any) that is awarded to

any Employee shall be determined by the Administrator, in its sole and

exclusive discretion.  The

Administrator’s determinations need not be uniform and may be made by it

selectively among eligible Employees.

(b)           A

Discretionary Stay in Place Bonus

awarded pursuant to this Section 3.3 shall become payable if:

(i)            a Definitive Agreement is signed

prior to July 1, 2002;

(ii)           the recipient is an Employee on the

date the Definitive Agreement is signed (if the Discretionary Stay in Place

Bonus is awarded prior to such date); and

(iii)          a Closing Date occurs under the terms

of the Definitive Agreement;

but only to the extent

the recipient is employed on the payment dates provided for in paragraph (c)

below.  A Discretionary Stay in Place

Bonus (or any portion thereof) that does not become payable pursuant to this

paragraph (b) shall be forfeited.

(c)           A Discretionary Stay in Place Bonus

that has become payable pursuant to paragraph (b) shall be paid as follows:

(i)            one-third of the Discretionary Stay

in Place Bonus shall be paid on the 90th day immediately following the Closing

Date, if the recipient is an Employee on such date;

(ii)           one-third of the Discretionary Stay

in Place Bonus shall be paid on the first anniversary of the Closing Date, if

the recipient is an Employee on such date; and

(iii)          one-third of the Discretionary Stay in

Place Bonus shall be paid on the second anniversary of the Closing Date, if the

recipient is an Employee on such date;

provided, that if the Participant’s employment is terminated by

an Employer without Just Cause on or after the date on which a Definitive

Agreement is signed, the unpaid amount of the Completion Bonus shall be paid to

the Participant within ten business days following the later of the Closing

Date or the date of the Participant’s termination of employment.

(d)           A Discretionary Stay in Place Bonus

shall not reduce any severance pay or benefits to which a Participant may

otherwise become entitled.

                3.4           Non-Discretionary Stay in Place Bonuses.

(a)           A Non-Discretionary Stay in Place

Bonus shall be payable to an Employee 

(other than the Chief Executive Officer, Chief Financial Officer or

Chief Operating Officer of the Company) who is not an Officer at any time after

the Effective Date upon the terms and conditions set forth in this Section 3.4.  Non-Discretionary

Stay in Place Bonuses that become payable pursuant to this Section 3.4 will not

reduce the $1,200,000 bonus pool established pursuant to Section 3.1.

(b)           The amount of a Non-Discretionary

Stay in Place Bonus shall be two weeks’ Base Pay, plus an additional one week’s

Base Pay for each full year of employment with the Employer, up to a maximum of

10 weeks’ Base Pay.  For this purpose, a

“full year” of employment shall be credited for each 12-consecutive month

period that commences on the Participant’s most recent date of hire by an

Employer or any anniversary thereof, and that ends prior to the date a

Definitive Agreement is signed.

(c)           A

Non-Discretionary Stay in Place Bonus

shall become payable if:

(i)            a Definitive Agreement is signed

prior to July 1, 2002;

(ii)           a Closing Date occurs under the terms

of the Definitive Agreement; and

(iii)          the recipient is an Employee of the

Company on the Closing Date;

but only to the extent

the recipient is employed on the payment dates provided for in paragraph (d)

below.  A Non-Discretionary Stay in

Place Bonus (or any portion thereof) that does not become payable pursuant to

this paragraph (c) shall be forfeited.

(d)           Subject to subparagraph (iii) below:

(i)            A Non-Discretionary Stay in Place

Bonus of $3,000 or more that becomes payable pursuant to paragraph (c) shall be

paid as follows:

(A)          one-third of the Non-Discretionary

Stay in Place Bonus shall be paid on the 90th day immediately following the Closing

Date, if the recipient is an Employee on such date;

(B)           one-third of the Non-Discretionary

Stay in Place Bonus shall be paid on the first anniversary of the Closing Date,

if the recipient is an Employee on such date; and

(C)           one-third of the Non-Discretionary

Stay in Place Bonus shall be paid on the second anniversary of the Closing

Date, if the recipient is an Employee on such date.

(ii)           A Non-Discretionary Stay in Place

Bonus of less than $3,000 that becomes payable pursuant to paragraph (c) shall

be paid as follows:

(A)          one-half of the Non-Discretionary Stay

in Place Bonus shall be paid on the 90th day immediately following the Closing

Date, if the recipient is an Employee on such date; and

(B)           one-half of the Non-Discretionary

Stay in Place Bonus shall be paid on the first anniversary of the Closing Date,

if the recipient is an Employee on such date.

(iii)          Notwithstanding the foregoing, if the

Participant’s employment is terminated by an Employer without Just Cause on or

after the date on which a Definitive Agreement is signed, the unpaid amount of

the Completion Bonus shall be paid to the Participant within ten business days

following the later of the Closing Date or the date of the Participant’s

termination of employment.

ARTICLE

IV

SEVERANCE BENEFITS

                4.1           Severance

Pay.

(a)           A

Participant (other than the Chief Executive Officer, Chief Financial Officer or

Chief Operating Officer of the Company) who is not an Officer at any time after

the Effective Date shall be entitled to severance pay pursuant to this Section

4.1 if:

(i)            a Definitive Agreement is signed

prior to July 1, 2002; and

(ii)           the Participant’s employment is

terminated by an Employer, without Just Cause, after the date the Definitive

Agreement is signed and prior to the first anniversary of the Closing Date.

(b)           A Participant who becomes entitled to

severance pay pursuant to this Section 4.1 shall receive a lump sum payment

equal to:

(i)            four weeks’ Base Pay, plus an

additional two weeks’ Base Pay for each full year of employment with an Employer,

up to a maximum of 20 weeks’ Base Pay; reduced by

(ii)           the aggregate amount of any

Non-Discretionary Stay in Place Bonus that has been paid, or is payable, to the

Participant.

For

this purpose, a “full year” of employment shall be defined as provided in

Section 3.4(b).

(c)           Notwithstanding the foregoing, a

Participant will not be entitled to severance pay if the Participant’s

termination of employment occurs by reason of:

(i)            the Participant’s transfer to or

from employment with an Affiliated Organization;

(ii)           the Participant’s employment by the

entity into which the Company was merged or by which the Company was acquired,

or by any affiliate of such an entity, following a Sale or Merger; or

(iii)          the Participant’s declining to be

employed by the entity into which the Company is merged or by which the Company

is acquired, or by any affiliate of such an entity, following a Sale or Merger.

                4.2           Stock

Option Adjustment.

(a)           A Participant (other than the Chief

Executive Officer, Chief Financial Officer or Chief Operating Officer of the

Company) who is the holder of an Unexercised Stock Option shall be entitled to

a “Stock Option Adjustment” if:

(i)            a Definitive Agreement is signed

prior to July 1, 2002; and

(ii)           the Participant’s employment is

terminated by an Employer, without Just Cause, after the date the Definitive

Agreement is signed and prior to the first anniversary of the Closing Date. or

(iii)          if the Participant is an Officer, the

Participant’s employment is terminated by the Participant, for Good Reason,

after the Closing Date and prior to the first anniversary of the Closing Date.

(b)           A Participant who becomes entitled to

A Stock Option Adjustment pursuant to this Section 4.1 shall have the right to

have the period during which his or her Unexercised Stock Option may be

exercised extended until the earlier of:

(i)            the second anniversary of the date

the Participant’s employment terminated; or

(ii)           the date on which the Participant’s

Unexercised Stock Option would have ceased to be exercisable had the

Participant continued in the employ of his or her Employer.

The right to a Stock

Option Adjustment may be exercised by an eligible Participant, by written

notice to the Company, at any time within 90 days following the date on which

the Participant’s employment terminates. 

Upon delivery of such written notice, the agreement governing the

exercise of the Participant’s Unexercised Stock Option shall be deemed to have

been amended to provide for the extension described in this paragraph (b),

whether or not a formal written amendment is prepared or executed.  The exercise by an eligible Participant of

the right to a Stock Option Adjustment shall not result in any changes to the

Participant’s Unexercised Stock Option other than those described in this

paragraph (b), except that that status of the amended option as an Incentive

Stock Option (as defined in Section 422 of the Code) shall be determined under

the applicable provisions of the Code.

(c)           Notwithstanding the foregoing, a

Participant will not be entitled to a Stock Option Adjustment if the

Participant’s termination of employment occurs by reason of:

(i)            the Participant’s transfer to or

from employment with an Affiliated Organization;

(ii)           the Participant’s employment by the

entity into which the Company was merged or by which the Company was acquired,

or by any affiliate of such an entity, following a Sale or Merger; or

(iii)          the Participant’s declining to be

employed by the entity into which the Company is merged or by which the Company

is acquired, or by any affiliate of such an entity, following a Sale or Merger;

unless, in the case of an

Officer, such event constitutes Good Reason for termination.

ARTICLE V

CLAIMS FOR BENEFITS

                5.1           Claims Procedure. 

If a claim for benefits made by a Participant is denied, the

Administrator will furnish to the Participant, within 90 days after its receipt

of such claim (or within 180 days after such receipt if special circumstances

require an extension of time), a written notice that specifies the reasons for

the denial, refers to the pertinent provisions of the Plan on which the denial

is based, describes any additional material or information that is necessary

for the perfection of the claim and explains why such material or information

is necessary, and explains the claim review procedures.

                5.2           Appeals.

(a)           Upon

the written request of the Participant submitted within 60 days after his or

her receipt of the written notice described in Section 5.1, the Administrator

will afford the Participant a full and fair

review of the decision denying the claim and, if so requested, permit the

Participant to review any documents that are pertinent to the claim, permit the

Participant to submit to the Company issues and comments in writing, and afford

the Participant an opportunity to meet with appropriate representatives of the

Company as a part of the review procedure.

(b)           Within

60 days after its receipt of a request for review (or within 120 days after

such receipt if special circumstances, such as the need to hold a hearing, require

an extension of time) the Administrator will notify the Participant in writing of its decision and the reasons

for its decision and will refer the Participant to the provisions of the Plan

which form the basis for its decision.

ARTICLE

VI

ADMINISTRATION

                6.1           Administrator. 

The Administrator shall be the “named fiduciary” of the Plan, to the

extent it is subject to ERISA.  The

Administrator may delegate to any person the responsibility to perform any part

or all of its duties, subject to revocation by the Administrator at any time.

                6.2           Administrator’s Discretion.  The

Administrator shall have the discretionary power and authority to make rules

and regulations required in the administration of the Plan, to make all

determinations the Administrator deems necessary for its administration, to

determine any person’s eligibility to participate in the Plan, to determine the

amount of benefits, if any, to which a Participant may be entitled, and to

construe and interpret the Plan whenever the Administrator deems necessary to

carry out its intent and purpose and to facilitate its administration.

                6.3           Retention of Services. 

The Administrator may retain such independent accounting, legal,

clerical and other services as may be required in the administration of the

Plan and may pay reasonable compensation for such services.  All costs of administering the Plan shall be

paid by the Employers.

ARTICLE

VII

LIMITATIONS AND LIABILITIES

                7.1           No Guarantee of Employment.  Neither the

establishment of the Plan, nor any modification thereof, nor the payment of any

benefits shall be construed as giving to any Participant or other person any

right to be retained in the employ of an Employer or to interfere with the

rights of an Employer to discharge any of its employees at any time, with or

without cause.

                7.2           No Alienation of Benefits.  Except to the

extent required by applicable law, the rights of a Participant to any payments

or benefits shall not be subject to attachment, garnishment or other legal

process, and a Participant shall have no right to alienate, anticipate,

commute, pledge, encumber or assign any benefits or payments that he or she may

expect to receive under the Plan.  Any

attempt to anticipate, alienate, commute, pledge, encumber or assign any rights

or benefits in violation of this section shall be void.

                7.3           Reliance on Others. 

To the extent permitted by applicable law, the Administrator may rely

upon all certificates and reports made by an Employer, and upon all reports and

opinions within the area of expertise of, and given by, accountants, legal

counsel and other professionals retained by them; and, to such extent, such

persons shall be fully protected with respect to any action taken or suffered

by them in good faith in reliance upon any such certificates, reports and

opinions, and all actions so taken or suffered shall be conclusive upon each of

them and upon all Participants.  The

Administrator shall be entitled to rely upon any data or information furnished

by an Employer or a Participant as to any information pertinent to a

calculation or determination to be made under the provisions of the Plan and,

as a condition to payment of any benefit under the Plan, may request any

Participant to furnish such information as the Administrator deems necessary or

desirable in administering the Plan.

                7.4           Indemnification. 

The Employers shall, to the extent permitted by their articles of

incorporation and bylaws, and by the laws of the States in which they are

incorporated, indemnify the Administrator and any employee or director of an

Employer, against any and all liabilities arising by reason of any act or

omission, made in good faith pursuant to the provisions of the Plan, including

expenses reasonably incurred in the defense of any claim relating thereto.  The Employers may, in their sole discretion,

and to the extent permitted by their articles of incorporation and bylaws, and

by the laws of the States in which they are incorporated, indemnify any other

person or corporation providing services to the Plan against any liabilities

arising by reason of any act or omission, made in good faith pursuant to the

provisions of the Plan, including any expenses reasonably incurred in the

defense of any claim relating thereto.

ARTICLE

VIII

FUNDING

                8.1           No

Obligation to Fund Benefits.  The Employers

shall have no obligation to insure any benefits payable under the Plan or to

establish any fund or trust for the payment of such benefits.  However, the Company may, in its sole

discretion, purchase such insurance and establish such funds or trusts as it

may deem necessary or desirable to provide for the payment of benefits under

the Plan.

                8.2           Insured Benefits. 

Any benefit that is insured by an insurance company shall be paid solely

by the insurance company, and the Employers shall have no responsibility for

the payment of such benefit.

                8.3           Benefits

Funded Through a Trust.  To the extent

any benefit has been funded through contributions to a trust, the benefit shall

be payable solely out of the assets of the trust and the Employers shall have

no responsibility for the payment of such benefit.

                8.4           Other Benefits. 

To the extent an Employer is liable for benefits which have not been

insured or funded through a trust, such benefits shall be paid out of the

general assets of the Employers.

ARTICLE

IX

AMENDMENT AND TERMINATION

                9.1           Amendments. 

The Board of Directors of the Company reserves the right to amend the

Plan at any time, to any extent it may deem advisable; provided, that no amendment

shall deprive a Participant of the right to receive a bonus or severance

benefits with respect to a Sale or Merger consummated under a Definitive

Agreement signed before July 1, 2002, unless the amendment is adopted at least

90 days prior to the date on which the Definitive Agreement is signed.

                9.2           Termination. 

The Board of Directors of the Company reserves the right to terminate

the Plan at any time, provided, that the termination of the Plan

shall not deprive a Participant of the right to receive a bonus or severance

benefits with respect to a Sale or Merger consummated under a Definitive

Agreement signed before July 1, 2002, unless the termination is effected at

least 90 days prior to the date on which the Definitive Agreement is

signed.  Unless it is extended by the

Board of Directors of the Company, the Plan shall terminate automatically:

(a)           on 

July 1, 2002, if a Definitive Agreement has not been signed by that

date; or

(b)           on the first anniversary of the date

a Definitive Agreement signed, if the Sale or Merger contemplated by the

Definitive Agreement has not been completed by that date.

No amounts shall be

payable under the Plan following its termination.

ARTICLE X

GENERAL PROVISIONS

                10.1         ERISA Requirements. 

To the extent the Plan is subject to the requirements of ERISA:

(a)           The preparation and distribution of a

summary plan description, and the filing of such annual reports and notices as

may be required by ERISA, shall be a duty of the Administrator.

(b)           Any person or persons may serve in

more than one fiduciary capacity with respect to the Plan.

(c)           The Administrator may allocate its

responsibilities among its members or to any other named fiduciaries and may

delegate such responsibilities to persons who are not named fiduciaries.

                10.2         Applicable Law. 

This Plan shall be construed and interpreted in accordance with the laws

of the State of Minnesota, except insofar as the same may be preempted by ERISA

or other federal law.

                10.3         No Waiver or Estoppel. 

No term, condition or provision of the Plan shall be deemed to have been

waived, and no oral or written representation shall constitute an estoppel

against the enforcement of any term, condition or provision of the Plan, unless

such waiver or representation is set forth in a written instrument constituting

an amendment of the Plan.  A failure by

any party to enforce any term, condition or provision of the Plan shall not

constitute a waiver or estoppel of such party’s right to enforce such term,

condition or provision in the future.

                10.4         Overpayments. 

If a Participant receives benefits under the Plan that exceed the

benefits the Participant should have received, or if benefits are paid to or on

behalf of a Participant that should not have been paid, the Administrator may

deduct the amount of the excess or improper payments from any subsequent

benefits payable to or on behalf of the Participant, or it may recover the

payments from the Participant.

                10.5         Successors.

(a)           The Company will require any successor or assign (whether

direct or indirect, by purchase, merger, consolidation or otherwise) to all or

substantially all of the business and/or assets of the Company absolutely and

unconditionally to assume and agree to perform this Plan in the same manner and

to the same extent that the Company would be required to perform it if no such

succession or assignment had taken place.

(b)           This Plan shall inure to the benefit of and be enforceable

by a Participant’s personal and legal representatives, executors,

administrators, successors, heirs, distributees, devisees and legatees.  If a Participant should die while any

amounts are still payable to the Participant hereunder, all such amounts,

unless otherwise provided herein, shall be paid in accordance with the terms of

the Plan to the Participant’s devisee, legatee or other designee or, if there be

no such designee, to the Participant’s estate.

                10.6         Legal Actions. 

No Participant or any other person having or claiming to have an

interest in this Plan shall be a necessary party to any action involving the

Plan or the administration thereof, and no such person shall be entitled to any

notice or process, except to the extent required by applicable law.  Any final judgment which is not appealed or

appealable that may be entered in any such action shall be binding and

conclusive on the parties hereto and upon all persons having or claiming to

have any interest in the Plan.

To record the adoption of

the Plan as set forth above, the undersigned has executed this document for and

on behalf of the Company on this 23rd day of August, 2001.

 

	

   

  	

  RURAL CELLULAR CORPORATION

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By: 

  	

  /s/ Richard P. Ekstrand

  
	

   

  	

   

  	

  Richard P.

  Ekstrand

  
	

   

  	

  As its:  President<PAGE>

EXHIBIT 10.01

THIS NOTE AND THE COMMON STOCK REFERENCED HEREIN HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR UNDER THE PROVISIONS
OF ANY APPLICABLE STATE SECURITIES LAWS, BUT HAS BEEN ACQUIRED BY THE REGISTERED
HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON STATUTORY EXEMPTIONS
UNDER THE 1933 ACT, AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. NEITHER THE
NOTE NOR THE COMMON STOCK MAY BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT
IN A TRANSACTION WHICH IS EXEMPT UNDER PROVISIONS OF THE 1933 ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT; AND IN THE CASE OF AN EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION DOES NOT
REQUIRE REGISTRATION OF THIS NOTE.

                                  ZYMETX, INC.

___________, 2001                                              $_____,000

                               12% PROMISSORY NOTE

ZymeTx, Inc. (the "Company"), for value received, hereby promises to pay to
_____________________ or registered assigns (the "Holder") on the earliest of
(i) May 31, 2002, (ii) the consummation of the sale or exchange (including by
way of merger) of all or substantially all of the outstanding shares of common
stock of the Company, or (iii) the date of consummation of certain mergers or
consolidations of the Company, as described in Section 2(b) hereof (in any such
event, the "Maturity Date"), at the principal offices of the Holder, the
principal sum of _______________ DOLLARS ($____,000) in such coin or currency of
the United States of America as at the time of payment shall be legal tender for
the payment of public and private debts, and to pay interest on the outstanding
principal sum hereof at the rate of twelve percent (12%) per annum (the "Note").
Principal and accrued interest, if any, shall be payable on the Maturity Date in
like coin or currency to the Holder hereof at the offices of the Company,
provided that any payment otherwise due on a Saturday, Sunday or legal Bank
holiday may be paid on the following business day.

         1. Transfers of Note to Comply with the 1933 Act

         The Holder agrees that this Note may not be sold, transferred, pledged,
hypothecated or otherwise disposed of except as follows: (1) to a person whom
the Note may legally be transferred without registration and without delivery of
a current prospectus under the 1933 Act with respect thereto and then only
against receipt of an agreement of such person to comply with the provisions of
this Section 1 with respect to any resale or other disposition of the Note; or
(2) to any person upon delivery of a prospectus then meeting the requirements of
the 1933 Act relating to such securities and the offering thereof for such sale
or disposition, and thereafter to all successive assignees.

<PAGE>

         2. Prepayment; Repayment Upon Consolidation or Merger.

         (a) The principal amount of this Note may be prepaid by the Company, in
whole or in part without premium or penalty, at any time. Upon any prepayment of
the entire principal amount of this Note, all accrued, but unpaid, interest
shall be paid to the Holder on the date of prepayment. The date upon which the
Company prepays the principal plus all accrued and unpaid interest due on this
Note shall be hereinafter referred to as the "Prepayment Date."

         (b) This Note shall be paid in full, without premium, in the event the
Company consolidates or merges with another corporation, unless (i) the Company
shall be the surviving corporation in such consolidation or merger or (ii) the
other corporation controls, is under common control with or is controlled by the
Company immediately prior to the consolidation or merger whether or not the
Company shall be the surviving corporation in such consolidation or merger, in
which event this Note shall remain outstanding as an obligation of the
consolidated or surviving corporation.

         3. Covenants of Company

         The Company covenants and agrees that, so long as any principal of, or
interest on, this Note shall remain unpaid, unless the Holder shall otherwise
consent in writing, it will comply with the following terms:

         (a) Reporting Requirements. The Company will furnish to the Holder:

                  (i) as soon as possible, and in any event within ten (10) days
after obtaining knowledge of the occurrence of (A) an Event of Default, as
hereinafter defined, (B) an event which, with the giving of notice or the lapse
of time or both, would constitute an Event of Default, or (C) a material adverse
change in the condition or operations, financial or otherwise, of the Company,
taken as whole, the written statement of the Chief Executive Officer or the
Chief Financial Officer of the Company, setting forth the details of such Event
of Default, event or material adverse change and the action which the Company
proposes to take with respect thereto;

                  (ii) promptly after the sending or filing thereof, copies of
all financial statements, reports, certificates of its Chief Executive Officer,
Chief Financial Officer or accountants and other information which the Company
or any subsidiary sends to any holders (other than the Notes) of its securities;

                  (iii) promptly after the commencement thereof, notice of each
action, suit or proceeding before any court or other governmental authority or
other regulatory body or any arbitrator as to which there is a reasonable
possibility of a determination that would (A) materially impact the ability of
the Company or any subsidiary to conduct its business, (B) materially and
adversely affect the business, operations or financial condition of the Company
taken as a whole, or (C) impair the validity or enforceability of the Notes or
the ability of the Company to perform its obligations under the Notes;

<PAGE>

                  (iv) promptly upon request, such other information concerning
the condition or operations, financial or otherwise, of the Company as the
Holder from time to time may reasonably request.

         (b)   Taxes. The Company has filed or will file all federal, state and
local tax returns required to be filed or sent or has obtained extensions
thereof. Except as otherwise disclosed, the Company has timely paid or made
provision for all taxes shown as due and payable on its tax returns required to
be filed prior to the date hereof and all assessments received by the Company
and will timely pay all taxes that will be shown as due and payable on its tax
returns required to be filed after the date hereof, except to the extent that
the Company shall be contesting such taxes and assessments in good faith by
appropriate proceedings.

         (c)   Compliance with Laws. The Company will comply, in all material
respects with all applicable laws, rules, regulations and orders, except to the
extent that noncompliance would not have a material adverse effect upon the
business, operations or financial condition of the Company taken as a whole.

         (d)   Keeping of Records and Books of Account. The Company will keep
adequate records and books of account, with complete entries made in accordance
with generally accepted accounting principles, reflecting all of its financial
and other business transactions.

         (e)   Negative Covenants. The Company covenants and agrees that while
this Note is outstanding it will not directly or indirectly:

         (i)   Incur any indebtedness (other than in the ordinary course of its
               business) or grant any liens with respect to any of its assets,
               without the written consent of the Holder;

         (ii)  Guaranty or otherwise in any way become or be responsible for
               indebtedness for borrowed money, or for obligations, in either
               case of any of its officers, directors or principal stockholders
               or any of their affiliates, contingently or otherwise, other than
               such guaranties existing as of the date hereof;

         (iii) Declare or pay cash dividends;

         (iv)  Sell, transfer or dispose of, any of its assets other than in the
               ordinary course of its business and for fair value;

         (v)   Purchase, redeem, retire or otherwise acquire for value any of
               its capital stock now or hereafter outstanding; or

         (vi)  Repay any indebtedness for borrowed funds or any related party
               obligations (other than in the ordinary course of its business).

<PAGE>

         4. Events of Default and Remedies

         (a) Any one or more of the following events which shall have occurred
and be continuing shall constitute an event of default (Event of Default):

                  (i) Default in the payment of the principal or accrued
interest on this Note or upon any indebtedness of the Company that is greater
than $100,000, as and when the same shall become due, whether by default or
otherwise, which Default shall have continued for a period of five (5) business
days; except for any pre-existing events of default under the $2,000,000
principal amount of 5% Senior Secured Convertible Debentures, due October 12,
2002, which were sold to Palladin Opportunity Fund, LLC and Halifax Fund, L.P.
pursuant to a Purchase Agreement dated October 13, 2000; or

                  (ii) Any representation or warranty made by the Company or any
officer of the Company in the Notes, or in any agreement, report, certificate or
other document delivered to the Holder pursuant to the Notes shall have been
incorrect in any material respect when made which shall not have been remedied
ten (10) days after written notice thereof shall have been given by the Holder;
or

                  (iii) The Company shall fail to perform or observe any
affirmative covenant contained in Section 3 of this Note or any of the Notes and
such Default, if capable of being remedied, shall not have been remedied ten
(10) days after written notice thereof shall have been given by the Holder; or

                  (iv) The Company or any subsidiary (A) shall institute any
proceeding or voluntary case seeking to adjudicate it bankrupt or insolvent, or
seeking dissolution, liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of any order for relief or the appointment of a receiver,
trustee, custodian or other similar official for such the Company or any
subsidiary or for any substantial part of its property, or shall consent to the
commencement against it of such a proceeding or case, or shall file an answer in
any such case or proceeding commenced against it consenting to or acquiescing in
the commencement of such case or proceeding, or shall consent to or acquiesce in
the appointment of such a receiver, trustee, custodian or similar official; (B)
shall be unable to pay its debts as such debts become due, or shall admit in
writing its inability to apply its debts generally; (C) shall make a general
assignment for the benefit of creditors; or (D) shall take any action to
authorize or effect any of the actions set forth above in this subsection
4(a)(iv); or

                  (v) Any proceeding shall be instituted against the Company
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for the
Company or for any substantial part of its property, and either such proceeding
shall not have been dismissed or shall not have been stayed for a period of
sixty (60) days or any of the actions sought in such proceeding (including,
without limitation, the entry of any order for relief against it or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its property) shall occur; or

<PAGE>

                  (vi) One or more final judgments, arbitration awards or orders
for the payment of money in excess of $100,000 in the aggregate shall be
rendered against the Company, which judgment remains unsatisfied for thirty (30)
days after the date of such entry.

         (b) If an Event of Default described above has occurred, then the
Holder may, without further notice to the Company, declare the principal amount
of this Note at the time outstanding, together with accrued unpaid interest
thereon, and all other amounts payable under this Note to be forthwith due and
payable, whereupon such principal, interest and all such amounts shall become
and be forthwith due and payable.

         (c) The Company covenants that in case the principal of, and accrued
interest on, the Note becomes due and payable by declaration or otherwise, then
the Company will pay in cash to the Holder of this Note, the whole amount that
then shall have become due and payable on this Note for principal or interest,
as the case may be, and in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including reasonable
fees and disbursements of the Holder's legal counsel. In case the Company shall
fail forthwith to pay such amount, the Holder may commence an action or
proceeding at law or in equity for the collection of the sums so due and unpaid,
and may prosecute any such action or proceeding to judgment or final decree
against Company or other obligor upon this Note, wherever situated, the monies
adjudicated or decreed to be payable.

         (d) The Company agrees that it shall give notice to the Holder at its
registered address by facsimile, confirmed by certified mail, of the occurrence
of any Event of Default within ten (10) days after such Event of Default shall
have occurred.

         5. Security Interest

         As security for this Note, provided that a minimum of $500,000 is
raised in this Offering, the Company shall grant the Holder of this Note,
together with the Holders of like Notes aggregating a maximum of $1,000,000, a
pro-rata security interest in a maximum of $200,000 of the Company's assets.
Such security interest shall be on a pari passu basis with the security interest
held by Palladin Opportunity Fund, LLC and Halifax Fund, L.P., the holders of
$2,000,000 principal amount of 5% Senior Secured Convertible Debentures due
October 12, 2002.

         6. Miscellaneous

         (a) This Note has been issued by the Company pursuant to authorization
of the Board of Directors of the Company.

         (b) The Company may consider and treat the entity in whose name this
Note shall be registered as the absolute owner thereof for all purposes
whatsoever (whether or not this Note shall be overdue) and the Company shall not
be affected by any notice to the contrary. Subject to the limitations herein
stated, the registered owner of this Note shall have the right to transfer this
Note by assignment, and the transferee thereof shall, upon his registration as
owner of this Note, become vested with all the powers and rights of the
transferor. Registration of any new owners shall take place upon presentation of
this Note to the Company at its principal offices, together with a duly
authenticated assignment. In case of transfer by operation of law, the
transferee agrees to notify the Company of such transfer and of his address, and
to submit appropriate evidence regarding the transfer so that this Note may be
registered in the name of the transferee. This Note is transferable only on the
books of the Company by the holder hereof, in person or by attorney, on the
surrender hereof, duly endorsed. Communications sent to any registered owner
shall be effective as against all holders or transferees of the Note not
registered at the time of sending the communication.

<PAGE>

         (c) Payments of principal and interest shall be made as specified above
to the registered owner of this Note. No interest shall be due on this Note for
such period of time that may elapse between the maturity of this Note and its
presentation for payment.

         (d) The Holder shall not, by virtue, hereof, be entitled to any rights
of a shareholder in the Company, whether at law or in equity, and the rights of
the Holder are limited to those expressed in this Note.

         (e) Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Note, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Note, if mutilated, the Company shall
execute and deliver a new Note of like tenor and date.

         (f) This Note shall be construed and enforced in accordance with the
laws of the State of New York, without giving effect to the conflicts of law
principles thereof or the actual domiciles of the parties. The Company and the
Holder hereby consent to the jurisdiction of the Courts of the State of New York
and the United States District Courts situated therein in connection with any
action concerning the provisions of this Note instituted by the Holder against
the Company.

         (g) No recourse shall be had for the payment of the principal or
interest of this Note against any incorporator or any past, present or future
stockholder officer, director, agent or attorney of the Company, or of any
successor corporation, either directly or through the Company or any successor
corporation, otherwise, all such liability of the incorporators, stockholders,
officers, directors, attorneys and agents being waived, released and surrendered
by the Holder hereof by the acceptance of this Note.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]

<PAGE>

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Note as
of the day and year first above written.

                                            ZYMETX, INC.

                                       By:  ________________________________
                                            Name:
                                            Title:

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