PROMISSORY NOTE

$ 250,000                                                            Atlanta, GA
                                                                 January 5, 2001

                  FOR VALUE RECEIVED,  Fullnet Communications,  Inc. an Oklahoma
corporation (the Borrower),  promises to pay to the order of Generation  Capital
Associates,  a New  York  limited  partnership  and  assigns  (Lender)  at  1085
Riverside  Trace,  Atlanta,  GA  30328,  or at such  other  place  as  might  be
designated in writing by the Lender,  the principal sum of $250,000.00 in lawful
money of the  United  States of  America,  on March 31,  2001  (Maturity  Date),
together with interest on the unpaid principal  balance of said principal sum at
the rate of ten per cent  (10%)  per annum  (computed  on the basis of a 365 day
year) from the date hereof  until such  principal  sum is fully paid;  provided,
however,  Borrower  shall reduce the principal  amount  outstanding by fifty per
cent (50%) of the net proceeds  collected by Borrower  from its ongoing  private
placement.  Such  principal  reductions  shall  be made at the  closing  of each
additional investment in such private placement.

                  Borrower  has  also  agreed  to pay to  Lender,  in lieu of an
origination  fee, an equity kicker  (Kicker) in the form and amount as set forth
on Exhibit A attached hereto.

                  Borrower and Lender acknowledge that Bathgate McColley Capital
Group, LLC have acted as placement agents  (Placement Agent) in this transaction
and Lender agrees to pay a placement  agent fee to Placement Agent in accordance
with the  terms of a  separate  agreement  dated as of the date  hereof  between
borrower and Placement Agent.

                  The Borrower  will have the right at any time and from time to
time to prepay  the  unpaid  principal  balance of this Note in whole or in part
without penalty,  but with interest on the unpaid  principal  balance accrued to
the date of prepayment.

                  This Note shall be governed and construed in  accordance  with
the internal laws of the state of Georgia  without  regard to the  principles of
conflict of laws. Borrower consents to the jurisdiction of the Superior Court of
the State of Georgia, Fulton County and/or any Federal District Court located in
the state of Georgia for any suit brought under this Note.

                  The  Borrower  agrees that a facsimile  of this Note signed on
behalf of Borrower shall constitute an enforceable  obligation against Borrower.
If suit is  brought  for the  collection  of this  Note  Borrower  shall  not be
entitled to raise as a defense that a facsimile of this Note and not an original
has been placed in evidence.

                  The  Borrower  agrees  that if, and as often as,  this Note is
placed in the hands of an attorney for collection or to defend or enforce any of
the  Lender's  rights  under  this  Note  the  Borrower  will  pay the  Lender's
reasonable  attorneys' fees, all court costs and all other expenses  incurred by
the Lender in connection therewith.

         IN WITNESS WHEREOF, the Borrower has executed this instrument effective
the 5th day of January 2001.

                                  Fullnet Communication, Inc.

                                  By:__________________________________________
                                     Timothy J. Kikkenny, President and CEO

                                  By:__________________________________________
                                     Roger Baresel, Chief Financial Officer


Attest:
________________________
________________________
 (Print Name & Title)



                                    EXHIBIT A

                                  EQUITY KICKER

This Exhibit A constitutes  part of the  Promissory  Note dated  January  5,2001
issued  by  Fullnet  Communications,   Inc.  (Borrower)  to  Generation  Capital
Associates (Lender) in the principal amount of $250,000.


         1. Borrower hereby issues to Lender warrants to purchase 125,000 shares
of the  common  stock of  Lender at an  exercise  price of $0.01 per share for a
period of five years from the date hereof.  These  warrants shall be exercisable
immediately for cash.

         2. Borrower  hereby issues to Lender warrants to purchase 125,00 shares
of the  common  stock of  Lender at an  exercise  price of $1.00 per share for a
period of five years from the date hereof.  These  warrants shall be exercisable
immediately for cash, unless at the time of exercise the common stock underlying
the  warrants  has not been  registered  for  resale  with a current  prospectus
available, in which case the warrants shall be exercised on a "cashless basis."



IN WITNESS WHEREOF,  the Borrower has executed this Exhibit A effective  January
5, 2001


                           Fullnet Communication, Inc.

                                  By:__________________________________________
                                     Timothy J. Kikkenny, President and CEO

                                  By:__________________________________________
                                     Roger Baresel, Chief Financial Officer


Attest:
________________________
________________________
 (Print Name & Title)