OKLAHOMA INDUSTRIES AUTHORITY

                                       AND

                                TOWER TECH, INC.



                                          ---------------------------------

                                 LOAN AGREEMENT
                                          ---------------------------------




                           Dated as of October 1, 1996





=================================================================



         The  interest  of  the  Oklahoma  Industries  Authority  in  this  Loan
Agreement has been assigned  (except for amounts payable under Sections  4.2(b),
4.2(e),  7.2 and 8.4 hereof)  pursuant to the Indenture of Trust dated as of the
date hereof from the Issuer to Boatmen's  National Bank of Oklahoma,  as trustee
(the  "Trustee"),  and  is  subject  to the  security  interest  of the  Trustee
thereunder.



<PAGE>


                                 LOAN AGREEMENT

                                TABLE OF CONTENTS

         (This Table of Contents is not a part of the Loan Agreement and is only
for convenience of reference.)

                                                                    Page

PARTIES                    .....................................    1

PREAMBLES                  .....................................    1

                                    ARTICLE I

DEFINITIONS                .....................................    3

                                   ARTICLE II
                    REPRESENTATIONS, COVENANTS AND WARRANTIES

SECTION 2.1         Representations, Covenants and Warranties
                             of the Issuer.......................    6
SECTION 2.2                Representations, Covenants and Warranties
                             of the Company..........................6

                                   ARTICLE III
                       ACQUISITION AND CONSTRUCTION OF THE
                         PROJECT; ISSUANCE OF THE BONDS

SECTION 3.1             Agreement to Acquire, Construct, Furnish
                             and Equip the Project.....................9
SECTION 3.2             Agreement to Issue the Bonds; Application
                             of Bond Proceeds..........................9
SECTION 3.3              Disbursements from the Construction Fund..... 9
SECTION 3.4              Furnishing Documents to the Trustee.......... 9
SECTION 3.5              Establishment of Completion Date............. 9
SECTION 3.6                Company Required to Pay in Event
                         Construction Fund Insufficient............... 10

                                   ARTICLE IV
                                 LOAN PROVISIONS

SECTION 4.1                Loan of Proceeds.........................   11
SECTION 4.2                Amounts Payable..........................   11
SECTION 4.3                Obligations of Company Unconditional.....   12

                                    ARTICLE V
                      DAMAGE, DESTRUCTION AND CONDEMNATION

SECTION 5.1                Damage, Destruction and Condemnation.....   14
SECTION 5.2                Application of Net Proceeds..............   14
SECTION 5.3                Insufficiency of Net Proceeds............   14



<PAGE>


                                   ARTICLE VI
                                SPECIAL COVENANTS

SECTION 6.1                No Warranty of Condition or Suitability
                             by Issuer...................................15
SECTION 6.2                Access to the Project.........................15
SECTION 6.3                Further Assurances and Corrective
                             Instruments.................................15
SECTION 6.4                Issuer and Company Representatives............15
SECTION 6.5                Standby Bond Purchase Agreement...............15

                                   ARTICLE VII
                          ASSIGNMENT, SELLING, LEASING;
                           INDEMNIFICATION; REDEMPTION

SECTION 7.1    Assignment, Selling and Leasing..................   16
SECTION 7.2    Release and Indemnification Covenants............   16
SECTION 7.3    Redemption of Bonds..............................   18
SECTION 7.4    Issuer to Grant Security Interest
                 to Trustee.....................................   18
SECTION 7.5    Indemnification of Trustee.......................   18

                                  ARTICLE VIII
                              DEFAULTS AND REMEDIES

SECTION 8.1    Defaults Defined.................................   19
SECTION 8.2    Remedies on Default..............................   20
SECTION 8.3    No Remedy Exclusive..............................   21
SECTION 8.4    Agreement to pay Attorneys' Fees and
                 Expenses.......................................   21
SECTION 8.5    No Additional Waiver Implied by One
                 Waiver; Consent of Standby Purchaser
                 Required for Waivers...........................   21

                                   ARTICLE IX
                         OPTIONS TO TERMINATE AGREEMENT

SECTION 9.1      Option to Terminate Upon the Occurrence
                   of Certain Events...............................   22
SECTION 9.2      Optional Prepayment...............................   23

                                    ARTICLE X
                                  MISCELLANEOUS

SECTION 10.1   Term of Agreement..................................   24
SECTION 10.2   Notices............................................   24
SECTION 10.3   Binding Effect.....................................   24
SECTION 10.4   Severability.......................................   24
SECTION 10.5   Amounts Remaining in Funds.........................   24
SECTION 10.6   Amendments, Changes and Modifications..............   25
SECTION 10.7   Execution in Counterparts..........................   25
SECTION 10.8   Applicable Law.....................................   25
SECTION 10.9   Captions...........................................   25

TESTIMONIUM   ....................................................   26

SIGNATURES    ....................................................   26

EXHIBIT A - Project Site

EXHIBIT B - Project Building

EXHIBIT C - Form of Requisition

EXHIBIT D - Form of Completion Certificate

EXHIBIT E - Payment Schedule




<PAGE>





                                 LOAN AGREEMENT

     THIS LOAN  AGREEMENT  is dated as of  October  1,  1996,  between  OKLAHOMA
INDUSTRIES  AUTHORITY  (the  "Issuer")  and  TOWER  TECH,  INC.,  a  corporation
organized and existing under the laws of the State of Oklahoma (the "Company").

                              W I T N E S S E T H :

     WHEREAS,  the Issuer is empowered under the Act to assist any person,  firm
or corporation in the financing of certain projects and facilities,  through the
issuance of its limited  obligation  revenue bonds. The Company has proposed the
acquisition of land and the  constructing and equipping of the Project and as an
inducement  therefor has  requested the Issuer to assist in the financing of the
Project and certain other expenses  incidental  thereto,  as provided in the Act
and detailed in this Agreement and generally as follows:  The Issuer proposes to
issue the Bonds under the Act and use the  proceeds  thereof to make the Loan to
the Company to be repaid in such Loan Repayments sufficient to pay the principal
and interest of the Bonds.  From the proceeds of the Loan,  the Company will pay
the cost of acquisition,  construction  and equipping of the Project.  Under the
terms of the  Agreement,  the  Company  will make Loan  Repayments,  and will be
responsible  for paying  any costs of the  Project  exceeding  the amount of the
Bonds,  maintaining and insuring the Project,  and paying all taxes and expenses
relating to the Project.  The Issuer's  obligation  with respect to the Bonds is
subject to the limitations therein contained,  including the limitation that the
principal  of and  interest  on the  Bonds  and any  other  costs  or  pecuniary
liability relating to the Bonds, the Loan and installation of the Project or any
proceeding,  document or certification incidental to the foregoing,  shall never
be payable from tax revenues or public funds of the State or any agency  thereof
or general  funds or assets of the  Issuer  (except  as  specifically  set forth
therein) or Oklahoma County, but shall be payable only from the Loan Repayments,
or otherwise by the Company.

     WHEREAS,  the Issuer has  determined  that entering into this Agreement and
thereby  assisting in the  financing of the Project  through the issuance of its
Bonds will promote and serve the  intended  purposes of the Act and will serve a
valid public purpose.

     WHEREAS,  the Issuer has been advised by Bond  Counsel that this  Agreement
conforms to the  provisions  and  requirements  of the Act.  It is intended  and
understood  by the  Issuer and the  Company  that this  Agreement  and all other
documentation relating to the issuance of the Bonds shall provide that Costs (as
herein  defined),  payment of  principal  and interest on the Bonds or any other
pecuniary  liability of the Issuer  relating to the issuance of the Bonds,  this
Agreement  or the  Project  shall  never be payable  from tax  revenues or other
public or general  funds or assets of the Issuer  (except  as  specifically  set
forth  therein)  or the  County,  but shall be payable  solely and only from the
Trust  Estate,  or from other funds derived from the Project or otherwise by the
Company.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
and  subject  to the  limitations  hereinafter  contained,  the  parties  hereto
covenant, agree and bind themselves as follows:


<PAGE>


                                    ARTICLE I

                                   DEFINITIONS

     All  capitalized,  undefined terms used herein shall have the same meanings
as used in Article I of the  hereinafter  defined  Indenture.  In addition,  the
following words and phrases shall have the following meanings:

         "Bonds" means $4,405,000  Oklahoma Industries  Authority  Adjustable
 Rate Taxable Industrial Revenue Bonds
(Tower Tech Project) Series 1996.

     "Consulting Engineer" means any licensed professional architect or engineer
or an architectural or engineering firm (who may be in the employ of the Company
or chosen by the Company) acceptable to the Standby Purchaser.

     "Cost"  with  respect to the  Project  shall be deemed to include all items
permitted to be financed  under the  provisions of the Act,  including,  but not
limited to:

                   (i)     all costs  which the Issuer or the  Company  shall be
 required to pay under the terms of any contract or contracts for the
 acquisition, rehabilitation, furnishing or equipping of the Project;

                  (ii)  obligations  of  the  Company  incurred  for  labor  and
         materials (including  obligations payable to the Company) in connection
         with the  acquisition,  rehabilitation,  furnishing or equipping of the
         Project,  including  reimbursement  to the Company for all advances and
         payments made in connection with the Project;

                 (iii)     the cost of  performance  or other bonds and any and
 all types of insurance  that may be necessary or appropriate to have in
 effect during the course of rehabilitation of the Project;

                  (iv) all  costs of  engineering  and  architectural  services,
         including  the  costs  of  the  Company  for  test  borings,   surveys,
         estimates,  plans and  specifications  and  preliminary  investigations
         therefor,  and  for  supervising  rehabilitation,  as  well  as for the
         performance of all other duties required by or consequent to the proper
         rehabilitation of the Project;

                   (v) all expenses  incurred in connection with the issuance of
         the  Bonds,  including  but not  limited  to,  compensation,  fees  and
         expenses of the Issuer, the Trustee, including reasonable counsel fees,
         compensation  to any financial  consultant,  underwriters  or placement
         agents,  legal  fees and  expenses,  cost of  printing  and  engraving,
         recording and filing fees, and costs of title insurance, if any; and

                  (vi) any sums  required to reimburse  the Company for advances
         made by the  Company  for any of the above items or for any other costs
         incurred which are presently chargeable to the Project.

         "County" means the County of Oklahoma, State of Oklahoma.

     "Default"  means any  Default  under this  Agreement  as  specified  in and
defined by Section 8.1 hereof.

     "Indenture"  means the Indenture of Trust dated as of this date between the
Issuer and the Trustee, pursuant to which the Bonds are authorized to be issued,
and any amendments and supplements thereto.

     "Loan" means the Loan made pursuant to Section 4.1 of this Agreement.

     "Loan  Repayment"  means the  amounts  payable by the  Company  pursuant to
Section 4.2 hereof.

     "Net  Proceeds"  when used with  respect to any  insurance  proceeds or any
condemnation  award,  means the amount  remaining  after  deducting all expenses
(including attorneys' fees) incurred in the collection of such proceeds or award
from the gross proceeds thereof.

     "Project" means the Project Building and the Project Site.

     "Project  Building" means (i) the property which is described  generally in
Exhibit B hereto, and (ii) any items of machinery,  equipment, or other tangible
property  acquired in  substitution  for, or as a renewal or replacement of or a
modification or improvement to, the property described in (i) above.

     "Project Site" means the real estate described in Exhibit A hereto on which
the Project  Building will be situated and any other interests in real property,
leasehold interests,  easements,  licenses and rights in real property hereafter
acquired by the Company with  proceeds of the Bonds for use in  connection  with
the Project.

     "Requisition"   means  a  written  request  for  a  disbursement  from  the
Construction Fund signed by a Company Representative,  substantially in the form
attached  hereto as Exhibit C and  satisfactorily  completed as  contemplated by
said form.

     "State" means the State of Oklahoma.

         "Substitute Credit Enhancement" means a standby bond purchase agreement
or similar  credit  enhancement  delivered  to the  Trustee in  accordance  with
Section 6.5 hereof,  replacing  any  existing  Standby Bond  Purchase  Agreement
issued on  substantially  identical  terms and  conditions  as the then existing
Standby Bond Purchase Agreement.

     "Term of  Agreement"  means  the term of this  Agreement  as  specified  in
Section 10.1 hereof.

                              * END OF ARTICLE I *


<PAGE>


                                   ARTICLE II

                    REPRESENTATIONS, COVENANTS AND WARRANTIES

     Section 2.1.  Representations,  Covenants and Warranties of the Issuer. The
 Issuer  represents,  covenants and warrants that:

                  (a) The Project and the financing  thereof through issuance of
         the Bonds will  promote  the public  purposes of the Act and the public
         welfare  by   encouraging   and  assisting   the  location,   purchase,
         rehabilitation,     reconstruction,     modernization,     improvement,
         maintenance,  repair, furnishing, equipping and expansion by industrial
         and commercial enterprises of their facilities near Oklahoma County and
         the  alleviation  and prevention of conditions of  unemployment  and by
         otherwise  strengthening the economy of Oklahoma County and the City of
         Oklahoma City.

                  (b) The Issuer has the necessary  power under the Act, and has
         duly taken all action on its part  required to  authorize,  execute and
         deliver  the  Agreement  and to issue  the  Bonds.  The  execution  and
         performance  by the  Issuer  will  not  violate  or  conflict  with any
         agreement  or  instrument  by which the  Issuer or its  properties  are
         bound.

                  (c) The Issuer  covenants  that it will not pledge the amounts
         derived  from  this  Agreement   other  than  as  contemplated  by  the
         Indenture.

         Section  2.2.  Representations,   Covenants  and  Warranties  of  the  
Company.  The  Company  represents, covenants and warrants that:

                  (a)  The  Company  is  a  corporation  validly  organized  and
         existing under the laws of the State of Oklahoma and duly authorized to
         do business in the State.  The execution,  delivery and  performance by
         the Company of this Agreement and the transactions  contemplated hereby
         have been duly  authorized by all  necessary  action on the part of the
         Company and such actions do not violate any  provision of the Company's
         charter. The Company has the power to enter into this Agreement.

                  (b) The Company  agrees that during the Term of  Agreement  it
         will maintain its existence,  will not dissolve or otherwise dispose of
         all or substantially all of its assets and will not consolidate with or
         merge into  another  legal  entity or permit  one or more  other  legal
         entities  to  consolidate  with or  merge  into it;  provided  that the
         Company may, without violating the agreement contained in this Section,
         consolidate  with or merge into another legal entity,  or permit one or
         more legal  entities to  consolidate  with or merge into it, or sell or
         otherwise  transfer to another legal entity all or substantially all of
         its assets as an entirety and  thereafter  dissolve,  provided (i) that
         the surviving,  resulting or transferee  legal entity,  as the case may
         be, shall have a net worth immediately  subsequent to such acquisition,
         consolidation, merger or transfer at least equal to that of the Company
         immediately  prior  to  such  acquisition,   consolidation,  merger  or
         transfer; and (ii) that if the surviving, resulting or transferee legal
         entity, as the case may be, is not the Company,  then such legal entity
         shall be a legal entity organized and existing under the laws of one of
         the States of the United  States of America,  shall be  qualified to do
         business in the State,  and shall assume all of the  obligations of the
         Company  under the  Agreement,  in which event the Issuer shall release
         the  Company in writing,  concurrently  with and  contingent  upon such
         acquisition,  consolidation,  merger or transfer;  and provided further
         that, prior to such  acquisition,  consolidation,  merger, or transfer,
         the Trustee shall be furnished with a certificate  from Company stating
         that in the opinion of the Company none of the  covenants  contained in
         this  Agreement  will be  violated  as a  result  of such  acquisition,
         consolidation, merger or transfer.

                  (c) Neither the execution  and delivery of this  Agreement nor
         the  consummation  of the  transactions  contemplated  hereby,  nor the
         fulfillment of or compliance  with the terms and  conditions  hereof or
         thereof,   conflicts  with  or  results  in  a  breach  of  the  terms,
         conditions,  or  provisions of any agreement or instrument to which the
         Company is bound,  or constitutes a default under any of the foregoing,
         or  results  in the  creation  or  imposition  of any  lien,  charge or
         encumbrance  whatsoever  upon  any of the  property  or  assets  of the
         Company under the terms of any such instrument or agreement.

                  (d)  There  is  no  action,  suit,   proceeding,   inquiry  or
         investigation,  at law or in  equity,  before or by any  court,  public
         board or body,  known to be pending or threatened  against or affecting
         the  Company,  nor to the best  knowledge  of the  Company is there any
         basis  therefor,  wherein an  unfavorable  decision,  ruling or finding
         would materially adversely affect the transactions contemplated by this
         Agreement or which would adversely  affect, in any way, the validity or
         enforceability  of  the  Bonds,  this  Agreement  or any  agreement  or
         instrument to which the Company is a party,  used or  contemplated  for
         use in the consummation of the transactions contemplated hereby.

                  (e)      The Project is of the type  authorized  and permitted
 by the Act, and its estimated Cost is not less than $4,405,000.

                  (f)      The  proceeds  from the sale of the Bonds will be
 used only for  payment of Costs of the Project.

                  (g) The Company will use due diligence to cause the Project to
         be operated in accordance with the laws, rulings, regulations, agencies
         and political  subdivisions thereof. The Company has obtained or caused
         to be  obtained  all  requisite  approvals  of the  State  and of other
         federal,   state,  regional  and  local  governmental  bodies  for  the
         acquisition, rehabilitation, furnishing and equipping of the Project.

                  (h) The  Company  will fully and  faithfully  perform  all the
         duties and  obligations  which the Issuer has  covenanted and agreed in
         the  Indenture  to cause the  Company  to  perform  and any  duties and
         obligations  which the Company is required in the Indenture to perform.
         The foregoing  shall not apply to any duty or undertaking of the Issuer
         which by its nature cannot be delegated or assigned.

                  (i)      The Project when completed will be located entirely
 within Oklahoma City.


                              * END OF ARTICLE II *



<PAGE>


                                   ARTICLE III

                       ACQUISITION AND CONSTRUCTION OF THE
                         PROJECT; ISSUANCE OF THE BONDS

     Section  3.1.  Agreement  to  Acquire,  Construct,  Furnish  and  Equip the
Project.  The Company  agrees to make all contracts and do all things  necessary
for the  acquisition,  rehabilitation,  furnishing and equipping of the Project,
with or without advertising for bids.

     The Company  further  agrees that it will acquire the land,  construct  the
building, furnish and equip the Project with all reasonable dispatch and use its
best efforts to cause  acquisition,  rehabilitation,  furnishing,  equipping and
occupancy  of the  Project  to be  completed  by  October  1,  1997  or as  soon
thereafter as may be  practicable,  delays caused by force majeure as defined in
Section  8.1  hereof  only  excepted;  but if for any reason  such  acquisition,
rehabilitation,  furnishing  and  equipping is not  completed by said date there
shall be no resulting  liability on the part of the Company and no diminution in
or postponement of the payments required in Section 4.2 hereof to be paid by the
Company.

     Section 3.2. Agreement to Issue the Bonds; Application of Bond Proceeds. In
order to provide  funds for the payment of the Cost of the Project,  the Issuer,
concurrently with the execution of this Agreement,  will issue, sell and deliver
the  Bonds  and  deposit  the net  proceeds  thereof  with  the  Trustee  in the
Construction Fund.

     Section 3.3.  Disbursements  from the Construction Fund. The Issuer has, in
the Indenture,  authorized and directed the Trustee to make  disbursements  from
the  Construction  Fund to pay the Costs of the  Project,  or to  reimburse  the
Company for any Cost of the Project paid by the Company.  The Trustee  shall not
make any disbursement  from the  Construction  Fund until the Company shall have
provided the Trustee with a Requisition.

     Section 3.4.  Furnishing  Documents to the Trustee.  The Company  agrees to
cause such  Requisitions  to be directed to the Trustee as may be  necessary  to
effect  payments out of the  Construction  Fund in  accordance  with Section 3.3
hereof.

     Section 3.5. Establishment of Completion Date. The Completion Date shall be
evidenced  to  the  Issuer  and  the  Trustee  by  delivery  of  the  Completion
Certificate  in the form  attached as Exhibit  "D"  hereto,  signed by a Company
Representative  stating that,  except for amounts retained by the Trustee at the
Company's direction to pay any Cost of the Project not then due and payable, (i)
rehabilitation  of the  Project  has been  completed  and all  costs  of  labor,
services,  materials and supplies used in  connection  with such  rehabilitation
have been paid,  (ii) all  equipment  for the Project has been  installed,  such
equipment  so  installed is suitable  and  sufficient  for the  operation of the
Project, and all costs and expenses incurred in the acquisition and installation
of such equipment have been paid,  and (iii) all other  facilities  necessary in
connection  with the Project have been  acquired,  rehabilitated,  furnished and
equipped and all costs and expenses  incurred in connection  therewith have been
paid.  Notwithstanding  the foregoing,  such certificate  shall state that it is
given without  prejudice to any rights  against third parties which exist at the
date of such  certificate or which may subsequently  come into being.  Forthwith
upon completion of the acquisition, rehabilitation,  furnishing and equipping of
the Project, the Company agrees to cause such certificate to be furnished to the
Issuer and the Trustee.  Upon  receipt of such  certificate,  the Trustee  shall
retain in the Construction Fund a sum equal to the amounts necessary for payment
of the  Costs  of the  Project  not  then  due  and  payable  according  to such
certificate. If any such amounts so retained are not subsequently used, prior to
any  transfer of said  amounts to the Bond Fund as provided  below,  the Trustee
shall give  notice to the Company of the failure to apply said funds for payment
of the Costs of the Project.  Any amount not to be retained in the  Construction
Fund for payment of the Costs of the  Project,  and all amounts so retained  but
not subsequently used, shall be transferred by the Trustee into the Bond Fund.

         Section  3.6.  Company  Required  to Pay  in  Event  Construction  Fund
Insufficient.  In the event the moneys in the  Construction  Fund  available for
payment of the Costs of the Project should not be sufficient to pay the Costs of
the Project in full,  the Company agrees to complete the Project and to pay that
portion of the Costs of the Project in excess of the moneys  available  therefor
in the Construction Fund. The Issuer does not make any warranty,  either express
or implied,  that the moneys paid into the  Construction  Fund and available for
payment of the Costs of the Project will be  sufficient  to pay all of the Costs
of the Project. The Company agrees that if after exhaustion of the moneys in the
Construction  Fund,  the  Company  should  pay any  portion  of the Costs of the
Project  pursuant to the  provisions of this  Section,  the Company shall not be
entitled  to any  reimbursement  therefor  from the  Issuer,  the Trustee or the
Owners of any of the Bonds,  nor shall the Company be entitled to any diminution
of the amounts payable under Section 4.2 hereof.

                             * END OF ARTICLE III *



<PAGE>


                                   ARTICLE IV

                                 LOAN PROVISIONS

     Section  4.1.  Loan of  Proceeds.  The  Issuer  agrees,  upon the terms and
conditions contained in this Agreement and the Indenture, to lend to the Company
the proceeds  received by the Issuer from the sale of the Bonds.  Such  proceeds
shall be  disbursed  to or on behalf of the  Company as  provided in Section 3.3
hereof.

     Section 4.2.  Amounts Payable.

                  (a) The Company hereby covenants and agrees to repay the Loan,
         as follows: on or before any interest payment date for the Bonds or any
         other date that any payment of interest,  premium, if any, or principal
         is  required  to be  made  in  respect  of the  Bonds  pursuant  to the
         Indenture, until the principal of, premium, if any, and interest on the
         Bonds shall have been fully paid or provision  for the payment  thereof
         shall have been made in accordance  with the Indenture,  in immediately
         available  funds, a sum which,  together with any moneys  available for
         such  payment in the Bond  Fund,  will  enable  the  Trustee to pay the
         amount  payable on such date as  principal  of  (whether at maturity or
         upon  redemption or acceleration  or otherwise),  premium,  if any, and
         interest on the Bonds as provided in the Indenture.

                  (b) The Company will also pay the  reasonable  expenses of the
         Issuer  related  to the  issuance  of the Bonds and  incurred  upon the
         written request of the Company.

                  (c) The Company will also pay the reasonable fees and expenses
         of the Trustee  under the  Indenture and all other amounts which may be
         payable to the  Trustee  under  Section  10.02 of the  Indenture,  such
         amounts  to be paid  directly  to the  Trustee  for the  Trustee's  own
         account as and when such amounts become due and payable.

                  (d) The  Company  covenants,  for the benefit of the Owners of
         the Bonds, to pay or cause to be paid, to the Trustee,  such amounts as
         shall be necessary  to enable the Trustee to pay the Purchase  Price of
         Bonds delivered to it for purchase,  all as more particularly described
         in Sections 4.01 of the Indenture.

                  (e)  The  Company   agrees  to  pay  amounts   sufficient   to
         reestablish  the Reserve  Fund at the Reserve Fund  Requirement  within
         twelve (12) months of any deficit in the Reserve Fund below the Reserve
         Fund Requirement.

                  (f) Recognizing that Issuer has certain audit,  administrative
         and  clerical  expenses,  the  Company  agrees to pay to the  Issuer an
         administrative payment in a sum equal to its proportionate share of the
         audit expense plus one-eighth of one percent (1/8th of 1%) per annum of
         the principal  amount of the Bonds  Outstanding  as of the payment date
         during the term  thereof,  one-half of the first year's  administrative
         payment to be calculated by the Issuer six months after delivery of the
         Bonds  and  payable  within  thirty  (30)  days  thereafter,  with like
         calculations  and  payments  semiannually  thereafter  with  the  final
         payment due when the Bonds are retired. In addition, the Company agrees
         to pay to the Issuer,  together with interest at the Late Payment Rate,
         all sums  paid by the  Issuer to the  Trustee  for the  benefit  of the
         Owners of the Bonds,  such sums to be due and payable  immediately upon
         payment by the Issuer. Payments under this subsection (f) shall be made
         directly to the Issuer at its office in Oklahoma City, Oklahoma,  or at
         such other location as my be set forth in writing by the Issuer.

                  (g) In the event the  Company  should  fail to make any of the
         payments  required in this Section 4.2, the item or  installment  so in
         default shall continue as an obligation of the Company until the amount
         in default  shall have been fully paid,  and the Company  agrees to pay
         the same with interest  thereon,  to the extent  permitted by law, from
         the date when such payment was due, at the Late Payment Rate.

                  It is understood  and agreed that all payments  payable by the
         Company  under  subsections  (a),  (d) and (e) of this  Section 4.2 are
         assigned  by the Issuer to the Trustee for the benefit of the Owners of
         the Bonds.  The Company assents to such  assignment.  The Issuer hereby
         directs the Company and the Company hereby agrees to pay to the Trustee
         at the  Principal  Office of the  Trustee all  payments  payable by the
         Company pursuant to this subsection.

         For the  convenience  of the parties the fixed  payments  hereunder are
attached hereto as Exhibit "E".

         Section 4.3. Obligations of Company  Unconditional.  The obligations of
the  Company to make the  payments  required  in Section  4.2 and to perform and
observe  the  other   agreements   contained   herein   shall  be  absolute  and
unconditional  and shall not be subject  to any  defense or any right of setoff,
counterclaim  or  recoupment  arising  out of any  breach  by the  Issuer or the
Trustee of any obligation to the Company, whether hereunder or otherwise, or out
of any  indebtedness or liability at any time owing to the Company by the Issuer
or the Trustee,  and, until such time as the principal of, premium,  if any, and
interest  on the Bonds shall have been fully paid or  provision  for the payment
thereof shall have been made in accordance  with the Indenture,  the Company (i)
will not suspend or discontinue any payments provided for in Section 4.2 hereof,
(ii) will perform and observe all other  agreements  contained in this Agreement
and (iii) except as provided in Article IX hereof,  will not  terminate the Term
of Agreement for any cause,  including,  without  limiting the generality of the
foregoing,  failure of the Company to complete the acquisition,  rehabilitation,
furnishing  and  equipping  of  the  Project,  the  occurrence  of any  acts  of
circumstances  that  may  constitute  failure  of  consideration,   eviction  or
constructive  eviction,  destruction of or damage to the Project,  the taking by
eminent  domain  of  title  to or  temporary  use of any or all of the  Project,
commercial  frustration  of purpose,  any change in the tax or other laws of the
United States of America or of the State or any political  subdivision of either
thereof or any  failure of the Issuer or the  Trustee to perform and observe any
agreement,  whether  express or implied,  or any duty,  liability or  obligation
arising out of or  connection  with this  Agreement.  Nothing  contained in this
Section shall be construed to release the Issuer from the  performance of any of
the agreements on its part herein contained,  and in the event the Issuer or the
Trustee  should fail to perform any such  agreement on its part, the Company may
institute  such action against the Issuer or the Trustee as the Company may deem
necessary  to compel  performance  so long as such action does not  abrogate the
obligations of the Company contained in the first sentence of this Section.

                              * END OF ARTICLE IV *



<PAGE>


                                    ARTICLE V

                      DAMAGE, DESTRUCTION AND CONDEMNATION

     Section 5.1. Damage, Destruction and Condemnation. Unless the Company shall
have exercised its option to terminate this Agreement pursuant to the provisions
of Section  9.1(a) or Section  9.1(b)  hereof,  if prior to full  payment of the
Bonds (or prior to provision for payment  thereof having been made in accordance
with the provisions of the Indenture) (i) the Project is destroyed or damaged by
fire or other casualty or (ii) title to or any interest in, or the temporary use
of, the Project shall be taken under the exercise of the power of eminent domain
by any  governmental  body or by any person,  firm or  corporation  acting under
governmental  authority,  the Company  shall be obligated to continue to pay the
amounts specified in Section 4.2 hereof.

         Section  5.2.  Application  of Net  Proceeds.  The Net  Proceeds of any
insurance  proceeds or condemnation award resulting from any events described in
Section 5.1 hereof shall be deposited to the  Construction  Fund and used by the
Company to  restore  the  Project,  unless the Bonds are  redeemed  pursuant  to
Section 9.1(a) or 9.1(b).

     Section 5.3.  Insufficiency of Net Proceeds.  Unless the Company shall have
exercised its option to terminate this  Agreement  pursuant to the provisions of
Section 9.1(a) or 9.1(b) hereof,  if the Net Proceeds are insufficient to pay in
full the cost of any repair,  restoration,  modification  or  improvement of the
Project, the Company will nonetheless complete the work and will pay any cost in
excess of the amount of the Net Proceeds.  The Company  agrees that if by reason
of any such  insufficiency  of the Net  Proceeds,  the  Company  shall  make any
payments  pursuant to the  provisions of this Section,  the Company shall not be
entitled  to any  reimbursement  therefor  from the  Issuer,  the Trustee or the
Owners of any of the Bonds,  nor shall the Company be entitled to any diminution
of the amounts payable under Section 4.2 hereof.

                              * END OF ARTICLE V *



<PAGE>



                                   ARTICLE VI


                                SPECIAL COVENANTS

     Section 6.1. No Warranty of Condition or Suitability by Issuer.  THE ISSUER
MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE PROJECT OR THE CONDITION
THEREOF,  OR THAT THE PROJECT  WILL BE SUITABLE FOR THE PURPOSES OR NEEDS OF THE
COMPANY.  THE ISSUER MAKES NO  REPRESENTATION  OR WARRANTY,  EXPRESS OR IMPLIED,
THAT THE COMPANY WILL HAVE QUIET AND  PEACEFUL  POSSESSION  OF THE PROJECT.  THE
ISSUER MAKES NO REPRESENTATION OR WARRANTY,  EXPRESS OR IMPLIED, WITH RESPECT TO
THE MERCHANTABILITY,  CONDITION OR WORKMANSHIP OF ANY PART OF THE PROJECT OR ITS
SUITABILITY FOR THE COMPANY'S PURPOSES.

     Section 6.2. Access to the Project. The Company agrees that the Issuer, the
Standby  Purchaser,  the Trustee and their duly  authorized  agents,  attorneys,
experts,  engineers,  accountants  and  representatives  shall have the right to
inspect  the  Project at all  reasonable  times and on  reasonable  notice.  The
Issuer,  the Standby  Purchaser,  the Trustee and their duly  authorized  agents
shall also be  permitted,  at all  reasonable  times,  to examine  the books and
records of the Company with respect to the Project.

     Section 6.3. Further Assurances and Corrective Instruments.  The Issuer and
the Company agree that they will,  from time to time,  execute,  acknowledge and
deliver, or cause to be executed,  acknowledged and delivered,  such supplements
hereto and such further  instruments  as may reasonably be required for carrying
out the expressed intention of this Agreement.

     Section  6.4.  Issuer  and  Company  Representatives.  Whenever  under  the
provisions  of this  Agreement  the  approval  of the  Issuer or the  Company is
required  or the Issuer or the  Company is  required  to take some action at the
request of the  other,  such  approval  or such  request  shall be given for the
Issuer  by  an  Issuer   Representative   and  for  the  Company  by  a  Company
Representative.  The Trustee  shall be authorized to act on any such approval or
request.

         Section 6.5. Standby Bond Purchase Agreement. The Company covenants and
agrees to maintain a Standby Bond  Purchase  Agreement  or a  Substitute  Credit
Enhancement  at all  times  that  the  Bonds  remain  Outstanding.  The  Company
covenants  and  agrees  that it will not take any action  which will  impair its
rights  or the  rights of any  other  party  under  the  Standby  Bond  Purchase
Agreement or Substitute Credit Enhancement.  At any time the Company may, at its
option, subject to the provisions of the Standby Bond Purchase Agreement and the
Indenture,  provide  for the  delivery  to the  Trustee of a  Substitute  Credit
Enhancement in lieu of the Standby Bond Purchase Agreement then in effect.

                              * END OF ARTICLE VI *


<PAGE>



                                   ARTICLE VII


                          ASSIGNMENT, SELLING, LEASING;
                           INDEMNIFICATION; REDEMPTION

     Section 7.1.  Assignment,  Selling and Leasing.  This  Agreement may not be
assigned  and the  Project  may not be sold or  leased,  as a whole  or in part,
except upon payment in full of the principal,  interest and premium,  if any, on
the Bonds.

     Section 7.2.  Release and Indemnification Covenants.

                  (a) The Company  shall and hereby agrees to indemnify and save
         the Issuer,  the Standby Purchaser and the Trustee harmless against and
         from all claims by or on behalf of any  person,  firm,  corporation  or
         other legal entity  arising from the conduct or management  of, or from
         any work or thing done on, the  Project  during the Term of  Agreement,
         including without  limitation,  (i) any condition of the Project,  (ii)
         any breach or default on the part of the Company in the  performance of
         any  of  its  obligations  under  this  Agreement,  (iii)  any  act  or
         negligence  of  the  Company  or of any  of  its  agents,  contractors,
         servants,  employees  or  licensees  with  respect  to the  conduct  or
         management  of, or work or things  done on, the Project or (iv) any act
         or  negligence  of any  assignee  or lessee of the  Company,  or of any
         agents, contractors,  servants,  employees or licensees of any assignee
         or lessee of the Company with respect to the conduct or management  of,
         or work or things done on, the Project. The Company shall indemnify and
         save the Issuer,  the Standby  Purchaser and the Trustee  harmless from
         any such claim arising as aforesaid,  or in connection  with any action
         or proceeding  brought  thereon,  and upon notice from the Issuer,  the
         Standby Purchaser or the Trustee,  the Company shall defend them or any
         of them in any such action or proceeding.

                  (b)  Notwithstanding the fact that, except as specifically set
         forth on the face of the  Bonds,  it is the  intention  of the  parties
         hereto  that the  Issuer  shall not incur any  pecuniary  liability  by
         reason of the terms of this Agreement or the  undertakings  required of
         the Issuer hereunder, by reason of the issuance of the Bonds, by reason
         of the  execution of the Indenture or by reason of the  performance  of
         any act  requested of the Issuer by the Company,  including all claims,
         liabilities or losses  arising in connection  with the violation of any
         statutes or regulation  pertaining to the foregoing;  nevertheless,  if
         the Issuer  should  incur any such  pecuniary  liability,  then in such
         event the Company shall indemnify and hold the Issuer harmless  against
         all claims, demands or causes of action whatsoever,  by or on behalf of
         any person,  firm or  corporation  or other legal entity arising out of
         the same or out of any offering statement or lack of offering statement
         in  connection  with the sale or  resale of the Bonds and all costs and
         expenses  incurred in  connection  with any such claim or in connection
         with any action or proceeding brought thereon, and upon notice from the
         Issuer,  the  Company  shall  defend the  Issuer in any such  action or
         proceeding.  All  references to the Issuer in this Section 7.2 shall be
         deemed to include its trustees, officers, employees and agents.

                  (c) The Company  agrees to  indemnify  and hold  harmless  the
         Issuer, the Standby Purchaser and the Placement Agents from and against
         any and all loss, liability,  claim, damage and expenses whatsoever (i)
         arising out of any untrue  statement or alleged  untrue  statement of a
         material  fact  contained  in the Private  Placement  Memorandum  which
         relates  to  the   Company,   to  the  Project  or  to  the   Company's
         participation  in the transactions  contemplated by the Indenture,  the
         Agreement or the Standby Bond Purchase  Agreement or arising out of the
         omission or alleged omission from the Private  Placement  Memorandum of
         any material  fact  required to be stated  therein or necessary to make
         the  statements  as they relate to the Company or the Project or to the
         Company's  participation  in  the  transactions   contemplated  by  the
         Indenture,  the Agreement or the Standby Bond Purchase Agreement in the
         light of the  circumstances  under which they were made, not misleading
         unless such statement or omission was made in reliance upon information
         furnished  to the Company by the Issuer,  the Standby  Purchaser or the
         Placement  Agents,  as the  case  may  be,  (ii) to the  extent  of the
         aggregate  amount paid in  settlement of any  litigation,  commenced or
         threatened,  arising from a claim based on any such untrue statement or
         omission or any such alleged  untrue  statement  or  omission,  if such
         settlement  is effected  with the written  consent of the Company,  and
         (iii)  reasonable  expenses  incurred in  investigating,  preparing  or
         defending against any litigation, commenced or threatened, arising from
         a claim based upon any such untrue  statements  or omission or any such
         alleged  untrue  statement  or  omission,  to the extent  that any such
         expense is not paid pursuant to the preceding clauses of this sentence.
         The Company  shall be notified in writing of the nature of each and any
         such claim within a reasonable  time after the assertion  thereof,  but
         failure to notify the Company shall not relieve them from any liability
         which they may have on account of this  indemnity.  Each of the Issuer,
         the Standby  Purchaser  and the  Placement  Agents shall be entitled to
         participate at its own expense in the defense of any such claim.

         Notwithstanding  anything to the contrary contained herein, the Company
shall have no liability to indemnify the Issuer or the Trustee against claims or
damages resulting from the Issuer's or Trustee's own gross negligence or willful
misconduct.

     Section 7.3. Redemption of Bonds. The Company,  upon giving forty-five (45)
days written notice to the Trustee,  shall have and is hereby granted the option
to cause all or a portion of the Bonds to be redeemed at the times  permitted by
the Indenture.  The Issuer, at the request of the Company,  shall forthwith take
all steps  (other than the payment of the money  required  for such  redemption)
necessary under the applicable  redemption provisions of the Indenture to effect
redemption of all or part of the  Outstanding  Bonds, as may be specified by the
Company, on the date established for such redemption.

     Section  7.4.  Issuer to Grant  Security  Interest to Trustee.  The parties
hereto  agree that  pursuant to the  Indenture,  the Issuer  shall assign to the
Trustee,  in order to secure  payment of the Bonds,  all of the Issuer's  right,
title and  interest in and to this  Agreement,  except for the  Issuer's  rights
under Sections 4.2(b), 4.2(f), 7.2 and 8.4 hereof.

     Section  7.5.  Indemnification  of Trustee.  The  Company  shall and hereby
agrees to indemnify the Trustee for, and hold the Trustee harmless against,  any
loss,  liability  or expense  (including  the costs and  expenses  of  defending
against any claim of liability)  incurred  without  gross  negligence or willful
misconduct  by the  Trustee  and not in  violation  of any of the  terms  of the
Indenture and arising out of or in  connection  with its acting as Trustee under
the Indenture.

                             * END OF ARTICLE VII *



<PAGE>


                                  ARTICLE VIII

                              DEFAULTS AND REMEDIES

     Section 8.1. Defaults Defined. The following shall be "Defaults" under this
Agreement  and  the  term  "Default"  shall  mean,  whenever  it is used in this
Agreement, any one or more of the following events:

                  (a)  Failure by the  Company to pay any amount  required to be
         paid under  subsection (a) or (d) of Section 4.2 hereof,  which failure
         shall  have  resulted  in a Default  under  clause  (a),  (b) or (c) of
         Section 9.01 of the Indenture.

                  (b)  Failure  by  the  Company  to  observe  and  perform  any
         covenant,  condition  or  agreement  on  its  part  to be  observed  or
         performed, other than as referred to in Section 8.1(a), for a period of
         thirty  (30) days after  written  notice  specifying  such  failure and
         requesting  that it be remedied shall have been given to the Company by
         the Issuer or the Trustee; provided,  however, if the failure stated in
         the notice cannot be corrected within the applicable period, the Issuer
         and the Trustee may consent to an extension of such time if  corrective
         action is instituted by the Company  within the  applicable  period and
         diligently pursued until such failure is corrected.

                  (c) The  dissolution or liquidation of the Company,  except as
         authorized by Section 2.2 hereof,  or the  voluntary  initiation by the
         Company of any  proceeding  under any federal or state law  relating to
         bankruptcy, insolvency,  arrangement,  reorganization,  readjustment of
         debt or any other form of debt relief,  or the  initiation  against the
         Company of any such proceeding which shall remain undismissed for sixty
         (60) days,  or failure by the Company to promptly have  discharged  any
         execution,  garnishment  or  attachment  of such  consequence  as would
         impair the  ability of the  Company to carry on its  operations  at the
         Project, or assignment by the Company for the benefit of creditors,  or
         the entry by the Company  into an  agreement  of  composition  with its
         creditors  or the failure  generally by the Company to pay its debts as
         they become due.

                  (d) Any  representation or warranty made by the Company herein
         or any  statement in any report,  certificate,  financial  statement or
         other  instrument  furnished in connection  with this  Agreement or the
         Standby Bond  Purchase  Agreement  shall at any time prove to have been
         false or misleading in any material respect when made or given.

                  (e) The  Company  shall fail to  perform or observe  any other
         term,  covenant,  condition or agreement  contained or  incorporated by
         reference herein (other than a term, covenant, condition or agreement a
         default in the  performance or observance of which is elsewhere in this
         Section   specifically  dealt  with)  and  such  failure  shall  remain
         unremedied for thirty (30) days after notice to remedy the same.

                  (f)      The occurrence of a Default under the Indenture.

The  provisions of  subsection  (b) of this Section are subject to the following
limitation:  if by reason of force  majeure the Company is unable in whole or in
part to  carry  out any of its  agreements  contained  herein  (other  than  its
obligations  contained in Article IV hereof), the Company shall not be deemed in
Default during the  continuance of such  inability.  The term "force majeure" as
used herein shall mean, without limitation,  the following: acts of God; strikes
or other industrial disturbances; acts of public enemies; order or restraints of
any kind of the government of the United States of America or of the State or of
any of their  departments,  agencies or  officials,  or of any civil or military
authority;   insurrections;   riots;  landslides;  earthquakes;  fires;  storms;
droughts;  floods; explosions;  breakage or accident to machinery,  transmission
pipes or canals;  and any other cause or event not reasonably within the control
of the  Company.  The Company  agrees,  however,  to remedy with all  reasonable
dispatch  the cause or causes  preventing  the  Company  from  carrying  out its
agreement,  provided  that  the  settlement  of  strikes  and  other  industrial
disturbances  shall be  entirely  within the  discretion  of the Company and the
Company shall not be required to settle strikes,  lockouts and other  industrial
disturbances  by acceding to the demands of the  opposing  party or parties when
such course is in the judgment of the Company unfavorable to the Company.

     Section  8.2.  Remedies on  Default.  Whenever  any Default  referred to in
Section 8.1 hereof shall have happened and be  continuing,  the Trustee,  or the
Issuer with the written consent of the Trustee,  may take one or any combination
of the following remedial steps:

                  (a) If the Trustee has declared the Bonds  immediately due and
         payable pursuant to Section 9.02 of the Indenture, by written notice to
         the  Company,  declare  an  amount  equal to all  amounts  then due and
         payable on the Bonds,  whether by acceleration on maturity (as provided
         in the Indenture) or otherwise,  to be  immediately  due and payable as
         liquidated damages under this Agreement and not as a penalty, whereupon
         the same shall become immediately due and payable;


<PAGE>





                  (b) Have  reasonable  access to and inspect,  examine and make
         copies of the  books and  records  and any and all  accounts,  data and
         income tax and other tax returns of the Company during regular business
         hours of the  Company if  reasonably  necessary  in the  opinion of the
         Trustee; or

                  (c)  Take  whatever  action  at law or in  equity  may  appear
         necessary or  desirable to collect the amounts then due and  thereafter
         to  become  due,  or to  enforce  performance  and  observance  of  any
         obligation, agreement or covenant of the Company under this Agreement.

         Any amounts collected pursuant to action taken under this Section shall
be paid into the Bond Fund and applied in accordance  with the provisions of the
Indenture.

     Section  8.3.  No Remedy  Exclusive.  No remedy  herein  conferred  upon or
reserved to the Issuer or the Trustee is intended to be  exclusive  of any other
available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Agreement or now
or hereafter  existing at law or in equity. No delay or omission to exercise any
right or power accruing upon any Default shall impair any such right or power or
shall be  construed to be a waiver  thereof,  but any such right or power may be
exercised from time to time and as often as may be deemed expedient. In order to
entitle the Issuer or the Trustee to exercise any remedy  reserved to it in this
Article, it shall not be necessary to give any notice, other than such notice as
may be  required  in this  Article.  Such  rights and  remedies as are given the
Issuer hereunder shall also extend to the Trustee,  and the Trustee, the Standby
Purchaser  and  the  Owners  of the  Bonds,  subject  to the  provisions  of the
Indenture,  shall be  entitled to the benefit of all  covenants  and  agreements
herein contained.

     Section 8.4.  Agreement to Pay Attorneys'  Fees and Expenses.  In the event
the Company should default under any of the provisions of this Agreement and the
Issuer,  the Standby Purchaser or the Trustee should reasonably employ attorneys
or  reasonably  incur other  expenses for the  collection  of payments  required
hereunder or the  enforcement  of performance or observance of any obligation or
agreement on the part of the Company herein  contained,  the Company agrees that
it will on demand  therefor  pay to the  Issuer,  the Standby  Purchaser  or the
Trustee the reasonable fee of such attorneys and such other expenses so incurred
by the Issuer, the Standby Purchaser or the Trustee.

     Section 8.5. No Additional Waiver Implied by One Waiver; Consent of Standby
Purchaser  Required for Waivers.  In the event any  agreement  contained in this
Agreement should be breached by either party and thereafter  waived by the other
party, such waiver shall be limited to the particular breach so waived and shall
not be deemed to waive any other  breach  hereunder.  Neither the Issuer nor the
Trustee may waive any provision  hereunder  without the prior written consent of
the Standby Purchaser.

                             * END OF ARTICLE VIII *


<PAGE>



                                   ARTICLE IX


                         OPTIONS TO TERMINATE AGREEMENT

     Section 9.1. Option to Terminate Upon the Occurrence of Certain Events. The
Company  shall  have,  and is  hereby  granted,  the  option  to  terminate  its
obligations  under this  Agreement  if any of the events set forth  below  shall
occur:

                  (a) The Project  shall have been damaged or  destroyed  (i) to
         such extent that it cannot,  in the Company's  judgment,  be reasonably
         restored  within a period of six (6)  months to the  condition  thereof
         immediately  preceding  such  damage  or  destruction,  or (ii) to such
         extent  that  the  Company  is  thereby  prevented,  in  the  Company's
         judgment,  from carrying on its normal  operations at the Project for a
         period of six (6) months or more.

                  (b)  Title to,  or the  temporary  use for a period of six (6)
         months or more of, all or substantially  all the Project,  or such part
         thereof as shall materially interfere,  in the Company's judgment, with
         the  operation  of the Project for the purpose for which the Project is
         designed,  shall have been  taken  under the  exercise  of the power of
         eminent  domain  by any  governmental  body or by any  person,  firm or
         corporation  acting  under  governmental  authority  (including  such a
         taking or takings as results in the  Company  being  thereby  prevented
         from  carrying on its normal  operations at the Project for a period of
         six (6) months or more).

                  (c) Changes  which the Company  cannot  reasonably  control or
         overcome in the economic  availability of materials,  supplies,  labor,
         equipment and other  properties and things  necessary for the efficient
         operation  of  the  Project  for  the  purposes  contemplated  by  this
         Agreement  shall have  occurred  which in the  judgment  of the Company
         render the  continued  operation  of the  Project  uneconomic  for such
         purposes.

                  (d) As a result  of any  changes  in the  Constitution  of the
         State  or the  Constitution  of the  United  States  of  America  or of
         legislative or  administrative  action (whether state or federal) or by
         final  decree,  judgment or order of any court or  administrative  body
         (whether  state or federal)  entered  after the contest  thereof by the
         Company  in good  faith,  this  Agreement  shall  have  become  void or
         unenforceable  or impossible  of  performance  in  accordance  with the
         intent and purposes of the parties as expressed in this  Agreement,  or
         unreasonable  burdens or excessive  liabilities shall have been imposed
         on  the  Company  in  respect  to  the  Project,   including,   without
         limitation,  federal, state or other ad valorem,  property,  income, or
         other taxes not being imposed on the date of this Agreement.

To exercise such option, the Company shall within ninety (90) days following the
event  authorizing  such  termination,  give written  notice to the Issuer,  the
Standby  Purchaser  and the  Trustee  and  shall  specify  therein  the  date of
redemption of Bonds pursuant to Section 3.01 of the Indenture,  which date shall
be the next interest payment date in respect of the Bonds for which the required
notice of  redemption  can  practicably  be given,  and shall make  arrangements
satisfactory to the Trustee for the giving of the required notice of redemption.
In order to exercise such option, the Company shall pay, or cause to be paid, on
or prior to the applicable  redemption date, to the Trustee,  an amount equal to
the sum of the following:

                  (1) An amount of money which, when added to the amount then on
         deposit and  available in the Bond Fund,  will be  sufficient to retire
         and  redeem  all  the  Outstanding   Bonds  on  the  earliest  possible
         redemption  date after notice as provided in the Indenture,  including,
         without  limitation,  the  principal  amount  thereof,  all interest to
         accrue to said redemption date, and the applicable  redemption premium,
         if any, plus

                  (2) An  amount  of  money  equal  to the  Trustee's  fees  and
         expenses  under the  Indenture  accrued and to accrue  until such final
         payment and redemption of the Bonds, plus

                  (3) An amount of money equal to the Issuer's fees and expenses
         under this Agreement accrued and to accrue until such final payment and
         redemption of the Bonds.

         Section  9.2.  Optional  Prepayment.  The Company  shall be permitted
to prepay the Loan to the extent and
in the manner permitted by the Indenture.  No other prepayment is permitted.

                              * END OF ARTICLE IX *



<PAGE>


                                    ARTICLE X

                                  MISCELLANEOUS

     Section 10.1. Term of Agreement.  This Agreement shall remain in full force
and effect from the date hereof to and  including  such time as all of the Bonds
and the fees and expenses of the Issuer,  the Standby  Purchaser and the Trustee
shall have been fully paid or provision made for such payments.

     Section 10.2. Notices.  All notices,  certificates or other  communications
hereunder shall be  sufficiently  given and shall be deemed given when delivered
or mailed by registered mail, postage prepaid, or sent by a reputable over-night
courier service capable of providing a receipt,  addressed as follows: if to the
Issuer, to the Oklahoma Industries  Authority,  123 Park Avenue,  Oklahoma City,
Oklahoma 73102; if to the Trustee, to Boatmen's National Bank of Oklahoma,  P.O.
Box 25189, Oklahoma City, Oklahoma 73125, Attention: Corporate Trust Department;
if to the Company,  to Tower Tech,  Inc.,  P.O. Box 1838,  Chickasha,  Oklahoma,
73023, Attention:  President; and if to the Standby Purchaser,  Oklahoma Gas and
Electric Company, 101 North Robinson,  Oklahoma City, Oklahoma 73102, Attention:
Treasurer.  A duplicate copy of each notice,  certificate or other communication
given  hereunder by the Issuer or the Company shall also be given to the Trustee
and the Standby Purchaser.  The Issuer, the Company, the Trustee and the Standby
Purchaser  may, by written  notice  given  hereunder,  designate  any further or
different  addresses  to  which  subsequent   notices,   certificates  or  other
communications shall be sent.

     Section 10.3. Binding Effect.  This Agreement shall inure to the benefit of
and shall be binding upon the Issuer, the Company,  the Standby  Purchaser,  the
Trustee,  the  Owners of Bonds  and their  respective  successors  and  assigns,
subject, however, to the limitations contained in Section 2.2(b) hereof.

     Section 10.4.  Severability.  In the event any provision of this  Agreement
shall be held invalid or unenforceable  by any court of competent  jurisdiction,
such holding shall not invalidate or render  unenforceable  any other  provision
hereof.

     Section  10.5.  Amounts  Remaining in Funds.  Subject to the  provisions of
Section  6.10 of the  Indenture,  it is agreed by the  parties  hereto  that any
amounts  remaining  in the Bond Fund,  the  Construction  Fund or any other fund
created  under the Indenture  upon  expiration  or earlier  termination  of this
Agreement, as provided in this Agreement, after payment in full of the Bonds (or
provision for payment thereof having been made in accordance with the provisions
of the  Indenture)  and the fees and expenses of the Trustee in accordance  with
the Indenture, shall belong to and be paid to the Company by the Trustee.

     Section  10.6.  Amendments,  Changes and  Modifications.  Subsequent to the
issuance  of Bonds  and prior to their  payment  in full (or  provision  for the
payment  thereof  having  been made in  accordance  with the  provisions  of the
Indenture),  and except as otherwise herein expressly  provided,  this Agreement
may not be effectively amended, changed, modified, altered or terminated without
the written consent of the Trustee and the Standby  Purchaser and payment of all
amounts  payable to the Standby  Purchaser in accordance  with the provisions of
the Indenture.

     Section   10.7.   Execution  in   Counterparts.   This   Agreement  may  be
simultaneously  executed  in  several  counterparts,  each of which  shall be an
original and all of which shall constitute but one and the same instrument.

     Section 10.8.  Applicable  Law.  This  Agreement  shall be governed by and
construed in  accordance  with the laws of the State.

     Section 10.9.  Captions.  The captions and headings in this Agreement are
for  convenience  only and in no way define, limit or describe the scope or
intent of any provisions or Sections of this Agreement.

                              * END OF ARTICLE X *



<PAGE>


         IN WITNESS WHEREOF, the Issuer has caused this Agreement to be executed
in its name and the Company has caused this Agreement to be executed in its name
all as of the date first above written.

                                               OKLAHOMA INDUSTRIES AUTHORITY



                                               By:__________________________
                                                  Chairman

(Seal)

Attest:

------------------------
Assistant Secretary



                                                   TOWER TECH, INC.


                                                   By:______________________
                                                      President




<PAGE>





                                   EXHIBIT "A"

                                  PROJECT SITE

         A part of the Southeast Quarter (SE/4) of Section Eleven (11), Township
         Ten (10) North,  Range Four (4) West of the Indian Meridian,  Cleveland
         County,   Oklahoma,  being  more  particularly  described  as  follows:
         COMMENCING  at  the  Southeast  corner  of  said  SE/4,   THENCE  South
         89(Degree)42'04"  West along the South line of said SE/4 a distance  of
         1,780.60  feet to the  POINT  OF  BEGINNING;  THENCE  continuing  South
         89(Degree)42'04" West along the South line a distance of 843.24 feet to
         the Southwest Corner of said SE/4; THENCE North  00(Degree)07'35"  West
         along the West line of said SE/4 a distance of 1,764.49 feet to a point
         880.00 feet South of the  Northwest  Corner of said SE/4;  THENCE North
         89(Degree)42'07"  East  parallel  to and 880.00 feet South of the North
         line  of  said  SE/4  a  distance   of  490.00   feet;   THENCE   South
         00(Degree)07'35"  East and  parallel  with the West line of said SE/4 a
         distance  of  450.00  feet;  THENCE  North  89(Degree)42'07"  East  and
         parallel  with the North line of said SE/4 a distance of 1,380.65  feet
         to a point on the West right-of-way line of Will Rogers West Expressway
         (Interstate Highway No. 44); THENCE South  18(Degree)12'00"  West along
         the West  right-of-way line of said Expressway for a distance of 501.74
         feet to a point  of  curvature;  THENCE  Southwesterly  along  the West
         right-of-way  line of said  Expressway and on the arc of a curve to the
         right  having a radius  of  681.20  feet and a chord  bearing  of South
         33(Degree)11'53"  West for an arc distance of 356.68 feet to a point of
         tangency;   THENCE   South   48(Degree)12'00"   West   along  the  West
         right-of-way  line of said Expressway a distance of 515.05 feet; THENCE
         South  89(Degree)42'04"  West and parallel  with the South line of said
         SE/4 a distance of 200.00 feet; THENCE South  48(Degree)11'34" West and
         parallel to the Westerly  right-of-way  line of said  Expressway  for a
         distance of 3.15 feet to a point of curvature; THENCE Southwesterly and
         parallel to the Westerly  right-of-way  line of said  Expressway and on
         the arc of a curve to the left  having a radius of 185.78  feet,  and a
         chord bearing of South  23(Degree)56'51"  West for a distance of 157.23
         feet; THENCE South  42(Degree)39'21" West a distance of 39.62 feet to a
         point  33.00 feet North of the South  line of said SE/4;  THENCE  South
         00(Degree)17'56" East a distance of 33.00 feet to the POINT OR PLACE OF
         BEGINNING. Said described tract contains 50.1586 acres, more or less.



<PAGE>





                                   EXHIBIT "B"

                                PROJECT BUILDING

         105,000 Square Foot Manufacturing Facility located on the real property
described on Exhibit "A" hereto.



<PAGE>





                                   EXHIBIT "C"

                              REQUISITION NO. _____

To:      Boatmen's National Bank            Re:      $4,405,000 Oklahoma
         Bank of Oklahoma, as                         Industries Authority
         P.O.                                         Adjustable Rate Taxable
         Oklahoma City, OK  73125                     Industrial Revenue
                                                      Bonds (Tower Tech, Inc.
                                                      Project) Series 1996

Amount Requested:

Total Disbursements to Date:

         1. Each  obligation  for which a  disbursement  is hereby  requested is
described in  reasonable  detail in Exhibit A hereto  together with the name and
address of the person, firm or corporation to whom payment is due.

     2. The  bills,  invoices  or  statements  of  account  for each  obligation
referenced in Exhibit A are attached hereto as Exhibit B.

     3.  The Company hereby certifies that:

                  (a) each  obligation  mentioned  in Exhibit A is a Cost of the
         Project,  has been properly  incurred,  is a proper charge  against the
         Construction   Fund  and  has  not  been  the  basis  of  any  previous
         disbursement;

                  (b)      no part of the  disbursement  requested  hereby 
         will be used to pay for  materials  or equipment  not yet
         incorporated  into  the  Project  or for  services  not yet
         performed  in  connection therewith;

                  (c)  the  expenditure  of  the  amount  requested  under  this
         Requisition,   when   added  to  all   disbursements   under   previous
         Requisitions,  will  result in the total of such  disbursements,  other
         than disbursements for reasonable  expenses incurred in connection with
         the  issuance of the Bonds,  having been used (i) for the  acquisition,
         rehabilitation,  reconstruction  or  improvement of land or property or
         equipping of the Project of a character  subject to the  allowance  for
         depreciation  under the Code, or (ii) for payment of amounts which are,
         for federal  income tax purposes,  chargeable to the Project's  capital
         account or would be so chargeable  either with a proper election by the
         Company or but for a proper  election  by the  Company  to deduct  such
         amounts.

         4. All  capitalized  terms herein  shall have the meanings  assigned to
them in the  Loan  Agreement  dated  as of  October  1,  1996  between  Oklahoma
Industries Authority and Tower Tech, Inc.
                                               TOWER TECH, INC.



                                             By:___________________________
                                                Company Representative

<PAGE>





                                   EXHIBIT "D"

                             COMPLETION CERTIFICATE

TO:               Oklahoma Industries Authority ("Authority")
                  Boatmen's National Bank of Oklahoma ("Trustee")

FROM:    Tower Tech, Inc. ("Company")

SUBJECT: Loan  Agreement  dated as of the 1st day of October,  1996,  between
the  Company and the  Authority  (the "Loan Agreement").

         Capitalized terms used herein are defined in the Loan Agreement.

     The undersigned does hereby certify:

     1. The  acquisition,  rehabilitation  and  installation of the Project have
been substantially  completed in accordance with the Plans and in such manner as
to conform with all applicable zoning,  planning and building regulations of the
governmental   authorities   having   jurisdiction   of  the   Project,   as  of
_________________, 19_____ (the "Completion Date").

     2. The Costs of the Project have been paid in full except for those not yet
due and  payable,  which are  described  below and for which  moneys for payment
thereof are being held in the Construction Fund:

         Costs of the Project not yet due and payable:

                  Description                                 Amount

                                                              $----------------
                                       Total                  $________________

     3. No event of  default  has  occurred  under  the  Loan  Agreement  or the
Indenture nor has any event occurred which with the giving of notice or lapse of
time or both shall become such an event of default.  Nothing has occurred to the
knowledge of the Company that would prevent the  performance of its  obligations
under the Loan Agreement or the Indenture.

     This  certificate  is given without  prejudice to any rights  against third
parties  which  exist at the date  hereof  or which may  subsequently  come into
being.

     Executed this ______ day of __________________, 19_____.
                                          TOWER TECH, INC.


                                          By:___________________________
                                          Its Authorized Representative


<PAGE>



                                   EXHIBIT "E"