EXHIBIT 10.2

                                 PROMISSORY NOTE


$40,000.00                        Dallas, Texas               October 11, 1996


         FOR VALUE  RECEIVED,  Preferred/Telecom,  Inc., a Delaware  corporation
promises  to pay to the order of  Lawrence E.  Steinberg,  at 5420 LBJ  Freeway,
Suite 540, LB 56,  Dallas,  Texas 75240,  or at such other address as the holder
hereof may designate,  the principal sum of Forty Thousand Dollars ($40,000.00),
together  with  interest on the unpaid  principal  balance  from the date hereof
until this note is paid in full at a rate of 10% per annum.

         Principal and interest shall be payable in one  installment on November
25, 1996.

         All payments  received shall be applied first to the payment of accrued
interest and then to the payment of principal.

         Maker shall have the right to prepay any and all amounts due  hereunder
without penalty for the privilege of doing so.

         No payment shall be considered in default  unless it is not paid within
ten (10) days after delivery of written notice of nonpayment.

         In the event  default is made in the  payment of this Note,  the unpaid
balance on this Note shall at once become due and payable,  without  notice,  at
the option of the Holder. Failure to exercise this option shall not constitute a
waiver of the right to declare the entire  principal  due and payable at once at
any subsequent time.

         If, after default,  this Note is placed in the hands of an attorney for
collection,  or if collected  through judicial  proceeding,  Maker shall pay, in
addition to the sums  referred to above,  a reasonable  sum as a  collection  or
attorneys'  fee and all other  costs  incurred  by Holder in  collection  of the
unpaid amounts due hereunder.

         This note is secured  evidenced  by a Security  Agreement  of even date
herewith between maker and payee.

         Each maker, surety,  guarantor,  endorser or other party liable for the
payment of this Note, in whole or in part,  hereby expressly waives  presentment
and demand for payment,  notice of intention to accelerate  maturity,  notice of
acceleration of maturity, protest and notice of protest and nonpayment, bringing
of suit and  diligence  in taking any action to collect sums owing  hereon,  and
agree that this Note,  and any payment  hereunder,  may be extended from time to
time without in any way affecting such liability.

PROMISSORY NOTE - Page 1

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                                                     MAKER:

                                                     PREFERRED/TELECOM, INC.


                                                     By:
                                                              G. Ray Miller
                                                              Its:  Chairman



PROMISSORY NOTE - Page 2

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                               SECURITY AGREEMENT


                                                         Date:  October 11, 1996

A.       PARTIES

         1.       Debtor:           Preferred/telecom, Inc.

         2.       Address:          12655 N. Central Expressway, Suite 800
                                    Dallas, Texas  75243

         3.       Secured Party:    Lawrence E. Steinberg

         4.       Address:          5420 LBJ Freeway, Suite 450
                                    Dallas, Texas  75240

  (Information  concerning this security  interest may be obtained at the office
of the secured party shown above.)

B.       AGREEMENT

         Subject to the  applicable  terms of this  security  agreement,  debtor
         grants  secured party a security  interest in the  collateral to secure
         the payment of the obligation.

C.       OBLIGATION

         The following is the obligation secured by this agreement:

         1.       Debtor's note to secured party, dated October 11, 1996 in the 
                  amount of $40,000, and extension and renewals thereof.

         2.       All costs incurred by secured party to obtain,  preserve,  and
                  enforce this security  interest,  collect the obligation,  and
                  maintain and preserve the  collateral,  and including (but not
                  limited to) taxes,  assessments,  insurance premium,  repairs,
                  reasonable  attorney's fees and legal expenses,  rent, storage
                  costs, and expense of sale.

         3.       Interest on the above amounts, as agreed between secured party
                  and debtor, or, if no such agreement, at the maximum rate 
                  permitted by law.

D.       COLLATERAL

         1.       The security is granted in the collateral described on the 
                  page, headed "DESCRIPTION OF COLLATERAL," initialed by the 
                  parties for identification.

         2.       The collateral includes all substitutes and replacements for, 
                  accessions, attachments, and other additions to it.

         3.       The collateral will be kept at:   12655 N. Central Expressway,
                                                    Suite 800
                                                    Dallas, Dallas County, Texas

         4.       The collateral is classified under (one or more of) the 
                  following Uniform Commercial Code categories:

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(  ) Consumer goods (personal, family, household)    (  ) Equipment (farm use)

(  ) Equipment (business use other than farming)     (  ) Farm products

(  ) Account or contract rights                      (  ) Inventory

(  )Fixture attached or to be attached to land described on the page, headed 
     "DESCRIPTION OF COLLATERAL"

         5.       (  ) If this block is checked, this is a purchase money 
                  security interest and debtor will use funds advanced to 
                  purchase the collateral, or secured party may disburse funds 
                  direct to the seller of the collateral.

         6.       If any of the collateral is accounts or contract rights, the 
                  location of the office where the records concerning them are 
                  kept is:
                  --------------------------------------------------------------

         7.       If this security agreement is to be filed as a financing 
                  statement, check the appropriate block if
                  (  ) Proceeds                                   (  ) Products

                  are  covered for  financing  statement  purposes.  Coverage of
                  proceeds  for  financing  statement  purposes  is  not  to  be
                  construed as giving debtor any additional  rights with respect
                  to the  collateral,  and  debtor  is not  authorized  to sell,
                  lease, otherwise transfer, furnish under contracts of service,
                  manufacture,  process,  or assemble the  collateral  except in
                  accordance  with the  provisions  on the back of this security
                  agreement.

                           (ADDITIONAL TERMS ON BACK)

SECURED PARTY:                         DEBTOR:


By:                                    By:
        Lawrence E. Steinberg             G. Ray Miller, Chief Executive Officer

ATTEST:  (If corporation)                 ATTEST:  (If corporation)





DEBTOR WARRANTS, COVENANTS AND AGREES:

1.       TITLE - Except for the security interest hereby granted, Debtor has, or
         upon  acquisition  will have,  full fee simple title to Collateral free
         from any lien,  security  interest,  encumbrance,  or claim, and Debtor
         will, at Debtor's cost and expense  defined any action which may affect
         Secured Party's security interest in or Debtor's title to Collateral.
2.       FINANCING STATEMENT - No Financing Statement covering Collateral or any
         part thereof or any proceeds thereof is on file in any public office 
         and at Secured Party's request Debtor will join in executing all 
         necessary

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         Financing  Statements in forms  satisfactory  to Secured Party and will
         pay the  cost of  filing  same  and  will  further  execute  all  other
         necessary  instruments  deemed by Secured  Party to be required and pay
         the cost of filing same.
3.       SALE,  LEASE,  OR DISPOSITION OF COLLATERAL - Debtor will not,  without
         written  consent  of  Secured  Party  sell,  contract  to sell,  lease,
         encumber or dispose of  collateral  or any interest  therein until this
         Security  Agreement  and all debts  secured  thereby  have  been  fully
         satisfied.
4.       INSURANCE - Debtor will insure the Collateral with companies acceptable
         to Secured Party against such casualties and in such amounts as Secured
         Party shall require with a standard mortgage clause in favor of Secured
         Party and Secured Party is hereby  authorized to collect sums which may
         become due under any of said policies and apply same to the obligations
         hereby secured.
5.       PROTECTION  OF  COLLATERAL  - Debtor will keep the  Collateral  in good
         order and repair and will not waste or destroy  Collateral  or any part
         thereof. Debtor will not use the Collateral in violation of any statute
         or  ordinance  and  Secured  Party will have the right to  examine  and
         inspect Collateral at any reason time.
6.       TAXES - Debtor will pay promptly when due all taxes and assessments 
         upon the Collateral or for its use and operation.
7.       LOCATION AND IDENTIFICATION - Debtor will keep the Collateral  separate
         and  identifiable and at the address shown on the front page hereof and
         will not  remove  the  Collateral  from said  address  without  Secured
         Party's written consent.
8.       ADDITIONAL  SECURITY INTEREST - Debtor hereby grants to Secured Party a
         security  interest in and to all  proceeds,  increases,  substitutions,
         replacements,   additions,  and  accessions  to  the  Collateral.  This
         provision  will not be construed to mean that Debtor is  authorized  to
         sell, lease, or dispose of Collateral without Secured Party's consent.
9.       FUTURE  INDEBTEDNESS - The security interest hereby granted secures the
         indebtedness   described  on  the  front  page  hereof  and  all  other
         obligations of Debtor to Secured Party, direct or indirect, absolute or
         contingent,  due  or to  become  due,  whether  existing  or  hereafter
         arising.
10.      Intentionally deleted.
11.      REIMBURSEMENT  OF EXPENSES - At Secured Party's  option,  Secured Party
         may  discharge  taxes,  lien,  interest,  or  perform  or  cause  to be
         performed  for and in behalf  of Debtor  any  actions  and  conditions,
         obligations or covenants  which Debtor has failed or refused to perform
         and may pay for the repair,  maintenance and preservation of Collateral
         and all sums so  expended,  including  (but not limited to)  attorney's
         fees, court costs, agent's fees, or commissions,  or any other costs or
         expenses  shall bear  interest  from the date of payment at the rate of
         10% per annum and shall be payable at the place designated in the above
         described note and shall be secured by this Security Agreement.
12.      PAYMENT - Debtor will pay the note secured by this  Security  Agreement
         or any renewal or extension thereof and any other  indebtedness  hereby
         secured in accordance  with the terms and  provisions  thereof and will
         repay immediately all sums expended by Secured Party in accordance with
         the terms and provisions of this Security Agreement.
13.      CHANGE OF RESIDENCE OR PLACE OF BUSINESS - Debtor will promptly  notify
         Secured  Party of any  change of  Debtor's  residence,  chief  place of
         business or place where records concerning accounts and contract rights
         are kept.
14.      ATTORNEY-IN-FACT   -Debtor  hereby  appoints   Secured  Party  Debtor's
         Attorney-in-fact  to do any and every act which  Debtor is obligated by
         this  Security  Agreement to do and to exercise all rights of Debtor in
         Collateral  and to make  collections  and to execute any and all papers
         and  instruments  and to do all other things  necessary to preserve and
         protect  Collateral and to protect Secured Party's security interest in
         said Collateral.
15.      TIME  WAIVER - Debtor  agrees  that in  performing  any act under  this
         Security  Agreement and the note secured  thereby that time shall be of
         the  essence  and  that  Secured  Party's   acceptance  of  partial  or
         delinquent payments,  or failure of Secured Party to exercise any right
         or remedy shall not be a waiver of any obligation of Debtor or right of
         Secured  Party or  constitute  a waiver  of any other  similar  default
         subsequently occurring.
16.      DEFAULT - Debtor shall be in default under this Security Agreement upon
         the happening of any of the following events or conditions:
         a.   Default in the payment or performance of any note obligation, 
              covenant or liability contained or referred to herein after 
              expiration of any cure period provided in the Note.

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         b.   Any  warranty,  representation  or statement  made or furnished to
              Secured  Party by or on behalf of Debtor proves to have been false
              in any material respect when made or furnished.
         c.   Any event which results in the acceleration of the maturity of the
              indebtedness of Debtor or others under any indenture, agreement or
              undertaking.
         d.   Loss, theft, substantial damages, destruction, sale or encumbrance
              to or of any of the Collateral, or the making of any levy, seizure
              or attachment thereof or thereon.
         e.   Substantial change in any fact warranted or represented in this 
              agreement.
         f.   Intentionally deleted.
         g.   Merger or consolidation of Debtor with another.
         h.   Death, dissolution, termination of existence, insolvency, business
              failure, appointment of a receiver for any part of the Collateral,
              assignment for the benefit of creditors or the commencement of any
              proceeding  under any  bankruptcy or insolvency  law by or against
              debtor or any guarantor or surety for Debtor.
         i.   Filing any financing statement with regard to the Collateral, 
              other than relating to the security interest.
         j.   Intentionally deleted.
17.      REMEDIES - Upon the occurrence of any such event of default, and at any
         time thereafter Secured Party may declare all obligations secured 
         hereby immediately due and payable and may proceed to enforce payment 
         of the same and exercise any and all of the rights and remedies 
         provided by the Uniform Commercial Code as well as all other rights and
         remedies possessed by Secured Party.  Secured Party may require Debtor 
         to assemble the Collateral and make it available to Secured Party at 
         any place to be designated by Secured Party which is reasonably 
         convenient to both parties.  Unless the Collateral is perishable or 
         threatens to decline speedily in value or is of a type customarily sold
         on a recognized market, Secured Party will give Debtor reasonable 
         notice of the time and place of any public sale thereof or of the time 
         after which any private sale or any other intended disposition thereof
         is to be made.  The requirements of reasonable notice shall be met
         if such notice is mailed, postage prepaid, to the address of Debtor 
         shown at the beginning of this Security Agreement at least five (5) 
         days before the time of the sale or disposition. Expenses of re-taking,
         holding, preparing for sale, selling or the like shall include Secured 
         Party's reasonable attorney's fees and legal expenses.
18.      MISCELLANEOUS  - The rights and privileges of Secured Party shall inure
         to its  successors  and assigns.  All  representations,  warranties and
         agreements  of Debtor are joint and  several if Debtor is more than one
         and shall bind Debtor's personal representatives, heirs, successors and
         assigns.  Definitions in the Uniform Commercial Code apply to words and
         phrases in this  Agreement.  If Code  definitions  conflict,  Article 9
         definitions  apply.  Debtor  waives  presentment,   demand,  notice  of
         dishonor,  protest,  and  extension  of time  without  notice as to any
         instruments and chattel paper in the Collateral, if any.

                            DESCRIPTION OF COLLATERAL

NOTE:  The following information must be included:

1.       For crops, oil, gas or other minerals to e extracted, timber to be cut,
         and fixtures (goods to be affixed to real estate), A DESCRIPTION OF THE
         REAL ESTATE concerned and the name of the record owner.
2.       If  Debtor's  residence  is  outside  of the State:  give  location  of
         consumer goods,  farm products and farm  equipment,  and, if Collateral
         includes accounts arising from the sale of farm products, give location
         of products sold.
3.       If this is a purchase money security interest in farm equipment, give 
         purchase price of each item.


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