PROMISSORY NOTE AND SECURITY AGREEMENT

DATE: ___________                               $______________
DEBTOR:
                                                CREDITOR/SECURED PARTY:
Mountain States Capital, Inc.
2601 East Thomas Road, Suite 117                --------------------------------
Phoenix, Arizona 85016
                                                --------------------------------
PROMISE TO PAY
                                                --------------------------------

     Mountain States Capital, Inc. ("Debtor") hereby promises to pay upon demand
to the order of the  CREDITOR/SECURED  PARTY  listed above  ("Creditor")  at the
above  address,   the  sum  indicated  above,  with  interest  at  the  rate  of
____________  percent per month until paid.  This  Promissory  Note and Security
Agreement ("Agreement") is made in Phoenix, Arizona and shall be for a period of
_______________  months at which time all interest and principal  then remaining
shall be due and payable.  The  Agreement  may be called by the Creditor with 90
days written notice.  Monthly interest  payments will be made on the last day of
the month.  All amounts due for partial  months will be prorated  based upon the
number of days in that  month.  Debtor  shall have the option of  prepaying  the
principal  under this Agreement in whole or part,  without  penalty it any time.
All payments  hereunder  shall be applied first to interest,  then to principal,
then to late  charges.  Debtor  shall pay,  upon demand,  any and all  expenses,
including reasonable attorney fees, incurred or paid by Creditor without suit or
action in attempting to collect funds due under this Agreement.  In the event an
action is instituted to enforce or interpret any of the terms of this  Agreement
including  but not  limited  to any  action  or  participation  by  Debtor,  the
prevailing party shall be entitled to recover all expenses  reasonably  incurred
at, before and after trial,  on appeal,  and on review whether or not taxable as
costs,  including,  without limitation,  attorney fees, witness fees (expert and
otherwise), deposition costs, copying charges and other expenses.

SECURITY AGREEMENT

     Debtor,  does  hereby  grant unto the Secured  Party,  its  successors  and
assigns,  a security interest in the assets of the corporation,  Mountain States
Capital,  Inc.,  together  with all  increases,  intangible  assets,  equipment,
renewals and  replacements of all or any part thereof,  and other assets whether
now owned or hereafter acquired by Debtor (all hereinafter called "Collateral"),
and all proceeds of the  Collateral,  to secure prompt  payment when due of this
Promissory  Note and Security  Agreement,  executed  and  delivered by Debtor to
Secured Party, and any and all extensions and renewals thereof,  and any and all
future  advances  made by  Secured  Party to Debtor at Secured  Party's  option,
together with all other  liabilities to Secured Party  (primarily,  secondarily,
direct,  contingent,  sole, joint, or several) due or to become due or which may
be hereafter  contracted or acquired and the performance by Debtor of all of the
terms and conditions of this Agreement.

DEBTOR WARRANTS:  1. Debtor is or will be the owner of the Collateral subject to
similar secured agreements;  2. Debtor has the right to make this agreement;  3.
the Collateral is used or bought for use and will be used primarily for business
purposes  and that  the  location  specified  above is  Debtor's  only  place of
business.

     THIS AGREEMENT IS SUBJECT TO THE ADDITIONAL TERMS ON THE BACK OF THIS PAGE,
WHICH ARE MADE A PART HEREOF.


-----------------------------------     ----------------------------------------
SECURED PARTY             Date          MOUNTAIN STATES CAPITAL, INC.    Date


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SECURED PARTY             Date
<PAGE>
              DEBTORS FURTHER COVENANTS, WARRANTS AND AGREES THAT:

     1.  Debtor will pay the  Secured  Party all amounts  payable on the note or
notes  mentioned above and all other notes held by Secured Party as and when the
same  shall  be due  and  payable,  whether  at  maturity,  by  acceleration  or
otherwise,  and will  perform  all  terms of said  notes  and this or any  other
security or loan agreement  between Debtor and Secured Party, and will discharge
all said liabilities.

     2.  Debtor  will defend the  Collateral  against  all  persons  claiming an
interest  adverse to that of the  Secured  Party and pay  promptly  when due all
taxes and assessments upon the Collateral.

     3. Debtor will keep the Collateral in good condition and repair, reasonable
wear and tear  excepted,  and will permit  Secured Party to enter upon any lands
owned, leased or otherwise  controlled by the Debtor at reasonable times for the
purpose of examining the Collateral.

     4.  Debtor  will  pay as part  of the  debt  hereby  secured  all  amounts,
including reasonable attorney's fees and legal expenses,  with interest thereon,
paid  by  Secured  Party  (a) for  taxes,  levies,  insurance,  repairs  to,  or
maintenance of the Collateral,  and (b) in taking  possession of disposing of or
preserving the  Collateral,  and (b) in taking  possession  of,  disposing of or
preserving the Collateral after any default hereinafter described.

     5. Debtor will  immediately  notify Secured Party of any change in Debtor's
residence or place of business.

     6. Debtor will without the prior  written  consent of Secured Party provide
for additional  notes and security  agreements at the sole discretion of Debtor.
The Secured Party may be over or under secured.

     7. Debtor hereby authorizes  Secured Party at Debtor's  expense,  to do all
acts and things which Secured  Party may deem  necessary to perfect and continue
perfected  the  security  interest  created by this  security  agreement  and to
protect the Collateral.

     S. Any notice  form  Secured  Party to Debtor,  if mailed,  shall be deemed
given when mailed,  certified mail, postage prepaid,  addressed to Debtor either
at Debtor's address specified above, or such other address of Debtor as may from
time to time be shown on Secured Party's records.

     9. UNTIL  DEFAULT,  Debtor may  retain possession of the Collateral and use
it in any lawful manner not inconsistent with the agreements herein, or with the
terms and conditions of any policy of insurance thereon.

     10.  DEFAULT-Debtor  shall be in  default  under this  agreement  upon the
happening  of any of the  following  events:  (a)  nonpayment,  when due, of any
amount  payable on any of the  liabilities  or failure to observe or perform any
term hereof; (b) if any covenant,  warranty or representation  shall prove to be
untrue in any material  respect;  (c) any Debtor becomes insolvent or unable to
pay debts as they mature or makes an assignment for the benefit of creditors, or
any  proceeding  is  instituted  by or against any Debtor   alleging  that such
Debtor is  insolvent  or unable  to pay debts as they  mature;  (d) entry of any
judgement  against any Debtor;  (e) death of any Debtor who is a natural person,
or of any partner of any Debtor which is a partnership; (f) dissolution,  merger
or consolidation,  or transfer of substantial part to the property of any Debtor
which is a corporation or a partnership; or (g) loss, theft, substantial damage,
destruction or encumbrance of any of the Collateral.

     In the event of a default,  Secured  Party  shall  have the  right,  at its
option  and  without  demand  or  notice,  to  declare  all or any  part  of the
obligations  immediately  due and payable;  and in addition,  Secured  Party may
exercise,  in addition to the rights and  remedies  granted  hereby,  all of the
rights and remedies of a Secured Party under the Uniform  Commercial Code or any
other  applicable  law.  Debtor  agrees in the event of a  default,  to make the
Collateral  available to Secured  Party at a place to be  designated  by Secured
Party which is reasonably convenient. Debtor further agrees  to pay all cost and
expenses  of  Secured  Party,  including  reasonable  attorneys'  fees,  in  the
collection  of any  of the  Obligations  or the  enforcement  of any of  Secured
Party's rights. If any notice of sale,  disposition or other intended  action by
Secured  Party is  required by law to be given to Debtor,  such notice  shall be
deemed  reasonably  and  properly  given if  mailed  to  Debtor  at the  address
specified  above,  or such  other  address  of Debtor as may be shown on Secured
Party's  records,  at least (10) days  before  such sale,  disposition  or other
intended action.  Waiver of any default  hereunder by Secured Party shall not be
waiver of any other default or of a same default on a later  occasion.  No delay
or failure by Secured Party to exercise any right or remedy shall be a waiver of
such right or remedy and no single,  or partial exercise by Secured Party of any
right or remedy shall preclude other or further exercise thereof or the exercise
of any other right or remedy at any other time.

     11. This  agreement  and all rights and  obligations  hereunder,  including
matters of construction, validity and performance, shall be governed by the laws
of  Arizona.  If any  part of this  contract  shall  be  adjudged  invalid,  the
remainder shall not thereby be invalidated.

     12. If more than one party  shall sign this  Security  Agreement,  the term
"Debtor" shall mean all such parties and each of them and all such parties shall
be jointly and severally obligated hereunder.  All rights of Secured Party shall
inure to the benefit of its  successors  and  assigns,  and all  obligations  of
Debtor shall bind Debtor's  heirs,  executors,  administrators,  successors  and
assigns.

     13.   Additional   provisions   of   this   agreement   (if   none   insert
"NONE"):__________________________