Exhibit 1.3

                                 AMENDMENT #2 TO
                             RESCISSION/DISTRIBUTION
                             BROKER/DEALER AGREEMENT


    THE  RESCISSION/DISTRIBUTION  BROKER/DEALER AGREEMENT (the "Agreement") made
and  entered  into as of the 31st day of March 2000 and  amended  the 3rd day of
May, 2000, by and between Mountain States Capital,  Inc., an Arizona corporation
(the "Company"), and Heritage West Securities, Inc., an Arizona corporation (the
"Broker/Dealer"),  is hereby further amended this 31st day of October, 2000. The
Agreement is hereby amended as follows:

    SECTION #4 (d) OF THE AGREEMENT IS AMENDED TO READ:

     (d) In  addition  to  the  expenses  described  in  Section  4(c)  and  the
commissions described in Section 4(e) with respect to the New Notes, the Company
shall pay the Broker/Dealer a fee for services rendered that are specific to the
Company's  Rescission Offer. The fee shall be equal to the greater of $25,000 or
One and One-Half  Percent (1 1/2%) of the total amount of principal  and accrued
but unpaid interest of the Outstanding  Notes applied toward the purchase of New
Notes by  Rescission  Offerees who have  accepted  the  Rescission  Offer.  Upon
execution  of  this  Agreement,  the  sum  of  $12,500  shall  be  paid  to  the
Broker/Dealer for Rescission Offer services to be performed.

     The remainder of the Broker/Dealer's  Rescission Offer fee shall be paid as
follows:

          (i) $10,000 within thirty (30) days of this Agreement; and

          (ii) The balance will be paid to the Broker/Dealer  upon conclusion of
the Rescission  Offer (at such time as the percentage of the total amount of the
face value of the rescinded Notes can be calculated).

     SECTION #4 (e) OF THE AGREEMENT IS AMENDED TO READ:

     (e)  The  Broker/Dealer's  fee for all New  Notes  issued  pursuant  to the
Registration Statement shall be as follows:

          (i)  Three   Percent   (3%)  of  the  face  amount  of  all  New  Note
subscriptions  where the offeree:  (a) is not a current or past New Note holder;
(b) is  identified  by the  Broker-Dealer;  and (c) does  not  have an  existing
relationship with, or was not identified by, the Company.

          (ii)  Three   Percent  (3%)  of  the  face  amount  of  all  New  Note
subscriptions  where the  offeree is a current or past New Note  holder,  but is
not, and has not ever been, identified by the Company or a Rescission Offeree.

          (iii) No fee on all New Notes  subscriptions  where the  offeree  is a
Rescission  Offeree who is applying his or her  Outstanding  Note balance toward
the purchase of the New Notes.

          (iv) One and One Half  Percent (1 1/2%) of the face  amount of all New
Note subscriptions that are issued pursuant to the Registration Statement and do
not fall into one of the three categories  described in  subparagraphs  4(e)(i),
(ii) or (iii) above.

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     If the Company and the Broker/Dealer agree that other broker-dealers are to
be utilized in the further distribution of the New Notes, then supplemental fees
will be  negotiated  amongst the parties on a case by case basis.  Inclusion  of
additional broker-dealers is not contemplated at this time.

     - All fees under this Section 4(e) shall be payable in twelve equal monthly
installments  paid monthly in arrears,  beginning  thirty days after the date of
the Company's  receipt of subscription  proceeds for the New Notes. In the event
any New Notes are prepaid or retired prior to their  maturity,  the Company will
be obligated to compensate the  Broker/Dealer  only for fees accrued through the
date the New Notes are prepaid or retired.

     SECTION #10 OF THE AGREEMENT IS AMENDED TO READ:

     10. Independent Bank to Oversee Separate Escrow Account.

     (a) In overseeing the Rescission  Offer and  distribution of the New Notes,
the Broker/Dealer will be acting in the capacity of a "$5,000  broker-dealer" as
that term is  defined by the SEC's net  capital  rules.  Accordingly,  all funds
initially received by the Broker/Dealer  pursuant to the Company's  Registration
Statement will be promptly  deposited or wired to the "Separate  Escrow Account"
maintained by Wells Fargo Bank,  National  Association.  The Broker/Dealer shall
cause all checks  issued or wires sent by New Note  investors to be made payable
to Wells Fargo Bank - Escrow Account FBO Mountain States Capital, Inc.

     (b) If the sum of the  canceled  Old Notes (as that term is  defined in the
Registration  Statement)  and New Note Investor funds on deposit in the Separate
Escrow  Account  total  $2,200,000 at any time prior to the  termination  of the
Separate  Escrow Account  Agreement dated August 22, 2000 and amended on October
30, 2000, then Well Fargo Bank shall release the Separate  Escrow  Account"funds
to the  Company.  If the  minimum  amount  of  canceled  Old  Notes and New Note
investor  funds in the  Separate  Escrow  Account  has not met or  exceeded  the
$2,200,000  prior to the "Minimum Amount Date",  Wells Fargo Bank shall within a
reasonable time following the "Termination  Date" refund to each of the New Note
investors all sums paid pursuant to their New Note subscription agreements.  For
the purposes of this  Agreement,  the terms  Separate  Escrow  Account,  Minimum
Amount Date and Termination  Date will have the meaning  ascribed to them in the
Separate Escrow Account Agreement.

     The  Agreement  is not  otherwise  amended  except as  expressly  set forth
herein.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this amendment to the
Agreement to be executed the day and year set forth above.

         MOUNTAIN STATES CAPITAL, INC.



         By: /s/ Chad Collins
            -------------------------------
            Chad Collins, President


         HERITAGE WEST SECURITIES, INC.



         By: /s/ Paul F. Arutt
            -------------------------------
            Paul F. Arutt, President

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