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<SEC-DOCUMENT>0000318673-06-000003.txt : 20060105
<SEC-HEADER>0000318673-06-000003.hdr.sgml : 20060105
<ACCEPTANCE-DATETIME>20060105140108
ACCESSION NUMBER:		0000318673-06-000003
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20051230
ITEM INFORMATION:		Completion of Acquisition or Disposition of Assets
FILED AS OF DATE:		20060105
DATE AS OF CHANGE:		20060105

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SECURITY NATIONAL FINANCIAL CORP
		CENTRAL INDEX KEY:			0000318673
		STANDARD INDUSTRIAL CLASSIFICATION:	FINANCE SERVICES [6199]
		IRS NUMBER:				870345941
		STATE OF INCORPORATION:			UT
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-09341
		FILM NUMBER:		06511822

	BUSINESS ADDRESS:	
		STREET 1:		PO BOX 57220
		CITY:			SALT LAKE CITY
		STATE:			UT
		ZIP:			84157
		BUSINESS PHONE:		8012641060

	MAIL ADDRESS:	
		STREET 1:		PO BOX 57220
		CITY:			SALT LAKE CITY
		STATE:			UT
		ZIP:			84157

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SNL FINANCIAL CORP
		DATE OF NAME CHANGE:	19910401
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>snfc8k0106.txt
<DESCRIPTION>8K FOR MEMORIAL INS. CO 01/04/06
<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549




                                    FORM 8-K




                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934



       Date of Report (Date of Earliest Event Reported): December 29, 2005



                     SECURITY NATIONAL FINANCIAL CORPORATION
             (Exact name of registrant as specified in this Charter)



         Utah                         0-9341                 87-0345941
       --------                     ---------              -------------
(State or other jurisdiction  (Commission File Number)     (IRS Employer
 of incorporation)                                       Identification No.)




5300 South 360 West,  Salt Lake City, Utah                       84123
- ------------------------------------------                     ---------
(Address of principal executive offices)                        (Zip Code)



       Registrant's Telephone Number, Including Area Code: (801) 264-1060





                                 Does Not Apply
          (Former name or former address, if changed since last report)



<PAGE>

ITEM 2.01.  Completion of Acquisition of Memorial Insurance Company of America.

     On  December  29,  2005,  Security  National  Financial   Corporation  (the
"Company"), through its subsidiaries,  Security National Life Insurance Company,
a Utah domiciled  insurance  company and wholly owned subsidiary of the Company,
and Southern  Security Life Insurance  Company,  a Florida  domiciled  insurance
company and wholly owned subsidiary of Security National Life Insurance Company,
completed  a stock  purchase  transaction  with  Memorial  Insurance  Company of
America, an Arkansas domiciled insurance company ("Memorial Insurance Company"),
to purchase all of the outstanding  shares of common stock of Memorial Insurance
Company.  Under the  terms of the  transaction,  the  shareholders  of  Memorial
Insurance  Company  received   $13,500,000  in  consideration  for  all  of  the
outstanding common shares of Memorial  Insurance Company,  with each shareholder
having  received  a  pro  rata  share  of  the  total  amount  of  the  purchase
consideration based upon the number of shares such shareholder owns.

     The shareholders  received a total of $13,500,000 for their shares by means
of  distributions,  with Security  National Life Insurance  Company and Southern
Security Life Insurance Company simultaneously  contributing  sufficient capital
and surplus to Memorial  Insurance Company to maintain its status as an admitted
insurer in good  standing in the state of  Arkansas.  The  transaction  is to be
treated, for federal and state tax purposes,  as a part sale, part redemption of
the Memorial  Insurance  Company stock. At the closing of the  transaction,  the
shareholders of Memorial  Insurance Company sold all of their shares of Memorial
Insurance Company stock to Southern Security Life Insurance Company, such shares
representing  all of the  issued and  outstanding  stock of  Memorial  Insurance
Company.  As  a  result,   Memorial  Insurance  Company  became  a  wholly-owned
subsidiary of Southern Security Life Insurance Company.

     As of December 31, 2004, Memorial Insurance Company had 100,170 policies in
force and 50 agents.  For the year ended December 31, 2004,  Memorial  Insurance
Company had revenues of $4,893,000 and net income of $2,158,000.  As of December
31, 2004, the statutory assets and the capital and surplus of Memorial Insurance
Company were $45,048,000 and $12,303,000, respectfully.

     Under the  terms of the  transaction,  as set  forth in the Stock  Purchase
Agreement  dated  September  23, 2005 among  Security  National  Life  Insurance
Company,  Southern  Security  Life  Insurance  Company,  and Memorial  Insurance
Company,  the shareholders agree, where applicable  following the closing of the
transaction,  to maintain any existing policies from Memorial  Insurance Company
that were  previously  sold  through  such  shareholders'  funeral and  mortuary
businesses  and to avoid  replacing  any of such  policies  with the policies of
other  insurance  companies.   The  shareholders  further  agree  to  use  their
reasonable  best  efforts to support the  business  and  operations  of Memorial
Insurance  Company,   including,   where  applicable,  to  maintain  a  business
relationship  with  Memorial  Insurance  Company to the  extent  such a business
relationship existed prior to such closing.

     Moreover,  Security  National Life Insurance  Company and Southern Security
Life  Insurance  Company  agree,  pursuant  to the terms of the  Stock  Purchase
Agreement,  to maintain the corporate  offices of Memorial  Insurance Company at
its current location in Blytheville,  Arkansas.  Furthermore,  Security National
Life Insurance Company and Southern Security Life Insurance Company agree to use
their best efforts,  following the closing, to assist Memorial Insurance Company
in retaining  the sales agents and brokers in its business and  operations.  The
obligations to complete the  transaction  were  contingent  upon approval of the
transaction by the Arkansas Insurance Department. A hearing was held on December
9, 2005 with the Commissioner of the Arkansas  Insurance  Department to consider
the request to approve the  transaction,  and the  Commissioner  issued an order
dated December 21, 2005 approving the transaction.

     At the closing of the transaction, Security National Life Insurance Company
and Memorial Insurance Company entered into a reinsurance  agreement to reinsure
the majority of the in force business of Memorial  Insurance Company to Security
National Life Insurance  Company,  as reinsurer,  to the extent permitted by the
Arkansas Insurance Department.  The assets and liabilities to be reinsured under
the  reinsurance  agreement  will be deposited  into a trust  account,  in which
Zion's First National Bank has agreed to act as trustee.  Under the terms of the
reinsurance agreement,  in the event of the insolvency of Security National Life
Insurance  Company,   Zions  First  National  Bank  will  hold  the  assets  and
liabilities  in trust for  purposes  of the  administration  of the  assets  and
liabilities with respect to such insolvency.


<PAGE>


     As a  result  of  the  execution  of  the  reinsurance  agreement,  certain
insurance  business  and  operations  of  Memorial  Insurance  Company  will  be
transferred to Security National Life Insurance Company,  including all policies
in force as of the  effective  date thereof,  except for certain  policies to be
retained  by  Memorial  Insurance  Company.  Any future  insurance  business  by
Memorial Insurance Company will be covered by this reinsurance agreement. All of
the business and operations of Memorial  Insurance Company are to be transferred
to Security  National Life Insurance  Company under the terms of the reinsurance
agreement,  except for capital and surplus of  approximately  $1,000,000.  Thus,
approximately  $30,091,000 in assets and  liabilities  will be transferred  from
Memorial  Insurance Company to Security National Life Insurance Company pursuant
to the reinsurance agreement.

     At the  closing  of the  stock  purchase  transaction,  Memorial  Insurance
Company issued a $30,091,000  note to Security  National Life Insurance  Company
payable,  together  with  accrued  interest,  within  30 days  from  the date of
issuance.  The note is to be repaid in cash or in  assets to be  transferred  to
Security  National  Life  Insurance  Company.  The note is secured by the assets
owned by  Memorial  Insurance  Company.  In  addition,  Southern  Security  Life
Insurance  Company  contributed  $2,200,000  to  Memorial  Insurance  Company at
closing in  consideration  for the surplus note. It is anticipated that Memorial
Insurance  Company  will repay the surplus note in early 2006 using the proceeds
from the sale of the investments in common stock that Memorial Insurance Company
currently holds in its investment portfolio.

ITEM 9.01.  Financial Statements and Exhibits

     (a)  It is  impracticable  for the  Company  to provide  audited  financial
          statements  of Memorial  Insurance  Company at the time this report is
          required to be filed. The Company intends to file the required audited
          financial  statement as soon as practicable but not later than 71 days
          after this report must be filed.

     (b)  The  Company   intends  to  file  the  required  pro  forma  financial
          information  as soon as  practicable  but not later than 71 days after
          this report must be filed.



<PAGE>


      (c)  Exhibits

          10.1 Stock Purchase  Agreement among Security  National Life Insurance
               Company,  Southern  Security  Life  Insurance  Company,  Memorial
               Insurance  Company of America,  and the  shareholders of Memorial
               Insurance   Company   that  have   executed   the   Agreement  by
               Shareholders  of  Memorial  Insurance  Company of America to Sell
               Shares in Stock Purchase Transaction.*

          10.2 Reinsurance  Agreement  between Security  National Life Insurance
               Company and Memorial Insurance Company of America.

          10.3 Trust Agreement  between Security National Life Insurance Company
               and Memorial Insurance Company of America.

          10.4 Promissory Note between Memorial  Insurance  Company as Maker and
               Security National Life Insurance Company as Payee.

          10.5 Security  Agreement between Memorial  Insurance Company as Debtor
               and Security National Life Insurance Company as Secured Party.

          10.6 Surplus  Contribution Note between Memorial  Insurance Company of
               America as Maker and Southern  Security Life Insurance Company as
               Payee.

          10.7 Guaranty  Agreement by Security  National Life Insurance  Company
               and Southern Security Life Insurance Company as Guarantors.

          10.8 Administrative  Services Agreement between Security National Life
               Insurance Company and Memorial Insurance Company of America.

     * Incorporated  by reference from Report on Form 8-K, as filed on September
27, 2005.




<PAGE>



                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.


                     SECURITY NATIONAL FINANCIAL CORPORATION
                                  (Registrant)



Date: January 4, 2006
                                By:  /s/ Scott M. Quist
                                -----------------------
                                        Scott M. Quist
                                        President and Chief Operating Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>exhibit1.txt
<TEXT>
                              REINSURANCE AGREEMENT

                                     Between

                      MEMORIAL INSURANCE COMPANY OF AMERICA

                                       and

                    SECURITY NATIONAL LIFE INSURANCE COMPANY


<PAGE>
<TABLE>
<CAPTION>



                                TABLE OF CONTENTS


                                    ARTICLES

<S>                                                                         <C>
I.       GENERAL PROVISIONS................................................ 1

II.      DURATION OF RISK.................................................. 3

III.     PREMIUMS AND CONSIDERATIONS....................................... 4

IV.      BENEFIT PAYMENTS.................................................. 4

V.       ACCOUNTING AND SETTLEMENTS........................................ 5

VI.      ARBITRATION....................................................... 6

VII.     INSOLVENCY........................................................ 6

VIII.    DAC TAX PROVISION................................................. 7

IX.      MISCELLANEOUS PROVISIONS.......................................... 8

X.       EXECUTION AND EFFECTIVE DATE...................................... 9


                                    SCHEDULES

A. POLICIES AND RISKS REINSURED

B. REINSURANCE PREMIUMS

C. COMMISSION AND EXPENSE ALLOWANCE

D. MONTHLY REPORT OF ACTIVITY AND SETTLEMENTS


                                    EXHIBITS

 1. TRUST AGREEMENT

</TABLE>

<PAGE>



                              REINSURANCE AGREEMENT


     THIS AGREEMENT (the  "Agreement") is made and entered into,  effective this
29th day of  December,  2005,  by and  between  MEMORIAL  INSURANCE  COMPANY  OF
AMERICA, an Arkansas domiciled insurance company (hereinafter referred to as the
"Company")  and SECURITY  NATIONAL  LIFE  INSURANCE  COMPANY,  a Utah  domiciled
insurance company (hereinafter referred to as the "Reinsurer").

     The Company and the Reinsurer  mutually  agree to reinsure on the terms and
conditions stated herein. This Agreement is an indemnity  reinsurance  agreement
solely between the Company and the Reinsurer, and performance of the obligations
of each party under this Agreement shall be rendered solely to the other party.

                                    ARTICLE I

                               GENERAL PROVISIONS

1.  Contracts and Risks  Reinsured.  The  Reinsurer  agrees to indemnify and the
Company  agrees to transfer  risk to the  Reinsurer,  according to the terms and
conditions hereof, the risks described in Schedule A hereto,  which are in force
on the  effective  date  (the  "Effective  Date")  of this  Agreement;  subject,
however, to the same rights, offsets,  counterclaims,  cross claims and defenses
as are available to the Company.  The Reinsurer agrees to assume all of the risk
relating to the policies transferred hereunder on the Effective Date and any new
business  written after the Effective  Date,  except for certain  policies to be
retained  by the  Company.  No such  offsets,  counterclaims,  cross  claims  or
defenses are waived but the same are expressly  preserved,  and Reinsurer is and
shall be fully subrogated thereto,  either in its own name or in the name of the
Company,  and  whether  the  name be now  known to  exist  or may  hereafter  be
discovered.

2.  Coverages  and  Exclusions.  Only risks  under the life  insurance  policies
referred to in Schedule A are reinsured under this Agreement.

3. Plan of Reinsurance.  This indemnity  reinsurance shall be on the coinsurance
plan. The Company and the Reinsurer  shall  establish,  maintain,  and place all
assets held in relation to the reserves in trust in accordance with the terms of
a certain Trust Agreement, a copy of which is attached hereto as Exhibit _1_ and
by this  reference  is made a part hereof.  The assets are to be  accounted  for
using statutory accounting principles of the state of Arkansas. On the Effective
Date of this Agreement,  the assets to be transferred into the trust pursuant to
the  Trust  Agreement  shall be  equal to the  amount  of  reserves  transferred
thereunto.



<PAGE>


4. Reserves. The word reserves, whenever used, shall mean the statutory reserves
held by the Company, or as should be held by the Company, on its NAIC Convention
Blank, with respect to the policies reinsured hereunder.  The Company certifies,
to the best of its knowledge and belief,  the actuarial accuracy of the reserves
based upon the appropriate mortality table, interest assumptions,  and method of
calculation  relating  to  each of the  policies  reinsured  hereunder,  and the
accuracy of the outstanding balances of the policy loans,  dividend deposits and
coupon deposits, if any, applicable to each of the policies reinsured hereunder;
provided,  however,  that in the  event of a breach  of  these  policies  or the
discovery  by the  Company  or the  Reinsurer  of an  error  in  calculation  or
actuarial inaccuracies,  any such breach or error may be cured by the Company or
the  Reinsurer  making a cash  payment to the other,  as the case may be, of the
amount of any such error in calculation or actuarial inaccuracy.

5.  Extracontractual  Damages.  In no event shall the Reinsurer indemnify nor be
liable for any  extracontractual  damages or  liability  of any kind  whatsoever
resulting  from,  but not  limited  to, the  Company's  negligent,  reckless  or
intentional  wrongs,  fraud,  oppression,  bad  faith or strict  liability.  The
Reinsurer  shall  indemnify  the  Company  for any  extracontractual  damages or
liability  of any  kind  whatsoever  resulting  from  but not  limited  to,  the
Reinsurer's  or its agents'  neglect,  reckless  or  intentional  wrong,  fraud,
oppression,  bad  faith or  strict  liability.  The  following  liabilities  are
examples of liabilities that would be considered extracontractual:  compensatory
damages, damages for emotional distress, and punitive or exemplary damages.

6.  Contract  Administration.  The  Reinsurer  shall  administer  the  contracts
reinsured  hereunder and shall perform all accounting  and other  administrative
functions.  The  Company  shall  make  the  use of its  name  available  in such
administration and shall otherwise make available all records and other material
needed in such administration.

7. Inspection.  At any reasonable time, the Reinsurer may inspect, during normal
business hours at the principal office of the Company,  the papers and any other
books or documents of the Company relating to reinsurance  under this Agreement.
At any reasonable time, the Company may inspect, during normal business hours at
the principal office of the Reinsurer, the papers and any and all other books or
documents of the Reinsurer relating to reinsurance under this Agreement. Neither
the Company nor the  Reinsurer  will use any  information  obtained  through any
inspection  pursuant to this section for  purposes  not relating to  reinsurance
under this Agreement.

8. Taxes.  The allowance,  if any, for any premium taxes paid in connection with
the contracts reinsured hereunder shall be granted as part of the commission and
expense allowance as defined in Article V below.

9. Condition.  The reinsurance  hereunder is subject to the same limitations and
conditions as the contracts written by the Company that are reinsured hereunder,
except as otherwise provided in this Agreement.

10.  Misunderstandings  and Oversights.  If any failure to pay amounts due or to
perform any other act required by this Agreement is unintentional  and caused by
misunderstanding  and  oversight,  the Company and the Reinsurer will adjust the
situation to what it would have been had the  misunderstanding  or oversight not
occurred.

11.  Age  Adjustment.  If the  Company's  liability  under any of the  contracts
reinsured  under this Agreement is changed because of a misstatement of age, the
Reinsurer  will share in the  change  proportionately  to the  amount  reinsured
hereunder,  and the Company and the Reinsurer will make any and all proportional
adjustments thereunto.


<PAGE>


12.  Reinstatements.  If  a  contract  reinsured  hereunder  that  was  reduced,
terminated, or lapsed, and is subsequently reinstated,  the reinsurance for such
contract  under this Agreement  will be reinstated  automatically  to the amount
that would be in force if the  contract  had not been  reduced,  terminated,  or
lapsed.  The Company will pay to the  Reinsurer  the  Reinsurer's  proportionate
share of all amounts collected from, or charged to, the insured.

13. Amendments. This Agreement shall be amended only by written agreement of the
parties.

14. Policies, Contracts. The words policy or policies, and contract or contracts
as used herein shall have the same meaning.

15. Policyholder  Information.  The Company shall not sell, distribute or in any
way use the policyholder  information on contracts  reinsured  hereunder without
the prior approval of the Reinsurer, except for purposes of executing its duties
under this Agreement.

16. Reinsurance With Other Companies.  Existing reinsurance with other insurance
companies  on the  policies  specified  in  Schedule A shall be  retained by the
Company,  except as agreed upon in writing by the Reinsurer and the Company. Any
amounts paid to other  reinsurance  companies  shall be fully  reimbursed by the
Reinsurer.  Any amounts  received by the Company from other insurance  companies
will be paid to the Reinsurer.


                                   ARTICLE II

                                DURATION OF RISK

1.  Duration.  Except as otherwise  provided  herein,  this  Agreement  shall be
unlimited in duration,  and the Company and the Reinsurer shall have no right to
terminate it.

2.  Reinsurer's  Liability.  The liability of the Reinsurer  with respect to any
contract reinsured hereunder will begin simultaneously with that of the Company,
but not prior to the Effective Date of this Agreement. The Reinsurer's liability
with respect to any contract reinsured hereunder will terminate with that of the
Company on the date the Company's liability on such contract is terminated.

3.  Recapture.  Contracts  reinsured  under this  Agreement are not eligible for
recapture,  unless the Reinsurer  becomes insolvent or is placed in receivership
or ceases to exist as a life insurance company.

4.  Contract  Changes.  The Company  will not make any  contract  changes in any
policies reinsured  hereunder except as required by law or as mutually agreed to
by the Company and the  Reinsurer.  See  Schedule C in reference to increases in
coverage amounts.




<PAGE>


                                   ARTICLE III

                           PREMIUM AND CONSIDERATIONS

1. Net Reserves. On the Effective Date of this Agreement,  the Company agrees to
transfer into the trust pursuant to the Trust Agreement as a reserve transfer an
amount equal to the net reserves on the Effective  Date of this  Agreement  with
respect to the  liabilities  reinsured as of such date and described in Schedule
A, less the ceding allowance.  Net reserves are calculated as statutory reserves
minus net due and deferred premiums minus policy loans, plus advance premiums.

2. Ceding  Allowance.  On the Effective  Date of this  Agreement,  the Reinsurer
agrees to pay the Company a ceding allowance equal to ten dollars ($10.00).

3.  Reinsurance  Premiums.  The Company agrees to pay the Reinsurer  reinsurance
premiums  in  accordance  with  Schedule  B. For each  contract,  the  amount of
reinsurance  premium will be the amount which  corresponds to the portion of the
contract  reinsured.  The Company makes no  representations  or warranties  with
respect to future lapses and surrenders of the contracts reinsured.


                                   ARTICLE IV

                                BENEFIT PAYMENTS

1. Notice.  The Reinsurer will notify the Company  promptly after receipt of any
information  as to a claim on a policy to the extent  reinsured  hereunder.  The
reinsurance claim form and any copies of notifications,  claim papers and proofs
will be furnished to the Company as soon as possible.

2. Liability and Payment.  The Company will accept the decision of the Reinsurer
on  payment  of a claim  or  surrender  on a  policy  reinsured  hereunder.  The
Reinsurer  agrees to utilize to the extent possible the claims  practices of the
Company.  The  Reinsurer  will  pay  such  claim  based  upon  the form of claim
settlement determined. In no instance shall anyone other than the Company or the
Reinsurer  have any rights under this  Agreement,  and the Company  shall be and
remain  solely  liable to any insured,  policyowner,  or  beneficiary  under any
policy reinsured hereunder.

3. Contract Claims. The Company will not contest, compromise or litigate a claim
involving  a policy  reinsured  hereunder  without  the  prior  approval  of the
Reinsurer. The Reinsurer will pay to the Company any litigation or investigative
expenses incurred on contested claims.




<PAGE>


                                    ARTICLE V

                            ACCOUNTING AND SETTLEMENT

1. Agreement  Accounting Period. This Agreement shall be on a monthly accounting
period for all accounting settlements.

2. Monthly  Accounting  Reports.  Accounting  reports  shall be submitted to the
Reinsurer by the Company and by the Reinsurer to the Company,  not later than 15
business days after the end of each calendar  month.  Such reports shall include
information on the amount of reinsurance premiums,  policy loans and policy loan
interest,  the commission  and expense  allowance,  claims,  and reserves on the
contract reinsured for the preceding calendar month.

3.  Monthly   Accounting   Period.   The  monthly   accounting  shall  be  on  a
calendar-month  basis,  except that the initial monthly  accounting period shall
run from the Effective Date of this Agreement,  after the initial accounting has
occurred, through the last day of the calendar month in which the Effective Date
of this Agreement falls. The final monthly  accounting period shall run from the
end of the preceding  calendar month until the termination of this Agreement but
prior to actual termination of this Agreement.

4. Monthly Settlements.

     (a) Within 15  business  days  after the end of each  calendar  month,  the
Company will pay the Reinsurer the sum of: (i) the reinsurance  premiums for the
preceding month, determined in accordance with Article III, plus (ii) the policy
loan repayments and policy loan interest paid in the preceding month, plus (iii)
any amounts received from other reinsurance companies.

     (b) Simultaneously,  the Reinsurer will pay the Company the sum of: (i) the
amount of benefits  paid during the  preceding  month on the policies  reinsured
hereunder,  plus  (ii)  the  commission  and  expense  allowance  determined  in
accordance with Schedule C, plus (iii) new policy loans paid to policyholders in
the preceding  calendar month,  plus (iv) any amounts paid to other  reinsurance
companies.

5.  Amounts  Due  Monthly.  Except as  otherwise  specifically  provided in this
Agreement,  all amounts  due to be paid to either the  Company or the  Reinsurer
under this Agreement on a monthly basis shall be determined on a net basis as of
the last day of each  calendar  month  and shall be due and  payable  as of such
date.

6.  Estimations.  If the  amounts,  as defined in  Paragraph 4 above,  cannot be
determined  at such dates,  as defined in Paragraph 5 above,  on an exact basis,
such payments will be paid in accordance with a mutually  agreeable formula that
will approximate the actual payments.

7. Offset of  Payments.  All monies due to either the  Company or the  Reinsurer
under this  Agreement  may be offset  against  each  other,  dollar for  dollar,
regardless of the insolvency of either party.



<PAGE>


8. Accounting  Reports.  Annual reports shall be submitted to the Company by the
Reinsurer not later than 20 business  days after the end of each calendar  year.
Such reports shall include  information for the analysis of increase in reserves
and the  exhibit of life  insurance  of the NAIC  Convention  Blank based on the
contracts reinsured  hereunder.  Quarterly accounting reports shall be submitted
to the Reinsurer by the Company not later than 20 business days after the end of
each calendar quarter and shall include  information for pages 2, 3, 4, and 5 of
the NAIC Quarterly Blank.


                                   ARTICLE VI

                                   ARBITRATION

1. General.  All disputes and differences  between the Company and the Reinsurer
on which an  agreement  cannot be reached  will be decided by  arbitration.  The
arbitrators will regard this Agreement from the standpoint of practical business
and equitable principles rather than that of strict law.

2. Method. Three arbitrators will decide any differences.  They must be officers
of life insurance  companies other than the two parties to this Agreement or any
Company owned by, or affiliated with, either party. One of the arbitrators is to
be appointed by the Reinsurer,  another by the Company,  and they shall select a
third  before  arbitration  begins.  Should  one of the two  parties  decline to
appoint an  arbitrator or should the two  arbitrators  not be able to agree upon
the  choice  of a third  arbitrator,  the  appointment(s)  shall  be left to the
President  of the American  Council of Life  Insurance  or its  successors.  The
arbitrators  are not  bound by any rules of  evidence.  They  shall  decide by a
majority  of votes and their  decision  will be final and  binding.  The cost of
arbitration,  including the fees of the arbitrators,  shall be shared equally by
the parties unless the arbitrators decide otherwise.


                                   ARTICLE VII

                                   INSOLVENCY

<PAGE>

1. General. In the event of the Company's  insolvency,  liquidation,  entry into
rehabilitation,  change of control,  bankruptcy,  or other  significant  adverse
financial event,  this Agreement will be deemed to convert,  pending approval by
the  Arkansas  Insurance  Department  but  without any action on the part of any
party,  to an  assumption  reinsurance  agreement  as of the day  prior  to such
insolvency,   change  of  control,  or  other  adverse  event.   Following  such
conversion,  the Reinsurer is hereby empowered without any need of action on the
part of the  Company,  to take all other  steps  necessary  for such  conversion
including the issuance of assumption certificates. Notwithstanding the forgoing,
the  Reinsurer may elect not to have such  automatic  conversion  occur.  In the
event the Reinsurer  elects not to have such automatic  conversion to assumption
reinsurance,  then the Reinsurer's  contractual liability on contracts reinsured
hereunder  shall  continue to be  determined  by all the terms,  conditions  and
limitations  under this  Agreement,  but the Reinsurer will make  settlement (i)
directly to the Company's liquidator,  receiver or statutory successor, and (ii)
without  increase  or  diminution  because  of  the  Company's  insolvency.  The
liquidator,  receiver  or  statutory  successor  of the  Company  shall give the
Reinsurer  written  notice of the pendency of a claim against the Company on any
contract  reinsured  within  reasonable  time  after  such claim is filed in the
insolvency  proceeding.  During the  pendency of any such claim,  the  Reinsurer
shall investigate such claim and interpose in the Company's name (or in the name
of the Company's liquidator,  receiver or statutory successor) in the proceeding
where  such  claim  is to be  adjudicated,  any  defense  or  defenses  that the
Reinsurer  may deem  available  to the  Company or its  liquidator,  receiver or
statutory  successor.  The  expense  thus  incurred  by the  Reinsurer  shall be
chargeable,  subject to court  approval,  against  the  Company as a part of the
expense of  liquidation  to the extent of a  proportionate  share of the benefit
which may accrue to the Company solely as a result of the defense  undertaken by
the Reinsurer.  In the event of the Reinsurer's insolvency,  liquidation,  entry
into rehabilitation, change of control, bankruptcy, or other significant adverse
financial  event, the assets and liabilities held by the trustee pursuant to the
Trust Agreement shall be held for purposes of  administration of such assets and
liabilities with respect to such insolvency.


                                  ARTICLE VIII

                                DAC TAX PROVISION

1. The Company and Reinsurer  hereby agree to abide by Section  1.848-2(g)(8) of
the Income Tax  Regulations  under  Section 848 of the Internal  Revenue Code of
1986,  as amended.  The terms used in this  Article are defined by  reference to
Regulation  1.848-2.  The term "net  consideration"  will  refer to  either  net
consideration as defined in Regulation  Section 1.848-2(f) or amount of premiums
collected and other  considerations as defined in Regulation Section 1.848-3(b),
as appropriate.

2. Each party  shall  attach a schedule  to its  federal  income tax return that
identifies  the relevant  reinsurance  agreements  for which the joint  election
under the Regulation has been made.

3. The party with net  positive  consideration,  as  defined  in the  Regulation
promulgated  under Code Section 848, for such  Agreement  for each taxable year,
shall  capitalize  specified  policy  acquisition  expenses with respect to such
Agreement  without  regard to the general  deductions  limitation of Section 848
(c)(1).

4. Each party  agrees to exchange  information  pertaining  to the amount of net
consideration under such Agreement each year to ensure consistency.

5. This election  shall be effective for the year that the Agreement was entered
into and for all subsequent years that such Agreement remains in effect.



<PAGE>


6.  The  Company  will  submit  to the  Reinsurer  by  May 1 of  each  year  its
calculation  of the net  consideration  for the preceding  calendar  year.  This
schedule of calculations will be accompanied by a statement signed by an officer
of the Company  stating that the Company will report such net  consideration  in
its tax return for the preceding calendar year.

7. The  Reinsurer  may contest such  calculation  by  providing  an  alternative
calculation to the Company in writing within 30 days of the Reinsurer's  receipt
of the Company's calculation. If the Reinsurer does not so notify the Company in
the Reinsurer's tax return for the previous calendar year.

8. If the Reinsurer contests the Company's calculation of the net consideration,
the  parties  will act in good  faith to reach an  agreement  as to the  correct
amount  within  30  days of the  date  the  Reinsurer  submits  its  alternative
calculation.  If the Company and the Reinsurer reach agreement on the net amount
of  consideration,  each party shall report such amount in their  respective tax
returns for the previous calendar year.


                                   ARTICLE IX

                            MISCELLANEOUS PROVISIONS

1.  All  Schedules  referred  to in  this  Agreement  are  attached  hereto  and
incorporated herein by reference.

2. Neither this  Agreement nor any  reinsurance  under this  Agreement  shall be
sold,  assigned or transferred by the Company  without prior written  consent of
the Reinsurer.  Such approval shall not unreasonably be withheld. The provisions
of this section are not intended to preclude the Reinsurer from  retroceding the
reinsurance on an indemnity basis.

3. This  Agreement,  including  any of the  schedules  and  amendments  thereto,
constitutes  the  entire  agreement  between  the  parties  with  respect to the
business being reinsured hereunder,  and there are no understandings between the
parties other than as expressed in this Agreement. Any changes in this Agreement
shall be null and void unless such changes are made by written amendment to this
Agreement, signed by both parties.

4. Any notice or  notification  required under this Agreement  requires  written
notice or notification  mailed or delivered to the Company at its home office in
Blytheville,  Arkansas, or to the Reinsurer at its administrative office in Salt
Lake City, Utah.

5.  If  any  provision  of  this  Agreement  is  determined  to  be  invalid  or
unenforceable,  such determination will not impair or affect the validity or the
enforceability of the remaining provisions of the Agreement.



<PAGE>


6. The Company agrees to assist the Reinsurer in maintaining,  where applicable,
any existing policies  reinsured under this Agreement and to avoid replacing any
of such policies with policies of the Company, or its subsidiaries, or any other
insurance companies.  In addition, the Company agrees to use its best reasonable
efforts to keep the policies  reinsured in force and to support the business and
operations of the  Reinsurer,  including,  where  applicable,  in  maintaining a
satisfactory business relationship with the Reinsurer.


                                    ARTICLE X

                          EXECUTION AND EFFECTIVE DATE

     This  Agreement  shall be effective on and after  December 29, 2005. In the
event of a death or other  occurrence  giving  rise to a claim  under one of the
policies,  which  death or  occurrence  occurred  prior to the  Effective  Date,
regardless  of whether the death  claim or  occurrence  is reported  prior to or
subsequent  to the  effective  date,  the Company shall be solely liable for the
payment  of any  claim  made on  account  of any such  death or  occurrence  and
Reinsurer  shall pay to the Company the amount of the reserve of the policy with
respect to which the claim is paid,  to the extent that such  reserve is reduced
as a result of such payment.

     IN WITNESS of the above,  this  Agreement is executed  effective as of this
29th day of December, 2005.

                    SECURITY NATIONAL LIFE INSURANCE COMPANY



                    By: /s/ Scott M. Quist
                        ------------------
                    Title:  President
                            ---------



                    MEMORIAL INSURANCE COMPANY OF AMERICA



                    By: /s/ Larry N. Perrin
                        -------------------
                    Title:   Treasurer
                             ---------









<PAGE>



                                   SCHEDULE A

                          POLICIES AND RISKS REINSURED

     Under this Agreement,  the Reinsurer  reinsures all policies in force as of
the  Effective  Date of this  Agreement  and any new business  written after the
Effective Date, except for certain policies to be retained by the Company.

     Following  the  transfer of reserves  and related  assets  pursuant to this
Agreement, the Company's capital and surplus shall not be less than $1,000,000.


<PAGE>



                                   SCHEDULE B

                              REINSURANCE PREMIUMS

1.  Reinsurance  Premiums.  The Company  shall pay the  Reinsurer a  reinsurance
premium on all  policies in effect from time to time under this  Agreement in an
amount equal to the premium collected by the Company corresponding to the amount
and policies reinsured hereunder.

2. Mode of Payment.  The Premium  paid to the  Reinsurer  by the Company will be
paid as collected by the Company.




<PAGE>



                                   SCHEDULE C

                        COMMISSIONS AND EXPENSE ALLOWANCE

1. Ceding Commission Fee on Individual Life Insurance

         Plan Description                  Ceding Commission Fee
         ----------------                  ----------------------
         All plans reinsured hereunder     An amount equal to the actual sales
                                           commissions paid on policies
                                           reinsured hereunder

2. Expense Allowance for Premium Taxes, Including All Other Licenses and Fees.

     An expense  allowance  equal to the actual  premium taxes paid on collected
premiums  plus other  licenses and fees will be paid by reinsurer in addition to
all other allowances.

3. Any Other Administrative Expenses Will Be Paid by the Reinsurer.

     All  administrative  expenses  to include,  but not be limited  to,  policy
administration,  accounting,  financial statement preparation,  and policyholder
services.



<PAGE>



                                   SCHEDULE D

                               MONTHLY SETTLEMENT

                                      FROM
                      MEMORIAL INSURANCE COMPANY OF AMERICA
                   TO SECURITY NATIONAL LIFE INSURANCE COMPANY
                                    AND FROM
                    SECURITY NATIONAL LIFE INSURANCE COMPANY
                                       TO
                      MEMORIAL INSURANCE COMPANY OF AMERICA

             Reporting Month: ________________/ ____________/ ___________
       Date Report Completed: ________________/ ____________/ ___________

1)       Direct Premiums                                  ____________
         Less Other Reinsurance Premiums Paid             ____________
         Total Premiums                                   ____________
            Total                                         ____________

2)       Policy Loans                                     ____________
            Policy Loans Repaid                           ____________
            Policy Loan Interest Paid in Cash             ____________
            Total                                         ____________

3)          Benefits
            Surrenders                                    ____________
            Deaths                                        ____________
            Other                                         ____________
            Less Other Reinsurance Recoveries             ____________
            Total                                         ____________

4)       Commissions and Expense Allowance (Schedule C)   ____________
         Less Other Reinsurance Allowances                ____________
         Net Commission and Expense Allowance             ____________
         Total                                            ____________


5)       New Policy Loans Paid Out in Cash                ____________

6)       Net Due Equals (1) + (2) - (3) - (4) - (5) =     ____________


<PAGE>



                              SCHEDULE D CONTINUED
Supplemental Information

Direct
                                           Policy
                      # of Policies       Reserves         Face Amount
Beg. of Period         ___________      ____________      _____________
+Additions             ___________      ____________      _____________
- -Terminations          ___________      ____________      _____________
End of Period          ___________      ____________      _____________

Reinsurance Ceded
                                           Policy
                      # of Policies       Reserves          Face Amount
Beg. of Period         ____________     ____________      _____________
+Additions             ____________     ____________      _____________
- -Terminations          ____________     ____________      _____________
End of Period          ____________     ____________      _____________

Direct                                    Gross                 Net
- ------                                    -----                 ---
Deferred Premiums:                     _____________     ____________
Due Premiums:                          _____________     ____________
Advance Premiums:                      _____________

Reinsurance Ceded
Deferred premiums:                     _____________     ____________
Due Premiums:                          _____________     ____________
Advance Premiums:                      _____________

Coinsurance Allowances on Reinsurance Ceded
Deferred Premium                       ____________
Due Premium                            ____________
Advance Premium                        ____________
Policy Loan Interest Due:              ____________
Policy Loan Interest Accrued:          ____________
Policy Loan Interest Unearned:         ____________
Policy Loan Beginning of Period:       ____________
+ New Loans Paid in Cash:              ____________
+ New Loans to Cover Interest:         ____________
+ New Loans to Pay Premiums:           ____________
- - Loans Paid Off:                      ____________
Policy Loans End of Period:            ____________
Policy Loans Interest Paid in Cash:    ____________
Policy Loans Interest Added to Loan:   ____________

Total Policy Loan Interest:            ____________


<PAGE>



                                    EXHIBIT 1

                                 TRUST AGREEMENT
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>exhibit2.txt
<TEXT>
                                 TRUST AGREEMENT


                    effective as of December 29, 2005, among
               MEMORIAL INSURANCE COMPANY OF AMERICA, as Grantor.
          SECURITY NATIONAL LIFE INSURANCE COMPANY, as Beneficiary, and
                     ZIONS FIRST NATIONAL BANK, as Trustee.



<PAGE>
<TABLE>
<CAPTION>


                                TABLE OF CONTENTS
                                                                           Page
Parties and Recitals

<S>        <C>                                                              <C>
Section 1.  Deposit of Assets into the Trust Account........................ 1

Section 2.  Withdrawal of Assets from the Trust Account....................  3

Section 3.  Redemption, Investment and Substitution of Assets..............  4

Section 4.  The Income Account.............................................  5

Section 5.  Right to Vote Assets...........................................  5

Section 6.  Additional Rights and Duties of Trustee........................  5

Section 7.  Trustee's Compensation, Expenses and Indemnification...........  6

Section 8.  Resignation of Trustee.........................................  7

Section 9.  Termination of the Trust Account...............................  7

Section 10. Tax Returns....................................................  8

Section 11. Definitions....................................................  8

Section 12. Governing Law..................................................  9

Section 13. Successors and Assigns.........................................  9

Section 14. Severability...................................................  9

Section 15. Entire Agreement..............................................  10

Section 16. Amendments..................................................... 10

Section 17. Notices........................................................ 10

Section 18. Headings....................................................... 11

Section 19. Counterparts................................................... 11

Exhibit A Reinsurance Agreement
Exhibit B List of Assets Deposited into Trust Account
</TABLE>



<PAGE>




                                 TRUST AGREEMENT

     THIS TRUST  AGREEMENT is made and entered into,  effective this 29th day of
December,  2005 (the  "Agreement"),  by and among MEMORIAL  INSURANCE COMPANY OF
AMERICA,  an  Arkansas  life  insurance  company,  together  with any  successor
thereof, including, without limitation, any liquidator,  rehabilitator, receiver
or conservator (the "Grantor"), SECURITY NATIONAL LIFE INSURANCE COMPANY, a Utah
domiciled life insurance  company (the  "Beneficiary")  and ZIONS FIRST NATIONAL
BANK, a national banking corporation (the "Trustee")  (Grantor,  Beneficiary and
Trustee are each hereinafter  sometimes referred to, individually,  as a "Party"
and, collectively, as the "Parties").

                                   WITNESSETH:

     WHEREAS,  Grantor and Beneficiary  have entered into a certain  reinsurance
agreement, effective as of December 29, 2005, a copy of which is attached hereto
as Exhibit  "A",  and by this  reference  made a part hereof  (the  "Reinsurance
Agreement") concerning certain insurance policies (the "Reinsured Policies");

     WHEREAS,  Grantor  desires,  pursuant  to  the  Reinsurance  Agreement,  to
transfer to Trustee  for  deposit  into a trust  account  (the "Trust  Account")
assets  equal in amount to the  statutory  reserves  subject to the  Reinsurance
Agreement  in order to secure  payments to be made  pursuant to the terms of the
Reinsurance Agreement; and

     WHEREAS,  Trustee has agreed to act as the trustee  hereunder,  and to hold
such assets in trust in the Trust Account and the Income Account,  as defined in
Section 4 below,  for the sole use and  benefit of  Beneficiary  pursuant to the
Reinsurance Agreement;

     NOW, THEREFORE, for and in consideration of the promises and for other good
and valuable  consideration,  the receipt of which is hereby  acknowledged,  the
Parties hereby agree as follows:

               Section 1. Deposit of Assets into the Trust Account

     (a) Grantor shall establish the Trust Account and Trustee shall  administer
the Trust Account in its name as the trustee for Beneficiary.  The Trust Account
shall be subject to withdrawal by Beneficiary as provided herein.

     (b) Grantor shall transfer to Trustee,  for deposit into the Trust Account,
the assets listed in Exhibit B hereto, and may transfer to Trustee,  for deposit
to the Trust Account, such other assets as it may from time to time desire or as
may be required  pursuant to the terms of the  Reinsurance  Agreement  (all such
assets  actually  received in the Trust  Account  are herein  referred to as the
"Assets").  The  Assets  shall  consist  of cash  and  Eligible  Securities  (as
hereinafter defined).

     (c) The amounts  deposited  by Grantor into the Trust  Account  shall be in
such  amount  that the  aggregate  market  value  of the  Trust  Account  at the
inception  of this  Trust  equals  or  exceeds  the  statutory  reserves  on the
reinsurance  ceded  under the  Reinsurance  Agreement  as of the same date.  For
purposes of this section, aggregate market value shall be determined by Trustee,
and the Assets that are in default  according to their terms shall have a market
value of $0 (zero dollars). For purposes of this Agreement,  statutory reserves,
whenever used,  shall mean the gross statutory  reserves held by Grantor,  or as
should be held by Grantor,  on its NAIC  Convention  Blank,  with respect to the
policies reinsured  hereunder.  Grantor certifies,  to the best of its knowledge
and belief,  the actuarial  accuracy of the reserves based upon the  appropriate
mortality table,  interest  assumptions,  and method of calculation  relating to
each of the policies  reinsured  hereunder,  and the accuracy of the outstanding
balances of the policy loans,  dividend  deposits and coupon  deposits,  if any,
applicable to each of the policies reinsured hereunder;  provided, however, that
in the event of a breach of these  certificates  or the  discovery by Grantor or
Beneficiary of an error in calculation, any such breach or error may be cured by
Grantor or Beneficiary  making a cash payment to the other,  as the case may be,
of the amount of any such error in calculation or actuarial inaccuracy.

<PAGE>

     (d) Grantor hereby represents and warrants (i) that any Assets  transferred
by Grantor to Trustee for deposit  into the Trust  Account  will be in such form
that Beneficiary may,  whenever  necessary,  and Trustee will, upon direction by
Beneficiary, negotiate any such Assets without consent or signature from Grantor
or any other person in  accordance  with the terms of this  Agreement;  and (ii)
that all Assets  transferred  by Grantor to Trustee for  deposit  into the Trust
Account will consist only of cash and Eligible Securities.

     (e) Trustee shall have no responsibility to determine whether the Assets in
the Trust  Account are  sufficient  to secure  Grantor's  liabilities  under the
Reinsurance  Agreement  or  whether  such  assets  are  equal  to the  Statutory
Reserves.

     (f) This  Agreement  is a security  agreement  under the  Arkansas  Uniform
Commercial  Code  ("Arkansas  UCC"),  as  enacted  and in effect in the State of
Arkansas, and creates a security interest in the Assets in favor of Trustee, for
the benefit of Beneficiary.  Upon Beneficiary's  request,  financing  statements
shall be executed by the necessary  party or parties and filed by Trustee in the
manner  required  by law to perfect  such  security  interest.  Compliance  with
Arkansas UCC  requirements  shall not alter any rights  under this  Agreement or
under any other laws of the State of Arkansas,  nor shall it relieve  Trustee of
any  obligation.  Compliance  with the  Arkansas  UCC is solely to preserve  the
priority of Beneficiary's security interest in the Assets.

     (g) Grantor  shall deliver the Assets listed in Exhibit B hereto to Trustee
with appropriate assignments,  bond powers, or powers of attorney that authorize
Trustee  to  transfer  the  Assets to its name and hold them for the  benefit of
Beneficiary.  In the event Assets are added to or are substituted for the Assets
already in the fund, appropriate assignments,  bond powers or powers of attorney
authorizing  Trustee to transfer  the Assets to its name shall also be delivered
to Trustee.

     (h) Grantor warrants that it will not create any other security interest in
or otherwise  encumber  the Assets.  In the event that any lien or claim is made
against any Assets which  asserts an interest  superior to that of  Beneficiary,
Grantor will promptly take steps  satisfactory  to  Beneficiary to discharge the
claim or lien or shall substitute other assets for those encumbered.

             Section 2. Withdrawal of Assets from the Trust Account

     (a) Without  notice to Grantor,  but upon  written  notice to Trustee  (the
"Withdrawal  Notice"),  Beneficiary  shall have the right,  at any time and from
time to time, to withdraw from the Trust  Account,  such Assets as are specified
in such  Withdrawal  Notice for  legitimate  business  purposes,  including  the
purposes set forth below. The Withdrawal Notice may designate a third party (the
"Designee")  to whom the Assets  specified  therein  shall be delivered  and may
condition delivery of such Assets to such Designee upon receipt,  and deposit to
the  Trust  Account,  of  other  Assets  specified  in such  Withdrawal  Notice.
Beneficiary need present no statement or document other than a representation to
be  contained  in  the  Withdrawal  Notice  that  the  Assets,  using  statutory
accounting principles as required or allowed by the state of Arkansas, remaining
in the Trust  Account  are at least  equal to the  Statutory  Reserves as of the
preceding  quarterly  statutory  filing,  nor is said right of withdrawal or any
other  provision of this Agreement  subject to any conditions or  qualifications
not  contained  in  this  Agreement.  At no  time  shall  Beneficiary  submit  a
withdrawal  notice to Trustee  that  would  cause the Assets in this Trust to be
less than the  Statutory  Reserves,  using  statutory  accounting  principles as
required or allowed by the state of Arkansas,  on the  Reinsured  Policies as of
the preceding quarterly statutory filing.

     (b)  Beneficiary  shall have the right to  withdraw  Assets  from the Trust
Account in  accordance  with this Section 2 for the following  purposes:  (i) to
make payment of any obligation of Beneficiary  under the Reinsurance  Agreement;
(ii) to fund  Beneficiary's  share of  non-forfeiture  benefits  returned to the
owners of  policies  reinsured  under the  Reinsurance  Agreement  on account of
cancellations of such policies;  (iii) to fund Beneficiary's share of surrenders
and benefits or losses paid pursuant to the provisions of the policies reinsured
under the  Reinsurance  Agreement;  (iv) to the  extent  the Assets in the Trust
Account,  using  statutory  accounting  principles as required or allowed by the
state of Arkansas, exceed the statutory reserves for the policies covered by the
Reinsurance  Agreement,  such  excess  amount  of  Assets  may be  withdrawn  by
Beneficiary in its sole discretion. Beneficiary shall have sole ownership of any
increases in the amount of the Assets in the Trust Account,  including,  without
limitation,  any  income  derived  from such  Assets.  However,  Beneficiary  is
responsible to contribute to the Trust Account if the Assets are insufficient to
cover all reserve requirements on an on-going basis.

     (c) Upon receipt of a Withdrawal Notice, Trustee shall immediately take any
and all steps  necessary  to transfer the Assets  specified  in such  Withdrawal
Notice and shall  deliver  such Assets to or for the account of  Beneficiary  or
such Designee as specified in such Withdrawal Notice.

     (d)  Subject to  paragraph  (a) of this  Section 2 and to Section 4 of this
Agreement,  in the  absence  of a  Withdrawal  Notice,  Trustee  shall  allow no
substitution or withdrawal of any Asset from the Trust Account.

     (e) Trustee shall have no responsibility whatsoever to determine the manner
in which any assets  withdrawn from the Trust Account pursuant to this Section 2
will be used and/or applied.

          Section 3. Redemption, Investment and Substitution of Assets

     (a) Trustee shall  surrender for payment all maturing Assets and all Assets
called for  redemption  and deposit the principal  amount of the proceeds of any
such payment to the Trust Account.

     (b) From time to time, at the written  order and direction of  Beneficiary,
Trustee  shall invest  Assets in the Trust  Account in Eligible  Securities,  as
authorized  by the  insurance  laws of Arkansas,  and laws of other  controlling
insurance  authorities.  Trustee is  specifically  authorized to invest any cash
balances in one or more money market vehicles  utilized by Trustee for fiduciary
accounts without receiving prior written  direction or any further  confirmation
from Beneficiary. Trustee is further permitted to utilize any such fund invested
in its own bank's deposits.

     (c) From  time to time,  Beneficiary  may  direct  Trustee  in  writing  to
substitute  Eligible  Securities for other Eligible Securities held in the Trust
Account  at such  time.  Trustee  shall  have no  responsibility  whatsoever  to
determine the value of such  substituted  securities or whether such substituted
securities constitute Eligible Securities. On an annual basis, Beneficiary shall
send a written  statement to Trustee,  certifying that all the securities in the
Trust Account constitute Eligible Securities.

     (d) Trustee shall have no  responsibility  whatsoever to determine that any
Assets in the Trust Account are or continue to be Eligible  Securities.  Trustee
shall  execute   instructions   or  orders   concerning   such   investments  or
substitutions  of securities  (the  "Investment  Orders") and settle  securities
transactions  by itself or by means of an agent or broker.  Trustee shall not be
responsible for any act or omission,  or for the solvency,  of any such agent or
broker  unless  said act or  omission  is the  result,  in whole or in part,  of
Trustee's negligence, willful misconduct or lack of good faith.

     (e) Any loss  incurred  from any  investment  pursuant to the terms of this
Section 3 shall be borne exclusively by Beneficiary. Trustee shall not be liable
for any loss due to changes in market rates or penalties for early redemption.

                          Section 4. The Income Account

     All payments of interest  and  dividends  received  from or relating to the
Assets in the Trust Account shall be deposited by Trustee into a separate income
account that shall be  established by Grantor and  administered  by Trustee (the
"Income  Account") for the benefit of Beneficiary.  Trustee's  compensation  and
expenses shall be deducted from the Income Account,  as provided in Section 7 of
this Agreement.

                         Section 5. Right to Vote Assets

     Trustee  shall forward all annual and interim  stockholder  reports and all
proxies  and proxy  materials  relating  to the  Assets in the Trust  Account to
Beneficiary.  Beneficiary  shall  have  the full and  unqualified  right,  where
applicable, to vote any Assets in the Trust Account.

               Section 6. Additional Rights and Duties of Trustee

     (a) Trustee shall notify Grantor and Beneficiary in writing within ten days
following each deposit to, or withdrawal from, the Trust Account.

     (b) Before  accepting any Asset for deposit to the Trust  Account,  Trustee
shall  determine  that  such  Asset is in such form  that  Beneficiary  whenever
necessary  may, or Trustee upon direction by  Beneficiary  will,  negotiate such
Asset  without  consent or signature  from Grantor or any person or entity other
than Trustee in accordance with the terms of this Agreement.

     (c) Trustee may  deposit  any Assets in the Trust  Account in a  book-entry
account maintained at a federally  chartered bank or in depositories such as the
Depository Trust Company. Assets may be held in the name of a nominee maintained
by Trustee or by any such depository.

     (d)  Trustee  shall  accept  and open  all  mail  directed  to  Grantor  or
Beneficiary in care of Trustee.

     (e) Trustee shall furnish Grantor and Beneficiary with a written  statement
of all the Assets in the Trust  Account upon the  inception of the Trust Account
and at the end of each calendar quarter thereafter.

     (f) Upon the  request of Grantor or  Beneficiary,  Trustee  shall  promptly
permit  the  Grantor or  Beneficiary,  their  respective  agents,  employees  or
independent  auditors to examine,  audit,  excerpt,  transcribe and copy, during
Trustee's  normal  business  hours,  any books,  documents,  papers and  records
relating to the Trust Account or the Assets.

     (g) Trustee is authorized to follow and rely upon  instructions  consistent
with the  provisions of this  Agreement  that may be given by officers  named in
incumbency  certificates  furnished  to Trustee from time to time by Grantor and
Beneficiary,   respectively,  and  by  attorneys-in-fact  acting  under  written
authority  furnished to Trustee by Grantor or  Beneficiary,  including,  without
limitation,  instructions  given by letter,  facsimile  transmission,  telegram,
teletype,  cablegram or electronic  media, if Trustee believes such instructions
to be genuine and to have been signed,  sent or presented by the proper party or
parties.  Trustee shall not incur any liability to anyone resulting from actions
taken by Trustee in reliance in good faith on such  instructions.  Trustee shall
not incur any liability in executing  instructions (i) from an  attorney-in-fact
prior to receipt by it of notice of the  revocation of the written  authority of
the attorney-in-fact or (ii) from any officer of Grantor or Beneficiary named in
an incumbency  certificate  delivered hereunder prior to receipt by it of a more
current certificate.

     (h)  The  duties  and  obligations  of  Trustee  shall  only be such as are
specifically  set  forth  in  this  Agreement,  as it may  from  time to time be
amended,  and no implied duties or obligations shall be read into this Agreement
against  Trustee.  Trustee shall only be liable for its own negligence,  willful
misconduct or lack of good faith.

     (i) No provision of this Agreement shall require Trustee to take any action
which, in Trustee's reasonable  judgment,  would result in any violation of this
Agreement  or any  provision  of law.

     (j)  Trustee  may confer  with  counsel of its own  choice in  relation  to
matters   arising  under  this  Agreement  and  shall  have  full  and  complete
authorization  from the other Parties hereunder for any action taken or suffered
by it under this Agreement or under any transaction  contemplated hereby in good
faith and in accordance with the opinion of such counsel.

         Section 7. Trustee's Compensation, Expenses and Indemnification

     (a) Trustee  shall be paid its  compensation  and expenses  from the Income
Account,  as set forth in Paragraph  4, for its  services as trustee  under this
Agreement,  based  upon a fee  schedule  that will be  mutually  agreed  upon by
Trustee and  Beneficiary.  If at anytime  there is not  sufficient  funds in the
Income Account to pay the trustee's  fees,  Beneficiary  will pay such fees from
sources other than the Assets in the Trust Account.  Beneficiary  shall have the
right to review at any time the  amount of  compensation  and  expenses  paid to
Trustee for serving as a trustee  hereunder  and, if  necessary,  to dispute any
such amounts that may be incorrectly or improperly determined.  All of Trustee's
expenses and  disbursements  in connection  with its duties under this Agreement
will be paid from the Income Account, except any such expense or disbursement as
may arise from Trustee's  negligence,  willful misconduct or lack of good faith.
Trustee shall be entitled to deduct its  compensation and expenses from payments
of  dividends,  interest  and other  income in respect of the Assets held in the
Trust Account prior to the deposit  thereof to the Income Account as provided in
Section  4  of  this  Agreement,   upon  written  notification  to  Beneficiary.
Beneficiary and Grantor also hereby indemnify  Trustee for, and hold it harmless
against, any loss,  liability,  costs or expenses (including attorney's fees and
expenses)  incurred or made without  negligence,  willful misconduct or lack. of
good faith on the part of  Trustee,  arising  out of or in  connection  with the
performance  of its  obligations  in  accordance  with  the  provisions  of this
Agreement, including any loss, liability, costs or expenses arising out of or in
connection with the status of Trustee and its nominee as the holder of record of
the Assets.  Grantor hereby  acknowledges  that the foregoing  indemnities shall
survive the  resignation  of Trustee or the  termination  of this  Agreement and
hereby grants the Trustee a lien, right of set-off and security  interest in the
funds in the  Income  Account  for the  payment  of any claim for  compensation,
reimbursement or indemnity hereunder.

     (b) No Assets, other than as related to income, shall be withdrawn from the
Trust Account or used in any manner for paying compensation to, or reimbursement
or indemnification of, Trustee.

                        Section 8. Resignation of Trustee

     (a) Trustee may resign at any time by giving not less than 90 days' written
notice  thereof  to  Beneficiary  and to  Grantor,  such  resignation  to become
effective  on the  acceptance  of  appointment  by a  successor  trustee and the
transfer  to such  successor  trustee  of all  Assets  in the Trust  Account  in
accordance with paragraph (b) of this Section 8.

     (b)  Upon  receipt  of  Trustee's   notice  of  resignation,   Grantor  and
Beneficiary shall appoint a successor trustee.  Any successor trustee shall be a
bank  that is a member of  Federal  Reserve  System or shall not be a Parent,  a
Subsidiary or an Affiliate of Grantor or Beneficiary. Upon the acceptance of the
appointment as trustee hereunder by a successor trustee and the transfer to such
successor trustee of all Assets in the Trust Account, the resignation of Trustee
shall become effective.  Thereupon,  such successor trustee shall succeed to and
become vested with all the rights, powers, privileges and duties of Trustee, and
Trustee shall be discharged  from any future duties and  obligations  under this
Agreement,  but Trustee shall continue  after its  resignation to be entitled to
the benefits of the indemnities provided herein for Trustee.

                   Section 9. Termination of the Trust Account

     (a) The Trust Account and this Agreement shall be terminated upon the joint
action of both Grantor and  Beneficiary,  provided  they have  obtained  written
approval from the Arkansas Insurance Department  consenting to such termination.
Such notice shall specify the date (the "Termination Date") on which Grantor and
Beneficiary intend the Trust Account to terminate,  which date shall be at least
fifteen (15) days subsequent to the date that the termination notice is given.

     (b) On the  Termination  Date,  upon  receipt  of written  approval  of the
Arkansas  Insurance  Department  consenting to such  termination,  Trustee shall
transfer to Beneficiary all amounts remaining in the Trust Account. In the event
of  insolvency  of  Beneficiary,  as defined in Article  VII of the  Reinsurance
Agreement,  Trustee  shall hold all monies due to the  Beneficiary  pursuant  to
unreimbursed  payments  made in  accordance  with the  terms of the  Reinsurance
Agreement and thereafter hold any Assets and liabilities  remaining in the Trust
Account for  purposes of  administration  of such  Assets and  liabilities  with
respect to such insolvency.

     (c) If the Reinsurance Agreement is converted to an Assumption Agreement as
a result of Grantor's  insolvency  as defined in Article VII of the  Reinsurance
Agreement,  the Trust Account shall  terminate and all Assets and liabilities in
the Trust Account shall be distributed to Beneficiary.

                             Section 10. Tax Returns

     Beneficiary  shall be responsible for causing to be prepared and filed in a
timely  fashion  all  tax  returns,  if  any,  of  the  Trust  relating  to  the
transactions  contemplated by this Agreement or otherwise  contemplated  hereby,
and it shall  send a copy of each  such  tax  return  to  Trustee  and  Grantor.
Trustee,  upon request, will furnish Grantor with all such information as it has
in its  possession  and as may be  reasonably  required in  connection  with the
preparation  of such tax  returns and shall,  upon the  request of  Beneficiary,
execute such returns if required to do so by the  applicable  taxing  authority.
Trustee shall not be liable for any tax due and payable in connection  with this
Trust  Agreement  except for any tax based on or  measured  by the net income of
Trustee  resulting from the amounts paid to Trustee as fees or compensation  for
acting as Trustee hereunder.

                             Section 11. Definitions

     Except as the context shall  otherwise  require,  the following terms shall
have the following  meanings for all purposes of this Agreement (the definitions
to be  applicable to both the singular and the plural forms of each term defined
if both such forms of such term are used in this Agreement):

     The  term  "Affiliate"  with  respect  to  any  corporation  shall  mean  a
corporation which directly,  or indirectly  through one or more  intermediaries,
controls or is controlled by, or is under common control with, such corporation.
The term  "control"  (including  the related  terms  "controlled  by" and "under
common control  with") shall mean the ownership,  directly or indirectly of more
than fifty percent (50%) of the voting stock of a corporation.

     The term  "Business Day" shall mean any day on which the offices of Trustee
is open for business.

     The term  "Eligible  Securities"  shall mean and  include  certificates  of
deposit issued by a United States bank and payable in United States legal tender
and obligations  issued,  assumed or guaranteed by the United States, any state,
territory or possession thereof, or the District of Columbia or any money market
vehicles utilized by Trustee for fiduciary  accounts,  to include those invested
in its own bank's deposits,  any other investment  authorized under the relevant
statutes and rules of Beneficiary's  domiciliary state; provided,  however, that
no such  securities  shall  have been  issued by a Parent,  a  Subsidiary  or an
Affiliate of either Grantor or Beneficiary.

     The  term  "obligations"  shall  mean,  with  respect  to  the  Reinsurance
Agreement,  (a) losses,  to include  policyholder  benefits,  and allocated loss
expenses paid or payable by  Beneficiary,  but not recovered  from Grantor,  (b)
reserves for losses reported and  outstanding,  (c) reserves for losses incurred
but not reported,  (d) reserves for allocated loss expenses and (e) reserves for
unearned premiums.

     The term "person"  shall mean and include an individual,  a corporation,  a
partnership,  an  association,  a trust,  an  unincorporated  organization  or a
government or political subdivision thereof.

     The term "Parent" shall mean an institution  that,  directly or indirectly,
controls another institution.

     The term  "Subsidiary"  shall mean an institution  controlled,  directly or
indirectly, by another institution.

                            Section 12. Governing Law

     This Agreement shall be subject to and governed by the laws of the State of
Arkansas. Venue and jurisdiction shall be in the State of Arkansas.


                       Section 13. Successors and Assigns

     No Party may assign  this  Agreement  or any of its  rights or  obligations
hereunder,  without the written consent of the other Parties, whether by merger,
consolidation,  sale of all or  substantially  all of its  assets,  liquidation,
dissolution  or  otherwise,  except as expressly  permitted by Section 8 of this
Agreement,  except that Beneficiary may assign all of its rights and obligations
hereunder to a Parent or Subsidiary.

                            Section 14. Severability

     In the event that any provision of this Agreement shall be declared invalid
or  unenforceable  by any  regulatory  body or court having  jurisdiction,  such
invalidity or  unenforceability  shall not affect the validity or enforceability
of the remaining portions of this Agreement.

                          Section 15. Entire Agreement

     This Agreement  constitutes  the entire  agreement  among the Parties,  and
there are no understandings or agreements, conditions or qualifications relative
to this Agreement which are not fully expressed in this Agreement.

                             Section 16. Amendments

     This Agreement may be modified or otherwise amended,  and the observance of
any term of this  Agreement may be waived,  if such  modification,  amendment or
waiver is in writing and signed by all of the Parties.

                               Section 17. Notices

     Unless  otherwise  provided in this  Agreement,  all  notices,  directions,
requests,   demands,   acknowledgments  and  other  communications  required  or
permitted  to be given or made under the terms  hereof  shall be in writing  and
shall  be  deemed  to have  been  duly  given  or  made  (a)(i)  when  delivered
personally,  (ii) when made or given by prepaid telex,  telegraph or telecopier,
or (iii) in the case of mail  delivery,  upon the expiration of three days after
any  such  notice,   direction,   request,   demand,   acknowledgment  or  other
communication   shall  have  been  deposited  in  the  United  States  mail  for
transmission  by first class mail,  postage  prepaid,  or upon receipt  thereof,
whichever shall first occur and (b) when addressed as follows:

 If to Grantor:

                  Memorial Insurance Company of America
                  634 West Main
                  Blytheville, Arkansas 72315
                  Attn:  ________________________

 If to Beneficiary:

                  Security National Life Insurance Company
                  5300 South 360 West, Suite 200
                  Salt Lake City, Utah 84123
                  Attn:  Scott M. Quist, President

If to Trustee:

                  Zions First National Bank
                  10 East South Temple, Suite 300
                  Salt Lake City, Utah 84111
                  Attn:  ___________________


     Each Party may from time to time designate a different address for notices,
directions,  requests,  demands,  acknowledgments  and other  communications  by
giving  written  notice  of such  change  to the  other  Parties.  All  notices,
directions, requests, demands, acknowledgments and other communications relating
to Beneficiary's approval of Grantor's authorization to substitute Assets and to
the  termination of the Trust Account shall be in writing and may not be made or
given by prepaid telex, telegraph or telecopier.

                              Section 18. Headings

     The headings of the Sections and the Table of Contents  have been  inserted
for  convenience of reference only, and shall not be deemed to constitute a part
of this Agreement.

                            Section 19. Counterparts

     This Agreement may be executed in any number of counterparts, each of which
when  so  executed  and  delivered  shall  constitute  an  original,   but  such
counterparts together shall constitute one and the same Agreement.


<PAGE>


     IN WITNESS  WHEREOF,  the Parties  hereto have caused this  Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.

                              MEMORIAL INSURANCE COMPANY OF AMERICA,
                              as Grantor


                              By:_________________________________________
                              Title: ______________________________


                              SECURITY NATIONAL LIFE INSURANCE COMPANY,
                              as Beneficiary


                              By: /s/ Larry N. Perrin
                                  -------------------
                              Title:  Treasurer
                                      ---------

                              ZIONS FIRST NATIONAL BANK, as Trustee

                              By: /s/ Brandon Elzinga
                                  -------------------
                              Title:   Trust Officer
                                       -------------



<PAGE>




                                    EXHIBIT A

     REINSURANCE  AGREEMENT  between  MEMORIAL  INSURANCE  COMPANY OF AMERICA of
Blytheville,  Arkansas and SECURITY NATIONAL LIFE INSURANCE COMPANY of Salt Lake
City, Utah, effective as of December 29, 2005.

<PAGE>

                                    EXHIBIT B

                       Assets Deposited into Trust Account
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>exhibit3.txt
<TEXT>
                                 PROMISSORY NOTE


     DATED this 29th day of December, 2005.

     For valuable consideration, the sufficiency and receipt of which are hereby
acknowledged,  MEMORIAL  INSURANCE  COMPANY OF AMERICA,  an  Arkansas  domiciled
insurance company (the "Maker"), hereby promises to pay to the order of SECURITY
NATIONAL  LIFE  INSURANCE  COMPANY,  a Utah  domiciled  insurance  company  (the
"Payee"),  at 5300 South 360 West, Suite 250, Salt Lake City, Utah 84123, or, at
the Payee's  option,  at such other place as may be  designated  in writing from
time to time by the Payee, the sum of Thirty Million Ninety-one Thousand Dollars
($30,091,000),  together with interest thereon as hereinafter  provided, in cash
or in assets of the Company to be  transferred to the Payee as determined by the
Payee in its sole discretion to be acceptable as payment on the Note.

     Interest on the loan shall be charged on the unpaid  principal  of the loan
at a rate equal to six  percent  (6%) per annum,  computed on the basis of a 365
day year until the loan shall have been paid in full.

     Principal and accrued interest shall be due and payable on or before thirty
(30) days from the date of Note.

     The Maker may prepay all or any  portion  of the  principal  balance of the
Note at any time,  and from time to time,  without  penalty.  All payments  made
under this Note shall be applied  first  toward  the  reduction  of accrued  and
unpaid interest and then toward the reduction of the unpaid principal hereof.

     This Note is secured by a Security Agreement of even date herewith executed
by the Maker.

     The Maker  shall be in default  under this Note if the Maker shall (a) fail
to make payment due hereunder when the same shall be due and payable, (b) file a
petition seeking to be adjudged bankrupt,  (c) make a general assignment for the
benefit of creditors,  (d) suffer the appointment of a receiver, (e) be found to
have  made  any  misrepresentation  to  the  Payee,  whether  or  not  any  such
misrepresentation  resulted in the making of this Note,  (f) fail to comply with
any other agreement  related to or contemplated in connection with the execution
of this Note, or (g) become insolvent, and, in the Payee's sole discretion,  any
such occurrence of default shall not be cured within ten (10) days thereof.


<PAGE>

     Upon  default  hereunder,  at the option of the Payee,  the Payee will,  in
addition to the remedies set forth herein, be entitled to exercise all legal and
equitable  remedies  available  to the  holder  of a full  recourse  obligation,
including  seeking payment from all of the assets of the Maker. No agreement has
been made,  or will be made,  which  limits  the  Payee's  right to proceed  for
payment against any or all of the Maker's assets.  Upon default  hereunder,  the
Maker  immediately  shall  pay the  Payee,  on  demand,  any  and  all  expenses
reasonably  incurred in relation hereto,  including  reasonable  attorney's fees
incurred or paid by the Payee in protecting or enforcing its rights hereunder.

     This Note, in whole or in part,  may be extended from time to time with the
written consent of the Payee,  without in any manner  affecting the liability of
the Maker. Any consent of the Payee hereunder (written or otherwise), acceptance
of any payment due and payable under this Note other than in accordance with the
terms and provisions  hereof, or any failure of the Payee to exercise any rights
under this Note or to specifically enforce the terms and provisions hereof shall
not be deemed or  constitute  a waiver of any  rights or  remedies  to which the
Payee is entitled to under this Note or otherwise.

     If any  covenant or other  provision  of the Note is invalid,  illegal,  or
incapable of being enforced,  by reason of any rule of law or public policy, all
other  covenants and  provisions of the Note shall  nevertheless  remain in full
force and effect,  and no covenant or provision  shall be deemed  dependent upon
any other covenant or provision.

     This  Note  has  been  executed  as of the  date  first  above  written  in
conformity  with, and shall be construed  under and governed by, the laws of the
State of Arkansas.

                             MAKER:

                             MEMORIAL INSURANCE COMPANY OF AMERICA


                             By: /s/ Larry N. Perrin
                                 -------------------
                             Its:  Treasurer
                                   ---------
ATTEST:

 /s/ Bryan W. Duke
Its: Attorney

                             SECURITY NATIONAL LIFE INSURANCE COMPANY



                             By: /s/ Scott M. Quist
                                 ------------------
                             Its:  President
                                   ---------
ATTEST:

 /s/ Stephen M. Sill
Its: Chief Financial Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>exhibit4.txt
<TEXT>
                               SECURITY AGREEMENT


     THIS SECURITY AGREEMENT (the "Security Agreement") is made and entered into
effective  this 29th day of December,  2005, by and between  MEMORIAL  INSURANCE
COMPANY OF AMERICA, an Arkansas domiciled insurance company (the "Debtor"),  and
SECURITY  NATIONAL LIFE INSURANCE  COMPANY,  a Utah domiciled  insurance company
(the "Secured Party").

<PAGE>

1.   Security  Interest.  Subject to the terms and  provisions  of this Security
     Agreement,  the Debtor grants to the Secured Party a security interest (the
     "Security Interest") in the following collateral (the "Collateral"): All of
     the Debtor's  right,  title and  interest in, and to the proceeds  received
     from,  all of the assets owned by the Debtor,  as of the effective  date of
     this Agreement,  as listed and described in Schedule "A", which is attached
     hereto and by this reference made a part hereof.

2.   Obligation.  This  Security  Agreement  and the Security  Interest  granted
     hereby secure payment by the Debtor of its obligations  (the  "Obligation")
     under that certain  promissory note, of even date herewith,  payable to the
     Secured Party in the principal amount of Thirty Million Ninety-one Thousand
     Dollars ($30,091,000) (the "Note").

3.   Debtor's  Warranties  and  Covenants.  The  Debtor  hereby  represents  and
     warrants as follows:

     a.   Financing  Statements.   No  financing  statement  or  other  security
          agreement covering the Collateral or any proceeds thereof exists or is
          on file in any public office.

     b.   Ownership  of  Collateral.  The  Debtor is the  absolute  owner of the
          Collateral and has the right to pledge,  sell,  assign or transfer the
          same.  The Debtor shall defend the  Collateral  against all claims and
          demands of all persons at any time  claiming  the same or any interest
          therein adverse to the Secured Party.

     c.   No Material Adverse Change.  There has been no material adverse change
          in the  business,  business  prospects or  financial  condition of the
          Debtor that has not been fully disclosed to Secured Party.

     d.   Maintenance.  The Debtor shall keep the Collateral free from liens and
          other  security  interests and shall not create or suffer to exist any
          lien  or  security  interest  in  the  Collateral.  The  Debtor  shall
          immediately pay all costs necessary (including  reasonable  attorney's
          fees) to obtain,  preserve,  defend and enforce the Security Interest,
          collect the Note, and preserve, defend and collect the Collateral.

4.   Rights  and  Powers  of  Secured  Party.  The  Secured  Party  may,  in its
     discretion,  upon the occurrence of an event of default under this Security
     Agreement,  including,  without  limitation,  any breach of any covenant or
     warranty  hereunder  or any event of  default  under the Note (an "Event of
     Default").

     a.   Require  the  Debtor  to give  title,  possession  or  control  of the
          Collateral to the Secured Party;

     b.   Sell the  Collateral  and use  cash  proceeds  of sale or other  funds
          generated by the Collateral to reduce any part of the Obligation;

     c.   Take any  action the  Secured  Party is  permitted  to take under this
          Security  Agreement to preserve and enforce this  Security  Agreement,
          and maintain and preserve the  Collateral,  all without  notice to the
          Debtor; and

     d.   Add costs  incurred  in  connection  with each of the  forgoing to the
          Obligation  (but the  Secured  Party is under no duty to take any such
          action).

5.   Remedies of Secured  Party Upon Default.  When an Event of Default  occurs,
     and at any time  thereafter,  the Secured Party may declare the  Obligation
     secured  hereby  immediately  due and  payable  and may  proceed to enforce
     payment of the same and to exercise  any and all of the rights and remedies
     provided by the Arkansas Uniform  Commercial Code (the "Code"),  as well as
     all other  rights and remedies  processed  by the Secured  Party under this
     Security Agreement or otherwise.

6.   General.  In  addition  to the  foregoing,  the  parties  to this  Security
     Agreement also agree as follows:

     a.   Waiver.  No delay on the part of the Secured Party in  exercising  any
          power or right shall operate as a waiver hereof or thereof;  nor shall
          nay single or partial exercise of any power or right preclude other or
          further  exercise thereof or the exercise of any other power or right.
          No  waiver  by the  Secured  Party of any  right  hereunder  or of any
          default by the Debtor shall be binding upon the Secured Party,  unless
          in writing,  and no failure by the Secured Party to exercise any right
          hereunder  or waiver of any default of the Debtor  shall  operate as a
          waiver  of any  other  or  further  exercise  of such  right or of any
          further default.

     b.   Parties Bound.  The rights of the Secured Party  hereunder shall inure
          to the benefit of its  successors  and assigns and shall be assignable
          by the Secured Party  without  notice to or the consent of the Debtor.
          Notwithstanding  any other provision of this Security Agreement or any
          instrument or agreement  referenced  herein, the Debtor may not assign
          this   Security   Agreement  or  any  interest   herein   voluntarily,
          involuntarily,  by  operation of law or  otherwise,  without the prior
          written  consent of the Secured  Party,  which consent may be withheld
          for any reason whatsoever.  The terms of this Security Agreement shall
          be binding upon,  without  restriction,  the successors and assigns of
          the parties hereto. All representations,  warranties and agreements of
          the Debtor shall bind the Debtor's successors, and assigns.

     c.   Definitions.  Unless the context indicates  otherwise,  definitions in
          the Code apply to words and phrases in this Security Agreement; if the
          Code definitions conflict, Article 9 of the Code definitions apply.

     d.   Notice.  Notice mailed postage prepaid to Debtor's most recent address
          as shown by notice of change on file with the  Secured  Party at least
          five (5) days prior to the  related  action (or if the Code  elsewhere
          specifies  a longer  period,  such  longer  period)  shall  be  deemed
          reasonable.

     e.   Modifications. No provision hereof shall be modified or limited except
          by a  written  agreement  signed  by both  parties  to  this  Security
          Agreement.

     f.   Severability.  The  unenforceability of any provision of this Security
          Agreement shall not affect the unforceability or validity of any other
          provision hereof.

     g.   Financing  Statement.  The Debtor hereby appoints the Secured Party as
          the  exclusive  attorney-in-fact  with sole  authority to complete and
          sign one or more  financing  statements  on behalf of the Debtor  with
          respect  to the  Collateral  and to file the  same in the  appropriate
          office or place.

     h.   Governing  Law.  This  Security  Agreement  shall be  governed  by and
          construed in accordance with the laws of the State of Arkansas.

     i.   Further  Assurances;  Diligence.  Each  party  agrees to  execute  and
          deliver  all  documents  and  to  perform  all  further  act as may be
          reasonably  necessary  to carry out the  provisions  of this  Security
          Agreement. The parties hereto agree to use reasonable diligence and to
          exercise  their best efforts to fulfill their  respective  obligations
          under  this  Security  Agreement  at  all  times  that  this  Security
          Agreement is in effect.

     IN WITNESS WHEREOF, this Security Agreement is executed and delivered as of
the date and year first above written.

DEBTOR:                             MEMORIAL INSURANCE COMPANY OF AMERICA



                                    By:  /s/ Larry N. Perrin
                                         -------------------
                                    Its:  Treasurer
                                          ---------


SECURED PARTY:                      SECURITY NATIONAL LIFE INSURANCE COMPANY


                                    By: /s/ Scott M. Quist
                                        ------------------
                                    Its:  President
                                          ---------


STATE OF ARKANSAS          )
                           )ss.
COUNTY OF  PULASKI         )
           -------

     On the 29 day of December,  2005,  personally  appeared  before me Larry N.
Perrin , who being by me duly sworn did say that he is the Treasurer of MEMORIAL
INSURANCE  COMPANY OF  AMERICA,  and that he signed  the  within  and  foregoing
document on behalf of said corporation.

                                  /s/ Erin Cristler
                                  NOTARY PUBLIC
                                                    [SEAL]

STATE OF UTAH              )
                           )ss.
COUNTY OF SALT LAKE        )

     On the 29 day of December,  2005,  personally  appeared  before me Scott M.
Quist,  who being by me duly sworn did say that he is the  President of SECURITY
NATIONAL  LIFE  INSURANCE  COMPANY,  and that he signed the within and foregoing
document on behalf of said corporation.

                                   /s/ DeAnn Theurer
                                   -----------------
                                   NOTARY PUBLIC              [SEAL]
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>exhibit5.txt
<TEXT>
                      MEMORIAL INSURANCE COMPANY OF AMERICA

                            SURPLUS CONTRIBUTION NOTE

     FOR VALUE  RECEIVED,  MEMORIAL  INSURANCE  COMPANY OF AMERICA,  an Arkansas
domiciled  insurance  company  (hereinafter  the  "Company"),   subject  to  and
conditioned  upon the terms,  conditions,  limitations,  and provisions  hereof,
promises to pay to SOUTHERN SECURITY LIFE INSURANCE COMPANY, a Florida domiciled
insurance company, the principal amount of up to Two Million Two Hundred Dollars
($2,200,000),  together with interest on the unpaid balance  thereof at the rate
provided for herein.  The Note and accrued  interest shall not be a liability of
the Company until all conditions for repayment  specifically provided for herein
are met.

     Interest shall accrue on the outstanding principal amount of this Note from
the date hereof at the rate of six percent (6%) per annum, computed on the basis
of a 365 day year until the Note shall have been paid in full. The interest rate
herein shall never exceed the maximum rate  permitted by the law in the state of
Arkansas.  Principal  and  interest,  if any,  shall be payable  upon the terms,
conditions, stipulations and in the amount set forth in this Note.

     The Company shall be required to pay the principal  amount of this Note and
any accrued  interest,  if any, only out of its surplus in excess of one million
dollars ($1,000,000).  In no event shall any amount of principal or interest, if
any, be required of the Company if such payment reduces its surplus to less than
$1,000,000. Interest, if any, on the outstanding principal balance shall be paid
on a quarterly basis beginning January 1, 2006.

     Any payments made on this Note by the Company to the holder hereof shall be
credited  first to accrued but unpaid  interest  due, if any, and the balance of
such payment shall then be accredited to the principal amount of this Note.

     Payments of principal and/or interest on this Note shall not be made unless
such payment has been approved in advance by the Arkansas Insurance Department.

     No  payment  on the Note  shall be made if, in the sole  discretion  of the
Company, the payment will impair the capital or surplus of the Company or reduce
the  capacity  of the Company to  maintain a proper  ratio of  retained  written
premiums to surplus.

     This Note, upon prior approval of the Arkansas Insurance Department, may be
repaid,  in  whole or in part,  without  premium  or  penalty  and with  accrued
interest, if any, to the date of payment only.

     In  the  event  of  reorganization,   consolidation,  merger,  dissolution,
liquidation  or  receivership  of the Company,  the holder of this Note shall be
entitled to an equal right in and to the assets of the  Company,  along with all
of the creditors, to the extent of any unpaid principal and accrued interest, if
any, thereon,  before any payment to or consideration of stockholders' equity or
rights.



<PAGE>


     In the event of liquidation  of the Company,  all  obligations,  rights and
claims hereunder are expressly  subordinated to the claims of (a) policyholders,
insureds and beneficiaries under insurance contracts issued by the Company,  (b)
a supervisor,  conservator, or receiver of the Company appointed by the Arkansas
Insurance Department, and (c) the payment of principal and interest on any prior
surplus contribution notes or bonds issued by the Company.

     This Note will be governed by and construed in accordance  with the laws of
the state of  Arkansas.  This  Note will be  binding  upon the  Company  and its
successors  and  assigns,  and shall not be amended by the  parties  without the
prior written consent of the Arkansas Insurance Department.

     IN WITNESS WHEREOF, this Surplus Contribution Note has been executed and is
effective as of the 29th day of December, 2005.


                            MEMORIAL INSURANCE COMPANY OF AMERICA
Attest:


 /s/ Bryan W. Duke                      By:  /s/ Larry N. Perrin
 -----------------                           -------------------
Its:   Attorney                         Its  Treasurer
       --------                              ---------


                             SOUTHERN SECURITY LIFE INSURANCE COMPANY
Attest:


 /s/ Stephen M. Sill                    By:  /s/ Scott M. Quist
 -------------------                         -------------
Its: Chief Financial Officer                 Its  President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>7
<FILENAME>exhibit6.txt
<TEXT>
                               GUARANTY AGREEMENT


     THIS GUARANTY AGREEMENT (the "Guaranty") is made and given this 29th day of
December,  2005, by SECURITY NATIONAL LIFE INSURANCE  COMPANY,  a Utah domiciled
insurance  company,  and its  wholly-owned  subsidiary,  SOUTHERN  SECURITY LIFE
INSURANCE  COMPANY,  a Florida domiciled  insurance company  (collectively,  the
"Guarantors").

                                   WITNESSETH:

     WHEREAS, on September 23, 2005, Security National Financial Corporation,  a
Utah  corporation,  through its  subsidiaries,  Security National Life Insurance
Company and  Southern  Security  Life  Insurance  Company,  entered into a stock
purchase  agreement (the "Stock  Purchase  Agreement")  with Memorial  Insurance
Company of America, an Arkansas domiciled insurance company ("Memorial Insurance
Company");

     WHEREAS, under the terms of the Stock Purchase Agreement, Southern Security
Life Insurance Company and Memorial  Insurance Company each agree at the closing
date of the stock purchase transaction to enter into a reinsurance  agreement to
reinsure all of the in force business of Memorial  Insurance Company to Security
National Life  Insurance  Company,  as insured,  except for eleven  policies not
included  within the  reinsured  policies,  which are to be retained by Memorial
Insurance Company (the "Retained Policies");

     WHEREAS,  the  Retained  Policies  that  are  to be  retained  by  Memorial
Insurance  Company  pursuant  to the  terms of the  stock  purchase  transaction
consist of the following  policies,  together with the face amount and amount of
reserves of such policies:


               Policy           Face
               Number          Amount          SAP Reserve
               ------        ----------        -----------
               40116         $1,400.00           $665.50
               37893          1,400.00            665.50
               40117          1,200.00            374.72
               39303          1,200.00            374.72
               34758            700.00            557.46
               38161          1,300.00            406.95
               39301          2,600.00          1,090.88
               32025          3,500.00          1,984.97
               36085          1,400.00            744.95
               34759            700.00            576.04
               44711          1,400.00          1,102.01
                            ----------         ---------
                 Total      $16,800.00         $8,543.70
                            ==========         =========

     WHEREAS,  on October 20, 2005, Security National Life Insurance Company and
Southern  Security Life Insurance  Company  submitted to the Arkansas  Insurance
Department  for  approval a Form A Filing  for the  Acquisition  and  Control of
Memorial Insurance Company by Southern Security Life Insurance Company, in which
the  filing  included  a  proposed   reinsurance   agreement  (the  "Reinsurance
Agreement") that Security  National Life Insurance Company intends to enter into
with  Memorial  Insurance  Company  at the  closing  date of the stock  purchase
transaction;

     WHEREAS, as a condition to the Arkansas Insurance  Department approving the
Form A filing, Security National Life Insurance Company has agreed to enter into
a guaranty agreement with Memorial  Insurance  Company,  in a form acceptable to
the department,  to guaranty the benefit  payments stated in the eleven Retained
Policies  as a result of the  Reinsurance  Agreement  to be entered  into at the
closing date of the stock purchase transaction; and

     WHEREAS,  Security  National Life Insurance Company desires to enter into a
guaranty  agreement  to guaranty  the benefit  payments  stated in the  Retained
Policies to be retained by Memorial  Insurance  Company following the completion
of  the  stock  purchase  transaction  and  the  execution  of  the  Reinsurance
Agreement;

     NOW,  THEREFORE,  in  respect  of the  foregoing,  Security  National  Life
Insurance Company and Southern Security Life Insurance  Company,  as guarantors,
represent and warrant as follows:



<PAGE>




1. The Guarantors hereby  unconditionally and irrevocably  guarantee to Memorial
Insurance Company, the Arkansas Insurance Department and to the policyholders of
the  Retained  Policies  the full and prompt  payment,  when due, of the benefit
payments  stated in each of the  Retained  Policies  to be  retained by Memorial
Insurance  Company  following the closing of the stock purchase  transaction and
the  execution  of the  Reinsurance  Agreement,  to the extent that the reserves
relating  to such  policies  are  unable to  provide  for the full and  complete
payment of the benefits thereto (the "Obligations").

2.  This  guarantee  of  the   Obligations  is  a  continuing,   absolute,   and
unconditional  guaranty and shall remain in full force and effect and be binding
in accordance  with and to the extent of its terms upon the Guarantors and their
respective successors, transferees and assigns thereof, and inure to the benefit
of  the  policyholders  of  the  Retained   Policies  and  their  heirs,   legal
representatives, assigns and successors in interest, until the Obligations shall
have been satisfied in full.

3. The Guarantors further represent and warrant that:

     (a) the  Guarantors  have full power and  authority  to execute and deliver
this Guaranty and to preform fully and  completely  all of the  obligations  and
liabilities under this Guaranty;

     (b) the  execution,  delivery and  performance  of this Guaranty  shall not
violate any law, regulation,  order, writ, injunction, decree or judgment of any
court  or  governmental  authority,  and  will not  result  in a  breach  of any
contract, agreement or undertaking to which any Guarantor is a party; and

     (c) this Guaranty is a valid and binding  obligation,  enforceable upon the
Guarantors  in  accordance  with the terms  hereof  (except as may be limited by
bankruptcy,  insolvency  or other  similar laws  affecting  the  enforcement  of
creditors' rights generally and subject to the qualification  that the remedy of
specific performance or of injunctive relief is subject to the discretion of the
court before which any proceeding therefore may be brought).



<PAGE>



4. If any of the provisions of this Guaranty shall contravene or be held invalid
under the laws of any  jurisdiction,  this Guaranty shall be construed as if not
containing  those  provisions  and the rights  and  obligations  of the  parties
thereto shall be construed and enforced accordingly.

5. This  Guaranty may not be changed  orally,  and this Guaranty and the rights,
obligations and liabilities of the parties and policyholders  hereunder shall be
governed by and construed in accordance  with the laws of the state of Arkansas,
without giving effect to provisions thereof concerning conflict of laws.

6. The  Guarantors'  liability  hereunder  shall  not be  discharged  except  by
performance  and  payment  of all  the  Obligations  hereunder,  provided  that,
Guarantors'  liability  hereunder  shall be reduced to the extent of any benefit
payments made from the reserves relating to the Retained Policies.

7. The Guarantors jointly and severely waive presentment for payment, notice of
protest, notice of dishonor, notice of nonpayment, notice of presentment, demand
for payment, or protest of any of the Obligations.

8. Neither the Guarantors nor their  successors in interest (by operation of law
or otherwise) or legal representatives, shall assign or otherwise transfer their
obligations hereunder.

9. This Guaranty shall continue in force and affect until all Obligations of the
Guarantors under said instrument have been fully satisfied and until the benefit
payments  have been paid in full to the  policyholders  of each of the  Retained
Policies to be retained by Memorial  Insurance  Company following the closing of
the stock purchase transaction and the execution of the Reinsurance Agreement.

     IN WITNESS WHEREOF, the Guarantors have executed and given this Guaranty as
of the day and year first above written.

                            GUARANTORS:

                            SECURITY NATIONAL LIFE INSURANCE COMPANY



                            By: /s/ Scott M. Quist
                                ------------------
                                    Scott M. Quist, President
                                    and Chief Operating Officer


                            SOUTHERN SECURITY LIFE INSURANCE COMPANY



                            By: /s/ Stephen M. Sill
                                -------------------
                                Stephen M. Sill, Vice President, Treasurer
                                and Chief Financial Officer

STATE OF UTAH              )
                           ) ss.
COUNTY OF SALT LAKE        )

     On this 29th day of December,  2005, personally appeared before me Scott M.
Quist,  who being by me duly  sworn did say that he is the  President  and Chief
Operating  Officer of SECURITY  NATIONAL  LIFE  INSURANCE  COMPANY and that said
Scott M. Quist stated that he signed the within and foregoing document on behalf
of said corporations.


                              /s/ DeAnn Theurer
                                  NOTARY PUBLIC       [SEAL]

STATE OF UTAH              )
                           ) ss.
COUNTY OF SALT LAKE        )

     On this 29th day of December,  2005,  personally appeared before me Stephen
M.  Sill,  who  being by me duly  sworn  did say that he is the Vice  President,
Treasurer  and Chief  Financial  Officer of  SOUTHERN  SECURITY  LIFE  INSURANCE
COMPANY  and that said  Stephen  M. Sill  stated  that he signed  the within and
foregoing document on behalf of said corporations.



                                /s/ DeAnn Theurer
                                    NOTARY PUBLIC      [SEAL]
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>8
<FILENAME>exhibit7.txt
<TEXT>
                        ADMINISTRATIVE SERVICES AGREEMENT


     THIS AGREEMENT (the  "Agreement") is effective as of December 29, 2005 (the
"Effective  Date") and is made and entered into by and between SECURITY NATIONAL
LIFE INSURANCE  COMPANY,  a Utah domiciled  life  insurance  company  ("Security
National"),  and MEMORIAL  INSURANCE COMPANY OF AMERICA,  an Arkansas  domiciled
insurance company ("Memorial").

                                   WITNESSETH:

     WHEREAS,  on September  23, 2005,  Security  National and its  wholly-owned
subsidiary,  Southern  Security  Life  Insurance  Company,  a Florida  domiciled
insurance company,  entered into a stock purchase agreement (the "Stock Purchase
Agreement") with Memorial;

     WHEREAS, under the terms of the Stock Purchase Agreement, Security National
and  Memorial  each agree at the closing of the stock  purchase  transaction  to
enter into a reinsurance agreement (the "Reinsurance Agreement") to reinsure all
the in force business of Memorial to Security National, as the reinsurer, except
for certain policies that are to be retained by Memorial; and

     WHEREAS, as a condition to the Stock Purchase Agreement and the Reinsurance
Agreement,  Security  National agrees to enter into an  administrative  services
agreement with Memorial, in a form acceptable to the Arkansas and Utah insurance
departments,  to provide  general  and  administrative  services  to Memorial in
connection with the policies to be retained by Memorial following the closing of
the stock purchase  transaction and the execution of the Reinsurance  Agreement,
but not to include the policies to be reinsured to Security National pursuant to
the  Reinsurance  Agreement,   in  accordance  with  the  terms  and  conditions
hereinafter contained;

     NOW,  THEREFORE,  in  consideration  of  the  mutual  promises,  covenants,
representations and undertakings hereinafter contained, the parties hereto agree
as follows:

                                    ARTICLE I

                              Term and Termination

     Section 1.1 This  Agreement  shall commence on the Effective Date and shall
be  unlimited  in  duration,  remaining  in full force and effect as long as the
Reinsurance Agreement shall remain in full force and effect.

     Section 1.2. Any  termination of this Agreement shall not affect the rights
and  obligations  of the  parties  hereto  as to  transactions  or acts  done or
performed by either party prior to the effective date of termination.



<PAGE>

                                   ARTICLE II

             Appointment, Authority and Duties of Security National

     Section  2.1.   Memorial  hereby  engages  Security   National  to  provide
administrative  and  financial  services  described  herein to Memorial  for the
policies to be retained by Memorial  pursuant to the stock purchase  transaction
and the  Reinsurance  Agreement,  but not to include the  policies  reinsured to
Security  National  under  the  Reinsurance  Agreement..  Without  limiting  the
generality of the foregoing,  Security  National shall,  directly or indirectly,
and at the  reasonable  request  and  direction  of the  Board of  Directors  of
Memorial,  perform or render the following administrative and financial services
relating to:

     A. Accounting Services.  These services shall include policyholder billing,
collection of policyholder premiums, payment of commissions, maintaining records
of accounts  receivable  and accounts  payable,  payment of expenses,  providing
management reports to include budgeting and interim financial  reports,  payroll
administration  to the extent  Memorial has employees  outside the scope of this
Agreement,  proper  posting of financial  transactions  to the  policyholder  in
force, among other items.

     B. Financial  Reports and Statements.  Preparation of financial reports and
statements to include the preparation of statutory reports  including  quarterly
and annual reports for the submission to the Arkansas  Insurance  Department and
other  relevant  jurisdictions,  other  management  reports  to be agreed  upon,
periodic  reports to the Internal Revenue  Service,  including tax returns,  the
management  and  payment  of an annual  audit fee with an  acceptable  certified
public accounting firm, management of insurance department examinations, and the
payment of the fees therefore.

     C. Actuarial.  Security National shall make available all existing products
of Security  National  or related  subsidiaries,  shall  maintain  reserves  and
reserve calculations for financial  statement,  including GAAP,  statutory,  and
federal income tax, and internal purposes,  shall perform profitability analysis
and  shall  be  available  for  limited  product   development   and/or  product
enhancement work.

     D.   Policyholder   Services.   Policyholder   services  shall  handle  all
policyholder  correspondence,  shall calculate cash surrender  values,  maintain
lapses,  cancellations,   reinstatement,   and  shall  provide  claim  services,
including investigation and administration of claims and the payment thereof.

     E. Underwriting.  To include the receipt of applications,  analysis of said
applications,  and  selection  of risks  including  the  management  of  medical
evaluation of such risks,  requesting  MIB reports,  requesting  and  evaluating
attending physician statements, medical examinations, and upon the acceptance of
such risks the issuance of the policy.

     F. Data Processing.  To allow Memorial access to the data processing system
of Security  National  and to provide  data  processing  services  such that the
services  contemplated  by this  Agreement  can be provided  on a timely  basis,
including  new  policy  issue,  policyholder  services,   accounting,   in-force
maintenance, commissions and other functions.



<PAGE>


     G. Legal.  To include review of contracts,  drafting or review of contracts
for the purpose of agents or other  purposes,  and  management of legal expenses
incurred by Memorial for litigation or otherwise.

     H. Building Management. To insure the building is properly maintained.

     I. Marketing Advisory Services. To include agent licensing,  calculation of
commissions, payment of commissions, maintenance of the agency system, providing
market analysis of various opportunities,  and managing policy acquisition costs
including commissions,  advertising,  marketing contests, sales conventions, and
other items.

     J.  Investment  Services.  To provide  investment  services  including  the
recommendation of publicly traded investments,  mortgage loan services including
purchase  of loans and  investments  in  mortgage  warehouse  lines,  investment
accounting  including   preparation  of  Schedule  D  of  the  statutory  annual
statement,   and  investment  maintenance  including  calls  and  redemption  of
securities.

     Section 2.2. All services  including  underwriting,  claims  management and
investment  services  provided  to Memorial  hereunder  are to be based upon the
written criteria,  standards and guidelines of Memorial.  In the absence of such
written  procedures,  Security  National  shall be entitled to rely upon its own
best judgment in the respective  matter. The standard shall be that of a prudent
person  managing  his own  affairs.  Memorial  shall have the ultimate and final
authority  over all  decisions  and  policies,  including  but not  limited  to,
decisions  and  policies  related to the  acceptance,  rejection or canceling of
rights,  the  payment or  nonpayment  of claims,  and the  purchase  and sale of
securities.

     Section 2.3.  Notwithstanding any other provision of this Agreement,  it is
understood  that the  business  and affairs of Memorial  shall be managed by its
Board  of  Directors,  and  to  the  extent  delegated  by  such  Board,  by its
appropriately designated officers.

     Section 2.4. All services provided by Security National  hereunder shall be
performed in accordance with generally accepted  professional  standards and, in
this regard,  Security  National  shall (a)  maintain a staff of  competent  and
trained  personnel,  supplies and equipment  for the purpose of  performing  its
duties hereunder;  (b) use reasonable efforts to service Memorial diligently and
faithfully,  to promote and  safeguard the best  interests of Memorial;  and (c)
perform all acts reasonably necessary to ensure the smooth and proper conduct of
the subject business on behalf of Memorial.  Security  National may employ other
persons  or  entities  to  furnish  it  with   statistical   and  other  factual
information, advice and assistance as it may deem necessary or desirable for the
proper and efficient conduct of its activities hereunder.

     Section 2.5. Standard of care and standard of performance of duties. Duties
and  obligations of Security  National shall be provided in a manner  consistent
with the nature,  type,  timeliness,  and amount of service that was provided by
Memorial's own employees. Where services are to be provided by Security National
that had not previously been provided by Memorial's employees,  the standard for
such  services  shall be that of a  reasonable  person  managing his own affairs
engaged in similar service.



<PAGE>


     Section 2.6. It is  contemplated  that Security  National will hire certain
current  employees  of  Memorial  in order to  accomplish  the  purposes of this
Agreement. Memorial agrees to cooperate in retaining such employees and in other
ways to  effectuate  the purposes of this  Agreement.  Memorial  represents  and
agrees that all employees are "at will"  employees not subject to any employment
agreement or retirement plan.

     Section 2.7.  Warranties and Limitation of Liability.  It is understood and
agreed that  Security  National  will be using  certain  commercially  available
products to include  software  and  computer  hardware  among  others.  Security
National  specifically makes no guarantees,  warranties,  or otherwise regarding
such  items and the only such  warranty  or  guaranty  is that  provided  by the
manufacturer.  Furthermore,  it is specifically  agreed that in undertaking this
Agreement, Security National is relying upon Memorial's representation as to its
needs, requirements, and past capabilities.  Security National makes no warranty
or  guaranty  and  accepts no  liability  with  regards to its  services or with
regards to its investment advice.


                                   ARTICLE III

                 Expenses and Compensation of Security National

     Section 3.1. Security National shall furnish at its own expense, executive,
supervisory  and other  personnel and services in  connection  with the services
that it is to provide as contemplated by this Agreement.

     Section 3.2. In full  consideration  for the services  rendered by Security
National  hereunder,  during each year of the term of this  Agreement,  Memorial
shall  pay  to  Security   National   an   Administrative   Services   Fee  (the
"Administrative Services Fee") of $25.00 per policy per year, provided, however,
that the  Administrative  Services  Fee shall be  reduced to zero for as long as
capital  and surplus of  Memorial  is less than or equal to  $1,000,000,  unless
Memorial and Security National  otherwise agree in writing and such agreement is
approved by the Arkansas and Utah insurance departments.


                                   ARTICLE IV

                         Representations and Warranties

     Section 4.1.  Security  National hereby represents and warrants to Memorial
that it has full corporate power and authority to enter into this Agreement, and
that the officer  executing this Agreement has full authority and right to do so
on behalf of Security National.

     Section 4.2.  Memorial hereby  represents and warrants to Security National
that it has full corporate  power and authority to enter into this Agreement and
that the officer  executing this Agreement has full authority and right to do so
on behalf of Memorial.




<PAGE>


                                    ARTICLE V

                      Compliance with the Memorial Policies

     Security  National  covenants  and  agrees  that the  investment  planning,
investment advice and services that it furnishes  Memorial  hereunder will be in
accordance with the general investment  policies of Memorial set forth from time
to time by its Board of Directors or any appropriate  committee thereof,  and in
any memoranda or letter agreements to Security National,  in accordance with the
criteria and limitations provided by Sections of the Arkansas insurance laws, as
amended from time to time.


                                   ARTICLE VI

                                     Records

     Section 6.1.  Security  National  agrees that it will maintain all records,
memoranda,  instructions and  authorizations  relating to the services performed
hereunder on behalf of Memorial  (the  "Records").  The Records shall (a) be and
remain the  property of  Memorial,  (b) be open at all times to  inspection  and
audit by Memorial or its authorized representatives,  and (c) shall be delivered
to Memorial upon written demand  therefore  provided that Security  National may
retain a copy or duplicate of each Record, delivered to Memorial pursuant to (d)
and  Memorial  will  reimburse  Security  National for all  reasonable  expenses
incurred in delivering  Records to Memorial,  including  without  limitation the
cost to photocopy  Records,  copies of which are retained by Security  National,
and delivery expenses.

     Section 6.2.  Security  National shall, at the request of Memorial,  assist
and provide operational support in connection with any audit of any records with
respect to the services  provided  hereunder  that is  undertaken  by Memorial's
auditors,  its firm of CPA's,  its actuaries or the insurance  department of any
state or any other governmental agency.

     Section 6.3.  Security National shall provide,  upon Memorial's  reasonable
request,  any Records in its  possession and control which are necessary to file
any report required by any federal,  state or local  governmental  agencies.  If
such  Records  are not  timely  provided,  Security  National  will pay any cost
reasonably incurred by Memorial in compiling the necessary information.

     Section 6.4. The terms and  conditions of this Agreement and the Records in
the possession and the control of Security  National are  confidential and shall
be treated as such by Security National and its employees.

                                   ARTICLE VII

                             Independent Contractors



<PAGE>


     This Agreement is not a contract of employment and nothing herein contained
shall be construed to created the  relationship of employer and employee between
Memorial and Security National.  Security National is an independent  contractor
and shall be free to exercise  judgment and discretion with regard to its duties
under this Agreement.

                                  ARTICLE VIII

                                     Notices

         Section 8.1. All notices, requests, demands and other communications
under this Agreement or in connection therewith shall be given or made as
follows:

     If to Memorial:

           Memorial Insurance Company of America
           64 West Main
           Blytheville, Arkansas 72315
           Attn:  ________________________
           Facsimile:    (870) 838-0988
           Telephone No.:  (870) 763-0713

     With copies to:

            Randall A. Mackey, Esq.
            Mackey Price Thompson & Ostler
            57 West 200 South, Suite 350
            Salt Lake City, Utah 84111
            Facsimile:    (801) 575-5006
            Telephone No.:  (801) 575-5000

     If to Security National:

            Security National Life Insurance Company
            5300 South 360 West, Suite 250
            Salt Lake City, Utah 84123
            Attn:  Scott M. Quist, President
                   and Chief Operating Officer
            Facsimile:    (801) 265-9882
            Telephone No.:  (801) 264-1060



<PAGE>


     with a copy to:

            Randall A. Mackey, Esq.
            Mackey Price Thompson & Ostler
            57 West 200 South, Suite 350
            Salt Lake City, Utah 84111
            Facsimile:    (801) 575-5006
            Telephone No.:  (801) 575-5000

     Section 8.2. Any notice or communication  required or permitted to be given
in terms of this Agreement shall be valid and effective only if in writing.

     Section  8.3.  Either  party may by  written  notice  to the other  sent by
prepaid  registered mail change its address to another physical address provided
that change of address  shall only  become  effective  on the seventh  (7th) day
after dispatch of the notice.

     Section 8.4. Any notice or communication sent by prepaid United States mail
pursuant to this Agreement shall be deemed to have been received within ten (10)
days of the date of  posting.  Any  notice or  communication  sent by  facsimile
transmission pursuant to this Agreement shall be deemed to have been received on
the day that  such  notice  was  transmitted  and  confirmation  of  receipt  of
transmission was received.

                                   ARTICLE IX

                                  Miscellaneous

     Section 9.1. This Agreement shall be governed by and interpreted  according
to the laws of the State of Arkansas and the parties agree to submit  themselves
to the jurisdiction of any competent Arkansas court, both state and federal.

     Section  9.2.  This  Agreement  embodies  the  final,  complete  and entire
agreement  between the parties with respect to the Matters set forth herein.  No
other  representations,  understandings  or agreements  have been made or relied
upon in the making of this Agreement other than those  specifically set forth or
referred to herein.

     Section 9.3. Any  alterations,  modifications,  amendments,  variations  or
additions to this Agreement  shall only be valid if in writing and executed with
the same formalities as this instrument.

     Section  9.4. The failure of either party to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a waiver of such
provisions, nor in any way to affect the validity of this Agreement, or any part
thereof, or the rights of either party to thereafter enforce each and every such
provision.



<PAGE>


     Section 9.5. This Agreement shall not be assigned, delegated, subdelegated,
charged or otherwise  disposed of by Memorial  without the prior express written
consent of Security National. Upon written notice to Memorial, Security National
may assign, delegate,  subdelegate,  charge or otherwise transfer this Agreement
and its  obligations  hereunder;  provided  that  any  such  assignee,  delegee,
subdelegee, chargee or transferee agrees in writing to be bound hereunder.

     Section 10.6. This Agreement may be executed in two separate  counterparts,
each of which shall be deemed to be an original  hereof,  but all of which shall
constitute one and the same instrument.

     IN WITNESS  WHEREOF,  Security  National and Memorial  have  executed  this
Agreement as of the Effective Date.

                   SECURITY NATIONAL LIFE INSURANCE COMPANY



                   By: /s/ Scott M. Quist
                       ------------------
                   Its: President
                        ---------

                   MEMORIAL INSURANCE COMPANY OF AMERICA


                   By: /s/ Larry N. Perrin
                       -------------------
                       Its: Treasurer
                       --------------
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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