LOAN AND SECURITY AGREEMENT


     This Loan and Security  Agreement  (this  "Agreement")  is made and entered
into in Salt Lake City,  Utah,  this 24th day of December,  2002, by and between
KEYBANK NATIONAL  ASSOCIATION,  a national banking association  ("Lender"),  and
SECURITY  NATIONAL  FINANCIAL  CORPORATION,  a  Utah  corporation  ("Borrower").
Borrower  and Lender are  sometimes  referred  to herein,  collectively,  as the
"Parties."

     In consideration of the mutual covenants and agreements  contained  herein,
the Parties agree as follows:

     1. Term Loan. Subject to all of the terms and conditions  contained in this
Agreement,  Lender  agrees  to  make a loan  (the  "Loan")  to  Borrower  in the
principal amount of NINE MILLION AND NO/100 DOLLARS ($9,000,000).  The Loan is a
non-revolving  line of  credit  that  will be  fully  disbursed  at the  time of
closing. In connection herewith,  and as further evidence of the Loan, Borrower,
as maker,  shall execute and deliver to Lender, as payee, a promissory note (the
"Promissory  Note") for the amount of Loan,  which  Promissory  Note shall be in
form and content  satisfactory to Lender. All sums advanced on the Loan pursuant
to the terms of this  Agreement  shall be deemed  advances or  disbursements  of
principal under the Promissory Note.

     2. Commercial  Purpose of Loan. The purpose of the Loan is to provide funds
for the  acquisition  by  Borrower  or one or more  of its  subsidiaries  of the
capital stock in, or the book of insurance  business,  of Gulf National Life. No
other use of the proceeds of this Promissory Note shall be made without Lender's
prior written consent.

     3. Interest;  Default Interest.  All sums advanced or disbursed pursuant to
this Agreement and the Promissory  Note shall bear interest form the date hereof
until paid in full,  both before and after  judgment,  at a variable or floating
rate  equal  to the sum of an  index  and a  margin  (the  sum of  which  is the
"Effective  Rate")  where the index is the Prime  Rate and the margin is a minus
twenty-eight  (28) basis points  (i.e.,  - .28%) per annum.  Adjustments  to the
Effective Rate shall be made on and as of the same day that changes occur to the
Prime Rate. As used herein,  "Prime Rate" means the percentage  rate of interest
designated  from time to time by Lender as its "prime" or base lending rate. The
Prime Rate is based on certain  factors which Lender  selects from time to time,
such as the prime or base lending  rates of other  financial  institutions.  The
Prime Rate is an index used by Lender to establish the  effective  interest rate
for variable-rate  loans made by it which use that term as an index.  Prime Rate
does not necessarily mean the lowest or best rate at which Lender may make loans
or extend credit. Interest will be calculated on the basis of a 360-day year and
charged for the actual number of days elapsed.  Upon the  occurrence of an Event
of Default (as  hereinafter  defined) and during the  continuance  thereof,  the
margin used to compute the  Effective  Rate shall,  at Lender's  sole option and
without prior notice to Borrower,  immediately  increase by an  additional  four
hundred  (400) basis points  (i.e.,  4%) and shall  continue at such rate,  both
before  and after  judgment,  until the Loan and the  Promissory  Note have been
repaid in full and all of Borrower's other obligations to Lender thereunder have
been fully paid and discharged.

     4.Payments.  Borrower shall make payments in the amounts, at the times, and
in the manner set forth in the  Promissory  Note. The Parties  contemplate  that
Borrower will enter into an interest rate hedge, derivative, or "swap" agreement
with Lender or an affiliate of Lender in  connection  with the Loan,  upon terms
and conditions as may be mutually  satisfactory  to them. If Borrower and Lender
enter into such interest rate hedge, derivative,  or swap agreement, the monthly
payment  amount due under the  Promissory  Note shall be adjusted in  accordance
with a schedule or exhibit or be attached thereto.

     5. Late Charges. If any payment is not paid within five (5) days after it's
scheduled  payment  date,  Borrower  agrees  to pay a late  charge  equal to the
greater of $50 or five percent (5%) of the amount of the delinquent payment. The
late  charge is  intended  to cover,  in part,  the extra  expense  of Lender in
handling  such  delinquent   payment  and  loss  opportunity   costs.   Borrower
acknowledges that it would be impractical for the Parties to determine the exact
amount of damages  Lender  will incur if a payment is  delinquent,  and that the
amount set forth in this  Paragraph 5 is a good faith  estimate of, and shall be
presumed  to be,  the amount of damages  that will be  sustained  by Lender as a
result of a delinquent  payment.  Nothing herein shall be construed to waive any
other right or remedy Lender may have with respect to a delinquent payment.

     6. Loan Fees and Other Expenses. Borrower agrees to pay to Lender a loan or
commitment fee in the amount of $9,000.00 upon execution of this Agreement. Such
loan or  commitment  fee shall be deemed  fully  earned and  non-refundable.  In
addition,  Borrower agrees to pay or reimburse  Lender for all of Lender's costs
and expenses incurred by Lender in connection with the transaction  contemplated
herein,  including without limitation filing fees and reasonable attorney's fees
and expenses. Such costs and expenses shall be due and payable upon execution of
this Agreement, or if incurred thereafter, upon demand by Lender.

     7. Collateral. The obligations,  undertakings, liabilities and indebtedness
of  Borrower  with  respect  to the Loan or in any  manner  arising  under  this
Agreement,  the  Promissory  Note,  the other  Loan  Documents  (as  hereinafter
defined), and any obligation or liability that Borrower may now or hereafter owe
to  Lender  in  connection  with  or  arising  from  any  interest  rate  hedge,
derivative, or "swap" agreement made with respect to the Loan, including without
limitation  obligations  which may arise pursuant to any "ISDA Master Agreement"
and any schedules  thereto,  whether presently  existing or hereafter arising or
entered into, and any early  termination fees  (collectively,  the "Obligation")
shall be secured by, and  Borrower  hereby  assigns,  transfers,  and conveys to
Lender,  and  grants  Lender  a  security  interest  in and  to,  the  following
(collectively, the "Collateral"):

          (a) All of the  issued and  outstanding  capital  stock (the  "Pledged
     Stock") of Security  National Life Insurance  Company,  a Utah  corporation
     ("SNLIC"),  a wholly owned  subsidiary  of Borrower.  Without  limiting the
     foregoing,  Lender  shall have a security  interest in that  certain  stock
     certificate  Number 1  representing  15,000 shares of common stock in SNLIC
     (the "Pledged Stock Certificate")

          (b) All  shares  and  associated  rights and  interests  resulting  or
     derived from the Pledged Stock,  including without  limitation stock issued
     in  connection  with forward and reverse  stock  splits,  stock  dividends,
     warrants,  stock appreciation  rights, and stock and other consideration or
     distributions  received  with respect to or on account of Pledged  Stock in
     any merger,  consolidation,  reorganization,  recapitalization,  or similar
     transaction.

          (c) All dividends  and  distributions,  whether in cash or kind,  made
     with respect to, or on account of, the Pledged Stock.

          (d) All products and proceeds from any of the foregoing.


<PAGE>



     Borrower shall execute and deliver to Lender, or shall cause to be executed
and delivered to Lender, such assignments,  security  agreements,  UCC financing
statements  (including   continuation   statements  and  amendments),   pledges,
hypothecations,  consents, acknowledgments, and other documents and instruments,
and shall take such other  action,  as Lender may  request to further  effect or
perfect its security interest in the Collateral.  Such documents,  together with
this Agreement,  the Promissory Note, and the Guaranty (as hereinafter  defined)
are referred to as the "Loan Documents". Borrower agrees that the Pledged Stock,
together with any  additional  stock that may be issued with respect  thereto or
issued in  conversion  or exchange  thereof,  shall be  delivered to and held by
Lender or its nominee at all times,  and agrees to take all necessary  action to
effect such delivery.  Notwithstanding  the foregoing,  the Parties  acknowledge
that Lender is currently  holding the Pledge Stock Certificate in its possession
pursuant to a "Commercial Pledge and Security  Agreement" dated December 8, 1998
(the "Pledge Agreement"),  and is holding the same as security for certain other
loans and  extensions  of credit made by Lender to Borrower.  The Parties  agree
that the term  "Indebtedness"  as used in the Pledge  Agreement  shall  include,
without limitation,  the Obligations,  and that the Pledge Agreement constitutes
one of the Loan Documents.

     8. Guarantor.  The Obligation of Borrower to Lender shall be absolutely and
unconditionally  guaranteed by SECURITY NATIONAL LIFE INSURANCE  COMPANY, a Utah
corporation  ("Guarantor"),  using a form of guaranty agreement  satisfactory to
Lender (the "Guaranty").

     9.  Conditions  Precedent.  Lender  shall  not  be  required  to  make  any
disbursement on the Loan or under the Promissory

Note unless and until the following  conditions  have been,  and continue to be,
met to the satisfaction of the Lender:

          (a) This Agreement,  the Promissory Note, the Guaranty,  and any other
     Loan  Documents  required  by Lender  shall have been duly  executed by the
     parties thereto,  acknowledged (if required),  and delivered to Lender, and
     the same shall be in full force and effect.

          (b) Borrower shall have provided evidence  satisfactory to Lender that
     Borrower and any other person signing any Loan Document (other than Lender)
     have the authority to do so.

          (c) The representations and warranties contained in this Agreement and
     the other Loan Documents executed by Borrower (including without limitation
     the Pledge Agreement) shall be true and correct in all material respects.

          (d) The security  interest of Lender in and to the Collateral shall be
     valid,  perfected,  in full force and effect,  and shall constitute a first
     lien position senior in interest and right to all other liens,  claims, and
     encumbrances.

          (e) No Event of Default shall have occurred and be continuing,  and no
     condition shall exist or event shall have occurred  which,  with the giving
     of  notice  or the  lapse of time or  both,  would  constitute  an Event of
     Default.

     Notwithstanding  anything in this  Agreement or the other Loan Documents to
the contrary, the foregoing conditions are solely for the benefit and protection
of Lender. Lender may, in its sole discretion, waive or defer the performance of
any condition on one or more  occasions.  Any such waiver or deferral  shall not
establish a course of dealings or otherwise  obligate  Lender to waiver or defer
any condition on other occasions.


<PAGE>


     10. Representations and Warranties. In order to induce Lender to enter into
this Agreement and to make the Loan,  Borrower represents and warrants to Lender
as follows:

          (a) Borrower is a corporation,  duly organized,  validly existing, and
     in good standing  under the laws of the State of Utah with the power to own
     its assets and to transact business in Utah, and in such other states where
     its business is conducted  and it is required to be registered or otherwise
     qualified to transact business.

          (b)  Borrower  has all  requisite  authority  and power to execute and
     deliver this Agreement, the Promissory Note, and any other Loan Document to
     which it is a party,  and to perform  its  obligations  thereunder  and any
     condition or obligation imposed under the terms thereof.

          (c) The  execution,  delivery  and  performance  by  Borrower  of this
     Agreement,  the Promissory Note, and other Loan Document, and each document
     incident  hereto will not  violate any  provision  of any  applicable  law,
     regulation,  order,  judgment,  decree,  article of incorporation,  by-law,
     indenture, contract, agreement, or other undertaking to which Borrower is a
     party,  or which  purports to be binding on Borrower or its assets and will
     not result in the  creation or  imposition  of a lien on any of its assets,
     other  than the  security  interest  granted  to Lender  and the  Permitted
     Encumbrances.


          (d) There is no action, suit, investigation, or proceeding pending or,
     to the knowledge of Borrower,  threatened, against or affecting Borrower or
     any of its assets  which,  if adversely  determined,  would have a material
     adverse  affect on the financial  condition of Borrower or the operation of
     its business.

          (e) Any financial  statements  which have  heretofore been provided to
     Lender by Borrower or at  Borrower's  request,  are correct and complete in
     all material  respects,  and truly,  fairly,  and accurately  represent the
     financial position of Borrower as of the date of such financial statements.
     Since  the date of such  statements  there  have been no  material  adverse
     changes

          (f) No  information  or  report  furnished  by  Borrower  to Lender in
     connection  with  its  request  or  application  for  the  Loan  or in  the
     negotiation  of this  Agreement or any other Loan  Document  contained  any
     material  misstatement  of fact or omitted to state a material  fact or any
     fact necessary to make the statements contained therein not misleading.

          (g) Borrower has (1) filed all applicable  federal,  state,  and local
     tax returns or other statements required to be filed in connection with its
     business,  including those for income taxes,  sales taxes,  property taxes,
     payroll taxes, payroll withholding amounts, FICA contributions, and similar
     items; (2) maintained appropriate reserves for the accrual of the same; and
     (3) paid when due all such taxes, or sums or assessments made in connection
     therewith. Provided, however, that (until distraint,  foreclosure, sale, or
     similar  proceedings  have been  commenced)  nothing  herein  will  require
     Borrower  to pay any sum or  assessment,  the  validity  of  which is being
     contested in good faith by proceedings  diligently  pursued and as to which
     adequate reserves have been made.

          (h) Lender's  security  interest in the  Collateral is in a first lien
     position  senior  in  right  and  title to all  other  liens,  claims,  and
     encumbrances of any kind.


<PAGE>


          (i) Borrower is not engaged in the  business of  extending  credit for
     the  purpose  of  purchasing  or  carrying  margin  stock  (as  defined  in
     Regulation  U issued  by the  Board of  Governors  of the  Federal  Reserve
     System),  and no proceeds of the Loan will be used to purchase or carry any
     margin stock or to extend credit to others for the purpose of purchasing or
     carry margin stock in violation of Regulation U.

          (j) As used in this Agreement,  "ERISA" means the Employee  Retirement
     Income  Security Act of 1974,  as amended,  together  with all  regulations
     issued pursuant  thereto;  "ERISA  Affiliate"  means each trade or business
     (whether  or not  incorporated)  which,  together  with  Borrower,  will be
     treated as a single employer under ERISA;  "Plan" means any plan defined in
     Section  4021(a)  of the  Internal  Revenue  Code or in  respect  of  which
     Borrower is an  "employer"  or a  "substantial  employer" as said terms are
     defined  in ERISA;  and  "Prohibited  Transaction"  means  any  transaction
     described  in Section  406 of ERISA which is not  otherwise  exempt and any
     transaction described in Section 4975(c) of the Internal Revenue Code which
     is not otherwise exempt.  Except as has been disclosed to Lender in writing
     on or  before  the  date  hereof,  neither  Borrower  nor any of its  ERISA
     Affiliates nor any Plan is in material  violation of any provision of ERISA
     or any other applicable state or federal law, including the requirements of
     the Internal  Revenue Code; no Prohibited  Transaction or reportable  event
     has occurred  with respect to any Plan;  no notice of intent to terminate a
     Plan has been filed within the twenty-four  (24) month period preceding the
     date hereof nor has any Plan been terminated under Section 4041(c) of ERISA
     since  September 2, 1974; no proceeding has been  instituted by the Pension
     Benefit Guaranty  Corporation ("PBGC") to terminate or appoint a trustee to
     administer a Plan;  and to the best of Borrower's  knowledge,  no event has
     occurred  or  condition  exists  which  might  constitute  grounds  for the
     termination of or  appointment  of a trustee to administer  any Plan;  each
     Plan meets the  minimum  funding  requirements  of  Internal  Revenue  Code
     Section  412 and no waiver from the minimum  funding  requirement  has been
     applied for or approved;  and neither  Borrower nor any ERISA Affiliate has
     incurred or expects to incur any withdrawal liability to any multi-employer
     Plan within the meaning of Section 4001(a)(3) of ERISA.

          (k) The Pledged  Stock  Certificate  represents  all of the issued and
     outstanding  capital  stock of  SNLIC.  The  Pledged  Stock  has been  duly
     authorized,  validly issued, fully paid and is non-assessable.  There is no
     agreement or arrangement  restricting  the transfer of the Pledged Stock or
     the transfer of any other Collateral. SNLIC is not a party to any document,
     option, warrant, or other agreement, however designated,  pertaining to the
     issuance of any additional capital stock in SNLIC.

     11. Affirmative Covenants. So long as any of the Obligation remains unpaid,
Borrower  covenants and agrees that,  except with the prior  written  consent of
Lender, it shall do the following:

          (a) Borrower  shall  furnish to Lender such  financial  statements  as
     Lender  may from time to time  reasonably  request.  Without  limiting  the
     foregoing,  Borrower shall, at a minimum,  provide the following  financial
     information to Lender:

               (i) within 120 days after the end of each fiscal year,  copies of
          Borrower's audited financial  statements,  including all notes thereto
          and the opinion of Borrower's independent auditors.;

               (ii) within 45 days after the end of each fiscal quarter,  copies
          of Borrower's  internally  prepared  financial  statements,  including
          balance sheet and income statement; and

               (iii) annually, within 30 days after filing, copies of Borrower's
          federal  income tax returns (or  requests  for filing  extensions,  if
          applicable), including all schedules and exhibits thereto.


<PAGE>


          (b) Borrower shall  promptly  notify Lender in writing of any Event of
     Default  under the terms  hereof,  or the existence of any condition or the
     occurrence  of any event  which,  with the giving of notice of the lapse of
     time or both, would  constitute an Event of Default,  or of any litigation,
     proceeding,  or  development  which may have a material  adverse  effect on
     Borrower's  ability  to  perform  under the terms of this  Agreement.  Such
     notice shall include a description of the matter requiring the notice to be
     given and the actions that Borrower intends to take with respect thereto.

          (c)  Borrower  shall duly and timely  observe and conform to all valid
     requirements or any governmental  authority  relative to the conduct of its
     business, its properties, or its asset. Borrower shall maintain and keep in
     full force and effect (1) all licenses and permits  necessary to the proper
     conduct  of its  business,  and  (2) its  existence  in  good  standing  as
     corporation.

          (d) Borrower  shall keep proper books of records and accounts in which
     full,   true,  and  correct  entries  will  be  made  of  all  dealings  or
     transactions relating to its business and activities.

          (e) Borrower shall (1) file all applicable  federal,  state, and local
     tax returns or other statements required to be filed in connection with its
     business,  including those for income taxes,  sales taxes,  property taxes,
     payroll taxes, payroll withholding amounts, FICA contributions, and similar
     items; (2) maintained appropriate reserves for the accrual of the same; and
     (3) paid when due all such taxes, or sums or assessments made in connection
     therewith. Provided, however, that (until distraint,  foreclosure, sale, or
     similar  proceedings  have been  commenced)  nothing  herein  will  require
     Borrower  to pay any sum or  assessment,  the  validity  of  which is being
     contested in good faith by proceedings  diligently  pursued and as to which
     adequate reserves have been made.

          (f) Borrower  shall permit any person  designated in writing by Lender
     to visit and inspect any of the corporate  books and  financial  records of
     Borrower  and to  discuss  its  affairs  and  finances  with its  principal
     officers,  all at such reasonable  times and as often as Lender may in good
     faith request, subject to any reasonable conditions imposed by Borrower.

          (g) Borrower will materially comply with all applicable  provisions of
     ERISA and,  promptly  after the filing or receiving  thereof,  will provide
     copies of all  reports and notices  which  Borrower or any ERISA  Affiliate
     files with or receives from the PBGC or the U.S.  Department of Labor under
     ERISA. As soon as possible,  and in any event within thirty (30) days after
     the  Borrower or any ERISA  Affiliate  knows or has reason to know that any
     reportable event or Prohibited Transaction has occurred with respect to any
     Plan or the PBGC, or Borrower or an ERISA  Affiliate has instituted or will
     institute  a  proceeding  under  Title IV of ERISA to  terminate  any Plan,
     Borrower  will  deliver  to Lender a  certificate  of the  Chief  Financial
     Officer of Borrower  setting  forth  details as to such  reportable  event,
     Prohibited  Transaction or planned termination and the action that Borrower
     proposes to take with respect thereto.

          (h) Borrower shall, on a consolidated basis, at all times maintain the
     following financial covenants and ratios:

               (i)  Borrower  shall  maintain  a Net  Worth  of  not  less  than
          $20,000,000.  As used  herein,  "Net  Worth"  means  Borrower's  total
          tangible and intangible assets less Total Debt; and "Total Debt" means
          all  of  Borrower's   liabilities,   including  debt  which  has  been
          subordinated  to  this  Loan  in a  manner  approved  by  Lender  on a
          case-by-case  basis.  Compliance with the foregoing  covenant shall be
          tested at the end of each fiscal quarter.


<PAGE>


               (ii) Borrower  shall  maintain a ratio of Operating  Cash Flow to
          Fixed  Charges  of not  less  than  1.25  5o  1.00.  As  used  herein,
          "Operating  Cash Flow" means net income  after taxes and  exclusive of
          extraordinary gains and losses, gains on the sale of fixed assets, and
          other extraordinary income, plus depreciation,  amortization, interest
          expense,  and lease  expense,  less dividends and  distributions;  and
          "Fixed  Charges " means the sum of interest  expense,  lease  expense,
          current  maturities  of  long-term  debt,  and current  maturities  of
          capital  leases (all  calculated for the preceding  12-month  period).
          Compliance with the foregoing ratio shall be tested at the end of each
          fiscal quarter for the preceding 12-month period.

          (f)  Borrower  shall  maintain  a  ratio  of  Total  Liabilities  less
     outstanding  balances  on  revolving  credit  lines  relating  to  mortgage
     operations to Net Worth of not more than 6.50 to 1. As used herein,  "Total
     Liabilities"  means all  liabilities of Borrower,  and Net Worth shall have
     the meaning in clause (i) above.  Compliance with the foregoing ratio shall
     be tested at the end of each fiscal quarter.

7.   In addition to the foregoing,  Guarantor  shall be required to maintain the
     following ratio and covenant:

               (i) Guarantor shall maintain a ratio of Total Adjusted Capital to
          Required  Risk Based Capital of not less than 3 to 1 (i.e.  300%).  As
          used herein,  "Total  Adjusted  Capital"  shall have the meaning given
          thereto by statutory  accounting  principles  applicable  to insurance
          companies.  Compliance with the foregoing ratio shall be tested at the
          end of each fiscal year.

               (ii) Guarantor  shall maintain a Net Change in Capital Surplus of
          not less than 5%. As used  herein,  "Net  Change in  Capital  Surplus"
          shall  have  the  meaning  given   thereto  by  statutory   accounting
          principles  applicable  to insurance  companies.  Compliance  with the
          foregoing  covenant shall be tested annually at the end of each fiscal
          year.

     12. Negative  Covenants.  So long as any of the Obligation  remains unpaid,
Borrower  covenants that,  except with the prior written  consent of Lender,  it
will not do any of the following:

          (a)  Borrower  shall  not  enter  into any  transaction  of  merger or
     consolidation,  or  acquire  all or  substantially  all of  the  assets  or
     business  of a person or other  legal  entity  without  the  prior  written
     consent of Lender.

          (b) Borrower shall not create or permit to exist any lien,  claim,  or
     encumbrance  on the  Collateral or any part  thereof,  except as granted to
     Lender.  Borrower  shall not do or refrain  from doing any act which may in
     any manner adversely affect Lender's interest in the Collateral or diminish
     the value thereof.

          (c) Borrower will not at any time permit any Plan  maintained by it to
     engage  in any  Prohibited  Transaction;  incur  any  "accumulated  funding
     deficiency" as such term is defined in ERISA; or terminate any such Plan in
     a manner which could result in the  imposition of a lien on any property of
     Borrower pursuant to ERISA.


<PAGE>



     13.  Covenants  as to the  Pledged  Stock So long as any of the  Obligation
remains unpaid, Borrower covenants and agrees as follows:

          (a) Perfection.  Concurrently  with the execution and delivery of this
     Agreement, Borrower shall (i) deliver to Lender ---------- all certificates
     representing  the Pledged  Stock,  accompanied by undated stock powers duly
     executed in blank and  medallion  guaranteed,  and (ii) take all such other
     actions  as shall be  necessary  or as Lender  may  reasonably  request  to
     perfect and establish the priority of the lien in the Collateral granted by
     this  Agreement.  Notwithstanding  the generality of the foregoing,  and in
     addition  to  the  Lender's  physical  possession  of any  certificates  as
     provided for herein,  Borrower hereby expressly  consents (x) to the filing
     of any UCC-1 financing statement by Lender in any jurisdiction Lender deems
     necessary or  appropriate,  or (y) the delivery to SNLIC or any other third
     party of any notice or correspondence deemed appropriate by Lender in order
     to perfect the priority of the liens granted by this Agreement.

          (b) Preservation and Protection of Security Interests. Borrower shall:

               (i) upon the acquisition after the date hereof by Borrower of any
          Collateral,  promptly  either (x)  transfer  and deliver to Lender all
          such Collateral  (together with the certificates (if any) representing
          such Collateral duly endorsed in blank or accompanied by updates stock
          powers  duly  executed  in blank),  or (y) take such  other  action as
          Lender shall reasonably deem necessary or appropriate to perfect,  and
          establish the priority of, the lien granted by this  Agreement in such
          Collateral; and


               (ii) give, execute, deliver, file or record any and all financing
          statements,  notices,  contracts,  agreements  or  other  instruments,
          obtain any and all  governmental  approvals and take any and all steps
          that may be necessary or as Lender may  reasonably  request to create,
          perfect,  establish  the  priority  of, or to preserve  the  validity,
          perfection  or priority of, the lien  granted by this  Agreement or to
          enable Lender to exercise and enforce its rights, remedies, powers and
          privileges under this Agreement with respect to such lien.

          (c) Grant of Proxy; Appointment of Lender as Attorney-in-Fact.

               (i) Borrower  hereby  grants to Lender a proxy to vote all shares
          of the Pledged Stock,  so long as an Event of Default has occurred and
          is  continuing.  Such  proxy,  being  coupled  with  an  interest,  is
          irrevocable  until  the  earlier  of (x) the date  when  the  Event of
          Default  shall  cease to  exist,  or (y) that date on which all of the
          Obligation has been indefeasibly paid in full.


               (ii)  So  long  as an  Event  of  Default  has  occurred  and  is
          continuing, Borrower hereby appoints Lender and any designee of Lender
          as Borrower's attorney-in-fact and authorizes Lender or such designee,
          at  Borrower's  sole  expense,  to exercise at any time in Lender's or
          such  designee's  discretion all or any of the following  powers (such
          power of attorney,  being coupled with an interest,  being irrevocable
          until all of the Obligation has been  indefeasibly  paid in full); (A)
          to ask, demand,  collect,  sue for, recover,  receive and give receipt
          and  discharge  for amounts due and to become due under and in respect
          of all or any part of the  Collateral;  (B) to  receive,  endorse  and
          collect  any  drafts,  instruments,  documents  and  chattel  paper in
          connection  with clause (A) above;  (C) to file any claims or take any
          action or proceeding  that Lender may deem  necessary or advisable for
          the collection of all or any part of the  Collateral;  (D) to execute,
          in connection with any sale or disposition of the Collateral permitted
          hereunder,  any  endorsements,  assignments,  bills  of sale or  other
          instruments  of conveyance or transfer with respect to all or any part
          of the  Collateral;  (E) to enter  and  remain  upon the  premises  of
          Borrower  and take  possession  of all or any part of the  Collateral,
          with or without judicial process; (F) to use the materials,  services,
          and books and records of Borrower  for the purpose of  liquidating  or
          collecting  the  Collateral,  whether  by  foreclosure,   auction,  or
          otherwise;  (G) to remove  the same to the  premises  of Lender or any
          designated  agent  for  such  time  as  Lender  may  desire  in  order
          effectively collect or liquidated the Collateral;  and (H) to exercise
          (1) all voting,  consensual, and other rights and powers pertaining to
          the Collateral  (whether or not transferred  into the name of Lender),
          at any meeting of shareholders,  exchange, subscription, and any other
          rights,  privileges,  or options pertaining to the Collateral as if it
          were the absolute owner thereof.

          (d)    Special    Provisions    Relating    to    Stock    Collateral.

               (i) So long as no Event of  Default  shall have  occurred  and be
          continuing,  Borrower  shall have the right to  exercise  all  voting,
          consensual  and other  powers  of  ownership  pertaining  to the stock
          Collateral  for all purposes,  provided  that Borrower  agrees that it
          will not vote the stock  Collateral in any manner that is inconsistent
          with any covenant by it in this  Agreement or any other Loan Document.
          Lender shall, at Borrower's expense,  execute and deliver to Borrower,
          or cause to be executed and  delivered to Borrower,  all such proxies,
          powers of attorney,  dividend and other orders and other  instruments,
          without recourse,  as Borrower may reasonably  request for the purpose
          of enabling  Borrower to  exercise  the rights and powers  which it is
          entitled to exercise in this Paragraph 13(d)(i).

               (ii)  If  any  Event  of  Default  shall  have  occurred  and  be
          continuing, and whether or not Lender exercises any available right to
          declare the  Obligations  or any part thereof due and payable or seeks
          or pursues any other right, remedy, power or privilege available to it
          under  applicable  law, this  Agreement,  the Promissory  Note, or the
          other  Loan  Documents,  Lender  shall be  entitled  to vote the proxy
          granted to it pursuant to Paragraph 13 (c)(i).

               (iii)  Borrower  shall be  entitled  to  receive  and  retain any
          interest, income, cash dividends, cash distributions and other amounts
          paid  or  payable  in  respect  of  any  Collateral  (including  stock
          Collateral);  providing,  however,  that, if an Event of Default shall
          have occurred and be continuing,  and whether or not Lender  exercises
          any available right to declare the Obligation due and payable or seeks
          or pursues any other right, remedy, power or privilege available to it
          under applicable law, this Agreement or the other Loan Documents,  all
          interest, dividends,  distributions, and other amounts paid or payable
          in respect of the  Collateral  shall be paid directly to Lender and be
          retained  by Lender as part of the  Collateral  (except  to the extent
          applied  upon  receipt  to the  payment of the  Obligation).  Upon the
          occurrence and during the continuation of an Event of Default,  Lender
          shall also be entitled to receive directly: (A) all interest,  income,
          dividends,  distributions, or other amounts paid or payable in cash or
          other  property in respect of any  Collateral in  connection  with the
          dissolution, liquidation,  recapitalization or reclassification or the
          capital  of  SNLIC  to the  extent  representing  (in  the  reasonable
          judgment   of  Lender)  an   extraordinary,   liquidating,   or  other
          distribution  in  return of  capital;  (B) all  additional  membership
          interests,  warrants,  options, or other securities or property (other
          than cash) paid or payable or distributed or  distributable in respect
          of  any   Collateral   in  connection   with  any  noncash   dividend,
          distribution,  return of capital,  spin-off,  stock  split,  split-up,
          reclassification,  combination  of  shares  or  interests  or  similar
          arrangement;  and (C) without affecting any restrictions  against such
          actions  otherwise   contained  herein,   all  additional   membership
          interests,   warrants,   options,  or  other  securities  or  property
          (including  cash) paid or payable or distributed or  distributable  in
          respect  of any  Collateral  in  connection  with  any  consolidation,
          merger, exchange of securities,  liquidation, or other reorganization.
          All interest, income, dividends,  distributions, or other amounts that
          are received by Borrower in violation  of  provisions  hereof shall be
          received in trust for the benefit of Lender,  shall be segregated from
          other property or funds of Borrower,  and shall be forthwith delivered
          to Lender as  Collateral  in the same  form as so  received  (with any
          necessary endorsements).

               (iv)  Borrower  shall  cause  SNLIC to not issue  any  additional
          capital  stock,  or  enter  into any  agreement  for the  issuance  of
          additional  capital stock,  or to grant an option,  warrant,  or other
          right to acquire any of the capital  stock,  and  Borrower  shall vote
          against any such proposal.

     14. Events of Default.  The  occurrence  of any of the following  events or
conditions shall constitute an "Event of Default" hereunder:


          (a) Borrower fails to make any payment of principal or interest on the
     Promissory Note or under this Agreement within ten (10) days after the same
     becomes due.

          (b) Any  representation or warranty made by Borrower in this Agreement
     or the Promissory  Note, or in any  certificate,  financial  statement,  or
     other statement  furnished by Borrower to Lender, is untrue in any material
     respect at the time when made.

          (c) Borrower  defaults in the  observance or  performance of any other
     covenant or  agreement  contained in this  Agreement,  other than a default
     constituting  a separate and distinct Event of Default under this Paragraph
     14,and such default  continues  unremedied for a period of twenty (20) days
     after notice thereof is given to Borrower.

          (d) Borrower  defaults in the  observance or  performance of any other
     covenant  or  agreement  contained  in any  other  Loan  Document  or other
     document or agreement  made and given in  connection  with this  Agreement,
     other than a default  constituting a separate and distinct Event of Default
     under this Paragraph 14, and the  continuance of the same  unremedied for a
     period of thirty (30) days after notice thereof is given to Borrower.

          (e)  Any of the  Loan  Documents  or  other  instrument  executed  and
     delivered in  connection  herewith for any reason  ceases to be valid or in
     full  force  and  effect  or the  validity  or  enforceability  of which is
     challenged or disputed by any signer thereof, other than Lender.

          (f)  Borrower  defaults in the payment of principal or interest on any
     other  obligation for borrowed money other than  hereunder,  or defaults in
     the payment of the deferred purchase price of property beyond the period of
     grace,  if  any,  provided  with  respect  thereto,   or  defaults  in  the
     performance  or observance of any  obligation or in any agreement  relating
     thereto,  if the effect of such default is to cause or permit the holder or
     holders of such obligation (or trustee on behalf of such holder or holders)
     to cause such obligation to become due prior to the stated maturity.

          (g) Borrower or  Guarantor  files a voluntary  petition in  bankruptcy
     seeking reorganization,  arrangement or readjustment of debts, or any other
     relief under the Bankruptcy  Code as amended or under any other  insolvency
     act or law, state or federal, now or hereafter existing.


<PAGE>


          (h) An involuntary  petition is filed against Borrower or Guarantor in
     bankruptcy seeking reorganization, arrangement or readjustment of debts, or
     any other relief under the Bankruptcy  Code as amended,  or under any other
     insolvency act or law, state or federal, now or hereafter existing, and the
     continuance  thereof  for  sixty  (60)  days  undismissed,   unbonded,   or
     undischarged.

          (i)  All or any  substantial  part  of the  property  of  Borrower  or
     Guarantor shall be condemned, seized, or otherwise appropriated, or custody
     or control of such  property is assumed by any  governmental  agency or any
     court of  competent  jurisdiction,  and is retained  for a period of thirty
     (30) days.

          (j)  Guarantor  shall  default  in any term,  condition,  of  covenant
     contained in the Guaranty or in any other  agreement or  undertaking it may
     now or hereafter have with Lender.

          (k) Lender otherwise in good faith deems itself to be insecure, or the
     value  of the  Collateral  to have  significantly  declined  from  the date
     hereof,  or the prospect of timely  payment or  performance to be impaired,
     provided,  however,  Lender shall have given Borrower written notice of the
     grounds  thereof,  and Borrower shall have failed to correct such matter or
     given Lender other assurance satisfactory to Lender within twenty (20) days
     thereof.

15.      Remedies

          (a) Upon the occurrence of an Event of Default,  Lender may accelerate
     the entire unpaid principal  balance of the Promissory Note,  together with
     accrued  interest  thereon,  and declare the same to be immediately due and
     payable without presentment,  demand, protest, or other notice of any kind.
     Without  waiving any right or remedy  available  to it,  Lender may proceed
     against  Borrower,  Guarantor,  or any Collateral  simultaneously or in any
     order it chooses.  To the fullest extent permitted by law,  Borrower waives
     any  rights  to  presentment,  demand,  protest,  or  notice of any kind in
     connection  with this  Agreement,  the  Promissory  Note, or the other Loan
     Documents.  No  failure  or delay on the part of Lender in  exercising  any
     right,  power,  or privilege  hereunder  will preclude any other or further
     exercise thereof or the exercise of any other right, power or privilege.

          (b) The rights and remedies  provided  herein are  cumulative  and not
     exclusive  of any other  rights or  remedies  provided at law or in equity.
     Without  limiting  the  foregoing,  upon  the  occurrence  and  during  the
     continuation  of an Event  of  Default,  Lender  shall  have  the  right in
     Lender's sole and absolute discretion to determine which rights,  security,
     liens,   or  remedies   Lender  shall  at  any  time  pursue,   relinquish,
     subordinate,  modify or take any other action with respect thereto, without
     in any way  modifying  or affecting  any of them or any of Lender's  rights
     hereunder  or the  Obligation,  and  Lender,  among  its other  rights  and
     remedies,  shall  have all of the rights and  remedies  of a secured  party
     under the Uniform  Commercial  Code of the State of Utah (as  amended,  the
     "UCC"). Without in any way limiting the generality of the foregoing, Lender
     may, upon the ---  occurrence  and during the  continuation  of an Event of
     Default:  (A) subject to compliance with the terms of Section 70A-9a-609 of
     the UCC,  cause the Collateral to be transferred to Lender's name or in the
     name of a nominee and, thereafter,  exercise all of the rights, powers, and
     remedies of an owner thereof; and (B) sell, resell,  assign and deliver, in
     its sole  discretion,  all or any of the Collateral,  in on or more lots or
     parcels, subject to applicable federal and state securities laws, at public
     or private  sale, at any of the Lender's  offices or  elsewhere,  for cash,
     upon  credit,  or for  future  delivery,  at such time or times and at such
     price or prices and upon such other terms as Lender may deem  satisfactory.
     If any of the  Collateral  is sold by  Lender  upon  credit  or for  future
     delivery,  Lender  shall not be liable for the failure of the  purchaser to
     purchase or pay for the same and, in the event of any such failure,  Lender
     may resell such Collateral. In no event shall Borrower be credited with any
     part of the proceeds of sale of any Collateral until and to the extent cash
     payment in respect  thereof has  actually  been  received  by Lender.  Each
     purchaser at any such sale shall hold the  property  sold  absolutely  free
     from any claim or right of any kind  whatsoever,  including  any  equity or
     right of  redemption of Borrower,  and Borrower  expressly  waives,  to the
     fullest extent permitted by applicable law, all rights of redemption,  stay
     or  appraisal,  and all rights to require  Lender to marshal  any assets in
     favor of  Borrower  or any other  person or against or in payment of any or
     all of the  Obligation,  that it has or may have  under  any rule of law or
     statute now existing or hereafter adopted. No demand, presentment, protest,
     advertisement, or notice of any kind (except any notice required by law, as
     referred to below),  all of which are hereby  expressly waived by Borrower,
     shall be required in connection  with any sale or other  disposition of all
     or any part of the  Collateral.  If any notice of a proposed  sale or other
     disposition  of all or any part of the  Collateral  shall be required under
     applicable  law,  Lender shall give  Borrower at least ten (10) days' prior
     notice of the time and place of any public sale and of the time after which
     any private sale or other  disposition is to be made, which notice Borrower
     agrees is  commercially  reasonable.  Lender shall not be obligated to make
     any sale of  Collateral if it shall  determine not to do so,  regardless of
     the fact that  notice  of sale may have been  given.  Lender  may,  without
     notice or publication, adjourn any public or private sale or cause the same
     to be  adjourned  from time to time by  announcement  at the time and place
     fixed for sale, and such sale may,  without further notice,  be made at the
     time and place to which the same was so  adjourned.  Upon each  public sale
     and, to the extent  permitted by  applicable  law,  upon each private sale,
     Lender may purchase all or any of the Collateral  being sold, free from any
     equity, right of redemption, or other claim or demand, and may make payment
     therefore  by  endorsement  and  application   (without  recourse)  of  the
     Obligation in lieu of cash as a credit on account of the purchase price for
     such  Collateral.  If, following the occurrence and during the continuation
     of an Event of Default,  Lender seeks to take  possession  of any or all of
     the Collateral by judicial process, Borrower hereby irrevocably waives: (x)
     any bond and any surety or security relating thereto by any statute,  court
     rule or  otherwise  as an incident to such  possession;  (y) any demand for
     possession  prior to the  commencement  of any suit or  action  to  recover
     possession  thereof;  and (z) any requirement that Lender retain possession
     of and not  dispose  of any  such  Collateral  until  after  trial or final
     judgment.  The  enumeration  of the rights and  remedies  of Lender in this
     Paragraph 15 is not intended to be exhaustive  and the exercise of any such
     rights or remedies  shall not  preclude the exercise of any other rights or
     remedies, all of which shall be cumulative.

          (c ) Lender shall incur no  liability as a result of the sale,  lease,
     or other  disposition  of all or any part of the  Collateral at any private
     sale pursuant to this Paragraph 15 conducted in a  commercially  reasonable
     manner.  Borrower hereby waives any claims against Lender arising by reason
     of the fact that the price at which all or any  portion  of the  Collateral
     may have been sold at such private sale was less than the price which might
     have been obtained at a public sale or was less than the  aggregate  amount
     of the Obligation, even if Lender accepts the first offer received and does
     not offer such Collateral to ore than one offeree,  provided that such sale
     is in all other respects conducted in a commercially reasonable manner.

          (d)  Borrower  recognizes  that,  by  reason of  certain  prohibitions
     contained in the Securities Act of 1933, as amended (the "Securities Act"),
     and applicable state or foreign  securities laws,  Lender may be compelled,
     with respect to any sale of all or any portion of the  Collateral  to limit
     purchasers  to those who will  agree,  among other  things,  to acquire the
     Collateral (or any portion thereof) for their own account,  for investment,
     and not with a view to distribution or sale. Borrower acknowledges that any
     such  private  sale may be at prices and on terms less  favorable to Lender
     than those obtained through a public sale without such  restrictions,  and,
     notwithstanding  such  circumstances,  aggress  that any such  private sale
     shall be deemed to have been made in a commercially  reasonable  manner and
     that Lender shall have no obligation  to engage in public  sales.  Borrower
     further acknowledges that SNLIC is under no legal or contractual obligation
     to register any of the Collateral under the Securities Act.


<PAGE>


          (e) Subject to the  provisions of the  Promissory  Note,  the proceeds
     from any sale or other  disposition  of Collateral by Lender shall first be
     applied to any costs and expenses  incurred by Lender, or any of its agents
     or  representatives  (i) in  securing  possession  thereof  or in  storing,
     repairing, and finishing same for sale, or (ii) in connection with any sale
     thereof,  with the balance,  if any, of such proceeds to be applied  toward
     the payment of the  Obligation in any manner deemed  appropriate  by Lender
     Party in its sole and absolute discretion.  Application of the net proceeds
     as to any  particular  portion  of the  Obligation  or as to  principal  or
     interest   shall  be  in  the  Lender's   sole  and  absolute   discretion,
     notwithstanding any contrary instructions which Lender may have received or
     receive  from any  other  person.  Any  deficiency  will be paid to  Lender
     forthwith upon demand.  Any surplus will be paid by Lender,  subject to the
     claims of third persons, to Borrower.

          (f) Borrower  agrees to pay all costs and expenses  incurred by Lender
     by reason of the default,  including court costs and reasonable  attorney's
     fees whether  incurred prior to, during,  or subsequent to any  bankruptcy,
     reorganization,  receivership,  liquidation, legal, judicial, appellate, or
     other proceeding involving Borrower or any of its assets.

     16. Notices.  Unless otherwise  specifically  provided herein,  all notices
required to be given shall be in writing  addressed to the  respective  party as
set forth below and shall be either personally served, sent by overnight courier
service,  or sent by registered or certified United States mail,  return receipt
requested.  Such notices shall be deemed to have been given: (a) if delivered in
person,  when  delivered;  (b) if delivered by overnight  courier,  on the first
business day after depositing the same with the overnight courier;  or (c) if by
United  States mail,  on the first date that delivery was attempted or three (3)
business days after  depositing in the United States mail,  postage  prepaid and
properly  addressed,  whichever  first  occurs.  Notices  shall be  addressed as
follows:

        If to Lender:             KeyBank National Association
                                  Attn:  Commercial Loan Dept.
                                  KeyBank Tower, Suite 2007
                                  50 South Main Street
                                  Salt Lake City, Utah 84144

        If to Borrower:           Security National Financial Corporation
                                  Attn:  President
                                  5300 South 360 West. Suite 310
                                  Salt Lake City, Utah 84123

     or to such other address as the party to whom such notice is intended shall
     have previously designated by written notice to the serving party.

     17. General  Provisions.  All  representations  and warranties made in this
Agreement,  the Promissory Note, any other Loan Document, and in any certificate
delivered  pursuant  thereto  shall  survive the  execution and delivery of this
Agreement and the making of the Loan  hereunder.  This Agreement will be binding
upon  and  inure  to the  benefit  of  Borrower  and  Lender,  their  respective
successors  and  assigns,  except that  Borrower  may not assign or transfer its
rights or delegate its duties  hereunder  without the prior  written  consent of
Lender. This Agreement,  the Promissory Note, the other Loan Documents,  and all
documents and instruments  associated herewith will be governed by and construed
and interpreted in accordance with the laws of the State of Utah. Time is of the
essence hereof. Lender may set off against any debt or account it owns Borrower,
now existing or hereafter arising,  in accordance with its rules and regulations
governing  deposit  accounts then in existence,  and for such purposes is hereby
granted a security interest in all such accounts.


<PAGE>


     18.  Waiver of Jury  Trial.  BORROWER  AND LENDER EACH WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR  PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS OR RELATING  THERETO OR ARISING FROM
THE LENDING  RELATIONSHIP  WHICH IS THE SUBJECT OF THIS AGREEMENT AND AGREE THAT
ANY SUCH  ACTION OR  PROCEEDING  SHALL BE TRIED  BEFORE A COURT AND NOT BEFORE A
JURY.

     19. Entire Agreement. This Agreement, together with the Promissory Note and
the other Loan Documents,  constitutes the entire understanding and agreement of
the Parties with respect to the general  subject  matter  hereof;  supersede all
prior  negotiations  and  agreements  with  respect  thereto;  and  may  not  be
contradicted  by evidence of any alleged oral  agreement.  This  Agreement,  the
Promissory Note, and the other Loan Documents may not be amended,  modified,  or
rescinded  in any manner  except by a written  agreement  signed by Lender which
clearly and unequivocally  expresses an intent to amend,  modify, or rescind the
same.

    EXECUTED on the day and year first written above.

                                            SECURITY NATIONAL FINANCIAL
                                            CORPORATION, a Utah corporation





                                            By:  s/s  Scott M. Quist
                                                      President




                                            KEYBANK NATIONAL ASSOCIATION
                                            A national banking association




                                            By:  s/s Roger L. Ford
                                                     Vice President