Document:

EXHIBIT 10(c)

                           GENERAL AGENCY AGREEMENT

      THIS GENERAL AGENCY  AGREEMENT (this "Agreement")  is made and  entered
 into as of  the April 1,  2003, by and  among STATE AND  COUNTY MUTUAL  FIRE
 INSURANCE COMPANY,  an insurance  company organized  under the  laws of  the
 State of  Texas  ("Company"),  AMERICAN HALLMARK  GENERAL  AGENCY,  INC.,  a
 corporation organized under the laws of the State of Texas ("General Agent")
 and AMERICAN HALLMARK  INSURANCE COMPANY  OF TEXAS  and DORINCO  REINSURANCE
 COMPANY (collectively the "Reinsurer");

                             W I T N E S S E T H:

      THAT, in consideration  of the mutual  covenants hereinafter  contained
 and upon the terms and conditions hereinbelow set forth, the parties  hereto
 agree as follows:

                                   PREAMBLE
                                   --------

      The Company, the Reinsurer and the General Agent have entered into that
 certain Quota Share Reinsurance Agreements dated  as of April 1, 2003,  true
 and complete copies of  which are attached  hereto as Exhibits  A and B  and
 fully incorporated herein by  this reference (collectively the  "Reinsurance
 Agreement"), which  Reinsurance Agreement  requires the  appointment of  the
 General Agent to perform certain specified acts on behalf of the Company and
 Reinsurer.  The General  Agent desires to perform  the functions and  duties
 necessary under the Reinsurance Agreement.  It is therefore mutually  agreed
 by the parties that the General  Agent will perform all functions  necessary
 for the  production, service,  management and  loss adjustment  of  policies
 issued under  the Reinsurance  Agreement in  accordance with  the terms  and
 conditions set forth therein and  herein.  To the  extent that there is  any
 conflict between the terms of this Agreement and the Reinsurance  Agreement,
 the Reinsurance Agreement  shall govern. Notwithstanding  any provisions  to
 the contrary contained  elsewhere herein  or in  any other  document, it  is
 expressly understood that the execution and  delivery of this Agreement  and
 the Company's performance  hereunder shall  not under  any circumstances  be
 interpreted to  affect,  weaken  or modify  the  Reinsurer's  obligation  to
 indemnify and  hold  the  Company  harmless  of  all  business,  credit  and
 insurance risks as set forth in the Reinsurance Agreement.  The  contractual
 assumption by  the  Reinsurer of  all  of  these risks  in  the  Reinsurance
 Agreement is  a condition  precedent to  the  Company's entering  into  this
 Agreement with the General Agent.

                                  ARTICLE I
                            APPOINTMENT AND DUTIES
                            ----------------------

 1.01 The Company, at  the direction of  the Reinsurer,  hereby appoints  the
 General Agent as its managing general agent for the purpose of producing and
 handling the  business which  is the  subject of  the Reinsurance  Agreement
 issued or renewed on  or after the  effective date of  this Agreement.   The
 Company, at the  request of the  Reinsurer, hereby grants  authority to  the
 General Agent to solicit, accept and  receive applications for such  classes
 of coverage as are specified in the Reinsurance Agreement; to secure, at its
 own expense, reasonable underwriting information through reporting  agencies
 or other appropriate sources relating to each risk insured; to issue,  renew
 and countersign policies, certificates,  endorsements and binders which  the
 Company may, from time to time,  authorize to be issued, delivered,  renewed
 and countersigned; and to collect and  receipt for the premiums thereon  and
 therefor; and to  perform such  other duties  as are  generally required  of
 agents and general agents.

 1.02 All activities of the General Agent pursuant to this Agreement shall be
 in strict compliance  with the terms  of the Reinsurance  Agreement and  all
 rules, regulations  and  instructions of  the  Company, including,  but  not
 limited to,  all  rules, instructions  and  specifications included  in  the
 Company's rate manuals, rate brochures and rate schedules.

 1.03 The Company, at the Reinsurer's request, further authorizes the General
 Agent to perform all acts and  duties under policies of insurance issued  by
 the Company as would otherwise be  performed by the Company, including,  but
 not limited  to,  properly sending  and/or  receiving reports  and  notices,
 remitting and/or receiving monies due from or to the Company, and  adjusting
 and paying losses or other claims.  The Company grants to the General  Agent
 the authority  to settle  claims  on behalf  of  the Company.  However,  the
 maximum dollar amount of such authority per claim shall not exceed  $30,000.
 For claims  settlement in  excess of  $30,000, the  General Agent  may  only
 settle such claims with  prior approval of the  Company and Reinsurer.   The
 Company retains final authority to determine any disputes relating to claims
 settlement and setting  of loss reserves.   In performing  each of the  acts
 mentioned above, the General Agent shall be under the direct supervision and
 control of the Reinsurer, and the Reinsurer shall be solely responsible  for
 the acts of the  General Agent. While  there are acts  of the General  Agent
 which may be required by the State of Texas or any regulatory agency thereof
 to be  performed  on behalf  of  the  Company, the  Reinsurer  shall  remain
 ultimately responsible for such acts and will indemnify and hold the Company
 completely harmless for  any damage,  cost, liability,  expense and/or  loss
 (including attorneys' fees and expenses) incurred by the Company as respects
 such acts of the General Agent.  The General Agent must send to the  Company
 a report,  within  thirty (30)  days  of  determination, that  a  claim  (i)
 involves a coverage  dispute; (ii)  involves a  demand in  excess of  policy
 limits; (iii)  alleges bad  faith; (iv)  alleges a  violation of  the  Texas
 Deceptive Trade  Practices Act;  or (v)  alleges a  violation of  the  Texas
 Insurance Code, Article 21.21 (Unfair Competition and Unfair Practices).

 1.04 The General  Agent  is  authorized  to  have  claims  adjusted  through
 independent claims adjusters, subject to  the supervision of the  Reinsurer.
 The selection  of independent  claims adjusters  shall be  subject to  prior
 written approval  of the  Reinsurer and  Company.   Such independent  claims
 adjusters are not the agents  of the Company and  the Company shall be  held
 harmless and indemnified by the Reinsurer for any liability, claim,  demand,
 expense and/or cost of whatever kind or character as a result of, related to
 or connected with any action or inaction of such claims adjusters.

 1.05 The Company shall not be responsible  for the General Agent's  expenses
 and costs,  including,  but  not limited  to,  salaries,  bonuses,  rentals,
 transportation  facilities,   clerk   hire,   solicitors'   fees,   postage,
 advertising, exchange,  personal license  fees,  adjustment by  the  General
 Agent of losses  under policies issued  by the General  Agent, or any  other
 agency expenses whatsoever.  The General Agent's sole compensation shall  be
 the fee agreed  to by the  Reinsurer and the  General Agent  as provided  in
 Section 3.01 of this Agreement.

 1.06 The General  Agent understands  and  agrees that  it  has no  power  or
 authority granted  to  it by  the  Company independent  of  the  Reinsurance
 Agreement, and  that  this  Agreement  and  the  General  Agent's  authority
 hereunder shall cease immediately upon termination, for any reason, of  this
 Agreement or  of  the  Reinsurance Agreement  (excepting  only  the  General
 Agent's responsibilities with  regard to run-off  and other  matters as  set
 forth herein or in the Reinsurance Agreement).

 1.07 The General Agent shall not have the power to accept or bind risk other
 than as set forth herein,  as set forth in  the Reinsurance Agreement or  as
 may be subsequently authorized by the Company and Reinsurer in writing.  The
 General Agent may not bind or cede reinsurance or retrocessions on behalf of
 the Company, may  not commit the  Company to participation  in insurance  or
 reinsurance syndicates, and may not commit the Company to a claim settlement
 with a reinsurer without the prior written approval of the Company.  If such
 prior written approval is given, the General Agent shall forward promptly  a
 report  to  the Company  concerning such  transaction  and/or  payment.  The
 Company hereby authorizes the General Agent  to collect payments for  losses
 and loss adjustment expenses from a reinsurer.  The General Agent shall send
 a report to the Company concerning such transactions promptly.

 1.08 The General Agent  acknowledges that  this Agreement  shall not  become
 effective until the General  Agent is duly appointed  by the Company and  on
 file with the Texas Department of Insurance.  The General Agent agrees  that
 any producing agent  receiving commission pursuant  to this Agreement  shall
 first be duly appointed by the Company and said appointment on file with the
 Texas Department  of Insurance.   The  General Agent  further agrees  to  be
 responsible for the payment of any  penalty assessed to the Company for  any
 violation by  the General  Agent or  any producing  agent appointed  by  the
 General Agent pursuant to the provisions of Article IV hereof of any license
 or appointment  provision of  the  Texas Insurance  Code  or the  rules  and
 regulations promulgated thereunder.  If the General Agent fails to pay  such
 penalty, the Reinsurer  shall pay it  immediately upon  notification by  the
 Company (either orally or in writing) of the General Agent's failure to  pay
 such penalty.

 1.09 It is understood that the Reinsurer  has acknowledged that the  Company
 shall not be  required to monitor  the General Agent's  compliance with  the
 terms of  either  the  Reinsurance  Agreement  or  this  Agreement  and  the
 Reinsurer shall be responsible for monitoring the General Agent's compliance
 with the Reinsurance Agreement and this Agreement.

 1.10 The authority and limitations  of the General  Agent to issue  policies
 are as follows:

      (a)  the maximum annual  premium volume the  General Agent may  produce
           under this General Agency Agreement is $80,000,000;

      (b)  the basis of the  rates charged are as  provided in the  Company's
           rate manuals, rate brochures and rate schedules which the  General
           Agent shall follow;

      (c)  the only classes of  business the General  Agent is authorized  to
           produce and  handle  under  this  Agreement  are  the  classes  of
           business specified in the Reinsurance Agreement;

      (d)  the maximum  limits  of  liability for  policies  to  be  produced
           pursuant to  this  Agreement  are set  forth  in  the  Reinsurance
           Agreement;

      (e)  the General Agent may issue policies under this Agreement only  to
           insureds domiciled  in the  State of  Texas; but  this  limitation
           shall not  apply  to  losses if  said  policies  provide  coverage
           outside the aforesaid territorial limit;

      (f)  the General Agent shall only cancel  policies as set forth in  the
           policy form for  the policies produced  hereunder or as  otherwise
           permitted by the laws of the State of Texas;

      (g)  the maximum term for any policy  issued hereunder shall be  twelve
           (12) months;

      (h)  the General  Agent shall  employ  all reasonable  and  appropriate
           measures to  control and  keep a  record of  the issuance  of  the
           Company's insurance policies hereunder, including, but not limited
           to, keeping  records  of  policy numbers  issued  and  maintaining
           policy inventories;

      (i)  the  excluded  risks  are  those  set  forth  in  the  Reinsurance
           Agreement.

 In underwriting policies,  the General Agent  shall follow the  underwriting
 guidelines developed by the  General Agent, the  Reinsurer and the  Company,
 and these guidelines are herein incorporated by reference.

                                  ARTICLE II
                                   PREMIUMS
                                   --------

 2.01 It is expressly agreed  and understood that  all premiums collected  by
 the General Agent are collected on behalf of the Company; that such premiums
 are the property of the Company;  and that the General Agent has no interest
 in the premiums  collected by  it.  All  premiums collected  by the  General
 Agent on  the business  produced under  the Reinsurance  Agreement shall  be
 deposited in a bank account separate and apart from all other bank  accounts
 of the General Agent which reflects ownership of the account by the Company.
 The only disbursements  from such account  shall be the  payment of  claims,
 claims expenses, return  premiums and commission  due the  General Agent  as
 authorized herein  and  in  the  Reinsurance  Agreement  and  remittance  of
 premiums to the Reinsurer.  The General Agent shall not make personal use of
 any funds in this separate account.  The commissions payable to the  General
 Agent are debts due to the General Agent by the Reinsurer and the  privilege
 herein granted of  deducting commissions from  said premiums  should not  be
 taken as  a waiver  by the  Company  of its  exclusive ownership  rights  of
 premiums as provided herein.  Should any dispute arise between the  Company,
 the Reinsurer and/or  the General Agent  regarding payment  of premium,  the
 General Agent  shall  remit  immediately all  money  and  property,  without
 deductions for commissions, to the segregated account with full  reservation
 of any and all rights reserved by the parties.

 2.02 The General  Agent  shall furnish  to  the Company  and  Reinsurer  all
 necessary premium and loss data (in  a form acceptable to the Reinsurer  and
 the Company) no  later than forty-five  (45) days following  the end of  the
 month during which the business is written or losses are incurred to  enable
 the Company to record  statistics required by  statutes, regulation or  upon
 call by authorities having competent jurisdiction.  Such data shall include,
 but is not  limited to, premiums  written and unearned  premium.  Said  data
 shall be segregated by lines of insurance and location of risk.

 2.03 The keeping of an account with the General Agent on the Company's books
 as a creditor and debtor account is declared a record memorandum of business
 transacted and  neither  such  keeping of  an  account,  nor  alteration  in
 commission rate, nor failure to enforce  prompt remittance or compromise  or
 settlement or declaration  of balance  of account,  shall be  held to  waive
 assertion of the  trust relation  as to  premiums collected  by the  General
 Agent.

 2.04 The General Agent shall be liable for the payment of all premiums  upon
 all policies of  insurance written  through the  General Agent  or any  sub-
 agents of the General Agent.

 2.05 The General Agent shall remit to the  Reinsurer any funds of or due  to
 the Company under this Agreement at the earlier of the following:  (1) sixty
 (60) days from the  end of the month  in which premium  is recorded; or  (2)
 ninety (90) days from the end of the month in which the coverage under  this
 Agreement is issued.

 5.6 The General  Agent shall  hold all  funds  of or  due  the Company  in a
 fiduciary capacity.

                                 ARTICLE III
                      COMPENSATION TO THE GENERAL AGENT
                      ---------------------------------

 3.01 The Reinsurer shall allow  the General Agent  in full compensation  for
 all services rendered and in full reimbursement for all expenditures made by
 the  General  Agent the  fee specified  in the  Reinsurance  Agreement.  The
 Reinsurer shall pay the Company directly its ceding fee as specified in  the
 Reinsurance Agreement, and the amounts for assignments, assessments, premium
 taxes, fines and penalties as specified  in the Reinsurance Agreement.   The
 General Agent  shall not  be required  to return,  as commission  or  return
 commission, monies  greater  than the  total  commission paid  or  otherwise
 payable to the General Agent.

 3.02 The Company shall not be liable for or responsible for any  commissions
 or other  monies  payable to  the  General  Agent in  connection  with  this
 Agreement or the Reinsurance Agreement. The  General Agent shall not sue  or
 seek arbitration against  the Company  for any  actions by,  or debts  owing
 from, the Reinsurer.

 3.03 In the event the  Company or the Reinsurer,  during the continuance  of
 this Agreement or after its termination,  refunds premiums under any  policy
 of insurance  by reasons  of cancellation  or otherwise,  the General  Agent
 agrees immediately  to return  to the  Reinsurer the  commission  previously
 received by it on the portion of the premium refunded.

                                  ARTICLE IV
                                  SUB-AGENTS
                                  ----------

 4.01 The General  Agent  may  appoint such  producing  agents  as  shall  be
 reasonably approved by the Reinsurer and the Company.  The General Agent may
 not  terminate  the   appointment  of  such   agents  without  the   written
 authorization of the Company.

 4.02 The General Agent  and the Reinsurer  shall comply with,  and shall  be
 responsible to insure the compliance by all such producing agents with,  the
 terms of this Agreement and the Reinsurance Agreement and all other  written
 rules and regulations of the Company, and treat as confidential and use only
 in the interest of the Company  all instructions, information and  materials
 received from the Company.

 4.03 The General Agent  and Reinsurer shall  be solely  responsible for  the
 performances of any producing agents under  all of the terms and  provisions
 hereof, including,  but not  limited to,  the  collections of  premiums  and
 refunds of premiums.

 4.04 Each such  producing  agent  must  be  properly  licensed  as  a  local
 recording agent or Group II agent and receive an appointment as an agent  of
 the Company through the appropriate regulatory body of Texas as provided  by
 law, before any application  shall be accepted from  him or other  insurance
 performances on behalf  of the  Company are  performed.   The Reinsurer  and
 General Agent  shall be  ultimately responsible  for the  obligation of  the
 producing agent to obtain  an appointment as provided  herein.  The  General
 Agent shall have each producing agent appointed with the Company.

 4.05 It is also specified that the General Agent and the Reinsurer shall  be
 solely responsible for all commissions payable to any producing agents.  The
 Reinsurer, General Agent and any producing agent shall not seek to hold  the
 Company liable through litigation, arbitration or otherwise for  commissions
 payable to such producing agents.

 4.06 The Company, in its sole discretion with or without cause, and  without
 prior written notice, may terminate the appointment of any producing agent.

                                  ARTICLE V
                          ADDITIONAL DUTIES OF AGENT
                          --------------------------

 5.01 The General  Agent  shall, at  all  times  during the  period  of  this
 Agreement, comply with all laws of the State of Texas and all orders, policy
 decisions or other requirements of the Texas Department of Insurance.

 5.02 All books,  records,  accounts,  documents and  correspondence  of  the
 General Agent  and  any producing  agent  pertaining to  the  Company's  and
 Reinsurer's business shall,  at all  times, be  open to  examination by  any
 authorized representative of the  Company or Reinsurer.   The General  Agent
 shall make  copies of  records  available upon  request  by the  Company  or
 Reinsurer, whether  such request  is before  or  after termination  of  this
 Agreement or the  Reinsurance Agreement.   The General  Agent must  maintain
 separate records of  business, including, but  not limited to,  underwriting
 files for each insurer for whom it acts  as a general agent pursuant to  the
 Texas Insurance Code,  Article 21.07-3, Section  3C(b) or  any amendment  or
 successor thereto.  Such  records must be maintained  for five (5) years  or
 until the completion of a financial examination by the insurance  department
 of the state in which the Company is domiciled, whichever is longer.

 5.03 The General  Agent shall  maintain adequate  accounting procedures  and
 systems, at no cost or expense to the Company, and shall provide  statistics
 in a  timely manner  for all  reporting requirements  under the  Reinsurance
 Agreement or  as shall  be required  from  time to  time by  the  regulatory
 authorities of  the State  of  Texas or  any  other governmental  agency  or
 authority.  Such statistical information shall be provided to the Company by
 the General Agent at the General Agent's sole cost and expense.

 5.04 The General Agent shall forward to the Company, no later than the  45th
 day of the month following the month being accounted for, a report in detail
 of all policies of  insurance written or placed,  or liability increased  or
 decreased, or policies continued  or renewed or canceled  by or through  the
 General Agent during the month being accounted for, which shall include  all
 premiums due thereon whether collected or  not.  Such report shall show  the
 net amount due  to the Company  and Reinsurer on  all such  business on  the
 lines of business  authorized to  be written by  the General  Agent and  the
 amounts paid  in losses,  loss adjustment  expenses and  commissions.   Such
 report shall  also  include,  to  the  extent  not  already  included,  both
 insurance and  reinsurance transactions  and  all transactions  pursuant  to
 Texas Insurance Code, Article 21.07-3, Section 3C(a) including:

      (i)   statement of written, earned and unearned premiums;

      (ii)  losses and loss expenses outstanding;

      (iii) losses incurred but not reported; and

      (iv)  any management fees.

 The report shall be received  by or confirmed to  the Company no later  than
 forty-five (45)  days from  the close  of the  month for  which business  is
 reported.  The Company  shall maintain such account  reports on file for  at
 least three (3) years  and shall make the  account reports available to  the
 Commissioner of Insurance  of the State  of Texas  (the "Commissioner")  for
 review upon request.

 5.05 The General Agent shall  account for and furnish  to the Company,  upon
 request, complete  copies of  all policies  issued, copies  of all  spoiled,
 voided or otherwise unissued policies, and copies of all claim files created
 with respect to  all loss  occurrences under  any policy  issued under  this
 Agreement.

 5.6 The title of all undelivered policies, books, supplies or other property
 related to the  reinsured business  is in the  Company, and  these shall  be
 delivered  to  the  Company  by  the  General  Agent  immediately  upon  the
 termination  of  this  Agreement.  The  General Agent  agrees  to  surrender
 peaceably the same  without compelling the  Company to resort  to any  legal
 proceedings whatsoever. Upon request of the  Company, prior to or after  the
 termination of  this  Agreement, the  General  Agent shall  provide  to  the
 Company, at the General Agent's sole cost and expense, electronic copies  of
 any and all data related to the reinsured business in a format specified  by
 the Company.  Further,  the General Agent shall  ensure any vendor or  other
 third party  acknowledges and  agrees  the Company,  at  no expense  to  the
 Company, shall have use of any systems, data, information, reports, files or
 statistics prior to or after the termination of this Agreement.

 5.07 The General Agent  shall not  insert any  advertisement respecting  the
 Company or  the business  to  be written  under  this Agreement  and/or  the
 Reinsurance Agreement  in any  publication or  issue any  circular or  paper
 referring to  the  Company or  such  business without  first  obtaining  the
 written consent  of  the Company.  The  General Agent  shall  establish  and
 maintain records of any  such advertising as required  by Texas statute  and
 regulation.

 5.08 The General Agent shall maintain on behalf of the Company and Reinsurer
 complete copies of  all policies issued  hereunder and copies  of all  claim
 files created with respect to all  loss occurrences thereunder.  Any or  all
 policies and/or  claim files  required to  be  maintained by  General  Agent
 pursuant to this Section 5.08 may  be maintained in electronic data  storage
 form accessible by computer  and if so stored  in this fashion, no  physical
 copy of such items  need be maintained.   Where electronic claims files  are
 maintained by  the General  Agent, any  data from  such files  requested  or
 required by the Company shall be provided within thirty (30) days or less if
 so requested by the Company.

 5.09 The General Agent shall pay to  the Reinsurer the positive balance,  if
 any, no later than  sixty (60) days  following the end  of the month  during
 which the business was written, earned  premiums hereunder less the  General
 Agent's commissions and less loss adjustment expenses and loss payments plus
 salvage and  subrogation. Should  such balance  be  a negative  amount,  the
 Reinsurer shall promptly pay the General Agent upon receipt and verification
 of the amount due as reported by the General Agent.

 5.10 The General  Agent  shall  be  solely  responsible  for  procuring  and
 renewal, extension, or new policy or  insurance that may be required by  any
 state or rule or regulation of  any State Insurance Department with  respect
 to policies originally written directly for the Company.  The General  Agent
 and Reinsurer shall  indemnify the  Company and  hold it  harmless from  any
 loss, damage, cost, claim or expense whatsoever that the Company may  incur,
 or for which it may become liable, as  a result of the said General  Agent's
 failure, refusal or neglect to fulfill said responsibility.

 5.11 The General Agent  agrees that its  duties and  obligations under  this
 Agreement shall  be due  and owing  also to  the Company's  and  Reinsurer's
 successors and assigns.

 5.12 Nothing in this Article V shall  be construed as requiring the  Company
 to monitor the  book of  business which is  the subject  of the  Reinsurance
 Agreement for the benefit of the Reinsurer.

 5.13 The Company  shall  conduct or  cause  to be  conducted  a  semi-annual
 examination of the General Agent, in compliance with 28 TAC S19.1204(b)(19).
 Furthermore, if the Company's aggregate  premium volume increases by  thirty
 (30) percent in any thirty  (30) day period, at  no expense to the  Company,
 the Company shall examine  or cause to be  examined within ninety (90)  days
 the General  Agent  if  it writes  more  than  twenty (20)  percent  of  the
 Company's volume and has also experienced a twenty (20) percent increase  in
 premium volume during that same thirty (30) day period in compliance with 28
 TAC S19.1204(b)(19).

 The examinations  required under  the preceding  paragraph shall  adequately
 provide the Commissioner with  the information outlined  in (a) through  (e)
 below, shall be made available to the Commissioner for review, shall  remain
 on file with the Company for  a minimum of three (3)  years and shall, at  a
 minimum, contain information concerning the following:

      (a)  claims procedures of the General Agent;

      (b)  timeliness  of  claims   payments by the General Agent (i.e.,  lag
           time between date claim is reported and date claim is paid);

      (c)  timeliness of  premium reporting  and  collection by  the  General
           Agent;

      (d)  compliance by the General Agent with underwriting guidelines under
           Section 1.10 hereof; and

      (e)  reconciliation of policy inventory.

 5.14 The General Agent  shall return any  unearned premium  due insureds  or
 other persons  on the  business  which is  the  subject of  the  Reinsurance
 Agreement;   if for  any reason,  the  General Agent  does not  return  such
 unearned premium, then the Reinsurer shall pay such amount and/or amounts.

 5.15 The General Agent shall be duly licensed as a managing general agent or
 as otherwise required as required under Texas law.

 5.16 Should the Texas Department of Insurance make a request to the  Company
 for any data required  to comply with a  statistical plan and/or data  call,
 the General Agent shall  be solely responsible to  provide the Company  with
 such data.   Should  the  request from  the  Texas Department  of  Insurance
 require the Company to contract the  services of an outside source, such  as
 an actuarial firm, to compile the data required, the General Agent shall  be
 responsible for  its proportionate  share of  the  total cost  for  services
 rendered.

 5.17 The General Agent will act, at its sole cost and expense, on behalf  of
 the Company to produce, prepare, and  file statistical information with  the
 designated statistical  reporting  bureau.   The  General  Agent  will  also
 furnish the Company, and  other parties as designated  by the Company,  with
 monthly, quarterly and annual reports showing statistical data in respect of
 the business written as required.

                                  ARTICLE VI
                             TERM AND TERMINATION
                             --------------------

 6.01 The effective  date of  this Agency  Agreement is  12:01 a.m.,  Central
 Standard Time, on  April 1,  2003, and  shall remain  continuously in  force
 unless canceled as follows:

      (a)  This Agreement may be canceled by any party giving at least ninety
           (90) days prior written notice to the other parties.  Notice shall
           be provided  by registered  mail,  return receipt  requested,  and
           notice shall  be deemed  to  have been  provided  on the  date  of
           mailing.

      (b)  Immediately by mutual consent of the Company and Reinsurer.

      (c)  At any time, by the Company, without prior notice in the event  of
           any other party  declaring bankruptcy or  being declared or  found
           bankrupt or insolvent, or being the subject of a cease and  desist
           order, corrective  order, or  being placed  in, or  subject to,  a
           proceeding  of   supervision,  conservation,   rehabilitation   or
           liquidation.

      (d)  Immediately upon written notice by the Reinsurer or the Company in
           the event  of  the  cancellation or  non-renewal  of  the  General
           Agent's license by the Texas Department of Insurance.

      (e)  Immediately upon written notice by  the Company, if the  Reinsurer
           or General Agent  is found to  be insolvent by  a State  Insurance
           Department or court  of competent  jurisdiction, or  is placed  in
           supervision, conservation, rehabilitation, or liquidation, or  has
           a receiver or supervisor appointed.  By the Reinsurer, upon thirty
           (30) days written notice, if the Company or General Agent is found
           to be  insolvent  by a  State  Insurance Department  or  court  of
           competent jurisdiction, or is placed in supervision, conservation,
           rehabilitation or  liquidation, or  has a  receiver or  supervisor
           appointed.

      (f)  If the General Agent  shall default in  making remittance for  net
           premiums then this Agreement shall be terminated according to  the
           terms provided in the Reinsurance Agreement.

      (g)  If the  General Agent  shall defraud  or  attempt to  defraud  the
           Company; or any  policyholder, then the  Company may  at its  sole
           discretion cancel  this  contract  by  giving  the  General  Agent
           written notice of cancellation served personally or by mail, which
           shall be effective immediately.

      (h)  Automatically and immediately, without notice upon cancellation or
           termination of  the  Reinsurance  Agreement,  including,  but  not
           limited to,  termination  of  the  Reinsurance  Agreement  by  the
           Company as provided in the Reinsurance Agreement.

      (i)  As provided in Section 9.11 of this Agreement.

      (j)  By the  Dorinco  Reinsurance  Company  immediately  in  the  event
           American Hallmark Insurance Company of Texas' surplus drops  below
           $5,000,000.

 6.02 This Agreement shall  automatically become  renewed from  year to  year
 upon the renewal of the license  or certificate of authority granted to  the
 General Agent by the Commissioner or  Department  of Insurance of the  state
 wherein this contract is to be  performed, provided this Agreement shall not
 be otherwise canceled.

 6.03 It is expressly agreed  and understood that  nothing in this  paragraph
 authorizes the General Agent to write any new business under this  Agreement
 should the  Reinsurance Agreement  terminate, except  the business  that  is
 required to be renewed or issued because of applicable law or regulation, as
 provided in the  Reinsurance Agreement (any  such business  which is  issued
 because of the requirements of law or regulation is 100% reinsured under the
 Reinsurance Agreement).

 6.04 The Company  shall  have  no liability  to  the  General  Agent  and/or
 Reinsurer by virtue of  the Company's termination of  this Agreement as  set
 forth  in  this  Article;  it   being  expressly  understood  that   partial
 consideration for the  Company's grant of  agency authority  to the  General
 Agent is the General Agent's and Reinsurer's promise that the Company  shall
 not be  responsible for  any damages  which  might arise  by virtue  of  any
 termination of this Agreement.

 6.05 In the event of termination of this Agreement, after the General  Agent
 having promptly accounted  for and paid  over premiums for  which it may  be
 liable, the General Agent's  records, use and  control of expirations  shall
 remain the  property  of  the  General Agent  and  left  in  its  undisputed
 possession.

 6.06 In the event that this Agreement is terminated, the General Agent,  for
 no additional fee, shall have the  authority (unless revoked by the  Company
 at its sole discretion in which case the Reinsurer shall appoint a successor
 at no cost  to the Company)  as provided in  this Agreement  to continue  to
 perform all of  its duties under  this Agreement on  the remaining  policies
 during the run-off period.   The General Agent's  duties during the  run-off
 period shall include handling  and servicing of  all policies through  their
 natural expiration, together with any policy renewals required to be made by
 the provisions of applicable law, whether or not the effective date of  such
 renewal is  subsequent  to  the  effective  date  of  cancellation  of  this
 Agreement.  Further, upon termination of  this Agreement, the General  Agent
 shall not be relieved of or released from any obligation created by or under
 this Agreement  in relation  to payment,  expenses, reports,  accounting  or
 handling, which  relate to  the outstanding  insurance business  under  this
 Agreement existing on the  date of such termination.   The Company,  General
 Agent and Reinsurer will cooperate in  handling all such business until  the
 business has expired either by cancellation or by the terms of the  policies
 and all outstanding losses and loss adjustment expenses have been settled.

 6.07 As the  Reinsurance Agreement  provides for  termination on  a  run-off
 basis, the relevant  provisions of this  Agreement shall  apply to  business
 being run-off.  It is also  expressly agreed that the terms, conditions  and
 obligations of the Preamble and Articles II, IV and V, Sections 6.04,  6.05,
 6.06, 6.07 and 6.08,  Articles VII and VIII,  and Section 9.11 herein  shall
 survive termination of this Agreement.

 6.08 The Company may suspend the authority  of the General Agent during  the
 pendency of any dispute regarding any event of default by the General Agent.

                                 ARTICLE VII
                   T.B.A. INSURANCE GROUP, LTD. ("T.B.A.")
                   ---------------------------------------

      The Company  has contracted  with TBA  as its  designated  intermediate
 agent to perform certain duties on the Company's behalf and to issue certain
 checks on behalf of the Company in exchange for certain fees.  The Reinsurer
 agrees that TBA is  to bear no  business, credit or  insurance risk and  can
 bear no liability whatsoever to the Reinsurer save liability for any  actual
 fraud or  violation of  criminal  law it  commits,  which has  been  finally
 determined by a court of competent jurisdiction after the exhaustion of  any
 appeals.  TBA  shall receive all  the protections from  liability which  are
 contained herein for the benefit of the Company.

                                 ARTICLE VIII
                      HOLD HARMLESS AND INDEMNIFICATION
                      ---------------------------------

      The General Agent  agrees to  and does  hereby indemnify  and hold  the
 Company harmless from and  against any and all  actions, causes of  actions,
 suits, arbitrations,  or  proceedings  of  any  kind,  liabilities,  losses,
 claims,  damages,  costs,  or   expenses  (including  attorneys'  fees   and
 expenses), incurred by the Company by reason of, arising out of, or relating
 in any way to this Agreement or any action taken or inaction by the  General
 Agent in  breach  of  the terms  of  this  Agreement or  the  terms  of  the
 Reinsurance Agreement, or which is not in full compliance therewith.  If the
 General Agent does not indemnify and  hold the Company harmless as  provided
 in this Article  VIII, the Reinsurer  shall fulfill the  obligations of  the
 General Agent and make the payments  required of the General Agent  pursuant
 to this Article VIII.  In addition, if the Reinsurer does not indemnify  and
 hold the  Company harmless  as required  by the  Reinsurance Agreement,  the
 General Agent shall fulfill  the obligations of the  Reinsurer and make  the
 payments required pursuant to the Reinsurance Agreement.

                                  ARTICLE IX
                                MISCELLANEOUS
                                -------------

 9.01 This Agreement has been made and entered into in the State of Texas and
 shall be governed by and construed in accordance with the laws of the  State
 of Texas.

 9.02 This Agreement shall be binding upon the parties hereto, together  with
 their respective successors and permitted assigns.

 9.03 This Agreement is not exclusive and  the Company reserves the right  to
 appoint other agents  in the  territory covered  by this  Agreement and  the
 General Agent reserves the right to act as General Agent for other  insurers
 or reinsurers.

 9.04 The Company shall have no right of control over the General Agent as to
 time, means or manner of the General Agent's conduct within the terms of the
 Agreement and the Reinsurance Agreement and the authority herein granted and
 nothing herein is  intended or  shall be  deemed to  constitute the  General
 Agent an employee or servant of the Company.  The General Agent shall at all
 times be an independent contractor.

 9.05 This  Agreement   shall  be   deemed  performable   at  the   Company's
 administrative office in Fort Worth, Texas, and it is agreed that the  venue
 of any controversy arising out of this Agreement, or for the breach thereof,
 shall be in Tarrant County, Texas.

 9.06 Neither the Reinsurer  nor the General  Agent shall assign  any of  its
 rights or obligations under this Agreement without the prior written consent
 of the Company.   No  verbal modification will  be recognized  by any  party
 hereto and this Agreement cannot be modified by any subsequent practices  or
 course of dealing by the parties inconsistent herewith.  If the Company, the
 General Agent or Reinsurer shall fail to take advantage of a breach, if any,
 by another party of the terms, conditions, covenants, or any of them  herein
 contained, such failure shall not be  deemed to constitute, or be  construed
 as, a waiver  of any rights  on the part  of the General  Agent, Company  or
 Reinsurer to  thereafter  enforce  any of  the  said  terms,  conditions  or
 covenants.

 9.07 This Agreement  may be  amended, modified  or  supplemented only  by  a
 written instrument executed by all parties  hereto.  All such amendments  or
 changes shall specify the effective date of such amendments or changes.

 9.08 This  Agreement  supersedes  any  and  all  provisions,  terms   and/or
 conditions of any other general agency agreements, whether oral or  written,
 by between and among the parties.

 9.09 The General Agent  shall notify the  Company in  writing within  thirty
 (30) days when  there is a  change in the  ownership of 10%  or more of  the
 outstanding stock in the General  Agent or when there  is any change in  the
 General Agent's principal officers or directors.

 9.10 The General Agent shall  not offset balances  due under this  Agreement
 against balances due or owing under any other contract.

 9.11 This Agreement  shall be  interpreted  in conformance  with  applicable
 Texas law  and  regulation.   If  it is  found  or  ordered by  a  court  or
 regulatory body  that any  provision  or term  of  this Agreement  does  not
 conform to such law or regulation then this Agreement shall be deemed to  be
 amended, and modified  to be in  accordance with such  law.  However,  where
 this Agreement is found  not to comply with  applicable law or  regulations,
 the Company may in its sole discretion terminate this Agreement  immediately
 and without prior notice.

                                  ARTICLE X
                                   PRIVACY
                                   -------

 10.01     The General Agent shall provide to each new policyholder, prior to
 or upon the issuance  of any Policies written  under this Agreement, and  in
 accordance with applicable state and federal laws, an initial notice of  the
 Company's privacy policies and practices. Not less than annually thereafter,
 the General Agent, upon the request of the Company, distribute a copy of the
 Company's annual privacy  notice, as may  be amended from  time to time,  to
 each existing policyholder.  In addition, the General Agent shall, upon  the
 request of  the  Company, distribute  revised  privacy notices  and  opt-out
 notices as applicable to  each policyholder to  reflect any revisions  which
 may be made to the Company's privacy policies and practices.  In each  case,
 the Company shall be responsible for providing the Agency with a copy of the
 form for its privacy policies and practices notice, which forms the  General
 Agent shall use to create and  deliver the notices described herein, at  the
 Agency's sole  cost  and  expense.   These  notices  shall  be  created  and
 delivered independent of any separate legal obligation the General Agent may
 have to create and deliver its own such notices.

 10.02     The General Agent shall not disclose or use any nonpublic personal
 financial information or  nonpublic personal health  information related  to
 any policyholder, or to any consumer or customer (as such terms are  defined
 under applicable state  and federal privacy  laws), except  as necessary  to
 carry out its duties  and obligations under this  Agreement or as  otherwise
 permitted under applicable state or federal law.

 10.03     The General Agent shall develop and implement, in accordance  with
 applicable state  and  federal  laws, a  comprehensive  written  information
 security program designed to (i) ensure the security and confidentiality  of
 nonpublic personal  financial  information  and  nonpublic  personal  health
 information related to any policyholder, or to any consumer or customer  (as
 such terms are  defined under applicable  state and  federal privacy  laws),
 (ii) protect against any anticipated threats  or hazards to the security  or
 integrity of such information, and (iii) protect against unauthorized access
 to or  use of  such information  that could  result in  substantial harm  or
 inconvenience to any customer.

      IN WITNESS  WHEREOF,  the  Parties  hereto  by  their  respective  duly
 authorized representatives have executed this Agreement as of the date first
 above mentioned.

 STATE AND COUNTY MUTUAL FIRE INSURANCE COMPANY

 BY:  _________________________________

 ITS: _________________________________

 AMERICAN HALLMARK GENERAL AGENCY, INC.

 BY:  _________________________________

 ITS: _________________________________

 AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS

 BY:  _________________________________

 ITS: _________________________________

 DORINCO REINSURANCE COMPANY

 BY:  _________________________________

 ITS: _________________________________EXHIBIT 10(d)

                           SECURITY FUND AGREEMENT
                 (hereinafter referred to as the "Agreement")

                          entered into by and among

                 American Hallmark Insurance Company of Texas
                                 City, State
                 (hereinafter referred to as the "Depositor")
                                     and

                State And County Mutual Fire Insurance Company
                              Fort Worth, Texas
                (hereinafter referred to as the "Beneficiary")

                                   Held By

                  First Tennessee Bank, National Association
                              Memphis, Tennessee
                 (hereinafter referred to as the "Custodian")

 SECTION 1.     PURPOSE OF AGREEMENT
                --------------------

      1.1  The Depositor has assumed  all liabilities of Beneficiary  arising
      from insurance business subject to that certain Quota Share Reinsurance
      Agreement  dated  effective  April  1,  2003,  between  Depositor   and
      Beneficiary (hereinafter referred to as the "Reinsurance Agreement").

      1.2  Depositor desires to secure the payment of its liabilities and the
      performance of  its obligations  to Beneficiary  under the  Reinsurance
      Agreement.   Beneficiary  reserves the  right  to require  deposits  to
      secure the payment  of Depositor's liabilities  and performance of  its
      obligations  to  Beneficiary  under   (i)  that  certain  Quota   Share
      Reinsurance Agreement, and (ii) that certain General Agency  Agreement,
      both dated effective April 1, 2003, between Depositor and Beneficiary.

      1.3  Depositor desires to deliver to Custodian "Securities" (as defined
      in Section  4.1 hereof)  to  be held  by  Custodian as  collateral  and
      security for the sole use and benefit of Beneficiary, which  securities
      may hereinafter be referred to as the "Fund."

 SECTION 2.     SECURITY GRANTED BY DEPOSITOR
                -----------------------------

      2.1  Pursuant to  the  terms  hereof, the  Depositor  hereby  obligates
      itself to  deliver to  and deposit  with  the Custodian  securities  in
      accordance with Section  3 hereof as  collateral and  security for  the
      Depositor's obligations to Beneficiary under the Reinsurance  Agreement
      including the  obligations  for  Run-Off Risk,  Credit  Risk,  Unearned
      Premiums Reserves, if  any, and Reserves  For Losses  Incurred But  Not
      Reported  And  Losses Reported  But Unpaid.   The Loss  Reserves  shall
      include  all  allocated  loss   adjustment  expenses  and   appropriate
      unallocated loss adjustment expenses.  For purposes of this  Agreement,
      the following terms shall have the following meanings:

      (a)  "Unearned Premiums" means,  as of  any given  date, the  aggregate
           premium attributable  to  the  unexpired coverage  period  of  all
           insurance policies produced  under the  Reinsurance Agreement,  as
           determined  in  accordance  with  generally  accepted   accounting
           principles consistently applied.  For this purpose, premium  shall
           be the written  premium charged on  the insurance  policy for  the
           period such  policy is  in force  irrespective of  the  subsequent
           billing and collection of such premium.

      (b)  "Loss  Reserves"  means,  as  of  any  given  date,  the   reserve
           attributable to  losses  incurred  but  not  reported  and  losses
           reported but  not  paid with  respect  to the  insurance  policies
           produced  under  the  Reinsurance  Agreement,  and  shall  include
           provision for  both  allocated  and  unallocated  loss  adjustment
           expense,  in  each  instance  as  determined  in  accordance  with
           generally accepted accounting principles consistently applied.

      (c)  The Run-Off Risk is  $1,100,000.  The  calculation of the  Run-Off
           Risk is based  on average  monthly written  premium of  $4,000,000
           (the "Target Premium").   If the  average monthly written  premium
           during any  calendar  quarter is  more  or less  than  the  Target
           Premium, the Run-Off Risk shall be  adjusted on a pro rata  basis.
           The collateralization for  Run-Off Risk  shall be  funded in  four
           equal installments via the security  fund.  The first  installment
           shall be funded as soon as possible or within 10 business days  of
           the  effective  date  of  this Agreement.  The second,  third  and
           fourth installments shall be funded within 10 business days  prior
           to  the  end  of  each  calendar  quarter  thereafter.  Within  10
           business days  following the  end of  each calendar  quarter,  the
           General Agent shall provide a report to the Company and  Reinsurer
           setting forth the actual run off  risk hereunder (in force  policy
           count x $7.20  per month  to policy  expirations =  total run  off
           risk) for that calendar quarter and the Beneficiary and  Depositor
           shall immediately adjust the security fund accordingly.

      (d)  The Credit Risk is $3,000,000.  The calculation of the Credit Risk
           is based on  average monthly  written premium  of $4,000,000  (the
           "Target Premium").  If the average monthly written premium  during
           any calendar quarter is more or less than the Target Premium,  the
           Credit  Risk  shall  be  adjusted   on  a  pro  rata  basis.   The
           collateralization for  Credit  Risk shall  be  funded as  soon  as
           possible or within 10 business days of the effective date of  this
           Agreement.

      (e)  Should the amount of the security fund at the end of any  calendar
           quarter be greater than the amount required in this Section 2, the
           Depositor shall be entitled to reduce  the amount of the  security
           fund to  an amount  not  less than  the  amount required  in  this
           Section 2.   The  Qualified  United States  Financial  Institution
           shall  permit  such   reduction  upon   receipt  by   it  of   the
           Beneficiary's written statement that Depositor is entitled to such
           reduction, which  written  statement  shall  not  be  unreasonably
           withheld by Beneficiary.

           Beneficiary shall  be entitled  at any  time, at  its expense,  to
      engage an independent actuary  to review the  adequacy of the  Unearned
      Premiums and Loss Reserves.  In the event of a dispute or difference of
      opinion between the amount of Unearned  Premiums and Loss Reserves,  as
      determined by the actuary engaged by  Beneficiary, and such amounts  as
      determined by the Depositor or its affiliate, the amounts determined by
      the actuary  engaged  by  Beneficiary  shall  govern  for  purposes  of
      determining the amount  of the securities  to be  deposited under  this
      Agreement.

      2.2  During the term  of this Agreement,  Depositor hereby agrees  that
      Custodian shall act for the benefit  of Beneficiary in taking  delivery
      and possession of the said securities pursuant to Section 3 hereof  and
      in holding such  securities as  collateral for  the purposes  expressed
      herein for  Beneficiary's  benefit,  and  Depositor  hereby  grants  to
      Custodian all  powers  necessary  and  reasonable  in  the  performance
      hereunder.

      2.3  The  existence  of  the  Fund,  as  security  for  obligations  of
      Depositor to  Beneficiary,  shall not  affect  Depositor's  obligations
      under the Reinsurance Agreement, nor shall  the securities of the  Fund
      be used as a set off  by Depositor for any obligations to  Beneficiary,
      except for Depositor's right  to withdraw securities  from the Fund  in
      accordance with Section 3 or to  receive any excess securities held  by
      Beneficiary pursuant to Section 5.5.

 SECTION 3.     DEPOSITS TO AND INVESTMENT OF SECURITY
                --------------------------------------

      3.1  Within 10 business days of the  effective date of this  Agreement,
      and within 10 business days prior  to the end of each calendar  quarter
      thereafter, Beneficiary  shall  provide  Depositor with  a  good  faith
      estimate of the expected sum of Depositor's Run-Off Risk, Credit  Risk,
      Ceded Outstanding Unearned Premium And Loss  Reserves as of the end  of
      the forthcoming calendar quarter (the "Estimate"). The Depositor shall,
      within two business days prior to the commencement of such  forthcoming
      calendar quarter, fund  the security fund  in an  amount equivalent  to
      100% of the Estimate.

      3.2  Should the aggregate market  value of the Fund  at the end of  any
      calendar quarter be greater than the amount required in Section 2,  the
      Depositor shall be entitled to withdraw  such securities from the  Fund
      held in custody so as to reduce the aggregate market value of the  Fund
      to an amount not less than the  amount required in the said Section  2.
      The Custodian shall permit  such withdrawal upon receipt  by it of  the
      Beneficiary's written statement that Depositor is entitled to  withdraw
      the  designated  securities,  which  written  statement  shall  not  be
      unreasonably withheld by Beneficiary.

      3.3  The Depositor shall be entitled at any time to withdraw securities
      from the  Fund  if concurrently  therewith  securities (as  defined  in
      Section 4.1 hereof) of equal or  greater market value are deposited  in
      the Fund, and the Custodian is  authorized to permit such  substitution
      of securities upon receipt of the Beneficiary's written approval, which
      shall not be unreasonably withheld.

      3.4  All securities deposited by  the Depositor (i)  shall be free  and
      clear of all  encumbrances, and (ii)  shall be fully  negotiable or  in
      such form that Custodian  may sell, transfer  or otherwise deposit  the
      same without any additional signature or agreement from Depositor.

 SECTION 4.     SECURITIES
                ----------

      4.1  The term "Securities" as used herein is defined as any combination
      of (a) cash, or deposits held, or certificates of deposit issued by any
      national or state chartered bank or savings and loan association with a
      rating of  B+, or  better, by  Lace Financial  Corporation, (b)  United
      States Government issued or  guaranteed bonds, bills  or notes, or  (c)
      any other bonds with a Standard  & Poor's or Moody's quality rating  of
      "A" or better.   All securities and  assets held in  the Fund shall  be
      readily marketable over a national exchange and shall be listed by  the
      Securities Valuation Office  of the National  Association of  Insurance
      Commissioners with designations of "1-Highest Quality". All  securities
      and assets held in the Fund shall be of the type specified in the Texas
      Insurance Code  Article 5.75-1(d),  any successor  section thereto,  or
      other similar  applicable laws  or regulations.   All  such  securities
      shall be in conformance with  the investment requirements described  in
      Article  2.10  of  the  Insurance  Code  of  Texas,  or  other  similar
      applicable laws or regulations.

      4.2  For purposes of  this Agreement,  the market  value of  securities
      shall be determined  as follows:   (a) at the  time any securities  are
      deposited initially with the Custodian,  and as respects securities  on
      deposit at the end of each calendar month, the Depositor shall in  good
      faith place  a tentative  market value  on  said securities  and  shall
      notify  the  Beneficiary  of  such  valuation  by  supplement  to   the
      Custodian's monthly activities report; (b) if the Beneficiary disagrees
      with such tentative market  valuation, it may  so notify the  Depositor
      within 30  days after  the date  it  receives the  Custodian's  monthly
      activities report and  the Depositor's supplement  thereto; and (c)  in
      the event the parties cannot resolve any difference with respect to the
      market value of  the securities, the  market value of  the security  in
      dispute shall be determined by the  Securities Valuation Office of  the
      National Association of Insurance Commissioners.

 SECTION 5.     BENEFICIARY'S CLAIM ON THE FUND
                -------------------------------

      5.1  The Beneficiary shall have the  right to withdraw securities  from
      the  Fund,  without  diminution  because  of  the  insolvency  of   the
      Beneficiary or  the  Depositor, for  the  purposes and  to  the  extent
      specified in Sections 5.2 and 5.3  below, with written notice from  the
      Beneficiary to the Custodian  given in accordance  with Section 7.1  of
      this Agreement.   Upon  such written  notice  by the  Beneficiary,  the
      Custodian shall  immediately  take  any  and  all  steps  necessary  to
      transfer to the Beneficiary absolute  and unequivocal right, title  and
      interest in the  requested securities  and assets  in the  Fund and  to
      deliver such securities and assets  to the Beneficiary and  Beneficiary
      shall acknowledge to the Custodian receipt of such withdrawn securities
      and assets.   Any dispute between  Depositor and Beneficiary  regarding
      Beneficiary's claim  on  the  Fund shall  be  resolved  by  arbitration
      pursuant to  Section 11.   Custodian  shall  strictly comply  with  its
      instructions hereunder without resorting to interpleader.   Beneficiary
      will hold Custodian harmless if acting upon Beneficiary's  instructions
      hereunder.

      5.2  The Beneficiary may  require reimbursement from  the Fund for  any
      losses or unearned premiums, which the Beneficiary is obligated to  pay
      under the Reinsured Policies if:

      (a)  the Beneficiary  is  legally  required by  order  of  a  court  or
           regulatory  authority  having  jurisdiction,  to  pay  a  loss  or
           unearned premium amount under a Reinsured Policy; or

      (b)  the Beneficiary, although not legally required by order, as above,
           but acting under its non-delegable responsibility with respect  to
           claims for losses or  unearned premiums under Reinsured  Policies,
           pays any  such  claim  in good  faith;  provided  that  notice  of
           payment, along  with  documentation  and  an  explanation  of  the
           circumstances of the payment of the  claim, is first delivered  to
           Depositor and Depositor fails to pay  or reimburse any such  claim
           within 30 days from such notice.

      The term "legally required  by order" as used  in this Agreement  shall
      mean, in the case of a  court, a final unappealable order or  judgment,
      or an order or judgment which in the opinion of counsel for Beneficiary
      should not be appealed.   In the case  of a regulatory authority,  this
      shall mean any directive from a  person in a supervisory or  management
      position in an insurance regulatory agency  which has the authority  to
      initiate disciplinary  action against  the Beneficiary  for failure  to
      follow  such  directive  and  which   directive,  in  the  opinion   of
      Beneficiary's counsel, should not be further contested or appealed.

      The Beneficiary  will  reasonably  inform  Depositor  of  circumstances
      surrounding and preceding any such payment  of claim and shall  consult
      with Depositor.

      5.3  The Beneficiary may withdraw all of the securities of the Fund and
           hold the same under the Reinsurance Agreement if:

           (a)  the commissioner of insurance of any state in which  business
           is produced  under  the  Reinsurance  Agreement  pursuant  to  the
           applicable insurance code  (i) issues  an order  to the  Depositor
           notifying the  Depositor or  its Board  of Directors  that he  has
           determined that the Depositor is operating in a manner that  could
           lead to,  or is  in a  financial condition,  which, if  continued,
           would make it hazardous  to the public,  or its policyholders;  or
           (ii) reports  that there  may be  grounds for  rehabilitation  and
           liquidation under the  applicable insurance code;  or (iii)  gives
           notice of, or issues an order stating that Depositor is  operating
           in a manner which  appears to be detrimental  to the interests  of
           the  policyholders   or  the   general  public;   or  (iv)   files
           allegations, that a condition exists  which would justify a  court
           order for proceedings under the applicable insurance code;

           (b)  a court  having jurisdiction  over  the Depositor  enters  an
           order directing the Commissioner  of Insurance to take  possession
           or control of  the Depositor,  or its  property, business,  books,
           records and accounts; or

           (c)  the Beneficiary has  any other  good reason  to believe  that
           there has  been  a  substantial  deterioration  of  the  financial
           condition of the Depositor.

      5.4  In the  event  the Beneficiary  takes  control of  the  securities
      pursuant to Section 5.3, such securities  shall be held by  Beneficiary
      as an asset for the purpose of securing the Unearned Premiums and  Loss
      Reserves, and otherwise  securing Beneficiary under  the terms of  this
      Agreement, and shall be maintained in an identifiable manner as  "Funds
      Held  By  Beneficiary  Under   the  Quota  Share  Reinsurance   Treaty"
      (hereinafter referred to as "Funds Held.") The Beneficiary may disburse
      amounts from  the Funds  Held for  the payment  of losses  and  refunds
      through the Quota Share Reinsurance Agreement pursuant to the terms  of
      its General  Agency Agreement  with Beneficiary,  or to  any  successor
      appointed  by  the  Beneficiary  to  act as general agent in connection
      with  the  business  subject  to the  Reinsurance Agreement.  Also, the
      Beneficiary may use such Funds Held to reimburse itself for any amounts
      Depositor is obligated under the Reinsurance Agreement, including,  but
      not be limited to, any losses  paid, and unearned premiums refunded  by
      the Beneficiary, and for actual costs of administration incurred by the
      Beneficiary in the event Beneficiary is  required to assume control  of
      the servicing  and  claims handling  of  the business  subject  to  the
      Reinsurance Agreement.

      5.5  An amount equal  to the market  value of the  Funds Held shall  be
      carried by the Beneficiary as a liability under its financial statement
      denominated "Funds Held by Beneficiary Under Reinsurance Treaties," and
      all amounts paid out of such Funds Held by the Beneficiary pursuant  to
      Section  5.4  shall   reduce  the  liability  of  the  Depositor.   Any
      securities in  excess  of  the amount  required  to  pay  or  reimburse
      Beneficiary for  the purposes  described herein  shall be  returned  to
      Depositor, its successor or  legal representative, upon the  conclusion
      of all  further  obligations  of Depositor  to  Beneficiary  under  the
      Reinsurance Agreement.

      5.6  In the  event  the Beneficiary  takes  control of  the  securities
      pursuant to  Section  5.3, the  Depositor  shall remain  obligated  for
      amounts due under the Reinsurance Agreement  and shall be obligated  to
      maintain in the Funds Held by Beneficiary a value at least equal to the
      Unearned Premium and Loss Reserves in accordance with Section 3.1.  The
      Depositor's rights and obligations  to withdraw and deposit  securities
      from the Funds Held shall be the same as when the securities were  held
      in the Fund by the Custodian as provided in Section 3.

 SECTION 6.     INTEREST, DIVIDENDS AND EXPENSES
                --------------------------------

      6.1  Any interest, dividends or other investment income generated  from
      the securities held  by Custodian shall  remain in  the Fund,  subject,
      however, to  Depositor's right  to withdraw  assets  from the  Fund  in
      accordance with Sections 3.2  and 3.3.  Depositor  shall be liable  for
      reporting and paying any income taxes arising therefrom.

      6.2  Also,  Depositor  will  receive  the  benefit  of  the   interest,
      dividends or  other investment  income  generated from  any  securities
      taken and held by the Beneficiary pursuant to Section 5.3.

      6.3  All fees and expenses  charged by the  Custodian for its  services
      under the terms of this Agreement shall be paid by the Depositor.

 SECTION 7.     CUSTODIAN'S AGREEMENT
                ---------------------

      7.1  The Custodian agrees to hold and  disburse the Fund in  accordance
      with  the  provisions  expressed  herein.   Custodian   shall  disburse
      securities to  the Beneficiary  upon receipt  of  a duly  executed  and
      completed Affidavit by Beneficiary in accordance with the form attached
      hereto as Exhibit "A".   Custodian is authorized  and directed by  both
      parties to act  upon such instructions  in compliance herewith  without
      inquiry as to the accuracy of the facts and statements made in any such
      affidavit and  without  regard  to  protest  by  any  party;  provided,
      however, Custodian would not be expected  to act contrary to any  court
      order or any arbitration directive pursuant to Section 11, supported by
      the affidavit of two of the three arbitrators.

      7.2  The Fund  shall be  (i)  in the  possession  of Custodian  at  its
      offices in Memphis, Tennessee,  (ii) kept separate  and apart from  any
      assets of the Custodian and any other securities held by the  Custodian
      for whomever and for whatsoever purpose, (iii) clearly identifiable  as
      securities subject  to  this  Agreement  at  all  times  while  in  the
      possession of the Custodian, and (iv) in such form that the Beneficiary
      or the Custodian upon  the direction of  the Beneficiary may,  whenever
      necessary, negotiate any securities in the Fund, without the consent or
      signature from the Depositor or any other person or entity.

      7.3  The Custodian shall not  deposit any securities  of the Fund  with
      correspondent banks, investment  bankers, brokers or  any other  third-
      party nor  shall such  securities be  pledged  or hypothecated  by  the
      Custodian in  any manner  nor  shall such  securities  be used  by  the
      Custodian in any manner for the benefit of the Custodian.

      7.4  The Custodian shall on request of the Beneficiary, the  Depositor,
      certify in  writing  the  securities held  by  the  Custodian  for  the
      Beneficiary, which certification shall include  the name of the  issuer
      of each security,  the class of  security, the "cusip"  number of  each
      security, the number of shares of  units, and the face amounts of  such
      securities.

      7.5  The Custodian shall  fully and  completely respond  to any  direct
      inquiries of any  duly authorized  insurance regulatory  agency of  any
      state concerning  the  Fund, including,  but  not limited  to  detailed
      inventories of securities or funds, and  the Custodian will permit  the
      representative of any such regulatory agency  to examine and audit  all
      securities or funds held hereunder.

      7.6  The Custodian  agrees  to  provide copies  of  monthly  activities
      reports to  the  Beneficiary and  the  Depositor as  soon  as  possible
      following the end of each month, which reports shall show all deposits,
      withdrawals, substitutions and a listing of  securities in the Fund  as
      of the end of the month.  The Custodian agrees to notify the  Depositor
      and the Beneficiary within 10 days  of any deposits to, or  withdrawals
      from the Fund.

      7.7  The Custodian  hereby waives  any right  of offset  and all  other
      rights and remedies against or affecting the Fund.

      7.8  The Custodian  may at  any time  resign  from, and  terminate  its
      capacity hereunder by written notice of resignation, effective not less
      than 90 days after receipt by  both the Beneficiary and the  Depositor.
      However, no such resignation by the Custodian shall be effective  until
      a successor to the Custodian shall have been duly appointed as provided
      in this Agreement and  all the securities and  assets in the Fund  have
      been duly transferred to such successor.  The Beneficiary, upon receipt
      of such notice, shall undertake to obtain the agreement of a qualified,
      successor depository, agreeable to the Depositor, to act in  accordance
      with all agreements of  the Custodian herein.   A qualified  depository
      shall be any United States financial institution member of the  Federal
      Reserve System.  Depositor agrees not to unreasonably withhold approval
      if the  depository  so chosen  has  capital  and surplus  of  at  least
      $100,000,000.   Upon  the  Custodian's delivery  of  the  Fund  to  the
      qualified, successor depository, along with a closing statement showing
      all activities (as contemplated in Section  7.6) from the last  monthly
      report, the Custodian shall  be discharged of further  responsibilities
      hereunder.

 SECTION 8.     CUSTODIAN'S RESPONSIBILITY
                --------------------------

      8.1  The Custodian shall in no way  be responsible for determining  (a)
      market value or  rating of  the initial  deposit of  securities by  the
      Depositor, (b) market  value or rating  of any securities  as may  from
      time to  time  be substituted  by  the  Depositor, (c)  the  amount  of
      securities required to be deposited by the Depositor, or (d) monitoring
      whether or not the securities conform to investment requirements.

      8.2  The Custodian is not a  party to, and is  not bound by or  charged
      with notice of the Reinsurance Agreement or any other agreement out  of
      which this Agreement may arise.

      8.3  The  Custodian  is  not  responsible  or  liable  in  any   manner
      whatsoever for the sufficiency, correctness, genuineness or validity of
      the subject matter of  this Agreement or any  part thereof, or for  the
      form or execution thereof, for the identity or authority of any  person
      executing or depositing it.

      8.4  The Custodian  shall  be  protected in  acting  upon  any  written
      notice, request,  affidavit,  waiver,  consent,  certificate,  receipt,
      authorization, power of attorney or other  paper or document which  the
      Custodian in good faith believes to be genuine and what purports to  be
      from the Beneficiary or the Depositor.

      8.5  The Custodian  shall  be  indemnified  and  not  held  liable  for
      anything which it may do or refrain from doing in connection  herewith,
      except its own negligence, willful misconduct,  lack of good faith,  or
      breach of fiduciary duty.

      8.6  Notwithstanding anything else  contained herein  to the  contrary,
      the Custodian acknowledges liability for  any certificates lost due  to
      theft or  any  error  or  omission  or  other  comparable  act  of  the
      Custodian, or authorized representative  thereof, and Custodian  agrees
      that it shall maintain fidelity or other insurance coverage  applicable
      to such liability  which shall  be in addition  to the  full faith  and
      credit of the Custodian therefor.

 SECTION 9.     ACCESS TO RECORDS
                -----------------

      9.1  The Beneficiary  and the  Depositor shall  have the  right at  any
      reasonable time to examine all papers in the possession of each  other,
      or with  the  Custodian, applicable  to  this Agreement  and  the  Fund
      deposited and maintained hereunder.

 SECTION 10.    TERMINATION
                -----------

      10.1 This Agreement shall terminate and the Custodian shall release and
      deliver to the Depositor all securities held pursuant to this Agreement
      upon receipt by the Custodian of  written notice from Beneficiary  that
      Depositor's obligations under  the Reinsurance  Agreement for  Unearned
      Premium and Loss Reserves  have been discharged, including  obligations
      for the "run-off" of any business subject to the Reinsurance Agreement.

      10.2 The termination of the  Reinsurance Agreement shall not  terminate
      this Agreement, but Depositor  shall continue to  pay claims under  the
      terms of  the  Reinsurance  Agreement as  if  there  were  no  security
      provided under this Agreement,  subject, however, to Depositor's  right
      to withdraw securities from the Fund  in accordance with Section 3,  or
      to receive  any  excess  securities held  by  Beneficiary  pursuant  to
      Section 5.5.

 SECTION 11.    ARBITRATION
                -----------

      11.1 It  is  agreed   between  Beneficiary  and   Depositor  that   any
      disagreement  between   such   parties  regarding   the   construction,
      application, or implementation  of this Agreement  may be submitted  to
      arbitration  pursuant  to  arbitration  provisions  contained  in   the
      Reinsurance Agreement.  However, questions arising out of Section 3  or
      Section 5 require an expedited resolution pursuant to these provisions.

      11.2 The party  invoking  arbitration  with respect  to  Section  3  or
      Section 5 shall notify  the other party and  shall provide the name  of
      its designated arbitrator at that time.  The second party shall have 15
      days from  receipt of  notice to  designate its  arbitrator, who  shall
      contact  the  first  arbitrator to  select  a  third  arbitrator.  Both
      arbitrators shall use their best efforts  to obtain a third  arbitrator
      within   30   days.   Once   chosen,  the   three  arbitrators   should
      expeditiously resolve  the issues  presented by  the parties.   If  the
      party receiving notice of intent to  arbitrate does not provide  notice
      of its arbitrator within the 15  day period required, such party  shall
      be deemed to have waived its  right to designate the second  arbitrator
      and  the  arbitrator  first  designated  shall  designate  the   second
      arbitrator.  The arbitrators shall be disinterested, active or  retired
      officers of property and casualty insurance companies.  The arbitration
      provisions of the Reinsurance Agreement may be referred to for guidance
      as to matters not specifically provided herein.

      11.3 The Beneficiary and the Depositor agree  to be bound by the  final
      or any interim  findings and directives  of the arbitrators,  including
      the immediate deposit or return of securities or assets to the Fund  if
      so directed.

 SECTION 12.    CONSTRUCTION AND EFFECT
                -----------------------

      12.1 This Agreement  and  all  proceedings  pursuant  hereto  shall  be
      governed by the laws of the State of Texas.

      12.2 This Agreement  shall  be binding  upon  and shall  inure  to  the
      benefit of the parties hereto, their successors and assigns.

      12.3 In the  event of  the  failure of  the  Depositor to  perform  its
      obligations under  the  terms  of this  Agreement  or  the  Reinsurance
      Agreement, the  Depositor, at  the request  of the  Beneficiary,  shall
      submit to the jurisdiction  of any court  of competent jurisdiction  in
      any State  of the  United States,  will  comply with  all  requirements
      necessary to give such court jurisdiction, and will abide by the  final
      decision of such court  or of any  Appellate Court in  the event of  an
      appeal.

      12.4 The Depositor shall designate the State Board of Insurance in  the
      state in which business is produced,  or a designated attorney, as  its
      true and lawful attorney upon whom may be served any lawful process  in
      any action,  suit or  proceeding  instituted by  or  on behalf  of  the
      Beneficiary. This provision, however, is not intended to conflict  with
      or override the obligation of the parties to arbitrate their disputes.

 SECTION 13.    NOTICES
                -------

      13.1 Unless  otherwise  specifically  provided  herein,  every   notice
      required or permitted to be given  under this Agreement shall be  given
      in writing to an officer of the party to whom it is directed by  actual
      delivery to  the address,  or by  telecopy message  to the  number,  as
      follows:

                Depositor:

                American Hallmark Insurance Company of Texas
                14651 Dallas Parkway Suite 900
                Dallas, TX 75240
                Telecopy: 972-788-0520

                Beneficiary:

                State And County Mutual Fire Insurance Company
                8200 Anderson Boulevard
                Fort Worth, Texas 76120
                Telecopy:  (817) 861-1051

                Custodian:

                First Tennessee Bank, National Association
                4385 Poplar Avenue
                Memphis, Tennessee 38117
                Telecopy: (901) 681-2540

                Attn:  Trust Department

           Any party to this  Agreement may change  the address and  telecopy
           number above set out  by giving the other  parties notice of  such
           change in the manner specified for notice in this Agreement.

 SECTION 14.    EFFECTIVE DATE
                --------------

      14.1 This Agreement shall be effective April 1, 2003.

      IN WITNESS  WHEREOF,  the  parties  hereto  by  their  respective  duly
 authorized officers have executed this Agreement.

 STATE AND COUNTY MUTUAL FIRE INSURANCE COMPANY

 By: _________________________________
 Its _________________________________

 AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS

 By: _________________________________
 Its _________________________________

 FIRST TENNESSEE BANK, NATIONAL ASSOCIATION

 By: _________________________________
 Its _________________________________

<PAGE>

                                  EXHIBIT A
                                  ---------

                  CERTIFICATION OF WITHDRAWAL OF SECURITIES
                  -----------------------------------------

      Reference is  made  to  that  certain  Security  Fund  Agreement  dated
 effective _______________, by and among ___________________, ____________ as
 "Depositor," __________________, as "Beneficiary," and First Tennessee Bank,
 National Association, as "Custodian"  (the "Agreement").   Section 5 of  the
 Agreement set forth circumstances under  which the Beneficiary may  withdraw
 securities from  the  Fund.   Beneficiary  hereby  certifies  to  Custodian,
 pursuant to  Section  7 of  the  Agreement,  that the  following  event  has
 occurred which entitles Beneficiary to withdraw securities from the Fund:

      Capitalized terms used herein and not otherwise defined shall have  the
 respective meanings ascribed to such terms in the Agreement.

      Dated:              STATE AND COUNTY MUTUAL FIRE
                          INSURANCE COMPANY

                          By:  _________________________________
                          Its: _________________________________

 THE STATE OF TEXAS  S
                     S
 COUNTY OF TARRANT   S

 I, ______________________, a Notary Public, do  hereby certify that on  this
 the __ day of ________, 200_, personally appeared before me ________________
 ______, who declared that he is _______________ of the corporation executing
 the foregoing instrument,  and being by  me first  duly sworn,  acknowledged
 that he signed the foregoing document in the capacity therein set forth  and
 declared that the statements therein contained are true.

 IN WITNESS WHEREOF, I hereunder set my hand and seal of office, the date and
 year before written.

                                    Notary Public in and
                                    for the State of Texas

                                    My Commission expires: ____________

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