SECURITY NATIONAL FINANCIAL CORP
SETTLEMENT AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>SETTLEMENT AGREEMENT
<TEXT>


                              SETTLEMENT AGREEMENT


     THIS  SETTLEMENT  AGREEMENT  (the  "Agreement")  is made and  entered  into
effective as of December 31, 1999, by and among CAPITOL INDEMNITY CORPORATION, a
Wisconsin  corporation  ("Capitol  Indemnity"),  GEORGE A. FAIT ("George Fait"),
President  of  Capitol  Indemnity,  JOEL G. FAIT  ("Joel  Fait"),  an officer of
Capitol Indemnity,  SECURITY NATIONAL FINANCIAL CORPORATION,  a Utah Corporation
("Security  National"),   SECURITY  NATIONAL  LIFE  INSURANCE  COMPANY,  a  Utah
corporation  and  a  wholly-owned  subsidiary  of  Security  National,  SOUTHERN
SECURITY LIFE INSURANCE COMPANY, a Florida corporation ("Southern Security") and
SSLIC HOLDING  COMPANY,  a Florida  corporation,  formerly  known as CONSOLIDARE
ENTERPRISES, INC. ("Consolidare").

                                   WITNESSETH:

     WHEREAS,  Capitol  Indemnity,  George  Fait  and Joel  Fait  are  currently
shareholders of Southern  Security,  with Capitol Indemnity the owner of 151,871
shares of common stock ("Common  Stock") of Southern  Security,  George Fait the
owner of 33,000 shares of Common Stock of Southern  Security,  and Joel Fait the
owner  of  2,000  shares  of  Common  Stock of  Southern  Security  (hereinafter
collectively referred to as the "Shares");

     WHEREAS,  on November 4, 1998,  Capitol  Indemnity  and the State of Idaho,
Department of Insurance,  as Rehabilitator for Universe Life Insurance  Company,
an Idaho  corporation,  instituted  an action  against  Consolidare  and  George
Pihakis,  Samuel P. Brewer,  Stephen Reck, A. Thomas Frank,  Frank A. Hulet,  C.
Wesley Johnston, Lewis E. Kassis, Robert L. Martin, Charles W. Mullenix,  Ferris
S. Ritchey, Jr., John M. Roehm, David C. Thompson, Nikki Clark and Lloyd Zobrist
(collectively,  the  "Individual  Defendants"),  that  action  being  styled and
denominated as Capitol Indemnity Corp., et al. v. Consolidare Enterprises, Inc.,
et al., Case No. 98-2286-CA-16-K, pending in the Circuit Court of the Eighteenth
Judicial Circuit, Seminole County Florida;

     WHEREAS,  on December 17, 1998,  Security National through its wholly-owned
subsidiary,  Security  National  Life  Insurance  Company,  acquired  all of the
outstanding  shares of  common  stock of  Consolidare,  which  owned at  closing
approximately  57.4% of the  outstanding  shares  of  Common  Stock of  Southern
Security;

     WHEREAS, Consolidare desires to purchase all of the Shares owned by Capitol
Indemnity, George Fait and Joel Fait at an agreed upon price of $8.50 per share,
provided  that  Capitol  Indemnity  dismiss  its claims  with  prejudice  in the
above-entitled action against Consolidare and the Individual Defendants;

     WHEREAS, Capitol Indemnity,  George Fait and Joel Fait desire to sell their
shares of Common  Stock of Southern  Security to  Consolidare  at an agreed upon
price of $8.50 per share  and,  as a  condition  to such sale of stock,  Capitol
Indemnity  agrees to dismiss its claims with  prejudice in the  above-referenced
action against Consolidare;

     WHEREAS,  Security  National,  Security National Life Insurance Company and
Southern Security will guarantee the payments by Consolidare for the purchase of
the Shares; and

     WHEREAS, the parties to this Agreement,  in order to reduce the expense and
inconvenience  incident  to  further  litigation,   now  desire  to  settle  the
above-entitled  civil action on condition that  Consolidare  purchase all of the
Shares  of Common  Stock of  Southern  Security  collectively  owned by  Capitol
Indemnity,  George Fait and Joel Fait, that Security National, Security National
Life Insurance  Company and Southern  Security  guarantee payment by Consolidare
for the  purchase  of the  Shares,  and that  Southern  Security  pay the sum of
$5,000.00 to Capitol Indemnity and that Security National, Southern Security and
Consolidare  assign  their  rights to  Capitol  Indemnity  to  receive a $35,000
contribution   from  National  Union  Fire  Insurance   Company  of  Pittsburgh,
Pennsylvania  in  settlement  of the  claims  asserted  against  the  Individual
Defendants.

     NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth  herein,  and other  good and  valuable  consideration,  the  receipt  and
adequacy of which each party does hereby  acknowledge,  the parties hereto agree
as follows:


                                       17

     1. Capitol  Indemnity hereby agrees to dismiss its claims with prejudice in
the above-entitled  action against Consolidare and the Individual Defendants and
hereby authorizes Foley & Lardner, its counsel of record, to sign on its behalf,
immediately  upon the execution of this  Agreement,  the  Stipulation  and Joint
Motion for  Dismissal  with  Prejudice,  a copy of which is  attached  hereto as
Exhibit A, and to arrange for the filing of said Stipulation with the court.

     2. Capitol  Indemnity  agrees to sell,  transfer and deliver to Consolidare
and  Consolidare  agrees to purchase from Capitol  Indemnity  151,871  shares of
Common  Stock of Southern  Security.  These shares of Common Stock shall be sold
and  delivered  to   Consolidare   upon  the  execution  of  this  Agreement  in
consideration  for  Consolidare  making  payments  to Capitol  Indemnity  in the
principal  amount  of  $1,290,903.50,   payable  as  follows:  (a)  the  sum  of
$645,451.75 to be paid in certified funds upon execution of this Agreement;  and
(b) five annual  payments,  beginning one year from the  effective  date of this
Agreement,  each payment in the principal amount of $129,090.35 plus interest on
the unpaid  principal  balance at a rate of 6-1/2% per annum until the principal
and accrued interest thereon have been paid in full.

     3. George  Fait agrees to sell,  transfer  and deliver to  Consolidare  and
Consolidare agrees to purchase from George Fait 33,000 shares of Common Stock of
Southern  Security.  These shares of Common Stock shall be sold and delivered to
Consolidare  upon execution of this Agreement in  consideration  for Consolidare
making payments to George Fait in the principal  amount of $280,500.00,  payable
as  follows:  (a) the sum of  $140,250.00  to be paid in  certified  funds  upon
execution of this Agreement;  and (b) five annual  payments,  beginning one year
from the effective date of this Agreement,  each payment in the principal amount
of $28,050.00 plus interest on the unpaid principal  balance at a rate of 6-1/2%
per annum until the  principal  and accrued  interest  thereon have been paid in
full.

     4. Joel Fait  agrees to sell,  transfer  and  deliver  to  Consolidare  and
Consolidare  agrees to purchase  from Joel Fait 2,000  shares of Common Stock of
Southern  Security.  These shares of Common Stock shall be sold and delivered to
Consolidare  upon execution of this Agreement in  consideration  for Consolidare
making payments to Joel Fait in the principal  amount of $17,000.00,  payable as
follows:  (a) the sum of $8,500.00 to be paid in certified  funds upon execution
of this  Agreement;  and (b) five annual  payments,  beginning one year from the
effective  date of this  Agreement,  each  payment  in the  principal  amount of
$1,700.00 plus interest on the unpaid principal  balance at a rate of 6-1/2% per
annum until the principal and accrued interest thereon have been paid in full.

     5. Consolidare shall execute and deliver to Capitol Indemnity,  George Fait
and Joel Fait upon  execution of this Agreement  promissory  notes (the "Notes")
bearing  interest  at a rate of 6-12% per annum,  which  shall  provide  for the
payments  required to be made by Consolidare  pursuant to paragraphs 2 through 4
of this Agreement.

     6. Security National, Security National Life Insurance Company and Southern
Security shall execute and deliver Guarantees to Capitol Indemnity,  George Fait
and Joel Fait upon execution of this Agreement, which shall guarantee payment of
the Notes.

     7.  Consolidare may at any time prepay any balance owed on any of the Notes
to be issued to Capitol  Indemnity,  George Fait or Joel Fait hereunder  without
premium or penalty by paying the  principal  balance owed on any such Notes plus
the interest thereon at a rate of 6-1/2% per annum to the date of such payment.

     8. Security National agrees upon execution of this Agreement to pay the sum
of $5,000.00 to Capitol Indemnity on behalf of the Individual Defendants in full
settlement of all claims  asserted by Capital  Indemnity  against the Individual
Defendants in the  above-entitled  civil  action.  Security  National,  Southern
Security and Consolidare also agree to assign to Capitol  Indemnity their rights
to  the  $35,000.00   contribution  that  National  Fire  Insurance  Company  of
Pittsburgh,   Pennsylvania   is   prepared   to  make  in   settlement   of  the
above-referenced  action against the  Individual  Defendants as set forth in the
letter of March 2, 2000 from  Laurie  Beatus of  D'Amato & Lynch to Don B. Long,
Jr. of  Johnston,  Barton,  Proctor & Powell,  LLP, a copy of which is  attached
hereto as Exhibit "B" and by this reference made a part hereof.


                                       18

     9. Capitol Indemnity, George Fait and Joel Fait, singly and jointly, hereby
release, indemnify, and hold harmless Consolidare, and the Individual Defendants
from and against any and all claims,  suits, actions of any kind, whether legal,
administrative or other proceedings  brought or initiated by Capitol  Indemnity,
George Fait or Joel Fait relating to or in any way rising out of the acquisition
of  Consolidare  by Security  National  and  Security  National  Life  Insurance
Company.

     10.  Capitol  Indemnity,  George  Fait and Joel Fait,  singly and  jointly,
hereby release,  indemnify,  and hold harmless  Consolidare,  Southern Security,
Security  National,  Security National Life Insurance Company and the Individual
Defendants  from and  against any and all  claims,  suits,  actions of any kind,
whether  legal,  administrative  or other  proceedings  brought or  initiated by
Capitol  Indemnity,  George  Fait or Joel  Fait  against  Consolidare,  Southern
Security,  Security  National or Security National Life Insurance Company or any
of their  present  or past  directors,  officers  or  employees,  including  the
Individual  Defendants,  relating to or in any way arising out of the conduct of
the business and affairs of Consolidare, Southern Security, Security National or
Security National Life Insurance  Company by any of their respective  directors,
officers or employees prior to the date of this Agreement.

     11. Security National,  Security National Life Insurance Company,  Southern
Security, and Consolidare singly and jointly, hereby release, indeminfy and hold
harmless Capital  Indemnity,  George Fait and Joel Fait from and against any and
all claims,  suits, actions of any kind, whether legal,  administrative or other
proceedings  brought or initiated by Security  National,  Security National Life
Insurance Company,  Southern Security or Consolidare  against Capitol Indemnity,
George Fait or Joel Fait relating to or in any way arising out of the conduct of
the business and affairs of Consolidare,  Southern Security or Capital Indemnity
by any of their respective directors, officers or employees prior to the date of
this Agreement.

     12.  Each of the  parties  to  this  Agreement  (referred  to  herein  as a
"Representing  Party")  hereby  represents  and  warrants  to the other  parties
(referred to herein as the "Other Parties") that;

               (a)  Such  Representing  Party  has all  requisite  authority  to
               execute and deliver  this  Agreement  and to carry out and comply
               with the terms hereof;

               (b) This Agreement  constitutes a legal and binding obligation of
               the Representing Party, enforceable in accordance with its terms;

               (c) Neither the execution and delivery by the Representing  Party
               of this  Agreement,  nor  the  consummation  of the  transactions
               contemplated hereby, conflicts with or results in a breach of any
               of the  terms,  conditions  or  provisions  of any  agreement  or
               instrument to which the Representing Party is a party or by which
               the  Representing  Party is otherwise  bound,  or  constitutes  a
               default under any such agreement or instrument;

               (d) Each of the Parties  acknowledge  that they have received the
               benefit of separate  independent legal counsel in connection with
               the  negotiation  and  settlement of the matters  relating to and
               which are the subject matter of this Agreement. Capital Indemnity
               Corp.,  George  Fait and Joel Fait have been  represented  by the
               firm of Foley & Lardner of  Tallahassee,  Florida,  and  Security
               National,  Security  National Life Insurance Company and Southern
               Security  have been  represented  by the firm of  Mackey  Price &
               Williams of Salt Lake City, Utah; and

               (e) The  representations and warranties made herein shall survive
               the parties' execution and delivery of this Agreement.

     13. The Agreement and  undertakings  contained in this  Agreement have been
entered  into and made by the  parties  solely  for the  purpose  of  completely
settling and  compromising  claims which Capital  Indemnity has asserted against
Consolidare  and the Individual  Defendants in the  above-entitled  action,  any
liability  with  respect  to  any  such  claims  being  specifically  denied  by
Consolidare and the Individual Defendants named in the action.


                                       19

     14. The parties to this Agreement shall hold in strict confidence the terms
and conditions of this Agreement and shall not use any data or information  with
respect to this Agreement to the detriment of any other  parties,  provided that
the parties  hereto shall be entitled to disclose  such terms and  conditions as
may be required by law or a court of law or equity.

     15. The Representing  Parties will not, by words or actions, do anything or
issue any statements,  either orally or in writing,  that would tend to or would
disparage or defame the Other Parties or their reputations.

     16. Capital Indemnity,  George Fait and Joel Fait each hereby represent and
warrant to Security National, Security National Life Insurance Company, Southern
Security and Consolidare in connection with its purchase of the Shares of Common
Stock  of  Southern  Security  that  each  of  them  has  sufficient  investment
experience  to enable  them to  evaluate  the merits and risks of selling  their
Shares of Common Stock of Southern Security to Consolidare.  Capital  Indemnity,
George Fait,  and Joel Fait have  conducted all of the due diligence of Southern
Security,  its officers,  directors,  shareholders,  markets and prospects which
they have  deemed  necessary  in  evaluating  whether  to sell  their  Shares to
Consolidare.

     17. (a) The covenants and agreements contained herein shall be binding upon
and inure to the benefit of the successors and assigns of the respective parties
hereto;

          (b) The invalidity or unenforceability of any particular  provision in
          this Agreement shall not affect the other provisions  hereof, and this
          Agreement  shall be  construed  in all  respects as if such invalid or
          unenforceable provisions were omitted;

          (c) This  Agreement  sets  forth the  entire  understanding  among the
          parties  and shall not be  amended or  terminated  except by a written
          instrument duly executed by all the parties hereto;

          (d) This  Agreement  shall be  interpreted,  construed and enforced in
          accordance with and governed by the  substantive  laws of the state of
          Utah.

          (e) In the event any dispute or contest  shall arise  hereunder or any
          party  shall  breach  or  fail  to  perform  or  discharge  any of its
          obligations hereunder,  any party to this Agreement that shall prevail
          in  litigation  concerning  any such  dispute,  contest  or failure to
          perform or discharge, shall be entitled to an award against the losing
          party (or  jointly  against the losing  parties,  if more than one) of
          reasonable attorneys' fees and other costs incurred by such prevailing
          party (whether  incurred by such  prevailing  party (whether  incurred
          before or after commencement of such litigation);

          (f) Each party  agrees to and shall  forthwith  provide such other and
          further  assurances,  and agrees to and shall  forthwith  execute  and
          deliver such other and further instruments,  as any other party may at
          any  time  hereafter  reasonably  request  to  effectuate  any  of the
          purposes of this Agreement;

          (g)  Each  party  agrees  to  bear  its or his  own  costs,  including
          attorney's fees relating to the above-referenced action, including the
          preparation of this Agreement; and

          (h) This Agreement may be executed  simultaneously,  or in a number of
          counterparts,  each of which shall be deemed an  original,  but all of
          which together shall constitute one and the same Agreement.

     IN WITNESS WHEREOF,  the parties have executed this Agreement  effective as
of the date first above written.

                                    CAPITOL INDEMNITY CORPORATION


                                    By:____________________________________
                                    Its:____________________________




                                    _______________________________________
                                    George A. Fait


                                    _______________________________________
                                    Joel G. Fait


                                    SECURITY NATIONAL FINANCIAL CORPORATION


                                    By:____________________________________
                                    Its:____________________________

                                    SECURITY NATIONAL LIFE INSURANCE COMPANY



                                    By:____________________________________
                                    Its:____________________________

                                    SOUTHERN SECURITY LIFE INSURANCE COMPANY



                                    By:____________________________________
                                    Its:____________________________


                                    SSLIC HOLDING COMPANY, FORMERLY KNOWN AS
                                    CONSOLIDARE ENTERPRISES, INC.



                                    By:____________________________________
                                    Its:____________________________


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