WAIVER AND AMENDMENT NO. 1

                                       TO

          AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT


         THIS WAIVER AND  AMENDMENT  NO. 1  ("Amendment")  is entered into as of
August 12, 1998,  by and among  ALLSTATE  FINANCIAL  CORPORATION,  a corporation
organized  under the laws of the  Commonwealth  of  Virginia  ("Borrower"),  the
undersigned financial institutions  (collectively the "Lenders" and individually
a "Lender") and IBJ SCHRODER  BUSINESS  CREDIT  CORPORATION  as successor to IBJ
Schroder Bank & Trust Company ("IBJS"),  as agent for the Lenders (IBJS, in such
capacity, the "Agent).


                                                    BACKGROUND


         Borrower,  Agent and Lenders  are  parties to an Amended  and  Restated
Revolving  Credit  Loan and  Security  Agreement  dated  as of May 17,  1997 (as
amended,  supplemented  or  otherwise  modified  from  time to time,  the  "Loan
Agreement")  pursuant to which Agent and Lenders  provide  Borrower with certain
financial accommodations.

         Borrower has requested  that Agent and Lenders waive certain  Events of
Default and amend certain financial  covenants and Agent and Lenders are willing
to do so on the terms and conditions hereafter set forth.

         NOW,  THEREFORE,  in  consideration  of any loan or advance or grant of
credit  heretofore or hereafter  made to or for the account of Borrower by Agent
and  Lenders,  and for other good and  valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

     1.  Definitions.  All capitalized  terms not otherwise defined herein shall
have the meanings given to them in the Loan Agreement.


     2. Amendment to Loan  Agreement.  Subject to satisfaction of the conditions
precedent set forth in Section 4 below,  the Loan Agreement is hereby amended as
follows:


     (a)  Section  7.19 of the Loan  Agreement  is  amended in its  entirety  to
provide as follows:

     7.19.  Financial  Covenants.  Breach,  on a consolidated  basis, any of the
following financial  covenants,  each of which shall be calculated in accordance
with GAAP as in effect on the Effective Date:

     (a) (i) On the last day of each Fiscal Quarter  commencing  with the Fiscal
Quarter ended September 30, 1998, the ratio of (A) EBIT to (B) interest  expense
(other than interest expense in respect of the Convertible,  Senior Subordinated
Notes) for (w) the Fiscal  Quarter ended  September 30 1998,  (x) the two Fiscal
Quarters ended December 31, 1998 (taken as one accounting period), (y) the three
Fiscal Quarters ended March 31, 1999 (taken as one accounting  period),  and (z)
the four Fiscal Quarters ended on the last day of each Fiscal Quarter commencing
with the Fiscal  Quarter ended June 30, 1999 (taken as one  accounting  period),
shall not be less than 3:1; and


     (ii) On the last day of each  Fiscal  Quarter  commencing  with the  Fiscal
Quarter ended  September 30, 1998,  the ratio of (A) EBIT to (B) total  interest
expense for (w) the Fiscal  Quarter ended  September 30 1998, (x) the two Fiscal
Quarters ended December 31, 1998 (taken as one accounting period), (y) the three
Fiscal Quarters ended March 31, 1999 (taken as one accounting  period),  and (z)
the four Fiscal Quarters (taken as one accounting  period) ended on the last day
of each Fiscal Quarter  commencing  with the Fiscal Quarter ended June 30, 1999,
shall not be less than 2:1.



     (b) On the  last  day of  each  Fiscal  Quarter,  the  ratio  of (i)  Total
Liabilities  to (ii) Tangible Net Worth plus the aggregate  principal  amount of
Convertible, Senior Subordinated Notes then outstanding shall not exceed 2:1.

     (c) (1) The sum of (i) Tangible Net Worth plus (ii) the aggregate principal
amount of Convertible,  Senior  Subordinated  Notes  outstanding  shall equal or
exceed  $25,200,000  on June 30,  1998,  and (2) on the  last day of any  Fiscal
Quarter  thereafter,  the sum of (i) Tangible Net Worth plus (ii) the  aggregate
principal  amount of Convertible,  Senior  Subordinated  Notes then  outstanding
shall  equal or exceed  the sum of (x)  $25,200,000  and (y)  $10,000  times the
number of Fiscal  Quarters  elapsed from June 30, 1998 to the end of such Fiscal
Quarter.


     (d)  (i)  Net  cash  advanced  to any  Client  by  Borrower  (net  of  Risk
Participations  sold with respect to such  Client)  shall not at any time exceed
15% of the sum of (x) Borrower's  Tangible Net Worth (on a  consolidated  basis)
and (y) the aggregate principal amount of Convertible, Senior Subordinated Notes
outstanding  at such time,  except that net cash  advances to MGV  International
("MGV"),   Jarnow  Corporation  ("Jarnow")  and  United  Plastics  International
Corporation  ("UPIC") by Borrower (net of Risk  Participations sold with respect
to each such Client) may exceed 15% of the sum of clauses (x) and (y), but shall
at no time exceed (A) with  respect to Jarnow and UPIC (X) (until  December  31,
1998) 25% of the sum of clauses (x) and (y)  calculated  as of March 31, 1998 or
(y) (after  December 31, 1998) 25% of the sum of clauses (x) and (y)  calculated
as of the  date  such  determination  is  made  and  (B)  with  respect  to MGV,
$6,500,000.00;  provided  however,  that in the  event  at any time the net cash
advances  by  Borrower  to any  two  of  MGV,  Jarnow  and  UPIC  (net  of  Risk
Participations  sold with  respect to each such Client) do not exceed 15% of the
sum of  clauses  (x) and (y),  net cash  advances  to any one  other  Client  by
Borrower  (net of Risk  Participations  sole with  respect to such  Client)  may
exceed  15%,  but shall  not  exceed  20%,  of the sum of  clauses  (x) and (y);
provided further,  however,  that in the event at any time the net cash advances
by  Borrower  to every one of MGV,  Jarnow and UPIC (net of Risk  Participations
sold with  respect to each such  Client) do not exceed 15% of the sum of clauses
(x) and (y), net cash advances to any two other Clients by Borrower (net of Risk
Participations  sold with respect to each such Client) may exceed 15%, but shall
not exceed 20%, of the sum of clauses (x) and (y); and (ii) net cash advanced by
Borrower  (net of Risk  Participations)  with respect to  Receivables  owed by a
single  Account  Debtor  shall  not at any  time  exceed  25% of the  sum of (x)
Borrower's  Tangible Net Worth (on a  consolidated  basis) and (y) the aggregate
principal amount of Convertible,  Senior  Subordinated Notes outstanding at such
time.



     For purposes of this Section 7.19(d),  (x) each agency,  branch or division
of the Federal  government shall be treated as a separate Account Debtor and (y)
each insurance company under state workman's compensation  arrangements shall be
treated as a separate Account Debtor.


     (b)  Any  references  in the  Loan  Agreement  to the  Convertible,  Senior
Subordinated Notes shall be deemed to refer to the existing Convertible,  Senior
Subordinated  Notes as well as to any  Convertible,  Senior  Subordinated  Notes
which  may  be  issued  in  exchange  for  the  original   Convertible,   Senior
Subordinated  Notes, or which are issued to Value Partners in  consideration  of
Value  Partners  providing  loans  to  enable  Borrower  to repay  the  existing
Convertible,  Senior Subordinated Notes which are required to be redeemed at par
pursuant  to a Notice of  Fundamental  Charge  mailed  to  existing  holders  of
Convertible,  Senior  Subordinated  Notes on June 17, 1998. Any new Convertible,
Senior Subordinated Notes shall be subject to subordination provisions which are
acceptable  to Agent  and  Required  Lenders  (with the  existing  subordination
provisions  being  acceptable  to Agent and  Lenders),  have a maturity  date of
September 20, 2003, a fixed  interest  rate of 10% per annum and be  convertible
into common stock of the Borrower at $6.50 per share. All references in the Loan
Agreement  and any other  documents  shall be  deemed  to refer to the  existing
Convertible,  Senior  Subordinated Notes and to any notes issued in substitution
therefor  or  issued  to Value  Partners  in  exchange  for  money to be used by
Allstate to redeem any  existing  Convertible,  Senior  Subordinated  Notes.  No
Advances shall be used to redeem the existing  Convertible,  Senior Subordinated
Notes.


     3. Waiver. Subject to satisfaction of the conditions precedent set forth in
Section 4 below, Lender hereby waives the following Events of Default which have
occurred as a result of Borrower's  non-compliance with the following provisions
of the Loan Agreement on or prior to June 30, 1998:


     (a) Section  7.19, to the extent that such Event of Default arose solely as
a result of  Borrower's  failure to comply with clauses (a) - (d) thereof at and
for the four Fiscal Quarters ended June 30, 1998.

     (b) Section 10.14,  but only to the extent that such Event of Default arose
solely as a result of the  modification in May 1998 to the Board of Directors of
Borrower.

     4. Conditions of Effectiveness.  This Amendment shall become effective upon
satisfaction of the following  conditions  precedent:  Agent shall have received
(i) four (4) copies of this Amendment  executed by Borrower and Required Lenders
and consented and agreed to by each of the Guarantors, and (ii) an amendment fee
of  $15,000  for the  ratable  benefit  of  Lenders  (such fee may be charged to
Borrower's account).

     5. Representations and Warranties.  Borrower hereby represents and warrants
as follows:

     (a) This Amendment and the Loan Agreement,  as amended  hereby,  constitute
legal,  valid and binding  obligations of Borrower and are  enforceable  against
Borrower in accordance with their respective terms.

     (b) After given effect to this  Amendment,  Borrower  hereby  reaffirms all
covenants,  representations  and  warranties  made in the Loan  Agreement to the
extent  the same are not  amended  hereby  and  agree  that all such  covenants,
representations  and  warranties  shall be deemed to have been  remade as of the
effective date of this Amendment.


     (c) No Event of Default or Default has occurred and is  continuing or would
exist after giving effect to this Amendment.

     (d) Borrower has no defense, counterclaim or offset to the Obligations.

     6. Effect on the Loan Agreement.


     (a) Upon the effectiveness of Section 2 hereof,  each reference in the Loan
Agreement to "this Agreement,"  "hereunder," "hereof," "herein" or words of like
import shall mean and be a reference to the Loan Agreement as amended hereby.

     (b) Except as  specifically  amended herein,  the Loan  Agreement,  and all
other  documents,  instruments  and  agreements  executed  and/or  delivered  in
connection  therewith,  shall  remain in full force and  effect,  and are hereby
ratified and confirmed.

     7.  Governing  Law. This  Amendment  shall be binding upon and inure to the
benefit of the parties  hereto and their  respective  successors and assigns and
shall be governed by and construed in  accordance  with the laws of the State of
New York.

     8. Headings.  Section  headings in this  Amendment are included  herein for
convenience  of reference only and shall not constitute a part of this Amendment
for any other purpose.

     9.  Counterparts.  This  Amendment may be executed by the parties hereto in
one or more  counterparts,  each of which shall be deemed an original and all of
which when taken together shall constitute one and the same agreement.




<PAGE>




         IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first written above.


                 ALLSTATE FINANCIAL CORPORATION

                 By:_______________________________
                      Name:
                      Title:


                 IBJ SCHRODER BUSINESS CREDIT CORPORATION, as Agent and Lender

                 By:_______________________________
                      Name:
                      Title:


                 NATIONAL BANK OF CANADA, as Lender

                 By:_______________________________
                      Name:
                      Title:


                 By:_______________________________
                      Name:
                      Title:



CONSENTED AND AGREED TO:

LIFETIME OPTIONS, INC., A
VIATICAL SETTLEMENT COMPANY


By:
      Name:
      Title


                                        [SIGNATURES CONTINUED ON NEXT PAGE]


1026981.1/SJS/25254/010  3/31/99
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PREMIUM SALES NORTHEAST, INC.


By:
      Name:
      Title


RECEIVABLE FINANCING CORPORATION


By:
      Name:
      Title


BUSINESS FUNDING OF FLORIDA, INC.


By:
      Name:
      Title


BUSINESS FUNDING OF AMERICA, INC.


By:
      Name:
      Title


SETTLEMENT SOLUTIONS, INC.


By:
      Name:
      Title


AFC HOLDING CORPORATION


By:
      Name:
      Title


1026981.1/SJS/25254/010  3/31/99
                                                       3


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