FIRST SUPPLEMENTAL
                                 TRUST INDENTURE
                     ALLSTATE FINANCIAL CORPORATION, ISSUER

         This First  Supplemental  Trust  Indenture,  dated as of March 11, 1999
(this  "Supplemental  Indenture"),  is  [executed  by*] [made by and  between**]
Allstate  Financial  Corporation  (together  with any  successor  to its rights,
duties and obligations hereunder, the "Issuer")[, and ___________ (together with
any successor trustee hereunder, the "Trustee")**].

         WHEREAS,  the Issuer  has  heretofore  executed  and  delivered  [those
certain 10% Convertible Subordinated Notes (the "Notes") in the principal sum of
$4,961,000.00  dated as of September 14, 1998, to which is attached Exhibit "A",
the terms and  provisions  thereof  which shall  constitute  an Indenture in the
event of appointment  of an Indenture  Trustee*]  [that certain Trust  Indenture
dated as of September  14, 1998,  together  with those  certain 10%  Convertible
Subordinated Notes thereunder (the "Notes")**] (the "Indenture"); and

         WHEREAS, the Indenture provides in Section 8.2 thereof that the Issuer,
when  authorized  by a  resolution  of  the  Board  of  Directors  [and  by  the
Trustee**],  may with the  consent of the Holders of not less than a majority in
aggregate  principal  amount  of the  Notes  at the  time  outstanding,  add any
provisions to or change in any manner or eliminate any of the  provisions of the
Indenture or of any supplemental indenture or modify in any manner the rights of
the Holders of the Notes,  except under  certain  circumstances  not  applicable
herein; and

         WHEREAS, the Issuer [and the Trustee**], with the consent of a majority
of the holders of the aggregate  principal amount of the Notes outstanding,  now
[desires*]  [desire**]  to amend the  Indenture  for the  purpose  of  modifying
certain provisions of the Indenture regarding Section 3.16, entitled Earnings to
Debt Coverage; and

         WHEREAS, the execution and delivery of this Supplemental  Indenture has
been duly and validly  authorized  in all  respects by the Board of Directors of
the Issuer; and

         NOW, THEREFORE, in consideration of the mutual understandings, promises
and agreements herein contained and other good and valuable  consideration,  the
sufficiency  of which are hereby  acknowledged,  the Issuer [does*] [and Trustee
do**]covenant and agree hereby,  for the equal and proportionate  benefit of the
respective Holders from time to time of the Notes, as follows:


* Delete upon execution of the Form of Indenture by the Issuer and Trustee, if
named.
** Insert upon execution of the Form of Indenture.

Supplement - Allstate                                 -1-


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                                    ARTICLE I

                       DEFINITIONS AND STATUTORY AUTHORITY

     Section  1.1.  Supplemental  Indenture.  This  Supplemental  Indenture is a
Supplemental  Indenture  and is  adopted  in  accordance  with  Article 8 of the
Indenture.

     Section 1.2. Definitions.

     (A) Unless the context shall require otherwise, all defined terms contained
in the Indenture  shall have the same respective  meanings in this  Supplemental
Indenture as such defined terms are given in the Indenture.


         (B) As  used  in  this  Supplemental  Indenture,  except  as  otherwise
expressly provided or unless the context shall require otherwise:

     (1) This  "Supplemental  Indenture"  means this  instrument  as  originally
executed or as it may, from time to time, be  supplemented  or amended by one or
more  supplemental  indentures  hereto  entered into pursuant to the  applicable
provisions of the Indenture.

     (2) All references in this instrument to designated "Articles," "Sections,"
and other  subdivisions  are to the  designated  Articles,  Sections,  and other
subdivisions of this instrument as originally executed.


     Section  1.3.  Indenture  to  Remain in Force.  Except as  amended  by this
Supplemental  Indenture,  the Indenture shall remain in full force and effect as
to matters covered therein.



     Section 1.4.  Successors and Assigns.  All covenants and agreements in this
Supplemental  Indenture by the Issuer [and the Trustee**] shall bind the Holders
of the Notes, the Issuer,  [the Trustee **] and their respective  successors and
assigns, whether so expressed or not. 

     Section  1.5.   Benefits  of  Supplemental   Indenture.   Nothing  in  this
Supplemental  Indenture  or in the  Notes,  express or  implied,  shall give any
Person, other than the parties hereto, their respective successors hereunder and
the Holders of the

     Note, any benefit or any legal or equitable  rights,  remedy or claim under
this Supplemental Indenture.

     Section 1.6. Governing Law. This Supplemental  Indenture shall be construed
in accordance and governed by the laws of the State of Virginia. 



* Delete upon execution of the Form of Indenture by the Issuer and Trustee, if
   named.
** Insert upon execution of the Form of Indenture.

Supplement - Allstate                                 -2-


<PAGE>



                                   ARTICLE II

                             AMENDMENTS TO INDENTURE

     Section 2.1.  Earnings to Debt  Coverage.  Section 3.16 of the Indenture is
deleted in its entirety and replaced in full by the following,  which shall read
in its entirety as follows:



                  Section  3.16  Earnings to Debt  Coverage.  On the last day of
each fiscal quarter  commencing with the fiscal quarter ended December 31, 1998,
the ratio of (A) EBIT to (B) total  interest  expense for (w) the fiscal quarter
ended December 31, 1998, (x) the fiscal two quarters ended March 31, 1999 (taken
as one  accounting  period),  (y) the fiscal three  quarters ended June 30, 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 September 30, 1999, shall not be less than 1.5:1.


                                   ARTICLE III

                                  MISCELLANEOUS

     Section 3.1.  Ratification  and  Reaffirmation.  The Issuer [and Trustee**]
hereby  [ratifies  and  reaffirms*]  [ratify and  reaffirm**]  all the terms and
conditions of the Indenture,  as specifically  amended and  supplemented by this
Supplemental Indenture, and [each**] hereby 
[acknowledges*]  [acknowledge**]  that the Indenture  remains in full force
and effect, as so amended and supplemented.


     Section 3.2. Execution and Counterparts. This Supplemental Indenture may be
executed in several counterparts, all of which shall constitute one and the same
instrument  and each of which shall be, and shall be deemed to be, an  original.



     Section 3.3 Security Holder Consent.  The consenting  Security Holders will
execute  this  document  solely to signify  their  consent to this  Supplemental
Indenture.


         IN WITNESS  WHEREOF,  the Issuer  [has*] [and the Trustee  each have**]
caused  this  Supplemental  Indenture  to be  signed  on its  behalf by its duly
authorized representative, all as of the date first hereinabove written.

                                                ALLSTATE FINANCIAL CORPORATION

                                           By:
                                                Name:             David Campbell
                                                Title:            President

                                                 **[Indenture Trustee Signature]

* Delete upon execution of the Form of Indenture by the Issuer and Trustee, if
  named.
** Insert upon execution of the Form of Indenture.

Supplement - Allstate                                 -3-


<PAGE>


                          Consent of Security Holders:

         The  below  designated  Security  holders  of the  Indenture,  by their
execution hereof, consent to the First Supplemental Trust Indenture.


                                      VALUE PARTNERS, LTD.

                                      By:_____________________________
                                      Name:  Timothy G. Ewing
                                      Managing Partner of Ewing & Partners
                                      General Partner of Value Partners, Ltd.



* Delete upon execution of the Form of Indenture by the Issuer and Trustee, if
  named.
** Insert upon execution of the Form of Indenture.

Supplement - Allstate                                 -4-


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