The Board of Directors
                         Allstate Financial Corporation
                              July 2, 1998 - Page 1
                                  Craig Fishman
                              2687 Hillsman Street
                             Falls Church, VA 22043

                                  July 2, 1998


The Board of Directors
Allstate Financial Corporation
2700 South Quincy Street, Suite 540
Arlington, VA 22206

Gentlemen:

       Consistent with our  discussions,  the following are my suggestions as to
how to proceed in the best  interests  of Allstate  Financial  Corporation  (the
"Company"):

I.       Consulting Arrangements
         (following termination of
         Employment)

Nature of Consulting  Engagement:

     I will assist David  Campbell  (in  hiscapacity  as active  Chairman of the
Board) and/or the to-be-identified  replacement  President/CEO  address critical
transition  issues and I will  assist him (or them) with such other  tasks as he
(or they) may reasonably request.
I will use my best efforts when performing  consulting  services.  If either Mr.
Campbell or the  replacement  President/CEO  is not satisfied with my consulting
efforts or services, I expect him or them to so notify me immediately.

Consulting Period:

I  will  be  available  to  consult  as  an  independent  consultant  (see  "II.
Termination  of  Employment"  below) for up to 5 hours/week  from August 1, 1998
through September 30, 1998 (the "Initial
Consulting Period").

If requested by the Company,  I will make reasonable  efforts to be available to
consult  for  more  than 5  hours/week  from  time to time  during  the  Initial
Consulting Period.

Compensation During the Initial
Consulting Period and Thereafter:

The first 5 hours/week of  consultation  in any calendar week during the Initial
Consulting Period will be at no cost to the Company.






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The Board of Directors
Allstate Financial Corporation
July 2, 1998 - Page 2

     Consultation  in excess of 5  hours/week  in any  calendar  week during the
Initial  Consulting Period or consultation  beyond the Initial Consulting Period
will be billed and paid at $250/hour.

II.      Termination of Employment

Termination/Termination Date:


     For  purposes of  severance  benefits  under my  employment  agreement,  my
employment  will be terminated by the Company  without cause  effective July 31,
1998.  Until July 31,  1998, I will  continue to be a full time  employee of the
Company  compensated  at an annual rate of $220,000 paid at the same time as all
other employees.

     For all other purposes including,  without  limitation,  press releases and
employment references, my departure from the Company is by mutual agreement.

Severance Payments and Other
Lump Sum Benefits:

     Contractual  Benefits: On July 31, 1998, the Company will pay me 5.5 months
severance  (i.e.,  $100,833.50)  in a lump sum plus  accrued  salary and accrued
vacation (approximately 180 hours).

     On September  30, 1998,  the Company will pay me the  remaining  5.5 months
severance due under my employment contract (i.e., an additional  $100,833.50) in
a lump sum.

     The  Company  will  provide  such  other  benefits  as are set  forth in my
employment contract including,  without limitation,  health insurance for eleven
(11) months for me and my spouse (at no cost to me or my spouse).  Thereafter, I
will have  available for me and my spouse  eighteen (18) months of  continuation
health insurance coverage (at my expense) under federal COBRA law.

     Non-Contractual Benefits: On July 31, 1998, the Company will transfer to me
the Company car driven by me (at no cost to me).


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The Board of Directors
Allstate Financial Corporation
July 2, 1998 - Page 3

     The Company will pay me on July 31, 1998,  $5,000 to defray the expenses of
identifying, preparing for and obtaining subsequent employment.

Mutual Release:


     Effective July 31, 1998, the Company releases me and I release the Company,
from any and all  claims,  damages,  actions,  liabilities,  etc.  of any  kind,
provided that the foregoing release does not apply to claims, damages,  actions,
liabilities,  etc. arising from a breach by either party of obligations  created
under  this  letter   agreement  or  from  a  breach  by  either  party  of  any
post-termination obligations under my employment contract.



Non-Disparagement:

     Through July 31, 1999,  neither I nor the Company  (including  its officers
and  directors)  will make  statements  which may reasonably be considered to be
adverse to the interests of the other,  provided that the foregoing shall not be
construed  as waiver by me or the  Company of any cause of action that may arise
as a consequence of disparaging or other  statements  made on or after August 1,
1999.

Press Release:


     Through  July  31,  1999,  any  press  release  which  mentions  my name or
otherwise  refers to me (whether  directly or indirectly)  must, with respect to
such mention or reference,  be in form and substance reasonably  satisfactory to
me.

Coordination with Employment
Agreement:


     This letter  agreement and my employment  agreement are intended to be read
together  to give  full  effect  to both  agreements.  In the  case of a  direct
conflict, I and the Company will cooperate to resolve the conflict.


     Without  limiting the generality of the foregoing,  except in the case of a
direct  conflict,  nothing in this  letter  agreement  is intended to change the
non-compete, confidentiality or other provisions of my employment agreement.


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The Board of Directors
Allstate Financial Corporation
July 2, 1998 - Page 4


III.     Board Approval, Etc.

         The terms and  provisions of this letter  agreement  should be ratified
and approved by the Board of Directors on or before July 14, 1998.  If approved,
the terms and provisions  hereof should be incorporated  into a formal agreement
between me and the Company.  If,  however,  the Board of Directors  approves the
terms  and  provisions  hereof  and  no  formal  agreement  is  executed,  it is
understood and agreed that this letter agreement (once duly executed by a member
of the Board) is enforceable in accordance with its terms.  The signature of any
member of the Board of Directors in the space provided below shall be conclusive
evidence  that the Board of Directors  has duly ratified and approved all of the
terms and provisions hereof (without qualification or reservation).

         I believe the arrangements contemplated in this letter agreement are in
the best  interests  of the Company  and  provide the Company  (and its Board of
Directors) the best opportunity to manage and work through what I perceive to be
a crisis period for the Company.


                                                          Sincerely,

                                                          /s/ Craig Fishman  
                                                          ---------------------
                                                          Craig Fishman
                                                          President and CEO

 CF/gbb


 Ratified  and  Approved by the Board of  Directors  (without  qualification  or
 reservation) on this 14th day of July, 1998:

 ALLSTATE FINANCIAL CORPORATION

 By      /s/   David W. Campbell
         -----------------------
         Name:    David W. Campbell
         Title:   Director and Chairman of the Board



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