1

                           SECOND AMENDED AND RESTATED
                           ---------------------------
                                  SUPPLEMENT TO
                                  -------------
                                 TRUST AGREEMENT
                                 ---------------
                                       FOR
                                       ---
                             REVOLVING SERIES 1998-1
                             -----------------------

         This Second  Amended and Restated  Supplement  to Trust  Agreement  for
Revolving  Series  1998-1  (as  amended  or  modified  from  time to time,  this
"Supplement"),  dated as of September 15, 1999, is entered into among Allegiance
Funding I, LLC, a Delaware limited  liability  company  (successor to Allegiance
Funding Corp. I) (the  "Depositor"),  Manufacturers and Traders Trust Company, a
New  York  banking   corporation  (the   "Trustee"),   and  Point  West  Capital
Corporation, as servicer, a Delaware corporation (the "Servicer").

         This Supplement  incorporates by reference all of the provisions of the
Trust Agreement (the "Trust  Agreement"),  dated as of August 1, 1998, among the
Depositor,  the Servicer and the Trustee  entered  into in  connection  with the
transactions described below. This Supplement further amends and restates in its
entirety the Amended and Restated  Supplement  to Trust  Agreement for Revolving
Series 1998-1, dated as of September 1, 1999, among such parties.

         The  Depositor  duly  authorized  the  execution  and  delivery  of the
original  Supplement  dated as of August 1, 1998 to provide for the  issuance of
the Allegiance Capital Trust I Revolving Certificates,  Series 1998-1 (the "98-1
Revolving Certificates"), which consist of the Class A-R Revolving Certificates,
Series  1998-1  (the  "98-1  Class  A-R  Certificates"),   Class  B-R  Revolving
Certificates,  Series  1998-1  (the "98-1  Class B-R  Certificates"),  Class C-R
Revolving Certificates,  Series 1998-1 (the "98-1 Class C-R Certificates"),  and
Class  D-R   Revolving   Certificates,   Series  1998-1  (the  "98-1  Class  D-R
Certificates"),  each  issuable  as  provided  in the Trust  Agreement.  By this
Supplement,  the Depositor is authorizing the issuance of an additional Class of
98-1 Revolving Certificates, designated as the Class C2-R Revolving Certificates
, Series 1998-1 (the "98-1 C2-R Certificates") and the redesignation of the 98-1
Class C-R Certificates as the Class C1-R Revolving  Certificates , Series 1998-1
(the "98-1 C1-R Certificates").  This Series of Certificates has been designated
as a "Revolving  Series" under the Trust Agreement.  The Class A-R Certificates,
Class B-R Certificates, Class C1-R Certificates and Class C2-R Certificates have
initial credit ratings from the Rating Agency of A, BBB, BB and B, respectively,
and the Class D-R  Certificates are not rated. The Loan Schedule for this Series
as in effect on the date  hereof is attached  hereto as Schedule A.  Pursuant to
Section 2.02 of the Trust  Agreement,  this  Supplement sets forth the following
additional terms applicable to this Series of Certificates.

Section 1.        Definitions.
----------        ------------

         "Applicable  Rate Spread":  For each of the Class A-R, Class B-R, Class
C1-R and Class C2-R Certificates  within this Series, the amount specified below
(or as otherwise adjusted pursuant to Section 5 hereof):

                  Class             A-R = 2.00% per annum  for  Accrual  Periods
                                    commencing  before  September  1,  1999  and
                                    thereafter 2.05% per annum
                  Class B-R =       2.80% per annum
                  Class C1-R =      5.50% per annum
                  Class C2-R =      6.75% per annum


                                       1
<PAGE>


         "Certificate Interest Rate": (a) For the Class A-R Certificates in this
Series, a per annum rate equal to the LIBOR Rate plus the Applicable Rate Spread
for such Class,  provided that such  Certificate  Interest Rate shall not exceed
the Maximum Interest Rate; (b) for the Class B-R, C1-R and C2-R  Certificates in
this Series, respectively,  the rate that provides a bond equivalent yield equal
to the sum of the  Applicable  Rate Spread for such Class plus the Treasury Rate
for  such  Class  (as  reset  for each  Funding  Date  for  such  Class),  which
computation shall have been approved in writing by the Certificateholder  Agent;
and (c) for the Class D-R Certificates in this Series, 0.0%.

         "Class A-R Certificate": Any Certificate of this Series designated as a
Class A-R  Certificate,  substantially in the form attached hereto as Exhibit A,
and which is Outstanding as of any date.

         "Class B-R Certificate": Any Certificate of this Series designated as a
Class B-R  Certificate,  substantially in the form attached hereto as Exhibit B,
and which is Outstanding as of any date.

         "Class C1-R Certificate":  Any Certificate of this Series designated as
a Class C1-R  Certificate,  substantially in the form attached hereto as Exhibit
C-1, and which is Outstanding as of any date.

         "Class C2-R Certificate":  Any Certificate of this Series designated as
a Class C2-R  Certificate,  substantially in the form attached hereto as Exhibit
C-2, and which is Outstanding as of any date.

         "Class D-R Certificate": Any Certificate of this Series designated as a
Class D-R  Certificate,  substantially in the form attached hereto as Exhibit D,
and which is Outstanding as of any date.

         "Delivery Date":  August 19, 1998.

         "Draw Fee": With respect to any Funding, an amount equal to the product
of (i) 0.0010 and (ii) the Funding Amount for such Funding that is  attributable
to any Rated Certificates of this Series.

         "Effective Date":  September 21, 1999.

         "Excess  Funding  Amount":  With  respect to any Funding  Date,  if the
requested  Funding  Amount  (a)  would,  under  Section  2  hereof,   cause  the
Outstanding  Principal  Amount of a Class of  Certificates in this Series (other
than the Class A-R  Certificates)  to equal the Maximum  Series  Amount for such
Class but (b) would not be in an amount  sufficient  to also permit a Funding in
the amount of the Minimum  Funding Amount for the next Class of  Certificates to
be  funded  pursuant  to  Section 2 hereof,  the  amount by which the  requested
Funding Amount  exceeds the Maximum Series Amount for the Class of  Certificates
referenced in clause (a) of this definition.

         "Funding Termination Event": The earlier to occur of (a) the cumulative
Funding of Loans having an aggregate  Loan  Balance of  $60,000,045  and (b) the
occurrence of a Depositor Event of Default, Servicer Event of Default or Special
Servicer  Event of Default that has not been cured or waived  within thirty (30)
days after written notice thereof.

         "Initial Funding  Amount":  For each of the Class A-R, Class B-R, Class
C-R and Class D-R Certificates within this Series, the amount specified below:

                    Class A-R = $0.0
                    Class B-R = $0.0
                    Class C-R = $0.0
                    Class D-R = $3,650,000




                                       2

<PAGE>

"Initial Payment Date": October 15, 1998.

         "LIBOR Rate": With respect to each Accrual Period, a per annum interest
rate equal to the rate for London  interbank  offered  quotations  for one-month
Eurodollar  deposits  determined  by the  Servicer  for such  Accrual  Period as
follows:

         (a) On each Reset Date,  the Servicer will  determine the LIBOR Rate on
         the basis of the rate for deposits in U.S.  Dollars for a period of one
         month that appears on Bloomberg MMR2 or, if unavailable,  Telerate Page
         3750, as of 11:00 a.m. (London time) on such Reset Date.

         (b) If such rate does not  appear on  Telerate  Page 3750 or  Bloomberg
         MMR2,  the rate for such Reset Date will be  determined on the basis of
         the  rates  at  which  deposits  in U.S.  Dollars  are  offered  by the
         Reference Banks at approximately  11:00 a.m. (London time) on such date
         to prime banks in the London interbank market for a period of one month
         commencing on that Reset Date.  The Servicer will request the principal
         London  office  of  each  of the  Reference  Banks  to  provide  such a
         quotation.  If, on any Reset  Date:  (i) at least two  Reference  Banks
         provide  quotations when requested,  the LIBOR Rate for such Reset Date
         will be the arithmetic mean of the quotations so received; or (ii) only
         one or none of the Reference Banks provides such a quotation, the LIBOR
         Rate will be the  arithmetic  mean of the offered rates quoted by major
         banks in New York City selected by the Servicer at approximately  11:00
         a.m.  (New  York City  time) on such  Reset  Date for loans to  leading
         European banks in U.S.  Dollars for a period of one month commencing on
         that Reset Date.

         (c) If, on any Reset Date, the LIBOR Rate cannot be calculated pursuant
         to one of the above  methods,  the LIBOR Rate for such Reset Date shall
         be the rate as most recently determinable under such methods.

         "Maximum   Interest   Rate":  A  per  annum  rate  for  the  Class  A-R
Certificates that is derived from its pro rata share of the Series Percentage of
interest due on the Loans less the Series Percentage of Scheduled Expenses, with
such pro ration based upon the relative rate at which interest otherwise accrues
among Classes of this Series.

         "Maximum  Series  Amount":  $30,000,045,  allocated  to each  Class  of
Certificates  in this Series as follows (or as  otherwise  adjusted  pursuant to
Section 4 hereof):

                    Class A-R = $20,950,000
                    Class B-R = $ 3,300,045
                    Class C-R = $ 2,100,000
                    Class D-R = $ 3,650,000

         "Minimum Funding Amount":  The amount specified below for each Class of
Certificates in this Series:

                    Class A-R = $ 1,000,000
                    Class B-R = $ 3,300,045
                    Class C-R = $ 2,100,000
                    Class D-R = $     1,000

provided  that,  with respect to the final funding prior to issuance of any Term
--------
Certificates, the Minimum Funding Amount for the Class A-R Certificates shall be
$100,000.


                                       3
<PAGE>


         "Non-Usage  Fee":  With  respect to each  Accrual  Period  through  the
Funding Termination Date, an amount,  payable to *** to the account specified in
Annex 2 to the  Certificate  Purchase  Agreement,  equal to the  product  of (a)
0.0025 per annum and (b) the  positive  difference  between the  Maximum  Series
Amount for the Class A-R, B-R, Class C1-R and C2-R  Certificates  in this Series
and the average  Outstanding  Principal Amount of all Class A-R, B-R, Class C1-R
and C2-R Certificates in this Series during such Accrual Period.

         "Revolving  Funding  Date":  Any  Funding  Date on which the  Depositor
obtains a Funding under the 98-1 Revolving Certificates.

         "Revolving Funding Schedule":  The schedule attached hereto as Schedule
B, as amended  from time to time  pursuant to Section 4 hereof.  Such  Revolving
Funding Schedule,  as amended from time to time, is incorporated  herein by this
reference.

         "Scheduled Funding Termination Date": (a) With respect to the Class A-R
certificates,  March 31, 2000; and (b) with respect to the Class B-R, Class C1-R
and Class C2-R  certificates,  December 30, 1999,  provided  that if there is an

active  "B"  fund  under   management  by  the   Certificateholder   Agent,  the
Certificateholder  Agent  shall use its best  efforts  to extend  the  Scheduled
Funding  Termination  Date applicable to any Class B-R, Class C1-R or Class C2-R
Certificate to March 31, 2000.

         "Scheduled Maturity":  With respect to any Class A-R, Class B-R , Class
C1-R or Class C2-R Certificate, April 17, 2000.

         "Series  Termination Date": For each of the Class A-R, Class B-R, Class
C1-R, Class C2-R and Class D-R  Certificates in this Series,  the date specified
below:

                    Class A-R = July 15, 2019
                    Class B-R = July 15, 2019
                    Class C1-R = July 15, 2019
                    Class C2-R = July 15, 2019
                    Class D-R = July 15, 2019

         "Swap Agreement":  Means the ISDA Master Agreement,  dated as of August
1,1998,  along  with the  related  Schedule,  dated as of August 1, 1998 and the
Confirmation dated as of August 1,1998,  between Point West Capital  Corporation
and the Trust.

         "Transaction Documents Date":  As of August 1,1998.

         "Treasury  Rate":  With respect to the Class B-R,  Class C1-R and Class
C2-R Certificates, on the date three (3) Business Days prior to any Funding Date
for such Class, a per annum rate equal to the bond equivalent  yield on actively
traded U.S. government  securities with a one year maturity as set forth on page
"USD" of the Bloomberg Financial Markets Screen (or if not available,  any other
nationally  recognized  trading screen reporting  on-line  intra-day  trading in
United States government  securities) at 11:00 a.m. (New York time) on such date
of determination,  or in the event no such nationally  recognized trading screen
is available,  the  arithmetic  mean of the yields for the two columns under the
heading "Week Ending" published in the Federal Reserve H.15 Statistical  Release
under the caption "Treasury Constant Maturities" for one (1) year maturities.

***Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.



                                       4

<PAGE>


Section 2.        Sequence for Fundings.
----------        ----------------------

         (a) Holders of Certificates in this Series shall provide Fundings under
this Series in sequence, by Class, in reverse order of alphabetical  designation
such that no Class in this Series  shall be  obligated  to make a Funding  under
Section  4.05 of the Trust  Agreement  unless all  subordinated  Classes in this
Series have an Outstanding Principal Amount (taking into account any Fundings by
such subordinated Class on such Funding Date) equal to the Maximum Series Amount
for such Class;  provided that, on any Funding Date, the Excess Funding  Amount,
                 --------
if any, shall be funded by and allocated to the Class D-R  Certificates,  though
such Excess  Funding  Amount shall not change the Maximum Series Amount for such
Class;  provided  further  that,  on the  next  Funding  Date,  the  Holders  of
        --------  -------
Certificates  in the  applicable  Class of this Series then  obligated to make a
Funding shall first fund an amount equal to the Excess  Funding Amount then held
by the Holders of the Class D-R Certificates.

         (b) On each  Funding  Date,  all Draw Fees shall be paid as provided in
the applicable Certificate Purchase Agreement(s).

         (c)  Notwithstanding  the  definition  of Funding Date set forth in the
Trust Agreement, upon the request of the Depositor, up to two additional Funding
Dates may be  designated  under this  Series,  one  during the period  beginning
August  30,  1999 and  ending  September  17,  1999 and one  during  the  period
beginning  March  30,  2000 and  ending  April 14,  2000.  Such  Fundings  shall
otherwise occur on the terms set forth in the Transaction Documents.

Section 3.        Distributions.
----------        --------------

         Subject to the adjustments provided for in Section 5.02(c) of the Trust
Agreement,  on each Payment Date,  the Trustee shall  withdraw all funds then in
the  Distribution   Account  for  such  Series  and  shall  make  the  following
disbursements  in the  following  order  of  priority  (in  accordance  with the
provisions of and instructions on the monthly Servicer Report):

         (a)  to pay  the  interest  accrued  as of  that  Payment  Date  on all
outstanding Class A-R Certificates of this Series and any overdue interest;

         (b)  to pay  the  interest  accrued  as of  that  Payment  Date  on all
outstanding Class B-R Certificates of this Series and any overdue interest;

         (c) to pay the  interest  accrued as of that  Payment Date first (i) on
all outstanding  Class C1-R Certificates of this Series and any overdue interest
thereon and then (ii) on all outstanding  Class C2-R Certificates of this Series
and any overdue interest thereon;

         (d)      to pay any Non-Usage Fees then due;

         (e) to the extent of the Series Percentage of any Interest  Collections
in excess of Scheduled Expenses and amounts distributed  pursuant to clauses (a)
- (d) above,  to deposit into the Reserve  Account an amount equal to the Series
Percentage  of the amount  necessary  to bring the balance  therein to an amount
equal to the Reserve Account Required Balance;

         (f) to the extent of any remaining  Series  Collections,  to pay to the
Class A-R  Certificateholders  of this Series an amount  equal to the  Principal
Distribution  Amount allocable this Series,  to be applied to

                                       5

<PAGE>


the payment of the Outstanding  Principal Amount of such Certificates until such
Outstanding Principal Amount is repaid in full;

         (g) to the extent of any remaining  Series  Collections,  to pay to the
Class B-R  Certificateholders  of this Series an amount  equal to the  Principal
Distribution Amount allocable this Series (and not already distributed  pursuant
to clause (f) above), to be applied to the payment of the Outstanding  Principal
Amount of such Certificates until such Outstanding Principal Amount is repaid in
full;

         (h) to the extent of any remaining  Series  Collections,  to pay to the
Class C1-R  Certificateholders  of this Series an amount equal to the  Principal
Distribution Amount allocable this Series (and not already distributed  pursuant
to clauses (f) and (g) above),  to be applied to the payment of the  Outstanding
Principal Amount of such Certificates until such Outstanding Principal Amount is
repaid in full;

         (i) to the extent of any remaining  Series  Collections,  to pay to the
Class C2-R  Certificateholders  of this Series an amount equal to the  Principal
Distribution Amount allocable this Series (and not already distributed  pursuant
to  clauses  (f),  (g) and (h)  above),  to be  applied  to the  payment  of the
Outstanding  Principal  Amount  of  such  Certificates  until  such  Outstanding
Principal Amount is repaid in full;

         (j) to pay to the Class A-R  Certificateholders an amount equal to that
portion of the Certificate  Interest Rate that would have otherwise accrued with
respect to such Class in respect of a prior Payment Date but for the application
of the Maximum  Interest Rate, to the extent not already paid on a prior Payment
Date;

         (k) to pay to the Trustee,  the Servicer,  the Special Servicer and the
Servicing  Advisor any other  amounts due to them as  expressly  provided in the
Trust Agreement or in the Servicing  Agreement,  including Recovery Expenses not
previously  reimbursed and deferred  Servicer Fees,  Special  Servicer Fees, and
Servicing  Advisor Fees not otherwise  paid pursuant to any  Supplement or other
Transaction Document;

         (l) upon the  occurrence  of a Depositor  Event of  Default,  an amount
sufficient to reimburse the Trustee and the  Certificateholders for any expenses
incurred by them in enforcing remedies available under Section 6.02 of the Trust
Agreement; and

         (m) to pay any and all remaining  funds to the Holders of the Class D-R
Certificates  and,  if  no  such  Certificates  are  then  Outstanding,  to  the
Depositor.

Section 4.    Right to Cause Prepayments; Adjustment of Maximum Series Amounts
----------    ----------------------------------------------------------------
              and Minimum Funding Amounts.
              ----------------------------

         (a)  Notwithstanding  any other provision of the Trust Agreement or the
Certificates  to the contrary,  the Depositor shall have the option to cause the
Trust to prepay, without premium or penalty,  principal on any Outstanding Class
of 98-1  Revolving  Certificates  on a  dollar  for  dollar  basis  with the net
proceeds  of the  issuance  of a  Series  of Term  Certificates,  with  such net
proceeds  being  used to  prepay  all 98-1  Revolving  Certificates  by Class in
reverse order of issuance;  provided that no such  prepayment of 98-1  Revolving
                            --------
Certificates  shall be permitted  unless all Rated  Certificates  are prepaid in
full.  Notwithstanding such prepayment,  such 98-1 Revolving  Certificates shall
remain  Outstanding and additional  Fundings may be made under such Certificates
in  accordance  with Article  Three of the Trust  Agreement.  Following any such
prepayment in connection with the issuance of a Series of Term Certificates: (i)
the Maximum Series Amount for each Class of Certificates in this Series shall be
adjusted  from  time to time to the  level  required  by the  Rating  Agency  to
maintain the respective rating on each such Class of Certificates; provided that
in no event shall the aggregate  Maximum  Series Amount of  $30,000,045  for all
Classes be exceeded; (ii)

                                       6
<PAGE>


following such  adjustment,  the Minimum Funding Amount for the Class B-R, Class
C1-R and Class  C2-R  Certificates  shall be  adjusted  upward or  downward,  as
appropriate;  and (iii)  such  adjustments  shall be  reflected  on a  Revolving
Funding  Schedule  as  described  on  clause  (b)  below.   Notwithstanding  the
foregoing,  the Maximum Series Amounts and Minimum  Funding Amounts shall not be
increased  without the consent of the Holders of  Certificates  in the  relevant
Class, and the Certificateholder  Agent shall use its best efforts to obtain any
required approvals.

         (b) As of the Effective Date, the Revolving  Funding Schedule is as set
forth on Schedule B hereto.  Thereafter,  a revised  Revolving  Funding Schedule
shall be included  with each  Funding  Report  delivered  in  connection  with a
Funding Date.  In addition,  upon any  prepayment in accordance  with clause (a)
above, a revised  Revolving  Funding Schedule shall be provided by the Depositor
to the  Rating  Agency  and  the  Certificateholder  Agent.  Each  such  revised
Revolving Funding Schedule shall, as appropriate,  specify (i) the dollar amount
that each Class of this Series shall fund in connection with the related Funding
or (ii) the adjusted  Maximum Series Amount and Minimum  Funding Amount for each
Class of Certificates in this Series.

         (c) In addition,  on any Funding Date:  (i) the Class D-R  Certificates
may be prepaid,  without premium or penalty, in the amount of any Excess Funding
Amount being funded on such date by the Holders of Rated Certificates;  and (ii)
the Maximum Series Amount for the Class D-R  Certificates  shall be increased if
required by the Rating Agency to maintain the rating of any Certificates of this
Series in  connection  with a  specific  Funding  that  involves  Loans that are
permitted to deviate from the Program Guidelines or the Pool Criteria.

         (d) The parties agree that the aggregate amount of each Funding under a
Term Series shall be at least $15,000,000.

Section 5.        Increase in Interest Rate.
----------        --------------------------

         Notwithstanding  the definition of Certificate  Interest Rate set forth
above, if any Class A-R, Class B-R, Class C1-R or Class C2-R Certificate in this
Series is not repaid by its Scheduled  Maturity,  then,  for any Accrual  Period
commencing on or after such Scheduled Maturity, the Certificate Interest Rate on
such Certificate shall be increased by 1.00%.

Section 6.        Limitation of Transfer and Exchange of Class D-R Certificates.
----------        -------------------------------------------------------------

         So long as any Rated Certificates are Outstanding,  the Depositor shall
maintain  legal and  beneficial  ownership  of at least  51% of the  Outstanding
Principal  Amount of the Class D-R  Certificates,  unless otherwise agreed to by
the Controlling Holders.

Section 7.        Reserve Account Deposit.
----------        ------------------------

         On or prior to the initial Funding Date for this Series,  the Depositor
shall deposit  $250,000 into the Reserve Account for investment and disbursement
in accordance with Section 5.03 of the Trust Agreement.


Section 8.        Minimum Denominations.
----------        ----------------------

         The  Certificates  of this  Series  shall be issuable  without  minimum
denominations.


                                       7
<PAGE>


Section 9.        Distribution In-Kind.
----------        ---------------------

         By executing this Supplement  (including the related  Certificateholder
consent) all parties  acknowledge  and approve the  distribution  in-kind by the
Trustee to the Holder of the 98-1 Class D-R Certificate of all right,  title and
interest  in and to *** and any Loan  Assets  related  to such Loan in lieu of a
portion of the cash  prepayment  otherwise  being made to such  Holder as of the
Effective  Date.  The in kind  distribution  shall be credited  against the cash
prepayment due to such Holder in an amount equal to the unpaid principal balance
of such Loan, as shown on the Repurchase Price Calculation Statement included in
the Servicer  Report dated September 13, 1999. The Trustee is hereby directed to
execute and deliver all assignments,  note endorsements and other  documentation
necessary to effectuate such distribution in kind.

Section 10.       Precondition to Fundings.
-----------       -------------------------

         On or before each date for the first  Funding by the Holders of a Class
of Rated  Certificates  in this Series,  the  Depositor  shall  provide  written
confirmation  from the  Rating  Agency of the  initial  rating on the all of the
Rated Certificates in this Series.

Section 11.       References to Class C-R Certificates; General Provisions.
-----------       ---------------------------------------------------------

         The  amendments  made  pursuant  to this Second  Amended  and  Restated
Supplement shall be effective as of the Effective Date. All references herein or
in any other Transaction Document (including any Purchase Agreement) to the 98-1
Class C-R  Certificates  shall, at all times on and after the Effective Date, be
deemed  to  refer to the 98-1  Class  C1-R  Certificates  and  98-1  Class  C2-R
Certificates.  Upon  execution  and delivery of this  Supplement,  the Depositor
shall execute and the Trustee shall  authenticate  98-1 Class C1-R  Certificates
and 98-1 Class C2-R Certificates which shall be delivered by the Trustee to each
Holder of a 98-1 Class C-R  Certificate  in exchange for its existing 98-1 Class
C-R Certificate.  Pending such exchange, the 98-1 Class C-R Certificate shall be
deemed to  evidence  both the 98-1  Class C1-R  Certificate  and 98-1 Class C2-R
Certificate.

         As amended and supplemented by this Supplement,  the Trust Agreement is
in  all  respects   ratified  and  confirmed  and  the  Trust  Agreement  as  so
supplemented  shall be read, taken and construed as one and the same instrument.
In the event that any term or provision  contained herein shall conflict with or
be inconsistent with any term or provision contained in the Trust Agreement, the
terms and conditions of the Supplement shall be controlling.

         This  Supplement  shall be construed in accordance with and governed by
the internal laws of the State of New York  applicable to agreements made and to
be performed  therein,  without regard to the conflict of laws provisions of any
State.

         This Supplement may be executed in any number of counterparts,  each of
which so executed shall be deemed to be an original,  but all such  counterparts
shall together constitute but one and the same instrument.

***Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.


                                       8



<PAGE>



         IN WITNESS  WHEREOF,  the Depositor,  the Trustee and the Servicer have
caused  this  Supplement  to be  executed by their  respective  duly  authorized
officers as of the date and year first written above.


                                   ALLEGIANCE FUNDING I, LLC, as the
                                   Depositor

                                   By:  ALLEGIANCE MANAGEMENT CORP., as Manager

                                   By:     /s/ Alan B. Perper
                                   --------------------------------
                                   Name:   Alan B. Perper
                                   Title:  President


                                   MANUFACTURERS AND TRADERS TRUST
                                   COMPANY, as the Trustee

                                   By:     /S/ Russell T. Whitley
                                   --------------------------------
                                   Name:    Russell T. Whitley
                                   Title:   Assistant Vice President


                                   POINT WEST CAPITAL CORPORATION, as
                                   the Servicer


                                   By:     /s/ Alan B. Perper
                                   --------------------------------
                                   Name:   Alan B. Perper
                                   Title:  President


<PAGE>




Consented and Agreed:


TICE & CO., as registered owner of the Class A-R
Certificates


By:       /s/ Jacqueline M. May
Its:      VP
Date:     9/21/99

TICE & CO., as registered owner of the Class B-R
Certificates

By:       /s/ Jacqueline M. May
Its:      VP
Date:     9/21/99

TICE & CO., as registered owner of the Class C-R
Certificates

By:       /s/ Jacqueline M. May
Its:      VP
Date:     9/21/99

<PAGE>

                                                                      EXHIBIT A
                                                                      ---------

          FORM OF AMENDED AND RESTATED CLASS A-R REVOLVING CERTIFICATE
          ------------------------------------------------------------

THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT") OR ANY STATE SECURITIES LAWS IN
RELIANCE ON EXEMPTIONS  PROVIDED BY THE SECURITIES ACT AND SUCH STATE SECURITIES
LAWS.  THIS  CERTIFICATE  MAY NOT BE SOLD OR OTHERWISE  TRANSFERRED,  PLEDGED OR
HYPOTHECATED UNLESS SUCH RESALE,  TRANSFER,  PLEDGE OR HYPOTHECATION (A) IS MADE
IN ACCORDANCE  WITH SECTION 2.06 OF THE TRUST  AGREEMENT  REFERRED TO HEREIN AND
(B) IS MADE (i)  PURSUANT  TO AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE
SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT FROM THE REGISTRATION  REQUIREMENTS
OF THE SECURITIES ACT AND APPLICABLE  STATE SECURITIES LAWS OR (iii) TO A PERSON
WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE  SECURITIES  ACT WHO IS AWARE THAT THE RESALE
OR OTHER  TRANSFER IS BEING MADE IN RELIANCE  ON RULE 144A.  NEITHER  ALLEGIANCE
FUNDING I, LLC (THE "DEPOSITOR") NOR MANUFACTURERS AND TRADERS TRUST COMPANY, AS
TRUSTEE (THE  "TRUSTEE"),  IS OBLIGATED TO REGISTER THE  CERTIFICATES  UNDER THE
SECURITIES  ACT OR ANY  APPLICABLE  STATE  SECURITIES  LAWS. IN THE EVENT THAT A
TRANSFER OF A CLASS A-R  CERTIFICATE IS TO BE MADE, THE  PROSPECTIVE  TRANSFEREE
SHALL DELIVER AN INVESTMENT AND ASSUMPTION LETTER IN THE FORM REQUIRED UNDER THE
TRUST  AGREEMENT AND, IF THE TRUSTEE SO REQUESTS (IN A TRANSFER OTHER THAN UNDER
RULE 144A),  AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH  TRANSFER MAY BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAWS.

DUE TO THE  PROVISIONS  FOR FUNDINGS AND FOR THE PAYMENT OF PRINCIPAL  CONTAINED
HEREIN,  THE OUTSTANDING  PRINCIPAL AMOUNT OF THIS CERTIFICATE ON ANY PARTICULAR
DATE MAY BE LESS THAN THE AMOUNT  SHOWN ON THE FACE  HEREOF.  ANYONE  PURCHASING
THIS  CERTIFICATE  MAY  ASCERTAIN  THE  OUTSTANDING  PRINCIPAL  AMOUNT HEREOF BY
INQUIRY OF THE TRUSTEE.

No. A-R                                                        % of Class
       ----                                                              ----

                           ALLEGIANCE CAPITAL TRUST I
       AMENDED AND RESTATED CLASS A-R REVOLVING CERTIFICATE, SERIES 1998-1

Evidencing an undivided fractional interest in the Trust Estate, the property of
which includes, among other things, certain Loan Assets and monies on deposit in
the Collection Account.

             (This  Certificate  does not  represent  an  obligation  of,  or an
            interest in, the Depositor,  Allegiance Capital, LLC, the Trustee or
            any of their respective affiliates or successors.)


                           Registered Owner:
                                            --------------------------------

                                      A-1

<PAGE>


DELIVERY DATE:                            SERIES TERMINATION DATE: July 15, 2019
              ----- --, ----

         THIS CERTIFIES THAT the registered  owner  specified above is the owner
of an  undivided  fractional  interest in the  Allegiance  Capital  Trust I (the
"Trust") formed by Allegiance Funding Corp. I (the  "Depositor").  The Trust was
created pursuant to the Trust  Agreement,  dated as of August 1, 1998, among the
Depositor,  Manufacturers and Traders Trust Company, as Trustee (the "Trustee"),
and Point West  Capital  Corporation,  as Servicer,  and the Second  Amended and
Restated Supplement to Trust Agreement for Revolving Series 1998-1,  dated as of
September 15, 1999  (amending  and  restating  the original  Supplement to Trust
Agreement for Revolving  Series 1998-1,  dated as of August 1, 1998),  among the
Depositor,  the  Trustee  and  Point  West  Capital  Corporation,   as  Servicer
(collectively, the "Trust Agreement").  Reference is made to the Trust Agreement
for a statement  of the  respective  rights  thereunder  of the  Depositor,  the
Trustee  and the  Holders  of the  Certificates,  and the terms  upon  which the
Certificates are, and are to be, authenticated and delivered.  To the extent not
otherwise  defined  herein,  each  capitalized  term used herein has the meaning
assigned to it in the Trust Agreement.

         This  Certificate  is one of a duly  authorized  issue of  Certificates
designated as the Amended and Restated Class A-R Revolving Certificates,  Series
1998-1  having a scheduled  maturity of April 17, 2000 and a Series  Termination
Date of July 15, 2019 (herein called the "Class A-R Certificates") issued and to
be issued under the Trust Agreement.  This Class A-R Certificate is issued under
and is subject to the terms,  provisions and conditions of the Trust  Agreement,
to which Trust  Agreement the holder of this Class A-R  Certificate by virtue of
such Holder's acceptance hereof assents and by which such Holder is bound.

         The Holder of this  Certificate  is obligated  to provide  funds to the
Depositor  on each  Funding  Date  during  the  Funding  Period  subject  to the
applicable  terms and conditions  set forth in the  Transaction  Documents.  The
Fundings  made by the  Holder  of this  Certificate  to the  Depositor  shall be
evidenced by this  Certificate  and the  Certificateholder  shall endorse on the
schedule  annexed  hereto and made a part  hereof,  or elsewhere in its internal
records, the date and amount of each Funding made by it to the Depositor and the
amount of each payment of principal made by the Depositor with respect  thereto.
The Certificateholder is authorized and directed by the Depositor to endorse the
schedule   attached  hereto  or  maintain  such  records;   provided  that  each
                                                            --------
Certificateholder's  endorsements or records shall be effective only if they are
in agreement with the register maintained by the Trustee,  absent manifest error
in such register.  The failure of the  Certificateholder to make, or an error in
making,  a notation  with  respect to any Funding  shall not limit or  otherwise
affect the obligations of the Depositor  hereunder or under the Trust Agreement.
The aggregate  amount of all Fundings  required to be made by the Holder of this
Certificate shall be as set forth in the Revolving Funding Schedule.


         This Class A-R Certificate bears interest during each Accrual Period on
the  Outstanding  Principal  Amount  hereof (as of the first day of the  Accrual
Period) at the  Certificate  Interest  Rate,  until and  including  the last day
preceding the Payment Date on which the Outstanding  Principal Amount hereof has
been reduced to zero. Interest on the Outstanding  Principal Amount hereof shall
be calculated on the basis of a 360-day year  consisting of 12 months of 30 days
each.  Interest  shall be due and payable in arrears on each  Payment  Date.  In
addition,  with  respect to any  Funding by the Class A-R  Certificates  of this
Series occurring in any Accrual Period following the preceding Payment Date, the
related  Funding  Amounts shall accrue  interest  from the related  Funding Date
through the end of the Accrual Period in which such Funding occurs in the amount
of the  applicable  First Period  Interest,  which interest shall be paid on the
next  Payment  Date.  The First Period  Interest on the Funding  Amount shall be
determined on the Funding Date at the rate  established on the applicable  Reset
Date. Notwithstanding the foregoing, if the Outstanding Principal Amount of this
Certificate is not paid in full by its Scheduled Maturity, then, for any Accrual
Period

                                      A-2

<PAGE>


commencing on or after such Scheduled Maturity, the Certificate Interest Rate on
this Certificate shall be increased by 1.00%. In making any interest payment, if
the interest calculation with respect to a Certificate shall result in a portion
of such payment  being less than $0.01,  then such payment shall be decreased to
the nearest whole cent,  and no subsequent  adjustment  shall be made in respect
thereof.

          The  principal  of this  Class  A-R  Certificate  shall be  payable in
installments  ending no later than the Series Termination Date unless this Class
A-R  Certificate  becomes  due and  payable  at an  earlier  date  by  call  for
redemption or otherwise.  All reductions in the principal  amount of a Class A-R
Certificate  effected by  payments  of  installments  of  principal  made on any
Payment  Date  shall be  binding  upon all  future  Holders  of this  Class  A-R
Certificate  and of any Class A-R  Certificate  issued upon the  registration of
transfer  hereof or in exchange  herefor or in lieu hereof,  whether or not such
payment is noted on this Class A-R  Certificate.  Each  installment of principal
payable  on this  Class  A-R  Certificate  shall be in an  amount  equal to this
Certificateholder's  pro rata  share of the  Class  A-R  Principal  Distribution
Amount  available to be paid in accordance  with the  priorities of Section 3 of
the Supplement for this Series and Section 5.02 of the Trust Agreement.  Subject
to the terms of the Trust  Agreement,  the  principal  payable on this Class A-R
Certificate  shall be paid on each  Payment  Date  during  the term of the Trust
Agreement, beginning on the Initial Payment Date. All payments of principal with
respect to all of the Class A-R  Certificates of a Series shall be made on a pro
rata basis based upon the ratio that the Outstanding Principal Amount of a Class
A-R  Certificate  bears to the  Outstanding  Principal  Amount  of all Class A-R
Certificates  of such Series;  provided that, if as a result of such proration a
                               --------
portion of such principal  would be less than $0.01,  then such payment shall be
reduced to the nearest whole cent.

         In addition,  the Certificate  Prepayment Fee Amount,  if any, shall be
distributed on each Payment Date to the Holders of the Class A-R Certificates to
the extent such Class is receiving a distribution of Prepaid Principal Amount on
such date.  All payments of  Certificate  Prepayment Fee Amounts with respect to
the Class A-R  Certificates  shall be made  prorata  based upon the ratio of the
Outstanding  Principal Amount of this  Certificate to the Outstanding  Principal
Amount of Class A-R Certificates of this Series, provided that if as a result of
such  proration,  a portion of such payment would be less than $0.01,  then such
payment shall be reduce to the nearest whole cent.

         The  interest and  principal  so payable on any Payment  Date will,  as
provided  in the  Trust  Agreement,  be paid to the  Person  in whose  name this
Certificate is registered on the Record Date for such Payment Date,  which shall
be the close of business on the last day of the month prior to such Payment Date
(whether or not a Business Day). The principal and interest on this  Certificate
are  payable by wire  transfer  in  immediately  available  funds to the account
specified  in writing to the  Trustee  by the Person  whose name  appears as the
Registered  Holder of this Certificate on the Certificate  Register  received at
least five (5)  Business  Days prior to the Record Date for the Payment Date (or
if no such  account  is  specified  or if such wire  fails,  by check  mailed by
first-class  mail to the Person whose name appears as the  Registered  Holder of
this Certificate on the Certificate Register at the address of such Person as it
appears on the  Certificate  Register),  in such coin or  currency of the United
States of  America as at the time of  payment  is legal  tender  for  payment of
public and private debts. Funds represented by checks returned  undelivered will
be held for payment to the Person entitled thereto,  subject to the terms of the
Trust  Agreement,  at the  office  or  agency in the  United  States of  America
designated  as such by the  Depositor  for such  purpose  pursuant  to the Trust
Agreement.

         The Depositor has structured the Trust  Agreement and the  Certificates
with the intention that the Trust be treated as a  partnership,  with the assets
of the  partnership  including  all of the  assets of the Trust  Estate  and the
partners  of  the  partnership  being  all  of the  Certificateholders  and  the
Depositor.  The Depositor, the Trustee, the Servicer and each Certificateholder,
by acceptance of its Certificate  (and any

                                      A-3
<PAGE>


Person that is a beneficial owner of any interest in a Certificate, by virtue of
such Person's acquisition of a beneficial interest therein), agree to report the
transactions  contemplated  thereby in  accordance  with such stated  intentions
unless and until determined to the contrary by an applicable taxing authority.

         The  property  of the Trust  Estate  includes  certain  Loan Assets and
certain  other  assets  described  in  the  Trust   Agreement.   The  Class  A-R
Certificates of the 1998-1 Series and all other Series of Class A-R Certificates
issued under the Trust  Agreement are generally  payable out of the Trust Estate
pari passu among such Class A-R  Certificateholders  equally and ratably without
prejudice,  priority or distinction  between any Class A-R Certificate by reason
of time of issue or otherwise.  The Class A-R  Certificates are payable only out
of the Trust Estate and do not represent recourse  obligations of the Depositor,
Allegiance Capital, LLC or any of their respective affiliates or successors. The
Trust  Agreement  pursuant  to which this Class A-R  Certificate  is issued also
provides for the issuance of other Classes and Series of Certificates  from time
to time.  Payments of interest on the Class A-R  Certificates are senior to such
payments on other  Classes  having a lower credit  rating from the Rating Agency
and are  subordinate  to payments  of  interest  on any Classes  having a higher
credit  rating form the Rating  Agency.  Payments of  principal in the Class A-R
Certificates are senior to payments of principal on other classes having a lower
credit rating from the Rating Agency and are subordinate to such payments on any
Class having a higher credit rating from the Rating Agency.

         Unless the Depositor  exercises its Optional  Termination  rights,  the
Certificates  are  payable  only at the time and in the manner  provided  in the
Trust  Agreement  and are not  redeemable  or  prepayable  at the  option of the
Depositor  before such time,  except that the  Depositor  may cause the Trust to
prepay on a dollar for dollar basis the principal,  without  penalty or premium,
of any  Outstanding  Series of Revolving  Certificates  with the proceeds of the
issuance or Funding of a Series of Term Certificates.

         As provided in the Trust  Agreement and subject to certain  limitations
therein set forth,  the transfer of this  Certificate  may be  registered on the
Certificate  Register of the Depositor  upon surrender of this  Certificate  for
registration  of transfer at the office or agency of the Depositor in the United
States of America maintained for such purpose,  duly endorsed by, or accompanied
by a written  instrument  of transfer  in form  reasonably  satisfactory  to the
Depositor and the Trustee and duly executed by the holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Class A-R Certificates
of the same  Scheduled  Maturity of  authorized  denominations  and for the same
initial aggregate principal amount will be issued to the designated transferees.

         Prior  to  due  presentment  for   registration  of  transfer  of  this
Certificate,  the  Depositor,  the Trustee and any agent of the Depositor or the
Trustee shall treat the Person in whose name this  Certificate  is registered as
the owner hereof for the purpose of receiving payment as herein provided and for
all other purposes whether or not this  Certificate be overdue,  and neither the
Depositor,  the  Trustee,  nor any such agent shall be affected by notice to the
contrary.

         The Holder of this  Certificate,  by  acceptance  of this  Certificate,
agrees that for one year and one day after it has been paid hereunder, it or any
Affiliate  thereof will not (without the consent of Holders holding at least 51%
of all Rated Certificates, by Outstanding Principal Amount) file any involuntary
petition or otherwise  institute any  bankruptcy,  reorganization,  arrangement,
insolvency or liquidation  proceeding or other  proceeding  under any federal or
state bankruptcy or similar law against the Depositor.

         The  Trust  Agreement  permits,  with  certain  exceptions  as  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the Depositor and the rights of the Holders of the

                                      A-4
<PAGE>


Certificates under the Trust Agreement at any time by the Depositor, the Trustee
and the Servicer without the consent of the Holders of the Certificates.

         The  Certificates  are issuable only in registered form without coupons
in such authorized  denominations as provided in the Trust Agreement and subject
to certain limitations therein set forth.

         This Class A-R Certificate and the Trust Agreement shall be governed by
and  construed in  accordance  with the internal  laws of the State of New York,
without regard to conflicts of laws principles.

         No  reference  herein to the Trust  Agreement  and no provision of this
Class  A-R  Certificate  or of the Trust  Agreement  shall  alter or impair  the
obligation  of the Trust  Estate to pay the  principal  of and  interest on this
Class A-R  Certificate,  but solely  from the assets of the Trust  Estate at the
times, place and rate, and in the coin or currency, herein prescribed.

                                      A-5


<PAGE>
         IN  WITNESS  WHEREOF,   Allegiance  Funding  I,  LLC  has  caused  this
instrument to be signed, manually, by the President or a Vice President of its
Manager, Allegiance Management Corp.

                                         ALLEGIANCE FUNDING I, LLC

                                       By:      Allegiance   Management  Corp.,
                                                as Manager
                                       By:
                                                ------------------------------
                                       Title:
                                                ------------------------------

<PAGE>


                          CERTIFICATE OF AUTHENTICATION


         This  is  one  of  the   Class A-R  Certificates   described   in  the
within-mentioned Trust Agreement.


Dated:
      -------------------------------------

MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee

By:
      --------------------------------------
                  Authorized Signatory




<PAGE>




Schedule to Class A-R Term Certificates, Series 1998-1

Disbursement
Date of                  Amount of                 Principal
Funding                  Funding                   Payment        Date Paid

------------------------------------------------------------------------------

<PAGE>
                                                                 EXHIBIT B
                                                                 ---------

          FORM OF AMENDED AND RESTATED CLASS B-R REVOLVING CERTIFICATE
          ------------------------------------------------------------

THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT") OR ANY STATE SECURITIES LAWS IN
RELIANCE ON EXEMPTIONS  PROVIDED BY THE SECURITIES ACT AND SUCH STATE SECURITIES
LAWS.  THIS  CERTIFICATE  MAY NOT BE SOLD OR OTHERWISE  TRANSFERRED,  PLEDGED OR
HYPOTHECATED UNLESS SUCH RESALE,  TRANSFER,  PLEDGE OR HYPOTHECATION (A) IS MADE
IN ACCORDANCE  WITH SECTION 2.06 OF THE TRUST  AGREEMENT  REFERRED TO HEREIN AND
(B) IS MADE (i)  PURSUANT  TO AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE
SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT FROM THE REGISTRATION  REQUIREMENTS
OF THE SECURITIES ACT AND APPLICABLE  STATE SECURITIES LAWS OR (iii) TO A PERSON
WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE  SECURITIES  ACT WHO IS AWARE THAT THE RESALE
OR OTHER  TRANSFER IS BEING MADE IN RELIANCE  ON RULE 144A.  NEITHER  ALLEGIANCE
FUNDING I, LLC (THE "DEPOSITOR") NOR MANUFACTURERS AND TRADERS TRUST COMPANY, AS
TRUSTEE (THE  "TRUSTEE"),  IS OBLIGATED TO REGISTER THE  CERTIFICATES  UNDER THE
SECURITIES  ACT OR ANY  APPLICABLE  STATE  SECURITIES  LAWS. IN THE EVENT THAT A
TRANSFER OF A CLASS B-R  CERTIFICATE IS TO BE MADE, THE  PROSPECTIVE  TRANSFEREE
SHALL DELIVER AN INVESTMENT AND ASSUMPTION LETTER IN THE FORM REQUIRED UNDER THE
TRUST  AGREEMENT AND, IF THE TRUSTEE SO REQUESTS (IN A TRANSFER OTHER THAN UNDER
RULE 144A),  AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH  TRANSFER MAY BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAWS.

DUE TO THE  PROVISIONS  FOR FUNDINGS AND FOR THE PAYMENT OF PRINCIPAL  CONTAINED
HEREIN,  THE OUTSTANDING  PRINCIPAL AMOUNT OF THIS CERTIFICATE ON ANY PARTICULAR
DATE MAY BE LESS THAN THE AMOUNT  SHOWN ON THE FACE  HEREOF.  ANYONE  PURCHASING
THIS  CERTIFICATE  MAY  ASCERTAIN  THE  OUTSTANDING  PRINCIPAL  AMOUNT HEREOF BY
INQUIRY OF THE TRUSTEE.

No. B-R                                                        % of Class
        -----                                                             ----

                           ALLEGIANCE CAPITAL TRUST I
       AMENDED AND RESTATED CLASS B-R REVOLVING CERTIFICATE, SERIES 1998-1

Evidencing an undivided fractional interest in the Trust Estate, the property of
which includes, among other things, certain Loan Assets and monies on deposit in
the Collection Account.

          (This Certificate does not represent an obligation of, or an
       interest in, the Depositor, Allegiance Capital, LLC, the Trustee or
               any of their respective affiliates or successors.)


                           Registered Owner:
                                            -----------------------------
                                      B-1

<PAGE>

DELIVERY DATE:                          SERIES TERMINATION DATE: July 15, 2019
              ----- --, ----

         THIS CERTIFIES THAT the registered  owner  specified above is the owner
of an  undivided  fractional  interest in the  Allegiance  Capital  Trust I (the
"Trust") formed by Allegiance Funding Corp. I (the  "Depositor").  The Trust was
created pursuant to the Trust  Agreement,  dated as of August 1, 1998, among the
Depositor,  Manufacturers and Traders Trust Company, as Trustee (the "Trustee"),
and Point West  Capital  Corporation,  as Servicer,  and the Second  Amended and
Restated Supplement to Trust Agreement for Revolving Series 1998-1,  dated as of
September 15, 1999  (amending  and  restating  the original  Supplement to Trust
Agreement for Revolving  Series 1998-1,  dated as of August 1, 1998),  among the
Depositor,  the  Trustee  and  Point  West  Capital  Corporation,   as  Servicer
(collectively, the "Trust Agreement").  Reference is made to the Trust Agreement
for a statement  of the  respective  rights  thereunder  of the  Depositor,  the
Trustee  and the  Holders  of the  Certificates,  and the terms  upon  which the
Certificates are, and are to be, authenticated and delivered.  To the extent not
otherwise  defined  herein,  each  capitalized  term used herein has the meaning
assigned to it in the Trust Agreement.

         This  Certificate  is one of a duly  authorized  issue of  Certificates
designated as the Amended and Restated Class B-R Revolving Certificates,  Series
1998-1  having a scheduled  maturity of April 17, 2000 and a Series  Termination
Date of July 15, 2019 (herein called the "Class B-R Certificates") issued and to
be issued under the Trust Agreement.  This Class B-R Certificate is issued under
and is subject to the terms,  provisions and conditions of the Trust  Agreement,
to which Trust  Agreement the holder of this Class B-R  Certificate by virtue of
such Holder's acceptance hereof assents and by which such Holder is bound.

         The Holder of this  Certificate  is obligated  to provide  funds to the
Depositor  on each  Funding  Date  during  the  Funding  Period  subject  to the
applicable  terms and conditions  set forth in the  Transaction  Documents.  The
Fundings  made by the  Holder  of this  Certificate  to the  Depositor  shall be
evidenced by this  Certificate  and the  Certificateholder  shall endorse on the
schedule  annexed  hereto and made a part  hereof,  or elsewhere in its internal
records, the date and amount of each Funding made by it to the Depositor and the
amount of each payment of principal made by the Depositor with respect  thereto.
The Certificateholder is authorized and directed by the Depositor to endorse the
schedule   attached  hereto  or  maintain  such  records;   provided  that  each
                                                            --------
Certificateholder's  endorsements or records shall be effective only if they are
in agreement with the register maintained by the Trustee,  absent manifest error
in such register.  The failure of the  Certificateholder to make, or an error in
making,  a notation  with  respect to any Funding  shall not limit or  otherwise
affect the obligations of the Depositor  hereunder or under the Trust Agreement.
The aggregate  amount of all Fundings  required to be made by the Holder of this
Certificate shall be as set forth in the Revolving Funding Schedule.

         This Class B-R Certificate bears interest during each Accrual Period on
the  Outstanding  Principal  Amount  hereof (as of the first day of the  Accrual
Period) at the  Certificate  Interest  Rate,  until and  including  the last day
preceding the Payment Date on which the Outstanding  Principal Amount hereof has
been reduced to zero. Interest on the Outstanding  Principal Amount hereof shall
be calculated on the basis of a 360-day year  consisting of 12 months of 30 days
each.  Interest  shall be due and payable in arrears on each  Payment  Date.  In
addition,  with  respect to any  Funding by the Class B-R  Certificates  of this
Series occurring in any Accrual Period following the preceding Payment Date, the
related  Funding  Amounts shall accrue  interest  from the related  Funding Date
through the end of the Accrual Period in which such Funding occurs in the amount
of the  applicable  First Period  Interest,  which interest shall be paid on the
next  Payment  Date.  The First Period  Interest on the Funding  Amount shall be
determined on the Funding Date at the rate  established on the applicable  Reset
Date. Notwithstanding the foregoing, if the Outstanding Principal Amount of this
Certificate is not paid in full by its Scheduled Maturity, then, for any Accrual
Period

                                      B-2
<PAGE>



commencing on or after such Scheduled Maturity, the Certificate Interest Rate on
this Certificate shall be increased by 1.00%. In making any interest payment, if
the interest calculation with respect to a Certificate shall result in a portion
of such payment  being less than $0.01,  then such payment shall be decreased to
the nearest whole cent,  and no subsequent  adjustment  shall be made in respect
thereof.

         The  principal  of this  Class  B-R  Certificate  shall be  payable  in
installments  ending no later than the Series Termination Date unless this Class
B-R  Certificate  becomes  due and  payable  at an  earlier  date  by  call  for
redemption or otherwise.  All reductions in the principal  amount of a Class B-R
Certificate  effected by  payments  of  installments  of  principal  made on any
Payment  Date  shall be  binding  upon all  future  Holders  of this  Class  B-R
Certificate  and of any Class B-R  Certificate  issued upon the  registration of
transfer  hereof or in exchange  herefor or in lieu hereof,  whether or not such
payment is noted on this Class B-R  Certificate.  Each  installment of principal
payable  on this  Class  B-R  Certificate  shall be in an  amount  equal to this
Certificateholder's  pro rata  share of the  Class  B-R  Principal  Distribution
Amount  available to be paid in accordance  with the  priorities of Section 3 of
the Supplement for this Series and Section 5.02 of the Trust Agreement.  Subject
to the terms of the Trust  Agreement,  the  principal  payable on this Class B-R
Certificate  shall be paid on each  Payment  Date  during  the term of the Trust
Agreement, beginning on the Initial Payment Date. All payments of principal with
respect to all of the Class B-R  Certificates of a Series shall be made on a pro
rata basis based upon the ratio that the Outstanding Principal Amount of a Class
B-R  Certificate  bears to the  Outstanding  Principal  Amount  of all Class B-R
Certificates  of such Series;  provided that, if as a result of such proration a
                               --------
portion of such principal  would be less than $0.01,  then such payment shall be
reduced to the nearest whole cent.

         In addition,  the Certificate  Prepayment Fee Amount,  if any, shall be
distributed on each Payment Date to the Holders of the Class B-R Certificates to
the extent such Class is receiving a distribution of Prepaid Principal Amount on
such date.  All payments of  Certificate  Prepayment Fee Amounts with respect to
the Class B-R  Certificates  shall be made  prorata  based upon the ratio of the
Outstanding  Principal Amount of this  Certificate to the Outstanding  Principal
Amount of Class B-R Certificates of this Series, provided that if as a result of
such  proration,  a portion of such payment would be less than $0.01,  then such
payment shall be reduce to the nearest whole cent.

         The  interest and  principal  so payable on any Payment  Date will,  as
provided  in the  Trust  Agreement,  be paid to the  Person  in whose  name this
Certificate is registered on the Record Date for such Payment Date,  which shall
be the close of business on the last day of the month prior to such Payment Date
(whether or not a Business Day). The principal and interest on this  Certificate
are  payable by wire  transfer  in  immediately  available  funds to the account
specified  in writing to the  Trustee  by the Person  whose name  appears as the
Registered  Holder of this Certificate on the Certificate  Register  received at
least five (5)  Business  Days prior to the Record Date for the Payment Date (or
if no such  account  is  specified  or if such wire  fails,  by check  mailed by
first-class  mail to the Person whose name appears as the  Registered  Holder of
this Certificate on the Certificate Register at the address of such Person as it
appears on the  Certificate  Register),  in such coin or  currency of the United
States of  America as at the time of  payment  is legal  tender  for  payment of
public and private debts. Funds represented by checks returned  undelivered will
be held for payment to the Person entitled thereto,  subject to the terms of the
Trust  Agreement,  at the  office  or  agency in the  United  States of  America
designated  as such by the  Depositor  for such  purpose  pursuant  to the Trust
Agreement.

         The Depositor has structured the Trust  Agreement and the  Certificates
with the intention that the Trust be treated as a  partnership,  with the assets
of the  partnership  including  all of the  assets of the Trust  Estate  and the
partners  of  the  partnership  being  all  of the  Certificateholders  and  the
Depositor.  The Depositor, the Trustee, the Servicer and each Certificateholder,
by acceptance of its Certificate  (and any

                                      B-3

<PAGE>


Person that is a beneficial owner of any interest in a Certificate, by virtue of
such Person's acquisition of a beneficial interest therein), agree to report the
transactions  contemplated  thereby in  accordance  with such stated  intentions
unless and until determined to the contrary by an applicable taxing authority.

         The  property  of the Trust  Estate  includes  certain  Loan Assets and
certain  other  assets  described  in  the  Trust   Agreement.   The  Class  B-R
Certificates of the 1998-1 Series and all other Series of Class B-R Certificates
issued under the Trust  Agreement are generally  payable out of the Trust Estate
pari passu among such Class B-R  Certificateholders  equally and ratably without
prejudice,  priority or distinction  between any Class B-R Certificate by reason
of time of issue or otherwise.  The Class B-R  Certificates are payable only out
of the Trust Estate and do not represent recourse  obligations of the Depositor,
Allegiance Capital, LLC or any of their respective affiliates or successors. The
Trust  Agreement  pursuant  to which this Class B-R  Certificate  is issued also
provides for the issuance of other Classes and Series of Certificates  from time
to time.  Payments of interest on the Class B-R  Certificates are senior to such
payments on other  Classes  having a lower credit  rating from the Rating Agency
and are  subordinate  to payments  of  interest  on any Classes  having a higher
credit  rating form the Rating  Agency.  Payments of  principal in the Class B-R
Certificates are senior to payments of principal on other classes having a lower
credit rating from the Rating Agency and are subordinate to such payments on any
Class having a higher credit rating from the Rating Agency.

         Unless the Depositor  exercises its Optional  Termination  rights,  the
Certificates  are  payable  only at the time and in the manner  provided  in the
Trust  Agreement  and are not  redeemable  or  prepayable  at the  option of the
Depositor  before such time,  except that the  Depositor  may cause the Trust to
prepay on a dollar for dollar basis the principal,  without  penalty or premium,
of any  Outstanding  Series of Revolving  Certificates  with the proceeds of the
issuance or Funding of a Series of Term Certificates.

         As provided in the Trust  Agreement and subject to certain  limitations
therein set forth,  the transfer of this  Certificate  may be  registered on the
Certificate  Register of the Depositor  upon surrender of this  Certificate  for
registration  of transfer at the office or agency of the Depositor in the United
States of America maintained for such purpose,  duly endorsed by, or accompanied
by a written  instrument  of transfer  in form  reasonably  satisfactory  to the
Depositor and the Trustee and duly executed by the holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Class B-R Certificates
of the same  Scheduled  Maturity of  authorized  denominations  and for the same
initial aggregate principal amount will be issued to the designated transferees.

         Prior  to  due  presentment  for   registration  of  transfer  of  this
Certificate,  the  Depositor,  the Trustee and any agent of the Depositor or the
Trustee shall treat the Person in whose name this  Certificate  is registered as
the owner hereof for the purpose of receiving payment as herein provided and for
all other purposes whether or not this  Certificate be overdue,  and neither the
Depositor,  the  Trustee,  nor any such agent shall be affected by notice to the
contrary.

         The Holder of this  Certificate,  by  acceptance  of this  Certificate,
agrees that for one year and one day after it has been paid hereunder, it or any
Affiliate  thereof will not (without the consent of Holders holding at least 51%
of all Rated Certificates, by Outstanding Principal Amount) file any involuntary
petition or otherwise  institute any  bankruptcy,  reorganization,  arrangement,
insolvency or liquidation  proceeding or other  proceeding  under any federal or
state bankruptcy or similar law against the Depositor.

       The  Trust  Agreement  permits,  with  certain  exceptions  as  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the Depositor and the rights of the Holders of the

                                      B-4
<PAGE>

Certificates under the Trust Agreement at any time by the Depositor, the Trustee
and the Servicer without the consent of the Holders of the Certificates.

         The  Certificates  are issuable only in registered form without coupons
in such authorized  denominations as provided in the Trust Agreement and subject
to certain limitations therein set forth.

         This Class B-R Certificate and the Trust Agreement shall be governed by
and  construed in  accordance  with the internal  laws of the State of New York,
without regard to conflicts of laws principles.

         No  reference  herein to the Trust  Agreement  and no provision of this
Class  B-R  Certificate  or of the Trust  Agreement  shall  alter or impair  the
obligation  of the Trust  Estate to pay the  principal  of and  interest on this
Class B-R  Certificate,  but solely  from the assets of the Trust  Estate at the
times, place and rate, and in the coin or currency, herein prescribed.

                                      B-5



<PAGE>
         IN  WITNESS  WHEREOF,   Allegiance  Funding  I,  LLC  has  caused  this
instrument to be signed, manually, by the President or a Vice President of its
Manager, Allegiance Management Corp.

                                         ALLEGIANCE FUNDING I, LLC

                                       By:      Allegiance   Management  Corp.,
                                                as Manager
                                       By:
                                                ------------------------------
                                       Title:
                                                ------------------------------

<PAGE>


                          CERTIFICATE OF AUTHENTICATION


         This  is  one  of  the   Class B-R  Certificates   described   in  the
within-mentioned Trust Agreement.


Dated:
      -------------------------------------

MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee

By:
      --------------------------------------
                  Authorized Signatory




<PAGE>




Schedule to Class B-R Term Certificates, Series 1998-1

Disbursement
Date of                  Amount of                 Principal
Funding                  Funding                   Payment        Date Paid

------------------------------------------------------------------------------

<PAGE>

                                                                   EXHIBIT C-1
                                                                   -----------

          FORM OF AMENDED AND RESTATED CLASS C1-R REVOLVING CERTIFICATE
          -------------------------------------------------------------

THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT") OR ANY STATE SECURITIES LAWS IN
RELIANCE ON EXEMPTIONS  PROVIDED BY THE SECURITIES ACT AND SUCH STATE SECURITIES
LAWS.  THIS  CERTIFICATE  MAY NOT BE SOLD OR OTHERWISE  TRANSFERRED,  PLEDGED OR
HYPOTHECATED UNLESS SUCH RESALE,  TRANSFER,  PLEDGE OR HYPOTHECATION (A) IS MADE
IN ACCORDANCE  WITH SECTION 2.06 OF THE TRUST  AGREEMENT  REFERRED TO HEREIN AND
(B) IS MADE (i)  PURSUANT  TO AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE
SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT FROM THE REGISTRATION  REQUIREMENTS
OF THE SECURITIES ACT AND APPLICABLE  STATE SECURITIES LAWS OR (iii) TO A PERSON
WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE  SECURITIES  ACT WHO IS AWARE THAT THE RESALE
OR OTHER  TRANSFER IS BEING MADE IN RELIANCE  ON RULE 144A.  NEITHER  ALLEGIANCE
FUNDING I, LLC (THE "DEPOSITOR") NOR MANUFACTURERS AND TRADERS TRUST COMPANY, AS
TRUSTEE (THE  "TRUSTEE"),  IS OBLIGATED TO REGISTER THE  CERTIFICATES  UNDER THE
SECURITIES  ACT OR ANY  APPLICABLE  STATE  SECURITIES  LAWS. IN THE EVENT THAT A
TRANSFER OF A CLASS C1-R  CERTIFICATE IS TO BE MADE, THE PROSPECTIVE  TRANSFEREE
SHALL DELIVER AN INVESTMENT AND ASSUMPTION LETTER IN THE FORM REQUIRED UNDER THE
TRUST  AGREEMENT AND, IF THE TRUSTEE SO REQUESTS (IN A TRANSFER OTHER THAN UNDER
RULE 144A),  AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH  TRANSFER MAY BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAWS.

DUE TO THE  PROVISIONS  FOR FUNDINGS AND FOR THE PAYMENT OF PRINCIPAL  CONTAINED
HEREIN,  THE OUTSTANDING  PRINCIPAL AMOUNT OF THIS CERTIFICATE ON ANY PARTICULAR
DATE MAY BE LESS THAN THE AMOUNT  SHOWN ON THE FACE  HEREOF.  ANYONE  PURCHASING
THIS  CERTIFICATE  MAY  ASCERTAIN  THE  OUTSTANDING  PRINCIPAL  AMOUNT HEREOF BY
INQUIRY OF THE TRUSTEE.

No. C1-R                                                       % of Class
         ----                                                              ----

                           ALLEGIANCE CAPITAL TRUST I
      AMENDED AND RESTATED CLASS C1-R REVOLVING CERTIFICATE, SERIES 1998-1

Evidencing an undivided fractional interest in the Trust Estate, the property of
which includes, among other things, certain Loan Assets and monies on deposit in
the Collection Account.

          (This Certificate does not represent an obligation of, or an
            interest in, the Depositor,  Allegiance Capital, LLC, the Trustee or
               any of their respective affiliates or successors.)


                           Registered Owner:
                                             ----------------------------
                                      C1-1

<PAGE>

DELIVERY DATE:                            SERIES TERMINATION DATE: July 15, 2019
               ----- --, ----

         THIS CERTIFIES THAT the registered  owner  specified above is the owner
of an  undivided  fractional  interest in the  Allegiance  Capital  Trust I (the
"Trust") formed by Allegiance Funding Corp. I (the  "Depositor").  The Trust was
created pursuant to the Trust  Agreement,  dated as of August 1, 1998, among the
Depositor,  Manufacturers and Traders Trust Company, as Trustee (the "Trustee"),
and Point West  Capital  Corporation,  as Servicer,  and the Second  Amended and
Restated Supplement to Trust Agreement for Revolving Series 1998-1,  dated as of
September 15, 1999  (amending  and  restating  the original  Supplement to Trust
Agreement for Revolving  Series 1998-1,  dated as of August 1, 1998),  among the
Depositor,  the  Trustee  and  Point  West  Capital  Corporation,   as  Servicer
(collectively, the "Trust Agreement").  Reference is made to the Trust Agreement
for a statement  of the  respective  rights  thereunder  of the  Depositor,  the
Trustee  and the  Holders  of the  Certificates,  and the terms  upon  which the
Certificates are, and are to be, authenticated and delivered.  To the extent not
otherwise  defined  herein,  each  capitalized  term used herein has the meaning
assigned to it in the Trust Agreement.

         This  Certificate  is one of a duly  authorized  issue of  Certificates
designated as the Amended and Restated Class C1-R Revolving Certificates, Series
1998-1  having a scheduled  maturity of April 17, 2000 and a Series  Termination
Date of July 15, 2019 (herein called the "Class C1-R  Certificates")  issued and
to be issued under the Trust  Agreement.  This Class C1-R  Certificate is issued
under and is  subject  to the  terms,  provisions  and  conditions  of the Trust
Agreement, to which Trust Agreement the holder of this Class C1-R Certificate by
virtue of such Holder's  acceptance  hereof  assents and by which such Holder is
bound.

         The Holder of this  Certificate  is obligated  to provide  funds to the
Depositor  on each  Funding  Date  during  the  Funding  Period  subject  to the
applicable  terms and conditions  set forth in the  Transaction  Documents.  The
Fundings  made by the  Holder  of this  Certificate  to the  Depositor  shall be
evidenced by this  Certificate  and the  Certificateholder  shall endorse on the
schedule  annexed  hereto and made a part  hereof,  or elsewhere in its internal
records, the date and amount of each Funding made by it to the Depositor and the
amount of each payment of principal made by the Depositor with respect  thereto.
The Certificateholder is authorized and directed by the Depositor to endorse the
schedule   attached  hereto  or  maintain  such  records;   provided  that  each
                                                            --------
Certificateholder's  endorsements or records shall be effective only if they are
in agreement with the register maintained by the Trustee,  absent manifest error
in such register.  The failure of the  Certificateholder to make, or an error in
making,  a notation  with  respect to any Funding  shall not limit or  otherwise
affect the obligations of the Depositor  hereunder or under the Trust Agreement.
The aggregate  amount of all Fundings  required to be made by the Holder of this
Certificate shall be as set forth in the Revolving Funding Schedule.

          This Class C1-R  Certificate bears interest during each Accrual Period
on the Outstanding  Principal  Amount hereof (as of the first day of the Accrual
Period) at the  Certificate  Interest  Rate,  until and  including  the last day
preceding the Payment Date on which the Outstanding  Principal Amount hereof has
been reduced to zero. Interest on the Outstanding  Principal Amount hereof shall
be calculated on the basis of a 360-day year  consisting of 12 months of 30 days
each.  Interest  shall be due and payable in arrears on each  Payment  Date.  In
addition,  with  respect to any Funding by the Class C1-R  Certificates  of this
Series occurring in any Accrual Period following the preceding Payment Date, the
related  Funding  Amounts shall accrue  interest  from the related  Funding Date
through the end of the Accrual Period in which such Funding occurs in the amount
of the  applicable  First Period  Interest,  which interest shall be paid on the
next  Payment  Date.  The First Period  Interest on the Funding  Amount shall be
determined on the Funding Date at the rate  established on the applicable  Reset
Date. Notwithstanding the foregoing, if the Outstanding Principal Amount of this
Certificate is not paid in full by its Scheduled Maturity, then, for any Accrual
Period

                                      C1-2

<PAGE>


commencing on or after such Scheduled Maturity, the Certificate Interest Rate on
this Certificate shall be increased by 1.00%. In making any interest payment, if
the interest calculation with respect to a Certificate shall result in a portion
of such payment  being less than $0.01,  then such payment shall be decreased to
the nearest whole cent,  and no subsequent  adjustment  shall be made in respect
thereof.

         The  principal  of this  Class  C1-R  Certificate  shall be  payable in
installments  ending no later than the Series Termination Date unless this Class
C1-R  Certificate  becomes  due and  payable  at an  earlier  date  by call  for
redemption or otherwise.  All reductions in the principal amount of a Class C1-R
Certificate  effected by  payments  of  installments  of  principal  made on any
Payment  Date  shall be  binding  upon all  future  Holders  of this  Class C1-R
Certificate and of any Class C1-R  Certificate  issued upon the  registration of
transfer  hereof or in exchange  herefor or in lieu hereof,  whether or not such
payment is noted on this Class C1-R  Certificate.  Each installment of principal
payable  on this  Class  C1-R  Certificate  shall be in an amount  equal to this
Certificateholder's  pro rata  share of the Class  C1-R  Principal  Distribution
Amount  available to be paid in accordance  with the  priorities of Section 3 of
the Supplement for this Series and Section 5.02 of the Trust Agreement.  Subject
to the terms of the Trust  Agreement,  the principal  payable on this Class C1-R
Certificate  shall be paid on each  Payment  Date  during  the term of the Trust
Agreement, beginning on the Initial Payment Date. All payments of principal with
respect to all of the Class C1-R Certificates of a Series shall be made on a pro
rata basis based upon the ratio that the Outstanding Principal Amount of a Class
C1-R  Certificate  bears to the Outstanding  Principal  Amount of all Class C1-R
Certificates  of such Series;  provided that, if as a result of such proration a
                               --------
portion of such principal  would be less than $0.01,  then such payment shall be
reduced to the nearest whole cent.

         In addition,  the Certificate  Prepayment Fee Amount,  if any, shall be
distributed  on each Payment Date to the Holders of the Class C1-R  Certificates
to the extent such Class is receiving a distribution of Prepaid Principal Amount
on such date. All payments of Certificate Prepayment Fee Amounts with respect to
the Class C1-R  Certificates  shall be made prorata  based upon the ratio of the
Outstanding  Principal Amount of this  Certificate to the Outstanding  Principal
Amount of Class C1-R  Certificates of this Series,  provided that if as a result
of such proration, a portion of such payment would be less than $0.01, then such
payment shall be reduce to the nearest whole cent.

         The  interest and  principal  so payable on any Payment  Date will,  as
provided  in the  Trust  Agreement,  be paid to the  Person  in whose  name this
Certificate is registered on the Record Date for such Payment Date,  which shall
be the close of business on the last day of the month prior to such Payment Date
(whether or not a Business Day). The principal and interest on this  Certificate
are  payable by wire  transfer  in  immediately  available  funds to the account
specified  in writing to the  Trustee  by the Person  whose name  appears as the
Registered  Holder of this Certificate on the Certificate  Register  received at
least five (5)  Business  Days prior to the Record Date for the Payment Date (or
if no such  account  is  specified  or if such wire  fails,  by check  mailed by
first-class  mail to the Person whose name appears as the  Registered  Holder of
this Certificate on the Certificate Register at the address of such Person as it
appears on the  Certificate  Register),  in such coin or  currency of the United
States of  America as at the time of  payment  is legal  tender  for  payment of
public and private debts. Funds represented by checks returned  undelivered will
be held for payment to the Person entitled thereto,  subject to the terms of the
Trust  Agreement,  at the  office  or  agency in the  United  States of  America
designated  as such by the  Depositor  for such  purpose  pursuant  to the Trust
Agreement.

      The Depositor has structured the Trust  Agreement and the  Certificates
with the intention that the Trust be treated as a  partnership,  with the assets
of the  partnership  including  all of the  assets of the Trust  Estate  and the
partners  of  the  partnership  being  all  of the  Certificateholders  and  the
Depositor.  The Depositor, the Trustee, the Servicer and each Certificateholder,
by acceptance of its Certificate  (and any

                                      C1-3
<PAGE>


Person that is a beneficial owner of any interest in a Certificate, by virtue of
such Person's acquisition of a beneficial interest therein), agree to report the
transactions  contemplated  thereby in  accordance  with such stated  intentions
unless and until determined to the contrary by an applicable taxing authority.

         The  property  of the Trust  Estate  includes  certain  Loan Assets and
certain  other  assets  described  in  the  Trust  Agreement.   The  Class  C1-R
Certificates   of  the  1998-1  Series  and  all  other  Series  of  Class  C1-R
Certificates  issued under the Trust Agreement are generally  payable out of the
Trust  Estate  pari passu among such Class C1-R  Certificateholders  equally and
ratably  without  prejudice,  priority  or  distinction  between  any Class C1-R
Certificate by reason of time of issue or otherwise. The Class C1-R Certificates
are  payable  only  out of the  Trust  Estate  and  do  not  represent  recourse
obligations of the Depositor, Allegiance Capital, LLC or any of their respective
affiliates or successors.  The Trust Agreement pursuant to which this Class C1-R
Certificate is issued also provides for the issuance of other Classes and Series
of  Certificates  from time to time.  Payments  of  interest  on the Class  C1-R
Certificates  are senior to such payments on other Classes having a lower credit
rating from the Rating Agency and are subordinate to payments of interest on any
Classes  having a higher  credit  rating  form the Rating  Agency.  Payments  of
principal in the Class C1-R  Certificates are senior to payments of principal on
other  classes  having a lower  credit  rating  from the  Rating  Agency and are
subordinate to such payments on any Class having a higher credit rating from the
Rating Agency.

         Unless the Depositor  exercises its Optional  Termination  rights,  the
Certificates  are  payable  only at the time and in the manner  provided  in the
Trust  Agreement  and are not  redeemable  or  prepayable  at the  option of the
Depositor  before such time,  except that the  Depositor  may cause the Trust to
prepay on a dollar for dollar basis the principal,  without  penalty or premium,
of any  Outstanding  Series of Revolving  Certificates  with the proceeds of the
issuance or Funding of a Series of Term Certificates.

         As provided in the Trust  Agreement and subject to certain  limitations
therein set forth,  the transfer of this  Certificate  may be  registered on the
Certificate  Register of the Depositor  upon surrender of this  Certificate  for
registration  of transfer at the office or agency of the Depositor in the United
States of America maintained for such purpose,  duly endorsed by, or accompanied
by a written  instrument  of transfer  in form  reasonably  satisfactory  to the
Depositor and the Trustee and duly executed by the holder hereof or his attorney
duly  authorized  in  writing,   and  thereupon  one  or  more  new  Class  C1-R
Certificates of the same Scheduled Maturity of authorized  denominations and for
the same initial  aggregate  principal  amount will be issued to the  designated
transferees.

         Prior  to  due  presentment  for   registration  of  transfer  of  this
Certificate,  the  Depositor,  the Trustee and any agent of the Depositor or the
Trustee shall treat the Person in whose name this  Certificate  is registered as
the owner hereof for the purpose of receiving payment as herein provided and for
all other purposes whether or not this  Certificate be overdue,  and neither the
Depositor,  the  Trustee,  nor any such agent shall be affected by notice to the
contrary.

         The Holder of this  Certificate,  by  acceptance  of this  Certificate,
agrees that for one year and one day after it has been paid hereunder, it or any
Affiliate  thereof will not (without the consent of Holders holding at least 51%
of all Rated Certificates, by Outstanding Principal Amount) file any involuntary
petition or otherwise  institute any  bankruptcy,  reorganization,  arrangement,
insolvency or liquidation  proceeding or other  proceeding  under any federal or
state bankruptcy or similar law against the Depositor.

         The  Trust  Agreement  permits,  with  certain  exceptions  as  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the Depositor and the rights of the Holders of the

                                      C1-4
<PAGE>


Certificates under the Trust Agreement at any time by the Depositor, the Trustee
and the Servicer without the consent of the Holders of the Certificates.

         The  Certificates  are issuable only in registered form without coupons
in such authorized  denominations as provided in the Trust Agreement and subject
to certain limitations therein set forth.

         This Class C1-R  Certificate  and the Trust Agreement shall be governed
by and construed in accordance  with the internal laws of the State of New York,
without regard to conflicts of laws principles.

         No  reference  herein to the Trust  Agreement  and no provision of this
Class  C1-R  Certificate  or of the Trust  Agreement  shall  alter or impair the
obligation  of the Trust  Estate to pay the  principal  of and  interest on this
Class C1-R  Certificate,  but solely from the assets of the Trust  Estate at the
times, place and rate, and in the coin or currency, herein prescribed.

                                      C1-5

<PAGE>

        IN  WITNESS  WHEREOF,   Allegiance  Funding  I,  LLC  has  caused  this
instrument to be signed, manually, by the President or a Vice President of its
Manager, Allegiance Management Corp.

                                         ALLEGIANCE FUNDING I, LLC

                                       By:      Allegiance   Management  Corp.,
                                                as Manager
                                       By:
                                                ------------------------------
                                       Title:
                                                ------------------------------

<PAGE>


                          CERTIFICATE OF AUTHENTICATION


         This  is  one  of  the   Class C1-R Certificates   described   in  the
within-mentioned Trust Agreement.


Dated:
      -------------------------------------

MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee

By:
      --------------------------------------
                  Authorized Signatory




<PAGE>




Schedule to Class C1-R Term Certificates, Series 1998-1

Disbursement
Date of                  Amount of                 Principal
Funding                  Funding                   Payment        Date Paid

------------------------------------------------------------------------------

<PAGE>


                                                                    EXHIBIT C-2
                                                                    -----------

          FORM OF AMENDED AND RESTATED CLASS C2-R REVOLVING CERTIFICATE
          -------------------------------------------------------------

THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT") OR ANY STATE SECURITIES LAWS IN
RELIANCE ON EXEMPTIONS  PROVIDED BY THE SECURITIES ACT AND SUCH STATE SECURITIES
LAWS.  THIS  CERTIFICATE  MAY NOT BE SOLD OR OTHERWISE  TRANSFERRED,  PLEDGED OR
HYPOTHECATED UNLESS SUCH RESALE,  TRANSFER,  PLEDGE OR HYPOTHECATION (A) IS MADE
IN ACCORDANCE  WITH SECTION 2.06 OF THE TRUST  AGREEMENT  REFERRED TO HEREIN AND
(B) IS MADE (i)  PURSUANT  TO AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE
SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT FROM THE REGISTRATION  REQUIREMENTS
OF THE SECURITIES ACT AND APPLICABLE  STATE SECURITIES LAWS OR (iii) TO A PERSON
WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE  SECURITIES  ACT WHO IS AWARE THAT THE RESALE
OR OTHER  TRANSFER IS BEING MADE IN RELIANCE  ON RULE 144A.  NEITHER  ALLEGIANCE
FUNDING I, LLC (THE "DEPOSITOR") NOR MANUFACTURERS AND TRADERS TRUST COMPANY, AS
TRUSTEE (THE  "TRUSTEE"),  IS OBLIGATED TO REGISTER THE  CERTIFICATES  UNDER THE
SECURITIES  ACT OR ANY  APPLICABLE  STATE  SECURITIES  LAWS. IN THE EVENT THAT A
TRANSFER OF A CLASS C2-R  CERTIFICATE IS TO BE MADE, THE PROSPECTIVE  TRANSFEREE
SHALL DELIVER AN INVESTMENT AND ASSUMPTION LETTER IN THE FORM REQUIRED UNDER THE
TRUST  AGREEMENT AND, IF THE TRUSTEE SO REQUESTS (IN A TRANSFER OTHER THAN UNDER
RULE 144A),  AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH  TRANSFER MAY BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAWS.

DUE TO THE  PROVISIONS  FOR FUNDINGS AND FOR THE PAYMENT OF PRINCIPAL  CONTAINED
HEREIN,  THE OUTSTANDING  PRINCIPAL AMOUNT OF THIS CERTIFICATE ON ANY PARTICULAR
DATE MAY BE LESS THAN THE AMOUNT  SHOWN ON THE FACE  HEREOF.  ANYONE  PURCHASING
THIS  CERTIFICATE  MAY  ASCERTAIN  THE  OUTSTANDING  PRINCIPAL  AMOUNT HEREOF BY
INQUIRY OF THE TRUSTEE.

No. C2-R                                                     % of Class
        ----                                                            ----


                           ALLEGIANCE CAPITAL TRUST I
      AMENDED AND RESTATED CLASS C2-R REVOLVING CERTIFICATE, SERIES 1998-1

Evidencing an undivided fractional interest in the Trust Estate, the property of
which includes, among other things, certain Loan Assets and monies on deposit in
the Collection Account.

          (This Certificate does not represent an obligation of, or an
       interest in, the Depositor, Allegiance Capital, LLC, the Trustee or
            any of their respective affiliates or successors.)


                           Registered Owner:
                          -------------------------

                                      C2-1
<PAGE>


DELIVERY DATE:                            SERIES TERMINATION DATE: July 15, 2019
               ------

         THIS CERTIFIES THAT the registered  owner  specified above is the owner
of an  undivided  fractional  interest in the  Allegiance  Capital  Trust I (the
"Trust") formed by Allegiance Funding Corp. I (the  "Depositor").  The Trust was
created pursuant to the Trust  Agreement,  dated as of August 1, 1998, among the
Depositor,  Manufacturers and Traders Trust Company, as Trustee (the "Trustee"),
and Point West  Capital  Corporation,  as Servicer,  and the Second  Amended and
Restated Supplement to Trust Agreement for Revolving Series 1998-1,  dated as of
September 15, 1999  (amending  and  restating  the original  Supplement to Trust
Agreement for Revolving  Series 1998-1,  dated as of August 1, 1998),  among the
Depositor,  the  Trustee  and  Point  West  Capital  Corporation,   as  Servicer
(collectively, the "Trust Agreement").  Reference is made to the Trust Agreement
for a statement  of the  respective  rights  thereunder  of the  Depositor,  the
Trustee  and the  Holders  of the  Certificates,  and the terms  upon  which the
Certificates are, and are to be, authenticated and delivered.  To the extent not
otherwise  defined  herein,  each  capitalized  term used herein has the meaning
assigned to it in the Trust Agreement.

         This  Certificate  is one of a duly  authorized  issue of  Certificates
designated as the Amended and Restated Class C2-R Revolving Certificates, Series
1998-1  having a scheduled  maturity of April 17, 2000 and a Series  Termination
Date of July 15, 2019 (herein called the "Class C2-R  Certificates")  issued and
to be issued under the Trust  Agreement.  This Class C2-R  Certificate is issued
under and is  subject  to the  terms,  provisions  and  conditions  of the Trust
Agreement, to which Trust Agreement the holder of this Class C2-R Certificate by
virtue of such Holder's  acceptance  hereof  assents and by which such Holder is
bound.

         The Holder of this  Certificate  is obligated  to provide  funds to the
Depositor  on each  Funding  Date  during  the  Funding  Period  subject  to the
applicable  terms and conditions  set forth in the  Transaction  Documents.  The
Fundings  made by the  Holder  of this  Certificate  to the  Depositor  shall be
evidenced by this  Certificate  and the  Certificateholder  shall endorse on the
schedule  annexed  hereto and made a part  hereof,  or elsewhere in its internal
records, the date and amount of each Funding made by it to the Depositor and the
amount of each payment of principal made by the Depositor with respect  thereto.
The Certificateholder is authorized and directed by the Depositor to endorse the
schedule   attached  hereto  or  maintain  such  records;   provided  that  each
                                                            --------
Certificateholder's  endorsements or records shall be effective only if they are
in agreement with the register maintained by the Trustee,  absent manifest error
in such register.  The failure of the  Certificateholder to make, or an error in
making,  a notation  with  respect to any Funding  shall not limit or  otherwise
affect the obligations of the Depositor  hereunder or under the Trust Agreement.
The aggregate  amount of all Fundings  required to be made by the Holder of this
Certificate shall be as set forth in the Revolving Funding Schedule.

         This Class C2-R  Certificate  bears interest during each Accrual Period
on the Outstanding  Principal  Amount hereof (as of the first day of the Accrual
Period) at the  Certificate  Interest  Rate,  until and  including  the last day
preceding the Payment Date on which the Outstanding  Principal Amount hereof has
been reduced to zero. Interest on the Outstanding  Principal Amount hereof shall
be calculated on the basis of a 360-day year  consisting of 12 months of 30 days
each.  Interest  shall be due and payable in arrears on each  Payment  Date.  In
addition,  with  respect to any Funding by the Class C2-R  Certificates  of this
Series occurring in any Accrual Period following the preceding Payment Date, the
related  Funding  Amounts shall accrue  interest  from the related  Funding Date
through the end of the Accrual Period in which such Funding occurs in the amount
of the  applicable  First Period  Interest,  which interest shall be paid on the
next  Payment  Date.  The First Period  Interest on the Funding  Amount shall be
determined on the Funding Date at the rate  established on the applicable  Reset
Date. Notwithstanding the foregoing, if the Outstanding Principal Amount of this
Certificate is not paid in full by its Scheduled Maturity, then, for any Accrual
Period

                                      C2-2

<PAGE>

commencing on or after such Scheduled Maturity, the Certificate Interest Rate on
this Certificate shall be increased by 1.00%. In making any interest payment, if
the interest calculation with respect to a Certificate shall result in a portion
of such payment  being less than $0.01,  then such payment shall be decreased to
the nearest whole cent,  and no subsequent  adjustment  shall be made in respect
thereof.

         The  principal  of this  Class  C2-R  Certificate  shall be  payable in
installments  ending no later than the Series Termination Date unless this Class
C2-R  Certificate  becomes  due and  payable  at an  earlier  date  by call  for
redemption or otherwise.  All reductions in the principal amount of a Class C2-R
Certificate  effected by  payments  of  installments  of  principal  made on any
Payment  Date  shall be  binding  upon all  future  Holders  of this  Class C2-R
Certificate and of any Class C2-R  Certificate  issued upon the  registration of
transfer  hereof or in exchange  herefor or in lieu hereof,  whether or not such
payment is noted on this Class C2-R  Certificate.  Each installment of principal
payable  on this  Class  C2-R  Certificate  shall be in an amount  equal to this
Certificateholder's  pro rata  share of the Class  C2-R  Principal  Distribution
Amount  available to be paid in accordance  with the  priorities of Section 3 of
the Supplement for this Series and Section 5.02 of the Trust Agreement.  Subject
to the terms of the Trust  Agreement,  the principal  payable on this Class C2-R
Certificate  shall be paid on each  Payment  Date  during  the term of the Trust
Agreement, beginning on the Initial Payment Date. All payments of principal with
respect to all of the Class C2-R Certificates of a Series shall be made on a pro
rata basis based upon the ratio that the Outstanding Principal Amount of a Class
C2-R  Certificate  bears to the Outstanding  Principal  Amount of all Class C2-R
Certificates  of such Series;  provided that, if as a result of such proration a
                               --------
portion of such principal  would be less than $0.01,  then such payment shall be
reduced to the nearest whole cent.

         In addition,  the Certificate  Prepayment Fee Amount,  if any, shall be
distributed  on each Payment Date to the Holders of the Class C2-R  Certificates
to the extent such Class is receiving a distribution of Prepaid Principal Amount
on such date. All payments of Certificate Prepayment Fee Amounts with respect to
the Class C2-R  Certificates  shall be made prorata  based upon the ratio of the
Outstanding  Principal Amount of this  Certificate to the Outstanding  Principal
Amount of Class C2-R  Certificates of this Series,  provided that if as a result
of such proration, a portion of such payment would be less than $0.01, then such
payment shall be reduce to the nearest whole cent.

         The  interest and  principal  so payable on any Payment  Date will,  as
provided  in the  Trust  Agreement,  be paid to the  Person  in whose  name this
Certificate is registered on the Record Date for such Payment Date,  which shall
be the close of business on the last day of the month prior to such Payment Date
(whether or not a Business Day). The principal and interest on this  Certificate
are  payable by wire  transfer  in  immediately  available  funds to the account
specified  in writing to the  Trustee  by the Person  whose name  appears as the
Registered  Holder of this Certificate on the Certificate  Register  received at
least five (5)  Business  Days prior to the Record Date for the Payment Date (or
if no such  account  is  specified  or if such wire  fails,  by check  mailed by
first-class  mail to the Person whose name appears as the  Registered  Holder of
this Certificate on the Certificate Register at the address of such Person as it
appears on the  Certificate  Register),  in such coin or  currency of the United
States of  America as at the time of  payment  is legal  tender  for  payment of
public and private debts. Funds represented by checks returned  undelivered will
be held for payment to the Person entitled thereto,  subject to the terms of the
Trust  Agreement,  at the  office  or  agency in the  United  States of  America
designated  as such by the  Depositor  for such  purpose  pursuant  to the Trust
Agreement.

         The Depositor has structured the Trust  Agreement and the  Certificates
with the intention that the Trust be treated as a  partnership,  with the assets
of the  partnership  including  all of the  assets of the Trust  Estate  and the
partners  of  the  partnership  being  all  of the  Certificateholders  and  the
Depositor.  The Depositor, the Trustee, the Servicer and each Certificateholder,
by acceptance of its Certificate  (and any

                                      C2-3
<PAGE>


Person that is a beneficial owner of any interest in a Certificate, by virtue of
such Person's acquisition of a beneficial interest therein), agree to report the
transactions  contemplated  thereby in  accordance  with such stated  intentions
unless and until determined to the contrary by an applicable taxing authority.

         The  property  of the Trust  Estate  includes  certain  Loan Assets and
certain  other  assets  described  in  the  Trust  Agreement.   The  Class  C2-R
Certificates   of  the  1998-1  Series  and  all  other  Series  of  Class  C2-R
Certificates  issued under the Trust Agreement are generally  payable out of the
Trust  Estate  pari passu among such Class C2-R  Certificateholders  equally and
ratably  without  prejudice,  priority  or  distinction  between  any Class C2-R
Certificate by reason of time of issue or otherwise. The Class C2-R Certificates
are  payable  only  out of the  Trust  Estate  and  do  not  represent  recourse
obligations of the Depositor, Allegiance Capital, LLC or any of their respective
affiliates or successors.  The Trust Agreement pursuant to which this Class C2-R
Certificate is issued also provides for the issuance of other Classes and Series
of  Certificates  from time to time.  Payments  of  interest  on the Class  C2-R
Certificates  are senior to such payments on other Classes having a lower credit
rating from the Rating Agency and are subordinate to payments of interest on any
Classes  having a higher  credit  rating  form the Rating  Agency.  Payments  of
principal in the Class C2-R  Certificates are senior to payments of principal on
other  classes  having a lower  credit  rating  from the  Rating  Agency and are
subordinate to such payments on any Class having a higher credit rating from the
Rating Agency.

         Unless the Depositor  exercises its Optional  Termination  rights,  the
Certificates  are  payable  only at the time and in the manner  provided  in the
Trust  Agreement  and are not  redeemable  or  prepayable  at the  option of the
Depositor  before such time,  except that the  Depositor  may cause the Trust to
prepay on a dollar for dollar basis the principal,  without  penalty or premium,
of any  Outstanding  Series of Revolving  Certificates  with the proceeds of the
issuance or Funding of a Series of Term Certificates.

         As provided in the Trust  Agreement and subject to certain  limitations
therein set forth,  the transfer of this  Certificate  may be  registered on the
Certificate  Register of the Depositor  upon surrender of this  Certificate  for
registration  of transfer at the office or agency of the Depositor in the United
States of America maintained for such purpose,  duly endorsed by, or accompanied
by a written  instrument  of transfer  in form  reasonably  satisfactory  to the
Depositor and the Trustee and duly executed by the holder hereof or his attorney
duly  authorized  in  writing,   and  thereupon  one  or  more  new  Class  C2-R
Certificates of the same Scheduled Maturity of authorized  denominations and for
the same initial  aggregate  principal  amount will be issued to the  designated
transferees.

         Prior  to  due  presentment  for   registration  of  transfer  of  this
Certificate,  the  Depositor,  the Trustee and any agent of the Depositor or the
Trustee shall treat the Person in whose name this  Certificate  is registered as
the owner hereof for the purpose of receiving payment as herein provided and for
all other purposes whether or not this  Certificate be overdue,  and neither the
Depositor,  the  Trustee,  nor any such agent shall be affected by notice to the
contrary.

         The Holder of this  Certificate,  by  acceptance  of this  Certificate,
agrees that for one year and one day after it has been paid hereunder, it or any
Affiliate  thereof will not (without the consent of Holders holding at least 51%
of all Rated Certificates, by Outstanding Principal Amount) file any involuntary
petition or otherwise  institute any  bankruptcy,  reorganization,  arrangement,
insolvency or liquidation  proceeding or other  proceeding  under any federal or
state bankruptcy or similar law against the Depositor.

      The  Trust  Agreement  permits,  with  certain  exceptions  as  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the Depositor and the rights of the Holders of the

                                      C2-4
<PAGE>


Certificates under the Trust Agreement at any time by the Depositor, the Trustee
and the Servicer without the consent of the Holders of the Certificates.

         The  Certificates  are issuable only in registered form without coupons
in such authorized  denominations as provided in the Trust Agreement and subject
to certain limitations therein set forth.

         This Class C2-R  Certificate  and the Trust Agreement shall be governed
by and construed in accordance  with the internal laws of the State of New York,
without regard to conflicts of laws principles.

         No  reference  herein to the Trust  Agreement  and no provision of this
Class  C2-R  Certificate  or of the Trust  Agreement  shall  alter or impair the
obligation  of the Trust  Estate to pay the  principal  of and  interest on this
Class C2-R  Certificate,  but solely from the assets of the Trust  Estate at the
times, place and rate, and in the coin or currency, herein prescribed.

                                      C2-5

<PAGE>

        IN  WITNESS  WHEREOF,   Allegiance  Funding  I,  LLC  has  caused  this
instrument to be signed, manually, by the President or a Vice President of its
Manager, Allegiance Management Corp.

                                         ALLEGIANCE FUNDING I, LLC

                                       By:      Allegiance   Management  Corp.,
                                                as Manager
                                       By:
                                                ------------------------------
                                       Title:
                                                ------------------------------

<PAGE>


                          CERTIFICATE OF AUTHENTICATION


         This  is  one  of  the   Class C2-R Certificates   described   in  the
within-mentioned Trust Agreement.


Dated:
      -------------------------------------

MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee

By:
      --------------------------------------
                  Authorized Signatory




<PAGE>




Schedule to Class C2-R Term Certificates, Series 1998-1

Disbursement
Date of                  Amount of                 Principal
Funding                  Funding                   Payment        Date Paid

-------------------------------------------------------------------------------


<PAGE>
                                                                      EXHIBIT D
                                                                      ---------

          FORM OF AMENDED AND RESTATED CLASS D-R REVOLVING CERTIFICATE
          ------------------------------------------------------------

THIS  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE REGISTERED  UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT") OR ANY STATE SECURITIES LAWS IN
RELIANCE ON EXEMPTIONS  PROVIDED BY THE SECURITIES ACT AND SUCH STATE SECURITIES
LAWS.  THIS  CERTIFICATE  MAY NOT BE SOLD OR OTHERWISE  TRANSFERRED,  PLEDGED OR
HYPOTHECATED UNLESS SUCH RESALE,  TRANSFER,  PLEDGE OR HYPOTHECATION (A) IS MADE
IN ACCORDANCE  WITH SECTION 2.06 OF THE TRUST  AGREEMENT  REFERRED TO HEREIN AND
(B) IS MADE (i)  PURSUANT  TO AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE
SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT FROM THE REGISTRATION  REQUIREMENTS
OF THE SECURITIES ACT AND APPLICABLE  STATE SECURITIES LAWS OR (iii) TO A PERSON
WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE  SECURITIES  ACT WHO IS AWARE THAT THE RESALE
OR OTHER  TRANSFER IS BEING MADE IN RELIANCE  ON RULE 144A.  NEITHER  ALLEGIANCE
FUNDING I, LLC (THE "DEPOSITOR") NOR MANUFACTURERS AND TRADERS TRUST COMPANY, AS
TRUSTEE (THE  "TRUSTEE"),  IS OBLIGATED TO REGISTER THE  CERTIFICATES  UNDER THE
SECURITIES  ACT OR ANY  APPLICABLE  STATE  SECURITIES  LAWS. IN THE EVENT THAT A
TRANSFER OF A CLASS D-R  CERTIFICATE IS TO BE MADE, THE  PROSPECTIVE  TRANSFEREE
SHALL DELIVER AN INVESTMENT AND ASSUMPTION LETTER IN THE FORM REQUIRED UNDER THE
TRUST  AGREEMENT AND, IF THE TRUSTEE SO REQUESTS (IN A TRANSFER OTHER THAN UNDER
RULE 144A),  AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH  TRANSFER MAY BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAWS.

DUE TO THE  PROVISIONS  FOR FUNDINGS AND FOR THE PAYMENT OF PRINCIPAL  CONTAINED
HEREIN,  THE OUTSTANDING  PRINCIPAL AMOUNT OF THIS CERTIFICATE ON ANY PARTICULAR
DATE MAY BE LESS THAN THE AMOUNT  SHOWN ON THE FACE  HEREOF.  ANYONE  PURCHASING
THIS  CERTIFICATE  MAY  ASCERTAIN  THE  OUTSTANDING  PRINCIPAL  AMOUNT HEREOF BY
INQUIRY OF THE TRUSTEE.

No. D-R                                                        % of Class
       ----                                                              ----


                           ALLEGIANCE CAPITAL TRUST I
       AMENDED AND RESTATED CLASS D-R REVOLVING CERTIFICATE, SERIES 1998-1

Evidencing an undivided fractional interest in the Trust Estate, the property of
which includes, among other things, certain Loan Assets and monies on deposit in
the Collection Account.

          (This Certificate does not represent an obligation of, or an
       interest in, the Depositor, Allegiance Capital, LLC, the Trustee or
               any of their respective affiliates or successors.)


                           Registered Owner:
                                             ---------------------------

                                      D-1

<PAGE>

DELIVERY DATE:                            SERIES TERMINATION DATE: July 15, 2019
              ----- --, ----

         THIS CERTIFIES THAT the registered  owner  specified above is the owner
of an  undivided  fractional  interest in the  Allegiance  Capital  Trust I (the
"Trust") formed by Allegiance Funding Corp. I (the  "Depositor").  The Trust was
created pursuant to the Trust  Agreement,  dated as of August 1, 1998, among the
Depositor,  Manufacturers and Traders Trust Company, as Trustee (the "Trustee"),
and Point West  Capital  Corporation,  as Servicer,  and the Second  Amended and
Restated Supplement to Trust Agreement for Revolving Series 1998-1,  dated as of
September 15, 1999  (amending  and  restating  the original  Supplement to Trust
Agreement for Revolving  Series 1998-1,  dated as of August 1, 1998),  among the
Depositor,  the  Trustee  and  Point  West  Capital  Corporation,   as  Servicer
(collectively, the "Trust Agreement").  Reference is made to the Trust Agreement
for a statement  of the  respective  rights  thereunder  of the  Depositor,  the
Trustee  and the  Holders  of the  Certificates,  and the terms  upon  which the
Certificates are, and are to be, authenticated and delivered.  To the extent not
otherwise  defined  herein,  each  capitalized  term used herein has the meaning
assigned to it in the Trust Agreement.

         This  Certificate  is one of a duly  authorized  issue of  Certificates
designated as the Amended and Restated Class D-R Revolving Certificates,  Series
1998-1  having a scheduled  maturity of April 17, 2000 and a Series  Termination
Date of July 15, 2019 (herein called the "Class D-R Certificates") issued and to
be issued under the Trust Agreement.  This Class D-R Certificate is issued under
and is subject to the terms,  provisions and conditions of the Trust  Agreement,
to which Trust  Agreement the holder of this Class D-R  Certificate by virtue of
such Holder's acceptance hereof assents and by which such Holder is bound.

         The Holder of this  Certificate  is obligated  to provide  funds to the
Depositor  on each  Funding  Date  during  the  Funding  Period  subject  to the
applicable  terms and conditions  set forth in the  Transaction  Documents.  The
Fundings  made by the  Holder  of this  Certificate  to the  Depositor  shall be
evidenced by this  Certificate  and the  Certificateholder  shall endorse on the
schedule  annexed  hereto and made a part  hereof,  or elsewhere in its internal
records, the date and amount of each Funding made by it to the Depositor and the
amount of each payment of principal made by the Depositor with respect  thereto.
The Certificateholder is authorized and directed by the Depositor to endorse the
schedule   attached  hereto  or  maintain  such  records;   provided  that  each
                                                            --------
Certificateholder's  endorsements or records shall be effective only if they are
in agreement with the register maintained by the Trustee,  absent manifest error
in such register.  The failure of the  Certificateholder to make, or an error in
making,  a notation  with  respect to any Funding  shall not limit or  otherwise
affect the obligations of the Depositor  hereunder or under the Trust Agreement.
The aggregate  amount of all Fundings  required to be made by the Holder of this
Certificate shall be as set forth in the Revolving Funding Schedule.

        Principal  and other  amounts  distributable  with respect to Class D-R
Certificates  shall be  payable  only to the  extent  of  amounts  available  in
accordance  with,  and to the extent of, the priorities for payment of Class D-R
Certificates  set  forth in  Section 3 of the  Supplement  for this  Series  and
Section 5.02 of the Trust  Agreement,  in installments  ending no later than the
Series  Termination  Date  unless  the Class D-R  Certificates  becomes  due and
payable at an earlier date by call for  redemption or otherwise.  All reductions
in the principal  amount of a Class D-R  Certificate  effected by  distributions
made on any such Payment  Date shall be binding upon all future  Holders of this
Class  D-R  Certificate  and  of any  Class  D-R  Certificate  issued  upon  the
registration  of  transfer  hereof or in  exchange  herefor  or in lieu  hereof,
whether or not such payment is noted on this Class D-R Certificate. All payments
with respect to all of the Class D-R Certificates of a Series shall be made on a
pro rata basis  based upon the ratio that the  Outstanding  Principal  Amount of
this Class D-R  Certificate  bears to the  Outstanding  Principal  Amount of all
Class D-R  Certificates  of such Series;

                                      D-2

<PAGE>


provided  that, if as a result of such proration a portion of such payment would
--------
be less than $0.01,  then such  payment  shall be reduced to the  nearest  whole
cent.

         In addition,  the Certificate  Prepayment Fee Amount,  if any, shall be
distributed on each Payment Date to the Holders of the Class D-R Certificates to
the extent such Class is receiving a distribution of Prepaid Principal Amount on
such date.  All payments of  Certificate  Prepayment Fee Amounts with respect to
the Class D-R  Certificates  shall be made  prorata  based upon the ratio of the
Outstanding  Principal Amount of this  Certificate to the Outstanding  Principal
Amount of Class D-R Certificates of this Series, provided that if as a result of
such  proration,  a portion of such payment would be less than $0.01,  then such
payment shall be reduce to the nearest whole cent.

         All amounts  payable with respect to this Class D-R  Certificate on any
Payment Date will, as provided in the Trust Agreement,  be paid to the Person in
whose name this  Certificate  is  registered on the Record Date for such Payment
Date, which shall be the close of business on the last day of the month prior to
such Payment Date (whether or not a Business  Day).  Such amounts are payable by
wire transfer in immediately available funds to the account specified in writing
to the Trustee by the Person whose name appears as the Registered Holder of this
Certificate on the Certificate Register received at least five (5) Business Days
prior  to the  Record  Date  for the  Payment  Date  (or if no such  account  is
specified  or if such wire fails,  by check  mailed by  first-class  mail to the
Person whose name appears as the  Registered  Holder of this  Certificate on the
Certificate  Register  at the  address  of  such  Person  as it  appears  on the
Certificate Register),  in such coin or currency of the United States of America
as at the time of payment  is legal  tender  for  payment of public and  private
debts. Funds represented by checks returned undelivered will be held for payment
to the Person entitled thereto,  subject to the terms of the Trust Agreement, at
the office or agency in the United  States of America  designated as such by the
Depositor for such purpose pursuant to the Trust Agreement.

         The Depositor has structured the Trust  Agreement and the  Certificates
with the intention that the Trust be treated as a  partnership,  with the assets
of the  partnership  including  all of the  assets of the Trust  Estate  and the
partners  of  the  partnership  being  all  of the  Certificateholders  and  the
Depositor.  The Depositor, the Trustee, the Servicer and each Certificateholder,
by acceptance of its Certificate  (and any Person that is a beneficial  owner of
any  interest in a  Certificate,  by virtue of such  Person's  acquisition  of a
beneficial  interest  therein),  agree to report the  transactions  contemplated
thereby in accordance with such stated intentions unless and until determined to
the contrary by an applicable taxing authority.

         The  property  of the Trust  Estate  includes  certain  Loan Assets and
certain  other  assets  described  in  the  Trust   Agreement.   The  Class  D-R
Certificates of the 1998-1 Series and all other Series of Class D-R Certificates
issued under the Trust  Agreement are generally  payable out of the Trust Estate
pari passu among such Class D-R  Certificateholders  equally and ratably without
prejudice,  priority or distinction  between any Class D-R Certificate by reason
of time of issue or otherwise.  The Class D-R  Certificates are payable only out
of the Trust Estate and do not represent recourse  obligations of the Depositor,
Allegiance Capital, LLC or any of their respective affiliates or successors. The
Trust  Agreement  pursuant  to which this Class D-R  Certificate  is issued also
provides for the issuance of other Classes and Series of Certificates  from time
to time. Except as otherwise may be provided in future  Supplements to the Trust
Agreement, payments on the Class D-R Certificates are subordinate to payments on
all other Classes of Certificates.

         Unless the Depositor  exercises its Optional  Termination  rights,  the
Certificates  are  payable  only at the time and in the manner  provided  in the
Trust  Agreement  and are not  redeemable  or  prepayable  at the  option of the
Depositor  before such time,  except that the  Depositor  may cause the Trust to
prepay on a dollar

                                      D-3

<PAGE>

for dollar basis the principal,  without penalty or premium,  of any Outstanding
Series of Revolving Certificates with the proceeds of the issuance or Funding of
a Series of Term Certificates.

         As provided in the Trust  Agreement and subject to certain  limitations
therein set forth,  the transfer of this  Certificate  may be  registered on the
Certificate  Register of the Depositor  upon surrender of this  Certificate  for
registration  of transfer at the office or agency of the Depositor in the United
States of America maintained for such purpose,  duly endorsed by, or accompanied
by a written  instrument  of transfer  in form  reasonably  satisfactory  to the
Depositor and the Trustee and duly executed by the holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Class D-R Certificates
of the same Scheduled  Maturity,  of authorized  denominations  and for the same
initial aggregate principal amount will be issued to the designated transferees;
provided that so long as any Rated  Certificates are Outstanding,  the Depositor
--------
shall maintain legal and beneficial ownership of at least 51% of the Outstanding
Principal  Amount of the Class D-R  Certificates,  unless otherwise agreed to by
the Controlling Holders.

         Prior  to  due  presentment  for   registration  of  transfer  of  this
Certificate,  the  Depositor,  the Trustee and any agent of the Depositor or the
Trustee shall treat the Person in whose name this  Certificate  is registered as
the owner hereof for the purpose of receiving payment as herein provided and for
all other purposes whether or not this  Certificate be overdue,  and neither the
Depositor,  the  Trustee,  nor any such agent shall be affected by notice to the
contrary.

         The Holder of this  Certificate,  by  acceptance  of this  Certificate,
agrees that for one year and one day after it has been paid hereunder, it or any
Affiliate  thereof will not (without the consent of Holders holding at least 51%
of all Rated Certificates, by Outstanding Principal Amount) file any involuntary
petition or otherwise  institute any  bankruptcy,  reorganization,  arrangement,
insolvency or liquidation  proceeding or other  proceeding  under any federal or
state bankruptcy or similar law against the Depositor.

         The  Trust  Agreement  permits,  with  certain  exceptions  as  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the Depositor and the rights of the Holders of the  Certificates
under the Trust  Agreement  at any time by the  Depositor,  the  Trustee and the
Servicer without the consent of the Holders of the Certificates.

         The  Certificates  are issuable only in registered form without coupons
in such authorized  denominations as provided in the Trust Agreement and subject
to certain limitations therein set forth.

         This Class D-R Certificate and the Trust Agreement shall be governed by
and  construed in  accordance  with the internal  laws of the State of New York,
without regard to conflicts of laws principles.

         No  reference  herein to the Trust  Agreement  and no provision of this
Class  D-R  Certificate  or of the Trust  Agreement  shall  alter or impair  the
obligation  of the Trust  Estate to pay the  principal  of and  interest on this
Class D-R  Certificate,  but solely  from the assets of the Trust  Estate at the
times, place and rate, and in the coin or currency, herein prescribed.

                                      D-4

<PAGE>

        IN  WITNESS  WHEREOF,   Allegiance  Funding  I,  LLC  has  caused  this
instrument to be signed, manually, by the President or a Vice President of its
Manager, Allegiance Management Corp.

                                         ALLEGIANCE FUNDING I, LLC

                                       By:      Allegiance   Management  Corp.,
                                                as Manager
                                       By:
                                                ------------------------------
                                       Title:
                                                ------------------------------

<PAGE>


                          CERTIFICATE OF AUTHENTICATION


         This  is  one  of  the   Class D-R Certificates   described   in  the
within-mentioned Trust Agreement.


Dated:
      -------------------------------------

MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee

By:
      --------------------------------------
                  Authorized Signatory




<PAGE>




Schedule to Class D-R Term Certificates, Series 1998-1

Disbursement
Date of                  Amount of                 Principal
Funding                  Funding                   Payment        Date Paid

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