Termination Notice

Date: August 5, 2002

To: Point West Capital Corporation1700 Montgomery Street, Suite 250San Francisco, California 94111Fax: 415-394-9471

cc: Person Listed in Attached Distribution List

                   Reference is made to (a) the Servicing Agreement, dated as of August 1, 1998 (as amendedfrom time to time, the "**Servicing Agreement**"), among Point West CapitalCorporation, as Servicer, Allegiance Capital, LLC as Special Servicer, Foresight Analysts,Inc., as Servicing Advisor, Allegiance Funding I, LLC, as Depositor, and Manufacturers andTraders Trust Company, as Trustee; (b) the Trust Agreement, dated as of August 1, 1998 (asamended from time to time, the "**Trust Agreement**"), among the Depositor,the Trustee and the Servicer; and (c) the other Transactions Documents. Capitalized termsused herein and not otherwise defined herein have the same meanings herein as in theServicing Agreement or the Trust Agreement.

                   This is a Termination Notice to you as Servicer. One or more Depositor Events of Defaulthave occurred and are continuing, including under Section 6.01 (f) and Section 6.01 (g) ofthe Trust Agreement. Pursuant to Section 6.02 (b) of the Trust Agreement and Section 6.01(b) of the Servicing Agreement, the undersigned Controlling Holders and (at the directionof the Controlling Holders, which direction shall be deemed given hereby) the Trusteehereby notify you of the termination of your rights and servicing obligations under theServicing Agreement, provided that this Termination Notice shall not relieve orexculpate you from any liability for any action or inaction under the Servicing Agreementprior to the delivery of this Termination Notice or from any other obligations (whether asan Outgoing Servicer or otherwise) expressed in any of the Transaction Documents tosurvive or otherwise to remain effective after the delivery to you of a TerminationNotice.

                   Pursuant to Section 6.02 (a) of the Servicing Agreement, the Trustee, acting with theadvice of the Certificateholder Agent, has appointed Portfolio Financial ServicingCompany, a Delaware corporation ("PFSC") as Successor Servicer to the role asServicer (because one or more Depositor Events of Default exist and are continuing, theDepositor has no right to appoint a Successor Servicer). PFSC has accepted suchappointment and, simultaneously with delivery of this Termination Notice to you, hasassumed responsibilities as such Successor Servicer. (A copy of this instrument effectingsuch appointment, acceptance and assumption is attached hereto 

 

as Exhibit A.) Accordingly, this Termination Notice is effective immediatelyupon delivery to you.

                   Pursuant to the Servicing Agreement, you are obligated, among other things, to cooperatein effecting the termination of your rights and responsibilities under the ServicingAgreement and, at your own expense, to transfer your records (electronic and otherwise)relating to the Loans to the Successor Servicer in such form as the Successor Servicer insuch form as the Successor Servicer may request and to transfer all other records,correspondence and documents relating to the Loans that you may possess to the SuccessorServicer in the manner and at such times as the Successor Servicer shall reasonablyrequest. The address for notices to and other communications with the Successor Serviceris as follows:

> 
Portfolio Financial Servicing Company     2121 Southwest Broadway    Portland, Oregon 97201    Attention: Jerry Hudspeth    Telephone: (503) 721-3234    Fax: (503) 721-1712

                   The Controlling Holders and the Trustee expressly reserve all rights, powers and remediesof the Certificateholders and the Trustee under the Transaction Documents and applicablelaw.

[*Remainder of page intentionally left blank; next page is signature page.*]

 

 

 

IN WITNESS WHEREOF, each of the undersigned has executed this Termination Notice as ofthe date first written above.

| Certificateholder: | PACIFIC LIFE INSURANCE COMPANY                          |
|--------------------|---------------------------------------------------------|
|                    | (Certificates held in the nominee name Mac& Co.)    |
|                    |                                                         |
|                    | By:    Cathy Schwartz                    |
|                    | /s/      Cathy Schwartz        |
|                    |                                                         |
|                    | Title:   Assistant Vice President             |
|                    |                                                         |
|                    | By:      Audrey L. Milfs       |
|                    | /s/       Audrey L. Milfs |
|                    |                                                         |
|                    | Title:   Secretary                       |

 

| Certificateholder: | UNITED OF OMAHA LIFE INSURANCE COMPANY           |
|--------------------|--------------------------------------------------|
|                    |                                                  |
|                    |                                                  |
|                    | By:    Donna D. Ennis             |
|                    | /s/      Donna D. Ennis |
|                    |                                                  |
|                    | Title:  Vice President                      |

 

| Certificateholder: | NATIONWIDE LIFE INSURANCE COMPANY                    |
|--------------------|------------------------------------------------------|
|                    |                                                      |
|                    |                                                      |
|                    | By:    Mark W. Poeppelman             |
|                    | /s/      Mark W. Poeppelman |
|                    |                                                      |
|                    | Title:  Associate Vice President                |

 

| Certificateholder: | LIBERTY LIFE INSURANCE COMPANY                         |
|--------------------|--------------------------------------------------------|
|                    | (Certificates held in the nominee name Hare & Co.) |
|                    |                                                        |
|                    | By:    Adam Emerson                     |
|                    | /s/      Adam Emerson         |
|                    |                                                        |
|                    | Title:  Authorized Offcer                         |

 

| Certificateholder: | TICE & CO.                                |
|--------------------|-----------------------------------------------|
|                    |                                               |
|                    |                                               |
|                    | By:    Lori Luther             |
|                    | /s/      Lori Luther |
|                    |                                               |
|                    | Title:  Trust Officer/Partner            |

 

| Trustee: | MANUFACTURERS AND TRADERS TRUST COMPANY,             |
|----------|------------------------------------------------------|
|          | as Trustee                                           |
|          |                                                      |
|          | By:    Russell T. Whitley             |
|          | /s/      Russell T. Whitley |
|          |                                                      |
|          | Title:  Assistant Vice President                |

 

 

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Distribution List

Persons Receiving Copies of Termination Notice

 

 

Melanie J. Gnazzo, Esq.Peter S. Szurley, Esq.Gnazzo Thill625 Market Street, 11th FloorSan Francisco, CA 94105Fax: 415-541-0506

Allegiance Funding I, LLC1700 Montgomery Street, Suite 250-BSan Francisco, California 94111Fax: 415-394-6703

Allegiance Capital, LLC1700 Montgomery Street, Suite 250San Francisco, California 94111Fax: 415-394-9471

Foresight Analysts, Inc.5353 North 16th Street, Suite 370Phoenix, Arizona 85016Fax: 602-277-6722

Portfolio Financial Servicing Company2121 Southwest BroadwayPortland, Oregon 97201Attention: Jerry HudspethFax: 503-751-1712

 

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Exhibit A

[Copy of Appointment and Acceptance of Successor Special Servicer]

 

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Appointment and Acceptance of Successor  Servicer

 

 

Date: August 5, 2002

To: Portfolio Financial Servicing Company2121 Southwest BroadwayPortland, Oregon 97201

 

Reference is made to (a) the Servicing Agreement, dated as of August 1, 1998 (asamended from time to time, the "**Servicing Agreement**"), among Point WestCapital Corporation, as Servicer, Allegiance Capital, LLC as Special Servicer, ForesightAnalysts, Inc., as Servicing Advisor, Allegiance Funding I, LLC, as Depositor, andManufacturers and Traders Trust Company, as Trustee; (b) the Trust Agreement, dated as ofAugust 1, 1998 (as amended from time to time, the "**Trust Agreement**"),among the Depositor, the Trustee and the Servicer; and (c) the other TransactionsDocuments. Capitalized terms used herein and not otherwise defined herein have the samemeanings herein as in the Servicing Agreement or the Trust Agreement. 

Pursuant to the Trust Agreement and the Servicing Agreement, the Controlling Holdersand the Trustee have executed and are delivering a Termination Notice dated the datehereof to Point West Capital Corporation as Servicer. Pursuant to the Servicing Agreement,because one or more Depositor Events of Default exist and are continuing, the Trustee (andnot the Depositor), acting with the advice of the Certificateholder Agent, has the rightto appoint a Successor Servicer to the role of Servicer. The Certificateholder Agenthereby advises and directs the Trustee to appoint, and in accordance with such advice anddirection the Trustee does hereby appoint, Portfolio Financial Servicing Company, aDelaware corporation ("**PFSC**") as Successor Servicer to the role ofServicer. PFSC hereby accepts such appointment and assumes the rights and responsibilitiesof the Servicer under the Servicing Agreement and the other Transaction Documents. Suchappointment, acceptance and assumption shall be deemed effective simultaneously with thedelivery of such Termination Notice to Point West Capital Corporation. 

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IN WITNESS WHEREOF, each of the undersigned has executed this Termination Notice as ofthe date first written above.

 

| Certificateholder Agent: | WAREHOUSE LINE ADVISORS, INC.                        |
|--------------------------|------------------------------------------------------|
|                          | (Certificates held in the nominee name Mac& Co.) |
|                          |                                                      |
|                          | By:    Joseph A. Lorusso              |
|                          | /s/      Joseph A. Lorusso  |
|                          |                                                      |
|                          | Title:   Manager Entity                    |
|                          |                                                      |

 

| Certificateholder: Agent: | ABSF ADVISORS, INC.                                 |
|---------------------------|-----------------------------------------------------|
|                           |                                                     |
|                           |                                                     |
|                           | By:    Joseph A. Lorusso             |
|                           | /s/      Joseph A. Lorusso |
|                           |                                                     |
|                           | Title:  President                              |

 

| Certificateholder Agent: | STRUCTURED FINANCE ADVISORS, INC.                   |
|--------------------------|-----------------------------------------------------|
|                          |                                                     |
|                          |                                                     |
|                          | By:    Joseph A. Lorusso             |
|                          | /s/      Joseph A. Lorusso |
|                          |                                                     |
|                          | Title:  President                              |

 

| Certificateholder Agent: | ASSET BACKED SUBORDINATED FUND ADVISORS, INC.       |
|--------------------------|-----------------------------------------------------|
|                          |                                                     |
|                          |                                                     |
|                          | By:    Joseph A. Lorusso             |
|                          | /s/      Joseph A. Lorusso |
|                          |                                                     |
|                          | Title:  Joseph A. Lorusso                      |

 

| Trustee: | MANUFACTURERS AND TRADERS TRUST COMPANY,             |
|----------|------------------------------------------------------|
|          | as Trustee                                           |
|          |                                                      |
|          | By:    Russell T. Whitley             |
|          | /s/      Russell T. Whitley |
|          |                                                      |
|          | Title:  Assistant Vice President                |

 

| Successor Servicer: | PORTFOLIO FINANCIAL SERVICING COMPANY               |
|---------------------|-----------------------------------------------------|
|                     |                                                     |
|                     |                                                     |
|                     | By:    Jerry R. Hedgpeth             |
|                     | /s/      Jerry R. Hedgpeth |
|                     |                                                     |
|                     | Title:  President & CEO                    |

 

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