AMENDED & RESTATED




AMENDED & RESTATED

AMENDMENT AND WAIVER AGREEMENT



THIS AMENDED & RESTATED AMENDMENT AND WAIVER AGREEMENT, dated as of April 15, 2001
(this "Agreement"), is among ALLEGIANCE FUNDING I, LLC (the
"Depositor"), MANUFACTURERS AND TRADERS TRUST COMPANY (the "Trustee"),
POINT WEST CAPITAL CORPORATION (the "Servicer") and as consented to by the
Certificateholders named on the signature pages hereto.



RECITALS



                   
WHEREAS, (i) the Depositor, the Trustee and the Servicer are parties to that certain Trust
Agreement, dated as of August 1, 1998 (as amended from time to time, and including all
supplements thereto, the "Trust Agreement"), and (ii) the Depositor, the Trustee
and the Servicer are parties to that certain Third Amended and Restated Supplement to
Trust Agreement for Revolving Series 1998-1, dated as of April 14, 2000 (the "Series
1998-1 Revolving Supplement"), pursuant to which the Depositor issued the Allegiance
Capital Trust I Revolving Certificates, Series 1998-1 (the "98-1 Revolving
Certificates").


                   
WHEREAS, the Loan to Peavy & Brooks International, Inc. (the "PBI Loan")
held by the Depositor and the Loan to Southern Acquisitions, Inc. (the "Southern
Loan") held by the Depositor have become Defaulted Loans and have caused the
Depositor to be in violation of certain provisions of the Trust Agreement.


                   
WHEREAS, the parties previously agreed to amend a provision of the Series 1998-1 Revolving
Supplement and to amend and waive certain provisions of the Trust Agreement on the terms
and conditions set forth in the Amendment and Waiver Agreement dated as of December 15,
2000 (the "Initial Waiver").


                   
WHEREAS, the Scheduled Maturity of the 98-1 Revolving Certificates, as amended under the
Initial Waiver, is February 15, 2001.


                   
WHEREAS, pursuant to Section 9.02 of the Trust Agreement, the Depositor, the Servicer and
the Trustee may amend, modify or waive the provisions thereof with the prior written
consent of the Holders of each Outstanding Certificate and may amend, modify or waive the
provisions of the Series 1998-1 Revolving Supplement with the prior written consent of the
Holders of the 98-1 Revolving Certificates.


                   
WHEREAS, the parties have agreed to further amend a provision of the Series 1998-1
Revolving Supplement and to amend and waive certain provisions of the Trust Agreement on
the terms and conditions set forth in this Agreement.


                   
NOW, THEREFORE, the parties hereto agree as follows: 


                   
1.      Definitions. Each capitalized term used and not
otherwise defined herein, including those used in the Recitals, has the meaning set forth
in the Trust Agreement.


                   
2.      Amendments to Series 1998-1 Revolving Supplement.
  The definition of "Scheduled Maturity" in the Series 1998-1 Revolving
Supplement is hereby amended by deleting the date "December 15, 2000" therein
and substituting in its place the date "May 15, 2001". Notwithstanding the
foregoing, the 


1


increase in interest rate that became effective on March 1, 2001 under Section 5 of the
1998-1 Revolving Supplement (as amended by the Initial Waiver) shall remain in effect.


                   
3.      Amendments to Trust Agreement. Solely with respect to
the PBI Loan and the Southern Loan, each of the Depositor, the Servicer, the Trustee and
the Certificateholders agree to amend the following provisions of the Trust Agreement on
the following terms:


                           
(a)      Clause (b) of the definition of "Adjustment
Amount". The words "within sixty (60) days from the date the Loan became a
Defaulted Loan" in clause (b) of the definition of "Adjustment Amount" are
hereby deleted and replaced with the words "on or before July 16, 2001";


                           
(b)     Clause (c) of the definition of "Adjustment Amount".
The words "within one hundred twenty (120) days from the date of receipt of such
letter of intent" in clause (c) of the definition of "Adjustment Amount"
are hereby deleted and replaced with the words "on or before September 17,
2001";


                           
(c)     Section 1.03(b). Section 1.03(b) is hereby amended to
provide that Recoveries in respect of the PBI Loan or the Southern Loan shall be applied
first to reimburse the Reserve Account for any Recovery Expenses allocable to such PBI
Loan or Southern Loan and previously withdrawn from the Reserve Account.


                           
(d)     Section 5.03(d). Section 5.03(d) is hereby amended to allow
disbursement of funds from the Reserve Account on each Distribution Date to reimburse the
Servicer or the Special Servicer, as applicable, for Recovery Expenses allocable to the
PBI Loan and/or Southern Loan if (i) the Certificateholder Agent has provided to the
Depositor, the Servicer and the Special Servicer written consent to such disbursement and
(ii) the remaining balance in the Reserve Account after such disbursement would equal or
exceed the Reserve Account Floor Amount. The Depositor, the Servicer or the Special
Servicer, as applicable, shall provide a written request for such disbursement to the
Certificateholder Agent by the 3rd day of the calendar month in which such disbursement is
to be made (or the next Business Day if such day is not a Business Day) and the
Certificateholder Agent shall provide written consent or refusal to consent no later than
the 10th day of such calendar month (or the next Business Day if such day is not a
Business Day) and, assuming such request is timely delivered, the Certificateholder
Agent's approval shall not be unreasonably withheld. The Certificateholder Agent's written
consent shall be deemed to be direction to the Trustee to make such disbursement pursuant
to Schedule 9 of the Servicing Report.


                           
(e)      Section 6.01. Section 6.01 is hereby amended to delete
the period at the end of subparagraph (j) thereof and replace it with a semi-colon and to
add the following new clause at the end thereof:


                           
(k)      the failure of the Special Servicer to provide to the
Certificateholders and the Certificateholder Agent weekly reports as to the status of the
PBI Loan and the Southern Loan, including a comparison of actual results to the projected
timeline for completion of the workout of each such Defaulted Loans indicated on Exhibit A
hereto, so long as such Loans are included in the Trust Estate and have not been
re-classified as performing Loans or Liquidated Loans.


2


                   
4.      Waivers. The Trustee and the Certificateholders hereby
waive through but not beyond July 16, 2001, any Default by the Depositor under Section
6.01(f) of the Trust Agreement, provided, however, that a Depositor Event of Default under
Section 6.01(f) shall be deemed to exist on and after July 17, 2001 if the 98-1 Revolving
Certificates that are Rated Certificates have not been paid in full on or before July 16,
2001.


                   
5.      Expenses. The Trust shall reimburse from funds on
deposit in the Reserve Account all reasonable fees, costs and expenses incurred by the
Certificateholder Agent and the Holders of the Rated Certificates in connection with their
review of this Agreement, including without limitation the reasonable fees of their
special counsel (namely, Day, Berry & Howard LLP). In each applicable monthly Servicer
Report the Servicer shall from time to time instruct the Trustee to effect any such
reimbursements.


                   
6.      Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.


                   
7.      General. This Agreement and all the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall be as
effective as delivery of a manually executed counterpart of this Agreement.


                   
8.      Ratification. Except as expressly modified and
superseded by this Agreement, each of the Trust Agreement and the Series 1998-1 Revolving
Supplement is ratified and confirmed in all respects and shall continue in full force and
effect.


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IN WITNESS WHEREOF, the parties hereto have executed this Amended &
Restated Amendment and Waiver Agreement as of the day and year first above written.


 



  
    
      
        
          ALLEGIANCE FUNDING I, LLC, as Depositor 

          
        

        
          	/s/Michael W. McDermitt
	

              
	VP & Secretary


          

        

        
          
            
              
                
                  
                    
                       

                    

                  

                

              

            

          

          MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee

        

        
           

          	/s/Russell T. Whitley


            
            	

              


            
            	Asst. Vice President


            
          
          

        

        
          
            
              
                
                  
                    
                       

                    

                  

                

              

            

          

          POINT WEST CAPITAL CORPORATION, as Servicer

          
            
              
                
                  
                    
                       

                    

                  

                

              

            

          

        

        
           

          	/s/Alan B. Perper


            
            	

              


            
            	President


            
          
          

        

        
          
            
              
                
                  
                    
                       

                    

                  

                

              

            

          

        

      

    

  




Consented and Agreed:



Each of the Certificateholders authorizes and directs the Trustee to
execute the foregoing Amended & Restated Amendment and Waiver Agreement..



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



	/s/Brian D. Hunt
	

    
	Partner





 



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


 



	/s/Brian D. Hunt
	

    
	Partner





 



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


 



	/s/Brian D. Hunt
	

    
	Partner





________


 



ALLEGIANCE FUNDING I, LLC, as registered owner of the Class D-R
Certificates


 



	/s/Michael W. McDermitt
	

    
	VP & Secretary





 



PACIFIC LIFE INSURANCE COMPANY 



	/s/Cathy Schwartz
	

    
	Asst. Vice President





	/s/Jane M. Guon
	

    
	Asst.  Secretary





UNITED OF OMAHA LIFE INSURANCE COMPANY


 



	/s/Kent Knudsen
	

    
	Sr. Vice President





NATIONWIDE LIFE INSURANCE COMPANY



 



	/s/Mark W. Poeppelman
	

    
	Associate Vice President





LIBERTY LIFE INSURANCE COMPANY (Certificates held in the nominee
name HARE & CO.)


 



	/s/Adam Emerson
	

    
	Authorized Officer





 



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


 



	/s/Brian D. Hunt
	

    
	Partner





 



TICE & CO., registered owner of the Class D Certificates



	/s/Brian D. Hunt
	

    
	Partner





TICE & CO., registered owner of the Class E Certificates


 



	/s/Brian D. Hunt
	

    
	Partner