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
"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
"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
"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
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
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
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
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
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/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: President
MANUFACTURERS AND TRADERS TRUST
COMPANY, as the Trustee
By: /S/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Vice President
POINT WEST CAPITAL CORPORATION, as
the Servicer
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: President
Consented and Agreed:
XXXX & CO., as registered owner of the Class A-R
Certificates
By: /s/ Xxxxxxxxxx X. May
Its: VP
Date: 9/21/99
XXXX & CO., as registered owner of the Class B-R
Certificates
By: /s/ Xxxxxxxxxx X. May
Its: VP
Date: 9/21/99
XXXX & CO., as registered owner of the Class C-R
Certificates
By: /s/ Xxxxxxxxxx X. May
Its: VP
Date: 9/21/99
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
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
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
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
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
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:
------------------------------
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
Schedule to Class A-R Term Certificates, Series 1998-1
Disbursement
Date of Amount of Principal
Funding Funding Payment Date Paid
------------------------------------------------------------------------------
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
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
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
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
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
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:
------------------------------
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
Schedule to Class B-R Term Certificates, Series 1998-1
Disbursement
Date of Amount of Principal
Funding Funding Payment Date Paid
------------------------------------------------------------------------------
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
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
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
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
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
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:
------------------------------
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
Schedule to Class C1-R Term Certificates, Series 1998-1
Disbursement
Date of Amount of Principal
Funding Funding Payment Date Paid
------------------------------------------------------------------------------
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
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
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
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
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
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:
------------------------------
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
Schedule to Class C2-R Term Certificates, Series 1998-1
Disbursement
Date of Amount of Principal
Funding Funding Payment Date Paid
-------------------------------------------------------------------------------
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
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
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
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
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:
------------------------------
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
Schedule to Class D-R Term Certificates, Series 1998-1
Disbursement
Date of Amount of Principal
Funding Funding Payment Date Paid
-------------------------------------------------------------------------------
