<PAGE>   1
                                                                 Exhibit 10.20.2






                          SALE AND SERVICING AGREEMENT
                            Dated as of March 1, 2001

                                     Between

                              FIB FUNDING TRUST II
                                     (Trust)

                                       and

                            FIRST INTERNATIONAL BANK
                              (Seller and Servicer)

                           FIB FUNDING TRUST II NOTES
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                      Page
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                                    ARTICLE I

                                   DEFINITIONS

Section 1.01  Definitions...............................................      2
Section 1.02  Use of Words and Phrases..................................      2
Section 1.03  Captions; Table of Contents...............................      2

                                   ARTICLE II

                      SALE AND CONVEYANCE OF THE TRUST FUND

Section 2.01  Sale and Conveyance of Trust Fund.........................      3
Section 2.02  Possession of Business Files..............................      3
Section 2.03  Books and Records.........................................      3
Section 2.04  Delivery of SBA Loan Documents............................      4
Section 2.05  Acceptance by Trustee of the Trust Fund; Certain
              Substitutions; Certification by Indenture Trustee.........      6
Section 2.06  [Reserved]................................................      8
Section 2.07  [Reserved]................................................      8
Section 2.08  Fees and Expenses of the Owner Trustee and the Indenture
              Trustee...................................................      8
Section 2.09  Transfer and Conveyance of the SBA Loans..................      8
Section 2.10  Optional Repurchase or Substitution of SBA Loans..........     10
Section 2.11  Securitizations...........................................     10

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

Section 3.01  Representations of the Seller.............................     11
Section 3.02  Individual SBA Loans......................................     13
Section 3.03  Purchase and Substitution of Defective SBA Loans..........     18

                                   ARTICLE IV

                  ADMINISTRATION AND SERVICING OF SBA LOANS

Section 4.01  Duties of the Servicer....................................     20
Section 4.02  Liquidation of SBA Loans..................................     23
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                                      (i)
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<TABLE>
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Section 4.03  Establishment of Principal and Interest Accounts;
              Deposits in Principal and Interest Accounts...............     24
Section 4.04  Permitted Withdrawals From the Principal and Interest
              Account...................................................     26
Section 4.05  [Intentionally Omitted]...................................     27
Section 4.06  Transfer of Accounts......................................     27
Section 4.07  Maintenance of Hazard Insurance...........................     27
Section 4.08  [Intentionally Omitted]...................................     28
Section 4.09  Fidelity Bond.............................................     28
Section 4.10  Title, Management and Disposition of Foreclosed Property..     28
Section 4.11  [Intentionally Omitted]...................................     29
Section 4.12  Collection of Certain SBA Loan Payments...................     29
Section 4.13  Access to Certain Documentation and Information Regarding
              the SBA Loans.............................................     29

                                    ARTICLE V

                           PAYMENTS TO THE NOTEHOLDERS

Section 5.01  Establishment of Note Distribution Account; Deposits in
              Note Distribution Account; Permitted Withdrawals from
              Note Distribution Account.................................     31
Section 5.02  Establishment of Spread Account; Deposits in Spread
              Account; Permitted Withdrawals from Spread Account........     32
Section 5.03  Establishment of Expense Account; Deposits in Expense
              Account; Permitted Withdrawals from Expense Account.......     33
Section 5.04  Funding Account...........................................     34
Section 5.05  [Intentionally Omitted]...................................     34
Section 5.06  Investment of Accounts....................................     34
Section 5.07  Distributions.............................................     35
Section 5.08  [Intentionally Omitted]...................................     36
                                    -
Section 5.09  Statements................................................     36
Section 5.10  Reports of Foreclosure and Abandonment....................     38

                                   ARTICLE VI

                           GENERAL SERVICING PROCEDURE

Section 6.01  [Intentionally Omitted]...................................     39
Section 6.02  Satisfaction of Mortgages and Collateral and Release of
              SBA Files.................................................     39
Section 6.03  Servicing Compensation....................................     40
Section 6.04  Annual Statement as to Compliance.........................     41
Section 6.05  Annual Independent Public Accountants' Servicing Report...     41
Section 6.06  SBA's and Indenture Trustee's Right to Examine Servicer
              Records and Audit Operations..............................     41
</TABLE>


                                      (ii)
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<TABLE>
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Section 6.07  Reports to the Indenture Trustee; Principal and Interest
              Account Statements........................................     41
Section 6.08. Required Holdback Amount..................................     42

                                   ARTICLE VII

                       REPORTS TO BE PROVIDED BY SERVICER

Section 7.01  Financial Statements......................................     43

                                  ARTICLE VIII

                                  THE SERVICER

Section 8.01  Indemnification; Third Party Claims.......................     44
Section 8.02  Merger or Consolidation of the Servicer...................     44
Section 8.03  Limitation on Liability of the Servicer and Others........     45
Section 8.04  Servicer Not to Resign....................................     46

                                   ARTICLE IX

                              SERVICER TERMINATION

Section 9.01  Servicer Termination Events...............................     47
Section 9.02  Trustee to Act; Appointment of Successor..................     49
Section 9.03  Waiver of Defaults........................................     51
Section 9.04. Control by Majority Noteholders...........................     51

                                    ARTICLE X

                                   TERMINATION

Section 10.01 Termination...............................................     52
Section 10.02 Accounting Upon Termination of Servicer...................     52

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

Section 11.01 Acts of Noteholders.......................................     54
Section 11.02 Amendment.................................................     54
Section 11.03 Recordation of Agreement..................................     54
Section 11.04 Duration of Agreement.....................................     55
Section 11.05 Governing Law.............................................     55
Section 11.06 Notices...................................................     55
Section 11.07 Severability of Provisions................................     55
</TABLE>


                                     (iii)
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<TABLE>
<S>                                                                         <C>
Section 11.08 No Partnership............................................     56
Section 11.09 Counterparts..............................................     56
Section 11.10 Successors and Assigns....................................     56
Section 11.11 Headings..................................................     56
Section 11.12 Notification to Administrative Agent......................     56
Section 11.13 Inconsistencies...........................................     56
Section 11.14 Limitation of Liability...................................     56
Section 11.15 No Petition...............................................     57
</TABLE>


                                      (iv)
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APPENDIX A             Definitions and Usage

                                  EXHIBIT INDEX
                                  -------------

EXHIBIT A              Contents of SBA File
EXHIBIT B              [Intentionally Omitted]
EXHIBIT C              Principal and Interest Account
                         Letter Agreement
EXHIBIT D              [Intentionally Omitted]
EXHIBIT E              [Intentionally Omitted]
EXHIBIT F              Initial Certification
EXHIBIT F-1            Final Certification
EXHIBIT G              [Intentionally Omitted]
EXHIBIT H              SBA Loan Schedule
EXHIBIT I              Request for Release of Documents
EXHIBIT J              [Intentionally Omitted]
EXHIBIT K              Form of Delinquency Report
EXHIBIT L              Servicer's Monthly Computer Tape Format
EXHIBIT M              Multi-Party Agreement


                                      (v)
<PAGE>   7
      Sale and Servicing Agreement dated as of March 1, 2001, between FIB
Funding Trust II (the "Trust"), and First International Bank, as Seller (the
"Seller") and as Servicer (the "Servicer").

                              PRELIMINARY STATEMENT

      The Trust was formed for the purpose of issuing asset backed notes and
asset backed certificates secured by the Unguaranteed Interests in the SBA
Loans. The Issuer has entered into a trust indenture, dated as of March 1, 2001
(the "Indenture"), between the Trust and the Indenture Trustee, pursuant to
which the Trust intends to issue from time to time its FIB Funding Trust II
Notes in an aggregate principal amount not to exceed the Purchase Limit (the
"Notes"). Pursuant to the Indenture, as security for the indebtedness
represented by the Notes and any Hedging Agreements, the Issuer is and will be
pledging to the Indenture Trustee, and granting the Indenture Trustee a security
interest in, among other things, the Unguaranteed Interests in the SBA Loans and
its rights under this Agreement.

      The parties desire to enter into this Agreement to provide, among other
things, for the servicing of the SBA Loans by the Servicer. The Servicer
acknowledges that, in order further to secure the Notes and any Hedging
Agreements, the Trust is and will be granting to the Indenture Trustee a
security interest in, among other things, its rights under this Agreement, and
the Servicer agrees that all covenants and agreements made by the Servicer
herein with respect to the SBA Loans shall also be for the benefit and security
of the Indenture Trustee and the Secured Parties. For its services hereunder,
the Servicer will receive the Required Holdback Amount (as defined herein) with
respect to each SBA Loan serviced hereunder.
<PAGE>   8
                                    ARTICLE I

                                   DEFINITIONS

      Section 1.01 Definitions. For all purposes of this Agreement, capitalized
terms used herein shall have the meanings set forth in Appendix A, unless the
context clearly indicates otherwise.

      Section 1.02 Use of Words and Phrases. "Herein", "hereby", "hereunder",
"hereof", "hereinbefore", "hereinafter" and other equivalent words refer to this
Agreement as a whole and not solely to the particular section of this Agreement
in which any such word is used.

      Section 1.03 Captions; Table of Contents. The captions or headings in this
Agreement and the Table of Contents are for convenience only and in no way
define, limit or describe the scope and intent of any provisions of this
Agreement.


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                                   ARTICLE II

                   SALE AND CONVEYANCE OF THE TRUST FUND

            Section 2.01 Sale and Conveyance of Trust Fund.

            (a) On the terms and conditions hereinafter set forth, from time to
time prior to the Termination Date, the Seller may, at its option, transfer to
the Trust, without recourse, and for the benefit of the SBA, the Noteholders,
the Certificateholders and the Hedge Counterparties, subject to the terms of the
Basic Documents, all of the right, title and interest of the Seller in and to
the Unguaranteed Interests in the SBA Loans and all other assets included or to
be included in the Trust Fund. In consideration for its transfer of such
Unguaranteed Interests in the SBA Loans, on each Transfer Date the Seller shall
receive from amounts deposited into the Funding Account the amount determined
pursuant to Section 2.09(a)(ii).

            (b) The rights of the Noteholders, Certificateholders and the Hedge
Counterparties to receive payments with respect to the SBA Loans in respect of
the Notes, the Certificates and the Hedging Agreement, and all interests of the
Noteholders and Certificateholders in such payments, shall be as set forth in
the Basic Documents. The Required Holdback Amount, the FTA's Fee, the Additional
Fee and the amounts payable to the Registered Holders shall not constitute part
of the Trust Fund and the Noteholders, Certificateholders and the Hedge
Counterparties shall have no interest in, and are not entitled to receive any
portion of, the Required Holdback Amount, the FTA's Fee, the Additional Fee and
the amounts payable to the Registered Holders.

            Section 2.02 Possession of Business Files.

            (a) Upon the transfer of the Unguaranteed Interest in each SBA Loan,
the ownership of each SBA Note, the Mortgage, if applicable, and the contents of
the related SBA File will be vested in the Trust for the benefit of itself and
the SBA, as their interests may appear.

            (b) Pursuant to Section 2.04, on each Transfer Date, the Seller will
deliver or cause to be delivered, each SBA Note relating to an SBA Loan to the
FTA.

            Section 2.03 Books and Records.

            Although the Unguaranteed Interest of each SBA Loan will continue to
be reflected on the Seller's consolidated balance sheet for financial reporting
purposes because the consolidation of the Trust's assets with those of the
Seller is required under generally accepted accounting principles (i.e because
certain provisions of the Basic Documents result in the Trust not being
permitted to be characterized as a "qualifying special purpose entity" ("OSPE")
under FASB 125 or FASB 140), such balance sheet and the accompanying notes will:
(i) disclose that the Unguaranteed Interests were sold to the Trust; and (ii)
disclose that the Unguaranteed Interests are not available to creditors of the
Seller, and that such creditors should not rely on such Unguaranteed Interests
in extending credit to the Seller. In addition, (A) the records of the Seller
will reflect the sale of the Unguaranteed Interest of each SBA Loan as having
been sold to


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the Trust; (B) the records of the Trust will reflect that it owns the
Unguaranteed Interests of each SBA Loan; (C) the Seller will respond to any
third-party inquiry that the Unguaranteed Interest of each SBA Loan have been
sold to the Trust; and (D) the Seller will be responsible for maintaining and
will maintain, a complete set of books and records for each SBA Loan which shall
be clearly marked to reflect the ownership of the Unguaranteed Interest of each
SBA Loan by the Trust for the benefit of the SBA, the Noteholders, the
Certificateholders and the Hedge Counterparties, as their interests may appear.

            Section 2.04 Delivery of SBA Loan Documents.

            Two days prior to each Transfer Date the Seller will deliver or
cause to be delivered to the Indenture Trustee, or with respect to the SBA Notes
relating to the SBA Section 7(a) Loans being delivered pursuant to paragraph (a)
below, to the FTA, each of the following documents for each SBA Loan:

            (a) The original SBA Note, endorsed by means of an allonge as
follows: "Pay to the order of First Union Trust Company, National Association,
and its successors and assigns, not in its individual capacity but solely as
Owner Trustee under that certain Trust Agreement dated as of March 1, 2001 as
the same may be amended from time to time, for the benefit of the
Certificateholders and the United States Small Business Administration, as their
respective interests may appear, subject to the Multi-Party Agreement dated as
of March 1, 2001, as the same may be amended from time to time, without
recourse" and signed, by facsimile or manual signature, in the name of the
Seller by a Responsible Officer, with all prior and intervening endorsements
showing a complete chain of endorsement from the originator to the Seller, if
the Seller was not the originator, the allonge or the Note will also identify
the SBA Note by the applicable SBA Loan number (GP Number) (such allonge or the
Note shall bear a legend stating "HSBC Bank USA, as Indenture Trustee, has a
security interest in the Unguaranteed Interest in this Note");

            (b) With respect to those SBA Loans secured by Mortgaged Properties,
either: (i) the original Mortgage, with evidence of recording thereon, (ii) a
copy of the Mortgage certified as a true copy by a Responsible Officer of the
Seller where the original has been transmitted for recording until such time as
the original is returned by the public recording office or duly licensed title
or escrow officer or (iii) a copy of the Mortgage certified by the public
recording office in those instances where the original recorded Mortgage has
been lost.

            (c) With respect to those SBA Loans secured by Mortgaged Properties,
either: (i) the original Assignment of Mortgage from the Seller endorsed as
follows: "HSBC Bank USA, ("Assignee") its successors and assigns, as indenture
trustee under that certain Indenture dated as of March 1, 2001 as the same may
be amended from time to time, for the benefit of the United States Small
Business Administration and the holders of FIB Funding Trust II Notes, as their
respective interests may appear, subject to the Multi-Party Agreement dated as
of March 1, 2001 as the same may be amended from time to time," with evidence of
recording thereon (provided, however, that where permitted under the laws of the
jurisdiction wherein the Mortgaged Property is located, the Assignment of
Mortgage may be effected by one or more blanket assignments for SBA Loans


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secured by Mortgaged Properties located in the same county), or (ii) a copy of
such Assignment of Mortgage certified as a true copy by a Responsible Officer of
the Seller where the original has been transmitted for recording (provided,
however, that where the original Assignment of Mortgage is not being delivered
to the Indenture Trustee, such Responsible Officer may complete one or more
blanket certificates attaching copies of one or more Assignments of Mortgage
relating to the Mortgages originated by the Seller);

            (d) With respect to those SBA Loans secured by Mortgaged Properties,
either: (i) originals of all intervening assignments, if any, showing a complete
chain of title from the originator to the Seller, including warehousing
assignments, with evidence of recording thereon if such assignments were
recorded, (ii) copies of any assignments certified as true copies by a
Responsible Officer of the Seller where the originals have been submitted for
recording until such time as the originals are returned by the public recording
officer, or (iii) copies of any assignments certified by the public recording
office in any instances where the original recorded assignments have been lost;

            (e) With respect to those SBA Loans secured by Mortgaged Properties,
either: (i) originals of all title insurance policies relating to the Mortgaged
Properties to the extent the Seller obtained such policies or (ii) copies of any
title insurance policies or other evidence of lien position, including but not
limited to Policy Insurance Record of Title ("PIRT") policies, limited liability
reports and lot book reports, to the extent the Seller obtains such policies or
other evidence of lien position, certified as true by the Seller;

            (f) With respect to those SBA Loans secured by other items of
Collateral, the original or a certified copy of all filed UCC financing
statements securing such Collateral naming the Seller as "Secured Party;"

            (g) For all SBA Loans, blanket assignment of all Collateral securing
the SBA Loan, including without limitation, all rights under applicable
guarantees and insurance policies. Such assignment shall be in the name of HSBC
Bank USA, and its successors and assigns, as indenture trustee under that
certain Indenture dated as of March 1, 2001 as the same may be amended from time
to time, for the benefit of the United States Small Business Administration and
holders of FIB Funding Trust II Notes, subject to the Multi-Party Agreement
dated as of March 1, 2001 as the same may be amended from time to time;

            (h) For all SBA Loans, irrevocable powers of attorney of the Seller
and the Issuer to the Indenture Trustee to execute, deliver, file or record and
otherwise deal with the Collateral for the SBA Loans in accordance with this
Agreement. The powers of attorney will be delegable by the Indenture Trustee to
the Servicer and any successor servicer and will permit the Indenture Trustee or
its delegate to prepare, execute and file or record UCC financing statements and
notices to insurers; and

            (i) For all SBA Loans, blanket UCC-1 financing statements
identifying by type all Collateral for the SBA Loans in the SBA Loan Pool and
naming the Indenture Trustee, as assignee of the Trust, as "Secured Party" and
the Seller as the "Debtor". The UCC-1 financing


                                       5
<PAGE>   12
statements will be filed promptly following the Closing Date in Connecticut and
will be in the nature of protective notice filings rather than true financing
statements.

            The Seller shall, within ten Business Days after the receipt
thereof, and in any event, within one year of the related Transfer Date, deliver
or cause to be delivered to the Indenture Trustee: (i) the original recorded
Mortgage in those instances where a copy thereof certified by the Seller was
delivered to the Indenture Trustee; (ii) the original recorded Assignment of
Mortgage from the Seller to the Indenture Trustee, which, together with any
intervening assignments of Mortgage, evidences a complete chain of title from
the originator to the Indenture Trustee in those instances where copies thereof
certified by the Seller were delivered to the Indenture Trustee; and (iii) any
intervening assignments of Mortgage in those instances where copies thereof
certified by the Seller were delivered to the Indenture Trustee. Notwithstanding
anything to the contrary contained in this Section 2.04, in those instances
where the public recording office retains the original Mortgage, Assignment of
Mortgage or the intervening assignments of the Mortgage after it has been
recorded, the Seller shall be deemed to have satisfied its obligations hereunder
upon delivery to the Indenture Trustee of a copy of such Mortgage, Assignment of
Mortgage or assignments of Mortgage certified by the public recording office to
be a true copy of the recorded original thereof. All SBA Loan documents held by
the Indenture Trustee or the FTA, as the case may be, as to each SBA Loan are
referred to herein as the "Indenture Trustee's Document File."

            Although it is the intent of the parties to this Agreement that the
conveyance of the Seller's right, title and interest in and to the Unguaranteed
Interests in the SBA Loans and other assets in the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan, in the event that
such conveyance is deemed to be a loan, it is the intent of the parties to this
Agreement that the Seller shall be deemed to have granted, and hereby does
grant, to the Trust Fund a first priority perfected security interest in all of
the Seller's right, title and interest in, to and under the Unguaranteed
Interests in the SBA Loans and other assets in the Trust Fund, and that this
Agreement shall constitute a security agreement under applicable law.

            All recording required pursuant to this Section 2.04 shall be
accomplished by and at the expense of the Servicer.

            Section 2.05  Acceptance by Indenture Trustee of the Trust Fund;
                          Certain Substitutions; Certification by Indenture
                          Trustee.

            (a) The Multi-Party Agreement provides for the FTA to deliver an
acknowledgment of receipt for each SBA Note in accordance with the terms and
conditions of the Multi-Party Agreement. The Indenture Trustee agrees, for the
benefit of the SBA, the Noteholders, the Certificateholders and the Hedge
Counterparties, to review each Indenture Trustee's Document File (with the
exception of the SBA Notes held by the FTA), on or prior to the applicable
Transfer Date (or, with respect to any Qualified Substitute SBA Loan, on or
prior to the assignment thereof), and to deliver to the Seller and the Servicer
a certification in the form attached hereto as Exhibit F on or prior to such
Transfer Date (or, with respect to any Qualified Substitute SBA Loan, on or
prior to the assignment thereof). Notwithstanding the foregoing, with respect to
the SBA Notes held by the FTA, the Indenture Trustee shall only be required to


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<PAGE>   13
review the "Acknowledgment of Receipt" delivered by the FTA and on or prior to
the applicable Transfer Date, the Indenture Trustee shall deliver to the Company
and the Servicer a certification in the form attached hereto as Exhibit F
relating to such "Acknowledgment of Receipt". Within 360 days after each
Transfer Date (or, with respect to any Qualified Substitute SBA Loan, within 360
days after the assignment thereof), the Indenture Trustee shall deliver to the
Servicer, the Seller, the SBA, and any Noteholder who requests a copy from the
Indenture Trustee a final certification in the form attached hereto as Exhibit
F-1 evidencing the completeness of the Indenture Trustee's Document Files with
respect to the SBA Loans being transferred on such Transfer Date.

            (b) If the Indenture Trustee during the process of reviewing the
Indenture Trustee's Document Files finds any document constituting a part of an
Indenture Trustee's Document File which is not properly executed, has not been
received, is unrelated to an SBA Loan identified in the SBA Loan Schedule, or
does not conform in a material respect to the requirements of Section 2.04 or
the description thereof as set forth in the SBA Loan Schedule, the Indenture
Trustee shall promptly so notify the Seller and the Servicer. In performing any
such review, the Indenture Trustee may conclusively rely on the Seller as to the
purported genuineness of any such document and any signature thereon. It is
understood that the scope of the Indenture Trustee's review of the SBA Files is
limited solely to confirming that the documents listed in Section 2.04 have been
executed and received and relate to the SBA Loans identified in the SBA Loan
Schedule. The Seller agrees to use reasonable efforts to remedy a material
defect in a document constituting part of an SBA File of which it is so notified
by the Indenture Trustee. If, however, within 60 days after the Indenture
Trustee's notice to it respecting such material defect the Seller has not
remedied the defect and such defect materially and adversely affects the value
of the related SBA Loan, the Seller will (i) substitute in lieu of such SBA Loan
a Qualified Substitute SBA Loan in the manner and subject to the conditions set
forth in Section 3.03 or (ii) purchase the Unguaranteed Interest of such SBA
Loan at a purchase price equal to the Principal Balance of such Unguaranteed
Interest as of the date of purchase, plus 30 days' interest on such Principal
Balance, computed at the sum of the applicable Interest Rate and the Program Fee
as of the next succeeding Determination Date, plus any accrued unpaid Required
Holdback Amounts and Servicing Advances reimbursable to the Servicer with
respect to such SBA Loan, which purchase price shall be deposited in the
Principal and Interest Account on the next succeeding Determination Date.

            (c) Upon receipt by the Indenture Trustee of a certification of a
Servicing Officer of the Servicer of such purchase and the deposit of the
amounts described above in the Principal and Interest Account (which
certification shall be in the form of Exhibit I hereto), the Indenture Trustee
shall release to the Servicer for release to the Seller the related Indenture
Trustee's Document File and the Indenture Trustee and the Trust shall execute,
without recourse, and deliver such instruments of transfer necessary to transfer
such SBA Loan to the Seller. All costs of any such transfer shall be borne by
the Servicer.

            (d) If in connection with taking any action the Servicer requires
any item constituting part of the Indenture Trustee's Document File, or the
release from the lien of the related SBA Loan of all or part of any Mortgaged
Property or other Collateral, the Servicer shall deliver to the Indenture
Trustee a certificate to such effect in the form attached as Exhibit I hereto.
The


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<PAGE>   14
Servicer shall comply with the SBA Rules and Regulations in connection with such
action, including the giving of any necessary notice. Upon receipt of such
certification, the Indenture Trustee, shall deliver to the Servicer the
requested documentation and the Indenture Trustee shall execute, without
recourse, and deliver such instruments of transfer necessary to release all or
the requested part of the Mortgaged Property or other Collateral from the lien
of the related SBA Loan.

            On the Remittance Date in March of each year, the Indenture Trustee
shall deliver to the Seller, and the Servicer a certification detailing all
transactions with respect to the SBA Loans for which the Indenture Trustee holds
an Indenture Trustee's Document File pursuant to this Agreement during the prior
calendar year. Such certification shall list all Indenture Trustee's Document
Files which were released by or returned to the Indenture Trustee or the FTA
during the prior calendar year, the date of such release or return and the
reason for such release or return.

            Section 2.06  [Reserved].

            Section 2.07  [Reserved].

            Section 2.08  Fees and Expenses of the Owner Trustee and the
                          Indenture Trustee.

            The fees and expenses of the Owner Trustee in its individual
capacity and the Indenture Trustee including (i) the annual fees of the Owner
Trustee in its individual capacity and the Indenture Trustee and (ii) any other
fees and expenses to which the Owner Trustee in its individual capacity and the
Indenture Trustee are entitled shall be paid from the Expense Account in the
manner set forth in Section 5.03 hereof; provided, however, that the Seller
shall be liable for any expenses of the Trust Fund incurred prior to the Closing
Date. The Servicer, the Indenture Trustee and the Trust hereby covenant with the
Noteholders, the Certificateholders and the Hedge Counterparties that every
material contract or other material agreement entered into by the Trust, the
Indenture Trustee, or the Servicer, acting as attorney-in-fact for the Indenture
Trustee or the Trust, on behalf of the Trust Fund shall expressly state therein
that no Noteholder, Certificateholder or Hedge Counterparty shall be personally
liable in connection with such contract or agreement.

            Section 2.09  Transfer and Conveyance of the SBA Loans.

            (a) (i) Subject to the conditions set forth in paragraph (b) below,
in consideration of the Indenture Trustee's delivery on the related Transfer
Date to or upon the order of the Seller of the amount in the Funding Account
determined pursuant to Section 2.09(a)(ii) below, the Seller shall on any
Transfer Date contribute, transfer, assign, set over and otherwise convey
without recourse, to the Trust all right, title and interest of the Seller in
and to the Unguaranteed Interest in each SBA Loan listed on the SBA Loan
Schedule delivered by the Seller on such Transfer Date, all its right, title and
interest in and to principal collected and interest accruing on the Unguaranteed
Interest in each such SBA Loan on and after the related Transfer Date and all
its right, title and interest in and to the Unguaranteed Interest in all
insurance policies; provided, however, that the Seller reserves and retains all
its right, title and interest in and to principal (including Principal
Prepayments) collected and interest accruing on


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<PAGE>   15
the Unguaranteed Interest in each such SBA Loan prior to the related Transfer
Date. The transfer by the Seller of the Unguaranteed Interest in each of the SBA
Loans set forth on the SBA Loan Schedule to the Trust shall be absolute and
shall be intended by all parties hereto to be treated as a contribution by the
Seller.

                  (ii) The amount released from the Funding Account shall be the
lesser of (i) the product of (A) 100% minus the Minimum Subordination Percentage
and (B) the aggregate Principal Balances as of the related Transfer Date of the
Unguaranteed Interest in each of the SBA Loans so transferred, or (ii) the
amount such that immediately after such release the Subordination Percentage
equals the Minimum Subordination Percentage.

            (b) The Seller shall transfer to the Trust the Unguaranteed Interest
in each of the SBA Loans and the other property and rights related thereto
described in paragraph (a) above only upon the satisfaction of each of the
following conditions on or prior to the related Transfer Date:

                  (i) the Seller shall have provided the Indenture Trustee and
            the Administrative Agent with a timely Addition Notice and shall
            have provided any information reasonably requested by them with
            respect to the SBA Loans;

                  (ii) the Seller shall have delivered to the Indenture Trustee
            a duly executed written assignment (including an acceptance by the
            Indenture Trustee) that shall include an SBA Loan Schedule, listing
            the SBA Loans being transferred and any other exhibits listed
            thereon;

                  (iii) as of each Transfer Date, neither the Seller nor the
            Servicer was insolvent nor will either of them have been made
            insolvent by such transfer nor is either of them aware of any
            pending insolvency;

                  (iv) such addition will not result in a material
            adverse tax consequence to the Trust Fund or the Holders of
            the Notes and the Certificates;

                  (v) the Termination Date shall not have occurred;

                  (vi) the Seller shall have delivered to the Indenture Trustee
            an Officer's Certificate confirming the satisfaction of each
            condition precedent specified in this paragraph (b) and in Sections
            3.1 and 3.2 of the Note Purchase Agreement; and

                  (vii) the FTA shall have delivered to the Indenture Trustee,
            pursuant to the Multi-Party Agreement, an acknowledgment of receipt
            of the SBA Note relating to such SBA Section 7(a) Loan in the form
            attached as Exhibit 1 to the Multi-Party Agreement.


                                       9
<PAGE>   16
            (c) In connection with the transfer and assignment of the
Unguaranteed Interests in the SBA Loans, the Seller agrees to satisfy the
conditions set forth in Sections 2.02, 2.03, 2.04 and 2.05.

            Section 2.10  Optional Purchase or Substitution of SBA Loans.

            The Seller shall have the right, but not the obligation, to
purchase, or substitute for, any Defaulted Unguaranteed Interest or Charged-Off
Unguaranteed Interest. In the case of a purchase, the Seller shall deposit in
the Principal and Interest Account, on the next succeeding Determination Date,
an amount equal to the Principal Balance of the related Unguaranteed Interest as
of the date of such purchase plus accrued interest thereon at the applicable SBA
Loan Interest Rate. In the case of a substitution, the Seller shall deliver to
the Trust one or more Qualified Substitute SBA Loans and any required
Substitution Adjustment. Any such substitution shall be made in accordance with
the provisions of Section 3.03. On the date of such substitution, the Seller
shall deliver to the Deal Agent a certificate stating that such SBA Loan is a
Qualified Substitute SBA Loan. In no event, however, may the aggregate Principal
Balance of the Unguaranteed Interests of all SBA Loans purchased or substituted
for pursuant to this Section 2.10 exceed, in any one year, 15% of the Purchase
Limit.

            Section 2.11  Securitizations.

            If in connection with a Securitization the Noteholders exercise the
Put Option, on the closing date of such Securitization the Trust shall sell to
the party designated by the Administrative Agent the Unguaranteed Interests in
those SBA Loans then held by the Trust that are designated in writing by the
Trust pursuant to Section 4.09(b) of the Indenture. Concurrently with such sale,
the Servicer shall cause an amount equal to the Put Option Price to be deposited
into the Note Distribution Account.


                                       10
<PAGE>   17
                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES


            Section 3.01 Representations of the Seller.

            The Seller hereby represents and warrants to the Indenture Trustee,
the Owner Trustee, the Certificateholders, the Noteholders and each Hedge
Counterparty as of each Transfer Date:

            (a) The Seller is a Connecticut chartered bank duly organized and
validly existing under the laws of the State of Connecticut and has all licenses
necessary to carry on its business as now being conducted and is licensed and
qualified in each state where the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the Seller
and perform its obligations hereunder; the Seller has all requisite power and
authority to execute and deliver this Agreement and each other Basic Document to
which it is a party and to perform in accordance herewith and therewith; the
execution, delivery and performance of this Agreement and each other Basic
Document to which it is a party (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Seller and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action; this Agreement and each other
Basic Document to which it is a party evidence the valid, binding and
enforceable obligations of the Seller; and all requisite corporate action has
been taken by the Seller to make this Agreement and each other Basic Document to
which it is a party valid, binding and enforceable upon the Seller in accordance
with its respective terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally or the application of equitable principles in any
proceeding, whether at law or in equity, none of which will affect the ownership
of the Unguaranteed Interests in the SBA Loans by the Trust.

            (b) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and licenses
required to be taken, given or obtained, as the case may be, by or from any
federal, state or other governmental authority or agency (other than any such
actions, approvals, etc., under any state securities laws, real estate
syndication or "Blue Sky" statutes, as to which the Seller makes no such
representation or warranty), that are necessary or advisable in connection with
the purchase and sale of the Notes and the execution and delivery by the Seller
of the documents to which it is a party, have been duly taken, given or
obtained, as the case may be, are in full force and effect on the date hereof,
are not subject to any pending proceedings or appeals (administrative, judicial
or otherwise) and either the time within which any appeal therefrom may be taken
or review thereof may be obtained has expired or no review thereof may be
obtained or appeal therefrom taken, and are adequate to authorize the
consummation of the transactions contemplated by this Agreement and each other
Basic Document to which it is a party and the other documents on the part of the
Seller and the performance by the Seller of its obligations under this Agreement
and the other Basic Documents to which it is a party;


                                       11
<PAGE>   18
            (c) The consummation of the transactions contemplated by this
Agreement and the other Basic Documents to which the Seller is a party will not
result in the breach of any terms or provisions of the articles of association
or by-laws of the Seller or result in the breach of any term or provision of, or
conflict with or constitute a default under or result in the acceleration of any
obligation under, any material agreement, indenture or loan or credit agreement
or other material instrument to which the Seller or its property is subject, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject;

            (d) Neither this Agreement or any other Basic Document to which the
Seller is a party nor any statement, report or other document furnished or to be
furnished pursuant to this Agreement or any other Basic Document to which the
Seller is a party or in connection with the transactions contemplated hereby and
thereby contains any untrue statement of material fact or omits to state a
material fact necessary to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made;

            (e) The Seller does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained in
this Agreement or any other Basic Document to which the Seller is a party;

            (f) There is no action, suit, proceeding or investigation pending
or, to the best of the Seller's knowledge, threatened against the Seller which,
either in any one instance or in the aggregate, may (i) result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Seller or in any material impairment of the right or ability of
the Seller to carry on its business substantially as now conducted, or in any
material liability on the part of the Seller or of any action taken or to be
taken in connection with the obligations of the Seller contemplated herein, or
which would be likely to impair materially the ability of the Seller to perform
under the terms of this Agreement or any other Basic Document to which the
Seller is a party or (ii) which would draw into question the validity of this
Agreement or any other Basic Document to which the Seller is a party or the SBA
Loans;

            (g) The Trust will not constitute an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;

            (h) The Seller is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state, municipal
or governmental agency, which default might have consequences that would
materially and adversely affect the condition (financial or other) or operations
of the Seller or its properties or might have consequences that would materially
and adversely affect its performance hereunder;

            (i) The Seller is Well Capitalized;

            (j) No Noteholder or Certificateholder is subject to Connecticut
state licensing requirements solely by virtue of holding the Notes or the
Certificates;


                                       12
<PAGE>   19
            (k) The transfer, assignment and conveyance of the SBA Notes and the
Mortgages by the Seller pursuant to this Agreement are not subject to the bulk
transfer laws or any similar statutory provisions in effect in any applicable
jurisdiction and do not violate the SBA Rules and Regulations;

            (l) The origination and collection practices used by the Seller with
respect to each SBA Note and Mortgage have been in all material respects legal,
proper, prudent and customary in the SBA loan origination and servicing business
and comply with the Credit and Collection Policy;

            (m) Each SBA Loan was selected from among the existing SBA loans in
the Seller's portfolio at the related Transfer Date, in a manner not designed to
adversely affect the Noteholders or the Certificateholders;

            (n) The Seller received fair consideration and reasonably equivalent
value in exchange for the sale of the Unguaranteed Interests in the SBA Loans;

            (o) Neither the Seller nor any of its affiliates sold any interest
in any SBA Loan with any intent to hinder, delay or defraud any of their
respective creditors;

            (p) The Seller is solvent, and the Seller will not be rendered
insolvent as a result of the transfer of the Unguaranteed Interest in the SBA
Loans to the Trust or the sale of the Notes; and

            (q) The chief executive office and legal name of the Seller is as
set forth on the respective UCC-1 financing statement filed on behalf of the
Seller pursuant to Section 2.04, such office is the place where the Seller is
"located" for the purposes of Section 9-103(3)(d) of the Uniform Commercial Code
as in effect in the State of New York, and neither the location of such office
nor the legal name of the Seller has changed in the past four months.

            Section 3.02  Individual SBA Loans.

            The Seller hereby represents and warrants to the Indenture Trustee,
the Noteholders, the Owner Trustee, the Certificateholders and each Hedge
Counterparty, with respect to each SBA Loan as of the related Transfer Date:

            (a)   The information with respect to each SBA Loan set forth
in the SBA Loan Schedule is true and correct;

            (b) All of the original or certified documentation set forth in
Section 2.04 (including all material documents related thereto) has been or will
be delivered to the Indenture Trustee on the Transfer Date or as otherwise
provided in Section 2.04;


                                       13
<PAGE>   20
            (c) Each Mortgaged Property serving as the primary Collateral for an
SBA Loan is improved by a Commercial Property or a Residential Property and does
not constitute other than real property under state law;

            (d) Each SBA Loan was originated and underwritten, or purchased and
re-underwritten, by the Seller and each SBA Loan is being serviced by the
Seller, in each case in accordance with the Credit and Collection Policy;

            (e) Each SBA Loan is an SBA Section 7(a) Loan;

            (f) The SBA Loan Interest Rate for each SBA Loan is either a fixed
rate or adjusts monthly [or quarterly] to equal the then applicable prime rate
plus the margin (if applicable) set forth in the related SBA Note. Each SBA Note
will provide for a schedule of Monthly Payments (which, for adjustable rate SBA
Loans, will adjust monthly [or quarterly]) payable in United States dollars
which are, if timely paid, sufficient to fully amortize the principal balance of
such SBA Loan on its respective maturity date;

            (g) With respect to those SBA Loans secured by a Mortgaged Property,
each Mortgage is a valid and subsisting lien of record on the Mortgaged Property
subject only to any applicable Prior Liens on such Mortgaged Property and
subject in all cases to such exceptions that are generally acceptable to banking
institutions in connection with their regular commercial lending activities, and
such other exceptions to which similar properties are commonly subject and which
do not individually, or in the aggregate, materially and adversely affect the
benefits of the security intended to be provided by such Mortgage;

            (h) Immediately prior to the transfer and assignment herein
contemplated, the Seller held good and indefeasible title to, and was the sole
owner of, the Unguaranteed Interest of each SBA Loan conveyed by the Seller
subject to no liens, charges, mortgages, encumbrances or rights of others except
liens which will be released simultaneously with such transfer and assignment;
and immediately upon the transfer and assignment herein contemplated, the Trust
will hold good and indefeasible title, to, and be the sole owner of, each SBA
Loan subject to no liens, charges, mortgages, encumbrances or rights of others
except the interests of the SBA, the lien granted to the Indenture Trustee or
liens which will be released simultaneously with such transfer and assignment;

            (i) No SBA Loan is more than 30 days delinquent in payment;

            (j) To the best of the Seller's knowledge, there is no delinquent
tax or assessment lien on any Mortgaged Property which is the primary Collateral
for the related SBA Loan, and each Mortgaged Property is free of material damage
and is in good repair;

            (k) No SBA Loan is subject to any right of rescission, set-off,
counterclaim or defense, including the defense of usury, nor will the operation
of any of the terms of the SBA Note or any related Mortgage, or the exercise of
any right thereunder, render either the SBA Note or any related Mortgage
unenforceable in whole or in part, or subject to any right of rescission,


                                       14
<PAGE>   21
set-off, counterclaim or defense, including the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;

            (l) Each SBA Loan at the time it was made complied, and as of its
Transfer Date complies, in all material respects with applicable state and
federal laws and regulations, including, without limitation, usury, equal credit
opportunity, disclosure and recording laws and the SBA Rules and Regulations;

            (m) There is only one originally signed SBA Note for each SBA Loan,
which SBA Note has been delivered to the FTA;

            (n) Pursuant to the SBA - Rules and Regulations, the Seller requires
that the improvements upon each Mortgaged Property are covered by a valid and
existing hazard insurance policy with a generally acceptable carrier that
provides for fire and extended coverage representing coverage described in
Section 4.07;

            (o) Pursuant to the SBA Rules and Regulations, the Seller requires
that if a Mortgaged Property is in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards, a flood
insurance policy is in effect with respect to such Mortgaged Property with a
generally acceptable carrier in an amount representing coverage described in
Section 4.07;

            (p) Each SBA Note, any related Mortgage and any other agreement
pursuant to which Collateral is pledged as security for the related SBA Loan is
the legal, valid and binding obligation of the maker thereof and is enforceable
in accordance with its terms, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether considered in a proceeding or action in equity or
at law), [none of which will prevent the ultimate realization of the security
provided by the Collateral or other agreement, and all parties to each SBA Loan
had full legal capacity to execute all SBA Loan documents and convey the estate
therein purported to be conveyed];

            (q) The Seller has caused and will cause to be performed any and all
acts reasonably required to be performed to preserve the rights and remedies of
the Indenture Trustee and the Owner Trustee in any insurance policies applicable
to the SBA Loans including, without limitation, in each case, any necessary
notifications of insurers, assignments of policies or interests therein, and
establishments of co-insured, joint loss payee and mortgagee rights in favor of
the Indenture Trustee or the Seller, respectively;

            (r) Each original Mortgage was recorded, and all subsequent
assignments of the original Mortgage have been recorded in the appropriate
jurisdictions wherein such recordation is necessary to perfect the lien thereof
as against creditors of the Seller (or, subject to Section 2.04 hereof, are in
the process of being recorded);

            (s)   No SBA Loan has an original term to maturity exceeding
300 months;


                                       15
<PAGE>   22
            (t) The terms of the SBA Note and the related Mortgage or other
security agreement pursuant to which Collateral was pledged have not been
impaired, altered or modified in any respect, except by a written instrument
which has been recorded, if necessary, to protect the interest of the SBA, the
Noteholders, the Certificateholders and each Hedge Counterparty and which has
been delivered to the Indenture Trustee;

            (u) There are no material defaults in complying with the terms of
any applicable Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable;

            (v) There is no proceeding pending or threatened for the total or
partial condemnation of any Mortgaged Property, nor is such a proceeding
currently occurring, and such property is undamaged by waste, fire, earthquake
or earth movement, windstorm, flood, tornado or other casualty, so as to affect
adversely the value of the Mortgaged Property as security for the SBA Loan or
the use for which the premises were intended;

            (w) At the time of origination of an SBA Loan, in all instances
where commercial real property serves as the primary Collateral for such SBA
Loan, the related Mortgaged Property was free of contamination from toxic
substances or hazardous wastes requiring action under applicable laws or is
subject to ongoing environmental rehabilitation approved by the SBA, and as of
the related Transfer Date, the Seller has no knowledge of any such contamination
from toxic substances or hazardous waste material on any Mortgaged Property
unless such items are below action levels or such Mortgaged Property is subject
to ongoing environmental rehabilitation approved by the SBA;

            (x) The proceeds of the SBA Loan have been fully disbursed, and
there is no obligation on the part of the Seller to make future advances
thereunder and the guaranteed portion of the SBA Loan has been sold in the
secondary market pursuant to SBA Form 1086. Any and all requirements as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing or recording the SBA Loans were
paid;

            (y) There is no obligation on the part of the Seller or any other
party (except for any guarantor of an SBA Loan) to make Monthly Payments in
addition to those made by the Obligor;

            (z) No statement, report or other document signed by the Seller
constituting a part of the SBA File contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained therein not misleading in light of the circumstances under which they
were made;


                                       16
<PAGE>   23
            (aa) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and no fees or
expenses are or will become payable by the Noteholders, the Certificateholders
and/or any Hedge Counterparties to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the Obligor;

            (bb)  No SBA Loan has a shared appreciation feature, or other
contingent interest feature;

            (cc) With respect to each SBA Loan secured by a Mortgaged Property
or other Collateral and that is not a first priority lien, either (i) no consent
for the SBA Loan is required by the holder of any related Prior Lien or (ii)
such consent has been obtained;

            (dd) Each SBA Loan was originated to a business located in the
jurisdiction identified in the SBA Loan Schedule and the collateral securing
each SBA Loan is located in the United States;

            (ee) All parties which have had any interest in the SBA Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (1) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
any Mortgaged Property is located, and (2)(A) organized under the laws of such
state, or (B) qualified to do business in such state to the extent required, or
(C) federal savings and loan associations or national banks having principal
offices in such state, or (D) not doing business in such state;

            (ff) Any related Mortgage contains customary and enforceable
provisions in accordance with the SBA Rules and Regulations which render the
rights and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and (ii)
otherwise by judicial foreclosure. There is no homestead or other exemption
available to the Mortgagor which would materially interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage;

            (gg) There is no default, breach, violation or event of acceleration
existing under the SBA Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration; and the Seller, in its
capacity as either Servicer or Seller, has not waived any default, breach,
violation or event of acceleration;

            (hh) All parties to the SBA Note and any related Mortgage or other
document pursuant to which Collateral was pledged had legal capacity to execute
the SBA Note and any such Mortgage or other document and each SBA Note and
Mortgage or other document have been duly and properly executed by such parties;

            (ii)  The SBA Loan is risk rated "4" or better by the Seller;


                                       17
<PAGE>   24
            (jj) Including the Unguaranteed Interest in such SBA Loan in the
Trust will not cause the Concentration and Mix Criteria to be violated; and

            (kk) With respect to those SBA Loans secured by Collateral other
than a Mortgaged Property, the related SBA Note, security agreements, if any,
and UCC-1 filed with respect to such Collateral creates a valid and subsisting
lien of record on such Collateral subject only to any Prior Liens, if any, on
such Collateral and subject in all cases to such exceptions that are generally
acceptable to lending institutions in connection with their regular commercial
lending activities, and such other exceptions to which similar Collateral is
commonly subject and which do not individually, or in the aggregate, materially
and adversely affect the benefits of the security intended to be provided by
such SBA Note, security agreement and UCC-1;

            Section 3.03  Purchase and Substitution of Defective SBA Loans.

            It is understood and agreed that the representations and warranties
set forth in Sections 3.01 and 3.02 shall survive delivery of the Notes to the
Noteholders and the Certificates to the Certificateholders. Upon discovery by
the Servicer, any Subservicer, a Responsible Officer of the Owner Trustee or the
Indenture Trustee of a breach of any of such representations and warranties
which materially and adversely affects the value of the SBA Loans or the
interest of the Noteholders, the Certificateholders, the SBA or any Hedge
Counterparty therein or which materially and adversely affects the interests of
the Noteholders, the Certificateholders, the SBA or any Hedge Counterparty in
the related SBA Loan in the case of a representation and warranty relating to a
particular SBA Loan (notwithstanding that such representation and warranty was
made to the Seller's best knowledge), the party discovering such breach shall
give prompt written notice to the others. Within 60 days of the earlier of its
discovery or its receipt of notice of any breach of a representation or
warranty, the Seller shall (a) promptly cure such breach in all material
respects, (b) purchase the Unguaranteed Interest in such SBA Loan by depositing
in the Principal and Interest Account, on the next succeeding Determination
Date, an amount in the manner specified in Section 2.05(b), or (c) remove such
SBA Loan from the Trust Fund (in which case it shall become a Deleted SBA Loan)
and substitute one or more Qualified Substitute SBA Loans. Any such substitution
shall be accompanied by payment by the Seller of the Substitution Adjustment, if
any.

            As to any Deleted SBA Loan for which the Seller substitutes a
Qualified Substitute SBA Loan or Loans, the Servicer shall effect such
substitution by delivering to the Indenture Trustee a certification in the form
attached hereto as Exhibit I, executed by a Servicing Officer, and shall also
deliver to the Indenture Trustee, the documents constituting the Indenture
Trustee's Document File for such Qualified Substitute SBA Loan or Loans.

            The Servicer shall deposit in the Principal and Interest Account the
Unguaranteed Percentage of all payments of principal received in connection with
such Qualified Substitute SBA Loan or Loans after the date of such substitution
together with all interest (net of the portion thereof required to be paid to
the related Registered Holder, the FTA's Fee, the Required


                                       18
<PAGE>   25
Holdback Amount with respect to each SBA Loan and the Additional Fee with
respect to each Additional Fee SBA Loan). Monthly Payments received with respect
to Qualified Substitute SBA Loans on or before the date of substitution will be
retained by the Seller. The Trust Fund will own all payments received with
respect to the Unguaranteed Interest on the Deleted SBA Loan on or before the
date of substitution, and the Seller shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted SBA Loan. The Servicer
shall give written notice to the Indenture Trustee that such substitution has
taken place and shall amend the SBA Loan Schedule to reflect the removal of such
Deleted SBA Loan from the terms of this Agreement and the substitution of the
Qualified Substitute SBA Loan or Loans. Upon such substitution, such Qualified
Substitute SBA Loan or Loans shall be subject to the terms of this Agreement in
all respects, including Sections 2.04 and 2.05, and the Seller shall be deemed
to have made with respect to such Qualified Substitute SBA Loan or Loans, as of
the date of substitution, the covenants, representations and warranties set
forth in Sections 3.01 and 3.02. On the date of such substitution, the Seller
will remit to the Servicer, and the Servicer will deposit into the Principal and
Interest Account, an amount equal to the Substitution Adjustment.

            In addition to the cure, purchase and substitution obligation in
Sections 2.04, 2.05 and 3.03, the Seller shall indemnify and hold harmless the
Trust, the Indenture Trustee, the Noteholders, the Certificateholders and any
Hedge Counterparty against any loss, damages, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments and other costs and expenses
resulting from any claim, demand, defense or assertion based on or grounded
upon, or resulting from, a breach of the Seller's representations and warranties
contained in this Agreement. It is understood and agreed that the obligations of
the Seller set forth in Sections 2.04, 2.05 and 3.03 to cure, purchase or
substitute for a defective SBA Loan and to indemnify the Noteholders, the
Certificateholders, the Indenture Trustee, the Owner Trustee and any Hedge
Counterparty as provided in Sections 2.04, 2.05 and 3.03 constitute the sole
remedies of the Indenture Trustee, the Noteholders, the Certificateholders, the
Owner Trustee and any Hedge Counterparty, respecting a breach of the foregoing
representations and warranties.

            Any cause of action against the Servicer or the Seller relating to
or arising out of the breach of any representations and warranties made in
Sections 2.05, 3.01 or 3.02 shall accrue as to any SBA Loan upon (i) discovery
of such breach by any party and notice thereof to the Seller and or notice
thereof by the Seller to the Indenture Trustee, (ii) failure by the Seller to
cure such breach or purchase or substitute such SBA Loan as specified above, and
(iii) demand upon the Seller by the Indenture Trustee for all amounts payable
hereunder in respect of such SBA Loan.


                                       19
<PAGE>   26
                                   ARTICLE IV

                    ADMINISTRATION AND SERVICING OF SBA LOANS

            Section 4.01  Duties of the Servicer.

            (a) The Servicer, as independent contract servicer for the Trust,
shall service and administer the SBA Loans and shall have full power and
authority, acting alone, to do any and all things in connection with such
servicing and administration which the Servicer may deem necessary or desirable
and consistent with the terms of this Agreement, the Credit and Collection
Policy, the Multi-Party Agreement and the SBA Rules and Regulations. The
Servicer may enter into Subservicing Agreements for any servicing and
administration of SBA Section 7(a) Loans with any entity approved with prior
written consent by the SBA and the Administrative Agent. Any such Subservicing
Agreement must be approved by the SBA and shall be consistent with and not
violate the provisions of this Agreement and the Multi-Party Agreement. The
Servicer shall be entitled to terminate any Subservicing Agreement in accordance
with the terms and conditions of such Subservicing Agreement and to either
itself directly service the related SBA Section 7(a) Loans or enter into a
Subservicing Agreement with a successor Subservicer which qualifies hereunder.

            (b) Notwithstanding any Subservicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Servicer and a Subservicer or reference to actions taken through a Subservicer
or otherwise, the Servicer shall remain obligated and primarily liable to the
Indenture Trustee, for itself and on behalf of the Noteholders, the SBA, the
Certificateholders and any Hedge Counterparty for the servicing and
administering of the SBA Loans in accordance with the provisions of this
Agreement and the Multi-Party Agreement and the SBA Rules and Regulations,
without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the SBA Loans. For purposes
of this Agreement, the Servicer shall be deemed to have received payments on SBA
Loans when any Subservicer has received such payments. The Servicer shall be
entitled to enter into any agreement with a Subservicer for indemnification of
the Servicer by such Subservicer, and nothing contained in this Agreement shall
be deemed to limit or modify such indemnification.

            (c) Any Subservicing Agreement that may be entered into and any
transactions or services relating to the SBA Loans involving a Subservicer in
its capacity as such and not as an originator shall be deemed to be between the
Subservicer and the Servicer alone, and the Indenture Trustee, the SBA, the
Noteholders and any Hedge Counterparty shall not be deemed parties thereto and
shall have no claims, rights, obligations, duties or liabilities with respect to
the Subservicer except as set forth in Section 4.01(d) provided, that SBA shall
retain all claims it may have against any Subservicer that SBA would otherwise
have, including, without limitation, any rights under such Subservicing
Agreement, any other agreements or SBA Rules and Regulations.


                                       20
<PAGE>   27
            (d) In the event the Servicer shall for any reason no longer be the
Servicer, the Indenture Trustee or its designee shall, subject to Section 9.02
hereof and the Multi-Party Agreement, thereupon assume all of the rights and
obligations of the Servicer under each Subservicing Agreement that the Servicer
may have entered into, unless the Indenture Trustee is then permitted and elects
to terminate any Subservicing Agreement in accordance with its terms. The
Indenture Trustee, its designee or the successor servicer for the Indenture
Trustee shall be deemed to have assumed all of the Servicer's interest therein
and to have replaced the Servicer as a party to each Subservicing Agreement to
the same extent as if the Subservicing Agreements had been assigned to the
assuming party, except that the Servicer shall not thereby be relieved of any
liability or obligations under the Subservicing Agreements. The Servicer, at its
expense and without right of reimbursement therefor, shall, upon request of the
Indenture Trustee, deliver to the assuming party all documents and records
relating to each Subservicing Agreement and the SBA Loans then being serviced
and an accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the Subservicing
Agreements to the assuming party.

            (e) So long as it is consistent with the terms of this Agreement and
the Multi-Party Agreement, the SBA Agreement (as defined in the Multi-Party
Agreement) and the SBA Rules and Regulations, the Servicer may waive, modify or
vary any term of any SBA Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Obligor
if in the Servicer's determination such waiver, modification, postponement or
indulgence is not materially adverse to the interests of the SBA, the
Noteholders and any Hedge Counterparty, provided, however, that (unless (x) the
Obligor is in default with respect to the SBA Loan, or such default is, in the
judgment of the Servicer, imminent and (y) the Servicer determines that any
modification would not be considered a new loan for federal income tax purposes)
the Servicer may not permit any modification with respect to any SBA Loan that
would change the SBA Loan Interest Rate, defer (subject to Section 4.12), or
forgive the payment of any principal or interest (unless in connection with the
liquidation of the related SBA Loan), or extend the final maturity date on such
SBA Loan without the consent of the SBA, if such consent is then required by the
SBA Rules and Regulations. The Servicer may exercise all unilateral servicing
actions permitted by participating lenders in accordance with the SBA Rules and
Regulations. No costs incurred by the Servicer or any Subservicer in respect of
Servicing Advances shall for the purposes of distributions to Noteholders be
added to the amount owing under the related SBA Loan. Without limiting the
generality of the foregoing, so long as it is consistent with the SBA Rules and
Regulations, the Servicer shall continue, and is hereby authorized and empowered
to execute and deliver on behalf of the Indenture Trustee, the Owner Trustee,
the SBA, each Noteholder, each Certificateholder and each Hedge Counterparty,
all instruments of satisfaction or cancellation, or of partial or full release,
discharge and all other comparable instruments, with respect to the SBA Loans
and with respect to any Mortgaged Properties or other Collateral. If reasonably
required by the Servicer, the Indenture Trustee, on behalf of the Trust, shall
furnish the Servicer, within 5 Business Days of receipt of the Servicer's
request, with any powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Agreement. Any such request to the Indenture Trustee, on
behalf of the Trust, shall be accompanied by a certification in the form of
Exhibit I attached hereto signed by a Servicing Officer.


                                       21
<PAGE>   28
            The Servicer, in servicing and administering the SBA Loans, shall
employ or cause to be employed procedures (including collection, foreclosure and
Foreclosed Property and Repossessed Collateral management procedures) and
exercise the same care that it customarily employs and exercises in servicing
and administering SBA Loans for its own account and prudent lending standards,
and in accordance with the SBA Rules and Regulations, giving due consideration
to the Noteholders' and the SBA's reliance on the Servicer.

            (f) On and after such time as the Indenture Trustee receives the
resignation of, or notice of the removal of, the Servicer from its rights and
obligations under this Agreement, and with respect to resignation pursuant to
Section 8.04, after receipt of the Opinion of Counsel required pursuant to
Section 8.04 addressed to the SBA and the Indenture Trustee, the Indenture
Trustee or its designee shall assume all of the rights and obligations of the
Servicer, subject to Section 9.02 hereof and the Multi-Party Agreement. The
Servicer shall, upon request of the Indenture Trustee but at the expense of the
Servicer, deliver to the Indenture Trustee all documents and records (including
computer tapes and diskettes) relating to the SBA Loans and an accounting of
amounts collected and held by the Servicer and otherwise use its best efforts to
effect the orderly and efficient transfer of servicing rights and obligations to
the assuming party.

            (g) The Servicer shall perform the duties of the Issuer and the
Owner Trustee under the Basic Documents. In furtherance of the foregoing, the
Servicer shall consult with the Owner Trustee as the Servicer deems appropriate
regarding the duties of the Issuer and the Owner Trustee under the Basic
Documents. The Servicer shall monitor the performance of the Issuer and the
Owner Trustee and shall advise the Owner Trustee when action is necessary to
comply with the Issuer's or the Owner Trustee's duties under the Basic
Documents. The Servicer shall prepare for execution by the Owner Trustee or
shall cause the preparation by other appropriate Persons of all such documents,
reports, filings, instruments, certificates and opinions as it shall be the duty
of the Issuer or the Owner Trustee to prepare, file or deliver pursuant to the
Basic Documents.

            (h) In addition to the duties of the Servicer set forth in this
Agreement or any of the Basic Documents, the Servicer shall perform such
calculations and shall prepare for execution by the Issuer or the Owner Trustee
or shall cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Issuer to prepare, file or deliver pursuant to state and
federal tax and securities laws. In accordance with the directions of the Issuer
or the Owner Trustee, the Servicer shall administer, perform or supervise the
performance of such other activities in connection with the Issuer as are not
covered by any of the foregoing provisions and as are expressly requested by the
Issuer or the Owner Trustee and are reasonably within the capability of the
Servicer.

            (i) Notwithstanding anything in this Agreement or any of the Basic
Documents to the contrary, the Servicer shall be responsible for promptly
notifying the Owner Trustee and the Paying Agent in the event that any
withholding tax is imposed on the Issuer's payments (or allocations of income)
to a Noteholder, a Certificateholder or Hedge Counterparty.


                                       22
<PAGE>   29
Any such notice shall be in writing and specify the amount of any withholding
tax required to be withheld by the Owner Trustee or the Paying Agent pursuant to
such provision.

            (j) The Servicer shall prepare and file, on behalf of the Issuer,
all tax returns tax elections, financial statements and such annual or other
reports of the Issuer as are necessary for the preparation of tax reports as
provided in the Trust Agreement or required by applicable law. All tax returns
will be signed by the Servicer on behalf of the Issuer.

            (k) The Servicer shall maintain appropriate books of account and
records relating to services performed under this Agreement, which books of
account and records shall be accessible for inspection by the Owner Trustee at
any time during normal business hours.

            (l) The Servicer shall furnish to the Administrative Agent from time
to time such additional information regarding the Issuer or the Basic Documents
as the Administrative Agent shall reasonably request.

            (m) Without the prior written consent of the Administrative Agent,
the Servicer shall not agree or consent to, or otherwise permit to occur, any
amendment, modification, change, supplement or recision of or to the Credit and
Collection Policy, in whole or in part, in any manner that could have a material
adverse effect on the SBA Loans; provided that the consent of the Administrative
Agent shall not be required if any such amendment, modification, change,
supplement or recision was mandated by the Servicer's regulators including, but
not limited to, the SBA.

            (n) The Servicer shall furnish to the Administrative Agent written
notice of any change to (i) the Credit and Collection Policy within three (3)
Business Days of such change and (ii) any change to its accounting policy within
three (3) Business Days of such change.

            Section 4.02  Liquidation of SBA Loans.

            In the event that any payment due under any SBA Loan and not
postponed pursuant to Section 4.01 is not paid when the same becomes due and
payable, or in the event the Obligor fails to perform any other covenant or
obligation under the SBA Loan, the Servicer in accordance with the SBA Rules and
Regulations shall take such action as it shall deem to be in the best interests
of the Noteholders and the SBA. With respect to any such SBA Section 7(a) Loan
for which the SBA has expressed to the Servicer the SBA's desire to assume
servicing of such SBA Loan consistent with the SBA Rules and Regulations, the
Indenture Trustee shall, upon written direction of the Servicer, deliver to the
SBA or its designee all or any portion of the Indenture Trustee's Document File
relating to such SBA Section 7(a) Loan and the Indenture Trustee shall execute
such documents including but not limited to an endorsement of the related SBA
Note and an assignment of the related Mortgage, in each case without recourse,
representation or warranty of any kind, as the Servicer or the SBA shall
request. Expenses incurred in connection with any such action shall be the
responsibility of the Servicer and shall not be chargeable to the Principal and
Interest Account or the Note Distribution Account. Subject to the SBA Rules and
Regulations and with the prior written consent of the SBA (if required by the
SBA Rules and


                                       23
<PAGE>   30
Regulations), the Servicer shall foreclose upon or otherwise comparably effect
the ownership of Mortgaged Properties or other Collateral relating to defaulted
SBA Section 7(a) Loans for which the related SBA Section 7(a) Loan is still
outstanding, as to which no satisfactory arrangements can be made for collection
of delinquent payments in accordance with the provisions of Section 4.10. In
connection with such foreclosure or other conversion and any other liquidation
action, the Servicer shall exercise collection and foreclosure procedures with
the same degree of care and skill in its exercise or use as it would exercise
with respect to its own affairs, in accordance with prudent servicing standards,
and in accordance with the applicable SBA Rules and Regulations. Prior to
undertaking foreclosure of any Mortgaged Property, the Servicer must investigate
environmental conditions, including, if the Servicer deems necessary or if
required by the SBA Rules and Regulations the performance of a Phase I and/or
Phase II environmental site assessment, to ascertain the actual or potential
presence of any hazardous material on or under such property. For purposes of
this Agreement, the term hazardous material includes (1) any hazardous
substance, as defined by the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. 9601-9675, and (2) petroleum (as that
term is defined at 42 U.S.C. Section 6991) including any derivative, fraction,
by-product, constituent or breakdown product thereof, or additive thereto. In
the event that the environmental investigation determines the existence of any
hazardous material on or under the Mortgaged Property in excess of minimum
action levels established by relevant regulatory agencies, title to such
property shall not be taken without prior written approval from the SBA.

            Section 4.03  Establishment of Principal and Interest Accounts;
                          Deposits in Principal and Interest Accounts.

            (a) The Servicer shall cause to be established and maintained one or
more Principal and Interest Accounts, in one or more Eligible Deposit Accounts,
in the form of time deposit or demand accounts, which may be interest-bearing or
such accounts may be trust accounts wherein the moneys therein are invested in
Permitted Instruments, titled "First International Bank, as Servicer, in trust
for the registered holders of FIB Funding Trust II Notes." All funds in such
Principal and Interest Accounts shall be insured by the BIF or SAIF administered
by the FDIC to the maximum extent provided by law. The creation of any Principal
and Interest Account shall be evidenced by a letter agreement in the form of
Exhibit C hereto.

            A copy of such letter agreement shall be furnished to the Indenture
Trustee, the Owner Trustee and, upon request, the SBA, any Noteholder,
Certificateholder or Hedge Counterparty.

            (b) The Servicer and each Subservicer shall deposit without
duplication (within two Business Days of receipt thereof) in the applicable
Principal and Interest Account and retain therein:


                                       24
<PAGE>   31
                  (i) the Unguaranteed Percentage of all payments received on or
            after the applicable Transfer Date on account of principal on the
            SBA Loans, including all Principal Prepayments and Curtailments;

                  (ii) all payments received after the Transfer Date on account
            of interest on the SBA Loans (net of the portion thereof required to
            be paid to the related Registered Holders, the Required Holdback
            Amount and the FTA's Fee with respect to each SBA Loan, the
            Additional Fee with respect to each Additional Fee SBA Loan, and
            other servicing compensation payable to the Servicer as permitted
            herein);

                  (iii) the Unguaranteed Percentage of all Net Liquidation
            Proceeds;

                  (iv) the Unguaranteed Percentage of all Insurance Proceeds
            (other than amounts to be applied to restoration or repair of any
            related Mortgaged Property, or to be released to the Obligor in
            accordance with the Credit and Collection Policy);

                  (v) the Unguaranteed Percentage of all Released Mortgaged
            Property Proceeds and any other proceeds from any other Collateral
            securing the SBA Loans;

                  (vi) any amounts paid in connection with the purchase or
            repurchase of the Unguaranteed Interest of any SBA Loan and the
            amount of any Substitution Adjustment received pursuant to any
            provision of this Agreement;

                  (vii) any amount required to be deposited in the
            Principal and Interest Account pursuant to Section 4.04 or
            4.10; and

                  (viii) the amount of any losses incurred in connection with
            investments in Permitted Instruments.

            (c) The foregoing requirements for deposit in the Principal and
Interest Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments with respect to the
Guaranteed Interest to be paid to the Registered Holders, the Required Holdback
Amount and the FTA's Fee, with respect to each SBA Loan, and additionally the
Additional Fee with respect to each Additional Fee SBA Loan, together with the
difference between any Liquidation Proceeds and the related Net Liquidation
Proceeds and the amount of any related costs or expenses for which SBA or any
Person acting on behalf of SBA is entitled to be reimbursed pursuant to SBA
Rules and Regulations, may not be deposited by the Servicer in the Principal and
Interest Account.

            (d) Any interest earnings on funds held in the Principal and
Interest Account paid by a Designated Depository Institution, or investment
earnings in respect of other Permitted Instruments in which such funds are
invested, shall be for the account of the Servicer and may only be withdrawn
from the Principal and Interest Account by the Servicer immediately


                                       25
<PAGE>   32
following its monthly remittance to the Indenture Trustee pursuant to Section
4.04(a). Any reference herein to amounts on deposit in the Principal and
Interest Account shall refer to amounts net of such investment earnings.

            Section 4.04  Permitted Withdrawals From the Principal and Interest
                          Account.

            The Servicer shall withdraw funds from the Principal and Interest
Account first, to withdraw any funds deposited therein that are not required or
permitted to be deposited therein, or were deposited therein in error, and then
for the following purposes:

            (a) to effect the remittance to the Indenture Trustee on each
Determination Date for deposit into the Note Distribution Account of the
Available Funds for the related Remittance Date (net of amounts then on deposit
in the Spread Account);

            (b) to reimburse itself for any accrued unpaid Required Holdback
Amount allocable to the SBA Loans and for unreimbursed Servicing Advances to the
extent deposited in the Principal and Interest Account (and not netted from
Monthly Payments received). The Servicer's right to reimbursement for unpaid
Required Holdback Amounts and, except as provided in the following sentence,
Servicing Advances shall be limited to Liquidation Proceeds, Released Mortgaged
Property Proceeds, Insurance Proceeds and such other amounts as may be collected
by the Servicer from the Obligor or otherwise relating to the SBA Loan in
respect of which such unreimbursed amounts are owed. The Servicer's right to
reimbursement for Servicing Advances in excess of such amounts shall be limited
to any late collections of interest received on the SBA Loans generally,
including Liquidation Proceeds, Released Mortgaged Property Proceeds, Insurance
Proceeds and any other amounts; provided, however, that the Servicer's right to
such reimbursement pursuant hereto shall be subordinate to the rights of the
Noteholders;

            (c) to withdraw any amount received from an Obligor that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code in accordance with a
final, nonappealable order of a court having competent jurisdiction;

            (d) (i) to make investments in Permitted Instruments and (ii) to pay
to itself, as permitted by Section 4.03(d), interest paid in respect of
Permitted Instruments or by an Eligible Deposit Account on funds deposited in
the Principal and Interest Account;

            (e) to pay itself servicing compensation pursuant to Section 6.03
hereof; and

            (f) to clear and terminate the Principal and Interest Account upon
the termination of this Agreement in accordance with Section 10.01.

            So long as no default or Servicer Termination Event shall have
occurred and be continuing, and consistent with any requirements of the Code,
the Principal and Interest Accounts shall constitute one or more Eligible
Deposit Accounts as an interest-bearing account


                                       26
<PAGE>   33
meeting the requirements set forth in Section 4.03(a), or the funds held therein
may be invested by the Servicer (to the extent practicable) in Permitted
Instruments, as directed in writing by the Servicer. In either case, funds in
the Principal and Interest Account must be available for withdrawal without
penalty, and any Permitted Instruments must mature not later than the Business
Day immediately preceding the Determination Date next following the date of such
investment (except that if such Permitted Instrument is an obligation of the
institution that maintains such account, then such Permitted Instrument shall
mature not later than such Determination Date) and shall not be sold or disposed
of prior to its maturity. All Permitted Instruments must be held by or
registered in the name of "First International Bank, as Servicer, in trust for
the registered holders of FIB Funding Trust II Notes." All interest or other
earnings from funds on deposit in the Principal and Interest Account (or any
Permitted Instruments thereof) shall be the exclusive property of the Servicer,
and may be withdrawn from the Principal and Interest Account pursuant to clause
(d) above. The amount of any losses incurred in connection with the investment
of funds in the Principal and Interest Account in Permitted Instruments shall be
deposited in the Principal and Interest Account by the Servicer from its own
funds immediately as realized without reimbursement therefor.

            Section 4.05  [Intentionally Omitted]

            Section 4.06  Transfer of Accounts.

            The Servicer may, upon written notice to the Indenture Trustee, the
SBA and the Administrative Agent, transfer any Principal and Interest Account to
a different Eligible Deposit Account.

            Section 4.07  Maintenance of Hazard Insurance.

            The Servicer shall comply with the SBA Rules and Regulations
concerning the issuance and maintenance of fire and hazard insurance with
extended coverage customary in the area where the Mortgaged Property is located.
If at origination of an SBA Loan, to the best of the Servicer's knowledge after
reasonable investigation, the related Mortgaged Property is in an area
identified in the Federal Register by the Flood Emergency Management Agency as
having special flood hazards (and such flood insurance has been made available)
consistent with the SBA Rules and Regulations, the Servicer will require the
related Obligor to purchase a flood insurance policy with a generally acceptable
insurance carrier, in an amount representing coverage not less than the lesser
of (i) the full insurable value of the Mortgaged Property, or (ii) the maximum
amount of insurance available under the National Flood Insurance Act of 1968, as
amended. The Servicer shall also maintain, to the extent such insurance is
available, and required by the SBA Rules and Regulations and the Credit and
Collection Policy, on Foreclosed Property constituting real property, fire and
hazard insurance in the amounts described above and liability insurance. The
Unguaranteed Percentage of any amounts collected by the Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
Mortgaged Property, or to be released to the Obligor in accordance with the SBA
Rules and Regulations or in respect of liability insurance, to be applied to the
liabilities insured) shall be deposited in the Principal and Interest Account,
subject to withdrawal pursuant to Section 4.04.


                                       27
<PAGE>   34
It is understood and agreed that no earthquake or other additional insurance
need be required by the Servicer of any Obligor or maintained on Foreclosed
Property, other than pursuant to such applicable laws and regulations as shall
at any time be in force and as shall require such additional insurance. All
policies required hereunder shall be endorsed with standard mortgagee clauses
with losses payable to the Servicer or its affiliates.

            Section 4.08  [Intentionally Omitted].

            Section 4.09  Fidelity Bond.

            The Servicer shall maintain with a responsible company, and at its
own expense, a blanket fidelity bond and an errors and omissions insurance
policy, in a minimum amount equal to $1,500,000, and a maximum deductible of
$100,000, if commercially available, with coverage on all employees acting in
any capacity requiring such persons to handle funds, money, documents or papers
relating to the SBA Loans ("Servicer Employees"). The fidelity bond shall insure
the Indenture Trustee and the Owner Trustee, their respective officers and
employees against losses resulting from forgery, theft, embezzlement or fraud by
such Servicer Employees. The errors and omissions policy shall insure against
losses resulting from the errors, omissions and negligent acts of such Servicer
employees. No provision of this Section 4.09 requiring such fidelity bond and
errors and omissions insurance shall relieve the Servicer from its duties as set
forth in this Agreement. Upon the request of the Indenture Trustee, the Owner
Trustee, the SBA or any Noteholder, Certificateholder or Hedge Counterparty, the
Servicer shall cause to be delivered to the Indenture Trustee, Owner Trustee,
the SBA or such Noteholder or such Certificateholder a certified true copy of
such fidelity bond and insurance policy. The current issuer of such fidelity
bond and insurance policy is The Hartford Underwriters Insurance Company.

            Section 4.10  Title, Management and Disposition of Foreclosed
                          Property.

            Except as otherwise required by SBA Rules and Regulations, in the
event that title to a Mortgaged Property or other Collateral is acquired in
foreclosure or by deed in lieu of foreclosure or by other legal process (a
"Foreclosed Property"), the deed or certificate of sale, or the repossessed
Collateral shall be taken in the name of the Indenture Trustee or such other
Person as the SBA may designate in writing, in each case on behalf of the Trust
for the benefit of the Noteholders, the Certificateholders, the SBA and the
Hedge Counterparties, as their interests may appear under the Multi-Party
Agreement dated the date of this Agreement (or such other name as the SBA may
direct).

            Unless the servicing of a Foreclosed Property or item of Repossessed
Collateral relating to an SBA Loan is assumed by the SBA pursuant to the SBA
Rules and Regulations, the Servicer, subject to Sections 4.01 and 4.02 hereof,
shall manage, conserve, protect and operate each Foreclosed Property or other
Repossessed Collateral for the SBA, the Noteholders, the Certificateholders and
any Hedge Counterparty solely for the purpose of its prudent and prompt
disposition and sale. The Servicer shall, either itself or through an agent
selected by the Servicer, manage, conserve, protect and operate the Foreclosed
Property or other Repossessed Collateral in


                                       28
<PAGE>   35
the same manner that it manages, conserves, protects and operates other
foreclosed or repossessed property for its own account, and in the same manner
that similar property in the same locality as the Foreclosed Property or other
Repossessed Collateral is managed. The Servicer shall attempt to sell the same
(and may temporarily rent the same) on such terms and conditions as the Servicer
deems to be in the best interest of the SBA, the Noteholders, the
Certificateholders and any Hedge Counterparty.

            The Servicer shall cause to be deposited in the Principal and
Interest Account, no later than five Business Days after the receipt thereof,
the Unguaranteed Percentage of all revenues received with respect to the
conservation and disposition of the related Foreclosed Property or other
Repossessed Collateral net of Servicing Advances.

            The disposition of Foreclosed Property or other Repossessed
Collateral shall be carried out by the Servicer at such price, and upon such
terms and conditions, as the Servicer, with SBA concurrence (if required by the
SBA Rules and Regulations), deems to be in the best interest of the SBA, the
Noteholders, the Certificateholders and any Hedge Counterparty. The Unguaranteed
Percentage of the proceeds of sale of the Foreclosed Property or other
Repossessed Collateral shall promptly, but in no event later than two Business
Days after receipt, be deposited in the Principal and Interest Account as
received from time to time and, as soon as practicable thereafter, the expenses
of such sale shall be paid by the Servicer from the netting of Servicer Advances
provided for in the preceding paragraph. The Servicer shall, subject to Section
4.04, reimburse itself for any related unreimbursed Required Holdback Amounts
and unpaid Servicing Fees, and the Servicer shall deposit in the Principal and
Interest Account the net cash proceeds of such sale to be distributed to the
Noteholders in accordance with Section 5.07 hereof.

            Section 4.11  [Intentionally Omitted].

            Section 4.12  Collection of Certain SBA Loan Payments.

            The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the SBA Loans, and shall cause the
Obligor under the SBA Loan, to the extent such procedures shall be consistent
with this Agreement, to comply with the terms and provisions of any applicable
hazard insurance policy. Consistent with the foregoing and the SBA Rules and
Regulations, the Servicer may in its discretion waive or permit to be waived any
fee or charge (other than the Required Holdback Amounts, without the written
consent of the SBA) which the Servicer would be entitled to retain hereunder as
servicing compensation and extend the due date for payments due on an SBA Note
for a period (with respect to each payment as to which the due date is extended)
not greater than 180 days after the initially scheduled due date for such
payment.

            Section 4.13  Access to Certain Documentation and Information
                          Regarding the SBA Loans.

            The Servicer shall provide to the Owner Trustee, the Indenture
Trustee, the SBA, the FDIC, the OCC, the Federal Reserve, the Office of Thrift
Supervision and the supervisory


                                       29
<PAGE>   36
agents and examiners of the foregoing, access to the documentation regarding the
SBA Loans required by applicable local, state and federal regulations, such
access being afforded without charge but only upon reasonable request and during
normal business hours at the offices of the Servicer designated by it.


                                       30
<PAGE>   37
                                    ARTICLE V

                           PAYMENTS TO THE NOTEHOLDERS

            Section 5.01  Establishment of Note Distribution Account; Deposits
                          in Note Distribution Account; Permitted Withdrawals
                          from Note Distribution Account.

            (a) No later than the Closing Date, the Indenture Trustee will
establish and maintain with itself in its trust department a trust account,
which shall not be interest-bearing, titled "Note Distribution Account, HSBC
Bank USA, as Indenture Trustee for the registered holders of FIB Funding Trust
II Notes" (the " Note Distribution Account"). The Indenture Trustee shall,
promptly upon receipt, deposit in the Note Distribution Account and retain
therein:

                  (i) the Available Funds (net of the amount then on deposit in
            the Spread Account);

                  (ii) the proceeds received upon the sale of the Unguaranteed
            Interests in connection with a Securitization pursuant to Section
            2.11;

                  (iii) amounts transferred from the Spread Account pursuant to
            Section 5.02(b)(i);

                  (iv) amounts required to be paid by the Servicer pursuant to
            Section 5.06(e) in connection with losses on investments of amounts
            in the Accounts; and

                  (v) any payments received from any Hedge Counterparty pursuant
            to any Hedge Transaction or Hedging Agreements.

            (b) Amounts on deposit in the Note Distribution Account shall be
withdrawn on each Remittance Date by the Indenture Trustee, or the Paying Agent,
on its behalf, to effect the distribution described in Section 5.07(b) and
thereafter by the following parties in no particular order of priority:

                  (i) by the Indenture Trustee, to invest amounts on deposit in
            the Note Distribution Account in Permitted Instruments pursuant to
            Section 5.06;

                  (ii) by the Indenture Trustee, to pay on a monthly basis to
            the Servicer as additional servicing compensation interest paid and
            earnings realized on Permitted Instruments;

                  (iii) by the Indenture Trustee, to withdraw any amount not
            required to be deposited in the Note Distribution Account or
            deposited therein in error; and


                                       31
<PAGE>   38
                  (iv) by the Indenture Trustee, to clear and terminate the Note
            Distribution Account upon the termination of this Agreement in
            accordance with the terms of Section 10.01 hereof;

            Section 5.02  Establishment of Spread Account; Deposits in Spread
                          Account; Permitted Withdrawals from Spread Account.

            (a) No later than the Closing Date, the Indenture Trustee will
establish and maintain with itself in its trust department a trust account,
which shall not be interest bearing, titled "Spread Account, HSBC Bank USA, as
Indenture Trustee for the registered holders of FIB Funding Trust II Notes" (the
"Spread Account"). If on any Determination Date the Subordination Percentage is
less than the Minimum Subordination Percentage, the Indenture Trustee shall,
promptly upon receipt, deposit in the Spread Account the amounts transferred
from the Note Distribution Account pursuant to Section 5.07(b)(vi).

            (b) Amounts on deposit in the Spread Account shall be withdrawn by
the Indenture Trustee for distribution on each Remittance Date in the following
order of priority:

                  (i) to deposit in the Note Distribution Account for a
            principal payment on the Notes in the amount, if any, needed to
            increase the Subordination Percentage to the Minimum Subordination
            Percentage; and

                  (ii) During the Revolving Period, to the extent that the
            Subordination Percentage equals or exceeds the Minimum Subordination
            Percentage after giving effect to all required transfers from the
            Spread Account to the Note Distribution Account on such Remittance
            Date, the remainder of the amounts on deposit in the Spread Account
            shall be, by Issuer Request (x) transferred to the Funding Account,
            (y) transferred to the Note Distribution Account or (z) transferred
            to the Certificate Account;

and also, in no particular order of priority:

                  (iii) to invest amounts on deposit in the Spread Account in
            Permitted Instruments pursuant to Section 5.06;

                  (iv) to withdraw any amount not required to be deposited in
            the Spread Account or deposited therein in error; and

                  (v) to clear and terminate the Spread Account upon the
            termination of this Agreement in accordance with the terms of
            Section 10.01.


                                       32
<PAGE>   39
            Section 5.03  Establishment of Expense Account; Deposits in Expense
                          Account; Permitted Withdrawals from Expense Account

            (a) No later than the Closing Date, the Indenture Trustee will
establish with itself an account (the "Expense Account"). The Expense Account
shall not constitute part of the Trust Fund and is for the benefit of the
Indenture Trustee and the Owner Trustee in its individual capacity to pay their
fees and expenses related to the Trust. The Indenture Trustee shall deposit into
the Expense Account:

                  (i) on each Remittance Date from the amounts on deposit in the
            Note Distribution Account an amount equal to the fees and expenses
            of the Indenture Trustee and the Owner Trustee in its individual
            capacity then due and owing; provided, however, that such amounts
            shall not exceed $15,000 per annum without the prior written consent
            of the Administrative Agent; and

                  (ii) upon receipt, amounts required to be paid by the Servicer
            pursuant to Section 5.06(e) in connection with losses on investments
            of amounts in the Expense Account.

If, at any time the amount then on deposit in the Expense Accounts shall be
insufficient to pay in full the fees and expenses of the Indenture Trustee and
the Owner Trustee in its individual capacity then due, the Indenture Trustee and
the Owner Trustee in its individual capacity shall make demand on the Seller to
pay the amount of such insufficiency, and the Seller shall promptly pay such
amount.

            (b) The Indenture Trustee may invest amounts on deposit in the
Expense Accounts in Permitted Instruments pursuant to Section 5.06 hereof, and
the Indenture Trustee shall withdraw amounts on deposit in the Expense Accounts
to:

                  (i) pay the Indenture Trustee's and Owner Trustee's (in its
            individual capacity) fees and expenses as described in Section 2.08
            hereof;

                  (ii) pay on a monthly basis to the Servicer as additional
            servicing compensation interest paid and earnings realized on
            Permitted Instruments;

                  (iii) withdraw any amounts not required to be deposited in the
            Expense Accounts or deposited therein in error; and

                  (iv) clear and terminate the Expense Account upon the
            termination of this Agreement in accordance with the terms of
            Section 10.01.

            (c) On the twelfth Remittance Date following the Closing Date, and
on each twelfth Remittance Date thereafter, the Indenture Trustee shall
determine that all payments required to be made during the prior twelve month
period pursuant to subclauses (b)(i), (b)(ii) and (b)(iii) above, have been
made, and, if all such payments have been made, from the amounts


                                       33
<PAGE>   40
remaining in the Expense Accounts, the Indenture Trustee shall remit to the
Servicer as additional servicing compensation any amounts remaining in the
Expense Account.

            Section 5.04  Funding Account

            (a) No later than the Closing Date, the Indenture Trustee shall
establish and maintain in its trust department a trust account, which shall not
be interest-bearing, titled "FIB Funding Trust II Account" (the "Funding
Account"). The Funding Account shall constitute part of the Trust Fund and may
only be invested in Permitted Investments. The Indenture Trustee shall, promptly
upon receipt, deposit in the Funding Account and retain therein:

                  (i) all amounts paid by a Purchaser in connection with a
            Purchase made pursuant to Section 2.2 of the Note Purchase
            Agreement; and

                  (ii) amounts transferred from the Note Distribution Account
            pursuant to Section 5.07(b)(iv).

            (b) On each Transfer Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Funding Account the amount determined pursuant to
Section 2.09(a)(ii) and pay such amount to or upon the order of the Seller with
respect to such transfer.

            (c) If on the Termination Date amounts still remain in the Funding
Account, the Servicer shall instruct the Indenture Trustee to withdraw from the
Funding Account on the immediately following Remittance Date and deposit such
amounts in the Note Distribution Account.

            Section 5.05  [Intentionally Omitted]

            Section 5.06  Investment of Accounts.

            (a) So long as no default or Event of Default shall have occurred
and be continuing, and consistent with any requirements of the Code, all or a
portion of any Account held by the Indenture Trustee shall be invested by the
Indenture Trustee, as directed in writing by the Servicer, in one or more
Permitted Instruments in the name of the Indenture Trustee, bearing interest or
sold at a discount. No such investment in any Account shall mature later than
the Business Day immediately preceding the next Remittance Date; provided,
however, the Indenture Trustee or any affiliate thereof, may be the obligor on
any investment which otherwise qualifies as a Permitted Instrument and any
investment on which the Indenture Trustee is the obligor may mature on such
Remittance Date or date when needed, as the case may be.

            (b) If any amounts are needed for disbursement from any Account held
by the Indenture Trustee and sufficient uninvested funds are not available to
make such disbursement, the Indenture Trustee shall cause to be sold or
otherwise converted to cash a sufficient amount of the investments in such
Account. The Indenture Trustee shall not be liable for any investment loss or
other charge resulting therefrom.


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<PAGE>   41
            (c) The Indenture Trustee shall not in any way be held liable by
reason of any insufficiency in any Account held by the Indenture Trustee
resulting from any investment loss on any Permitted Instrument included therein
(except to the extent that the Indenture Trustee is the obligor thereon).

            (d) The Indenture Trustee shall invest and reinvest funds in the
Accounts held by the Indenture Trustee to the fullest extent practicable, in
such manner as the Servicer shall from time to time direct in writing, but only
in one or more Permitted Instruments.

            (e) All income or other gain from investments in any Account held by
the Indenture Trustee shall be deposited in such Account, immediately on
receipt, and the Indenture Trustee shall notify the Servicer of any loss
resulting from such investments. The Servicer shall remit the amount of any such
loss from its own funds, without reimbursement therefor, to the Indenture
Trustee for deposit in the Account from which the related funds were withdrawn
for investment by the next Determination Date following receipt by the Servicer
of such notice.

            Section 5.07  Distributions.

            (a) The rights of the Noteholders, Certificateholders and Hedge
Counterparties to receive distributions from the proceeds of the Trust Fund, and
all ownership interests of the Certificateholders in such distributions, shall
be as set forth in this Agreement.

            (b) By 11:00 A.M. New York time, on each Remittance Date the
Indenture Trustee shall withdraw from the Note Distribution Account an amount
equal to (A) that portion of the Available Funds received from the Servicer
pursuant to Section 5.01(a)(i), (ii) and (iv), and (B) the amounts deposited
therein pursuant to Section 5.02(b)(i), and make distributions thereof in the
following order of priority:

            (i) first, to any Hedge Counterparty under any Hedging Agreement or
Hedge Transaction, all amounts due other than Hedge Breakage Costs;

            (ii) second, to the Expense Account, the amount of unpaid fees and
expenses required to be paid to the Indenture Trustee and the Owner Trustee in
its individual capacity;

            (iii) third, to the Noteholders, the aggregate Interest Distribution
Amount, Program Fee, Facility Fee and Breakage Costs due for such Remittance
Date;

            (iv) fourth, (A) during the Revolving Period, to the Funding
Account, the amount, if any, set forth in an Issuer Request and to the
Noteholders, as a payment of principal on the Notes, the amount, if any, set
forth in an Issuer Request and (B) during the Amortization Period, to the
Noteholders, as a payment of principal on the Notes until the Outstanding Amount
of the Notes is reduced to zero;


                                       35
<PAGE>   42
            (v) fifth, to any Hedge Counterparty under any Hedging Agreement or
Hedge Transaction, all amounts due, if any, as Hedge Breakage Costs;

            (vi) sixth, if the Subordination Percentage is less than the Minimum
Subordination Percentage, to the Spread Account until the Subordination
Percentage equals the Minimum Subordination Percentage;

            (vii) seventh, to the Paying Agent under the Trust Agreement, for
distribution to the Certificateholders, any excess.

            (c) Notwithstanding the foregoing, on the Put Option Purchase Date,
the Indenture Trustee shall withdraw from the Note Distribution Account the
amount received pursuant to Section 2.11 and distribute such amount to the
Noteholders.

            (d) All distributions made to the Noteholders will be made on a pro
rata basis among the Noteholders of record on the next preceding Record Date
based on the Percentage Interest represented by their respective Notes, and
shall be made by check or, upon request by a Noteholders, by wire transfer of
immediately available funds to the account of such Noteholders at a bank or
other entity having appropriate facilities therefor, and, in the case of wire
transfers, at the expense of such Noteholder unless such Noteholder shall own of
record Notes which have initial principal balances aggregating at least
$1,000,000.

            Section 5.08  [Intentionally Omitted].

            Section 5.09  Statements.

            Each month, not later than 12:00 noon New York time on the
Determination Date, the Servicer shall deliver to the Administrative Agent and
the Indenture Trustee, by telecopy, for distribution to the Noteholders, the
receipt and legibility of which shall be confirmed telephonically, with hard
copy thereof and the Servicer's Monthly Computer Tape in the form attached
hereto as Exhibit L (both in hard copy and in computer tape form) to be
delivered on the Business Day following the Determination Date, a certificate
signed by a Servicing Officer (a "Servicer's Certificate") stating the date
(day, month and year), and, as of the close of business on the Record Date for
such month:

            (i) Available Funds for the related Remittance Date;

            (ii) The Aggregate Note Principal Balance as reported in the prior
Servicer's Certificate pursuant to subclause (xi) below, or, in the case of the
first Determination Date, the original Aggregate Note Principal Balance;

            (iii) The number and Principal Balances of all SBA Loans which were
the subject of Principal Prepayments during the Due Period and the number and
Principal Balances of all Defaulted Unguaranteed Interests or Charged-Off
Unguaranteed Interests purchased or substituted for during the Due Period;


                                       36
<PAGE>   43
            (iv) The product of the Unguaranteed Percentage multiplied by all
Curtailments which were received during the Due Period;

            (v) The product of the Unguaranteed Percentage multiplied by all
Monthly Payments in respect of principal received during the Due Period;

            (vi) The aggregate amount of interest received on the Unguaranteed
Interest of each SBA Loan net of the FTA's Fee, the Additional Fee and the
Servicing Fee attributable to the Unguaranteed Interest;

            (vii) The delinquency and foreclosure information set forth in the
form attached hereto as Exhibit K;

            (viii) The Interest Distribution Amount, Program Fee and Facility
Fee for the Remittance Date;

            (ix) The amount available in the Spread Account as of the related
Record Date and the amount, if any, to be transferred from the Spread Account to
the Note Distribution Account pursuant to Section 5.02(b)(i);

            (x) The amount, if any, of principal to be distributed to the Notes
on the Remittance Date;

            (xi) The Aggregate Note Principal Balance after giving effect to the
distribution to be made on the Remittance Date;

            (xii) The weighted average maturity and weighted average SBA Loan
Interest Rate;

            (xiii) The Servicing Fees and amounts to be deposited to the Expense
Account;

            (xiv) The amount of all payments and reimbursements to the Servicer;

            (xv) During the Revolving Period, the aggregate Principal Balance of
the Unguaranteed Interests in the SBA Loans purchased during the prior Due
Period and the amount on deposit in the Funding Account as of the end of such
Due Period;

            (xvi) The aggregate Principal Balance of the Unguaranteed Interests
in the SBA Loans removed from the Trust during the prior Due Period;

            (xvii) The following information for such Determination Date (a) the
Portfolio Yield, (b) the Default Ratio and the Average Default Ratio, (c) Net
Loss Ratio and the Average Net Loss Ratio, (d) the Portfolio Net Loss Ratio and
the Average Portfolio Net Loss Ratio;


                                       37
<PAGE>   44
            (xviii) The aggregate Principal Balance of all Eligible Loans and
all Ineligible Loans;

            (xix) The following information for such Determination Date (a) the
Minimum Subordination Percentage, (b) the Subordination Percentage, (c) the
amount in the Spread Account over or under the Minimum Subordination Percentage
and (d) the amount in the Note Distribution Account over or under the Minimum
Subordination Percentage; and

            (xx) Such other information as the Indenture Trustee, the
Noteholders and the Certificateholders or the Administrative Agent may
reasonably require.

            The Indenture Trustee shall forward such report to the Noteholders,
the Certificateholders, the Owner Trustee and any Hedge Counterparty on the
Remittance Date, together with a separate report indicating the amount of funds
deposited in the Note Distribution Account pursuant to Section 5.01(a)(iv); and
the amounts which are reimbursable to the Servicer or the Seller (all reports
prepared by the Indenture Trustee of such withdrawals and deposits will be based
in whole or in part upon the information provided to the Indenture Trustee by
the Servicer).

            To the extent that there are inconsistencies between the telecopy of
the Servicer's Certificate and the hard copy thereof, the Indenture Trustee
shall be entitled to rely upon the telecopy.

            (a) Upon reasonable advance notice in writing, the Servicer will
provide to each Noteholder which is a savings and loan association, bank or
insurance company certain reports and access to information and documentation
regarding the SBA Loans sufficient to permit such Noteholder to comply with
applicable regulations of the Office of Thrift Supervision or other regulatory
authorities with respect to investment in the Notes.

            (b) The Servicer, at its expense, shall furnish to each Noteholder,
during the term of this Agreement, such periodic, special, or other reports or
information, whether or not provided for herein, as shall be necessary,
reasonable, or appropriate with respect to the Noteholder or otherwise with
respect to the purposes of this Agreement, all such reports or information to be
provided by and in accordance with such applicable instructions and directions
as the Noteholder may reasonably require. The Administrative Agent shall receive
copies of any such reports or information furnished to the Noteholders.

            Section 5.10  Reports of Foreclosure and Abandonment of Mortgaged
                          Property

            Each year the Servicer shall make the reports of foreclosures and
abandonment of any Mortgaged Property required by Section 6050J of the Code.
Promptly after filing each such report with the Internal Revenue Service, the
Servicer shall provide the Indenture Trustee with an Officer's Certificate
certifying that such report has been filed.


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<PAGE>   45
                                   ARTICLE VI

                           GENERAL SERVICING PROCEDURE

            Section 6.01  [Intentionally Omitted].

            Section 6.02  Satisfaction of Mortgages and Collateral and Release
                          of SBA Files.

            The Servicer shall maintain the Fidelity Bond as provided for in
Section 4.09 insuring the Servicer against any loss it may sustain with respect
to any SBA Loan not satisfied in accordance with the procedures set forth
herein.

            Upon the payment in full of any SBA Loan, the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes or the deposit into the Principal and Interest
Account of the purchase price of any SBA Loan acquired by the Seller, the
Servicer or another Person pursuant to this Agreement, or any other Basic
Document, the Servicer will immediately notify the FTA and the Indenture Trustee
by a certification in the form of Exhibit I attached hereto (which certification
shall include a statement to the effect that all amounts received or to be
received in connection with such payment which are required to be deposited in
the Principal and Interest Account pursuant to Section 4.03 or the Note
Distribution Account pursuant to Section 5.01 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Indenture
Trustee's Document File. The Multi-Party Agreement provides for release by FTA
of the related SBA Note in accordance with the terms of the Multi-Party
Agreement. Upon receipt of such certification and request, the FTA and the
Indenture Trustee shall release, within 3 Business Days, the related Indenture
Trustee's Document File to the Servicer. Expenses incurred in connection with
any instrument of satisfaction or deed of reconveyance shall be payable by the
Servicer and shall not be chargeable to the Principal and Interest Account or
the Note Distribution Account.

            Subject to the Multi-Party Agreement, from time to time and as
appropriate for the servicing or foreclosure of any SBA Loan, the Indenture
Trustee shall, upon request of the Servicer and delivery to the Indenture
Trustee of a certification in the form of Exhibit I attached hereto signed by a
Servicing Officer, release the related Indenture Trustee's Document File to the
Servicer within 3 Business Days, and the Indenture Trustee shall execute such
documents as shall be necessary to the prosecution of any such proceedings. The
Multi-Party Agreement provides for release by FTA of the related SBA Note in
accordance with the terms of the Multi-Party Agreement. The Servicer shall
return the Indenture Trustee's Document File to the FTA and the Indenture
Trustee when the need therefor by the Servicer no longer exists, unless the SBA
Loan has been liquidated and the Unguaranteed Percentage of the Liquidation
Proceeds relating to the SBA Loan has been deposited in the Principal and
Interest Account and remitted to the Indenture Trustee for deposit in the Note
Distribution Account or the SBA File or such document has been delivered to an
attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property or repossession of other Collateral either
judicially or


                                       39
<PAGE>   46
non-judicially, and the Servicer has delivered to the Indenture Trustee a
certificate of a Servicing Officer certifying as to the name and address of the
Person to whom such SBA File or such document was delivered and the purpose or
purposes of such delivery. Upon receipt of a certificate of a Servicing Officer
stating that such SBA Loan was liquidated, the servicing receipt relating to
such SBA Loan shall be released by the Indenture Trustee to the Servicer.

            The Indenture Trustee shall execute and deliver to the Servicer any
court pleadings, requests for trustee's sale or other documents provided to it
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property or other Collateral or to any legal action brought to obtain judgment
against any Obligor on the SBA Note or Mortgage or other agreement securing
Collateral or to obtain a deficiency judgment, or to enforce any other remedies
or rights provided by the SBA Note or Mortgage or other agreement securing
Collateral or otherwise available at law or in equity. Together with such
documents or pleadings, the Servicer shall deliver to the Indenture Trustee a
certificate of a Servicing Officer requesting that such pleadings or documents
be executed by the Indenture Trustee and certifying as to the reason such
documents or pleadings are required and that the execution and delivery thereof
by the Indenture Trustee will not invalidate or otherwise affect the lien of the
Mortgage or other agreement securing Collateral, except for the termination of
such a lien upon completion of the foreclosure or trustee's sale. The Indenture
Trustee shall, upon receipt of a written request from a Servicing Officer,
execute any document provided to the Indenture Trustee by the Servicer or take
any other action requested in such request, that is, in the opinion of the
Servicer as evidenced by such request, required by any state or other
jurisdiction to discharge the lien of a Mortgage or other agreement securing
Collateral upon the satisfaction thereof and the Indenture Trustee will sign and
post, but will not guarantee receipt of, any such documents to the Servicer, or
such other party as the Servicer may direct, within five Business Days of the
Indenture Trustee's receipt of such certificate or documents. Such certificate
or documents shall establish to the Indenture Trustee's satisfaction that the
related SBA Loan has been paid in full by or on behalf of the Obligor and that
such payment has been deposited in the Principal and Interest Account.

            Section 6.03  Servicing Compensation.

            As compensation for its services hereunder, the Servicer shall be
entitled to retain from interest payments on the SBA Loans or withdraw from the
Principal and Interest Account (to the extent deposited therein) the Required
Holdback Amount and, in accordance with Section 4.04(b), any accrued but
unreimbursed Required Holdback Amounts. Additional servicing compensation in the
form of assumption and other administrative fees, interest paid on funds on
deposit in the Principal and Interest Account, interest paid and earnings
realized on Permitted Instruments, amounts remitted pursuant to Section 5.03(c)
and late payment charges shall be retained by or remitted to the Servicer to the
extent not required to be remitted to the Indenture Trustee for deposit in the
Note Distribution Account. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement therefor except as specifically provided for
herein.


                                       40
<PAGE>   47
            Section 6.04 Annual Statement as to Compliance.

      The Servicer will deliver to the Indenture Trustee, the SBA and the
Administrative Agent on or before March 31 of each year beginning March 31,
2002, an Officer's Certificate stating that (i) the Servicer has fully complied
with the provisions of Articles IV, V, VI and VII, (ii) a review of the
activities of the Servicer during the preceding calendar year and of performance
under this Agreement has been made under such officer's supervision, and (iii)
to the best of such officer's knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officers and the nature and status thereof and
the action being taken by the Servicer to cure such default.

            Section 6.05  Annual Independent Public Accountants' Servicing
                          Report.

            On or before March 31 of each year beginning March 31, 2002, the
Servicer, at its expense, shall cause one of the "big five" accounting firms to
furnish a letter or letters to the Indenture Trustee and the Administrative
Agent to the effect that such firm has with respect to the Servicer's overall
servicing operations examined such operations in accordance with the
requirements of the Uniform Single Audit Program for Mortgage Bankers, and
stating such firm's conclusions relating thereto.

            Section 6.06  SBA's and Indenture Trustee's Right to Examine
                          Servicer Records and Audit Operations.

            The SBA, the Indenture Trustee and the Administrative Agent shall
have the right upon reasonable prior notice, during normal business hours and as
often as reasonably required, to examine and audit any and all of the books,
records or other information of the Servicer, whether held by the Servicer or by
another on behalf of the Servicer, which may be relevant to the performance or
observance by the Servicer of the terms, covenants or conditions of this
Agreement. No amounts payable in respect of the foregoing shall be paid from the
Trust Fund.

            Section 6.07  Reports to the Indenture Trustee; Principal and
                          Interest Account Statements.

            Not later than 20 days after each Record Date, the Servicer shall
forward to the Indenture Trustee, the Administrative Agent and the SBA a
statement, certified by a Servicing Officer, setting forth the status of the
Principal and Interest Account as of the close of business on the preceding
Record Date and showing, for the period covered by such statement, the aggregate
of deposits into the Principal and Interest Account for each category of deposit
specified in Section 4.03, the aggregate of withdrawals from the Principal and
Interest Account for each category of withdrawal specified in Section 4.04 and
the aggregate amount of permitted withdrawals not made in the related Due
Period.


                                       41
<PAGE>   48
            Section 6.08      Required Holdback Amount.

            Pursuant to and in accordance with the policies of the SBA and SBA
Form 1086, the Servicer shall retain the Required Holdback Amount for each SBA
Loan. The Required Holdback Amount shall not constitute part of the Trust Fund
and Noteholders and Certificateholders shall have no interest in, and are not
entitled to receive any portion of the Required Holdback Amount. If the Seller
is replaced as servicer pursuant to any provision of this Agreement, it shall no
longer be entitled to the Required Holdback Amount but, instead, the successor
servicer shall be entitled thereto.


                                       42
<PAGE>   49
                                   ARTICLE VII

                       REPORTS TO BE PROVIDED BY SERVICER

            Section 7.01  Financial Statements.

            (a) The Servicer shall furnish to the Administrative Agent (i)
promptly, copies of any material and adverse notices (including, without
limitation, notices of defaults, breaches, potential defaults or potential
breaches) given to or received from its other lenders, (ii) immediately, notice
of the occurrence of any Event of Default or Servicer Termination Event or of
any situation which the Servicer reasonably expects to develop into an Event of
Default or Servicer Termination Event, (iii) copies of the Servicer's parent's
annual and quarterly financial statements reflecting any public filings made to
the Securities and Exchange Commission, provided that any annual Form 10-K
filing shall be furnished no later than 90 days after each year-end and any
quarterly Form 10-Q filing shall be furnished no later than 45 days after each
quarter end, and (iv) annual audited financial statements 90 days after each
year-end.

            (b) The Servicer also agrees to make available on a reasonable basis
to any Noteholder and the Administrative Agent a knowledgeable financial or
accounting officer for the purpose of answering reasonable questions respecting
recent developments affecting the Servicer or the financial statements of the
Servicer and its parent (First International Bancorp, Inc. and any successor
thereto) and to permit any Noteholder and the Administrative Agent to inspect
the Servicer's servicing facilities during normal business hours for the purpose
of satisfying such Noteholder and the Administrative Agent that the Servicer has
the ability to service the SBA Loans in accordance with this Agreement.


                                       43
<PAGE>   50
                                  ARTICLE VIII

                                  THE SERVICER

            Section 8.01  Indemnification; Third Party Claims.

            (a) The Servicer agrees to indemnify, defend, and hold the Indenture
Trustee (as such and in its individual capacity), the Owner Trustee (as such and
in its individual capacity), the SBA and each Noteholder, Certificateholder and
any Hedge Counterparty harmless from and against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Indenture Trustee (as such or in its
individual capacity), the Owner Trustee (as such or in its individual capacity),
the SBA, and any Noteholder, Certificateholder or Hedge Counterparty may sustain
in any way related to the failure of the Servicer to perform its duties and
service the SBA Loans in compliance with the terms of this Agreement. The
Servicer shall immediately notify the Indenture Trustee, the Owner Trustee and
the SBA if a claim is made by any party with respect to this Agreement, and the
Servicer shall assume (with the consent of the indemnified party) the defense of
any such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against the Servicer, the Indenture Trustee (as such
or in its individual capacity), the Owner Trustee (as such or in its individual
capacity), the SBA, and/or a Noteholder, Certificateholder or Hedge Counterparty
in respect of such claim.

            (b) The Seller agrees to indemnify, defend, and hold the Indenture
Trustee (as such and in its individual capacity), the Owner Trustee (as such and
in its individual capacity), the SBA and each Noteholder, Certificateholder and
any Hedge Counterparty harmless from and against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Indenture Trustee (as such or in its
individual capacity), the Owner Trustee (as such or in its individual capacity),
the SBA and any Noteholder, Certificateholder or Hedge Counterparty may sustain
in any way related to the failure of the Seller to perform its duties in
compliance with the terms of this Agreement and in the best interests of the
SBA, the Noteholders, the Certificateholders and any Hedge Counterparty. The
Seller shall immediately notify the Indenture Trustee, the Owner Trustee and the
SBA, if a claim is made by a third party with respect to this Agreement, and the
Seller shall assume (with the consent of the indemnified party) the defense of
any such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against the Servicer, the Seller, the Indenture
Trustee (as such or in its individual capacity), the Owner Trustee (as such or
in its individual capacity), the SBA and/or a Noteholder, Certificateholder or
Hedge Counterparty in respect of such claim.

            Section 8.02  Merger or Consolidation of the Servicer.

            The Servicer will keep in full effect its existence, rights and
franchises as a corporation, bank or association and if required by applicable
law will obtain and preserve its


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<PAGE>   51
qualification to do business as a foreign entity, in each jurisdiction necessary
to protect the validity and enforceability of this Agreement or any of the SBA
Loans and to perform its duties under this Agreement.

            Any Person into which the Servicer may be merged or consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or any Person succeeding to all or substantially all
of the business of the Servicer, shall be an established mortgage loan servicing
institution that has a net worth of at least $15,000,000 and shall be an
approved SBA guaranteed lender in good standing, operating pursuant to an
effective Loan Guaranty Agreement, and shall be the successor of the Servicer,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding except as may be otherwise required by the SBA Rules and
Regulations and the Multi-Party Agreement. The Servicer shall send notice of any
such merger, consolidation, conversion, or succession to the Indenture Trustee,
the Owner Trustee, the Administrative Agent and the SBA.

            Subject to the receipt of written approval from the SBA and the
Administrative Agent which may be withheld in their sole discretion, the
Servicer is permitted to assign its rights and duties hereunder to, and such
rights and duties can be assumed by, an affiliate of the Servicer (the
"Assignee") (i) having a net worth of at least $50,000,000, (ii) which is an
approved SBA guaranteed lender in good standing operating pursuant to an
effective Loan Guaranty Agreement (iii) that acquires substantially all of the
Servicer's assets relating to its commercial lending business, (iv) that assumes
substantially all of the Servicer's liabilities relating to its commercial
lending business, but expressly excluding the Servicer's deposits, and (v) that
executes and delivers to the Administrative Agent and the Indenture Trustee such
amendments to this Agreement and such opinions of counsel as the Administrative
Agent may deem necessary including, but not limited to opinions to evidence that
the Assignee has assumed all of the Servicer's rights and obligations, and is
bound by all of the Servicer's agreements, set forth herein (in which case all
of the provisions of this Agreement and the Multi-Party Agreement shall, to the
same extent as they apply to the Servicer hereunder, apply to the Assignee
rather than the Servicer), without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding except as may be otherwise required by the SBA Rules
and Regulations and the Multi-Party Agreement. The Servicer shall send notice of
any such assignment to the Indenture Trustee, the Owner Trustee, the
Administrative Agent and the SBA.

            Section 8.03  Limitation on Liability of the Servicer and Others.

            The Servicer and any director, officer, employee or agent of the
Servicer may rely on any document of any kind which it in good faith reasonably
believes to be genuine and to have been adopted or signed by the proper
authorities or persons respecting any matters arising hereunder. Subject to the
terms of Section 8.01 herein, the Servicer shall have no obligation to appear
with respect to, prosecute or defend any legal action which is not incidental to
the Servicer's duty to service the SBA Loans in accordance with this Agreement.


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<PAGE>   52
            Section 8.04  Servicer Not to Resign.

            The Servicer shall not assign this Agreement nor resign from the
obligations and duties hereby imposed on it except (i) by mutual consent of the
Servicer, the SBA, the Indenture Trustee and the Majority Noteholders and the
Administrative Agent, or (ii) in connection with a merger, conversion or
consolidation permitted pursuant to Section 8.02 and with the prior written
consent of the SBA and the Administrative Agent (in which case the Person
resulting from the merger, conversion or consolidation shall be the successor of
the Servicer), or (iii) in connection with an assignment permitted pursuant to
Section 8.02 and with the consent of the SBA and the Administrative Agent (in
which case the assignee shall be the successor of the Servicer), or (iv) upon
the determination that the Servicer's duties hereunder are no longer permissible
under applicable law or administrative determination and such incapacity cannot
be cured by the Servicer. Any such determination permitting the resignation of
the Servicer shall be evidenced by a written Opinion of Counsel (who may be
counsel for the Servicer) to such effect delivered to the Indenture Trustee, the
SBA and the Administrative Agent, which Opinion of Counsel shall be in form and
substance acceptable to the Indenture Trustee, the Administrative Agent and the
SBA. No such resignation shall become effective until a successor approved in
writing by the SBA has assumed the Servicer's responsibilities and obligations
hereunder in accordance with Section 9.02.


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<PAGE>   53
                                   ARTICLE IX

                              SERVICER TERMINATION

            Section 9.01  Servicer Termination Events.

            (a) In case one or more of the following events (each a "Servicer
Termination Event") by the Servicer shall occur and be continuing, that is to
say:

                  (i) (A) the failure by the Servicer to make any required
            Servicing Advance, to the extent such failure materially and
            adversely affects the interests of the Noteholders; or (B) any
            failure by the Servicer to remit to Noteholders, or to the Indenture
            Trustee for the benefit of the Noteholders and Hedge Counterparties,
            or to the Owner Trustee for the benefit of the Certificateholders,
            any payment required to be made under the terms of the Basic
            Documents which continues unremedied for one Business Day after such
            payment was required to be made; or

                  (ii) failure by the Servicer or the Seller duly to observe or
            perform, in any material respect, any other covenants, obligations
            or agreements of the Servicer or the Seller as set forth in the
            Basic Documents, which failure continues unremedied for a period of
            30 days (if such failure can be remedied) after the earlier to occur
            of (A) the date on which written notice of such failure, requiring
            the same to be remedied, shall have been given to the Servicer or
            the Seller, as the case may be, by the Indenture Trustee or to the
            Servicer, or the Seller, as the case may be, and the Indenture
            Trustee by any Noteholder, Certificateholder or Hedge Counterparty
            or (B) the date a Responsible Officer of the Servicer receives
            actual knowledge of such failure; or

                  (iii) a decree or order of a court or agency or supervisory
            authority having jurisdiction for the appointment of a conservator
            or receiver or liquidator in any insolvency, readjustment of debt,
            marshaling of assets and liabilities or similar proceedings, or for
            the winding-up or liquidation of its affairs, shall have been
            entered against the Servicer and such decree or order shall have
            remained in force, undischarged or unstayed for a period of 60 days;
            or

                  (iv) the Servicer shall consent to the appointment of a
            conservator or receiver or liquidator in any insolvency,
            readjustment of debt, marshaling of assets and liabilities or
            similar proceedings of or relating to the Servicer or of or relating
            to all or substantially all of the Servicer's property; or

                  (v) the Servicer shall admit in writing its inability to pay
            its debts as they become due, file a petition to take advantage of
            any applicable insolvency or reorganization statute, make an
            assignment for the benefit of its creditors, or voluntarily suspend
            payment of its obligations; or


                                       47
<PAGE>   54
                  (vi) without the prior written consent of the Administrative
            Agent, the Servicer agrees or consents to, or otherwise permits to
            occur, any amendment, modification, change, supplement or recision
            of or to the Servicer or the Credit and Collection Policy, in whole
            or in part, in any manner that could have a material adverse effect
            on the SBA Loans; provided that the consent of the Administrative
            Agent shall not be required if any such amendment, modification,
            change, supplement or recision was mandated by the Servicer's
            regulators including, but not limited to, the SBA; or

                  (vii) without the prior written consent of the Administrative
            Agent, a Change in Control occurs with respect to the Servicer; or

                  (viii) the Servicer fails to maintain an active Loan Guaranty
            Agreement with the SBA; or

                  (ix) the Servicer fails to provide an estimate of the
            unrecoverable portion of any SBA Loan that is 180 days or greater
            past due and charge-off that estimated portion of the SBA Loan
            consistent with the Servicer's historical recovery rate and/or the
            Credit and Collection Policy;

            (b) then, and in each and every such case, so long as a Servicer
Termination Event shall not have been remedied, the Majority Noteholders, by
notice in writing to the Servicer (except with respect to (iii), (iv) and (v)
for which no notice is required) may, in addition to whatever rights such
Noteholders may have at law or equity including damages, injunctive relief and
specific performance, in each case, with the consent of the SBA (which consent
may be withheld in its sole discretion) immediately terminate all the rights and
obligations of the Servicer under this Agreement and in and to the SBA Loans and
the proceeds thereof, as Servicer. Upon such receipt by the Servicer of a
written notice from the Majority Noteholders (accompanied with the consent of
the SBA) stating that they or it intend to terminate the Servicer as a result of
such Servicer Termination Event, all authority and power of the Servicer under
this Agreement, whether with respect to the SBA Loans or otherwise, shall,
subject to Section 9.02 and the Multi-Party Agreement, pass to and be vested in
the Indenture Trustee and the Indenture Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, including, but not limited to, the transfer and
endorsement or assignment of the SBA Loans and related documents. The Servicer
agrees to cooperate with the Indenture Trustee in effecting the termination of
the Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Indenture Trustee for administration by it of
all amounts which shall at the time be credited by the Servicer to each
Principal and Interest Account or thereafter received with respect to the SBA
Loans. The Indenture Trustee shall provide written notice to the SBA of any
Servicer Termination Event of which a Responsible Officer of the Indenture
Trustee has knowledge and any actual termination of the Servicer hereunder.


                                       48
<PAGE>   55
            Section 9.02 Indenture Trustee to Act; Appointment of Successor

            On and after the time of the Servicer's termination, or the
Servicer's receipt of notice if required by Section 9.01, or at any time if the
Indenture Trustee receives the resignation of the Servicer evidenced by an
Opinion of Counsel pursuant to Section 8.04 or the Servicer is removed as
Servicer pursuant to this Article IX, the Indenture Trustee shall be the
successor in all respects to the Servicer in its capacity as Servicer under this
Agreement and the transactions set forth or provided for herein and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof; provided, however,
that the Indenture Trustee shall not be liable for any actions of any Servicer
prior to it, and that the Indenture Trustee shall not be obligated to make
advances or payments pursuant to Sections 4.03, 4.10 or 5.03 but only to the
extent the Indenture Trustee determines reasonably and in good faith that such
advances would not be recoverable, such determination to be evidenced with
respect to each such advance by a certification of a Responsible Officer of the
Indenture Trustee. As compensation therefor, the Indenture Trustee shall be
entitled to all funds relating to the SBA Loans which the Servicer would have
been entitled to receive from the Principal and Interest Account pursuant to
Section 4.04 if the Servicer had continued to act as Servicer hereunder,
together with other servicing compensation in the form of assumption fees, late
payment charges or otherwise as provided in Section 6.03 and shall be shall be
entitled to the Required Holdback Amount.

            Notwithstanding the above, the Indenture Trustee shall, if it is
unable to so act or if the SBA requests in writing to the Indenture Trustee,
promptly appoint, or petition a court of competent jurisdiction to appoint, any
established servicing institution acceptable to the SBA in its sole discretion
including but not limited to the SBA and, except for the SBA, satisfactory to
the Administrative Agent, that has a net worth of not less than $50,000,000, and
which is an approved SBA guaranteed lender in good standing, operating pursuant
to an effective Loan Guaranty Agreement, as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder. Any collections received by the
Servicer after removal or resignation shall be endorsed by it to the Indenture
Trustee and remitted directly to the Person entitled thereto under the
Multi-Party Agreement. As compensation, any successor servicer (including,
without limitation, the Indenture Trustee) so appointed shall be entitled to
receive all funds relating to the SBA Loans which the Servicer would have been
entitled to receive from the Principal and Interest Account pursuant to Section
4.04 if the Servicer had continued to act as Servicer hereunder, together with
any other servicing compensation in the form of assumption fees, late payment
charges or otherwise as provided in Section 6.03 and shall be entitled to the
Required Holdback Amounts. In the event the Indenture Trustee is required to
solicit bids as provided herein, the Indenture Trustee shall solicit, by public
announcement, bids from banks and mortgage servicing institutions meeting the
qualifications set forth above. Such public announcement shall specify that the
successor servicer shall be entitled to the full amount of the aggregate
Servicing Fees and Premium Protection Fees as servicing compensation, together
with the other servicing compensation in the form of assumption fees, late
payment charges or otherwise. Within thirty days after any such public


                                       49
<PAGE>   56
announcement, the Indenture Trustee shall negotiate and effect the sale,
transfer and assignment of the servicing rights and responsibilities hereunder
to the qualified party submitting the highest qualifying bid. The Indenture
Trustee shall deduct from any sum received by the Indenture Trustee from the
successor to the Servicer in respect of such sale, transfer and assignment all
costs and expenses of any public announcement and of any sale, transfer and
assignment of the servicing rights and responsibilities hereunder and the amount
of any unreimbursed Servicing Advances. After such deductions, the remainder of
such sum shall be paid by the Indenture Trustee as a Servicing Fee to the SBA at
the time of such sale, transfer and assignment to the Servicer's successor. The
Indenture Trustee and such successor shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such succession. The
Servicer agrees to cooperate with the Indenture Trustee and any successor
servicer in effecting the termination of the Servicer's servicing
responsibilities and rights hereunder and shall promptly provide the Indenture
Trustee or such successor servicer, as applicable, all documents and records
reasonably requested by it to enable it to assume the Servicer's functions
hereunder and shall promptly also transfer to the Indenture Trustee or such
successor servicer, as applicable, all amounts which then have been or should
have been deposited in the Principal and Interest Account or Spread Account by
the Servicer or which are thereafter received with respect to the SBA Loans.
Neither the Indenture Trustee nor any other successor servicer shall be held
liable by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by (i) the failure of the
Servicer to deliver, or any delay in delivering, cash, documents or records to
it, or (ii) restrictions imposed by any regulatory authority having jurisdiction
over the Servicer hereunder. No appointment of a successor to the Servicer
hereunder shall be effective until written notice of such proposed appointment
shall have been provided by the Indenture Trustee to the SBA and each Noteholder
and Certificateholder and the Indenture Trustee, the SBA and the Administrative
Agent shall have consented thereto. The Indenture Trustee shall not resign as
servicer until a successor servicer acceptable to the SBA and the Administrative
Agent has been appointed.

            Subject to the Multi-Party Agreement, pending appointment of a
successor to the Servicer hereunder, the Indenture Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Indenture Trustee may make such arrangements for the
compensation of such successor out of payments on SBA Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted the Servicer pursuant to Section 6.03 or otherwise as
provided in this Agreement. The Servicer, the Indenture Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession.

            SBA may, at its option, assume servicing of any SBA Loan in
accordance with SBA Rules and Regulations. If SBA becomes the successor Servicer
or becomes the servicer with respect to any particular SBA Loan in which the
Unguaranteed Interest is included in the Trust Fund, (i) SBA shall have no
obligation to perform any duties or comply with any obligations of the Servicer
hereunder, under the Basic Documents or under the Multi-Party Agreement if such
performance or compliance would violate the SBA Rules and Regulations in any
respect and (ii) except as specifically set forth under the Basic Documents or
in the Multi-Party Agreement, SBA's performance of any duties or compliance with
any obligations of the


                                       50
<PAGE>   57
Servicer hereunder or under the Multi-Party Agreement will be within SBA's sole
discretion. As used in this paragraph, the phrase "specifically set forth in the
Multi-Party Agreement" shall refer only to a specific identification of SBA.

            Section 9.03  Waiver of Defaults.

            The SBA may, or the Majority Noteholders may, on behalf of all the
Noteholders, Certificateholders and any Hedge Counterparty and subject to the
consent of the SBA, which consent may not be unreasonably withheld, waive any
events permitting removal of the Servicer pursuant to this Article IX; provided,
however, that the Majority Noteholders or the SBA may not waive a default in
making a required distribution on a Note without the consent of the holder of
such Note. Upon any waiver of a past default, such default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto except to the
extent expressly so waived.

            Section 9.04  Control by Majority Noteholders.

            The SBA may, or the Majority Noteholders with the consent of the SBA
may, direct the time, method and place of conducting any proceeding relating to
the Trust or the Notes or for any remedy available to the Indenture Trustee or
the Owner Trustee with respect to the Trust or exercising any trust or power
conferred on the Indenture Trustee or the Owner Trustee with respect to the
Trust provided that:

                  (i) such direction shall not be in conflict with any rule of
            law or with this Agreement;

                  (ii) the Indenture Trustee shall have been provided with
            indemnity satisfactory to it; and

                  (iii) the Indenture Trustee or the Owner Trustee may take any
            other action deemed proper by the Indenture Trustee or the Owner
            Trustee which is not inconsistent with such direction; provided,
            however, that the Indenture Trustee or the Owner Trustee, as the
            case may be, need not take any action which it determines might be
            unlawful, violate the Trust Agreement, or involve it in personal
            liability or may be unjustly prejudicial to the Holders not so
            directing.


                                       51
<PAGE>   58
                                    ARTICLE X

                                   TERMINATION

            Section 10.01  Termination.

            This Agreement shall terminate upon notice to the Indenture Trustee
of the earlier of the following events: (a) the final payment on or the
disposition or other liquidation by the Trust of the last SBA Loan or the
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any SBA Loan and the remittance of all funds due thereunder, or
(b) mutual written consent of the Servicer and the Administrative Agent.

            The Servicer may, at its option, terminate this Agreement on any
date (the "Optional Termination Date") on which the aggregate Principal Balance
of the Unguaranteed Interests is less than 5% of the Purchase Limit by
purchasing, on the next succeeding Remittance Date, all of the Unguaranteed
Interests in the SBA Loans and Foreclosed Properties at a price equal to the sum
of (i) 100% of the then outstanding and Aggregate Note Principal Balance, (ii)
the Interest Distribution Amount, (iii) the Program Fee, (iv) any Breakage Costs
and (v) any amounts owed to any Hedge Counterparty under any Hedging Agreement
or Hedge Transaction (including Hedge Breakage Costs) (the "Termination Price").

            Notice of any termination, specifying the Remittance Date upon which
the Trust Fund will terminate and that the Noteholders shall surrender their
Notes to the Indenture Trustee for payment of the final distribution and
cancellation shall be given promptly by the Servicer by letter to Noteholders
and the Administrative Agent mailed during the month of such final distribution
before the Determination Date in such month, specifying (i) the Remittance Date
upon which final payment of the Notes will be made upon presentation and
surrender of Notes at the office of the Indenture Trustee therein designated,
(ii) the amount of any such final payment and (iii) that the Record Date
otherwise applicable to such Remittance Date is not applicable, payments being
made only upon presentation and surrender of the Notes at the office of the
Indenture Trustee therein specified. The Servicer shall give such notice to the
Indenture Trustee and the SBA at the time such notice is given to Noteholders.
Any obligation of the Servicer to pay amounts due to the Indenture Trustee shall
survive the termination of this Agreement.

            Section 10.02  Accounting Upon Termination of Servicer

            Upon termination of the Servicer under Article IX hereof, the
Servicer shall:

            (a) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee the funds in any Principal and Interest
Account;

            (b) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee all SBA Files and related documents and
statements held by it hereunder and an SBA Loan portfolio computer diskette;


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<PAGE>   59
            (c) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee and to the Administrative Agent a full
accounting of all funds, including a statement showing the Monthly Payments
collected by it and a statement of monies held in trust by it for the payments
or charges with respect to the SBA Loans; and

            (d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient transfer of
servicing of the SBA Loans to its successor and to more fully and definitively
vest in such successor all rights, powers, duties, responsibilities, obligations
and liabilities of the Servicer under this Agreement.


                                       53
<PAGE>   60
                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

            Section 11.01  Acts of Noteholders.

            Except as otherwise specifically provided herein, whenever
Noteholder action, consent or approval is required under this Agreement, such
action, consent or approval shall be deemed to have been taken or given on
behalf of, and shall be binding upon, all Noteholders if the Majority
Noteholders agree to take such action or give such consent or approval.

            Section 11.02  Amendment.

            (a) This Agreement may be amended from time to time by the Servicer
and the Trust with the consent of the Indenture Trustee, the SBA and the
Administrative Agent, without notice to or consent of the Noteholders, the
Certificateholders or any Hedge Counterparty, to cure any ambiguity, to correct
or supplement any provisions herein, to comply with any changes in the Code, or
to make any other provisions with respect to matters or questions arising under
this Agreement which shall not be inconsistent with the provisions of this
Agreement; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel delivered to the Indenture Trustee and the SBA, adversely
affect the interests of any Noteholder, Certificateholder or any Hedge
Counterparty or any other party and further provided that no such amendment
shall reduce in any manner the amount of, or delay the timing of, any amounts
received on SBA Loans which are required to be distributed on any Note or
Certificate without the consent of the Holder of such Note or Certificate, or
change the rights or obligations of any other party hereto or any Hedge
Counterparty without the consent of such party.

            (b) This Agreement may be amended from time to time by the Servicer
and the Trust with the consent of the Indenture Trustee, the SBA and the
Administrative Agent, and the consent of the Majority Noteholders, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Holders; provided, however, that no such amendment shall reduce in any
manner the amount of, or delay the timing of, any amounts which are required to
be distributed on any Note without the consent of the Holder of such Note or
reduce the percentage of Holders which are required to consent to any such
amendment without the consent of the Holders of 100% of the Notes and
Certificates affected thereby.

            Section 11.03  Recordation of Agreement.

            To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the Noteholders' expense on direction of the Majority Noteholders,
but only when accompanied by an Opinion of Counsel to the effect that such
recordation materially


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<PAGE>   61
and beneficially affects the interests of the Noteholders or is necessary for
the administration or servicing of the SBA Loans.

            Section 11.04  Duration of Agreement.

            This Agreement shall continue in existence and effect until
terminated as herein provided.

            SECTION 11.05  GOVERNING LAW.

            EXCEPT TO THE EXTENT INCONSISTENT WITH FEDERAL LAW, IN WHICH CASE
FEDERAL LAW WILL GOVERN, THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.

            Section 11.06  Notices.

            All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by overnight mail, certified mail or registered mail, postage prepaid,
to (i) in the case of the Servicer and the Seller, First International Bank, 280
Trumbull Street, Hartford, Connecticut 06103, Attention: Theodore J. Horan, or
such other addresses as may hereafter be furnished to the Noteholders in writing
by the Seller and the Servicer, (ii) in the case of the Indenture Trustee, HSBC
Bank USA, 140 Broadway, New York, New York 10005, 12th Floor, Attention:
Corporate Trust Department, (iii) in the case of the Owner Trustee, First Union
Trust Company, National Association, One Rodney Square, 920 King Street,
Wilmington, Delaware 19801, Attention: Corporate Trust Administration, (iv) in
the case of the Noteholders, as set forth in the Note Register, (v) in the case
of the SBA, the United States Small Business Administration, 409 Third Street,
S.W., Washington, D.C. 20416, Attention: Associate Administrator for Financial
Assistance and (vi) in the case of the Administrative Agent, to First Union
Securities Inc., One First Union Center, TW9, Charlotte, North Carolina 28288,
Attention: Conduit Administration. Any such notices shall be deemed to be
effective with respect to any party hereto upon the receipt of such notice by
such party, except that notices to the Noteholders shall be effective upon
mailing or personal delivery.

            Section 11.07  Severability of Provisions.

            If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other covenants,
agreements, provisions or terms of this Agreement.


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<PAGE>   62
            Section 11.08  No Partnership.

            Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent for
the Noteholders.

            Section 11.09  Counterparts.

            This Agreement may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement.

            Section 11.10  Successors and Assigns.

            This Agreement shall inure to the benefit of and be binding upon the
Seller and the Servicer, the Indenture Trustee and the Noteholders and their
respective successors and assigns.

            Section 11.11  Headings.

            The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.

            Section 11.12  Notification to Administrative Agent.

            The Indenture Trustee shall give prompt notice to the Administrative
Agent of the occurrence of any of the following events of which it has received
notice: (1) any modification or amendment to this Agreement, (2) any change of
the Indenture Trustee, the Servicer or Paying Agent, (3) any Event of Default or
Servicer Termination Event, and (4) the final payment of all the Notes. The
Servicer shall promptly deliver to the Administrative Agent a copy of each of
the Servicer's Certificates.

            Section 11.13  Inconsistencies.

            If any provision of this Agreement is inconsistent with any
provision in the Multi-Party Agreement, the provision of the Multi-Party
Agreement shall control.

            Section 11.14  Limitation of Liability.

            Notwithstanding any other provision herein or elsewhere, this
Agreement has been executed and delivered by First Union Trust Company, National
Association (the "Trust Company"), not in its individual capacity, but solely in
its capacity as Owner Trustee of the Trust, in no event shall the Trust Company
or the Owner Trustee have any liability in respect of the representations,
warranties, or obligations of the Trust hereunder or under any other Basic
Document, as to all of which recourse shall be had solely to the assets of the
Trust, and for all


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<PAGE>   63
purposes of this Agreement and each other Basic Document, the Owner Trustee and
the Trust Company shall be entitled to the benefits of the Trust Agreement.

            Section 11.15  No Petition

                  The Servicer and the Seller will not, prior to the date which
is one year and one day after the termination of the Indenture, institute
against the Trust any bankruptcy proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Certificates, the Notes, the Sale and Servicing Agreement or any of the
other Basic Documents.

                     [REMAINDER OF PAGE INTENTIONALLY BLANK]


                                       57
<PAGE>   64
            IN WITNESS WHEREOF, the Seller, the Servicer and the Trust have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.

                                 FIRST INTERNATIONAL BANK
                                    as Seller and Servicer


                                 By:      /s/Ted Horan
                                       -----------------------------------------
                                       Name:  Ted Horan
                                       Title:    Sr. Vice President




                                 FIB FUNDING TRUST II

                                 By:   First Union Trust Company, National
                                 Association, not in its individual capacity
                                 but solely as Owner Trustee on behalf of
                                 the Trust



                                 By:      /s/Anita M. Roselli
                                       -----------------------------------------
                                       Name:  Anita M. Roselli
                                       Title:    Trust Officer


                                       58
<PAGE>   65
                                 Accepted and Agreed to:

                                 HSBC BANK USA, not in its individual
                                 capacity, but solely as Indenture Trustee



                                 By:    /s/Susan Barstock
                                     -----------------------------------
                                     Name:  Susan Barstock
                                     Title:    Assistant Vice President


                                       59
<PAGE>   66
STATE OF Delaware )
         : ss.:
COUNTY OF New Castle  )

            On the 27th day of March, 2001 before me, a Notary Public in and for
said State, personally appeared Anita Roselli known to me to be an officer of
First Union Trust Company, National Association, the trust company that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said banking corporation, and acknowledged to me that such banking
corporation executed the within instrument.

            IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.



                                      /s/Sheri M.Robinson
                                      ---------------------------
                                           Notary Public

                                    My Commission expires    10/9/04
                                                          -----------
<PAGE>   67
STATE OF CT  )
         : ss.:
COUNTY OF Hartford  )



            On the 27th day of March, 2001 before me, a Notary Public in and for
the State of CT, personally appeared Ted Horan known to me to be the Sr. Vice
President of First International Bank, one of the corporations that executed the
within instrument and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

            IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.



                                       /s/Susan Levin
                                       -----------------------------------
                                           Notary Public


                                    My Commission expires   12/31/05