<PAGE>   1
                                                                   Exhibit 10.19



                                                                  EXECUTION COPY






                          SALE AND SERVICING AGREEMENT
                           Dated as of October 1, 1999

                                     Between

                                FIB FUNDING TRUST
                                     (Trust)

                                       and

                            FIRST INTERNATIONAL BANK
                              (Seller and Servicer)

                             FIB FUNDING TRUST NOTES
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                                                     Page
<S>                                                                                                         <C>

                                    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]....................................................................................7
Section 2.07        [Reserved]....................................................................................7
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..............................................9
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
</TABLE>


(i)
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<TABLE>
<S>                                                                                                             <C>
Section 4.01        Duties of the Servicer.......................................................................20
Section 4.02        Liquidation of SBA Loans.....................................................................23
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................................25
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]......................................................................27
Section 4.09        Fidelity Bond................................................................................27
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.........................................30
Section 5.02        Establishment of Spread Account; Deposits in Spread Account; Permitted Withdrawals
                    from Spread Account..........................................................................31
Section 5.03        Establishment of Expense Account; Deposits in Expense Account; Permitted Withdrawals
                    from Expense Account.........................................................................32
Section 5.04        Funding Account..............................................................................33
Section 5.05        [Intentionally Omitted]......................................................................33
Section 5.06        Investment of Accounts.......................................................................33
Section 5.07        Distributions................................................................................34
Section 5.08        [Intentionally Omitted]......................................................................35
                                          -
Section 5.09        Statements...................................................................................35
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
</TABLE>


                                      (ii)
<PAGE>   4
<TABLE>
<S>                                                                                                             <C>
Section 6.06        SBA's and Indenture Trustee's Right to Examine Servicer Records and Audit Operations.........41
Section 6.07        Reports to the Indenture Trustee; Principal and Interest Account Statements..................41
Section 6.08.       Premium Protection Fee and Servicing Fee.....................................................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......................................................45
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...........................................................................50
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
</TABLE>


                                     (iii)
<PAGE>   5
<TABLE>
<S>                                                                                                              <C>
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
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
</TABLE>


                                      (iv)
<PAGE>   6
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 October 1, 1999, between FIB
Funding Trust (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 October 1,
1999 (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 Notes
in an aggregate principal amount not to exceed $60,000,000 (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 a Servicing Fee (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.


                                       2
<PAGE>   9
                                   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 Servicing Fee and the Premium
Protection Fee 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 Servicing Fee or the Premium
Protection Fee.

                  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.

                  The transfer of the Unguaranteed Interest of each SBA Loan
shall be reflected on the Seller's balance sheet and other financial statements
as a sale of assets by the Seller and the Seller shall respond to any
third-party inquiry that such transfer is so reflected as a sale. The Seller
shall be responsible for maintaining, and shall 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.


                                       3
<PAGE>   10
                  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 October 1, 1999 for
the benefit of the Certificateholders and the United States Small Business
Administration, as their respective interests may appear, 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 (such allonge 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 the Indenture dated as of October 1, 1999 subject to the
Multi-Party Agreement dated as of October 1, 1999" 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
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


                                       4
<PAGE>   11
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, its successors and assigns, as indenture trustee under the Indenture
dated as of October 1, 1999, subject to the Multi-Party Agreement dated as of
October 1, 1999;

                  (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 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


                                       5
<PAGE>   12
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 acknowledgement 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). 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


                                       6
<PAGE>   13
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 Servicing Fees and Servicing Advances reimbursable to the Servicer, 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 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].


                                       7
<PAGE>   14
                  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 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:


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<PAGE>   15
                           (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.

                  (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


                                       9
<PAGE>   16
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 Facility
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 Administrative Agent 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 and trust
company 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" as defined in 12 CFR Part
325;

                  (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 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) 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 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 to the Indenture Trustee 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
State 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, 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 "3W" 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 Premium


                                       18
<PAGE>   25
Protection Fee and the Servicing Fee 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, 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). Notwithstanding the
foregoing, the Servicer shall (i) at its expense and without reimbursement,
deliver to the Indenture Trustee and the SBA a copy of each Subservicing
Agreement and (ii) provide notice of the termination of any Subservicer within a
reasonable time after such Subservicer's termination to the Indenture Trustee
and the SBA.


                                       20
<PAGE>   27
                  (d) In the event the Servicer shall for any reason no longer
be the Servicer, the Servicer at its expense and without right of reimbursement
therefor, shall, upon request of the Indenture Trustee, deliver to the successor
servicer 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.

                  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.


                                       21
<PAGE>   28
                  (f) The Servicer shall, upon request of the Indenture Trustee
but at the expense of the Servicer, deliver to any successor servicer 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. 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.


                                       22
<PAGE>   29
                  (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 recission 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 recission 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 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 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 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


                                       23
<PAGE>   30
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 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:

                           (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 Premium Protection Fee, the FTA's Fee and the Servicing
                  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);


                                       24
<PAGE>   31
                           (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 Premium Protection
Fee, the FTA's Fee and the Servicing 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, 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 shall be for the
account of the Servicer and may only be withdrawn from the Principal and
Interest Account by the Servicer immediately 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 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 Servicing Fees
and Premium Protection Fees 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 Servicing Fees and Premium Protection Fees and, except
as provided in the following, Servicing Advances shall be limited to


                                       25
<PAGE>   32
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 withdraw any funds deposited in the Principal and
Interest Account that were not permitted or required to be deposited therein or
were deposited therein in error;

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

                  (g) 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 either be maintained with an Eligible
Deposit Account as an interest-bearing account 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 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.


                                       26
<PAGE>   33
                  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 least 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) shall be deposited in the Principal and Interest Account,
subject to withdrawal pursuant to Section 4.04. 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.


                                       27
<PAGE>   34
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.

                  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 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 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


                                       28
<PAGE>   35
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. The Servicer
shall, subject to Section 4.04, reimburse itself for any related unreimbursed
Servicing Advances 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 Servicing Fee or the Premium Protection
Fee, 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 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.


                                       29
<PAGE>   36
                                    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
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


                                       30
<PAGE>   37
                           (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 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.


                                       31
<PAGE>   38
                  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
                  fees (in its individual capacity) 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)


                                       32
<PAGE>   39
and (b)(iii) above, have been made, and, if all such payments have been made,
from the amounts 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 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


                                       33
<PAGE>   40
the investments in such Account. The Indenture Trustee shall not be liable for
any investment loss or other charge resulting therefrom.

                  (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;


                                       34
<PAGE>   41
                   (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


                                       35
<PAGE>   42
of all Defaulted Unguaranteed Interests or Charged-Off Unguaranteed Interests
purchased or substituted for during the Due Period;

                  (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;


                                       36
<PAGE>   43
                  (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;

                  (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.


                                       37
<PAGE>   44
                  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 non-judicially, and


                                       39
<PAGE>   46
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
Servicer's Servicing Fee and the Premium Protection Fee and, in accordance with
Section 4.04(b), any accrued but unreimbursed Premium Protection Fees and
Servicing Fees. 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,
2001, 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, 2001,
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.     Premium Protection Fee and Servicing Fee.

                  Pursuant to and in accordance with the policies of the SBA and
SBA Form 1086, the Servicer shall retain the Premium Protection Fee and the
Servicing Fee for each SBA Loan. Neither the Premium Protection Fee nor the
Servicing Fee shall constitute part of the Trust Fund and Noteholders and
Certificateholders shall have no interest in, and are not entitled to receive
any portion of, either the Premium Protection Fee or the Servicing Fee. If the
Seller is replaced as servicer pursuant to any provision of this Agreement, it
shall no longer be entitled to the Premium Protection Fee and the Servicing Fee
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.


                                       44
<PAGE>   51
                  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 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, 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


                                       45
<PAGE>   52
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.

                  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.


                                       46
<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 may be withheld in its sole discretion) 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 by 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 Sections 5.01 and 5.03 and shall be
shall be entitled to the Servicing Fee and the Premium Protection Fee.

                  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,
appoint, or petition a court of competent jurisdiction to appoint, any
established servicing institution acceptable to the SBA 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 Indenture Trustee or, at the direction of the Indenture
Trustee, to the successor servicer. 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 Servicing Fee and the Premium Protection Fee. 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 announcement, the Indenture Trustee shall negotiate and
effect the


                                       49
<PAGE>   56
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.

                  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.

                  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


                                       50
<PAGE>   57
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 Facility 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;


                                       52
<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


                                       54
<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.


                                       55
<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


                                       56
<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.


                                       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/Theodore J. Horan
                                   --------------------------------------------
                             Name:  Theodore J. Horan
                             Title: Senior Vice President




                             FIB FUNDING TRUST,

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



                             By:   /s/Edward L. Truitt, Jr.
                                   --------------------------------------------
                                   Name:  Edward L. Truitt, Jr.
                                   Title: Vice President


                                       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 3rd day of November 1999 before me, a Notary Public in
and for said State, personally appeared Edward L. Truitt, Jr. 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/Rita Marie Ritrovato Lawless
                                   --------------------------------------------
                                        Notary Public

                                   My Commission expires November 21, 1999

<PAGE>   67
STATE OF Connecticut )
      : ss.:
COUNTY OF Hartford )



                  On the 29th day of October 1999 before me, a Notary Public in
and for the State of Connecticut, personally appeared Theodore J. Horan known to
me to be the Senior 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/Maureen D. Coppola
                                   --------------------------------------------
                                  Notary Public


                                  My Commission expires December 31, 2003